Clements v. Apax Partners LLP

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

FORT MYERS DIVISION

LOUIS MATTHEW CLEMENTS,

Plaintiff,

v. Case No: 2:20-cv-310-JES-MRM

APAX PARTNERS LLP, ANDREW

SILLITOE, in his official

capacity as Co-CEO of Apax

Partners LLP, and MITCH

TRUWIT, in his official

capacity as Co-CEO of Apax

Partners LLP,

Defendants.

OPINION AND ORDER

This matter comes before the Court on review of defendant

Apax Partners LLP’s Motion to Dismiss Fifth Amended Complaint (Doc.

#87) filed on April 21, 2021, and Apax Co-CEOs Andrew Sillitoe and

Mitch Truwit's Motion to Dismiss Fifth Amended Complaint (Doc.

#93) filed on May 14, 2021. Plaintiff was provided two chances to

file a response. (Docs. ## 94, 96.) On July 1, 2021, plaintiff

filed an Amended Successive Motion in Opposition (Doc. #97).

Defendants seeks relief under Fed. R. Civ. P. 12(b)(2) for lack of

personal jurisdiction and 12(b)(6) for failure to state a claim.

For the reasons stated below, the motions are due to be granted.

I.

On March 16, 2021, the Court issued an Opinion and Order (Doc.

#82) finding that the Fourth Amended Complaint did not establish

personal jurisdiction because plaintiff had failed to allege

sufficient facts to make out a prima facie case of jurisdiction as

to Apax. Apax was only named in Count X for a violation of Florida

law in the Fourth Amended Complaint. Plaintiff was provided an

opportunity to amend as to Apax only. Defendants Sillitoe and

Truwit were not named as defendants in the Fourth Amended

Complaint. On April 7, 2021, plaintiff filed a Fifth Amended

Complaint (Doc. #84) adding Sillitoe and Truwit as defendants

without leave of Court and after the October 16, 2020 deadline to

amend pleadings.

Defendant Apax alleges that the Fifth Amended Complaint (Doc.

#84) repeats the same insufficient allegations regarding personal

1

jurisdiction, with only two substantive paragraphs added to the

1

The identified paragraphs are:

It is public knowledge that APAX PARTNERS LLP

as investor/owner, advised funds for the

purchase of 3M Electronic Monitoring with the

name changed to ATTENTI. See

https://pestakeholder.org/continuing-

incarceration-apax-partners-digital-

shackles/. (FAC ¶ 7).

It is public knowledge that US Senator

Elizabeth Warren and Members of the US House

of Representatives Alexandria Ocasio-Cortez

and Mark Pocan have targeted APAX for

document. (Doc. #87, p. 4.) Defendants Sillitoe and Truwit

2

believe two counts are directed as to them, Count IX and Count X.

Defendants Sillitoe and Truwit seek dismissal because they were

added as new parties long after the deadline to add new parties,

they are not subject to personal jurisdiction in Florida, the

claims are barred by res judicata and the statute of limitations,

and plaintiff fails to state a claim. (Doc. #93, p. 4.)

Regarding personal jurisdiction, plaintiff argues that the

Co-CEOs are liable for personal jurisdiction for the same reasons

that Apax is liable, but that without discovery ownership cannot

be determined. (Doc. #97, p. 9.) The remaining arguments center

on the substantive issues.

II.

In the Fifth Amended Complaint, plaintiff alleges that Apax

is a British equity firm, headquartered in London, England, and

that the company also operates out of Tel Aviv. Plaintiff alleges

that Apax is authorized to do business in New York, and that Apax

investing in and acquiring ATTENTI Electronic

Monitoring in their war on private equity

firms profiting from incarceration and

detention. See

https://www.warren.senate.gov/imo/media/doc/

2019-09-30%20Letters

%20to%20PE%20Firms%20re%20Prison%20Services.

pdf. (FAC ¶ 8).

2

The Court notes that the Fifth Amended complaint refers to

defendants collectively in every count.

is within reach of Florida’s long-arm statute. (Doc. #84, ¶ 2.)

Sillitoe is a CEO, partner of Apax, and citizen of England. Truwit

is the other CEO and a citizen of England. (Id., ¶¶ 3-4.)

Plaintiff alleges that Apax was an “investor/owner, advised funds

for the purchase of 3M Electronic Monitoring with the name changed

to Attenti.” (Id., ¶ 7.) Plaintiff alleges that Members of

Congress have targeted Apax for investing in and acquiring Attenti.

(Id., ¶ 8.)

Plaintiff alleges that defendants Apax and co-conspirators 3M

and Roman are an association-in-fact enterprise engaged in a

pattern of conspiracy and criminal activities and/or racketeering

activities and in violation of Florida’s Deceptive and Unfair Trade

Practices Act. (Id., ¶¶ 10-12.) Plaintiff alleges that while he

was on State probation from June 4, 2008 to June 4, 2013, the

equipment he was wearing repeatedly malfunctioned. Plaintiff

alleges that the malfunctions caused him to be arrested on seven

occasions for violations of probation. (Id., ¶ 23.) Plaintiff

alleges that the defect was not known to the courts or law

enforcement and was concealed by defendants. (Id., ¶ 27.)

Plaintiff alleges that instead of fixing or replacing the

defective equipment, 3M sold the company to Apax and renamed it to

Attenti. (Id., ¶ 45.) Plaintiff alleges this sale was a

fraudulent transfer as he was a “potential Judgement Creditor at

the time.” (Id., ¶ 46.) Plaintiff alleges that Apax and Attenti

are partners in ownership, and as co-conspirators with 3M and Roman

and Attenti, defendants used deceptive practices to mislead

consumers. (Id., ¶¶ 48, 50.) Plaintiff alleges that Truwit and

Sillitoe, and other unnamed employees, failed to provide proper

oversight of Apax but they managed and conducted the affairs of

the enterprise and aided and abetted the conduct of Apax employees

to conceal and cover up criminal and/or racketeering. (Id., ¶¶

51, 56.) Plaintiff alleges that defendants have had detailed

reports and evidence since 2008 that would have excluded plaintiff

as to the probation violations, but it was withheld from counsel

and the courts. (Id., ¶ 61.)

In Count I, plaintiff alleges design defects in Apax’s

equipment. Plaintiff argues that “defendants” knew of the

defective condition and design posing a serious risk to the wearer.

In Count II, plaintiff argues intentional infliction of emotional

distress because defendants knew about the defectiveness of the

monitoring equipment but did not relay the information to the State

of Florida or plaintiff. In Count III, plaintiff alleges negligent

infliction of emotional distress because plaintiff wore electronic

monitoring equipment on his ankle that had an impact on him. Count

IV alleges fraudulent misrepresentation, and Count V alleges

fraudulent concealment. In Count VI, plaintiff alleges negligent

misrepresentation because defendants were aware the testing

procedures were flawed. In Count VII, plaintiff alleges fraud and

deceit due to defendants’ unlawful, improper testing and blatant

distribution of false information which over states the location

finding ability of the monitoring equipment. In Count VIII,

plaintiff alleges that defendants committed gross negligence and

argues for punitive damages. Count IX alleges a RICO violation

under both state and federal law. Count X alleges a violation of

Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA). Count

XI simply seeks exemplary damages and Count XII alleges unjust

enrichment.

All defendants note that the find-and-replace nature of the

Fifth Amended Complaint leads to inconsistencies. Apax argues:

Despite clearly articulating in all 5 prior

complaints that Apax’s limited role was as a

private equity firm allegedly involved in the

purchase of 3M EM in 2017, with his find-and-

replace scheme Plaintiff is now suddenly

alleging that Apax (and not Attenti):

manufactured the electronic monitoring

equipment Plaintiff wore while on probation

from 2008 to 2013; had contracts with the

Florida Department of Corrections for the past

20 years; was somehow involved in hiding

exculpatory evidence at Plaintiff’s violation

of probation hearings from 2008 to 2013;

provided company employees/experts to testify

at these hearings from 2008 to 2013; and its

CEOs (or employees under their watch)

concealed exculpatory evidence and/or

evidence of product defects at these hearings,

and joined in a conspiracy to conceal and

further their criminal conduct so they could

maintain lucrative government contracts. FAC

¶¶ 26, 29, 35, 37, 51, 61, 65.

(Doc. #87, p. 6.) Similarly, Sillitoe and Truwit also note the

“find-and-replace scheme” issues:

Apax’s actual role (as alleged in the five

prior complaints filed in this action) is

entirely separate. Apax is a British private

equity firm headquartered in London, England.

FAC ¶ 2. Until the find-and-replace scheme in

the FAC, Plaintiff’s only substantive

allegations as to Apax were that in 2017,

while the 2016 Lawsuit was still pending, 3M

Company “sold or ‘dumped’” 3M Electronic

Monitoring (n/k/a Attenti), the defendant in

the 2016 Lawsuit, to Apax who “then renamed it

to Attent[i]”—which allegedly constituted a

fraudulent conveyance to avoid payment of a

potential judgment. See Compl. DE 1 ¶¶ 13, 18,

54, 58; Am. Compl. DE 16 ¶¶ 15, 20, 61, 65;

2nd Am. Compl. DE 24 ¶¶ 16, 21, 66, 70; 3rd

Am. Compl. DE 55 ¶¶ 18, 26, 71, 75; 4th Am.

Compl. DE 57 ¶¶ 42-47, 151-155. Indeed, Apax

was only identified in Count X for Violation

of FDUTPA based on the alleged Fraudulent

Conveyance in 2017 (more than four years after

Plaintiff last used a monitoring device in

2013 (FAC ¶ 21)). DE 82 p. 18; 4th Am. Compl.

DE 57 ¶¶ 151-55.

In contrast, none of the FAC allegations

against Sillitoe and Truwit (all of which were

previously alleged against 3M Company CEO Mike

Roman) relate to the alleged 2017 fraudulent

conveyance. Instead, because of the find-and-

replace scheme, the FAC now alleges that Apax

(and not Attenti) was the manufacturer,

seller, and monitor of the electronic

monitoring device Plaintiff used from 2008 to

2013, and that Apax’s Co-CEOs (and not 3M

Company’s) were involved in an obstruction of

justice conspiracy to suppress evidence of

product defects at Plaintiff’s VOP hearings

from 2008 to 2013, thus causing him to be

wrongfully incarcerated. FAC ¶¶ 48-65, 149,

155.

(Doc. #93, p. 3.) Considering plaintiff’s pro se status, the Court

will assume that all counts apply to all three defendants as the

allegations do not clearly identify defendants with any

distinction.

III.

When a defendant challenges the Court’s personal jurisdiction

over it, “the plaintiff bears the ultimate burden of establishing

that personal jurisdiction is present.” Oldfield v. Pueblo De

Bahia Lora, S.A., 558 F.3d 1210, 1217 (11th Cir. 2009). The Court

accepts the allegations in the complaint as true, “to the extent

that they are uncontroverted by the Defendant’s affidavits and

depositions, and must construe all reasonable inferences in favor

of the Plaintiff.” Consol. Dev. Corp. v. Sherritt, Inc., 216 F.3d

1286, 1291 (11th Cir. 2000). “Vague and conclusory allegations do

not satisfy this burden.” Catalyst Pharms., Inc. v. Fullerton,

748 F. App'x 944, 946 (11th Cir. 2018) (citing Snow v. DirecTV,

Inc., 450 F.3d 1314, 1318 (11th Cir. 2006)). Under Federal Rule

of Civil Procedure 8(a)(2), a Complaint must contain a “short and

plain statement of the claim showing that the pleader is entitled

to relief.” Fed. R. Civ. P. 8(a)(2).

When analyzing a dismissal for lack of

personal jurisdiction, “we first determine

whether the applicable statute potentially

confers jurisdiction over the defendant.”

Republic of Panama v. BCCI Holdings

(Luxembourg) S.A., 119 F.3d 935, 942 (11th

Cir. 1997). Jurisdiction over a non-resident

defendant may be based upon a federal statute

or a state long-arm statute. If a basis exists

for exercising jurisdiction, we “then

determine whether the exercise of jurisdiction

comports with due process.” Id.

Courboin v. Scott, 596 F. App'x 729, 732 (11th Cir. 2014). Under

the Florida long-arm statute,

(1)(a) A person, whether or not a citizen or

resident of this state, who personally or

through an agent does any of the acts

enumerated in this subsection thereby submits

himself or herself and, if he or she is a

natural person, his or her personal

representative to the jurisdiction of the

courts of this state for any cause of action

arising from any of the following acts:

1. Operating, conducting, engaging in, or

carrying on a business or business venture in

this state or having an office or agency in

this state.

2. Committing a tortious act within this

state.

3. Owning, using, possessing, or holding a

mortgage or other lien on any real property

within this state.

4. Contracting to insure a person, property,

or risk located within this state at the time

of contracting.

Fla. Stat. § 48.193(1)(a). Further, “[a] defendant who is engaged

in substantial and not isolated activity within this state, whether

such activity is wholly interstate, intrastate, or otherwise, is

subject to the jurisdiction of the courts of this state, whether

or not the claim arises from that activity.” Fla. Stat. §

48.193(2).

In order for a court to exercise specific

jurisdiction over a claim, there must be an

“affiliation between the forum and the

underlying controversy, principally, [an]

activity or an occurrence that takes place in

the forum State.” Goodyear [Dunlop Tires

Operations, S.A. v. Brown, 564 U.S. 915, 919,

131 S. Ct. 2846 (2011)] (internal quotation

marks and brackets in original omitted). When

there is no such connection, specific

jurisdiction is lacking regardless of the

extent of a defendant's unconnected activities

in the State. See id., at 931, n.6, 131 S. Ct.

2846 (“[E]ven regularly occurring sales of a

product in a State do not justify the exercise

of jurisdiction over a claim unrelated to

those sales”).

Bristol-Myers Squibb Co. v. Superior Ct. of Cal., San Francisco

Cty., 137 S. Ct. 1773, 1781, 198 L. Ed. 2d 395 (2017).

The Declaration of Simon Cresswell (Doc.#87-1, Exh. A), a

partner in Apax and general counsel, provides that he resides in

England. Mr. Cresswell states that Apax did not purchase 3M

Electronic Monitoring Company from 3M and has never owned 3M

Electronic Monitoring Company in that name or in its current name

Attenti US, Inc. In fact, Apax has never developed, manufactured,

sold or monitored electronic monitoring equipment, and has never

been in the business of providing electronic monitoring services.

Apax has no connection or ties to Florida and does not engage in

or carry out business in Florida. Mr. Cresswell asserts that Apax

has not committed any tortious acts in the State of Florida and

did not engage in solicitation or service activities in Florida

that resulted in injury to Plaintiff.

The Declaration of Mitch Truwit (Doc. #93-3, Exh. 3) provides

that Truwit is a Co-CEO of Apax, a private equity advisory firm

based in London England. Truwit works in the New York office and

resides in Connecticut. The Declaration of Andrew Sillitoe (Doc.

#93-2, Exh. 2) provides that Sillitoe is also a Co-CEO of Apax but

he works out of the London office and resides in London, England.

Neither defendant has ever resided in Florida, owned or leased

property in Florida, maintained any records in Florida, owned a

business registered with the Florida Department of State, and have

never filed suit or been sued in the State of Florida before this

suit was filed. Neither have ever attended any meeting of 3M or

Attenti.

Setting aside the issue of plaintiff adding counts as to Apax

that were not present in the previous pleading, and the issue of

adding new parties after the deadline to do so, the Court finds

that the motion should be granted because the allegations are

insufficient to support personal jurisdiction. “Legal conclusions

without adequate factual support are entitled to no assumption of

truth.” Mamani v. Berzain, 654 F.3d 1148, 1153 (11th Cir. 2011)

(citations omitted). “Threadbare recitals of the elements of a

cause of action, supported by mere conclusory statements, do not

suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

Even if read in a light most favorable to plaintiff, the

Declarations contradict the vague and conclusory allegations in

the Fifth Amended Complaint. Plaintiff alleges a conspiracy

regarding defective equipment, and the failure to disclose known

defects to the electronic monitoring equipment that were

concealed. The Declarations clearly state that none of the three

defendants have any affiliation with Florida. Apax denies being

in the business of electronic monitoring equipment altogether and

without some nexus between the offending electronic monitoring

equipment and Apax, there can be no personal jurisdiction over

this defendant or its CEOs. The allegations that Apax was an

“investor/owner” and that 3M sold the company to Apax do not

constitute sufficient allegations of a “business or business

venture”, a tortious act, or anything more than an isolated

activity. See Edwards v. Airline Support Group, Inc., 138 So. 3d

1209, 1212 (Fla. 4th DCA 2014) (Noting “that the majority of courts

nationwide have found a fraudulent transfer does not constitute a

tortious act for purposes of Florida's long-arm statute.”).

IV.

Count X alleges a violation of Florida’s Uniform Fraudulent

Transfers Act (FUFTA) and Florida’s Deceptive and Unfair Trade

Practices Act (FDUTPA). Count X was the only count against Apax

in the Fourth Amended Complaint, and therefore will be the only

count considered in the Fifth Amended Complaint.

“In order to state a FDUTPA claim, a plaintiff ‘must allege

(1) a deceptive act or unfair trade practice; (2) causation; and

(3) actual damages.’ Dolphin LLC v. WCI Communities, Inc., 715

F.3d 1243, 1250 (11th Cir. 2013).” State Farm Mut. Auto. Ins. Co.

v. Performance Orthopaedics & Neurosurgery, LLC, 278 F. Supp. 3d

1307, 1326 (S.D. Fla. 2017). A deceptive or unfair trade practice

may be shown by per se violation or a traditional violation. Id.

Plaintiff alleges a violation of Fla. Stat. § 726.105 and 11 U.S.C.

§ 548 for a fraudulent transfer.

The federal statute, Section 548, is part of the Bankruptcy

Code and by its plain language only applies to fraudulent transfers

that may be avoided by a U.S. Trustee. 11 U.S.C. § 548(a)(1) (“The

trustee may avoid any transfer....”). The state law counterpart,

Section 726.105, falls under the Florida Uniform Fraudulent

Transfer Act (FUFTA) and “allows creditors to set aside a debtor's

transfer of assets to a third party under certain circumstances.”

Arlan Asset Mgmt., LLC v. A.F.A.B. Contractors, Inc., No.

3:17CV775-MCR/EMT, 2018 WL 6720412, at *4 (N.D. Fla. June 1, 2018).

This is not a creditor-debtor relationship and neither statute may

be used as a predicate offense under the FDUTPA.

A FDUTPA claim does not necessarily require the violation of

a predicate statute. “To establish a traditional FDUTPA violation,

plaintiff must show defendants engaged in “[u]nfair methods of

competition, unconscionable acts or practices, and unfair or

deceptive acts or practices in the conduct of any trade or

commerce.” State Farm, 315 F. Supp. 3d at 1300 (citations

omitted). Plaintiff must also demonstrate causation and actual

damages. Feheley v. LAI Games Sales, Inc., No. 08-23060-CIV, 2009

WL 2474061, at *5 (S.D. Fla. Aug. 11, 2009) (citing Rollins, Inc.

v. Butland, 951 So. 2d 860, 869 (Fla. 2d DCA 2006)).

“To satisfy the first element, the plaintiff must show that

“the alleged practice was likely to deceive a consumer acting

reasonably in the same circumstances.” Carriuolo v. Gen. Motors

Co., 823 F.3d 977, 983–84 (11th Cir. 2016) (quoting State, Office

of Attorney Gen., Dep’t of Legal Affairs v. Commerce Com. Leasing,

LLC, 946 So. 2d 1253, 1258 (Fla. 1st DCA 2007)). Plaintiff alleges

that Apax was an investor/owner that “advised funds for the

purchase of 3M”. (Doc. #84, ¶ 7.) Plaintiff generally alleges

unfair trade practices by Apax as part of a conspiracy with the

dismissed defendants for “financial gain and expansion of Attenti

Electronic Monitoring” as racketeering activity. (Id., ¶ 155.)

Plaintiff alleges that he was injured in his business and property

in the form of lost compensation and emotional harm as a “direct

result” of the predicate acts. (Id., ¶ 157.) The vague

allegations of a conspiracy for financial gain do not show how a

consumer would be deceived by an investor, nor how an investment

would directly harm plaintiff “in his business”. The Fifth Amended

Complaint will be dismissed.

Accordingly, it is now

ORDERED:

1. Defendant Apax Partners LLP’s Motion to Dismiss Fifth

Amended Complaint (Doc. #87) is GRANTED and defendant is

dismissed with prejudice.

2. Defendant’s Apax Co-CEOs Andrew Sillitoe and Mitch Truwit's

Motion to Dismiss Fifth Amended Complaint (Doc. #93) is

GRANTED and the defendants are dismissed with prejudice.

3. The Clerk shall enter judgment accordingly, terminate all

pending motions and deadlines as moot, and close the file.

DONE AND ORDERED at Fort Myers, Florida, this 10th day of

August 2021.

\ Pome Ap p

E. STEELE

SHNIOR UNITED STATES DISTRICT JUDGE

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