Failure to Appeal Post-Trial Personal Jurisdiction Ruling Forfeited Issue, Holds Eleventh Circuit

In Acrylicon USA, Inc. v. Silikal GmbH, No. 17-15737 (11th Cir. Jan. 26, 2021), the panel holds that while the defendant preserved a record of opposing personal jurisdiction at the pleadings and post-trial stages, it forfeited the argument on appeal by not appealing the post-trial ruling.

Plaintiff AcryliCon USA (AC-USA) sued Silikal in federal district court in Georgia for breach of a trade secret agreement and violation of the Georgia Trade Secrets Act (GTSA), based on its sale of a resin called 1961 SW. “A jury awarded AC-USA damages of $1.5 million on each of the two claims, and the District Court awarded AC-USA $3 million in punitive damages on the Misappropriation claim.”

At the pleadings stage, Sillikal moved under Fed. R. Civ. P. 12(b)(2) to dismiss for lack of personal jurisdiction. “According to Silikal, the Northern District of Georgia lacked jurisdiction over its person because Silikal had not sold 1061 SW in the United States to anyone other than AcryliCon. Accordingly, the GSA [contract], which designates the Northern District of Georgia as the jurisdiction for claims arising from activities in the United States, did not apply. For the same reason, Silikal also asserted that the Court could not exercise jurisdiction under any applicable long-arm statute.”

After the district court denied the motion – holding, based on competing affidavits, that the defendant did sell the relevant product in the state – Silikal moved to reconsider. “arguing that the Court’s ruling was based on the misimpression that R 61 and R 61 H were the same product. Since there was no evidence that R 61—as opposed to R 61 H—was 1061 SW, Silikal argued that there was no evidence that it sold 1061 SW to anyone other than AC-USA in the United States. Accordingly, Silikal concluded that the GSA did not supply a jurisdictional basis.” This motion was dismissed on timeliness grounds.

When the district court entered a preliminary injunction on the sale of the 1061 SW, Silikal appealed to the Eleventh Circuit, again raising the personal jurisdiction issue. But the court “declined to exercise … pendent jurisdiction to consider Silikal’s personal-jurisdiction argument on interlocutory appeal.”

Finally, on post-trial motions, Silikal raised the personal jurisdiction issue on appeal one more time. “The [district court] rejected the argument on two grounds. First, … trial testimony indicated that Silikal had distributed a sample of 1061 SW in the United States. Second, Silikal[‘s counsel] had admitted that it breached the GSA Contract, which harmed AC-USA in the United States.”

On appeal, one more time, Silikal raised the personal jurisdiction issue. The Eleventh Circuit affirms.

The panel begins by noting that the personal jurisdiction issue, although it must be preserved (or else forfeited) at the Rule 12(b)(2) phase, may be raised at any stage of the case. On a Rule 12(b)(2) motion to dismiss, the district court must hear and decide the issue “before trial unless the court orders a deferral until trial.” Fed. R. Civ. P. 12(i).

The plaintiff’s burden of production on personal jurisdiction varies with the stage of the proceedings. While it is generally sufficient at the beginning of the case to merely furnish prima facie proof of a basis for personal jurisdiction (usually on the papers, supported by affidavits), as the case progresses, the plaintiff must prove personal jurisdiction on the factual record by a preponderance of the evidence.  While the district court reserves the power to conduct an evidentiary hearing at the beginning of the case to determine the issue, a final determination is often reserved for later in the case.

“When the District Court revisited the issue post-trial, it offered two new grounds for finding personal jurisdiction. Both came to light during the trial and were not included in the Court’s pre-trial order denying the motion to dismiss. The District Court’s post-trial ruling was its final disposition of the personal jurisdiction issue. If the Court considered the record incomplete when it denied the motion to dismiss pre-trial, the record of the trial afforded it the opportunity to make a more informed jurisdictional ruling.”

By failing to appeal the post-trial order on personal jurisdiction, Silikal forfeits the issue. “In essence, Silikal asks us to review the motion-to-dismiss record to determine whether the District Court erred at that juncture, despite the fact that the Court, in its pre-trial order, deferred its final jurisdictional ruling until trial. Because Silikal makes no argument about the post-trial order, we do not review it.”

“Stated generally, we now hold that when a district court denies a motion to dismiss for lack of personal jurisdiction, and then revisits personal jurisdiction post-trial in light of the record as it exists at that time, the defendant must appeal the post-trial disposition in order to preserve the issue of personal  jurisdiction on appeal.”

(In the end, though Silikal receives satisfaction on the merits: the panel reverses the GTSA verdict outright, vacates damages on the contract claim, and remands for entry of only nominal damages.)

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