United States District Court, S.D. Florida
AARON DATA SYSTEMS, INC., a Florida corporation and OZCOIN, INC., a Texas corporation, Plaintiffs,
GLD INTERNATIONAL, INC., a Delaware corporation d/b/a CRYPTOGLD; CITIGOLD CORPORATION LIMITED, an Australian public company organized under the laws of the Commonwealth of Australia; JOHANNES BREYTENBACH, individually; GREGORY BREYTENBACH, individually; JOHN FOLEY, individually; and MARK LYNCH, individually, Defendants.
REPORT AND RECOMMENDATION
S. SELTZER UNITED STATES MAGISTRATE JUDGE.
CAUSE is before the undersigned pursuant to the
District Court's Order of Referral to Magistrate Judge
Seltzer for all Pretrial Proceedings (DE 25) and
Defendants' Motion to Dismiss for Forum Non
Conveniens and Lack of Personal Jurisdiction (DE 12).
After reviewing the parties' pleadings, memoranda of law,
and supporting affidavits, and after hearing oral argument on
the issue of forum non conveniens, the undersigned
recommends that Defendants' Motion to Dismiss for
Forum Non Conveniens (DE 12) be GRANTED; that the
Complaint for Damages and Injunctive Relief (DE 1) be
DISMISSED; and that Plaintiffs be instructed that any future
complaint arising from the same subject matter be filed in
Allegations of the Complaint
Data Systems, Inc. (“ADSI”) is a Florida
corporation; it alleges that its principal place of business
is in Florida. OZcoin, Inc. (“OZcoin”) is
incorporated in Texas; it alleges that its principal place of
business is in Florida. Both Plaintiffs are internet-based
companies and neither maintains a physical location (other
than for mail receipt and corporate records storage) in the
United States, or anywhere else.
filed the instant Complaint (DE 1) in the Southern District
of Florida. Plaintiffs assert claims for conversion, breach
of fiduciary duty, and Deceptive and Unfair Trade Practices
under Florida law, as well as for conspiracy and
“aiding and abetting.” They seek damages and
injunctive relief against six defendants: GLD International,
Inc. (“GLD”), a Delaware corporation with its
principal place of business in New York; Citigold Corp., Ltd.
(“Citigold”), an Australian company with its
principal place of business in Australia; Johannes
Breytenbach (“J. Breytenbach”), a New Zealand
citizen with his primary residence in Queensland, Australia;
Gregory Breytenbach (“G. Breytenbach”), a New
Zealand citizen with his primary residence in New York; John
Foley (“Foley”), an Australian citizen with his
primary residence in Queensland, Australia; and Mark Lynch
(“Lynch”), an Australia citizen with residences
in Australia and the United Arab Emirates. Defendant Foley
sat on the board of directors of both Plaintiff OZcoin and
Defendant Citigold. Defendant J. Breytenbach was named as an
officer/director/Chief Technology Officer and a member of
Plaintiff OZcoin's Executive Committee (DE 22-1).
Defendant G. Breytenbach served as Plaintiff OZcoin's
social media manager. Defendant Lynch was the CEO of
to the Complaint (DE 1), ADSI's principal, Terry Aronson
(who holds dual United States and Australian citizenship),
was approached by Foley about ADSI creating and leading a
fundraising initiative for Citigold. Aronson and Foley were
long-time family friends from Australia. (DE 22-1). The
Complaint alleges that ADSI conceived the concept of a 100%
gold-backed cryptocurrency and created a licensed mobile app
to build the cryptocurrency. ADSI's cryptocurrency and
blockchain applications were developed and tested by
programmers in Switzerland and the United Kingdom (DE 22-1,
¶ 5). At a meeting that took place in Australia, ADSI
proposed utilizing gold assets owned by Citigold as
collateral for the cryptocurrency (DE 34). ADSI and Citigold
proceeded to execute an agreement (DE 1, ¶ 46), again in
Australia, pursuant to which ADSI formed an affiliate,
OZcoin, to market and promote the gold-backed cryptocurrency.
(DE 1, ¶ 47).
obtaining a license from ADSI to use its cryptocurrency
technology, OZcoin and Citigold entered into a Gold
Certificates and Security Agreement (DE 1-11) that granted
OZcoin a collateral security lien over 100, 000 ounces of
gold owned by Citigold; this gold formed the backing for
OZcoin's cryptocurrency. The gold would be purchased by
OZcoin, mined by Citigold, and stored at the Perth
(Australia) Mint with OZcoin holding gold certificates issued
by the Perth Mint (DE 1-11). Known as OzcoinGold
(“OzGLD”), the gold-backed cryptocurrency was
launched on March 10, 2017, with a promotion at the 2017
South by Southwest Conference and Festivals
(“SXSW”) in Austin, Texas.
April 2017, relations between OZcoin and Citigold began to
deteriorate when Defendant Lynch, at a meeting in Australia,
proposed an operating agreement that allegedly differed in
substantial fashion from the parties' prior agreements.
According to Plaintiffs, matters deteriorated further when,
in May 2017, Defendants Foley and J. Breytenbach met in
Australia and illegally removed Aronson as an officer of
OZcoin and orchestrated an allegedly fraudulent release of
OZcoin's security interest in Citigold's 100, 000
ounces of gold. Simultaneously, Foley, J. Breytenbach, and
Lynch “surreptitiously plotted to incorporate a
separate entity to launch a cryptocurrency clone of
OZcoinGold called CryptoGLD.” (DE 1, ¶ 105).
Defendant GLD International, Inc., was allegedly formed under
Delaware law for the alleged purpose of operating CryptoGLD.
(DE 1, ¶¶ 1-5, 110).
was launched in June 2017, “declaring itself ‘the
World's First 100% Gold-Backed Cryptocurrency'”
(DE 1, ¶ 112). CryptoGLD is allegedly based on the same
technology as that developed by ADSI. Citigold allegedly
announced that it had terminated its previous gold purchase
agreement with ADSI and, instead, entered into a gold
purchase agreement with GLD International. Plaintiffs contend
that Foley and J. Breytenbach were still serving as officers
and directors of OZcoin and/or ADSI while engaged in direct
competition with OZcoin through GLD International.
Defendants' Motion to Dismiss
move to dismiss the Complaint on the grounds of forum non
conveniens and lack of personal jurisdiction. “[A]
district court has discretion to respond at once to a
defendant's forum non conveniens plea, and need
not take up first any other threshold objection”
including “whether it has authority to adjudicate the
cause (subject matter jurisdiction) or personal jurisdiction
over the defendant if it determines that, in any event, a
foreign tribunal is plainly the more suitable arbiter of the
merits of the case.” Sinochem Int'l Co., Ltd.
v. Malaysia Int'l Shipping Corp., 549 U.S. 422, 425
(2007). Accordingly, this Report and Recommendation addresses
only Defendants' forum non conveniens argument.
argue that Australia is the appropriate forum because access
to witnesses and documentary proof is far superior in
Australia than in Florida, because the plaintiff corporations
have no presence (other than incorporation) in the United
States, and because foreign law governs this action.
Plaintiffs argue that Defendants do not satisfy the standard
for dismissal for forum non conveniens because
Plaintiffs' choice of forum is entitled to deference,
because certain non-party witnesses reside in the United
States or are willing to travel to the United States to
testify, and because relevant documents in the custody of
non-parties such as the Commonwealth Bank of Australia and
the Perth Mint are actually under the “control”
of at least one of the plaintiffs or defendants and, thus,
are subject to production. Plaintiffs also dispute that the
choice of law issue is determinative in identifying the
appropriate forum for this case.
Forum Non Conveniens Standards
doctrine of forum non conveniens allows a federal
court to dismiss an action if a foreign court is a more
appropriate and convenient forum for adjudicating a case.
See Sinochem, 549 U.S. at 425. To obtain dismissal
based on forum non conveniens, the moving party must
“establish that ‘(1) an adequate alternative
forum is available, (2) the public and private factors weigh
in favor of dismissal, and (3) the plaintiff can reinstate
his suit in the alternative forum without undue inconvenience
or prejudice.'” Tazoe v. Airbus S.A.S.,
631 F.3d 1321, 1330 (11th Cir. 2011) (quoting Leon v.
Million Air, Inc., 251 F.3d 1305, 1310-11 (11th Cir.
Adequate Alternative Forum
evaluating Defendants' request for dismissal based on
forum non conveniens, this Court first must consider
(1) whether the alternative forum of Australia is adequate
and (2) whether that forum is available. See Tazoe,
631 F.3d at 1330. An alternative forum is inadequate
“only in rare circumstances where the remedy offered by
the other forum is clearly unsatisfactory.” Aldana
v. Del Monte Fresh Produce N.A., 578 F.3d 1283, 1290
(11th Cir. 2009) (internal quotation marks omitted). Such a
remedy is insufficient when it is “no remedy at
all.” Piper Aircraft Co. v. Reyno, 454 U.S.
235, 254 (1981); see Aldana, 578 F.3d at 1290. An
alternative forum is available if the foreign court can
assert jurisdiction over the litigation. See Leon,
251 F.3d at 1311. Generally, this requirement is met
“when the defendant is ‘amenable to process'
in the other jurisdiction.” Piper Aircraft
Co., 454 U.S. at 254 n.22 (quoting Gulf Oil Corp. v.
Gilbert, 330 U.S. 501, 506-07 (1947)).
the parties do not dispute that Australia is an adequate
forum for Plaintiffs' claims. Nor does the Court have any
reason to doubt that the courts of that nation would offer
Plaintiffs an adequate remedy. Defendant Foley, a licensed
barrister in Queensland, Australia, filed an affidavit in
support of the Motion to Dismiss [DE 16]. Foley opined that
the Supreme Court of Queensland is a common law court of
unlimited jurisdiction, with proceedings conducted in
English. He stated that he has “confidence that
plaintiffs in the instant action can receive due process and
a fair hearing in the Supreme Court of Queensland.” (DE
16, ¶ 7). Indeed, the Gold Certificates and Security
Agreement (DE 1-11) between Citigold and OZcoin expressly
provides that the “agreement is governed by the laws of
New South Wales, Australia, and the parties submit to the
non-exclusive jurisdiction of that state.” (DE
1-11 ¶2) (emphasis added). Having reviewed Foley's
affidavit, the agreement of OZcoin to submit to the
jurisdiction of the Australian courts, and the underlying law
concerning forum non conveniens, the undersigned
concludes that the requirement of an available, adequate
alternative forum requirement is met. See Kolawole v.
Sellers, 863 F.3d 1361, 1370 (11th Cir. 2017) (defendant
satisfied the initial burden of establishing the availability
of an adequate alternative forum through the affidavit of a
Nigerian law professor who opined on the adequacy of relief
available in a Nigerian forum).
The Presumption of Deference
a forum is both available and adequate, courts proceed to
analyze the private and public factors relevant to forum
non conveniens.” Kolawole, 863 F.3d at
1371. The first inquiry is “a determination as to the
proper deference to afford the plaintiff's choice of
forum: there is normally a ‘strong presumption'
that a plaintiff has chosen a convenient forum.”
Id. (citing Leon, 251 F.3d at 1314). The
presumption is stronger when the plaintiff is a citizen of
the United States, Wilson v. Island Seas Invs. Ltd.,
590 F.3d 1264, 1269 (11th Cir. 2009), but weakens when the
plaintiff is a foreign citizen. King v. Cessna Aircraft
Co., 562 F.3d 1374, 1382 (11th Cir. 2009) (per curiam).
case, Plaintiffs are two corporations that are incorporated
in the State of Florida and the State of Texas, respectively.
Plaintiffs argue that their status as United States
corporations grants them a strong presumption of deference.
They argue that their presence in the United States is not a
mere formality and that, in fact, they are American