Case 4:20-cv-00181-CDL Document 125 Filed 11/30/21 Page 1 of 9
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE MIDDLE DISTRICT OF GEORGIA
`COLUMBUS DIVISION
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`Plaintiff,
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`REFRESCO BEVERAGES US INC.,
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`vs.
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`CALIFORMULATIONS, LLC, et al.,
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`Defendants.
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`CASE NO. 4:20-CV-181 (CDL)
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`O R D E R
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`Plaintiff Refresco Beverages US Inc. alleges that The Green
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`Organic Dutchman Holdings Ltd. (“TGOD”) encouraged several
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`individual Defendants to breach their fiduciary duties to
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`Refresco’s predecessor-in-interest, Cott Beverages, and tortiously
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`interfered with several Defendants’ contracts with Cott Beverages.
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`TGOD filed a motion to dismiss Refresco’s complaint, arguing that
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`this Court does not have personal jurisdiction over TGOD and that
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`Refresco fails to state a claim for relief. For the following
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`reasons, that motion (ECF No. 116) is denied.
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`DISCUSSION
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`To determine whether the Court can exercise personal
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`jurisdiction over TGOD, the Court must decide (1) whether the Court
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`can exercise personal jurisdiction under the forum state’s
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`(Georgia) long arm statute, and (2) whether exercising personal
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`jurisdiction over TGOD would violate the Due Process Clause of the
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE MIDDLE DISTRICT OF GEORGIA
`COLUMBUS DIVISION
`
`Plaintiff,
`
`
`REFRESCO BEVERAGES US INC.,
`
`
`
`vs.
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`CALIFORMULATIONS, LLC, et al.,
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`
`
`Defendants.
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`*
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`*
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`*
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`*
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`*
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`CASE NO. 4:20-CV-181 (CDL)
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`O R D E R
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`Plaintiff Refresco Beverages US Inc. alleges that The Green
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`Organic Dutchman Holdings Ltd. (“TGOD”) encouraged several
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`individual Defendants to breach their fiduciary duties to
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`Refresco’s predecessor-in-interest, Cott Beverages, and tortiously
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`interfered with several Defendants’ contracts with Cott Beverages.
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`TGOD filed a motion to dismiss Refresco’s complaint, arguing that
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`this Court does not have personal jurisdiction over TGOD and that
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`Refresco fails to state a claim for relief. For the following
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`reasons, that motion (ECF No. 116) is denied.
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`DISCUSSION
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`To determine whether the Court can exercise personal
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`jurisdiction over TGOD, the Court must decide (1) whether the Court
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`can exercise personal jurisdiction under the forum state’s
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`(Georgia) long arm statute, and (2) whether exercising personal
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`jurisdiction over TGOD would violate the Due Process Clause of the
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`Case 4:20-cv-00181-CDL Document 125 Filed 11/30/21 Page 2 of 9
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`Fourteenth Amendment. Mut. Serv. Ins. Co. v. Frit Indus., Inc.,
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`358 F.3d 1312, 1319 (11th Cir. 2004).
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`I.
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`Personal Jurisdiction under Georgia’s Long Arm Statute
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`Georgia’s long arm statute provides for personal jurisdiction
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`over a nonresident if the nonresident, “in person or through an
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`agent . . . (1) Transacts any business within this state; [or] (3)
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`Commits a tortious injury in [Georgia] caused by an act or omission
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`outside of [Georgia] if the tort-feasor regularly does or solicits
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`business, or engages in any other persistent course of conduct, or
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`derives substantial revenue from goods used or consumed or services
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`rendered in [Georgia].” O.C.G.A. § 9-10-91. A nonresident
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`defendant “transacts any business” in Georgia when it “has
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`purposefully done some act or consummated some transaction in”
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`Georgia, although the defendant “need not physically enter the
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`state.” Diamond Crystal Brands, Inc. v. Food Movers Int’l, Inc.,
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`593 F.3d 1249, 1264 (11th Cir. 2010) (quoting Robertson v. CRI,
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`Inc., 601 S.E.2d 163, 166 (Ga. Ct. App. 2004)). A court should
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`“examine all of a nonresident’s tangible and intangible conduct
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`and ask whether it can fairly be said that the nonresident has
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`transacted any business within Georgia.” Id.
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`The following factual allegations, supplemented by evidence
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`discovered during jurisdictional discovery, are relevant to
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`2
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`Case 4:20-cv-00181-CDL Document 125 Filed 11/30/21 Page 3 of 9
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`whether TGOD transacted business in Georgia for purposes of the
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`Georgia long arm statute.1
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`TGOD is a Canadian corporation with its principal place of
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`business in Ontario. Compl. ¶ 8, ECF No. 1. TGOD produces organic
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`cannabis products. In 2018, Symrise Inc. and two executives of
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`Cott Beverages (Edmund O’Keeffe and Tyrone Polhamus) decided to
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`share their proposal to form a new Georgia-based beverage
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`incubator, “NewCo/Califormulations,” with TGOD because they
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`believed there was a “lucrative market for cannabis-infused
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`beverages.” Id. ¶ 263. O’Keeffe approached TGOD’s Senior Vice
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`President of Sales, Michael Gibbons, and told him that Refresco
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`was going to buy Cott Beverages. At the time, that information
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`was not publicly known. Id. ¶ 266. Csaba Reider, TGOD’s
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`president, informed O’Keeffe and Polhamus that TGOD was interested
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`in the proposal and that Matt Schmidt would “take the lead” for
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`TGOD regarding TGOD’s potential participation. Id. ¶ 286.
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`TGOD representatives sent multiple emails and made multiple
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`phone calls to individuals in Georgia in connection with their
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`interest in the NewCo proposal. These contacts include, among
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`other correspondence, (1) a January 2019 email to O’Keeffe in which
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`Schmidt indicated TGOD was interested in investing subject to due
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`1 Refresco’s complaint describes an alleged conspiracy among various
`Defendants to steal its trade secrets and employees. Those facts are
`recounted in greater detail in a previous Order. See Order (Sep. 22,
`2021), ECF No. 94.
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`3
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`Case 4:20-cv-00181-CDL Document 125 Filed 11/30/21 Page 4 of 9
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`diligence and further review, and (2) February 2019 emails to
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`O’Keeffe in which Schmidt asked whether O’Keeffe’s “key guys” were
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`“good to go” and informed O’Keeffe that the NewCo “deal needs to
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`be contingent on the top R&D guy joining.” Compl. ¶¶ 336, 339.
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`TGOD President Csaba Reider also discussed including a lab for
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`TGOD scientist, Prem Virmani, in NewCo’s proposed Columbus,
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`Georgia location. Id. ¶ 280. No such lab was ever constructed
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`for Virmani, though, and Virmani never worked for NewCo in any
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`capacity. TGOD did, however, acknowledge that its investment would
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`mean that important Cott personnel, including several named
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`Defendants, would join Califormulations. See Pl.’s Resp. to Def.’s
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`Mot. to Dismiss Ex. 14, Summary of Proposed Terms and Conditions
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`for Investment in Califormulations, LLC 0009, ECF No. 122-13 (“Toby
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`Polhamus, Khanh Ly and Jason Pontes will be appointed as the
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`officers of the Company[.]”).
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`The Green Organic Beverage Corp., which is TGOD’s subsidiary,
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`is a 15% owner of Califormulations. Compl. ¶ 21. TGOD set up
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`this subsidiary “for the purpose of holding TGOD’s ownership stake
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`in Califormulations.”2 Id. Further, TGOD’s Chief Financial
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`Officer, Sean Bovingdon, is a member of Califormulations’ Board of
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`Managers. Id. In this role, Bovingdon participates in “oversight
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`2 TGOD initially argued that the subsidiary’s actions could not be
`attributed to it. After completing jurisdictional discovery, however,
`TGOD abandoned this argument. Am. Renewal of Def.’s Mot. to Dismiss,
`ECF No. 116.
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`4
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`Case 4:20-cv-00181-CDL Document 125 Filed 11/30/21 Page 5 of 9
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`of the management of Califormulations by its executive officers,”
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`but has “no role in directing the day-to-day operations of
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`Califormulations and [has] no authority to enter into contracts or
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`otherwise bind Califormulations.” Bovingdon Aff. ¶ 10, ECF No.
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`54-2. Califormulations’ website advertises TGOD’s involvement
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`with the company, stating that Califormulations “combines the
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`expertise of the Columbus Group, Symrise, . . . [and] the offering
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`of [TGOD].” Compl. ¶ 21. TGOD likewise issued a press release
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`advertising its role as an “investor and strategic partner” in
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`Califormulations, which was to operate out of Columbus, Georgia.
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`Pl.’s Resp. to Def.’s Mot. to Dismiss Ex. 5, Press Release, TGOD,
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`The Green Organic Dutchman Enters US Market Through Cornerstone
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`Investment in Califormulations LLC, ECF No. 122-4 at 4 (“TGOD Press
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`Release”).
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`TGOD argues that it did not “transact business” in Georgia
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`because its contacts with Georgia were limited to emails and phone
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`calls to people in Georgia and a minority investment in
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`Califormulations, a Delaware LLC with its principal place of
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`business in Georgia. In support of this argument, TGOD cites
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`LABMD, Inc. v. Tiversa, Inc., an unpublished opinion by a panel of
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`the Eleventh Circuit in which the panel found that the defendants’
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`actions—calling the plaintiff who was in Georgia, sending the
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`plaintiff nine e-mails offering intelligence and security
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`services, and accessing the plaintiff’s document on a peer-to-peer
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`5
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`Case 4:20-cv-00181-CDL Document 125 Filed 11/30/21 Page 6 of 9
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`network using computers outside of Georgia—were insufficient to
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`subject the defendant to personal jurisdiction under the first and
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`third prongs of Georgia’s long arm statute given that the defendant
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`was “not registered to do business in Georgia, [had] no employees
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`or customers in Georgia, deriv[ed] no revenue from business
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`activities in Georgia, own[ed] no Georgia property, and pa[id] no
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`Georgia taxes.” 509 F. App’x 842, 845 (11th Cir. 2013) (per
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`curiam). In addition, the panel noted that, generally, “when a
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`defendant uses the telephone or email to contact a Georgia
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`resident[,] [the] defendant’s conduct occurs at the place where
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`[the] defendant speaks into the telephone or types and sends his
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`email.” Id.
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`Notwithstanding this unpublished panel opinion, it is clear
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`that telephone calls and emails that originate outside the state
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`but are directed into the state are relevant to the long arm
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`statute inquiry. As explained in a published Eleventh Circuit
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`opinion, because “a defendant need not physically enter the state”
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`to transact business in Georgia, “a nonresident’s mail, telephone
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`calls, and other ‘intangible’ acts, though occurring while the
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`defendant is physically outside of Georgia, must be considered.”
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`Diamond Crystal Brands, 593 F.3d at 1264.
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`Moreover, TGOD did not simply send emails to Georgia contacts
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`advertising its services, as was the case in LABMD. Instead,
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`TGOD’s emails and phone calls reflect active negotiation of a
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`6
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`Case 4:20-cv-00181-CDL Document 125 Filed 11/30/21 Page 7 of 9
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`strategic partnership with Califormulations, which culminated in
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`TGOD’s purchase of a 15% interest in Califormulations and placement
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`of Sean Bovingdon, TGOD’s Chief Financial Officer, on
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`Califormulations’ Board of Managers.
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`TGOD also argues that its interest in Califormulations and
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`Bovingdon’s position on Califormulations’ Board of Managers do not
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`constitute “transacting business” in Georgia under the long arm
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`statute. TGOD contends that merely holding an interest in a
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`company is insufficient to subject it to jurisdiction in Georgia,
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`as doing so here would mean that any minority shareholder could be
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`subject to suit in Georgia simply for owning stock in a Georgia
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`corporation. TGOD, however, is not simply a passive silent
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`stockholder. TGOD held a 15% interest in Califormulations as a
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`self-described “strategic partner” of an LLC that does not sell
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`its stock on the open market. TGOD Press Release. TGOD also
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`argues that Sean Bovingdon’s role in Califormulations is
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`irrelevant because Bovingdon could not bind Califormulations to
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`contracts and did not oversee day to day management of the LLC.
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`Bovingdon, however, admittedly participated in “oversight of the
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`management of Califormulations by its executive officers,”
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`Bovingdon Aff. ¶ 10, and a reasonable interpretation of the
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`evidence and circumstances supports the conclusion that Bovingdon
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`sat on the board on behalf of TGOD. The Court finds that TGOD’s
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`ownership interest in Califormulations, combined with Bovingdon’s
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`7
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`Case 4:20-cv-00181-CDL Document 125 Filed 11/30/21 Page 8 of 9
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`role on the board and TGOD’s numerous emails and calls to
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`individuals located in Georgia, constitute “transacting business”
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`in Georgia under the long arm statute.
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`II. Personal Jurisdiction under the Due Process Clause
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`Having found personal jurisdiction under the long arm
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`statute, the Court must be satisfied that the exercise of that
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`jurisdiction does not offend due process. That inquiry requires
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`the Court to determine “(1) whether the plaintiff’s claims ‘arise
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`out of or relate to’ at least one of the defendant’s contacts with
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`the forum; (2) whether the nonresident defendant ‘purposefully
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`availed’ himself of the privilege of conducting activities within
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`the forum state, thus invoking the benefit of the forum state’s
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`laws; and (3) whether the exercise of personal jurisdiction
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`comports with ‘traditional notions of fair play and substantial
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`justice.’” Louis Vuitton Malletier, S.A. v. Mosseri, 736 F.3d
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`1339, 1355 (11th Cir. 2013) (quoting Burger King Corp. v.
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`Rudzewicz, 471 U.S. 462, 472-73, 474-75 (1985)).
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`Based on the present record, the Court has little trouble
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`concluding that exercising personal jurisdiction over TGOD here
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`does not offend TGOD’s constitutional due process rights. First,
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`Refresco’s claims arise from TGOD’s contacts with Georgia.
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`Refresco claims that TGOD aided and abetted several Defendants in
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`their breaches of contract and fiduciary duties. TGOD’s contacts
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`with Georgia include active negotiations suggesting that TGOD’s
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`8
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`Case 4:20-cv-00181-CDL Document 125 Filed 11/30/21 Page 9 of 9
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`investment was contingent on several Defendants joining
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`Califormulations. Summary of Proposed Terms and Conditions for
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`Investment in Califormulations, LLC 0009, ECF No. 122-13. Second,
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`TGOD purposefully availed itself of jurisdiction in Georgia
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`through its negotiations and eventual investment in a Georgia LLC.
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`Lastly, personal jurisdiction over TGOD would comport with
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`traditional notions of fair play and substantial justice. TGOD
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`argues that it is unfair to subject it to suit in Georgia when it
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`is a foreign corporation located in Canada. The Court finds that
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`argument unpersuasive given that TGOD appears to have actively
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`negotiated partial ownership of an LLC with its principal place of
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`business in Georgia. TGOD’s motion to dismiss for lack of personal
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`jurisdiction is denied.
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`CONCLUSION
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`For the foregoing reasons, TGOD’s motion to dismiss (ECF No.
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`116) is denied.3 The current stay in this action is hereby lifted,
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`and a Rules 16/26 order will be issued.
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`IT IS SO ORDERED, this 30th day of November, 2021.
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`S/Clay D. Land
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`CLAY D. LAND
`U.S. DISTRICT COURT JUDGE
`MIDDLE DISTRICT OF GEORGIA
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`3 TGOD’s motion to dismiss for failure to state a claim merely rehashes
`arguments made by the other Defendants in their respective motions to
`dismiss, which the Court denied in large part. The Court denies TGOD’s
`motion for the same reasons set forth in the Court’s Order denying the
`other Defendants’ motions. See generally Order (Sep. 22, 2021), ECF No.
`94.
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`9
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