Skyhop Techs., Inc. v. Narra

• Decision Date: 26 January 2023
• Docket Number: 21-14051
• Citation: 58 F.4th 1211
• Parties: SKYHOP TECHNOLOGIES, INC., a Delaware corporation, SkyHop Global, LLC, a Florida limited liability company, Kristine Scotto, an Individual, Plaintiffs-Appellants, v. Praveen NARRA, an Individual, Indyzen, Inc., a California corporation d.b.a. AppDevelopment.com, Inc. d.b.a. Tech.US, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

58 F.4th 1211

SKYHOP TECHNOLOGIES, INC., a Delaware corporation, SkyHop Global, LLC, a Florida limited liability company, Kristine Scotto, an Individual, Plaintiffs-Appellants,

v.Praveen NARRA, an Individual, Indyzen, Inc., a California corporation d.b.a. AppDevelopment.com, Inc. d.b.a. Tech.US, Inc., Defendants-Appellees.

No. 21-14051

United States Court of Appeals, Eleventh Circuit.

Filed: January 26, 2023

Alexander Esteban, Armando Rosquete, Bell Rosquete Reyes Esteban, PLLC, Coral Gables, FL, Omar Ortega, Reinaldo J. Dorta, Jr., Rosdaisy Rodriguez, Dorta & Ortega, PA, Coral Gables, FL, Javier Angel Reyes, Murai Wald Biondo & Moreno, PA, Coral Gables, FL, for Plaintiffs-Appellants.

Robert L. Parks, Gabriel A. Garay, Garay Law, Coral Gables, FL, for Defendants-Appellees.

Before William Pryor, Chief Judge, Rosenbaum, and Marcus, Circuit Judges.

Rosenbaum, Circuit Judge:

Nobody enjoys flight delays. They are disruptive for airlines, passengers, and crew members alike. And any number of things can cause them: to name just a few, severe weather, faulty equipment, or the unavailability of pilots and crew members.

Plaintiffs-Appellants SkyHop Global, LLC, SkyHop Technologies, Inc., and Kristine Scotto (collectively, "SkyHop") and Defendants-Appellees Praveen Narra and his company Indyzen, Inc. (collectively, "Indyzen" (unless otherwise indicated)) have taken aim at that last problem source: the unavailability of pilots and crew members. Together, they have developed and deployed digital software aimed at transporting crew members to and from airports across the country. And business has taken off. SkyHop has about eighty contracts with fifteen airlines, including major carriers like Delta, American, and United.

But now SkyHop and Indyzen dispute who owns the digital software. And beyond that, they disagree on where their dispute should be decided. Indyzen has filed an arbitration action in California (where it is based), alleging various forms of breach of contract and other promises. Meanwhile, SkyHop has filed this federal lawsuit in Florida (where it is based), alleging that Indyzen violated the federal Computer Fraud and Abuse Act ("CFAA") and the Florida Computer Abuse and Data Recovery Act ("CADRA").

In response, Indyzen sought to dismiss this action for lack of personal jurisdiction. It argued that the exercise of personal jurisdiction over it in Florida satisfied neither the Florida long-arm statute nor the Due Process Clause of the Fourteenth Amendment. The district court agreed and entered an order dismissing SkyHop's complaint.

We see things differently. The allegations in SkyHop's complaint, which we must accept as true on a motion to dismiss, suggest that SkyHop is the rightful owner of the digital software. And because Indyzen has refused to relinquish possession of the digital software without additional payment, SkyHop's complaint states a cause of action under the CFAA. The complaint therefore satisfies the Florida long-arm statute. And it also meets the requirements of the Due Process Clause because the emails that Indyzen sent into Florida triggered SkyHop's claims. So after careful review, and with the benefit of oral argument, we reverse the district court's order and remand for further proceedings.

I. Background¹

SkyHop Global, LLC, primarily offers a service to airlines: it provides ground transportation for flight crews to and from airports across the nation. To do this, SkyHop uses proprietary digital software, including a web-based program called SkyPlan and two mobile applications, SkyHop Crew and SkyHop Driver (collectively, the "Software").

SkyPlan uses flight manifests and real-time data to create schedules to pick up and drop off flight-crew members. Meanwhile, the mobile apps communicate and coordinate between flight crews and drivers on the ground. According to the First Amended Complaint, the operative complaint here, SkyHop Technologies, Inc. ("SkyHop Tech"), owns all this technology, and it licenses it to SkyHop Global. In turn, SkyHop Global has contracts with fifteen airlines and operates in twenty-one cities in eleven states. Both SkyHop Tech and SkyHop Global operate from their headquarters in Broward County, Florida.

Two password-protected cloud servers that are hosted by Amazon Web Services ("AWS") and physically located in Virginia house the SkyPlan program. One AWS account has the production server and SkyPlan's operational version, while the other account contains the staging server and its testing version. SkyHop Tech pays for both accounts.

Of course, the Software did not always exist. Rather, the process to develop it began in June 2014. Plaintiff Kristine Scotto—a Florida resident and one of SkyHop's founders—met with developers to discuss the development of what would become the Software. One of these developers was Defendant Praveen Narra. Narra resides in California and traveled to Fort Lauderdale, Florida, in 2014 to meet with Scotto. Scotto and her then-business partner reached an understanding with Narra that each of the three would own 32% of a newly formed entity that would become SkyHop Tech, with a fourth partner owning the remaining 4%.

After bringing Narra on board, SkyHop Tech contracted with Narra's California-based development company, Indyzen, Inc.—which does business under the name Tech.US—to develop and maintain the Software. That partnership has lasted for a few years. Since 2014, SkyHop Tech and Indyzen have signed several software-development and maintenance contracts for the ongoing services that Indyzen has provided. And in total, Narra has made three separate trips to Florida (in 2014, 2016, and 2018) to meet with Scotto about the relationship between the companies. All told, SkyHop Tech has paid Indyzen roughly $2.6 million—the full amount it owes under the agreements between the companies—for the development and maintenance of the Software.

As the party who developed and maintains the Software, Indyzen possesses what SkyHop Tech calls SkyHop's Digital Property: the source code for SkyHop's mobile apps, the outside vendor accounts those apps use to function (including the AWS accounts), the application programming interfaces for the apps, the relevant domain names, DNS service,² signing keys, and all corresponding passwords required to operate, develop, and maintain the Software.³ One of the relevant AWS accounts is in Narra's name while the other is in Indyzen's name (in its own right), and both accounts use Narra's personal residence as the account address.

Around the time Narra joined the venture and the parties sought to incorporate SkyHop Tech, the relationship between Scotto and her then-business partner began to break down, resulting in a lawsuit filed in January 2015. While Narra was never a party to that lawsuit, he twice represented during the course of those proceedings that he relinquished any ownership interest he had in SkyHop Tech. The parties based their settlement agreement resolving that dispute—five years later, in March 2020—on Narra's relinquishment of the ownership interest.

A few months later, on January 9, 2021, Scotto, in her role as the chief executive officer of SkyHop Global and President of SkyHop Tech, informed Narra that SkyHop Tech planned to hire in-house developers to take over development and maintenance of the Software. As a result, Scotto explained, SkyHop Tech planned to terminate its relationship with Indyzen.

Two days later, Narra responded by email that he would "turn over all the source code and intellectual property developed for SkyHop Tech[ ]" in exchange for slightly over $1.1 million. In reply, SkyHop Tech counteroffered $75,000 for three months of support and consulting. Indyzen did not accept. Instead, Tech.US's chief revenue officer, Rob Milks, emailed Scotto and reiterated Narra's offer to turn over the Software for roughly $1.1 million. A few days later, Narra sent another email to say that, if the parties could not reach a financial agreement, Scotto should transfer a 32% stake in SkyHop Tech to Narra individually.

On February 9, SkyHop Tech, through its counsel, sent a demand letter to Narra. In that letter, SkyHop Tech asserted that Indyzen lacked any property right in the Software and that Indyzen's refusal to transfer was "inconsistent with SkyHop Tech's ownership rights in its Property." The letter "demand[ed] that by March 1, 2021, Indyzen transfer possession of SkyHop's Property to SkyHop Tech." That did not occur.

Rather, on March 12, in San Jose, California, Indyzen (in its own right) filed a Demand for Arbitration against SkyHop Global, SkyHop Tech, and Scotto with the American Arbitration Association. A few months later, Indyzen filed an Amended Demand listing Narra as an additional claimant.

SkyHop responded by suing Indyzen in the Southern District of Florida. SkyHop raised six causes of action, including three claims under the CFAA, 18 U.S.C. § 1030 ; one claim under the Florida CADRA, Fla. Stat. § 668.803 ; and two claims seeking a declaratory judgment concerning the arbitrability of the dispute.

Indyzen moved to dismiss for lack of personal jurisdiction and, in the alternative, for improper venue.⁴ In support of the motion, Indyzen included Narra's affidavit, which asserted additional facts relevant to the jurisdiction inquiry. In the motion, Indyzen argued that personal jurisdiction was improper in Florida because the Florida long-arm statute was not satisfied and the exercise of jurisdiction did not comport with the Due Process Clause. Indyzen also contended that a valid and applicable forum-selection clause in the contracts required any litigation between the parties to be brought in Santa Clara County, California.

SkyHop opposed Indyzen's motion seeking dismissal. In support of its position, SkyHop argued Florida's long-arm statute supported jurisdiction because, in relevant part, Narra claimed an ownership interest in a Florida-based company and Indyzen committed a tortious act in...