Paul Horn borrowed $500,000 from Noble Prestige Limited to pursue a claim for damages against AT&T for Horn’s sale to AT&T’s predecessor of his ownership share of a telecommuncations platform. Horn agreed to repay Noble $5,000,000 or 5% of his recovery, whichever was greater. In 2014, after receiving the $500,000, Horn filed suit against AT&T in Colorado state court.
Horn suffers from a mental illness causing neurological impairments. In 2017, while the litigation with AT&T was pending, a conservatorship proceeding was instituted in the Denver Probate Court, and that court entered an order appointing Horn’s longtime lawyer, Craig Galle, as Special Conservator for Horn’s estate, authorized to make any and all decisions about the AT&T litigation. Galle settled the AT&T case for $57,500,000, with the proceeds paid into Horn’s estate. After the settlement, Noble sought payment of the $5,000,000 it claimed it was owed, but the Probate Court denied Galle permission to pay Noble because of questions it had about the enforceability of the Noble-Horn agreement. Noble instituted arbitration against Horn in the Hong Kong International Arbitration Centre (“HKIAC”).
Galle learned of the arbitration and asked the Probate Court to authorize him to protect Horn’s interest in the arbitration, which it did. The HKIAC tribunal, however, did not consider Galle’s authority sufficient under Hong Kong law, and issued two orders—one prohibiting Galle’s participation in the arbitration, and one ordering Galle to pay Noble’s costs incurred in litigating the issue of Galle’s authority. The arbitration continued without Horn, and the arbitration tribunal issued a final award ordering Horn to pay Noble $5,000,000.
Noble sought to have all three arbitration awards confirmed by the United States District Court for the Southern District of Florida, naming Horn, Galle, and Galle’s law firm as respondents in the confirmation proceeding. Noble also filed an ex parte application for a temporary restraining order imposing limits on the respondents’ ability to transfer money, including the money in the estate subject to conservatorship. Galle and his firm moved to dismiss. The district court heard from all parties on the motion to dismiss, but permitted only Noble to argue with respect the request for TRO.
The district court granted the motion to dismiss as to the law firm, but denied it as to Galle, holding that Galle’s voluntary participation in the arbitration gave the court subject-matter jurisdiction over him. The court granted the motion for TRO, ordering Galle and his firm, “notwithstanding any order(s) entered by the Probate Court,” not to “dissipate, transfer, send, sequester, or deplete. . . .the sum of US$10,000,000 [sic] from amount remaining of the payment in respect of Horn’s [payment from AT&T].” The order did not specify an end date for the freeze.
The respondents appealed. After confirming its jurisdiction over the order freezing funds (but not the order on the motion to dismiss), the court, in a decision written by Judge Marcus, vacated the order. Noble Prestige Ltd. v. Galle, 83 F.4th 1366 (11th Cir. 2023). The court had jurisdiction over the freeze order because even though the order was titled a “temporary restraining order,” it was really a preliminary injunction. The order had no end date, and its imposition of restrictions on Galle’s authority with respect to the funds changed, rather than preserved, the status quo. The court lacked appellate jurisdiction to consider the order on the motion to dismiss, however, because that order dismissed claims against just one party and did not conclude the litigation. (The respondents argued that the court could exercise pendent appellate jurisdiction over the order on the motion to dismiss, as a panel of the Eleventh Circuit had previously decided, but the court decided that the non-appealable matters were not “inextricably intertwined” with the appealable decision, as required for that doctrine to apply.)
Turning to the merits, the court held that the injunction had to be vacated for two reasons. First, the injunction ran afoul of the doctrine of “prior exclusive jurisdiction,” also called “Princess Lida” jurisdiction after Princess Lida of Thurn & Taxis v. Thompson, 305 U.S. 456 (1939). Under that doctrine, “when ‘a court of competent jurisdiction has obtained possession, custody, or control of particular property, that possession may not be disturbed by any other court.’” The doctrine applies to proceedings in rem, and “[t]here can be no question that the Denver Probate Court has asserted in rem jurisdiction over the assets of the Conservatorship estate”; the relevant Colorado statute conveys “exclusive jurisdiction” over the protected person’s estate, and the assets remain subject to the court’s custody and control even after a conservator is appointed. Accordingly, because the probate court order preceded the district court order, “the district court’s entry of the preliminary injunction represents an assertion of in rem jurisdiction that the court was powerless to make.” This did not require that the petition to confirm the arbitration awards be dismissed; the award of in personam relief, requiring the respondents to pay money, did not implicate the prior exclusive jurisdiction doctrine. But because the district court’s order reached farther than that, and assumed control of a res already subject to the state court’s jurisdiction, it had to be vacated.
Indeed, the court would have vacated the order even apart from the doctrine of prior exclusive jurisdiction, because Noble’s petition sought only legal, not equitable, relief. Noble did request a TRO, but its petition asserted no equitable claims and sought no equitable relief. As such, the court lacked jurisdiction to enter a preliminary injunction.