                                                                      [PUBLISH]


               IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT                  FILED
                         ________________________         U.S. COURT OF APPEALS
                                                            ELEVENTH CIRCUIT
                                                                JUNE 27, 2001
                                No. 99-15321
                                                             THOMAS K. KAHN
                         ________________________                 CLERK
                   D. C. Docket No. 98-CV-00863-CV-J-16B

JOHN PHILLIP RISLEY, individually,
J. STEPHEN RISLEY, JR., individually, et al.,

                                                        Plaintiffs-Appellants,

                                     versus

NISSAN MOTOR CORP. USA,
a California corporation,

                                                        Defendant-Appellee.
                         ________________________

                  Appeal from the United States District Court
                      for the Middle District of Florida
                       _________________________
                               (June 27, 2001)


Before BLACK and MARCUS, Circuit Judges, and HANCOCK*, District Judge.

BLACK, Circuit Judge:




      *
        Honorable James H. Hancock, U.S. District Judge for the Northern District
of Alabama, sitting by designation.
          Appellee Nissan Motor Corporation distributes its automobiles through a

nationwide network of independently-owned dealerships. Appellants are the former

shareholders of two such dealerships located in Jacksonville, Florida. Appellants

claim Appellee violated the Florida Automobile Dealer’s Act, Fla. Stat. §§ 320.60-

320.70 (1997).1 For this violation, Appellants seek damages and attorney’s fees

pursuant to Fla. Stat. § 320.697. The district court granted summary judgment to

Appellee. We affirm.2

                                 I. BACKGROUND3

      Beginning in 1996, AutoNation,4 a non-party, embarked on a strategy of

purchasing automobile dealerships nationwide. In March 1997, AutoNation and

Appellee met to discuss AutoNation’s interest in acquiring Nissan dealerships.



      1
        This case involved events that occurred in 1997 and 1998. Thus, in this
opinion, all citations to the Florida Statutes refer to the 1997 version. However,
the 2000 (and most recent) version of the statutes at issue in this case is identical to
their 1997 version.
      2
        Appellants also claim that Appellee is liable, under Florida law, for abuse
of process and tortious interference of contract. The district court granted Appellee
summary judgment on these claims. We affirm. See 11th Cir. R. 36-1.
      3
         In their briefs, both parties state that they are in substantial agreement with
the district court’s recitation of the facts in its summary judgment order.
Appellants Br. 2; Appellee Br. 3 n.1. Therefore, the facts we set forth in this
opinion are drawn largely from the district court’s order.
      4
          AutoNation was previously known as Republic Industries, Inc.
                                           2
Appellee believed that the meeting produced an oral contract, under which

AutoNation agreed to limit its ownership of Nissan dealerships to 5% of those

available nationally without any time limitation. AutoNation, however, denied

entering into any oral contract.

      Thereafter, AutoNation and Appellee continued negotiations with the goal of

entering into a Parent Company Agreement (PCA) to govern AutoNation’s

ownership of Nissan dealerships. The only issue that remained unresolved was the

time frame for the proposed ownership limits. On November 21, 1997, Appellee

wrote a letter to AutoNation indicating that unless an agreement could be reached

regarding the PCA, Appellee would reject any dealership transfers to AutoNation.

      While the negotiations between AutoNation and Appellee were ongoing,

Appellants were exploring the possibility of AutoNation’s acquiring their two

dealerships in Jacksonville, Florida. On November 24, 1997, Appellants and

AutoNation entered into a merger agreement, under which Appellants would sell

their equity interests in the two dealerships in exchange for employment contracts,

stock options, and $ 6.7 million worth of AutoNation stock. Upon receiving notice

of the merger agreement, Appellee informed Appellants in a letter dated

December 22, 1997, that it had “significant issues” with AutoNation.




                                         3
      In a letter dated January 12, 1998, Appellee advised AutoNation that unless

a PCA was signed by January 16, 1998, Appellee would reject all further proposed

transfers, including the transfer of the two Jacksonville dealerships. The same

letter stated that recent developments had forced Appellee to question its trust of

AutoNation. Among other things, Appellee accused AutoNation of not adhering to

dealership policies, contrary to AutoNation’s prior representations.

      No PCA was signed by January 16, 1998. On January 20, 1998, Appellee

notified Appellants that it was rejecting the proposed transfer of the two

Jacksonville dealerships to AutoNation. On the same day, in order to block the

transfer, Appellee initiated an administrative proceeding by filing a verified

complaint with the Florida Department of Highway Safety and Motor Vehicles

(DHSMV).

      In the DHSMV proceeding, Appellee relied on two grounds under Florida

law to justify its decision to reject the proposed transfer: (1) AutoNation’s lack of

good moral character, Fla. Stat. §§ 320.643(1), 320.643(2)(a), and (2)

AutoNation’s lack of business experience, Fla. Stat. §§ 320.643(1), 320.644.

Appellants filed a motion to dismiss. Since the proposed transfer involved merely

a sale of stock (and not a transfer of the franchise agreement or a change in

executive management), the Florida administrative law judge (ALJ) ruled that Fla.


                                          4
Stat. § 320.643(2)(a) provided the sole basis for Appellee to object to the transfer.

The ALJ held that, under § 320.643(2)(a), the only permissible ground for

challenging a transfer is the transferee’s lack of good moral character. Therefore,

the ALJ dismissed Appellee’s complaint insofar as it alleged AutoNation lacked

business experience.

      With respect to AutoNation’s alleged bad moral character per

§ 320.643(2)(a), the ALJ held that Appellee’s verified complaint stated a prima

facie case. The allegations in the verified complaint were detailed and specific.

Some of the allegations touched upon AutoNation’s conduct with respect to the

dealerships it had already acquired. For instance, AutoNation allegedly did not

comply with Appellee’s dealer-ownership policies, in contravention of oral and

written representations made by AutoNation throughout 1997. Additionally,

AutoNation allegedly refused to give local management full and complete control

over dealership operations, in violation of AutoNation’s contractual obligations.

Notably, one of Appellee’s executives swore under oath and signed a statement

that the allegations in the verified complaint were true.




                                          5
      The ALJ rendered his ruling on March 24, 1998. On April 9, 1998,

however, Appellee withdrew its verified complaint.5 The withdrawal of the

verified complaint permitted Appellants and AutoNation to consummate their

merger, which they did on April 22, 1998. Nevertheless, Appellants contend that

they were damaged because the value of AutoNation’s stock dropped during the

delay in consummating the merger.

      On September 2, 1998, Appellants filed the instant lawsuit seeking damages

for losses related to Appellee’s attempt to block the transfer of their dealerships to

AutoNation. After discovery, the parties filed cross-motions for summary

judgment. The district court denied Appellants’ motion and granted Appellee’s

motion.

                           II. STANDARD OF REVIEW

      We review a grant of summary judgment de novo, applying the same

standard as the district court. See, e.g., Katz v. Comprehensive Plan of Group Ins.,

197 F.3d 1084, 1088 (11th Cir. 1999). This case requires us to examine the Florida

Dealer Protection Act (the Act), Fla. Stat. §§ 320.60-320.70 (1997). In rendering a


      5
         On the same day, Appellee filed a federal lawsuit in California against
AutoNation. In that lawsuit, summary judgement was entered against Appellee.
See Nissan Motor Corp. in USA v. Republic Indus., Inc., No. SACV 99-0109-DOC
(C.D. Calif. Feb. 5, 1999) (unpublished). In May 1999, Appellee and AutoNation
entered into a PCA.
                                           6
decision based on state substantive law, “we are bound to decide the case the way

it appears the state’s highest court would.” E.g., Royal Ins. Co. of Am. v. Whitaker

Contracting Corp., 242 F.3d 1035, 1040 (11th Cir. 2001) (internal quotation marks

and citation omitted).

                                  III. DISCUSSION

      Appellants’ suit is based on Fla. Stat. § 320.697, which provides a cause of

action to “[a]ny person who has suffered pecuniary loss or who has been otherwise

adversely affected because of a violation by a licensee of [the Act]” (emphasis

added). Appellants contend that Appellee, a licensee,6 violated the Act,

specifically Fla. Stat. § 320.643, when it filed the verified complaint and objected

to the transfer of the dealerships’ equity interest.

      Section 320.643 provides a mechanism to regulate the transfer of dealer

franchise agreements and equity interests. A licensee, like Appellee, is entitled to

written notice of any such transfer. To object to the transfer, a licensee must file a

verified complaint with the DHSMV no later than 60 days after receiving notice.

The available grounds for objection differ depending on the type of transfer. For a



      6
        A licensee is an automobile manufacturer, distributor, or importer. See Fla.
Stat. §§ 320.60(8), 320.61; see also Mercedes-Benz of N. Am. v. Mike Smith
Pontiac GMC, Inc., 561 So. 2d 620, 623 n.5 (Fla. 1st DCA 1990). The parties do
not dispute that Appellee qualifies as a “licensee.”
                                            7
transfer of a franchise agreement, a licensee, under § 320.643(1), may not

unreasonably withhold its approval, and all objections to the transfer — other than

objections to the transferee’s moral character or business experience — are

presumed to be unreasonable. In contrast, for a transfer of the equity interest, a

licensee, under § 320.643(2)(a), may object solely on the ground that the transferee

lacks good moral character.7

      The parties agree that Appellants were transferring merely their equity

interest, not the franchise agreement, to AutoNation. In light of the Florida

Supreme Court’s decision in Hawkins v. Ford Motor Co., 748 So. 2d 993 (Fla.

1999), Appellee concedes that it could properly object to the transfer solely under

§ 320.643(2)(a) and on the basis of AutoNation’s lack of good moral character.

See id. at 1000-02. Likewise, Appellants concede the ALJ was correct insofar as

he ruled that Appellee filed a legally sufficient verified complaint, under the Act,

when it objected to AutoNation’s lack of moral character.




      7
         If the transfer of equity interest results in a change of executive
management, then a licensee may also object pursuant to Fla. Stat. § 320.644. See
Hawkins v. Ford Motor Co., 748 So. 2d 993, 1001 (Fla. 1999). Under § 320.644, a
licensee may prevent a change in the executive management if the new
management lacks good moral character or business experience. The parties,
however, have not raised the applicability of § 320.644 in this case.
                                          8
      Nonetheless, Appellants contend that the filing of the verified complaint was

a “violation” of the Act, because Appellee would have lost on the merits had it not

voluntarily dismissed the complaint.8 In other words, according to Appellants, any

licensee who exercises its rights under § 320.643 by filing a legally sufficient

verified complaint, but who ultimately would lose on the merits, is in violation of

the Act and subject to damages and attorney’s fees under § 320.697. On the other

hand, Appellee contends that, since its verified complaint was legally sufficient, it

did not commit a “violation” of the Act.

      In arguing their positions, both parties rely on Mike Smith Pontiac, GMC,

Inc. v. Mercedes-Benz of North America, Inc., 32 F.3d 528 (11th Cir. 1994), where

we faced similar circumstances under the Act.9 In that case, the automobile


      8
         As an alternative argument, Appellants suggest that a licensee who
“unreasonably” objects to a transfer has violated § 320.643. Stated differently, to
avoid liability, a licensee need not prove that it would prevail in the DHSMV
proceeding; rather, the licensee would have to show it acted “reasonably” in
objecting to a proposed transfer. Appellants do not clearly define what objections
should be deemed unreasonable. If this case were before the Florida Supreme
Court, we are convinced the court would reject the vague, almost standardless test
proposed by Appellants.
      9
        The dissent in Mike Smith criticized the majority for failing to certify a
question of Florida law to the Florida Supreme Court. See Mike Smith, 32 F.3d at
535 (Hill, J. dissenting). The Florida Supreme Court has spoken favorably (albeit
in dictum) of other issues discussed in Mike Smith. See Hawkins, 748 So. 2d at
997 n.5. Furthermore, no Florida court has disagreed or cast doubt on our
discussion in Mike Smith. Thus, Mike Smith — though a decision of this Court
                                           9
dealership initially proposed transferring its equity interest to Mr. Cutler. See id. at

530. Later, the dealership notified the licensee that the equity interest would

instead be transferred to Mr. Taylor. See id. The licensee objected to the Taylor

transfer and filed a verified complaint under § 320.643. See id. The sole ground

cited in the licensee’s complaint was that the Taylor transfer might cause the

licensee to incur multiple liability. See id. The ALJ dismissed the complaint, and

on appeal, the Florida First District Court of Appeal affirmed. See id. (citing

Mercedes-Benz of N. Am. v. Mike Smith Pontiac GMC, Inc. 561 So. 2d 620, 625

(Fla. 1st DCA 1990)). In affirming, the Florida appellate court held:

      [T]he only basis for [the licensee’s] complaint was its fear that
      Cutler . . . would successfully force a transfer under the original
      transfer agreement. Since this is not a proper basis for a transfer
      challenge [under § 320.643], the [DHSMV] correctly dismissed the
      complaint.

Mercedes-Benz, 561 So. 2d at 624 (footnote omitted).

      Subsequently, the dealership and Mr. Taylor sued the licensee in federal

court under § 320.697. The dealership and Mr. Taylor argued that, in initiating the

administrative proceeding, the licensee had “violated” § 320.643. We agreed and

held “where a [licensee] opposes a transfer on grounds not permitted under


and not the Florida Supreme Court — provides an appropriate analytical
framework for us to comply with the mandate that we must construe Florida law as
the Florida Supreme Court would.
                                           10
§ 320.643, that [licensee] must be deemed . . . to have violated this statute.” Mike

Smith, 32 F.3d at 533 (emphasis in original). We also stated, “It is clear from the

language of § 320.643 that a licensee has a right to object to a proposed transferee

and, when properly asserted, the objection is free from fear of reprisal under

§ 320.697.” Id. at 532 (emphasis added).

      Appellants contend Mike Smith dictates a reversal of the district court’s

summary judgment order. Stated simply, in Appellants’ view, Appellee’s verified

complaint was “not permitted” and not “properly asserted” because, although the

complaint was legally sufficient, Appellee would have ultimately lost on the

merits. As such, Appellants contend that Appellee committed a “violation”

pursuant to § 320.697.

      We disagree with Appellants’ construction of Mike Smith and § 320.697.

Mike Smith did not say that, for a licensee to be free from fear of reprisal under

§ 320.697, it had to file a successful or meritorious objection under § 320.643. In

using the words “not permitted” and “[not] properly asserted,” Mike Smith was

referring to complaints that were legally insufficient under the Act — that is,

complaints warranting dismissal because they lacked “a proper basis for a transfer

challenge.” Mercedes-Benz, 561 So. 2d at 624. Thus, a licensee does not violate

the Act pursuant to § 320.697 when it files a legally sufficient verified complaint,


                                          11
irrespective of whether the licensee would ultimately prevail in the challenge to the

proposed transfer.10

                                IV. CONCLUSION

      In this case, Appellee, a licensee, adhered to an administrative mechanism

created under the Florida Dealer Protection Act for the purpose of regulating equity

transfers in automobile dealerships. In accordance with § 320.643(2)(a), Appellee

filed, under oath, a verified complaint with detailed allegations about the

transferee’s lack of moral character. The ALJ correctly ruled that the allegations, if

proven true, were legally sufficient for Appellee to block the equity transfer. As

such, Appellee did not commit a “violation” pursuant to § 320.697,11 and the

district court properly granted summary judgment to Appellee.

      AFFIRMED.




      10
        In this case, Appellee’s complaint was properly verified, as one of
Appellee’s officers swore under oath that the allegations were truthful. We do not
decide whether a violation would have occurred had Appellee not properly verified
the complaint.
      11
         Since we conclude Appellee did not violate § 320.697, we need not
address the argument, advanced by Appellee, that holding it liable under § 320.697
would violate its “right . . . to petition the Government for a redress of grievances.”
U.S. Const. amend. I.
                                          12
