## Facts

- Charles Allen purchased securities through Oakbrook Securities Corp. in a transaction completed entirely outside Florida.
- The securities Allen bought were issued by a Florida corporation with its principal place of business in Florida.
- Allen alleged the sale involved material misrepresentations and omissions connected to the offering and sale of the securities.
- Allen sued Oakbrook in Florida circuit court asserting (1) securities fraud under Florida’s Securities and Investor Protection Act (Florida “Blue Sky” Law), including § 517.301, and (2) negligent misrepresentation.
- The trial court dismissed the complaint, reasoning it lacked subject-matter jurisdiction because the securities sale occurred outside Florida.
- Allen appealed the dismissal to the Fourth District Court of Appeal.

## Issues

1. Does Florida’s Blue Sky Law (§ 517.301) apply to a securities sale that occurred entirely outside Florida merely because the issuer is a Florida corporation headquartered in Florida?
2. Did the trial court err by dismissing the negligent misrepresentation claim for lack of subject-matter jurisdiction based on the out-of-state location of the securities sale?

## Decision

- Affirmed the dismissal of the § 517.301 (Chapter 517) securities-fraud claim because Florida’s Blue Sky Law did not apply to a transaction occurring wholly outside Florida.
- Clarified that the problem with the Chapter 517 count was statutory coverage (failure to state a claim under the Florida statute on these facts), not the circuit court’s subject-matter jurisdiction.
- Reversed the dismissal of the negligent misrepresentation claim and remanded, holding the circuit court had subject-matter jurisdiction over that common-law tort claim, notwithstanding the out-of-state sale.

## Legal Principles

- Florida’s Blue Sky Law generally applies to securities transactions occurring in Florida and is not applied to regulate transactions completed wholly outside the state.
- The issuer’s Florida incorporation and Florida principal place of business, standing alone, do not make an out-of-state securities sale actionable under § 517.301.
- In a Florida court of general jurisdiction, the absence of a viable statutory cause of action is a merits defect (failure to state a claim), not a subject-matter jurisdiction defect.
- Florida circuit courts have subject-matter jurisdiction over common-law tort claims such as negligent misrepresentation even when related statutory securities claims fail on territorial limits.

## Conclusion

The Fourth District Court of Appeal held that Chapter 517 did not reach Allen’s out-of-state securities purchase simply because the issuer was a Florida company, so dismissal of the Blue Sky claim was proper on the merits; however, the circuit court still had authority to hear Allen’s negligent misrepresentation claim, making dismissal for lack of subject-matter jurisdiction improper, and the case was remanded for further proceedings on that claim.


Allen v. Oakbrook Securities Corp., 763 So. 2d 1099 (1999)