Molex Company, LLC et al v. Andress
MEMORANDUM OPINION AND ORDER that plaintiffs' motion to remand, defendant'smotion to dismiss or to transfer venue, and defendants motion to strike all areDENIED; Plaintiffs' motion for lift of the stay on discovery and to reschedule th e evidentiary hearing is GRANTED in part and DENIED in part; it is ORDERED that the stay on discovery is lifted, and that the parties must proceed todiscovery on all matters that may be relevant to plaintiffs' application for preliminary injunct ive relief; Plaintiffs' motion to compel discovery is GRANTED, and defendant is ORDERED to participate in good faith in the discovery process; the parties are ORDERED to file a joint report by 8/20/2012, addressing the status of defendant's motion for protection from discovery; A hearing on plaintiffs' motion for preliminary injunctive relief will be reset by separate order; as more fully set out in order. Signed by Judge C Lynwood Smith, Jr on 8/10/2012. (AHI )
2012 Aug-10 PM 12:24
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
MOLEX COMPANY, LLC, and
PACIFIC MINING REAGENTS,
Civil Action No. 5:12-cv-2098-CLS
MEMORANDUM OPINION AND ORDER
Plaintiffs Molex Company, LLC (“Molex”) and Pacific Mining Reagents, Ltd.
(“Pacific”) originally commenced this action in the Circuit Court of Limestone
County, Alabama, asserting claims against defendant Charles Andress, a former
consultant for plaintiffs, for a temporary restraining order and injunctive relief to
redress violations of the Alabama Trade Secrets Act, Ala. Code § 8-27-1 et seq.,
monetary damages and permanent injunctive relief under that Act, damages for
breach of fiduciary duty, and a declaratory judgment that defendant has an obligation
to maintain the confidentiality of and refrain from using plaintiffs’ confidential and
proprietary information.1 Defendant removed the case to this court on June 7, 2012,
asserting federal jurisdiction based on satisfaction of the requirements of the diversity
See Complaint, appended to doc. no. 1 (Notice of Removal).
statute, 28 U.S.C. § 1332.2
The case currently is before this court on the following motions: (1) plaintiffs’
motion to remand;3 (2) defendant’s motion to dismiss for lack of jurisdiction,
improper venue, insufficient form and service of process, failure to state a claim upon
which relief can be granted, and, alternatively, motion to transfer venue;4 (3)
defendant’s motion to strike Exhibit 1 to plaintiffs’ brief in opposition to defendant’s
motion to dismiss;5 (4) plaintiff’s motion for a lift of stay of discovery and to reset an
evidentiary hearing on all pending motions;6 and (5) plaintiffs’ motion to compel
I. MOTION TO REMAND
The motion to remand must be considered first, because it addresses this
court’s subject matter jurisdiction. Federal district courts are tribunals of limited
jurisdiction, “‘empowered to hear only those cases within the judicial power of the
United States as defined by Article III of the Constitution,’ and which have been
entrusted to them by a jurisdictional grant authorized by Congress.” University of
Doc. no. 1 (Notice of Removal).
Doc. no. 7.
Doc. no. 9.
Doc. no. 19.
Doc. no. 26.
Doc. no. 11.
South Alabama v. The American Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999)
(quoting Taylor v. Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994)).
Accordingly, an “Article III court must be sure of its own jurisdiction before
getting to the merits” of any action. Ortiz v. Fiberboard Corp., 527 U.S. 815, 831
(1999) (citing Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 88-89
A removing defendant bears the burden of proving that federal jurisdiction
exists. See, e.g., Leonard v. Enterprise Rent A Car, 279 F.3d 967, 972 (11th Cir.
2002); Williams v. Best Buy Co., 269 F.3d 1316, 1319-20 (11th Cir. 2001)); Kirkland
v. Midland Mortgage Co., 243 F.3d 1277, 1281 n.5 (11th Cir. 2001) (“[T]he burden
is on the party who sought removal to demonstrate that federal jurisdiction exists.”)
(citing Tapscott v. MS Dealer Service Corp., 77 F.3d 1353, 1356 (11th Cir. 1996),
overruled on other grounds by Cohen v. Office Depot, Inc., 204 F.3d 1069 (11th Cir.
Further, removal statutes must be construed narrowly, and “all uncertainties as
to removal jurisdiction are to be resolved in favor of remand.” Russell Corp. v.
American Home Assurance Co., 264 F.3d 1040, 1050 (11th Cir. 2001) (citing Burns
v. Windsor Insurance Co., 31 F.3d 1092, 1095 (11th Cir. 1994)).
Plaintiffs’ argument in support of remand is based solely on the assertion that
the $75,000 statutory amount in controversy has not been satisfied. See 28 U.S.C. §
1332(a) (setting forth the $75,000 minimal jurisdictional amount in controversy).8
“When jurisdiction is premised on the diversity of the parties, the district court is
obligated to assure itself that the case involves the requisite amount in controversy.”
Morrison v. Allstate Indemnity Co., 228 F.3d 1255, 1261 (11th Cir. 2000) (citations
omitted). Further, the court must focus upon the amount that was in controversy on
the date the case was removed from state court. See, e.g., Burns, 31 F.3d at 1097
n.13 (“Jurisdictional facts are assessed on the basis of plaintiff’s complaint as of the
time of removal.”) (emphasis in original) (citations omitted); see also, e.g., Leonard,
279 F.3d at 972 (same).
Plaintiffs did not request a specific amount of damages on any of the claims in
their complaint.9 Therefore, the removing defendant bears the burden of proving that
the requisite jurisdictional amount was in controversy on the date of removal because,
whenever a plaintiff “fails to specify the total amount of damages demanded” in a
state court complaint — either by demanding a specific sum in compensatory
damages, but an indefinite amount as punitive damages, or by not designating any
No party contests that the citizenship of the parties is diverse. Indeed, plaintiffs state in
their complaint that Molex is an Alabama resident, Pacific is a resident of the Cayman Islands, and
defendant is a Texas resident. See Complaint, at ¶¶ 1-3.
See, e.g., Complaint, at 10 (plaintiffs request “a judgment in their favor and against
Defendant for compensatory and punitive damages, interest, costs, and attorneys’ fees” on their trade
secrets claim); id. at 11 (same, for plaintiff’s breach of fiduciary duty claim).
amounts at all (e.g., “compensatory and punitive damages in such amounts as the jury
may award”) — then “a defendant seeking removal based on diversity jurisdiction
must prove by a preponderance of the evidence that the amount in controversy
exceeds the $75,000 jurisdictional requirement.” Leonard, 279 F.3d at 972 (emphasis
supplied) (citing Tapscott, 77 F.3d at 1356-57 (“[W]here a plaintiff has made an
unspecified demand for damages in state court, a removing defendant must prove by
a preponderance of the evidence that the amount in controversy more likely than not
exceeds the [$75,000] jurisdictional requirement.”).
Defendant cannot satisfy his burden through pure speculation, without offering
any supporting facts or specific allegations. Lowery v. Alabama Power Co., 483 F.3d
1184, 1209, 1215 (11th Cir. 2007). On the other hand, “specific factual allegations
establishing jurisdiction and [supporting] them (if challenged by the plaintiff or the
court) with evidence combined with reasonable deductions, reasonable inferences, or
other reasonable extrapolations” will suffice. Pretka v. Kolter City Plaza II, Inc., 608
F.3d 744, 754 (11th Cir. 2010) (bracketed alteration supplied). A removing defendant
may offer “a wide range of evidence,” including affidavits, depositions, or other
“summary judgment-type evidence” to establish the amount in controversy. Id. at
Most of defendant’s arguments in support of satisfaction of the amount in
controversy are either unpersuasive or premised upon inaccurate interpretations of the
In his Amended Notice of Removal, defendant makes two statements about the
amount in controversy. First, he states that plaintiffs’ complaint “indicates that
Plaintiff [sic] seeks monetary relief in excess of $75,000.00 and Defendant herein
alleges that the actual amount of damages is in excess of the minimum amount in
controversy requirement for diversity jurisdiction pursuant to 28 U.S.C. § 1332.”10
affirmatively alleges that the damages sought by Plaintiff exceed the
$75,000.00 jurisdictional minimum amount of controversy for diversity
and alienage jurisdiction. Plaintiff’s “Complaint for Temporary
Restraining Order, Preliminary Injunction and Monetary Relief” is
attached hereto, and hereby incorporated by reference . . . . This
controversy involves amounts in excess of $100,000.00.11
To support that allegation, defendant references paragraph 12 of plaintiffs’ complaint,
Defendant became involved [in] Molex’s Frother Product
development efforts early on. Molex needed to test and validate its
various prototype formulations to measure their performance in mining
applications. Defendant is a metallurgist with mining experience, who
in the 1990’s was employed by one of Molex’s customers. Defendant
agreed to be a consultant to Molex and, over the years, assisted in the
testing verifying and validating the performance of the prototype
Doc. no. 2 (Amended Notice of Removal), at 1.
Id. at 2 (citations to the complaint omitted).
formulations. Defendant received in excess of $100,000 in exchange for
his consulting services.12
Plaintiffs aptly point out that their allegations in paragraph 12 do not “relate in any
way” to the amount of their damages.13 Instead, paragraph 12 only alleges that
plaintiffs paid defendant a significant sum for his consulting services, a fact that
defendant has not disputed. The amount of defendant’s paycheck has nothing to do
with how much plaintiffs were harmed by defendant’s alleged actions.14
In his response to plaintiffs’ remand motion, defendant also points to paragraph
8 of plaintiffs’ complaint, in which plaintiffs state that they spent “hundreds of
thousands of dollars” developing the Frother Products.15 Defendant asserts that
plaintiffs’ development costs are “potentially recoverable” in this lawsuit.16
Defendant relies upon the decision of the former Fifth Circuit Court of Appeals in
University Computing Co. v. Lykes-Youngstown Corp., 504 F.2d 518 (5th Cir.
Complaint, at ¶ 12 (emphasis supplied).
Doc. no. 8 (brief in support of motion to remand), at 9.
The court is not persuaded by defendant’s argument that plaintiffs’ payment to him of over
$100,000 for consulting services, coupled with plaintiffs’ offer for an additional $55,000 to sign a
confidentiality agreement after he left plaintiffs’ employment, indicate that plaintiffs value their trade
secrets at at least $155,000. Plaintiffs paid defendant $100,000 for his services, not necessarily for
Complaint, at ¶ 8. Kevin Bennett, Molex’s President, also attested to that fact in the
affidavit he submitted in support of plaintiffs’ motion for a temporary restraining order or
preliminary injunction in state court. See doc. no. 5-2, at 22 (Affidavit of Keith Bennett), ¶ 5.
Doc. no. 17 (defendant’s response to plaintiff’s motion to remand), at ¶ 12.
1974),17 where the Court stated that the “reasonable royalty” measure of damages in
trade secret cases has sometimes “been taken to mean the difference in costs to the
defendant of developing the trade secret on his own, using the actual development
costs of the plaintiff as the complete measure of damages.” Id. at 538 (citing Servo
Corp. v. General Electric Co., 342 F.2d 993 (4th Cir. 1965), cert. denied, 383 U.S.
However, the former Fifth Circuit’s opinion in the University
Computing case went on to criticize that method because it “simply uses the
plaintiff’s actual costs, and in our view is frequently inadequate in that it fails to take
into account the commercial context in which the misappropriation occurred.” Id.
Based upon those statements, the court does not consider plaintiffs’ product
development costs to be strong evidence of their trade secret damages.
Finally, defendant argues that the amount in controversy “must ” exceed
$75,000 because plaintiffs have refused to stipulate that a lower amount is in
controversy.18 That argument also is without merit, because the Eleventh Circuit has
clearly held that a plaintiff’s refusal to stipulate to the amount in controversy cannot
constitute proof that the amount is below the jurisdictional threshold. See Williams,
269 F.3d at 1320 (“There are several reasons why a plaintiff would not so stipulate,
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the
Eleventh Circuit adopted as binding precedent all decisions of the former Fifth Circuit handed down
prior to the close of business on September 30, 1981.
Doc. no. 17, at ¶ 21 (emphasis in original); see also doc. no. 17, at Exhibit C.
and a refusal to stipulate standing alone does not satisfy Best Buy’s burden of proof
on the jurisdictional issue. Thus, the pleadings are inconclusive as to the amount in
controversy.”) (emphasis supplied).
Some of defendant’s other arguments, however, are more persuasive.
Defendant asserts that, with regard to plaintiffs’ claim for declaratory relief, the
amount in controversy is the “monetary value of the object of the litigation from
[plaintiffs’] perspective.” Weiner v. Tootsie Roll Industries, Inc., 412 F. App’x 224,
227 (11th Cir. 2011) (quoting Federal Mutual Insurance Co. v. McKinnon Motors,
LLC, 329 F.3d 805, 807 (11th Cir.2003); Cohen, 204 F.3d at 1077) (internal quotation
marks omitted). According to defendant, the “object of the litigation” is plaintiffs’
Frother Products, and the amount in controversy is, therefore, the value of those
products. The court disagrees with this characterization. The object of the litigation
is defendant’s alleged misuse of plaintiffs’ trade secrets, and while those trade secrets
may be related to the Frother Products, that does not mean that the value of plaintiffs’
claim is the same as the value of the products themselves. Instead, plaintiffs should
be able to recover an amount sufficient to compensate them for any harm caused by
defendant’s alleged actions.
Even though defendant has mischaracterized the nature of plaintiffs’ damages,
the evidence he offers in support of his argument still is helpful in determining the
real value of plaintiffs’ claims. Defendant offers evidence that plaintiff Pacific sold
$188,320 worth of the Frother Products to a company called Simplot Phosphates,
LLC (“Simplot”) between September 19, 2011 and March 29, 2012, and that Simplot
consistently purchased approximately $300,000 worth of those products from Pacific
each year.19 Because plaintiffs have alleged that defendant used their trade secrets to
develop a product to sell to Simplot, and to thereby “steal” Simplot as a client, it is
reasonable to consider the value of plaintiffs’ past sales to Simplot in determining
how much defendant’s alleged misuse of trade secrets has cost plaintiffs.20
Defendant also points to plaintiff’s right to damages under the Alabama Trade
Secrets Act itself. That Act provides, in pertinent part, that “[t]he remedies available
for actual or threatened misappropriation of a trade secret” include, in addition to
[r]ecovery of any profits and other benefits conferred by the
misappropriation that are attributable to the misappropriation[.] (In
establishing the misappropriator’s profits, the complainant is required
to present proof only of the misappropriator’s gross revenue, and the
misappropriator is required to present proof of his or her deductible
Doc. no. 17, Exhibit 1 (Affidavit of Charles Andress), at ¶ 4.
Defendant also asserts that he once arranged a sale from a supplier that brought in more
than $300,000 for Pacific. See doc. no. 17, at ¶ 17. The court sees no connection between that fact
and any damages plaintiffs may have suffered as a result of defendant’s alleged misappropriation of
trade secrets. That is true even in light of plaintiffs’ request that defendant sign an agreement
promising not to disclose any of its suppliers. There is no allegation that defendant did disclose any
suppliers, or that plaintiffs lost any suppliers or customers, or otherwise suffered any economic loss
related to suppliers.
expenses and the elements of profit attributable to factors other than the
Ala. Code § 8-27-4(a)(1)(b).
If there is a finding of “willful and malicious
misappropriation,” the plaintiff also can recover attorney’s fees and “[e]xemplary
damages in an amount not to exceed the actual award made under subdivision (1), but
not less than ten thousand dollars ($10,000).” Ala Code §§ 8-27-4(a)(2)(c) & 8-274(a)(3).21
In conclusion, even if the evidence of business lost by plaintiffs as a result of
defendant’s alleged misuse of trade secrets is the only consideration taken into
account, this court finds that it is more likely true than not true that the amount in
controversy exceeds $75,000. Evidence of any profits or other benefits defendant
may have received, as well the consideration of potential exemplary damages and
attorney’s fees, only adds further support to that conclusion. Accordingly, defendant
has satisfied his burden of establishing, by a preponderance of the evidence, that the
requirements of diversity jurisdiction have been satisfied. Plaintiffs’ motion for
remand is due to be denied.
II. MOTION TO STRIKE AND MOTION TO DISMISS
OR TO TRANSFER VENUE
Defendant moved to dismiss plaintiffs’ complaint for lack of personal
Plaintiffs have alleged that defendant’s misappropriation was “knowing, willful, wanton,
malicious and oppressive and warrants the imposition of punitive damages.” Complaint, at ¶ 37.
jurisdiction, failure to state a claim upon which relief can be granted, and insufficient
service of process. He alternatively moved to transfer venue to the United States
District Court for the Southern District of Texas, Houston Division. Defendant also
moved to strike a portion of plaintiffs’ evidentiary submission.
Motion to Strike
Defendant asks this court to strike the supplemental affidavit of Keith Bennett,
which was filed under seal as “Exhibit 1" to plaintiffs’ brief in opposition to
defendant’s motion to dismiss or motion to transfer venue.22 Defendant asserts that
the notary seal on the affidavit is defective, that Bennett is a lay witness, that
Bennett’s allegations are not based upon personal knowledge, that the affidavit sets
out facts that are not admissible in evidence, that the affidavit was made in bad faith,
and that Bennett’s testimony is speculative or conclusory. Most of defendant’s
arguments are under-developed and conclusory, and all of them are without merit.
Defendant’s motion to strike is due to be denied.
Federal Rule of Civil Procedure 12(b) provides, in pertinent part, that a party
may assert by motion the defense of lack of personal jurisdiction. Fed. R. Civ. P.
12(b)(2). The plaintiff asserting jurisdiction over a non-resident defendant has the
See doc. no. 19 (motion to strike). Plaintiffs’ brief in opposition to defendant’s motion to
dismiss is doc. no. 16.
burden of establishing a prima facie case of personal jurisdiction, which can be done
by producing enough evidence to withstand a motion for directed verdict. Stubbs v.
Wyndham Nassau Resort and Crystal Palace Casino, 447 F.3d 1357, 1360 (11th Cir.
2006) (citing Meier ex rel. Meier v. Sun International Hotels, Ltd., 288 F.3d 1264,
1268-69(‘11th Cir.2002)). The court must accept as true all the allegations of the
plaintiff’s complaint, except to the extent that the defendant presents evidence to
contradict those allegations. If that occurs, then the burden shifts back to plaintiffs
to “produce evidence supporting personal jurisdiction.” Stubbs, 447 F.3d at 1360.
When the parties present conflicting evidence, the court must “construe all reasonable
inferences in favor of the plaintiff.” Id.
Alabama’s long-arm statute authorizes the exercise of personal jurisdiction to
the fullest extent allowed by the Due Process Clause of the Fourteenth Amendment
to the United States Constitution; therefore, the traditional two-step personal
jurisdiction inquiry of assessing the propriety of jurisdiction under the forum state’s
long-arm statute, and then determining whether the exercise of jurisdiction would
violate the Due Process Clause of the Fourteenth Amendment, collapses into a single
step in Alabama. See, e.g., Sloss Industries Corp. v. Eurisol, 488 F.3d 922, 925 (11th
Cir. 2007) (observing that in Alabama, “the two inquiries merge, because Alabama’s
long-arm statute permits the exercise of personal jurisdiction to the fullest extent
constitutionally permissible”); Matthews v. Brookstone Stores, Inc., 469 F. Supp. 2d
1056, 1060 (S.D. Ala. 2007) (“In Alabama, this two-pronged inquiry collapses into
a single question because Alabama’s long-arm provision permits its courts to exercise
personal jurisdiction to the full extent permitted by the Due Process Clause of the
Fourteenth Amendment.”); see also Ex parte Unitrin, Inc., 920 So. 2d 557, 560 (Ala.
2005) (“Jurisdiction is obtained over out-of-state defendants pursuant to the
‘long-arm’ rule, Ala. R. Civ. P. 4.2(a)(2)(A)-(I).”).
Due process authorizes the exercise of personal jurisdiction over a nonresident
defendant when “(1) the nonresident defendant has purposefully established minimum
contacts with the forum; [and] (2) the exercise of jurisdiction will not offend
traditional notions of fair play and substantial justice.” S.E.C. v. Carrillo, 115 F.3d
1540, 1542 (11th Cir. 1997) (citation omitted); see also Horizon Aggressive Growth,
L.P. v. Rothstein-Kass, P.A., 421 F.3d 1162, 1166 (11th Cir. 2005) (same).
“Furthermore, it is important to remember that the conduct at issue is that of
the defendants. No plaintiff can establish jurisdiction over a defendant through his
own actions.” Ruiz de Molina v. Merritt & Furman Ins. Agency, Inc., 207 F.3d 1351,
1356 (11th Cir. 2000) (emphasis supplied) (citing Hanson v. Denckla, 357 U.S. 235,
253 (1958)). Therefore, this court must determine what this defendant did to
purposefully avail himself “of the benefits of doing business in Alabama such that the
notions of reasonableness and fairness are not offended by requiring [him] to defend
[himself] in an Alabama court.” Id. (alterations supplied).
Plaintiffs do not appear to assert that there is “general” jurisdiction over
defendant in this court. Instead, they assert that this court’s jurisdiction over
defendant is “specific” to this case. “Specific jurisdiction arises out of a party’s
activities in the forum that are related to the cause of action alleged in the complaint.”
McGow v. McCurry, 412 F.3d 1207, 1214 n.3 (11th Cir. 2005) (citation omitted).
The exercise of personal jurisdiction on a specific jurisdiction theory is proper where
a defendant’s contacts with the forum state satisfy all of the following criteria: (1)
they are related or give rise to the plaintiff’s cause of action; (2) they involve some
act by which the defendant purposefully avails himself of the privilege of conducting
activities within the forum; and (3) the defendant’s contacts with the forum are such
that the defendant should reasonably anticipate being haled into court there. See, e.g.,
Sloss, 488 F.3d at 925; McGow, 412 F.3d at 1214; Vermeulen v. Renault, U.S.A., Inc.,
985 F.2d 1534, 1546 (11th Cir. 1993). That said, the court recognizes that a
minimum contacts analysis is “immune to solution by checklist,” and that such
contacts must be viewed both quantitatively and qualitatively. Sloss, 488 F.3d at 925.
In plaintiffs’ complaint, they allege that defendant first agreed to serve as a
consultant for Molex, an Alabama company, in the 1990s, and he that “assisted in the
testing, verifying and validating the performance of the prototype formulations” since
that time.23 During the course of providing such consulting services, defendant
“regularly worked with Molex’s headquarters staff and communicated with them
frequently by telephone, facsimile and email.”24 All records of the confidential and
proprietary information that was disclosed to defendant over the years are maintained
at Molex’s headquarters in Athens, Alabama.25 Plaintiffs also allege that Molex
created Pacific Mining Reagents, Ltd. in 2010, for the purpose of marketing Molex’s
products. Defendant began a consulting relationship with Pacific in 2010, in order
to prepare Pacific to market Molex’s products under a license. Defendant became
Pacific’s business manager in September of 2011, and he was tasked with marketing
and selling Molex’s Frother Products in the retail market.26 While employed by
Pacific, defendant regularly placed orders for Frother Products from the Athens,
Alabama location of Molex, and he “regularly communicated by telephone, facsimile,
and e-mail with Molex’s headquarters staff about order placements, order deliveries,
new product development opportunities, pricing, billing, invoicing, and other
Complaint, at ¶ 12.
Id. at ¶ 14.
Id. at ¶ 15.
Id. at ¶¶ 16-17.
Id. at ¶¶ 19.
Plaintiffs bolstered those allegations by submitting the supplemental affidavit
of Keith Bennett.28 Bennett stated that defendant provided consulting services for
Molex for fifteen years. Specifically, defendant participated in “testing, verifying and
validating a specific line of Molex chemical formulations and directing his results
back to Molex in Alabama.”29 Molex paid defendant more than $100,000 for his
services over the course of those fifteen years. Some of the payments defendant
received were drawn from an Alabama financial institution.30 Bennett also testified
that, as a consultant, “Andress was in frequent, at times almost daily, contact by
telephone and email with Molex personnel in Alabama. In the twenty months
between January 1, 2009 and August 31, 2010, Andress directed 240 emails to Molex
personnel in Alabama.”31 Defendant’s contact with Molex personnel continued after
Doc. no. 16, at Exhibit 1 (Supplemental Affidavit of Keith Bennett). The supplemental
affidavit of Keith Bennett was filed under seal and designated as “Confidential – For Attorney’s Eyes
Only” pursuant to the protective order entered by this court on June 15, 2012. Doc. no. 10. Plaintiffs
acknowledge that they designated the supplemental affidavit as confidential because of the
information contained in the exhibits to the affidavit, not the information contained in the affidavit
itself. See doc. no. 25 (plaintiffs’ brief in opposition to defendant’s motion to strike), at 1-2 (“The
exhibits to the Affidavit implicated certain confidential information and trade secrets Molex seeks
to protect in this action, specifically raw material sources used in Molex’s chemical formulations.
Pursuant to the Protective Order entered by this Court (Doc. 10), Plaintiffs designated the Affidavit
and accompanying exhibits “HIGHLY CONFIDENTIAL – ATTORNEY’S EYES ONLY” and filed
the documents under seal.”) (emphasis in original). Accordingly, the court concludes it is not
improper for it to discuss the affidavit testimony itself on the open record, as long as the confidential
information contained in the exhibits to the affidavit is not referenced.
Bennett Supplemental Affidavit, at ¶ 4.
Id. at ¶ 5.
he became a consultant for Pacific, because Pacific is a company that exclusively sells
Molex chemical products. Bennett stated that “[i]n the twelve months between
September 1, 2010 and August 31, 2011, Andress directed 297 email messages to
Molex personnel in Alabama.”32
Defendant’s contact with Molex employees
continued even after he became directly employed by Pacific as a salesperson in
September of 2011. “In the seven months Andress was employed by [Pacific],
Andress directed 201 emails to Molex personnel in Alabama.”33 Bennett represents
that defendant’s emails addressed “sales and marketing strategies, customer
information, samples for customers, specific product formulations to be developed
by chemists and engineers at Molex for particular customer[s], and orders for
[containers] of Molex products to be manufactured and shipped to customers for field
testing.”34 Additionally, as a consultant for both Molex and Pacific, defendant
“frequently requested and received samples of Molex products, which were
formulated and produced in Alabama for shipment to Andress.”35 Also, while he was
a consultant for Pacific, defendant routinely sent his expense reports to Molex for
review and approval.36 Further, Molex stores records of all of its confidential
Id. at ¶ 6.
Id. at ¶ 7 (bracketed alteration supplied).
Id. at ¶ 8 (bracketed alterations supplied).
Bennett Supplemental Affidavit, at ¶ 9.
Id. at ¶ 10.
information, including formulas, prices, purchasing methods, raw material sources
and prices, and electronic communications, in physical files or electronic servers at
its Athens, Alabama facility.37
Defendant has attempted to counter plaintiffs’ allegations about his contacts
with the State of Alabama by stating:
This court does not have specific jurisdiction over defendant because
defendant did not purposefully direct his activities to Alabama, and
Plaintiffs’ claim did not arise from or relate to defendant’s contacts with
Alabama. Rather, Plaintiffs’ claim arose from an offer, initiated by
Plaintiffs, for Andress to work for a company located in the Grand
Caymans. Andress never went to Alabama, never signed a contract in
Alabama, never entered into an agreement in Alabama, never did any
work in Alabama, and never attempted to get any business from
Alabama. Plaintiffs sought out Defendant’s services and came to
Houston to meet with him.38
These allegations are further supported by Andress’s affidavit, in which he states:
Molex, LLC, and Pacific Mining Reagents (“PMR”) are
Plaintiffs who have filed suit against me. I am a resident of Harris
County, Texas and domiciled in Texas. I have never been a resident of,
or been domiciled in the state of Alabama.
I am a provider of consultation services to chemical
manufacturing companies. Part of the consultation services I offer
involves the analysis and evaluation of raw materials for use in chemical
manufacturing. PMR requested that I develop formulas and markets for
its products used in mining.
Id. at ¶¶ 11-12.
Doc. no. 9 (defendant’s motion to dismiss for lack of personal jurisdiction, improper venue,
insufficient form and service of process, failure to state a claim on which relief can be granted, and,
alternatively motion to transfer venue), at ¶ 7.
I did not attempt to sell anything related to PMR or Molex,
LLC in Alabama. I was paid for my services by PMR, not Molex, LLC.
This payment was made via wire transfer from the island of Grand
Cayman in the Cayman Islands.
My sales efforts could only be directed at the states where
I have connections to potential customers of PMR’s products including
Arizona, New Mexico, or Utah. I did not attempt to sell PMR’s
products in Alabama. I do not have any connections or relationships
with any potential customers of PMR’s products in Alabama. I do not
know of any potential customers of PMR’s products in Alabama. I do
not believe that there are any potential customers of PMR’s products in
PMR never requested that I attempt to sell any product in
Alabama. My business cards for use in selling PMR’s products made no
reference to Molex, LLC. I was issued an email address of
firstname.lastname@example.org in order to do work for PMR. My business
cards had “PMR,” the location in the Cayman Islands, and a number
with a Florida Area Code.
Any analysis of raw material at either of Plaintiffs’ request
would have been performed in Houston, Texas, or Tucson, Arizona. I
never performed any analysis of raw material in Alabama.
I provided services at the ACB mix-facility in Hankamer,
Texas, for which I was paid by PMR.
I do not hold or maintain an office in Alabama. I have
never worked in Alabama. I have never gone to a meeting in Alabama.
I have never attempted to sell a Molex, LLC, or a PMR product in
Alabama. I have never been to Alabama on business. I do not recall
ever having visiting [sic] Alabama at all.
10. Keith Bennett [the President of Molex] came to visit me in
Houston, Texas. I never had any meetings with him in Alabama.39
Doc. no. 13 (Affidavit of Charles Andress), at ¶¶ 2-10.
A close examination of plaintiffs’ and defendant’s respective factual
allegations reveals that they are not actually contradictory. Instead, although the
parties do not explicitly so state, they seem to disagree more about the scope of the
minimum contacts inquiry. Plaintiffs would like the court to examine defendant’s
contacts with the State of Alabama throughout the entire time he served as a
consultant for both Molex and Pacific. Defendant, on the other hand, wants the focus
to be solely on his contacts with Alabama during the time period when he was
actually employed by or consulting for Pacific. The court does not understand how
the inquiry can be limited in the manner suggested by defendant. The court
acknowledges that only defendant’s contacts with Alabama that are related to the
claims asserted in this action are part of the specific jurisdiction inquiry. However,
plaintiffs’ substantive allegations of trade secret violations are based on knowledge
defendant allegedly gained throughout all of his consulting and employment
relationships with both Molex and Pacific. Therefore, all of defendant’s contacts
with the State of Alabama related to all of those professional relationships are
relevant to the personal jurisdiction analysis.
Taking into consideration all of defendant’s contacts with the State of Alabama
throughout his consulting and employment relationships with Molex and Pacific, the
court easily finds that plaintiffs have satisfied their burden of establishing sufficient
“minimum contacts” with the State of Alabama to warrant the exercise of personal
jurisdiction over defendant in an Alabama court. Even though defendant never
maintained an office in Alabama, sold to clients in Alabama, or even set foot in
Alabama, those types of direct contacts are not necessary to satisfy constitutional
concerns. See Cable/Home Communication Corp. v. Network Productions, Inc., 902
F.2d 829, 858 (1990) (“In our technologically sophisticated world permitting
interstate business transactions by mail, wire and satellite signals, physical presence
by the nonresident defendant is not necessary for personal jurisdiction in the forum
state.”) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985)).
Defendant purposefully availed himself of the privilege of conducting activities
within the State of Alabama by: performing consulting services for an Alabama
company; receiving payment, in part, by funds drawn from an Alabama banking
institution; frequently contacting Molex employees in Alabama by telephone, email,
and facsimile to discuss the results of the tests he performed; requesting test samples
and customer orders of Molex products from the Athens, Alabama office; discussing
marketing strategies, customer information, and product formulations with Molex’s
Alabama staff; and submitting his expense reports to Molex in Alabama. See
Diamond Crystal Brands v. Food Movers International, Inc., 593 F.3d 1249, 1268-69
(11th Cir. 2010) (“Courts have considered a defendant’s initiating the contractual
relationship, visiting the plaintiff’s factory to assess or improve quality, sending
materials to the plaintiff for inspection or use in shipping, participating in the
manufacturing process, establishing a relationship by placing multiple orders,
requiring performance in the forum, negotiating the contract via telefaxes or calls
with the plaintiff; the list goes on.”) (citations omitted); Air Products & Controls, Inc.
v. Safetech International, Inc., 503 F.3d 544, 551-52 (6th Cir. 2007) (finding personal
jurisdiction over defendant who contacted the plaintiff in the forum state on several
hundred occasions through telephone, email, facsimile, and regular mail to discuss
and place orders); Exhibit Icons, LLC v. XP Companies, LLC, 609 F. Supp. 2d 1282,
1292-94 (S.D. Fla. 2009) (holding that numerous electronic communications,
including 188 telephone calls, directed by the defendant to the forum state were
sufficient to establish personal jurisdiction).
Having determined that defendant purposefully availed himself of the privilege
of doing business in Alabama, the court next must consider whether the exercise of
personal jurisdiction over defendant in an Alabama court would offend the
“traditional notions of ‘fair play and substantial justice.’” Worldwide Volkswagen
Corp. v. Woodson, 444 U.S. 286, 292 (1980) (quoting International Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945) (in turn quoting Milliken v. Meyer, 311 U.S.
457, 463 (1940))). In making that inquiry, the court should consider factors
including: (1) the burden on the defendant from litigating in the forum state; (2) the
forum state’s interest in adjudicating the dispute; (3) the plaintiff’s interest in
obtaining convenient and effective relief; (4) the interstate judicial system’s interest
in obtaining the most efficient resolution of controversies; (5) and the states’
combined interests in furthering fundamental social policies. Worldwide Volkswagen,
444 U.S. at 564 (citations omitted). “[W]here a defendant who purposefully has
directed his activities at forum residents seeks to defeat jurisdiction, he must present
a compelling case that the presence of some other considerations would render
jurisdiction unreasonable.” Burger King Corp., 471 U.S. at 477.
Defendant asserts that being forced to litigate in Alabama would place an
undue burden on him because “[n]one of the records, files, or witnesses are located
in [Alabama.]”40 Defendant did not cite any evidence to support that assertion, and
the evidence produced by plaintiffs actually supports a contrary conclusion.
According to the supplemental affidavit of Keith Bennett, all of the relevant records,
including formulas, pricing information, and sales records, are maintained at Molex’s
facility in Athens, Alabama. Furthermore, all of the electronic communications
between plaintiffs and defendant are stored on a server in Athens, Alabama. Finally,
Doc. no. 9, at 4.
Bennett stated that most of plaintiffs’ witnesses reside in Alabama.41 Defendant does
not make any substantive arguments with regard to any of the other “fair play and
substantial justice” factors; instead, he simply recites the elements and avers that they
weigh in his favor. That is not sufficient to establish that the exercise of personal
jurisdiction would be unjust, especially considering that many of the relevant factors
weigh favor of maintaining the case in Alabama. For instance, courts have repeatedly
held that states have an interest in providing a forum in which their residents can
obtain relief from injuries inflicted by out-of-state actors. See, e.g., DocRX, Inc. v.
DOX Consulting, LLC, 738 F. Supp. 2d 1234, 1254 (S.D. Ala. 2010). Furthermore,
litigating in Alabama, plaintiffs’ chosen forum, certainly would serve plaintiffs’
interests in obtaining convenient and effective relief. Defendant asserts that litigating
in the United States District Court for the Southern District of Texas would better
serve the interests of all involved. The court will address that argument in more detail
below, in the context of defendant’s alternative motion to transfer venue. Let it
suffice for now to say that all of the factors set forth by the Supreme Court for
evaluating whether the exercise of jurisdiction over a defendant offends traditional
notions of fair play and substantial justice either weigh in plaintiffs’ favor or are
Bennett Supplemental Affidavit, at ¶ 13.
In summary, plaintiffs have established that defendant has constitutionally
significant minimum contacts with the State of Alabama, and defendant has not
established that the exercise of jurisdiction over him in an Alabama court would
offend traditional notions of fair play and substantial justice. Therefore, it is
constitutionally proper for this court to exercise personal jurisdiction over defendant.
Defendant’s motion to dismiss for lack of personal jurisdiction is due to be denied.
Insufficient Process and Insufficient Service of Process
Federal Rule of Civil Procedure 12 provides, in pertinent part, that a defendant
may raise by motion the defenses of insufficient process and insufficient service of
process. Fed. R. Civ. P. 12(b)(4) & (5). Defendant asserts that “the Court should
dismiss the suit and/or quash the service of process because service by Fedex was
inadequate and improper according to the Alabama Rules of Civil Procedure as well
as the Federal Rules of Civil Procedure. Plaintiffs’ [sic] attempted to Fedex and
email the petition to Andress.”42 Defendant also states that he “was prejudiced by the
defect in process and because the form of the summons is defective, the Court should
dismiss the suit or quash the service of process.”43 Defendant does not provide any
explanation for why he believes the summons was defective, and the court cannot
Doc. no. 9, at 5, ¶ 12.
Id. at 5, ¶ 13.
discern any defect. Defendant’s argument about being served by Federal Express and
email is equally unavailing. Records from the state court reflect that defendant also
was served by certified mail, restricted delivery, return receipt requested, which is an
adequate form of service under both Alabama and federal law. See Ala. R. Civ. P.
4(i)(2); Fed. R. Civ. P. 4(e)(1).
In summary, defendant’s motion to dismiss for insufficient process and
insufficient service of process is meritless and even borderline frivolous. It will be
denied. Defendant’s counsel is forewarned, however, that this court does not suffer
fools gladly, and if counsel persists in making arguments similar to those addressed
in this order, harsh sanctions shall swiftly follow.
Failure to State a Claim Upon Which Relief Can Be Granted
Defendant next argues that plaintiffs’ complaint should be dismissed for failure
to state a claim upon which relief can be granted pursuant to Federal Rule of Civil
Procedure 12(b)(6). That rule must be read together with Rule 8(a), which requires
that a pleading contain only a “short and plain statement of the claim showing that the
pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). While that pleading standard
does not require “detailed factual allegations,” Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 550 (2007), it does demand “more than an unadorned, the-defendantunlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(citations omitted). The Supreme Court elaborated this standard in its Iqbal opinion,
A pleading that offers “labels and conclusions” or “a formulaic
recitation of the elements of a cause of action will not do.” [Twombly,
550 U.S., at 555]. Nor does a complaint suffice if it tenders “naked
assertion[s]” devoid of “further factual enhancement.” Id., at 557.
To survive a motion to dismiss [founded upon Federal Rule of
Civil Procedure 12(b)(6), for failure to state a claim upon which relief
can be granted], a complaint must contain sufficient factual matter,
accepted as true, to “state a claim for relief that is plausible on its face.”
Id., at 570. A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged. Id., at 556. The
plausibility standard is not akin to a “probability requirement,” but it
asks for more than a sheer possibility that a defendant has acted
unlawfully. Ibid. Where a complaint pleads facts that are “merely
consistent with” a defendant’s liability, it “stops short of the line
between possibility and plausibility of ‘entitlement to relief.’” Id., at
557 (brackets omitted).
Two working principles underlie our decision in Twombly. First,
the tenet that a court must accept as true all of the allegations contained
in a complaint is inapplicable to legal conclusions. Threadbare recitals
of the elements of a cause of action, supported by mere conclusory
statements, do not suffice. Id., at 555 (Although for the purposes of a
motion to dismiss we must take all of the factual allegations in the
complaint as true, we “are not bound to accept as true a legal conclusion
couched as a factual allegation” (internal quotation marks omitted)).
Rule 8 marks a notable and generous departure from the hyper-technical,
code-pleading regime of a prior era, but it does not unlock the doors of
discovery for a plaintiff armed with nothing more than conclusions.
Second, only a complaint that states a plausible claim for relief survives
a motion to dismiss. Id., at 556. Determining whether a complaint
states a plausible claim for relief will, as the Court of Appeals observed,
be a context-specific task that requires the reviewing court to draw on
its judicial experience and common sense. 490 F.3d, at 157-158. But
where the well-pleaded facts do not permit the court to infer more than
the mere possibility of misconduct, the complaint has alleged — but it
has not “show[n]” — “that the pleader is entitled to relief.” Fed. Rule
Civ. Proc. 8(a)(2).
In keeping with these principles a court considering a motion to
dismiss can choose to begin by identifying pleadings that, because they
are no more than conclusions, are not entitled to the assumption of truth.
While legal conclusions can provide the framework of a complaint, they
must be supported by factual allegations. When there are well-pleaded
factual allegations, a court should assume their veracity and then
determine whether they plausibly give rise to an entitlement to relief.
Iqbal, 556 U.S. at 678-79 (emphasis added).
Defendant first asserts that plaintiffs’ complaint contains too many conclusory
allegations to satisfy the requirements of the Supreme Court’s Twombly and Iqbal
decisions. That argument, like much else of defendant’s attorney’s trite contentions,
is meritless. Defendant pulled ten sentences or short paragraphs from plaintiffs’
complaint and characterized each one as conclusory. For the most part, defendant’s
characterizations are inaccurate, for many of the identified sentences actually do
contain factual allegations, even when viewed in isolation. Some of the other
sentences identified by defendant seem conclusory when viewed in isolation, but even
a quick review of the complaint itself reveals that those sentences are accompanied by
others that provide more factual detail.
Defendant also asserts that plaintiffs’ complaint does not assert a plausible
claim for relief because plaintiffs acknowledge that defendant never entered into a
non-disclosure agreement with either of them. That argument is equally meritless, as
defendant has cited no authority, and this court knows of none, to support the
proposition that a written non-disclosure agreement is a necessary prerequisite to a
claim for wrongful disclosure of trade secrets.
In summary, defendant’s motion to dismiss for failure to state a claim upon
which relief can be granted is due to be denied.
In the caption of defendant’s motion to dismiss, he states that he is asserting
both a motion to dismiss for improper venue and a motion to transfer venue.44 In the
body of the motion, however, defendant does not challenge plaintiffs’ choice of venue
as improper, but only argues that venue should be transferred to the United States
District Court for the Southern District of Texas. Consequently, the motion to transfer
is the only motion that will be addressed by the court.45
See doc. no. 9, at 1 (“Motion to Dismiss for Lack of Personal Jurisdiction, Improper Venue,
Insufficient Form and Service of Process, Failure to State a Claim on Which Relief Can Be Granted,
and, Alternatively Motion to Transfer Venue”) (emphasis supplied).
It should also be noted that defendant has not asked that the case be dismissed under the
closely related common law doctrine of forum non conveniens. See Wilson v. Island Seas
Investments, Ltd., 590 F.3d 1264, 1269 (11th Cir. 2009) (“Under the doctrine of forum non
conveniens, ‘when an alternative forum has jurisdiction to hear a case, and when trial in the chosen
forum would establish oppressiveness and vexation to a defendant out of all proportion to plaintiff’s
Changes of venue are governed by 28 U.S.C. § 1404(a), which provides that,
“[f]or the convenience of parties and witnesses, in the interest of justice, a district
court may transfer any civil action to any other district or division where it might have
been brought or to any district or division to which all parties have consented.” The
burden is on the moving party to establish the propriety of a transfer of venue pursuant
to § 1404(a). See In re Ricoh Corp., 870 F.2d 570 (11th Cir. 1989). “Unless the
balance is strongly in favor of the defendant, the plaintiff’s choice of forum should
rarely be disturbed.” Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947); In re Ricoh
Corp., 870 F.2d at 572.
“The decision whether to transfer venue is within the discretion of the trial
court, and each case should be decided on its particular facts.” American Aircraft
Sales International, Inc. v. Airwarsaw, Inc., 55 F. Supp. 2d 1347, 1351 (M.D. Fla.
1999) (citations omitted). Relevant factors include:
(1) the convenience of the witnesses; (2) the location of relevant
documents and the relative ease of access to sources of proof; (3) the
convenience of the parties; (4) the locus of operative facts; (5) the
availability of process to compel the attendance of unwilling witnesses;
(6) the relative means of the parties; (7) a forum’s familiarity with the
governing law; (8) the weight accorded a plaintiff’s choice of forum; and
(9) trial efficiency and the interests of justice, based on the totality of the
convenience, or when the chosen forum is inappropriate because of considerations affecting the
court’s own administrative and legal problems, the court may, in the exercise of its sound discretion,
dismiss the case.’”) (citation omitted).
Manuel v. Convergys Corp., 430 F.3d 1132, 1135 n.1 (11th Cir. 2005) (citing Gibbs
& Hill, Inc. v. Harbert International, Inc., 745 F. Supp. 993, 996 (S.D. N.Y. 1990)).
“If the transfer would ‘merely shift the inconvenience from one party to the other,’ or
if the balance of all factors is but slightly in favor of the movant, the plaintiff’s choice
of venue should be given deference.” Johnston v. Foster-Wheeler Constructors, Inc.,
158 F.R.D. 496, 503 (M.D. Ala. 1994) (citations omitted).
The court first must determine whether the case could originally have been
brought in the Southern District of Texas, defendant’s alternative choice of venue.
The federal venue statute provides that venue is proper in “a judicial district in which
any defendant resides, if all defendants are residents of the State in which the district
is located.” 28 U.S.C. § 1391(b)(1). Defendant resides in Houston, Texas, which is
encompassed within Southern District of Texas. Accordingly, venue would have been
proper in the United States District Court for the Southern District of Texas, if the case
originally had been brought there.
The next question is whether, considering the balance of all factors, and giving
particular weight to plaintiffs’ choice of venue in the Northern District of Alabama,
transferring the case to the Southern District of Texas would further the convenience
of the parties and witnesses and serve the interest of justice. Defendant offers little
more than a conclusory recitation of the relevant factors to support his argument for
transfer. First he states that “[t]he current forum does not have any meaningful ties to
the controversy.”46 He also states that “[l]itigating the case in this district would force
citizens in a community with no connection to the case to serve on the jury.”47 Those
allegations make little sense, given that Molex is an Alabama company with its
headquarters in this district, and plaintiffs’ claims have been asserted under Alabama
Defendant also asserts that when the relative inconveniences of the parties are
compared, his inconvenience is greater because he has “no connection to Alabama,”
while plaintiffs have an office in Texas.48 As discussed above, however, plaintiff has
constitutionally significant minimum contacts with the State of Alabama, and he has
purposefully availed himself of the privilege of doing business in the state. There is
no doubt that defendant, a Texas resident, will suffer some inconvenience by having
to litigate in Alabama, but given defendant’s other contacts with the state, any
inconvenience he may suffer is not sufficiently severe to outweigh plaintiffs’ choice
of forum and the inconvenience plaintiffs would suffer by having to litigate in Texas.
Defendant also asserts that litigating in Texas will be more convenient for his
witnesses, who allegedly are unwilling to testify in an Alabama trial and are outside
Doc. no. 9, at 9, ¶ 24.
Id. at 10, ¶ 30.
Id. at 9-10, ¶ 25 (“The current forum is inconvenient for defendant, and plaintiffs will not
be inconvenienced by the transfer.”).
the subpoena power of this court.49 Defendant does not identify any of these alleged
witnesses, state where they reside, state how many witnesses will be unavailable, or
explain any witness’s unwillingness or unavailability to testify. Without more
information, the court cannot conclude that the overall convenience of the witnesses
weighs so much in favor of litigating in Texas as to override the plaintiffs’ choice of
an Alabama forum. This is especially true considering that plaintiffs have identified
several Alabama residents as potential witnesses.50
Next, defendant offers the conclusory assertion that “[p]ractical considerations
make the trial of this case more efficient and less expensive in the Southern District
of Texas.”51 Once again, defendant does not identify these “practical considerations,”
and does not offer any further explanation for his assertion. The court cannot
understand how the trial could be more efficiently and cost-effectively conducted in
Texas than in Alabama. As plaintiffs have pointed out, all of their business records
are stored in their Athens, Alabama facility, and all of their electronic communications
with defendant are stored on a server in Athens, Alabama.
See id. at 10, ¶ 26 (“A transfer to another district will be more convenient for defendant’s
key witnesses.”), ¶ 27 (“The cost of obtaining the attendance of witnesses will be substantially less
in the Southern District of Texas.”), ¶ 28 (“Defendant’s witnesses are unwilling to testify in the
current forum and are beyond compulsory process of this Court. . . . However, compulsory process
for the attendance of the unwilling witnesses is available in the Southern District of Texas.”).
See doc. no. 16, at 30-31.
Doc. no. 9, at 10, ¶ 29.
Finally, defendant asserts that the “Southern District of Texas is more familiar
with the law that will govern the case,” because “non-competes are disfavored by
public policy in the State of Texas.”52 This argument, like so many others asserted by
defendant’s attorneys, is obviously baseless. This case is not about the violation, or
the validity, of a non-compete agreement.53 It is about defendant’s alleged improper
disclosure of plaintiffs’ trade secrets. Even more importantly, the court has no idea
why defendant is suggesting that Texas law should apply, because plaintiffs’
complaint specifically asserts claims under Alabama law.
In summary, the balance of factors weighs in favor of retaining plaintiffs’
chosen forum. Defendant’s motion to transfer venue is due to be denied.
Summary and Cautionary Words for Defendant’s Counsel
Defendant’s motion to dismiss for lack of subject matter jurisdiction, improper
venue, insufficient form and service of process, failure to state a claim on which relief
can be granted, and, alternatively, motion to transfer will be denied in its entirety. As
the case will remain with this court, the court finds it appropriate to offer some
cautionary words to defendant’s counsel. The court will not be pleased to have its
time wasted with any more motions like defendant’s motion to dismiss or to transfer
Doc. no. 9, at 10, ¶ 31.
Plaintiffs even acknowledged in their complaint that defendant never executed any kind
of non-disclosure agreement. See Complaint, at ¶ 22.
venue, which offered a smattering of undeveloped, conclusory, and borderline
frivolous arguments. Any future similar motions may be met with summary denial
and/or the imposition of monetary sanctions. Thereafter, contempt proceedings may
III. MOTION FOR LIFT OF STAY AND TO RESCHEDULE
EVIDENTIARY HEARING AND MOTION TO COMPEL
This court entered an order on June 28, 2012, directing the parties to “proceed
to discovery on all matters that may be relevant to plaintiffs’ application for
preliminary injunctive relief.”54 The court also shortened the response times for all
written discovery requests and directed defendant to make himself available for
deposition within twenty-one (21) days of the date of the order.55 On July 18,
however, the court ordered that all discovery and deposition pursuant to the June 28
order be stayed pending a ruling by the United States District Court for the Southern
District of Texas on a Motion for Protection and Amended Motion for Protection filed
by non-party Corsi-Tech.56 Plaintiffs informed the court on August 6, 2012, that
Corsi-Tech withdrew its Motion for Protection from consideration by the United
States District Court for the Southern District of Texas, and that court consequently
Doc. no. 15, at 1.
Id. at 1-2.
Doc. no. 23.
denied the Motion for Protection as moot.57
Because the Motion for Protection no longer is at issue in the Texas court,
plaintiffs request this court to lift the stay on discovery and reset an evidentiary
hearing on the remainder of the pending motions in the case.58 The court agrees with
plaintiffs that there no longer is any reason for discovery to be stayed. Therefore,
plaintiffs’ motion to lift the stay on discovery is due to be granted. Plaintiffs’ motion
to compel discovery is likewise due to be granted.
With regard to plaintiffs’ request to reset the evidentiary hearing on all
remaining pending motions, the court has been able to decide the remainder of the
motions addressed in this opinion without the need for additional argument or
evidence. Therefore, plaintiffs’ motion to reset an evidentiary hearing on those
motions is due to be denied.
III. CONCLUSION AND ORDERS
In accordance with the foregoing, plaintiffs’ motion to remand, defendant’s
motion to dismiss or to transfer venue, and defendant’s motion to strike all are
DENIED. The case will remain in this court, despite the fact that neither party wants
See doc. no. 27.
Id. at 3. This court originally set an evidentiary hearing on all pending motions, other than
plaintiffs’ application for preliminary injunctive relief, for July 25, 2012. See text order entered on
July 19, 2012. That hearing was continued on July 20, 2012, and the court indicated that the hearing
would be reset by separate order. See text order entered on July 20, 2012.
Plaintiffs’ motion for lift of the stay on discovery and to reschedule the
evidentiary hearing is GRANTED in part and DENIED in part. For the reasons
discussed abovbe, the evidentiary hearing will not be rescheduled. However, it is
ORDERED that the stay on discovery is lifted, and that the parties must proceed to
discovery on all matters that may be relevant to plaintiffs’ application for preliminary
injunctive relief. Plaintiffs’ motion to compel discovery is GRANTED, and defendant
is ORDERED to participate in good faith in the discovery process in compliance with
the following directives: Response times for all written discovery requests related to
the application for preliminary injunctive relief are shortened to seven (7) calendar
days. Defendant must make himself available for deposition on all matters related to
plaintiffs’ request for preliminary injunctive relief within ten (10) days of the date of
The parties are ORDERED to file a joint report, on or before August 20, 2012,
addressing the status of defendant’s motion for protection from discovery.59
A hearing on plaintiffs’ motion for preliminary injunctive relief will be reset by
Doc. no. 18.
DONE this 10th day of August, 2012.
United States District Judge
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