Sabol-Krutz v. Quad Electronics,Inc.

Filing 19

MEMORANDUM & ORDER signed by Chief Judge Morrison C. England, Jr. on 7/6/2015. Defendant's is DENIED and plaintiff's 8 Motion for Partial Summary Judgment is DENIED. Plaintiff's first claim for declaratory relief is DISMISSED. This case will proceed on plaintiff's second claim for breach of contract ONLY. (Marciel, M)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 12 STACEY SABOL-KRUTZ, an individual, Plaintiff, 13 14 15 v. No. 2:15-cv-00201-MCE-AC MEMORANDUM AND ORDER QUAD ELECTRONICS, INC. d/b/a CABLCON, a Michigan corporation, 16 Defendant. 17 18 Through this action, Plaintiff Stacey Sabol-Krutz (“Plaintiff”) sues her former 19 employer, Defendant Quad Electronics (“Defendant”). As a condition of Plaintiff’s 20 employment with Defendant, Plaintiff signed a non-compete agreement (“Non-Compete 21 Agreement”). Defendant has terminated Plaintiff’s employment and Plaintiff now seeks a 22 declaration that the Non-Compete Agreement is invalid and monetary damages for 23 unpaid commissions earned during the course of her employment. Before the Court are 24 Defendant’s Motion to Dismiss for Lack of Subject Matter Jurisdiction (ECF No. 8) and 25 Plaintiff’s Motion for Partial Summary Judgment (ECF No. 11). For the reasons that 26 follow, both Motions are DENIED.1 27 1 28 Because oral argument would not have been of material assistance, the Court ordered this matter submitted on the briefing. E.D. Cal. Local R. 230(g). 1 1 BACKGROUND 2 Plaintiff began working for Defendant in December 2007 as a sales 3 4 representative. Compl., ECF No. 1, ¶ 6. At the start of her employment, Plaintiff signed 5 a contract that included, in relevant part, a Non-Compete Agreement. Id. ¶¶ 9, 10. The 6 Non-Compete Agreement contains a non-compete provision for a period of twelve 7 months after termination and includes a list of nineteen companies that Plaintiff agrees 8 not to be employed with during that period. See Non-Compete Agreement, ECF No. 8- 9 2, at 29. The Non-Compete Agreement did not contain a choice of law provision. Plaintiff alleges that Defendant urged her to move to California in 2011 to 10 11 “essentially run [its] West coast operations.” Id. ¶ 7. Defendant, however, contends that 12 the Plaintiff requested to move to California in order to establish residency so that her 13 daughter could pay in-state tuition at California universities. Def.’s Mot. to Dismiss, ECF 14 No. 8-1, at 3. While the reason for the move is disputed, Plaintiff does not dispute that 15 throughout her employment, at least ninety-nine percent (99%) of her business for 16 Defendant concerned accounts outside of California. Id. According to Defendant, 17 “Plaintiff was denied relocation expenses because her move was not business related.” 18 Id. 19 In August 2014, Defendant terminated Plaintiff’s employment. Compl. ¶ 11. 20 Plaintiff subsequently accepted a position at Defendant’s direct competitor, Great Lakes 21 Wire and Cable. Id. ¶ 12. Great Lakes Wire and Cable is a Michigan Corporation and is 22 one of the nineteen companies identified in the Non-Compete Agreement. Id. ¶ 12; 23 Def.’s Opp’n to Mot. for Summ. J., ECF No. 14, at 2. In January 2015, counsel for the 24 Defendant sent a letter to Plaintiff reminding her of the provisions of the Non-Compete 25 Agreement and demanding that the Plaintiff cease and desist in her interaction with 26 Great Lakes Wire and Cable. Compl. ¶ 13. Plaintiff did not comply and Defendant 27 brought suit against Plaintiff in Michigan state court to enforce the Non-Compete 28 Agreement on February 12, 2015. 2 1 On January 26, 2015, Plaintiff filed this action against Defendant seeking a 2 declaration that the Non-Compete Agreement is invalid and monetary damages for 3 unpaid commissions earned during the course of her employment. Plaintiff claims that 4 her unpaid commissions are “well in excess of $75,000.” Id. ¶¶ 3, 24. Subsequent to 5 the filing of the Complaint, Defendant filed a Motion to Dismiss for Lack of Subject Matter 6 Jurisdiction contending that the amount in controversy cannot possibly exceed the 7 requisite $75,000. ECF No. 8 at 1. Plaintiff then filed a Motion for Partial Summary 8 Judgment stating that, at this early stage in the litigation, the Court should be able to 9 grant declaratory relief prohibiting enforcement of the Non-Compete Agreement given 10 California’s strong public policy against enforcement of non-compete agreements. ECF 11 No. 11 at 2-3. 12 13 STANDARD 14 15 A. Motion to Dismiss for Lack of Subject Matter Jurisdiction 16 Federal courts are courts of limited jurisdiction and are presumptively without 17 jurisdiction over civil actions. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 18 377 (1994). The burden of establishing federal jurisdiction rests upon the party asserting 19 jurisdiction. Id. To establish federal subject matter jurisdiction, a plaintiff must prove the 20 matter in controversy exceeds the sum or value of $75,000, exclusive of interest and 21 costs, and is between citizens of different states. 28 U.S.C. § 1332. 22 The party opposing the motion has the burden of proving that subject matter 23 jurisdiction does exist, and must present any necessary evidence to satisfy this burden. 24 St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989). If the plaintiff’s allegations of 25 jurisdictional facts are challenged by the adversary in the appropriate manner, the 26 plaintiff cannot rest on the mere assertion that factual issues may exist. Trentacosta v. 27 Frontier Pac. Aircraft Ind., Inc., 813 F.2d 1553, 1558 (9th Cir. 1987). Furthermore, the 28 district court may review any evidence necessary, including affidavits and testimony, in 3 1 order to determine whether subject matter jurisdiction exists. McCarthy v. United States, 2 850 F.2d 558, 560 (9th Cir. 1988); Thornhill Pub. Co. v. Gen. Tel. & Elecs. Corp., 3 594 F.2d 730, 733 (9th Cir. 1979). A court may dismiss an action “when independent 4 facts show that the amount of damages was claimed merely to obtain federal court 5 jurisdiction.” Pachinger v. MGM Grand Hotel-Las Vegas, Inc., 802 F.2d 362, 364 (9th 6 Cir. 1986). However, in order to grant a motion to dismiss pursuant to Rule12(b)(1), a 7 court must find to a legal certainty that the plaintiff cannot recover an award that will 8 meet the amount in controversy requirement. St. Paul Mercury Indem. Co. v. Red Cab 9 Co., 303 U.S. 283, 289 (1938). If the nonmoving party fails to meet its burden and the 10 court determines that it lacks subject matter jurisdiction, the court must dismiss the 11 action. Fed. R. Civ. P. 12(h)(3). 12 B. Motion for Partial Summary Judgment 13 The Federal Rules of Civil Procedure provide for summary judgment when “the 14 movant shows that there is no genuine dispute as to any material fact and the movant is 15 entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Celotex Corp. v. 16 Catrett, 477 U.S. 317, 322 (1986). 17 A court may grant summary judgment on part of a claim or defense, known as 18 partial summary judgment. See Fed. R. Civ. P. 56(a) (“A party may move for summary 19 judgment, identifying each claim or defense—or the part of each claim or defense—on 20 which summary judgment is sought.”); see also Allstate Ins. Co. v. Madan, 889 F. Supp. 21 374, 378-79 (C.D. Cal. 1995). The standard that applies to a motion for partial summary 22 judgment is the same as that which applies to a motion for summary judgment. See 23 Fed. R. Civ. P. 56(a); State of Cal. ex rel. Cal. Dep’t of Toxic Substances Control v. 24 Campbell, 138 F.3d 772, 780 (9th Cir. 1998) (applying summary judgment standard to 25 motion for summary adjudication). 26 In a summary judgment motion, the moving party bears the initial responsibility of 27 informing the court of the basis for the motion and identifying the portions in the record 28 “which it believes demonstrate the absence of a genuine issue of material fact.” Celotex, 4 1 477 U.S. at 323. If the moving party meets its initial responsibility, the burden then shifts 2 to the opposing party to establish that a genuine issue of material fact actually does 3 exist. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); 4 First Nat’l Bank v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968). 5 The opposing party must demonstrate that the fact in contention is material, i.e., a 6 fact that might affect the outcome of the suit under the governing law. Anderson v. 7 Liberty Lobby, Inc., 477 U.S. 242, 248, 251-52 (1986); Owens v. Local No. 169, Assoc. 8 of W. Pulp and Paper Workers, 971 F.2d 347, 355 (9th Cir. 1987). The opposing party 9 must also demonstrate that the dispute about a material fact “is ‘genuine,’ that is, if the 10 evidence is such that a reasonable jury could return a verdict for the nonmoving party.” 11 Anderson, 477 U.S. at 248. As the Supreme Court explained, “[w]hen the moving party 12 has carried its burden under Rule [56(a)], its opponent must do more than simply show 13 that there is some metaphysical doubt as to the material facts.” Matsushita, 475 U.S. at 14 586. Therefore, “[w]here the record taken as a whole could not lead a rational trier of 15 fact to find for the nonmoving party, there is no ‘genuine issue for trial.’” Id. at 587. 16 In resolving a summary judgment motion, the evidence of the opposing party is to 17 be believed, and all reasonable inferences that may be drawn from the facts placed 18 before the court must be drawn in favor of the opposing party. Anderson, 477 U.S. at 19 255. Nevertheless, inferences are not drawn out of the air, and it is the opposing party’s 20 obligation to produce a factual predicate from which the inference may be drawn. 21 Richards v. Nielsen Freight Lines, 602 F. Supp. 1224, 1244-45 (E.D. Cal. 1985), aff’d, 22 810 F.2d 898 (9th Cir. 1987). 23 24 ANALYSIS 25 26 A. Motion to Dismiss for Lack of Subject Matter Jurisdiction 27 In its Motion to Dismiss, Defendant challenges Plaintiff’s assertion that she is 28 entitled to damages in excess of $75,000. Defendant contends that it is not possible that 5 1 Plaintiff is owed any back compensation because at the time of her termination it paid 2 Plaintiff more than she should have received by including compensation for orders she 3 initiated but that were never completed. Defendant provides an extensive description of 4 the calculations it used to determine that Plaintiff was owed $40,591.03 in gross and was 5 paid the net amount of $21,526.56 after deductions. Def.’s Mot. to Dismiss at 3-6. 6 Contrary to Defendant’s calculations, Plaintiff contends that she is still owed the 7 substantial sum of $1,138,152. Pl.’s Opp’n, ECF No. 13, at 3. Plaintiff alleges that 8 Defendant, through its agents, transferred her off of significant accounts that she 9 secured and forced her to split commissions with other managers on accounts that she 10 handled, resulting in significant losses of profits. Id. at 2, 4. In her Opposition, Plaintiff 11 supplies four specific accounts with corresponding commissions she contends she is 12 owed. ECF No. 13-1, at 2. 13 In response, Defendant contends that Plaintiff’s accounts were not transferred 14 and that some of the accounts she listed even predated Plaintiff’s employment with 15 Defendant. ECF No. 16, at 2-4. Defendant further contends that the over one million 16 dollars the Plaintiff is seeking would place her earnings at a disproportionately high level 17 of compensation in relation to other account managers so “as to be shocking in 18 Defendant’s business culture.” Id. at 1, 5. 19 Based on the substantial evidence that Defendant has submitted about the 20 accounts in question, the Court agrees that it appears unlikely that Plaintiff will recover 21 over one million dollars through this action. However, this Court cannot find to a legal 22 certainty that the Plaintiff cannot recover $75,000. Only a few instances clearly satisfy 23 the legal certainty requirement: 24 25 26 27 28 (1) when the terms of the contract limit a plaintiff’s possible recovery to less than the jurisdictional amount, (2) when a specific rule of substantive law . . . limits the amount of money recoverable by the plaintiff to less than . . . the requirement, and (3) when independent facts show that the amount of damages claimed has been inflated by the plaintiff merely to secure federal court jurisdiction. Pachinger, 802 F.2d at 364. 6 1 In the present case, there is no demonstrated contractual limit to Plaintiff’s 2 recovery, nor is there any substantive legal rule that limits her potential damages to less 3 than $75,000. Defendant contends that Plaintiff’s support for damages in excess of one 4 million dollars is not made in good faith. ECF No. 16 at 4-5. Defendant cites two 5 examples of circuit courts finding to a legal certainty that the amount in controversy 6 requirement could not be met. As will be discussed below, both of these cases illustrate 7 instances where plaintiffs were barred legally or otherwise from a damage award above 8 the requirement in 28 U.S.C. § 1332. 9 In Esquilin-Mendoza v. Don King Productions, 638 F.3d 1 (5th Cir. 2011), the Fifth 10 Circuit found that the plaintiff’s pleading of an amount over the statutory requirement was 11 made in good faith, but that evidence produced by the defendant definitively 12 demonstrated that the damages she sought (compensation for seizure of her vehicle) 13 could not exceed the reasonable rate of a rental car, $22,500. As potential damages for 14 her only viable claim, this figure fell so far below the statutory requirement of $75,000 15 that the Fifth Circuit was able to find to a legal certainty that plaintiff could not allege 16 damages over $75,000. 17 In the present case, Plaintiff has alleged damages over one million dollars with 18 more claims to be filed. Defendant offered extensive rebuttal evidence showing that 19 Plaintiff was not entitled to damages concerning the accounts she cited. Defendant’s 20 evidence may be accurate, but declarations and pleadings fall well short of the 21 requirement for this Court to be legally certain that Plaintiff cannot recover what she 22 alleges. In Esquilin, the Fifth Circuit could put a tangible number on the only possible 23 damages the plaintiff could receive based on her claims. There is no concrete measure 24 of damages, based on the pleadings, that this Court could divine at this stage of the 25 case. 26 Defendant also cites Christensen v. Northwest Airlines, Inc., 633 F.2d 529 (9th 27 Cir. 1980). In that case, the Ninth Circuit found that the plaintiff accepted alternative air 28 transportation after being “rudely bumped” from her flight, which consequently barred her 7 1 from seeking damages for the majority of her claims. Her only remaining claim was a 2 tort claim under Washington state law, which did not allow punitive damages for tort 3 claims absent statutory authority. As there was no statutory authority allowing plaintiff’s 4 punitive damages claim, it was clear to the Ninth Circuit that the plaintiff alleged the 5 damages solely to obtain federal jurisdiction. In the present case, there is no relevant 6 limit to damages from California or Michigan state law, and there is not a clear indication 7 that Plaintiff alleged over one million dollars in damages solely to obtain federal 8 jurisdiction. 9 Here, the Court cannot conclude to a legal certainty that Plaintiff alleged damages 10 from her breach of contract claim for the sole purpose of obtaining this Court’s 11 jurisdiction. Accordingly, Defendant’s Motion to Dismiss is DENIED. 12 B. Motion for Partial Summary Judgment 13 Soon after Defendant filed its Motion to Dismiss, Plaintiff filed a Motion for Partial 14 Summary Judgment asking the Court to find that the Non-Compete Agreement she 15 signed when she began her employment with Defendant in Michigan is unenforceable. 16 ECF No. 11-2 at 4. The outcome of this issue depends on whether the Court applies 17 Michigan or California law. 18 Michigan courts have repeatedly held that reasonable agreements not to compete 19 subsequent to employment are enforceable. See Hubbard v. Miller, 27 Mich. 15, 21 20 (1873); see also Cardiology Assocs. of Sw. Mich., PC v. Zencka, 400 N.W.2d 606, 607- 21 08 (Mich. Ct. App. 1985). The Legislature explicitly permitted reasonable agreements 22 that restrict competition subsequent to termination of employment in Michigan Compiled 23 Laws section 445.774a, and Michigan courts are given the ability to judge the 24 reasonableness of the agreement. Bristol Window & Door v. Hoogenstyn, 650 N.W.2d 25 670, 674 (Mich. Ct. App. 2002). 26 In California, however, covenants not to compete are generally unenforceable. 27 The California Supreme Court has explained that section 16600 of the Business and 28 Profession Code demonstrates a “settled legislative policy in favor of open competition 8 1 and employee mobility.” Edwards v. Arthur Anderson LLP, 44 Cal. 4th 937, 946 (2008). 2 This policy “ensures that every citizen shall retain the right to pursue any lawful 3 employment and enterprise of their choice.” Id. at 946. 4 Plaintiff argues that, given her residency and work in California, this Court should 5 invalidate the Non-Compete Agreement because it is contrary to California public policy. 6 ECF No. 11-2 at 4-5. Defendant contends, however, that since the contractual 7 agreement was entered into in Michigan for work at a Michigan-based company, 8 Michigan law should apply.2 9 When a federal court hears a case on diversity jurisdiction, it must look to, and 10 apply, the choice of law rules for the state in which it sits. Paracor Fin., Inc. v. GE Elec. 11 Capital Corp., 96 F.3d 1151, 1164 (9th Cir.1996). Thus, this Court must apply California 12 “choice of law” rules to determine whether Michigan or California doctrine on non- 13 compete agreements is appropriate. Choice of law rules on this issue are addressed by 14 both statute and common law. 15 1. Statutory Choice of Law in California 16 California interprets contracts “according to the law and usage of the place where 17 it is to be performed; or, if it does not indicate a place of performance, according to the 18 law . . . of the place where it is made.” Cal. Civ. Code § 1646 (West 2015). There is no 19 dispute here that the contract was entered into in the State of Michigan and that it is 20 silent regarding a place of performance. Therefore, under this statute, Michigan law 21 should apply. 22 2. Common Law Choice of Law in California 23 Under common law, California applies a so-called “governmental interest” test to 24 decide choice of law cases. Kearney v. Salomon Smith Barney, Inc., 39 Cal. 4th 95, 107 25 (2006). Applying this test involves evaluating “the nature and strength of the interest of 26 each jurisdiction in the application of its own law to determine which state’s interest 27 /// 28 2 As previously noted, the Non-Compete Agreement did not include a choice of law provision. 9 1 would be more impaired if its policy were subordinated to the policy of the other state.” 2 Id. at 108 (internal citation and quotation marks omitted). 3 Plaintiff contends that because she is currently a resident of California and 4 because Defendant continued to employ her while she lived in California for three years, 5 California has an interest in invalidating this Non-Compete Agreement. ECF No. 11-2 at 6 5. Plaintiff cites to three California District Court cases in which covenants not to 7 compete executed in out-of-state jurisdictions were deemed unenforceable under 8 California law. See Gallagher & Co. v. Lang, No. C 14-0909 CW, 2014 WL 2195062 9 (N.D. Cal. May 23, 2014); Arkley v. Aon Ins. Risk Servs., Inc., No. CV 12-1966 DSF, 10 2012 WL 2674980 (C.D. Cal. June 13, 2012); Davis v. Advanced Care Technologies, 11 Inc., No. Civ. S-06-2449 RRB DAD, 2007 WL 2288298 (E.D. Cal. Aug. 8, 2007). Yet, all 12 three cases are distinguishable. 13 In Gallagher, the employee was hired to work exclusively in California and did all 14 of his work within the state. 2014 WL 2195062 at *3. In Arkley, the employees lived in 15 California for the entirety of their employment and only periodically travelled to Illinois to 16 visit the company headquarters. 2012 WL 2674980 at *3. In Davis, the employee lived 17 in California for the entirety of his employment. Moreover, the employee was employed 18 as the Regional Sales Manager for the western United States, which implies that a 19 significant portion of his operations was in California. 2007 WL 2288298 at *2. 20 In the present case, Plaintiff entered into her employment contract in Michigan 21 and worked in that state for a number of years before moving to California. Her 22 business-related contacts with California involved no more than one percent of her 23 overall business activity. Moreover, she sought employment with a direct competitor to 24 Defendant that is not licensed to do business in California and also has its principle 25 place of business in Michigan. See ECF No. 14 at 6. 26 The facts of this case are much more analogous to those in Shorter v. Peaches 27 Uniform, Inc., No. 2:10-cv-2232-MCE-GGH, 2012 WL 3882322 (E.D. Cal. Sept. 6, 28 2012). In Shorter, this Court held that a Non-Compete Agreement entered into in Texas 10 1 was enforceable when the plaintiff’s only connection to California was her residence. 2 This Court explained, “Texas was where the oral employment contract was negotiated 3 and formed, as well as the headquarters for Peaches and the location where Shorter 4 submitted her work. The only connection to California is Shorter's residence, which is 5 otherwise unrelated to her employment.” Id. at *11. 6 Almost identically to the situation in Shorter, Plaintiff conducted most of her 7 business activity outside of California with a large portion coming from Michigan, and she 8 entered into the Non-Compete Agreement in Michigan with a Michigan company. After 9 she was terminated by Defendant, Plaintiff sought and accepted employment with 10 another Michigan company. Her only contact with the state of California was her 11 residency and the roughly one percent of business she derived from California accounts. 12 Therefore, the Court finds that California’s interest in applying its law to this case is low. 13 Additionally, the Court finds that California’s interest in ensuring that its citizens 14 enjoy the highest level of mobility possible in seeking employment would be better 15 served by the application of Michigan law to this case. Companies from other states 16 would be less likely to allow their employees to transfer to California if they knew that 17 doing so would invalidate bargained-for clauses of the employee’s original employment 18 contract. Further, there is nothing in the Non-Compete Agreement that limits Plaintiff’s 19 ability to seek employment in California or elsewhere so long as it is not with one of the 20 nineteen listed companies. Therefore, California’s interest in employing its citizens is not 21 seriously limited by the Agreement because Plaintiff had ample opportunity to seek 22 employment elsewhere. 23 The highest interest in this case is that of the state of Michigan, which has an 24 interest in protecting the integrity of contractual agreements entered into within its 25 borders between Michigan residents and Michigan companies. Defendant and Plaintiff’s 26 new employer, Great Lakes Wire and Cable, conduct a large portion of their business in 27 Michigan and both are headquartered there. Ruling that non-compete agreements 28 /// 11 1 entered into in Michigan with Michigan companies are unenforceable would undermine 2 the state’s authority to regulate its businesses and citizens. 3 Given that California only has a limited interest in the issue presented by this case 4 and Michigan has such a remarkably higher interest, the California common law choice- 5 of-law test also results in the application of Michigan law. Thus, the Court cannot 6 determine the Non-Compete Agreement is invalid at this stage of the litigation and 7 Plaintiff’s Motion for Partial Summary Judgment is DENIED. 8 3. Abstention 9 Not only does the Court decline to grant Plaintiff summary judgment on this claim, 10 the Court sua sponte dismisses Plaintiff’s claim for declaratory judgment under the 11 doctrine of abstention.3 When evaluating whether to abstain from adjudicating a claim 12 for declaratory relief, courts look to (1) the desire to avoid needless determination of 13 state law issues, (2) the discouragement of forum shopping, and (3) avoidance of 14 duplicative litigation. R.R. St. & Co. v. Transp. Ins. Co., 656 F.3d 966, 975 (9th Cir. 15 2011). 16 As previously stated, Defendant brought suit against Plaintiff in Michigan state 17 court in order to enforce the Non-Compete Agreement. It is the Court’s understanding 18 that the Michigan suit is still pending. Instead of challenging the validity of the Non- 19 Compete Agreement in Michigan, Plaintiff filed suit in California seeking a declaration 20 that the Non-Compete Agreement was invalid under California law. This is a classic 21 case of forum shopping, which this Court has no interest in encouraging. Assessing the 22 reasonableness of this Non-Compete Agreement simultaneously in two separate 23 jurisdictions is duplicative and wasteful of judicial resources. In the best case scenario, 24 both courts come to the same conclusion. In the worst case scenario, contradictory 25 results are reached, creating the need for further litigation that could otherwise be 26 27 28 3 The discretion of whether to proceed with a declaratory relief action is vested in the Court. See Gov’t Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1223 (9th Cir. 1998); see also Wilton v. Seven Falls Co., 515 U.S. 277, 288 (1995) (“If a district court, in the sound exercise of its judgment, determines after a complaint is filed that a declaratory judgment will serve no useful purpose, it cannot be incumbent upon that court to proceed to the merits before staying or dismissing the action.”). 12 1 avoided through abstention. Or, in what appears to be happening here, the Michigan 2 court is forced to wait for a determination by this Court before it can proceed. The 3 Michigan court sits in a better position to adjudicate the reasonableness of the 4 Agreement under Michigan law, and this Court abstains from interfering with that 5 process. Accordingly, Plaintiff’s first claim for declaratory relief is DISMISSED. 6 7 CONCLUSION 8 9 For the reasons set forth above, Defendant’s Motion to Dismiss (ECF No. 8) is 10 DENIED, Plaintiff’s Motion for Partial Summary Judgment (ECF No. 11) is DENIED, and 11 Plaintiff’s first claim for declaratory relief is DISMISSED. The case proceeds on 12 Plaintiff’s second claim for breach of contract only. 13 14 IT IS SO ORDERED. Dated: July 6, 2015 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13

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