Carmicle v. BJI Holdings, LLC et al

Filing 23

MEMORANDUM OPINION by Senior Judge John G. Heyburn, II on 6/19/2014 - Defendants 6 motion to transfer this case is SUSTAINED and the case is TRANSFERRED to the Southern District of Florida for consolidation with the first filed case. Carmicles 12 motion to remand is DENIED. All other motions are MOOT.cc: Counsel, Southern District of Florida(DAK)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
AT LOUISVILLE
CIVIL ACTION NO. 3:14-CV-00286-H
CHRISTOPHER CARMICLE

PLAINTIFF

v.
BJI HOLDINGS, LLC, et al.

DEFENDANTS

MEMORANDUM OPINION
Insofar as the Court can determine, the parties’ dispute here arises from Plaintiff
Carmicle’s performance as a leading executive for Defendants, Brown Jordan, some of its
executives and its affiliates. Plaintiff claims that using legitimate access to company e-mails he
uncovered various fraudulent securities schemes among the company’s top executives.
Defendants, in turn, believe that Plaintiff defrauded them and their company and unlawfully
hacked into their personal e-mails.
The legal proceedings began when Defendants filed claims in federal court in the
Southern District of Florida. A week later Carmicle filed his own related claims in Jefferson
Circuit Court. Defendants removed Carmicle’s state lawsuit to federal court here on grounds
that it included several federal claims.
Defendants want the cases to proceed in Florida where they filed the first claims of this
lawsuit and where Plaintiff’s employment agreements designate as the proper forum for any
dispute. Consequently, they have moved to transfer our case to the Southern District of Florida
pursuant to 28 U.S.C. § 1404(a), which allows transfer for the convenience of the parties and
witnesses and in the interest of justice. Carmicle wants his claims remanded to state court

because he believes his ten state court claims predominate over his two comparatively minor
federal claims. Consequently, he has moved to remand to state court pursuant to 28 U.S.C. §
1447(c). Moreover, Carmicle urges the Court to decline to exercise its supplemental jurisdiction
under 28 U.S.C. § 1367(a) and (c). There is no perfect answer which can give respect to all the
legitimate interests asserted here.
The claims asserted by each side are essentially mirror images of the other. Whenever
each party finally asserts counterclaims, the Florida and Kentucky actions should be virtually
identical. The Court has the discretion to determine which motion—to transfer or remand—that
it should consider first. See Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422,
431 (2007); see also Med. Mut. of Ohio v. k. Amalia Enterprises Inc., 548 F.3d 383, 393 (6th Cir.
2008).
Defendants are headquartered in Florida and do business nationwide. Carmicle worked
for Defendants from 2002 until his termination in 2014. He lived in Florida until 2005, and then
moved to Kentucky but continued to travel to Florida for work. Both sides claim a substantial
amount of evidence and witnesses would come from either state. It is impossible to say now
where the evidence would predominate.
Defendants’ motion to transfer presents the clearest path. The first-to-file rule, a “wellestablished doctrine that encourages comity among federal courts of equal rank,” AmSouth Bank
v. Dale, 386 F.3d 763, 791 n.8 (6th Cir. 2004) (quoting Zide Sport Shop of Ohio v. Ed Tobergte
Assoc., Inc., 16 Fed.Appx. 433, 437 (6th Cir. 2001) (unpublished)) presents a strong case for
transfer because (1) the two actions are very similar, see Certified Restoration Dry Cleaning
Network, L.L.C. v. Tenke Corp., 511 F.3d 535, 551 (6th Cir. 2007); (2) inconvenience in any
venue seems equal for the parties and (3) the contractual venue provision at least partially

supports a Florida venue, see Preferred Capital, Inc. v. Associates in Urology, 453 F.3d 718, 721
(6th Cir. 2006).
Carmicle claims that Defendants have tricked him by pretending to negotiate, then filing
in Florida and improperly removing to federal court here. The Court is certain that the parties
were engaged in negotiations but it is far from clear that Defendants deceived Plaintiff into
delaying his own lawsuit. Moreover, removal is certainly proper based on Plaintiff’s federal
claims. See 28 U.S.C. § 1441(c); 28 U.S.C. § 1367(a).
The only issues for remand are (1) whether Carmicle’s federal claims are so related to the
state claims that this Court should retain supplemental jurisdiction over the latter claims and (2)
whether the state claims so substantially predominate that at best they should be remanded.
Plaintiff’s ten state claims seem more substantial and significant than the two federal claims for
computer infringement. On the other hand, the federal and state claims, all stemming from
Carmicle’s termination and likely involving overlapping facts and witnesses, seem sufficiently
related for the Court to exercise supplemental jurisdiction over the state law claims. See United
Mine Workers of Am. v. Gibbs, 383 U.S. 715 (1966). The decision to do so is within the Court’s
discretion. Taylor v. First of Am. Bank–Wayne, 973 F.2d 1284, 1287 (6th Cir.1992).
This is a close case with several legitimate competing interests. The Sixth Circuit directs
that, in determining whether to exercise supplemental jurisdiction, a court should consider
“interests of judicial economy and the avoidance of multiplicity of litigation and balance those
interests against needlessly deciding state law issues.” Landefeld v. Marion Gen. Hosp., Inc.,
994 F.2d 1178, 1182 (6th Cir. 1993) (quoting Aschinger v. Columbus Showcase Co., 934 F.2d
1402, 1412 (6th Cir. 1991)). Where judicial economy would not be served and the case does not

raise complex or novel issues of state law, this Court has previously retained supplemental
jurisdiction. See Tallon v. Lloyd & McDaniel, 497 F.Supp. 2d 847, 854 (W.D. Ky. 2007).
Despite the significance of the state law claims, the interests of justice are not advanced
by splitting these claims between state and federal courts or having them litigated in separate
federal courts. Rather, separate proceedings may lead to duplication and inefficiency. Further,
this case presents no novel issues of state law. Transfer to the Southern District of Florida
complies with the reasonable concerns and objectives of the first-to-file rule and allows
resolution of this controversy in a forum where jurisdiction and venue are probably most
appropriate.
Being otherwise sufficiently advised,
IT IS HEREBY ORDERED that Defendants’ motion to transfer this case is SUSTAINED
and the case is TRANSFERRED to the Southern District of Florida for consolidation with the
first filed case.
IT IS FURTHER ORDERED that Carmicle’s motion to remand is DENIED.
All other motions are MOOT.

June 19, 2014

cc:

Counsel of Record
Southern District of Florida