Fruit of the Loom, Inc. et al v. Zumwalt

Filing 27

MEMORANDUM OPINION AND ORDER by Chief Judge Joseph H. McKinley, Jr. on 11/19/2015. Defendant's motion to dismiss the Verified Complaint filed by Plaintiffs, for lack of personal jurisdiction, or alternatively, a motion to transfer the action to the United States District Court for the Northern District of Oklahoma (DN 20 ) is DENIED. cc: counsel, David G. Hymer (JWM) Modified to edit distribution on 11/19/2015 (JWM).

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
BOWLING GREEN DIVISION

CIVIL ACTION NO. 1:15CV-131-JHM
FRUIT OF THE LOOM, INC., ET AL.

PLAINTIFFS

V.
RUSTON B. ZUMWALT

DEFENDANT

MEMORANDUM OPINION AND ORDER
This matter is before the Court on a motion by Defendant, Ruston B. Zumwalt, to dismiss
the Verified Complaint filed by Plaintiffs, Fruit of the Loom, Inc. and Russell Brands, LLC, for
lack of personal jurisdiction, or alternatively, a motion to transfer the action to the United States
District Court for the Northern District of Oklahoma. [DN 20] Fully briefed, this matter is ripe
for decision.
I. BACKGROUND
Plaintiff, Ruston B. Zumwalt, is a resident of Owasso, Oklahoma. From April 2010
through September 15, 2015, Zumwalt was employed as a salesman by Russell Brands, LLC, an
operating company of Fruit of the Loom. Both Fruit of the Loom and Russell Brands are
Delaware limited liability companies with their principal place of business in Bowling Green,
Kentucky. During his tenure as salesman, Zumwalt sold Russell Brands’ athletic and Bike
products in Oklahoma and south central Kansas.

Zumwalt was Russell Brands’ sole

representative in the territory. During his five-year employment, Zumwalt traveled to Kentucky
as part of his job duties with Russell Brands for national sales meetings. Zumwalt had access to
sensitive and proprietary information concerning Fruit of the Loom and Russell Brands,

including customer lists and contact information, account information, sales figures,
merchandising and sales strategies, product pricing, and sales practices and policies.
On May 27, 2015, Zumwalt signed a Trade Secrets and Non-Competition Agreement (the
“Agreement”).

The Agreement was generated in Kentucky and signed by Zumwalt in

Oklahoma. The parties to the Agreement were Zumwalt and Fruit of the Loom. In Section 7 of
the Agreement, the parties stipulated that the Agreement “shall be construed according to the
laws of the Commonwealth of Kentucky, without regard for its conflicts of laws principles.”
Zumwalt signed the Agreement in exchange for participation in Fruit of the Loom’s 2015 Sales
Incentive Program which awarded “bonus” compensation to Fruit of the Loom sales personnel
based on their performance during the year.

In Section 11 of the Agreement, Zumwalt

acknowledged that participation in the 2015 Sales Incentive Program was “good and valid
consideration” for his promises in the Agreement, “whether or not a bonus [was] actually earned
under the Program.”
In Section 1 of the Agreement, Zumwalt promised during and after his employment “not
to disclose Confidential Information or Trade Secrets to third parties, or to use Confidential
Information or Trade Secrets on behalf of third parties.” In Section 5(a)(i) of the Agreement,
Zumwalt promised that for a period of 12 months after termination of his employment, he would
not solicit or participate in soliciting any Covered Customer, directly or indirectly, to purchase
products from a competitor, or to decrease its level of business with Fruit of the Loom or Russell
Brands. Further, in Section 5(a)(ii) of the Agreement, Zumwalt promised that for a period of 12
months after termination of employment, he would not directly or indirectly work or provide
services for a competitor.
In September of 2015, Zumwalt announced his intent to resign his position with Russell

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Brands and go to work for BSN Sports, a competitor of Fruit of the Loom. On September 15,
2015, Zumwalt’s attorney sent Fruit of the Loom a letter stating that the non-competition
provision in the Agreement is “void and cannot be enforced” under Oklahoma law. The letter
also informed Fruit of the Loom that Zumwalt “[w]ould not use or disclose any confidential or
trade secret information” to any third party. On September 28, 2015, Zumwalt began working
for BSN Sports.
Plaintiffs filed suit on October 23, 2015, alleging breach of the non-competition and the
non-solicitation provisions and injunctive relief based on both provisions. On November 4,
2015, Zumwalt filed this motion to dismiss for lack of personal jurisdiction, or alternatively, to
transfer the action to the United States District Court for the Northern District of Oklahoma.
II. MOTION TO DISMISS
The Court will first address Defendant’s motion to dismiss for lack of personal
jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2). The burden is on Plaintiffs to demonstrate that
jurisdiction exists. See Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991). To make
such a showing, “the plaintiff may not stand on his pleadings but must, by affidavit or otherwise,
set forth specific facts showing that the court has jurisdiction.” Id. Further, when presented with
a Rule 12(b)(2) motion, “the court has three procedural alternatives: it may decide the motion
upon the affidavits alone; it may permit discovery in aid of deciding the motion; or it may
conduct an evidentiary hearing to resolve any apparent factual questions.” Id. (citation omitted).
Plaintiffs have not sought an evidentiary hearing. In his reply, Defendant suggests that if
the Court found that there were issues of disputed facts related to personal jurisdiction which
require resolution at an evidentiary hearing, the parties could address these issues at the time
presently scheduled for the preliminary injunction hearing. Plaintiffs filed suit on October 23,

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2015, alleging breach of the non-competition and the non-solicitation provisions and injunctive
relief based on both provisions. On November 4, 2015, Zumwalt filed this motion to dismiss for
lack of personal jurisdiction, or alternatively, to transfer the action to the United States District
Court for the Northern District of Oklahoma. The Court does not believe the matter requires a
hearing.

If the Court determines the jurisdictional issue on written submissions only, the

plaintiff “need only make a prima facie showing of jurisdiction.” Compuserve, Inc. v. Patterson,
89 F.3d 1257, 1262 (6th Cir. 1996). When making such a determination without an evidentiary
hearing, “the court must consider the pleadings and affidavits in a light most favorable to the
plaintiff.” Id. Furthermore, the court must “not consider facts proffered by the defendant that
conflict with those offered by the plaintiff.” Neogen Corp. v. Neo Gen Screening, Inc., 282 F .3d
883, 887 (6th Cir. 2002).
Subject matter jurisdiction in this case is based on diversity of citizenship pursuant 28
U.S.C. § 1332. In a diversity case, a federal court determines whether personal jurisdiction
exists over a nonresident defendant by applying the law of the state in which it sits. Third
National Bank v. WEDGE Group Inc., 882 F.2d 1087, 1089 (6th Cir. 1989). The Court applies a
two-step inquiry to determine whether it may exercise personal jurisdiction over a nonresident
defendant: “(1) whether the law of the state in which the district court sits authorizes jurisdiction,
and (2) whether the exercise of jurisdiction comports with the Due Process Clause.” Brunner v.
Hampson, 441 F.3d 457, 463 (6th Cir. 2006).
A. Kentucky’s Long-Arm Statute
Looking first to Kentucky’s long-arm statute, the Kentucky Supreme Court has found
that the statute requires a two-prong showing before a court can exercise personal jurisdiction
over a nonresident. Caesars Riverboat Casino, LLC v. Beach, 336 S.W.3d 51, 57 (Ky. 2011).

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First, the Court must find that a nonresident’s conduct or activities fall within one of nine
enumerated subsections in KRS § 454.210.

In this case, Plaintiffs maintain that the cause of

action falls under either KRS § 454.210(2)(a)(1) or (2), which provide that courts “may exercise
personal jurisdiction over a person who acts directly or by an agent, as to a claim arising from
the person’s . . . [t]ransacting any business in this Commonwealth . . . .” or “contracting to
supply services or goods in this Commonwealth.”
If this first prong is satisfied, then the second prong requires the Court to determine if the
Plaintiffs’ claims arise from the Defendant’s actions. See KRS § 454.210(2)(b) (“When
jurisdiction over a person is based solely upon this section, only a claim arising from acts
enumerated in this section may be asserted against him.”).

Accordingly, “even when the

defendant’s conduct and activities fall within one of the enumerated categories, the plaintiff’s
claim still must ‘arise’ from that conduct or activity before long-arm jurisdiction exists.” Caesars
Riverboat, 336 S.W.3d at 56. This requires a showing of “a reasonable and direct nexus between
the wrongful acts alleged in the complaint and the statutory predicate for long-arm
jurisdiction[.]” Id. at 59. This analysis should be undertaken on a case by case basis, “giving the
benefit of the doubt in favor of jurisdiction.” Id.
1. Transacting Business in Kentucky
Zumwalt argues that his limited contacts with Kentucky while employed as a sales
representative with Russell Brands does not satisfy KRS § 454.210(2)(a)(1) which provides that
personal jurisdiction is proper as to a claim arising from a person’s transacting any business in
Kentucky. Zumwalt represents that in the five years that he was employed by Russell Brands he
never worked as a salesman in Kentucky, never made a single sales call to any potential
customer in Kentucky, and has never sold any Russell Brands’ merchandise in Kentucky.

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(Zumwalt Aff. ¶¶ 6, 10.) Similarly, Zumwalt avers that he has not done any work in Kentucky
nor does he anticipate doing any work in Kentucky for his new employer, BSN Sports, where he
has been employed since September 28, 2015.

Id. at ¶¶ 11, 13-14.

During Zumwalt’s

employment with Russell Brands, his immediate supervisor lived and worked in either
Tennessee or Arkansas – not Kentucky. Further, Zumwalt maintains that the non-compete
agreement does not contain Zumwalt’s consent to jurisdiction in Kentucky or a choice of venue
in Kentucky.
In response, Plaintiffs contend that personal jurisdiction over Zumwalt is appropriate
under KRS § 454.210(2)(a)(1). (Compl. ¶ 6.) The facts alleged in Plaintiffs’ complaint to
support his transacting business in Kentucky are: (i) Zumwalt’s attendance at multi-day sales
meetings at Russell Brands headquarters in Bowling Green, Kentucky in May 2010, October
2010, February 2011, May 2011, October 2011, February 2012, May 2012, October 2012,
February 2013, May 2013, October 2013, May 2014, October 2014, and May 2015; (ii) his
attendance at Sales Council meetings at Russell Brands headquarters in Bowling Green,
Kentucky for three days on three separate occasions between 2013 and 2015; (iii) procurement of
sensitive and proprietary information concerning Fruit of the Loom and Russell Brands,
including customer lists and contact information, account information, sales figures,
merchandising and sales strategies, product pricing, and sales practices and policies from sources
at Russell Brands headquarters in Bowling Green; (iv) reporting to a regional Director of Sales
who was located in Arkansas and who ultimately reported to the Vice President of Sales located
in Bowling Green; (v) depending on personnel in Bowling Green, Kentucky to perform
administrative functions supporting his day-to-day work as a salesman for Russell Brands; and
(vi) maintaining regular electronic and telephone communications with Russell Brands

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headquarters in Bowling Green, Kentucky. Id. at ¶ 13-19.  
Based on Plaintiffs’ factual allegations, the Court believes that Plaintiffs made a prima
facie showing that Zumwalt “transacted business” in Kentucky, thus satisfying the first prong of
Kentucky’s long-arm statute. The alleged facts show that from April 2010 through September
2015, Zumwalt was a sales representative for Russell Brands, a Kentucky-based company. As a
regular part of his job duties, Zumwalt transmitted customer orders to Russell Brands
headquarters in Kentucky; he received direction and assistance from sales personnel at Russell
Brands headquarters in Kentucky; he received marketing materials and product information from
and in Kentucky; he received customer lists and contacts for his territory in Kentucky; he
transmitted customer orders using his company-issued electronic device to Russell Brand
headquarters in Kentucky; he relied upon Russell personnel in Kentucky to provide
administrative functions relating to accounting and payroll, human resources, and customer
service; he submitted reimbursements and reports for expenses for customer meals,
entertainment, and travel to Russell Brands headquarters in Kentucky; and he maintained
frequent communications by email and telephone with Russell Brand personnel in Kentucky.
(Reber Decl; Davis Decl.)
Significantly, during his five-year employment with Russell Brands, Zumwalt traveled to
Kentucky 14 times for three-day national sales meetings and three more times for multi-day
Sales Council meetings. The national sales meetings included not only continuing education and
training components, but also included information regarding which products Russell Brands
intended to take to market, the marketing plan and pricing for those products, and overall sales
goals of the company. (Reber Decl. ¶ 17.) At the meetings of the Sales Council (a group
comprised of the three regional sales directors plus two to three sales representatives from each

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region), corporate executives discussed the market strategy for the next year, new products and
pricing, and Russell’s plan to compete with other products and manufacturers in the market.
(Reber Decl. ¶ 19.) Zumwalt was asked to and consented to participate in 2013 and 2014. When
a vacancy on the Sales Council arose in 2015, Zumwalt volunteered to fill the vacancy. He
traveled to Kentucky for a three-day Sales Council meeting in late August/early September 2015,
only two weeks before he resigned from the company. (Reber Decl. ¶ 18.) As noted above, at
both the national sales meeting and especially in the Sales Council meetings that he attended in
Kentucky, Zumwalt obtained significant confidential information from Fruit of the Loom and
Russell Brands. (Reber Decl. ¶¶ 17, 19-20.) Zumwalt correctly points out that Plaintiffs did not
assert a claim against Zumwalt for breach of the confidentially provision in the Agreement.
However, Zumwalt’s procurement of confidential information including customer lists, product
information, and marketing information from Fruit of the Loom and Russell Brands relate to
Plaintiffs’ claims for breach of the non-competition and the non-solicitation provisions of the
Agreement.
Furthermore, contrary to Zumwalt’s argument, calling on customers in Oklahoma was
not the full extent of his business activities as a sales representative for Russell Brands. As
reflected in the record, Zumwalt was engaged in work for Russell Brands when he attended both
national sales meetings and Sales Council meetings, and he was reimbursed by Russell for his
travel.

According to Kevin Reber, Vice President of Sales for Russell Athletic, one of

Zumwalt’s “duties as a sales representative was to attend, several times each year, 3-day national
sales meetings in Kentucky.” (Reber Decl. ¶ 17.) In contrast to the cases relied upon by
Defendant, Zumwalt did not have limited communications or contacts with Kentucky; instead,
Zumwalt traveled to Kentucky as part of his job at least 17 times in a five-year period. These

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contacts cannot be characterized as limited and passive as Defendant attempts to do. Thus,
Zumwalt’s contacts with Kentucky were part of Zumwalt’s ongoing business activities with
Russell Brands. See Rickett v. Smith, 2014 WL 5520626, *3 (W.D. Ky. Oct. 31, 2014);
Production Group International, Inc. v. Goldman, 337 F. Supp. 2d 788, 793-97 (E.D. Va. 2004).
Viewing these facts in a light most favorable to Plaintiff, the Court concludes that Zumwalt did
transact business under KRS § 454.210(2)(a)(1). Because the Court finds KRS 454.210(2)(a)(1)
applies, there is no reason to determine whether KRS 454.210(2)(a)(2) is relevant. Therefore,
the Court will now consider whether such conduct gave rise to the underlying claim of
negligence.
2. Arising from
Having satisfied the first prong, the second prong requires the Court to determine if the
Plaintiffs’ claims arise from the Defendant’s actions. See KRS § 454.210(2)(b) (“When
jurisdiction over a person is based solely upon this section, only a claim arising from acts
enumerated in this section may be asserted against him.”). In Caesars, the Kentucky Supreme
Court interpreted the “arising from” requirement in KRS § 454.210 to mean that “‘the wrongful
acts of the defendant alleged in the plaintiff’s complaint must originate from the actions or
activities that form the applicable statutory predicate for assertion of long-arm jurisdiction.’”
Bayou City Exploration, Inc. v. Consumer Advocate Services Enterprises, LLC, 2015 WL
4094259, *6 (W.D. Ky. July 7, 2015)(quoting Caesars Riverboat, 336 S.W.3d at 58–59). In
other words, “the statutory foundation for the assertion of long-arm jurisdiction must be the
source of the plaintiff’s cause of action.” Caesars Riverboat, 336 S.W.3d at 58–59. There must
be “a reasonable and direct nexus between the wrongful acts alleged in the complaint and the
statutory predicate for long-arm jurisdiction.” Id.

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In the present case, Zumwalt accepted employment as a sales representative with Russell
Brands, a Kentucky based company. Not only did Zumwalt’s job entail sales of Russell Brands’
products in Oklahoma and Kansas, but also involved extensive training at the company’s
headquarters in Bowling Green, Kentucky. In fact, as discussed above, over a five-year period,
Zumwalt was required to attend 14 national sales meetings and voluntarily attended three Sales
Council meetings. In the course and scope of his employment with Russell Brands, Zumwalt
signed the Trade Secrets and Non-Competition Agreement in which he agreed not to compete or
solicit customers if he left employment in exchange for participation in the Sales Incentive
Program offered by Fruit of the Loom. The Agreement was designed to protect Russell Brands’
past and ongoing investments in the education and training of their sales staff and protect the
value of the Fruit of the Loom and Russell Brands’ confidential information, including customer
lists and contact information, account information, sales figures, merchandising and sales
strategies, product pricing, and sales practices and policies. (Davis Decl. ¶¶ 9-11.) Zumwalt
acquired both educational and proprietary information during his attendance at national sales
meetings and Sales Council meeting in Kentucky. The causes of action arise out of Zumwalt’s
business relationship with Russell Brands and his alleged breach of the Trade Secrets and NonCompetition Agreement. Thus, the Court finds that a “reasonable and direct nexus” between the
wrongful acts alleged in the complaint and the statutory predicate exists.
Taking the pleadings in the light most favorable to Plaintiffs, the Court concludes that
Plaintiffs’ claims arise out of Zumwalt’s transacting business in Kentucky.
B. Due Process
After finding that Kentucky authorizes jurisdiction, the Court must determine whether the
exercise of personal jurisdiction conforms with due process. “The relevant inquiry is whether the

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facts of the case demonstrate that the nonresident defendant possesses such minimum contacts
with the forum state that the exercise of jurisdiction would comport with ‘traditional notions of
fair play and substantial justice.’” Theunissen v. Matthews, 935 F.2d 1454, 1459 (6th Cir. 1991)
(quoting International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). The Sixth Circuit has
identified three criteria for determining whether specific in personam jurisdiction may be
exercised. 
First, the defendant must purposefully avail himself of the privilege of acting in
the forum state or causing a consequence in the forum state. Second, the cause of
action must arise from the defendant’s activities there. Finally, the acts of the
defendant or consequences caused by the defendant must have a substantial
enough connection with the forum state to make the exercise of jurisdiction over
the defendant reasonable.
Southern Machine Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968).
Under the first prong of the Southern Machine test, Plaintiffs must establish that Zumwalt
purposefully availed himself of the privilege of acting in Kentucky or causing consequences in
Kentucky. In determining whether a nonresident defendant has purposefully availed himself of
the benefits and protections of the forum state for purposes of personal jurisdiction, no single
factor is dispositive. See Gateway Press, Inc. v. LeeJay, Inc., 993 F. Supp. 578, 581 (W.D. Ky.
1997). “Rather, the Court’s conclusion will emerge from a careful evaluation of all of the facts
and circumstances of the parties’ business relationship taken as a whole.” Id. Jurisdiction is
proper under the purposeful availment requirement “where the contacts proximately result from
actions by the defendant himself that create a ‘substantial connection’ with the forum State.”
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985). Moreover, the defendant’s conduct
and connection with the forum must be of a character that he or she should reasonably anticipate
being haled into court there. Id. at 474. “This ‘purposeful availment’ requirement ensures that a
defendant will not be haled into a jurisdiction solely as a result of ‘random,’ ‘fortuitous,’ or
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‘attenuated’ contacts’ . . . or of the ‘unilateral activity of another party or third person.’” Id. at
475 (internal citations omitted). “The emphasis in the purposeful availment inquiry is whether
the defendant has engaged in ‘some overt actions connecting the defendant with the forum
state.’” See also Bridgeport Music, Inc. v. Still N the Water Pub, 327 F.3d 472, 478 (6th Cir.
2003)(quoting Dean v. Motel 6 Operating L.P., 134 F.3d 1269, 1274 (6th Cir. 1998)).
The Supreme Court has emphasized, with respect to interstate contractual obligations,
that “parties who ‘reach out beyond one state and create continuing relationships and obligations
with citizens of another state’ are subject to regulation and sanctions in the other State for the
consequences of their activities.” LAK, Inc. v. Deer Creek Enterprises, 885 F.2d 1293, 1300 (6th
Cir. 1989) (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 299 (1980);
Hanson v. Denckla, 357 U.S. 235, 253 (1958); Burger King, 471 U.S. at 473). For a personal
jurisdiction determination in the context of an employment contract dispute, “matters such as
contract negotiations, contemplated future consequences of the employment agreement, the
terms of the employment contract and the parties’ course of dealing will be considered.” United
Radio, Inc. v. Wagner, 448 F. Supp. 2d 839, 841 (E.D. Ky. 2006) (citing Conti v. Pneumatic
Products Corp., 977 F.2d 978, 982 (6th Cir. 1992)).
In this case, the parties’ business relationship bears a substantial connection with
Kentucky. As discussed above, Zumwalt entered into a business relationship and contract with
Russell Brands, a Kentucky-based company. Zumwalt was employed by Russell Brands for
more than five years. He was physically present in Kentucky on at least 17 separate occasions in
connection with his employment for both national sales meetings and Sales Council meetings,
where he obtained training and confidential information of Fruit of the Loom and Russell
Brands.

He relied upon staff at the Kentucky headquarters of Russell Brands to perform

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administrative functions.

He sent customer orders and expense reports to Kentucky for

processing, and he maintained frequent communications by email and telephone with Russell
employees in Kentucky.

He relied on Russell Brands personnel in Kentucky to provide

administrative functions relating to accounting and payroll, human resources, and customer
service. He received customer lists and marketing material in Kentucky to take back to his
Oklahoma/Kansas territory. (Zumwalt Aff. ¶ 4.) Acquisition of information both confidential
and otherwise was obtained in Kentucky through the Sales Council meetings, one of which
occurred two weeks days prior to his resignation from Russell Brands. Here, Defendant chose to
enter into an Agreement that contemplated the continuing contact with the corporation’s
headquarters in Bowling Green, Kentucky. As noted by a district court in a similar case, “it is
difficult to accept that his involvement with the forum was not free and intentional.” KraussMaffei Corp. v. Donovan, 2008 WL 108757, *4 (E.D. Ky. Jan. 9, 2008). Moreover,
“Defendant’s relationship to Kentucky cannot not be described as merely ‘passive,’ as Defendant
has traveled to Kentucky for employment purposes and depended on Kentucky headquarters for
administrative support.” Id. (citing Hillerich & Bradsby Co. v. Hall, 147 F. Supp. 2d 672, 677
(W.D. Ky. 2001)). See also AlixPartners, LLP v. Brewington, 2015 WL 5273878, *6 (E.D.
Mich. Sept. 9, 2015)(citing cases); United Radio, 448 F. Supp. 2d at 841.
Moreover, the Agreement in question was drafted by Fruit of the Loom in Kentucky, and
the parties anticipated that the Agreement would result in further conduct in Kentucky, including
Zumwalt’s access to confidential information and his participation in the Sales Incentive
Program. The Agreement also contained a Kentucky choice-of-law provision. Although not
dispositive, “the choice-of-law provision contained in the parties’ agreement is relevant to the
personal jurisdiction issue.” Krauss-Maffei Corp. v. Donovan, 2008 WL 108757, *4 (E.D. Ky.

13 

Jan. 9, 2008)(citing LAK, 885 F.2d at 1295.). “Though standing alone not determinative, a
choice-of-law provision supports the inference that Defendant intended to avail himself of the
benefits and protections of Kentucky law. . . . Having elected to invoke the benefits of Kentucky
law for resolving disputes under the contract, there is obviously much to be said in favor of
letting such disputes be resolved in [that state].” Id. (internal quotations and citations omitted).
In other words, the Kentucky choice-of-law provision contained in the Agreement reinforces
Zumwalt’s “deliberate affiliation with the forum State and the reasonable foreseeability of
possible litigation there.” United Radio, 448 F. Supp. 2d at 843.   See Burger King, 471 U.S. at
482 (choice of law provisions should not be ignored in considering whether a defendant has
“purposefully invoked the benefits and protections of a State’s law” for jurisdictional purposes).
Based on a consideration of the facts of this case, the Court finds that Zumwalt had
connections with Kentucky and availed himself of the forum. Thus, the first prong of Southern
Machine is satisfied.
The second and third prongs under the Southern Machine test are less stringent. See Air
Products and Controls, Inc. v. Safetech Intern., Inc., 503 F.3d 544, 553-55 (6th Cir. 2007). The
second prong of the Southern Machine test states that “the cause of action must arise from the
defendant’s activities” in the forum. Southern Machine, 401 F.2d at 381. For the second prong,
the Court must simply determine “whether the causes of action were ‘made possible by’ or ‘lie in
the wake of’ the defendant’s contacts, . . . or whether the causes of action are ‘related to’ or
‘connected with’ the defendant’s contacts with the forum state[.]” Air Products, 503 F.3d at 553
(quoting Youn v. Track, Inc., 324 F.3d 409, 419 (6th Cir. 2003)) (internal citations omitted).
“‘The activities do not have to directly result in the cause of action, they must only ‘have a
substantial connection with the defendant’s in-state activities.’” Krauss-Maffei Corp., 2008 WL

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108757, *6 (quoting United Radio, 448 F.Supp.2d at 842).
As discussed in more detail above, in the present case, Zumwalt entered into a business
relationship with a Kentucky company; engaged in required training exercises and meetings
within Kentucky; received customer lists and marketing materials in Kentucky to take back and
use in his territory in Oklahoma and Kansas; maintained regular communications with Russell
Brands’ personnel in Kentucky; and entered into an agreement not to compete or solicit
customers if he left employment with Russell Brands in exchange for participation in the Sales
Incentive Program. The Court finds that Zumwalt’s ongoing contacts with Russell Brands’
personnel in Kentucky and his participation in sales meetings and Sales Council meetings in
Kentucky where he procured confidential information including customer lists are sufficient to
establish a “substantial connection” with Plaintiffs’ claims that Zumwalt breached the
Agreement. Thus, this requirement of specific jurisdiction is satisfied. See Krauss-Maffei Corp.,
2008 WL 108757, *6; United Radio, 448 F.Supp.2d at 842.
Finally, under the third requirement of the Southern Machine test, “the acts of the
defendant or consequences caused by the defendant must have a substantial enough connection
with the forum state to make the exercise of jurisdiction over the defendant reasonable.”
Southern Machine, 401 F.2d at 381. “[W]here, as here, the first two criterion are met, ‘an
inference of reasonableness arises’ and ‘only the unusual case will not meet this third criteria.’”
Air Products, 503 F.3d at 554 (quoting Theunissen v. Matthews, 935 F.2d 1454, 1461 (6th
Cir.1991)). Under the third prong, several factors are often considered, including “(1) the burden
on the defendant; (2) the interest of the forum state; (3) the plaintiff’s interest in obtaining relief;
and (4) other states’ interest in securing the most efficient resolution of the policy.” Id. at 554-55
(citation omitted).

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In this case, Zumwalt’s contacts with Kentucky are substantial enough to make the
exercise of personal jurisdiction reasonable. Zumwalt’s inconvenience in litigating the matter in
Kentucky does not overcome the inference of reasonableness. Zumwalt was employed by
Russell Brands for five years and during that period of time he traveled at least 17 times to
Kentucky. Zumwalt hoped to profit financially from his employment with Russell Brands. By
signing the Agreement, he was eligible to participate in the Sales Incentive Program.

“[I]t is

hard to believe Defendant did not reasonably foresee that he might be haled into Kentucky Court
based on the employment arrangement contemplated in the parties’ agreement and the choice-oflaw provision therein.” Krauss-Maffei Corp., 2008 WL 108757, *6. See also United Radio, 448
F. Supp. 2d at 843.
Based on the analysis of the facts and the relevant case law, the Court finds personal
jurisdiction proper.
III. MOTION TO TRANSFER
In the alternative, Defendant moves to transfer the case to the United States District Court
for the Northern District of Oklahoma pursuant to 28 U.S.C. § 1404. Zumwalt argues that the
totality of the circumstances and common sense indicate that Oklahoma is the most appropriate
forum for this litigation. Section 1404(a) 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.” 28 U.S.C. § 1404(a). Under this section,
“Congress intended to give district courts the discretion to transfer cases on an individual basis
by considering convenience and fairness.” Kerobo v. Southwestern Clean Fuels, Corp., 285 F.3d
531, 536- 537 (6th Cir. 2002). The district court “should consider the private interests of the
parties, including their convenience and the convenience of potential witnesses, as well as other

16 

public-interest concerns, such as systemic integrity and fairness, which come under the rubric of
‘interests of justice.’” Moses v. Business Card Exp., Inc., 929 F.2d 1131, 1137 (6th Cir. 1991);
Kerobo, 285 F.3d at 537–538; Travelers Property Casualty Co. of America v. Centimark, Corp.,
2005 WL 1038842, *3 (S.D. Ohio May 3, 2005). The Sixth Circuit suggests that relevant factors
to be considered include: “(1) the convenience of 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 the operative facts; (5) the availability of process to compel attendance of
unwilling witnesses; (6) the relative means of the parties; (7) a forum’s familiarity with the
governing law; (8) the weight accorded the plaintiff’s choice of forum; and (9) trial efficiency
and the interests of justice based upon the totality of the circumstances.” National City Bank v.
Breeden, 2009 WL 3514587, *1 (W.D. Ky. Oct. 29, 2009)(citing Kattula v. Jade, 2007 WL
1695669 (W.D. Ky. June 8, 2007); Kentucky Speedway, LLC v. National Ass'n of Stock Car
Auto Racing, Inc., 406 F. Supp. 2d 751 (E.D. Ky. 2005). See also Reese v. CNH America LLC,
574 F.3d 315, 320 (6th Cir. 2009)). The moving party generally has the burden of proving that
transfer is appropriate and the plaintiff’s choice of forum is entitled to considerable weight.
Travelers Property Casualty, 2005 WL 1038842, *4 (S.D. Ohio May 3, 2005); Bacik v. Peek,
888 F. Supp. 1405, 1414 (N.D. Ohio May 14, 1993).
A. Convenience of the Parties, Convenience of Witnesses, and Access to Proof
Plaintiffs are headquartered in Kentucky. Plaintiffs argue that they would incur great
expense for themselves and counsel to travel to Oklahoma for depositions, hearings, and a trial.
Zumwalt, as the key witness for the defense, lives and works in Oklahoma and avers that
litigating in Kentucky would be inconvenient for him.

Clearly, the Plaintiffs would be

inconvenienced by litigating in Oklahoma, and Defendant likewise would be inconvenienced by

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litigating in Kentucky. Generally, “[a] transfer is not appropriate if the result is simply to shift
the inconvenience from one party to another.” Wayne County Employees’ Retirement Sys. v.
MGIC Inv. Corp., 604 F. Supp. 2d 969, 975 (E.D. Mich. 2009) (citing Evans Tempcon, Inc. v.
Index Indus., Inc., 778 F.Supp. 371, 377 (W.D. Mich. 1990)).
To establish their claims, Plaintiffs will rely on documents and witnesses located in
Kentucky. Two likely witnesses, Russell Brands’ Senior Vice-President and General Manager
Robert Davis and Vice President of Sales Kevin Reber have stated in their Declarations that
participating in hearings and a trial in Oklahoma would be inconvenient for them. Defendant
argues that any customers in Oklahoma and Kansas that would need potentially to testify
regarding sales or solicitations made by Zumwalt would be based in Oklahoma or Kansas, and
not in Kentucky. See Global Fitness Holdings, LLC v. Federal Recovery Acceptance, Inc., 2013
WL 1187009, *4 (E.D. Ky. Mar. 20, 2013) (concluding that the convenience of party witnesses
did not favor transfer because “neither forum will be convenient for all party witnesses”). The
Court believes that these three factors favor neither party.
B. Locus of Operative Fact
Here, the parties dispute where the operative facts giving rise to the suit occurred.
Plaintiffs maintain that the operative facts are centered in Kentucky. Specifically Plaintiffs cite
Zumwalt’s employment with Russell Brands; Russell Brands’ training and disclosure of
confidential information, including customer lists, with Zumwalt in national sales meetings and
Sales Council meetings; and the harm to Russell Brand resulting from Zumwalt’s breach of the
Agreement are centered in Kentucky. In contrast, Zumwalt argues that the events that gave rise
to this suit occurred in Oklahoma. Specifically, Zumwalt contends that he had no responsibility
beyond Oklahoma and parts of Kansas, and therefore, the locus of operative facts is Oklahoma.

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A review of the record reveals that operative facts occurred in both the Western District of
Kentucky and the Northern District of Oklahoma. Accordingly, the Court finds that this factor
favors neither party.
C. Availability of Process to Compel Attendance of Unwilling Witnesses
In considering the availability of process to compel attendance of an unwilling witness,
this factor favors neither party, as compelling the attendance in either state of unwilling
witnesses from the other state is equally possible. Functional Pathways of Tenn., LLC v. Wilson
Senior Care, Inc., 866 F. Supp. 2d 918 (E.D. Tenn. 2012).
D. Relative Means of the Parties
Zumwalt states that he would be highly inconvenienced and burdened in terms of both
time and money by having to litigate in Kentucky. (Zumwalt Aff. ¶15.) Zumwalt points out that
Plaintiffs are global companies with employees all around the world, and Zumwalt is an
individual who works in Oklahoma and Kansas. While a corporate plaintiff would appear to have
more financial resources than an individual defendant, Zumwalt has not presented any
documentation of his financial resources that would suggest that he is unable to litigate this
action in Kentucky.

Rickett, 2014 WL 5520626, *6 (“Defendants fail to supply financial

information that would justify transferring to Florida.”).
E. Forum Familiar with Governing Law
Pursuant to the express choice-of-law provision in the Agreement, this dispute is
governed by Kentucky law. Thus, this Court is more familiar with the laws of Kentucky
compared to the Norther District of Oklahoma.
litigating this action in Kentucky.

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Therefore, this factor weighs in favor of

F. Plaintiffs’ Choice of Forum and Interests of Justice
The weight accorded a Plaintiff’s choice of forum plainly favors Fruit of the Loom and
Russell Brands. “[U]nless the balance is strongly in favor of the defendant, the plaintiff’s choice
of forum should rarely be disturbed.” Reese, 574 F.3d at 320 (citations omitted). Similarly, the
interests of justice based on the totality of the circumstance weighs heavily in favor of retaining
this matter in Kentucky. In support of his argument that the interest of justice favors the transfer
of this matter to Oklahoma, Zumwalt maintains that this lawsuit is a blatant attempt to forum
shop by the Plaintiffs in an attempt to circumvent clear Oklahoma law and public policy.
According to Defendant, in Oklahoma non-compete agreements are statutorily void, contrary to
public policy, and unenforceable. Thus, Defendant maintains that the non-compete agreement
would not be enforced in Oklahoma – even with the Kentucky choice of law provision. See
Herchman v. Sun Med., Inc., 751 F. Supp. 942, 945 (N.D. Okla. 1990). It is undisputed that in
exchange for participation in the Sales Incentive Program with Fruit of the Loom, Zumwalt
signed a non-compete agreement that contained a Kentucky choice of law provision. Given the
admitted likelihood that Oklahoma courts will not adhere to Kentucky law in the present case
despite the choice of law provision in the Agreement, the Court finds that the interest of justice
weighs in favor of retaining jurisdiction in Kentucky.
Accordingly, balancing the above factors, the Court concludes that transfer of this matter
to the Northern District of Oklahoma is not appropriate.
IV. CONCLUSION
For the foregoing reasons, IT IS HEREBY ORDERED that the motion by Defendant,
Ruston B. Zumwalt, to dismiss the Verified Complaint filed by Plaintiffs, Fruit of the Loom, Inc.
and Russell Brands, LLC, for lack of personal jurisdiction, or alternatively, a motion to transfer

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the action to the United States District Court for the Northern District of Oklahoma [DN 20] is
DENIED.

November 19, 2015

cc: counsel of record

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