Medtronic Inc, et al v. Gannon, et al
MEMORANDUM OPINION AND ORDER granting 13 Motion to Remand to State Court; denying as moot 4 Motion to Dismiss for Lack of Jurisdiction (Written Opinion) Signed by Judge Susan Richard Nelson on 10/16/2017. (LMT)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Medtronic Sofamor Danek, Inc.,
Medtronic Sofamor Danek USA, Inc.,
and Medtronic, Inc.,
Case No. 0:17-cv-00943 (SRN/FLN)
Patrick B. Gannon,
Jonathan S. Parritz, Melissa R. Muro LaMere, Wayne S. Moskowitz, and William Z.
Pentelovitch, Maslon LLP, 90 South Seventh Street, Suite 3300, Minneapolis, Minnesota
55402, for Plaintiffs.
Anthony Barrett Haller and Leigh Ann Buziak, Blank Rome LLP, One Logan Square,
130 North Eighteenth Street, Philadelphia, Pennsylvania 19103, Mary L. Knoblauch,
Anthony Ostlund Baer & Louwagie PA, 90 South Seventh Street, Suite 3600,
Minneapolis, Minnesota 55402, for Defendant.
SUSAN RICHARD NELSON, United States District Judge
This matter is before the Court on two motions: Defendant’s Renewed Motion to
Dismiss for Lack of Personal Jurisdiction and Improper Venue or, in the Alternative, to
Transfer [Doc. No. 4] (“Motion to Dismiss”), and Plaintiffs’ Motion to Remand [Doc.
Defendant Patrick Gannon (“Gannon”) removed this case to federal court from
Anoka County District Court where it was originally filed. Plaintiffs Medtronic, Inc.,
Medtronic Sofamor Danek, Inc., and Medtronic Sofamor Danek USA, Inc. (collectively
“Medtronic”) maintain that Gannon is bound to litigate this claim in Minnesota state court
by a valid forum selection clause in his employment contract. The Court finds that the
forum selection clause is binding and grants Medtronic’s Motion to Remand.
Consequently, the Court does not reach Gannon’s Motion to Dismiss.
28 U.S.C. § 1441 generally provides a defendant in a state civil case the right to
remove that case to federal district court, assuming the case could have been brought there
originally. See Martin v. Franklin Capital Corp., 546 U.S. 132, 134 (2005). In turn, the
plaintiff may move to have the case remanded if subject matter jurisdiction is lacking, or if
some other defect makes removal improper. See 28 U.S.C. § 1447(c). The party seeking
removal and opposing remand has the burden to demonstrate federal jurisdiction, and all
doubts should be resolved in favor of remand. In re Bus. Men’s Assurance Co. of Am., 992
F.2d 181, 183 (8th Cir. 1993). “In addition to the notice of removal and its exhibits, to
determine whether there is jurisdiction, the court may consider documents submitted after
the notice of removal as well as those attached to subsequent motions.” In re Trusts, 241 F.
Supp. 3d 905, 914 (D. Minn. 2017) (quoting Guggenberger v. Starkey Labs., Inc., No. 16cv-2021, 2016 WL 7479542, at *5 (D. Minn. Dec. 29, 2016)); see also Willingham v.
Morgan, 395 U.S. 402, 407-08, 407 n.3 (1969) (considering affidavits submitted after
removal to determine that the district court had subject matter jurisdiction); Pudlowski v. St.
Louis Rams, LLC, 829 F.3d 963, 964-65 (8th Cir. 2016) (per curiam) (same).
Courts to have considered the issue, including the Eighth Circuit, have concluded
that removal in the face of a valid forum selection clause fixing venue in the state courts is
the sort of defect that qualifies a case for remand. See, e.g., iNet Directories, LLC v.
Developershed, Inc., 394 F.3d 1081, 1082 (8th Cir. 2005); Waters v. Browning-Ferris
Indus., Inc., 252 F.3d 796, 797 (5th Cir. 2001); Karl Koch Erecting Co. v. N.Y. Convention
Ctr. Dev. Corp., 838 F.2d 656, 659 (2d Cir. 1988). Eighth Circuit precedent requires any
waiver of the right to remand to be “clear and unequivocal.” Weltman v. Silna, 879 F.2d
425, 427 (8th Cir. 1989).
On March 3, 2015, Gannon began an employment relationship with Medtronic by
signing three documents: the Offer Letter, the Employee Agreement, and the Repayment
Agreement. (See Notice of Removal, Ex. 1, pt. 1 [Doc. No. 1-1], at 49-63; pt. 2 [Doc. No.
1-2], at 278.) 1 Each document’s contents will be explored below, but at the outset it should
be noted that the Employee Agreement contains a forum selection clause, mandating that
litigation of disputes “arising out of or related to this Agreement” take place in Minnesota
state court. (Id., pt. 1, at 57.) Gannon is a Massachusetts citizen, and has lived in
Massachusetts during all times relevant to this Order. (Gannon Decl. [Doc. No. 8], at 1-2.)
All references to page numbers in this Opinion are those assigned by the CM/ECF
A. Procedural History
In late 2016, Gannon left his employment with Medtronic and returned to his prior
employer, DePuy Spine. (Notice of Removal, Ex. 1, pt. 1, at 23.) Medtronic brought suit in
Anoka County District Court in the state of Minnesota, alleging that Gannon breached the
restrictive covenant in the Employee Agreement and that DePuy Spine intentionally
interfered with the contract between Gannon and Medtronic. (Id. at 43-45.) Medtronic later
filed an Amended Complaint, which added an additional count against Gannon. (Id., pt. 2,
at 156-84.) Count five of the Amended Complaint seeks damages for Gannon’s failure “to
perform his repayment obligations under the Repayment Agreement” between Gannon and
Medtronic. (Id. at 181.)2
Gannon moved to dismiss count five of the Amended Complaint for lack of personal
jurisdiction. (Id. at 258-74.) Before the state court could rule on that motion, however, the
parties settled counts one through four of the Amended Complaint. (Id., pt. 3 [Doc. No. 13], at 115-123.) With DePuy Spine no longer part of the case, Gannon removed to this
Court on the basis of diversity jurisdiction. (Notice of Removal [Doc. No. 1].) 3 He then
renewed his motion to dismiss for lack of personal jurisdiction, and further moved for
At approximately the same time, Gannon brought suit in Massachusetts state court,
seeking a declaratory judgment that the Repayment Agreement is not enforceable under the
Massachusetts Wage Act. (Buziak Decl., Ex. A [Doc. No. 9-1], at 10-12.) That claim has
been removed to federal district court in Massachusetts and is pending. (Buziak Decl. [Doc.
Medtronic does not dispute that the requirements of diversity jurisdiction are met
here. (See Mem. in Supp. of Pl.’s Mot. to Remand to Anoka County District Court [Doc.
No. 15] (“Pl.’s Mem. in Supp.”), at 15 n.1.)
dismissal based on improper venue or transfer to the federal district court for the District of
Massachusetts. (See Def.’s Mem. in Supp. of Renewed Notice of Mot. to Dismiss for Lack
of Personal Jurisdiction and Improper Venue, or, in the Alternative, to Transfer [Doc. No. 6]
(“Def.’s Mem. in Supp.”), at 1.) Medtronic moved to remand to Minnesota state court,
arguing that Gannon is bound by the forum selection clause in the Employee Agreement.
(See Mem. in Supp. of Pl.’s Mot. to Remand to Anoka County District Court [Doc. No. 15]
(“Pl.’s Mem. in Supp.”), at 1-2.)
B. Contractual Documents
Gannon signed the Offer Letter, Employee Agreement, and Repayment Agreement
on the same day. (See Notice of Removal, Ex. 1, pt. 1, at 49-63; pt. 2, at 278.) The Offer
Letter represents itself as “a formal offer of employment at Medtronic.” (Id., pt. 1, at 60.) It
states that “[t]his offer is contingent upon your signing the attached Employee Agreement
and the Sales Guarantee Repayment Agreement.” (Id. at 61.) The Offer Letter includes
basic information about the employment, including start date, compensation structure,
vacation time, and training. (Id. at 60-62.) Gannon signed under a passage that states, “I,
Patrick Gannon, accept this offer of employment and agree to the terms and conditions
outlined in this letter.” (Id. at 63.)
The Repayment Agreement is a one-page document that sets out the terms of
Gannon’s compensation under a sales guarantee arrangement.
(Id., pt. 2, at 278.)
Medtronic promised to pay Gannon $900,000 over a three-year guarantee period, on the
condition that, “if [Gannon] voluntarily terminates from Medtronic during the Guarantee
Period or within one year after the end of the Guarantee Period, [Gannon] must pay back to
Medtronic the difference between” Gannon’s earned commissions and his payments under
the guarantee plan. (Id.) Count five of the Amended Complaint alleges that Gannon
violated the Repayment Agreement by leaving before the guarantee period had ended and
failing to repay the difference between his earned commissions and the sales guarantee. (Id.
at 181.) The Offer Letter also describes the parameters of this sales guarantee plan, but does
not specify the payment amount. (Id., pt. 1, at 60-61.) The Repayment Agreement itself
does not mention forum selection. (Id., pt. 2, at 278.)
The Employee Agreement is the largest document of the three and primarily deals
with confidentiality, the restrictive covenant, and proprietary inventions. (Id. at 49-59.) The
Employee Agreement includes the following forum selection clause:
Any dispute arising out of or related to this Agreement, or any breach or
alleged breach hereof, shall be exclusively decided by a state court in the
State of Minnesota. Employee irrevocably waives Employee’s right, if any,
to have any disputes between Employee and MEDTRONIC arising out of or
related to this Agreement decided in any jurisdiction or venue other than a
state court in the State of Minnesota. Employee hereby irrevocably consents
to the personal jurisdiction of the state courts in the State of Minnesota for the
purposes of any action arising out of or related to this Agreement.
(Id. at 57.) The Employee Agreement also states, in § 8.4, that “nothing in this Agreement
invalidates, renders null or void, or otherwise affects any term or provision of any
MEDTRONIC compensation or benefit plan or any agreements related thereto.” (Id. at 58.)
Gannon argues that the forum selection clause from the Employee Agreement cannot
apply to Medtronic’s suit under the Repayment Agreement. (Def.’s Mem. in Supp., at 1018.) Gannon further argues that the Minnesota courts cannot exercise personal jurisdiction
over him without the forum selection clause, and that the case should therefore be dismissed
or transferred to the District of Massachusetts. (Id. at 7-10, 20-24.)
Medtronic makes no claim that Minnesota can independently exercise personal
jurisdiction over Gannon, but moves to remand solely on the basis of the forum selection
clause in the Employee Agreement. (See Mem. in Opp. to Def.’s Renewed Mot. to Dismiss
for Lack of Personal Jurisdiction and Improper Venue or, in the Alternative, to Transfer
[Doc. No. 19] (Pl.’s Mem. in Opp.”), at 1-2; Pl.’s Mem. in Supp., at 1-2) Medtronic argues
that the three contractual documents that Gannon signed on March 2, 2015, should be read
together as one contract. (Pl.’s Mem. in Supp., at 8-11.)
Gannon does not dispute that the forum selection clause in the Employee Agreement,
if applicable to this case, requires remand to the Minnesota state court where it was
originally filed. (Reply Mem. in Supp. of Def.’s Renewed Mot. to Dismiss for Lack of
Personal Jurisdiction and Improper Venue or, in the Alternative, to Transfer [Doc. No. 28]
(“Def.’s Reply”), at 7.) Even if Gannon were to dispute this point, the forum selection
clause here is substantially similar to a clause that this Court held enforceable in Valspar
Corp. v. Sherman, 211 F. Supp. 3d 1209 (D. Minn. 2016). The Court concludes that the
forum selection clause constitutes a “clear and unequivocal” waiver of the right to remove
to federal court. See Weltman, 879 F.2d at 427; Valspar, 211 F. Supp. 3d at 1211-13. If the
clause governs Medtronic’s remaining claim against Gannon, then the case must be
remanded to Minnesota state court.
A. Applicable Law
The Minnesota Supreme Court4 has stated that “instruments executed at the same
time, for the same purpose, and in the course of the same transaction are, in the eyes of the
law, one instrument and will be read and construed together unless the parties stipulate
otherwise,” even if the instruments “do not in terms refer to each other.” Marso v. Mankato
Clinic, Ltd., 153 N.W.2d 281, 288-89 (Minn. 1967); accord Winthrop Res. Corp. v. Stanley
Works, 259 F.3d 901, 904 (8th Cir. 2001); Boston Sci. Corp. v. Kiland, No. 10-cv-4053,
2011 WL 3035088, at *3 (D. Minn. July 25, 2011); Roemhildt v. Kristall Dev., Inc., 798
N.W.2d 371, 373 (Minn. Ct. App. 2011); Farrell v. Johnson, 442 N.W.2d 805, 806 (Minn.
Ct. App. 1989). “‘Whether separate documents executed simultaneously should be treated
as a single contract is governed by the intent of the parties manifested at the time of
contracting and viewed in light of the surrounding circumstances’ and is not contingent on a
finding of ambiguity.” Roemhildt, 798 N.W.2d at 373 (quoting Farrell, 442 N.W.2d at
Gannon argues that the Employee Agreement cannot be read together with the
Repayment Agreement because the Employee Agreement is narrowly focused on issues of
Gannon has not objected to the application of Minnesota state law to interpret the
contractual documents at issue, (see Def.’s Mem. in Supp.; Def.’s Reply,) and applying
Minnesota law here is not inconsistent with precedent, see Knutsen v. Rexair, Inc., 749 F.
Supp. 214, 216 n.1 (D. Minn. 1990) (“[O]ur Eighth Circuit Court of Appeals, recognizing
that contractual forum selection clauses share both substantive and procedural aspects,
has applied state law to analyze similar clauses in the past.”).
confidentiality, customer relationships, and the like. (Def.’s Mem. in Supp., at 10.) Gannon
emphasizes that the Employee Agreement and the Repayment Agreement do not refer to
each other, except in § 8.4 of the Employee Agreement, which states that the Agreement
will not “affect any term or provision of any MEDTRONIC compensation or benefit
plan.” (Id. at 10-11.) Gannon further argues that, if the Court applies the forum selection
clause from the Employee Agreement, it must also apply the Minnesota choice of law
provision, which would deprive Gannon of his “rights as a Massachusetts citizen to be
protected by the dictates of the Massachusetts legislature.” (Id. at 16; see supra n. 2.)
The Court agrees with Medtronic that the Offer Letter, Employee Agreement, and
Repayment Agreement should be read together as one contract. They were executed on the
same date, for the same purpose, and relate to the same transaction: the terms of Gannon’s
employment with Medtronic. See Marso, 153 N.W.2d at 288-89. The language of the
Offer Letter, which expressly conditions Gannon’s employment on his execution of the
Employee Agreement and Repayment Agreement, strongly supports this finding. See
Kiland, 2011 WL 3035088, at *3 (reading two documents together, in part, because entering
into both “was a condition of guaranteed employment and compensation”); ARCA of St.
Louis, Inc. v. Fritz, No. C7-98-919, 1998 WL 695227, at *1-2 (Minn. Ct. App. Oct. 6, 1998)
(“The plain language of each agreement indicates that the parties intended to execute them
in conjunction with each other.”).
When he signed the Offer Letter, Gannon agreed to be bound by the sales guarantee
plan, as outlined in the Offer Letter, and also by the Employee Agreement and Repayment
Agreement. (Notice of Removal, Ex. 1, pt. 1, at 61.) As Medtronic persuasively argued in
the motion hearing, “When he accepted it, the Offer Letter became the contract itself.”
Indeed, Medtronic’s claim against Gannon could be seen as arising from the Offer Letter as
much as from the Repayment Agreement. The Offer Letter states: “Should you terminate
from Medtronic while on a guarantee or within one year after the end of the Guarantee
Period, you must pay back to Medtronic the difference between your calculated incentive
compensation under the sales compensation plan and your guarantee payments during the
Guarantee Period.” (Id.)
Further, the forum selection clause in the Employee Agreement encompasses all
disputes “arising out of or related to this Agreement.” (Id. at 57 (emphasis added).)
Because the words “arising out of” must mean disputes about the terms of the Employee
Agreement—that is, confidentiality, restrictive covenant, etc.—the words “or relating to”
must mean something else. See Fortune Funding, LLC v. Ceridian Corp., 368 F.3d 985,
987 (8th Cir. 2004) (interpreting a contract to “avoid an interpretation that renders a clause
meaningless” (citing Oleson v. Bergwell, 283 N.W. 770, 772-73 (Minn. 1939)).
Medtronic’s claim may be considered “related to” the Employee Agreement because it
arises from the employment relationship that the three documents together represent. At the
same time, the choice of law provision in the Employee Agreement applies only to “the
validity, enforceability, construction and interpretation of this Agreement.” (Notice of
Removal, Ex. 1, pt. 1, at 57.) Thus, Gannon’s concern that enforcing the forum selection
clause would disrupt his Massachusetts law claim is misplaced.
The choice of law
provision lacks the broad language that makes the forum selection clause applicable here.
Gannon emphasizes § 8.4 of the Employee Agreement, which states that the
Agreement shall not “affect” any Medtronic compensation plan. (Id. at 58.) But the
forum selection clause does not affect a Medtronic compensation plan here. That is, it does
not alter Gannon’s rate of pay, vacation time, or other aspects of his compensation. It only
requires that he litigate any claims arising from the contract—including those involving
compensation—in the Minnesota state courts. A natural reading of § 8.4 does not prevent
application of the forum selection clause here.
Gannon also argues that the Court cannot look to the Offer Letter and Employee
Agreement unless it finds the Repayment Agreement ambiguous. (See Def.’s Mem. in
Supp., at 11-12 (citing Express Diagnostics, Inc. v. Phamatech, Inc., No A13-2156, 2014
WL 4056031 (Minn. Ct. App. Aug. 18, 2014).). But as the Minnesota Court of Appeals
stated in Farrell v. Johnson, “whether simultaneously executed documents will be read
together is not contingent upon a finding of internal ambiguity. Ambiguity is simply one
circumstance of many under which the trial court will be allowed to look outside the
contract to ascertain the parties’ intent.” 442 N.W.2d at 807. As support, Gannon cites
Express Diagnostics, Inc. v. Phamatech, Inc., but that case is distinguishable. In Express
Diagnostics, a forum selection clause encompassing “any claim . . . arising out of or relating
to this agreement” was held to not apply to an earlier agreement between the same parties.
2014 WL 4056031, at *1-2. But the earlier agreement was executed six months before the
agreement containing the forum selection clause, and it governed a different kind of
relationship between the parties. Id. Under those circumstances, application of the forum
selection clause would not accord with the manifest intent of the parties. Here, it does.
The Court must look at all surrounding circumstances to determine whether the
parties manifested an intent that the three documents be read together. See Farrell, 442
N.W.2d at 806-07. In light of the specific references to the Employee Agreement and the
Repayment Agreement contained in the Offer Letter, and the broad language of the forum
selection clause at issue, the Court concludes that the parties manifest intent was that the
three documents be read together as one contract. Reading the three documents together,
the forum selection clause applies to Medtronic’s current claim against Gannon. Gannon
has waived his right to remove to federal court, and the case must be remanded.
Consequently, Gannon’s Motion to Dismiss will be denied as moot.
Based on the foregoing, and all the files, records and proceedings herein, IT IS
HEREBY ORDERED that:
Plaintiff’s Motion to Remand [Doc. No. 13] is GRANTED;
Defendant’s Motion to Dismiss [Doc. No. 4] is DENIED AS MOOT; and
The Clerk of Court is DIRECTED to furnish a certified copy of this Order to
the clerk of Anoka County District Court, pursuant to 28 U.S.C. § 1447(c).
Dated: October 16, 2017
SUSAN RICHARD NELSON
United States District Judge
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