Chain Electric Company, Inc. v. Joubert et al
Filing
71
MEMORANDUM OPINION AND ORDER denying 58 Motion to Dismiss for Lack of Jurisdiction. Signed by District Judge Keith Starrett on 3/14/2016 (scp)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
EASTERN DIVISION
CHAIN ELECTRIC COMPANY
V.
PLAINTIFF
CIVIL ACTION NO. 2:15-CV-24-KS-MTP
JOHN D. JOUBERT, et al.
DEFENDANTS
MEMORANDUM OPINION AND ORDER
This is a breach of contract and tort case arising from an alleged conspiracy to
breach employee confidentiality agreements and tortiously interfere with business
relationships. Defendants Mick Dubea and LineTec Services, LLC filed a Motion to
dismiss [58] for lack of personal jurisdiction. For the reasons provided below, the Court
denies the motion.
“A federal court siting in diversity may exercise personal jurisdiction only to the
extent permitted [in] a state court under state law.” Paz v. Brush Engineered
Materials, Inc., 445 F.3d 809, 812 (5th Cir. 2006) (citations omitted). “The court may
only exercise jurisdiction if: (1) the state’s long-arm statute applies, as interpreted by
the state’s courts, and (2) if due process is satisfied under the 14th Amendment to the
federal Constitution.” Id. “When a nonresident defendant moves to dismiss for lack of
personal jurisdiction, the plaintiff bears the burden of establishing the district court’s
jurisdiction over the nonresident . . . . A plaintiff satisfies this burden by presenting a
prima facie case for personal jurisdiction.” Unified Brands, Inc. v. Teders, 868 F. Supp.
2d 572, 577 (S.D. Miss. 2012) (citations omitted). “The district court is not obligated to
consult only the assertions in the plaintiff’s complaint . . . . Rather, the district cout
may consider the contents of the record at the time of the motion, including affidavits
. . . .” Paz, 445 F.3d at 812 (citations omitted). But “uncontroverted allegations in the
plaintiff’s complaint must be accepted as true, and all disputed facts must be construed
in the plaintiff’s favor.” Blacklidge Emulsions, Inc. v. Blankenship, No. 1:13-CV-293,
2013 U.S. Dist. LEXIS 173082, 2013 WL 6492876, at *1 (S.D. Miss. Dec. 10, 2013)
(citations omitted).
A.
Long-Arm Statute
“Mississippi’s long-arm statute provides the courts shall have jurisdiction over
a nonresident who: (1) makes a contract with a resident of this state to be performed
in whole or in part by any party in this state, (2) commits a tort in whole or in part in
this state against a resident or nonresident, or (3) does any business or performs any
character of work or service in this state.” Smith v. Antler Insanity, LLC, 58 F. Supp.
3d 716, 720 (S.D. Miss. 2014). Plaintiff argues that the Court may exercise personal
jurisdiction over Defendants pursuant to the tort prong of the long-arm statute. “Under
the tort prong of the Mississippi long-arm statute, personal jurisdiction is proper if any
element of the tort (or any part of any element) takes place in Mississippi.” Allred v.
Moore & Peterson, 117 F.3d 278, 282 (5th Cir. 1997).
Among other things, Plaintiff alleges that Defendants tortiously interfered with
its business relationships. The elements of a tortious interference claim are: “(1) that
the acts were intentional and willful; (2) that they were calculated to cause damage to
the plaintiffs in their lawful business; (3) that they were done with the unlawful
purpose of causing damage and loss, without right or justifiable cause on the part of
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the defendant (which constitutes malice); and (4) that actual damage and loss
resulted.” Coleman & Coleman Enters. v. Waller Funeral Home, 106 So. 3d 309, 315-16
(Miss. 2012). Generally, tortious interference “occurs when a person unlawfully diverts
prospective customers away from one’s business.” Par Indus., Inc. v. Target Container
Co., 708 So. 2d 44, 48 (Miss. 1998).
This Court has previously addressed the long-arm statute’s application to a
tortious interference claim. Several district judges in this state have held that when
the plaintiff’s principal place of business or residence is in Mississippi the alleged
injury – an element of the tort – necessarily occurred here. See Antler Insanity, 58 F.
Supp. 3d at 720-21; Unified Brands, Inc. v. Teders, 868 F. Supp. 2d 572, 579 (S.D. Miss.
2012); Howard Indus. v. Ridgeway, No. 2:15-CV-38-KS-MTP, 2015 U.S. Dist. LEXIS
84105, at *5 (S.D. Miss. June 29, 2015); Blacklidge Emulsions, Inc. v. Blankenship, No.
1:13-CV-293-LG-JMR, 2013 U.S. Dist. LEXIS 173082, at *6 (S.D. Miss. Dec. 10, 2013);
Werner v. Landstar, LLC, 2006 U.S. Dist. LEXIS 24163, at *7 (N.D. Miss. Apr. 18,
2006).
Plaintiff alleged that it is a Mississippi corporation with its principal place of
business in Hattiesburg, Mississippi. It further alleged that Defendants’ actions caused
it to suffer damages, including lost revenues, lost profits, diminution of asset value,
and loss of customer goodwill. Plaintiff also pleaded specific facts related to bids lost
to LineTec on the Fairfield Estates Subdivision and the Jefferson Davis Electric
Cooperative. Accordingly, the Court finds that Plaintiff has alleged sufficient facts to
demonstrate that it suffered an injury in Mississippi, and that an element of the tort
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occurred in Mississippi.
B.
Due Process Clause
The Fourteenth Amendment’s Due Process Clause “permits the exercise of
personal jurisdiction over a nonresident defendant when (1) that defendant has
purposefully availed himself of the benefits and protections of the forum state by
establishing minimum contacts with the forum state; and (2) the exercise of
jurisdiction over that defendant does not offend traditional notions of fair play and
substantial justice.” Unified Brands, 868 F. Supp. 2d at 577. “Minimum contacts . . .
can be established either through contacts sufficient to assert specific jurisdiction, or
contacts sufficient to assert general jurisdiction.” Id.
Plaintiff argues that Defendants have sufficient contacts with Mississippi to
confer specific jurisdiction. “Specific jurisdiction exists when the defendant has
purposefully directed his activities at residents of the forum . . . and the litigation
results from alleged injuries that arise out of or relate to those activities.” Clemens v.
McNamee, 615 F.3d 374, 378 (5th Cir. 2010). The Court “applies a three-step analysis
to determine specific jurisdiction: (1) whether the defendant has minimum contacts
with the forum state; (2) whether the plaintiff’s cause of action arises out of or results
from the defendant’s forum related contacts; and (3) whether the exercise of personal
jurisdiction is fair and reasonable.” Jackson v. Tanfoglio Guiseppe S.R.L., 615 F.3d 579,
585 (5th Cir. 2010).
1.
Minimum Contacts
The Court’s inquiry “focuses on the relationship among the defendant, the
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forum, and the litigation.” Walden v. Fiore, 134 S. Ct. 1115, 1121, 188 L. Ed. 2d 12
(2014). “[T]he relationship must arise out of contacts that the defendant himself
creates with the forum State.” Id. at 1122. Phrased differently, the Court must
determine whether the non-resident defendant directed specific acts toward the forum
state. McFadin, 587 F.3d at 762; Bustos v. Lennon, 538 F. App’x 565, 568 (5th Cir.
2013). Here, all of the specific conduct by Dubea and LineTec occurred outside the state
of Mississippi. However, “even an act done outside the [forum] state that has
consequences or effects within the state will suffice as a basis for jurisdiction in a suit
arising from those consequences if the effects are seriously harmful and were intended
or highly likely to follow from the nonresident defendant’s conduct.” McFadin, 587 F.3d
at 761.1 The alleged intentional tort must “be assessed as part of the analysis of the
defendant’s relative contacts with the forum.” Stroman Realty, 513 F.3d at 486.
“Merely causing harm to a resident of a state is not sufficient.” Bustos, 538 F. App’x at
568. Likewise, “foreseeable injury in the state is not enough absent the direction of
specific acts toward the forum.” Id.
Dubea admitted during a hearing in another case [69-2] that a “lot of Chain
employees” once worked for him at another company, that he “got a lot of calls from
those past employees that wanted to join LineTec,” and that was the “sources of the
employees that [he] hire[d].” Dubea also admitted that he wants to hire other current
1
See also Calder v. Jones, 465 U.S. 783, 788-90, 104 S. Ct. 1482, 79 L. Ed. 2d
804 (1984); Stroman Realty, Inc. v. Wercinski, 513 F.3d 476, 486 (5th Cir. 2008);
Guidry v. United States Tobacco Co., 188 F.3d 619, 629 (5th Cir. 1999); Bustos, 538
F. App’x at 568; Blacklidge Emulsions, 2013 U.S. Dist. LEXIS 173082 at *7-*8.
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employees of Plaintiff, and that some have expressed interest in coming to work for
him. At the same hearing, Snyder admitted that he left Chain to work LineTech
because he “ha[d] some discussions with Mr. Dubea about he was wanting to form this
company . . . ,” and “whenever [he] was offered that, naturally it was a . . . better choice
for myself and my family to take that in hopes that . . . I would be more successful . .
. .”
Plaintiff recovered e-mail correspondence [69-5] between Snyder and Dubea. The
first message was sent by Snyder on February 2, 2015 – approximately one month
before he left Plaintiff to work for LineTec, and two weeks before Plaintiff had a bid
due on a large contract. Snyder told Dubea: “Here are the tool listings and equipment
on URD and OH crews. If you need any help with decisions on equipment or help with
pricing it out please inform and I will be glad to assist you. Thanks again for the
opportunities . . . .” Two files were attached to the message; they were titled “OH
Distribution Tool List.pdf” and “URD Tool List.pdf.” A week later Dubea responded
with a list of questions regarding a quote, seeking Snyder’s assistance. Snyder
performed similar work for Plaintiff, coordinating bids for new projects.
On February 10, 2015, Snyder sent Dubea an e-mail with the subject heading
“Progress.” Snyder wrote: “Just wondering how things are going? Everything is well
here, including employees and customers. Very gracefully I have spoken to the key
players and everyone is aboard. Looking forward to talking to you soon.”
On February 18, 2015 – approximately two weeks before Snyder and Joubert left
Plaintiff – Dubea e-mailed them some potential logos for LineTec Services to ask their
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opinion. He said, “We can change the colors in the Logo’s [sic] to whatever we like. Let
me know your Logo preference and Color preference.” On February 19 and 25, 2015,
Dubea sent Snyder and Joubert e-mails concerning bid packages due for two different
potential LineTec customers.
Deleted text messages [69-4] recovered from Snyder’s company phone
demonstrate that he spoke with Dubea for approximately fifty minutes on February
15, 2015, the night before a major bid was due, while at Joubert’s home, only two
weeks before he quit working for Plaintiff and went to work for LineTec. Among other
things, Snyder texted: “We are gonna call Mick and try to answer his questions real
quick.”
Finally, Plaintiff alleged that Snyder and Joubert worked on the “Fairfield
Project” bid prior to resigning, while simultaneously communicating with and assisting
Dubea with LineTec’s own bid for the Fairfield Project. One of Dubea’s e-mails [69-5]
to Snyder and Joubert concerned the Fairfield Project. The Fairfield bids were due on
March 5, 2015 – three days after Joubert and Snyder left Plaintiff for LineTec. Plaintiff
alleges that it lost the bid to LineTec, and that this was the first time LineTec had ever
bid on a project in competition with it.
In summary, the record contains a wide variety of evidence [69-1, 69-2, 69-4, 695] indicating that Dubea – and, by extension, LineTec – conspired with Snyder and
Joubert to tortiously interfere with Plaintiff’s business. Dubea admitted in a hearing
before another court [69-2] that many of his employees came from Plaintiff, and that
he wanted to hire more of Plaintiff’s employees. Snyder admitted that he quit working
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for Plaintiff because he had been talking with Dubea, who made him a better offer. Email [69-5] and text message [69-4] correspondence demonstrates that Dubea had been
conspiring with Snyder and Joubert for at least a month before they “changed shirts.”2
Therefore, Plaintiff has provided evidence that Defendants Dubea and LineTec
“intentionally aimed their . . . harmful conduct” at Plaintiff, a Mississippi corporation.
Bustos, 538 F. App’x at 568. Plaintiff also alleged that the effects of Defendants’
conduct accrued in Mississippi, in the form of lost bids, revenue, and profits. This is not
a case where it was merely foreseeable that Plaintiff would be harmed, or where it was
merely fortuitous that Plaintiff resides in Mississippi. Plaintiff alleges and has
provided evidence that Defendants intended to harm it in Mississippi through out-ofstate acts. In the Court’s opinion, these facts are sufficient to place this case within the
relatively narrow category of cases where “an act done outside the [forum] state . . . has
consequences or effects within the state” as intended by the alleged tortfeasor and,
therefore, “will suffice as a basis for jurisdiction in a suit arising from those
consequences . . . .” McFadin, 587 F.3d at 761. Defendants “are not charged with mere
untargeted negligence,” but, rather, “their alleged intentional . . . tortious actions were
knowingly initiated and aimed at” a Mississippi resident. Guidry, 188 F.3d at 630.
“Under the circumstances, [Defendants] must reasonably anticipate being haled into
court” in Mississippi. Id. Accordingly, Dubea and LineTech have minimum contacts
2
According to Defendants, it is a routine practice in their industry for
subcontractors and employees to “change shirts” and switch employers without
prior notice.
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with Mississippi.
2.
Arises from the Contacts
Plaintiff asserted claims of tortious interference and civil conspiracy against
Defendants, and the specific acts it alleged Defendants committed in furtherance of the
conspiracy are Defendants’ forum-related contacts. Therefore, Plaintiff’s “cause of
action arises out of or results from” Defendants’ “forum related contacts.” Jackson, 615
F.3d at 585.
3.
Fair and Reasonable
“The specific jurisdiction inquiry next asks whether jurisdiction would comport
with fair play and substantial justice,” Taishan-Gypsum Co. v. Gross, 753 F.3d 521,
544 (5th Cir. 2014), or “whether the exercise of personal jurisdiction is fair and
reasonable.” Jackson, 615 F.3d at 585. “[T]he burden shifts to the defendant to defeat
jurisdiction by showing that its exercise would be unfair or unreasonable.” Seiferth v.
Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006). The Court considers five
factors: “(1) the defendant’s burden; (2) the forum state’s interests; (3) the plaintiff’s
interest in convenient and effective relief; (4) the judicial system’s interest in efficient
resolution of controversies; and (5) the state’s shared interest in furthering
fundamental social policies.” Taishan-Gypsum, at 544.
First, Defendants argue that they “face significant burdens in defending this
lawsuit in Mississippi as a result of travel expenses and inconvenience, the continued
retention of Mississippi counsel, and the movement of evidence and witnesses from
Texas and Louisiana to Mississippi.”
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This Court frequently hears cases involving out-of-state litigants, and the
burdens on them are minimal. Dubea resides in Beaumont, Texas, which is
approximately a five and a half hour drive from Hattiesburg, Mississippi – a drive that
Dubea himself made to attend the Court’s hearing on August 28, 2015, even though he
was not a party to the litigation at that time. Litigants frequently travel from much
farther distances to litigate in this Court. Technology has greatly reduced the cost of
litigating from a distance, and Defendant would only be required to travel to
Hattiesburg for a pretrial conference and trial. The Court finds that the burden on
Defendants would be minimal.
Next, Defendants argue that judicial efficiency would best be served if they
defended the case in Louisiana because that is where the Defendants and most of the
evidence and witnesses are located. Undoubtedly, some witnesses and evidence are
located in Louisiana. However, some are also located right here in Hattiesburg,
Mississippi. As the Court noted at the hearing last fall, someone will have to travel in
this litigation. All Defendants have offered the Court is their bare assertion that it
would be more efficient to hear it in Louisiana. That is insufficient to carry their
burden of demonstrating unreasonableness.
Finally, Defendants argue that any fundamental social policies at issue would
be best addressed by resolving this dispute in Louisiana because that is where all of
the disputed conduct occurred. This factor cuts both ways insofar as both Mississippi
and Louisiana have a strong interest in vindicating their respective social policies. In
fact, the second factor in the Court’s analysis is the forum state’s interest, which
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weighs in favor of Mississippi.
On the whole, Defendants failed to carry their burden of demonstrating that the
exercise of jurisdiction would be unfair or unreasonable. The burden on Defendants is
minimal, and they have provided the Court with no basis to conclude that litigating
elsewhere would be more efficient. Both Louisiana and Mississippi have a strong
interest in furthering their respective social policies. At best, these factors are neutral.
C.
Conclusion
For the reasons provided above, the Court denies the Motion to Dismiss [58]
filed by Defendants Mick Dubea and LineTec Services, LLC.
SO ORDERED AND ADJUDGED this 14th day of March, 2016.
s/ Keith Starrett
UNITED STATES DISTRICT JUDGE
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