Sightpath Medical Services, LLC v. Rick Terry

Filing 17

MEMORANDUM AND ORDER - IT IS HEREBY ORDERED that Defendants Motion to Dismiss for Improper Venue (ECF No. 7) is GRANTED. An appropriate Order of Dismissal will accompany this Memorandum and Order. Signed by District Judge Jean C. Hamilton on 1/27/15. (KJS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
SIGHTPATH MEDICAL SERVICES,
LLC F/K/A MIDWEST SURGICAL
SERVICES, INC.,
Plaintiff,
vs.
RICK TERRY,
Defendant.

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Case No. 4:14-cv-01488-JCH

MEMORANDUM AND ORDER
This matter is before the Court on Defendant’s Motion to Dismiss for Improper Venue,
or in the Alternative to Transfer Venue, pursuant to FRCP 12(b)(3) and 28 U.S.C. § 1406(a),
filed December 8, 2014. (ECF No. 7). The matter is fully briefed and ready for disposition.
BACKGROUND
Plaintiff Sightpath Medical Services, LLC (“Sightpath”) is a corporation existing under
the laws of the State of Minnesota, with its principal place of business in St. Paul, Minnesota and
Chesterfield, Missouri. (ECF No. 1, ¶ 1). Defendant Rick Terry (“Terry”) is a resident of
Montana and a former employee of Sightpath. (Id., ¶¶ 2, 17).
While employed at Sightpath, Terry signed a Confidentiality, Non-Competition and
Equipment Agreement (the “Agreement”) with Sightpath. (ECF No. 1, ¶ 22). Pursuant to the
Agreement Terry agreed, for a period of one (1) year following the termination of his
employment, not to:
a.
directly or indirectly . . . engage in, enter into or participate in any way in any
business or enterprise which competes with any business conducted by the Company

during the course of Employee’s employment or contemplated to be conducted by the
Company at the time of termination;
b.
directly or indirectly solicit or attempt to solicit, divert or attempt to divert, handle
or attempt to handle, service or attempt to service the account or business of any
customer which at the time of termination of Employee’s employment (or during the one
(1) year period prior thereto) was a customer account of the Company or was directly
solicited by the Company with a view toward establishing a customer relationship;
c.
directly or indirectly hire away or attempt to hire away or otherwise engage any
employee, key advisor, or consultant of the Company; or
d.
directly or indirectly interfere or attempt to interfere in any way with the
Company’s relationships with any of its suppliers, including without limitation, inducing
or attempting to induce any supplier to the Company to change the terms of its dealings
with the Company.
(ECF No. 1-4, ¶ 1(a)). Terry further agreed not, at any time, to “divulge, or cause to be divulged,
communicate or cause to be communicated, publish or cause to be published, or otherwise
disclose or cause to be disclosed….information regarded by the Company to be confidential or of
a proprietary nature….” (Id., ¶ 1(b)).
The Agreement contained a forum-selection clause, which provided in relevant part as
follows:
This Agreement, and all questions arising in connection therewith shall be governed by
and construed in accordance with the laws of the State of Missouri. The parties submit to
the jurisdiction of the federal and state courts of the Eastern District of the State of
Missouri for the resolution of any disputes rising out of or connected with this agreement.
(ECF No. 1-4, ¶ 7).
Terry resigned from his position with Sightpath in July, 2014. (ECF No. 1, ¶ 26; ECF
No. 1-5). According to Sightpath, Terry then began (or was to begin) working with Sightpath
customers, and using Sightpath’s confidential information, in violation of the Agreement. (ECF
No. 1, ¶¶ 29, 30). Sightpath therefore filed suit against Terry in the Eastern District of Missouri

on August 28, 2014, alleging Breach of Contract and Tortious Interference with Contractual
and/or Business Relationships. (Id., ¶¶ 32-57).
As stated above, Terry filed the instant Motion to Dismiss or Transfer Venue on
December 8, 2014, contending that venue is improper in this district under the provisions of 28
U.S.C. § 1391, the general federal venue statute. (ECF No. 7).
DISCUSSION
FRCP 12(b)(3) and 28 U.S.C. § 1406(a) authorize dismissal when venue is “wrong” or
“improper” in the forum in which suit was brought. Atlantic Marine Const. Co. v. U.S. Dist.
Court for Western Dist. of Texas, 134 S.Ct. 568, 577 (2013). Whether venue is “wrong” or
“improper” is generally governed by 28 U.S.C. § 1391, which provides in relevant part as
follows:
A civil action may be brought in—(1) a judicial district in which any defendant resides, if
all defendants are residents of the State in which the district is located; (2) a judicial
district in which a substantial part of the events or omissions giving rise to the claim
occurred, or a substantial part of property that is the subject of the action is situated; or
(3) if there is no district in which an action may otherwise be brought as provided in this
section, any judicial district in which any defendant is subject to the court’s personal
jurisdiction with respect to such action.
28 U.S.C. § 1391(b); Atlantic Marine Const. Co., 134 S.Ct. at 577. “When venue is challenged,
the court must determine whether the case falls within one of the three categories set out in §
1391(b). If it does, venue is proper; if it does not, venue is improper, and the case must be
dismissed or transferred under § 1406(a).” Id. A forum selection clause is outside the scope in
determining whether venue is proper. See Id. at 578, 577 (“The structure of the federal venue

provisions confirms that they alone define whether venue exists in a given forum,” and “those
provisions say nothing about a forum-selection clause.”).1
Upon considering Sightpath’s allegations in conjunction with the venue statute, the Court
finds venue in the Eastern District of Missouri to be improper. Sightpath does not maintain
Terry is a resident of Missouri, nor does it contend that a substantial part of the events or
omissions giving rise to its claims occurred in Missouri. Furthermore, this action may be
brought in Montana, where Terry both resides and is subject to personal jurisdiction. Under
these circumstances, the Court will dismiss this case for improper venue pursuant to 28 U.S.C. §
1406(a).
CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Defendant’s Motion to Dismiss for Improper Venue
(ECF No. 7) is GRANTED.

An appropriate Order of Dismissal will accompany this

Memorandum and Order.

Dated this 27th Day of January, 2015.

/s/ Jean C. Hamilton
UNITED STATES DISTRICT JUDGE

“Extending this reasoning, the Court here finds that the parties cannot alter the statutorilymandated analysis in § 1391(b)(2) by contract.” Karl W. Schmidt & Associates, Inc. v. Action
Environmental Solutions, LLC, 2014 WL 6617095, at *3 n. 2 (D. Colo. Nov. 21, 2014).
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