Auld v. Daugherty Systems, Inc.

Filing 20

ORDER granting 11 Motion to Transfer/Change Venue (Written Opinion). Signed by Senior Judge David S. Doty on 10/13/2015. (DLO)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 15-3336(DSD/SER)
Thomas Auld,
Plaintiff,
ORDER

v.
Daugherty Systems, Inc.
d/b/a Daugherty Business
Solutions,
Defendant.

Cassie C. Navarro, Esq. and Christopher D. Jozwiak, Esq.,
Baillon Thome Jozwiak & Wanta LLP, 100 South Fifth Street,
Suite 1200, Minneapolis, MN 55402, counsel for plaintiff.
Daniel J. Doetzel, Esq., Hesse Martone, P.C. 23430 North 84th
Street, Scottsdale, AZ 85255 and Jennifer V. Ives, Esq.,
Stinson Leonard Street LLP, 150 South 5th Street, Suite 2300,
Minneapolis, MN 55402, counsel for defendant.

This matter is before the court upon the motion to transfer
venue

by

defendant

Business Solutions.

Daugherty

Systems,

Inc.,

d/b/a

Daugherty

Based on a review of the file, record, and

proceedings herein, and for the following reasons, the court grants
the motion and transfers the case to the United States District
Court for the Eastern District of Missouri.

BACKGROUND
This employment dispute arises out of plaintiff Thomas Auld’s
termination from Daugherty.

Daugherty is a Missouri corporation

that provides

software

development,

information technology services.

computer

programming,

and

Garofalo Decl. ¶ 5; Compl. ¶ 2.

Daugherty has offices in several states, including Minnesota.
Compl. ¶¶ 2-3.

Daugherty hired Auld to work as a consultant in its

Minneapolis office.

Id. ¶ 7.

On August 25, 2009, Auld and

Daugherty executed an Employee Agreement, which set forth certain
terms and conditions of Auld’s employment. See Moerke Decl. Ex. B.
Relevant here, the Agreement establishes that (1) Auld’s employment
was at-will, (2) Auld would be compensated according to company
policy, (3) Daugherty did not promise or guaranty any particular
level or amount of compensation, and (4) Auld was required to
maintain the confidentiality of Daugherty’s data. Id. §§ 1-3. The
Agreement also includes the following forum-selection clause:

“In

any suit to enforce this Agreement, venue and jurisdiction is
proper in the St. Louis County Circuit Court and (if federal
jurisdiction exists), the U.S. District Court for the Eastern
District of Missouri.”

Id. § 7(f).

Auld “waive[d] all objections

to jurisdiction in any such forum and any defense or claim that
either such forum is not the most convenient forum.”

Id.

The

Agreement states that it cannot be modified unless in a writing
signed by Auld and an executive officer of Daugherty.

Id. § 7(g).

In November 2014, Auld told Daugherty that he wanted to part
ways to work elsewhere.

Compl. ¶¶ 9-10.

Auld alleges that

Daugherty asked him to stay on until March 31, 2015, to work on a

2

special project.

Id. ¶¶ 12-13, 17.

Daugherty agreed to provide

Auld with certain incentive payments during that period. Id. ¶ 15.
Daugherty also agreed to provide a separation package.

Id. ¶ 18.

Daugherty ultimately terminated Auld on February 11, 2015, for
reasons not relevant to this motion.

See id. ¶¶ 24-50.

Daugherty

offered Auld a $15,000 severance payment, which he alleges is
substantially less than the amount previously promised.

Id. ¶ 49.

On July 30, 2015, Auld filed this action in Minnesota state
court,

alleging

violation
§

of

609.221,

counterclaim

breach

the

et

of

contract,

Minnesota

seq.

Whistleblower

Daugherty

alleging

that

promissory

Auld

timely

estoppel,

Act,

removed

violated

the

Minn.
and

and

Stat.

filed

a

confidentiality

provisions of the Agreement and misappropriated its trade secrets.
Daugherty now moves to transfer venue to the United States District
Court for the Eastern District of Missouri.

DISCUSSION
I.

Standard of Review
Daugherty moves to transfer under 28 U.S.C. § 1404(a), which

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

or

consented.”

to

any

district

...

to

which

all

parties

have

Deciding whether to transfer under § 1404(a) in the

3

absence of a valid forum selection clause generally “require[s] a
case-by-case evaluation of the particular circumstances at hand and
a consideration of all relevant factors.”

Terra Int’l, Inc. v.

Miss. Chem. Corp., 119 F.3d 688, 691 (8th Cir. 1997).

However,

“[w]hen the parties have agreed to a valid forum-selection clause,
a district court should ordinarily transfer the case to the forum
specified in that clause.”

Atl. Marine Constr. Co. v. U.S. Dist.

Court for the W. Dist. of Tex., 134 S. Ct. 568, 581 (2013).
II.

Applicability of the Forum Selection Clause
Auld argues that the forum-selection clause does not apply to

the instant dispute because his tort and contractual claims do not
fall within the scope of the clause.
In a transfer analysis, “a district court ... must decide
whether the [forum selection] clause applies to the type of claims
asserted in the lawsuit.”
“Whether

...

claims

are

Terra Int’l, 119 F.3d at 692.
to

be

governed

by

forum

selection

provisions depends upon the intention of the parties reflected in
the wording of particular clauses and the facts of each case.”

Id.

at 693 (citation and internal quotation marks omitted).
Here, the parties agreed that venue would be proper in the
Eastern District
Agreement.”

of

Missouri

“[i]n

any

Moerke Aff. Ex. B § 7(f).

suit to

enforce

this

Auld argues that the clause

does not apply because this case involves separate agreements
regarding

his

compensation

and

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term

of

employment

that

are

unrelated to the Agreement.

Auld alleges that Daugherty promised

him employment through March 31, 2015, and specific incentive and
separation payments.

Compl. ¶¶ 55-75.

Those alleged promises,

however, directly modified the Agreement’s terms relating to Auld’s
compensation and employment status.1

As a result, Auld’s attempt

to enforce the promises is an attempt to enforce the Agreement.
Auld

also

argues

that

his

whistleblower

application of the forum-selection clause.

claim

precludes

The court disagrees.

Auld alleges that Daugherty violated the Whistleblower Act by
terminating

him

before

March

31,

2015,

and

withdrawing

his

incentive and separation packages because he reported aggressive
and threatening behavior by a Daugherty executive.

Id. ¶ 52.

The

whistleblower claim is inextricably intertwined with the central
contractual issue presented:

the enforceability of Daugherty’s

alleged promises regarding employment term and compensation.

See

Terra Int’l, 19 F.3d at 695 (holding that the forum-selection
clause applies to “tort claims [that] involve the same operative
facts as would a parallel claim for breach of contract”).
result,

the

forum-selection

clause

also

applies

As a
to

the

whistleblower claim.

1

Specifically, the March 31, 2015, end date would modify the
Agreement’s at-will provision, and the incentive and separation
packages would modify the Agreement’s compensation provision.
Whether the Agreement was in fact modified is a question for
another day.
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III. Effect of Forum Selection Clause
Having determined the that the forum-selection clause applies,
the court now considers the effect of such a clause on the instant
dispute.

“The presence of a valid forum-selection clause requires

district courts to adjust their usual § 1404(a) analysis in three
ways.”

Atl. Marine, 134 S. Ct. at 581.

“First, the plaintiff’s

choice of forum merits no weight. Rather, as the party defying the
forum-selection

clause,

the

plaintiff

bears

the

burden

of

establishing that transfer to the forum for which the parties
bargained is unwarranted.”

Id.

Second, the court “should not

consider arguments about the parties’ private interests.”
582.

Id. at

Accordingly, though Auld makes numerous arguments related to

his convenience and relative ability to pay for distant litigation,
the court may not consider such factors.

Instead, the court “may

consider arguments about public-interest factors only ... [and]
those factors will rarely defeat a transfer motion.” Id. Relevant
public interest factors include “the administrative difficulties
flowing

from

court

congestion;

the

local

interest

in

having

localized controversies decided at home; [and] the interest in
having the trial of a diversity case in a forum that is at home
with the law.”

Id. at 581 n.6 (citation and internal quotation

marks omitted).
Here, Auld has not persuasively argued that transfer would
produce any administrative hardship in Missouri or that the instant

6

case presents a controversy localized in Minnesota.

Nor does he

argue against the benefit of having a case largely governed by
Missouri

law

application.2

decided

in

a

forum

more

familiar

with

its

That said, there is also no impediment to the

Eastern District of Missouri applying Minnesota’s Whistleblower
Act.

See Hughes v. Wal-Mart Stores, Inc., 250 F.3d 618, 620 (8th

Cir. 2001) (“A federal district court is faced almost daily with the
task of applying some state's law other than that of the forum
state, and it is equally capable of resolving the dispute under
[another state’s laws].”).

Thus, these factors are either neutral

or favor transfer to Missouri.

Third, there are no unusual or

exceptional circumstances that warrant setting aside the clause.
See Atl. Marine, 134 S. Ct. at 575 (finding that, where there is a
valid forum selection clause, “a district court should transfer the
case unless extraordinary circumstances ... clearly disfavor a
transfer”).

Auld has not met his burden of establishing that

transfer is improper.

As a result, transfer to the Eastern

District of Missouri is warranted.

2

The Agreement provides for the application of Missouri law
to the dispute. Moerke Decl. Ex. B § 7(f). If the transferee
court determines that provision does not apply, it is equally
capable of applying Minnesota law to the breach-of-contract and
promissory estoppel claims.
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CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED that
defendant’s motion to transfer venue [ECF No. 11] is granted and
this action is transferred to the United States District Court for
the Eastern District of Missouri.

Dated:

October 13, 2015
s/David S. Doty
David S. Doty, Judge
United States District Court

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