Computer Sciences Corporation v. Cognizant Technology Solutions U.S. Corporation et al

Filing 51

ORDER - The defendants' # 5 Motion to dismiss is DENIED. The alternative application to transfer this action to the United States District Court in the District of Virginia is GRANTED. The court will transfer this action to the Eastern District of Virginia. The parties may file any objections to the transfer to the Eastern District of Virginia rather than the Western District of Virginia on or before November 23, 2015. Transfer of this action will be stayed pending the filing of any timely objections. Should no objections be filed the action will be transferred on November 25, 2015. Signed by Judge Howard D. McKibben on 11/18/2015. (Copies have been distributed pursuant to the NEF - DRM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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COMPUTER SCIENCES CORPORATION,

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Plaintiff,
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vs.
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COGNIZANT TECHNOLOGY SOLUTIONS
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U.S. CORPORATION, and JOHN
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MAGUIRE, and DOES 1-10,
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inclusive,
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Defendants.
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_________________________________ )

3:15-cv-00267-HDM-VPC
ORDER

Defendants John Maguire (“Maguire”) and Cognizant Technology

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Solutions U.S. Corporation (“Cognizant”) (collectively

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“defendants”) have moved to dismiss this action on the basis of a

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binding forum selection clause (#5).

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Corporation (“CSC”) has opposed (#9), and defendants have replied

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(#13).

Plaintiff Computer Sciences

In CSC’s opposition to the defendants’ motion to dismiss,
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CSC has applied in the alternative to transfer this action to the

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District of Virginia.

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CSC brings this action against Maguire, its former employee,

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and Cognizant, Maguire’s subsequent employer, alleging breach of

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contract, tortious interference with contract, breach of fiduciary

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duty, aiding and abetting breach of fiduciary duty, and concert of

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action.

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violation of several restrictive covenants to which he was subject.

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CSC’s claims are largely based on Maguire’s alleged

Maguire was employed by CSC from April 2013 to October 2014.

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On April 19, 2013, Maguire signed a non-competition/non-

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solicitation agreement that contained provisions preventing Maguire

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from disclosing or misusing CSC’s confidential information,

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soliciting CSC’s employees or customers for a period of time, and

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competing against CSC for a period of time. (Compl. at 3 & Ex. 1).

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During his employment with CSC, Maguire entered into five

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stock option award agreements.

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agreement contained a recoupment and forfeiture provision requiring

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Maguire to return to CSC the value of gains realized on exercised

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options in the event he violated the restrictive covenants in the

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agreement, including non-disclosure and non-use of confidential

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information, non-solicitation of CSC employees, clients and

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prospective clients for a period of time, and non-competition for a

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period of time.

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permissive forum selection clause that read:

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Id.

(Compl. at 4 & Exs. 2-6).

Each

Each stock option agreement also contained a

Any action, suit or proceeding to enforce the terms and
provisions of the Agreement, or to resolve any dispute or
controversy arising under or in any way relating to the
Agreement, may be brought in the state courts for the
County of Washoe, State of Nevada, United States of
America, and the parties hereto consent to the
jurisdiction of such courts.
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(Id. Exs. 2-6).

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After Maguire’s employment with CSC was terminated, he and CSC

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entered into a letter agreement dated November 6, 2014.1

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agreement modified the restrictive covenants in the original non-

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competition/non-solicitation agreement and contained a merger and

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integration clause that stated: “This Agreement supersedes any and

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all prior oral and/or written agreements between the Company and

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you, and sets forth the entire agreement between Company and you

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regarding the subject matter described herein.”

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Ex. A).

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The

(Mot. to Dismiss

which stated:

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The agreement also contained a forum selection clause,

Any action arising out of or relating to any of the
provisions of this Agreement may, at the election of
either party, be brought and prosecuted only in the
courts of, or located in, the Commonwealth of Virginia,
and in the event of such election, the parties hereto
consent to the jurisdiction and venue of said courts.

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Id.
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Defendants argue that the forum selection clause in the
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November 6, 2014, letter agreement mandates venue in the state or
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federal courts of Virginia and therefore this action must be
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dismissed pursuant to 28 U.S.C. § 1404(a).

CSC opposes the motion

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on several grounds, arguing that the forum selection clause of the
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letter agreement does not cover all of its claims and that venue is
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proper in Nevada under the forum selection clauses of the stock
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option agreements.
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In resolving a motion to dismiss or transfer based on a forum
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selection clause, the court does not accept the pleadings as true,
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CSC and Maguire amended the letter agreement on January 19, 2015.
The amendment is immaterial to this motion.

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may consider facts outside the pleadings, and must construe the

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clause if necessary.

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Banco Mexicano, S.A., 87 F.3d 320, 324 (9th Cir. 1996).

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See Doe 1, 552 F.3d at 1081-82; Argueta v.

The forum selection clause in the November 6, 2014, letter

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agreement is mandatory, requiring that at the election of either

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party, an action “arising out of or relating to any of the

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provisions” of the agreement be brought “only” in the courts “of,

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or located in” the Commonwealth of Virginia.

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indeed has not been) disputed that this clause is valid and

It cannot be (and

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applies, at a minimum, to CSC’s claims that arise out of the letter

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agreement. Thus, at least some of CSC’s claims in this action are

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subject to the Virginia forum selection clause.

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CSC argues that its other claims – particularly those arising

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out of the stock option award agreements – are not subject to the

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Virginia forum selection clause.

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The subject matter of the letter agreement was the resolution of

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“all issues and obligations that exist or may exist between [CSC

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and Maguire] concerning [Maguire’s] employment and termination.”

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The forum selection clause applies to all claims that “aris[e] out

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of or relat[e] to” the letter agreement.

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those based on the non-solicitation/non-compete agreements, those

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based on the stock option award agreements, and those arising

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purely in tort – relate to Maguire’s employment and termination and

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thus arise out of or relate to the letter agreement.

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CSC’s claims are covered by the forum selection clause of the

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letter agreement.

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merger and integration clause, the letter agreement “supersedes any

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and all prior oral and/or written agreements between [CSC and

This argument is without merit.

All of CSC’s claims –

Thus, all of

Moreover, pursuant to the letter agreement’s

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Maguire], and sets forth the entire agreement between [CSC and

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Maguire] regarding the subject matter described herein.”

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stock option award agreements are prior written agreements between

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CSC and Maguire that concern Maguire’s employment with CSC, the

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forum selection clause of the letter agreement supersedes and

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extinguishes the forum selection clauses of those agreements.2

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Accordingly, pursuant to the parties’ agreed-upon forum selection

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clause, this action must be tried in either the state or federal

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courts in Virginia.3

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As the

Where a forum selection clause specifies another federal

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court, it is properly enforced pursuant to § 1404(a).

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Marine Constr. Co., Inc. v. U.S. Dist. Court for the W. Dist. of

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Tex., – U.S. –, 134 S. Ct. 568, 579 (2013).

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court “may transfer any civil action to any other district or

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division where it might have been brought or to any district or

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division to which all parties have consented” for “the convenience

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of parties and witnesses, in the interest of justice. . . .”

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Atlantic

Under § 1404(a), the

Despite the clear language of § 1404(a), defendants have filed

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a motion to dismiss pursuant to § 1404(a), arguing that while

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transfer is the norm under the statute, dismissal is authorized by

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the Supreme Court’s decision in Atlantic Marine, 134 S. Ct. 568.

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Defendants’ argument is without merit.

In Atlantic Marine, the

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CSC asserts that the court cannot make this finding at this point.
CSC’s argument relies on an incorrect assumption that defendants’ motion
should have been brought under Federal Rule of Civil Procedure 12(b)(6).
Defendants did not file their motion under that rule nor were they required
to do so.
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Defendants concede this interpretation, which is proper under Ninth
Circuit case law. See Doe 1 v. AOL LLC, 552 F.3d 1077, 1081 (9th Cir.
2009); Mot. to Dismiss at 6.

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Supreme Court held that the “appropriate way to enforce a forum-

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selection clause pointing to a state or foreign forum is through

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the doctrine of forum non conveniens.”

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at 580.

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forum non conveniens in which the transferee forum is within the

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federal court system; in such cases, Congress has replaced the

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traditional remedy of outright dismissal with transfer.”

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580 (emphasis added).

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alternative forum is a federal district court.

Atlantic Marine, 134 S. Ct.

However, § 1404(a) is “a codification of the doctrine of

Id. at

Dismissal is therefore not proper where the
See id.; Ravelo

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Monegro v. Rosa, 211 F.3d 509, 512-13 (9th Cir. 2000) (“Section

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1404(a) thus serves as a statutory substitute for forum non

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conveniens in federal court where the alternative forum is within

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the territory of the United States. The doctrine of forum non

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conveniens survives in federal court only when the alternative

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forum is in a foreign country.”); Isdal-Giroux v. Linguisearch,

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Inc., 2007 WL 865248, at *2 (D. Ariz. Mar. 20, 2007) (unpublished

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disposition) (“Since the passage of 28 U.S.C. § 1404(a), a federal

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court is without power to dismiss an action under the common law

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doctrine of forum non conveniens where § 1404(a) is applicable,

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since the remedy for an inconvenient forum under the statute is not

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a dismissal but a transfer.”).

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in this case authorizes suit in a federal district court, and a

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transfer is available, a dismissal would not be appropriate.4

Because the forum selection clause

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To the extent defendants argue that dismissal would be appropriate
because the provision also identifies state courts, that argument is also
without merit. The provision at issue in Atlantic Marine also identified
both a state and a federal court, and there the Supreme Court applied §
1404(a).
See Atlantic Marine, 134 S. Ct. at 575, 581 (“[T]he Court of
Appeals correctly identified § 1404(a) as the appropriate provision to
enforce the forum-selection clause in this case. . . .”).

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In deciding whether a transfer is appropriate under § 1404(a),

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the court applies the same private and public factors as it does in

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considering a motion to dismiss under the doctrine of forum non

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conveniens.

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clause the plaintiff’s choice of forum is not entitled to any

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weight, and the private interests are deemed to “weigh entirely in

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favor of the preselected forum.”

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therefore considers only the public interest factors.5

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Even so, public interest factors will “rarely defeat a transfer

Id.

However, where there is a valid forum selection

Id. at 581-82.

The court
Id. at 582.

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motion.”

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forum-selection clause, a district court should ordinarily transfer

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the case to the forum specified in that clause.

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extraordinary circumstances unrelated to the convenience of the

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parties should a § 1404(a) motion be denied.”

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plaintiff bears the burden of showing its case should not be

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transferred to the forum to which the parties agreed.

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Marine, 134 S. Ct. at 582.

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Id. at 582.

“When the parties have agreed to a valid

Only under

Id. at 581.

The

Atlantic

CSC has not identified any unusual or extraordinary

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circumstances that would justify denying defendants’ motion to

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transfer and has made no compelling argument that the public

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factors weigh heavily against transfer.

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this action to the parties’ designated forum is appropriate.

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Therefore, transfer of

Accordingly, the defendants’ motion to dismiss is DENIED.

The

alternative application to transfer this action to the United

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The public factors are: (1) the local interest of the lawsuit; (2)
the court’s familiarity with governing law; (3) the burden on the local
courts and juries; (4) congestion in the court; and (5) the costs of
resolving a dispute unrelated to this forum. Lueck v. Sundstrand Corp., 236
F.3d 1137, 1147 (9th Cir. 2001).

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States District Court in the District of Virginia is GRANTED.

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There are two federal district courts in the state of Virginia,

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either of which would be a proper venue under the parties’ forum

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selection clause.

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of business is in Falls Church, Virginia.

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will transfer this action to the Eastern District of Virginia,

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where Falls Church is located.

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to the transfer to the Eastern District of Virginia rather than the

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Western District of Virginia on or before November 23, 2015.

The pleadings reflect that CSC’s principal place
Therefore, the court

The parties may file any objections

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Transfer of this action will be stayed pending the filing of any

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timely objections.

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be transferred on November 25, 2015.

Should no objections be filed the action will

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IT IS SO ORDERED.

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DATED: This 18th day of November, 2015.

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____________________________
UNITED STATES DISTRICT JUDGE

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