IDINGO LLC et al v. COHEN et al

Filing 33

OPINION. Signed by Judge Anne E. Thompson on 1/4/2017. (km)

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RECEIVED

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
!DINGO LLC, a Delaware limited liability
company, and HY ENTERPRISE, LLC, a
Delaware limited liability company,

JAN 0 5 2017
AT 8:30
WILLIAM T. WALSH
CLERK

M

Civ. No. 16-6525
Plaintiffs,

OPINION

v.
AMIR COHEN, SHAY COHEN, and
SHAMIR, LLC, a Delaware limited liability
company,
Defendants.
THOMPSON, U.S.D.J.

INTRODUCTION
This matter has come before the Court on a motion to dismiss brought by Defendants Amir
Cohen, Shay Cohen, and Shamir, LLC (collectively "Defendants"). (ECF No. 27). Plaintiffs
!dingo LLC and HY Enterprise, LLC (collectively "Plaintiffs") oppose the motion. (ECF No. 29).
The Court has decided the motion based on the written submissions of the parties and without oral
argument pursuant to Local Civil Rule 78.l(b). For the following reasons, Defendants' motion is
denied.

BACKGROUND
This case arises out of the alleged use by Defendant Amir Cohen ("Amir. Cohen") of his···
former employer's confidential, proprietary, and trade secret information. Plaintiff !dingo LLC .
("!dingo") is a Delaware LLC that manufactures and sells health supplements online. (Compl. ,, 5,
12, ECF No. 1). Plaintiff HY Enterprises, LLC ("HY") is a Delaware LLC and the wholly-owned
affiliate of Idingo that performs !dingo's web development, marketing and advertising operations in

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Modi'in, Israel. (Id. at mf 6, 13). Amir Cohen previously worked for Idingo and HY. (Id.

at~ 24).

Amir Cohen currently resides in Israel. (Deel. of Amir Cohen Ex. A, ECF No. 27-2). Defendant
Shay Cohen ("Shay Cohen") is·Amir Cohen's brother and the individual with whom Amir allegedly
is currently in business. (Id. at 1~ 65-70). Defendant Shamir, LLC ("Shamir") is a Delaware LLC
formed by Amir Cohen and Shay Cohen (Id.

at~

9).

Amir Cohen began working for Plaintiffs on January 10, 2016. (Id. at 124). Amir Cohen
and Plaintiffs executed multiple documents in connection with his employment. The parties agreed
to a Non-Disclosure/Confidentiality Agreement containing a forum selection clause which states,
"Any and all disputes arising under or related to this agreement shall be adjudicated exclusively in
Illinois." (Compl. Ex. A, ECF No. 1). The parties also agreed to an Employment Agreement
containing a different forum selection clause which states, "Any dispute relating to the employeremployee relationship between the worker and the employer wiH have exclusive jurisdiction to the
Regional Labor Court in Tel Aviv." (Compl. Ex. C, ECF No. 1).
During his time. at_ Idingo, Amir Cohen was Director of Operations and Marketing at its
location in.Modi'in, Israel.- (Compl. ~ 24, ECF No. 1). Idingo. was allegedly disappointed in Amir
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-:~:~:=,\:_Q.Qp~)_ l~9k of perfonnanc~; and as a result, Idingo terminat~d. his employment on June 19, -2016.

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busines~, Shamir, while he
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Cohen formed a competing

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:I'!°.~~~~· an~:~:;~~~~~~~~ti()n in viola~~~:.f ~t0~!~~.e,nt agreements alld two post:· .empfoY:meiit_ r~strictive .coveriants:c_

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~pecifically, °ldingo_all~ges that Shamir'is Sellin~ similar health

pr<ld~~til Online llsillg near.identlca1.featuies, sym~ol~, loios and dCsigns. as its

-. products:. (Jd; at ml 46-55). Ih thi-s lawsuit; Plai~tlffs al~~~~~~ll.lltiple .c9unt~against the various
defenda.tlts, including: 1). breach or fiduciary duty of loyalty;

2) aiding and abetting breach of

- fiduciary duty of loyalty; 3) vio}~tion oftheDefen~Trad~_S~crets Act; 4) common law

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misappropriation of trade secrets; 5) breach of contract; 6) tortious interference with prospective
economic relations; 7) violation of the Lanham Act; 8) common law unfair competition; 9) violation
of the New Jersey Fair Trade Act; 10) and violation of the New Jersey Consumer Fraud Act. (See
id. at Tif 61-.-112).
The Court previously scheduled a hearing on Plaintiffs' motion for a preliminary injunction
on November 17, 2016. On October 26, 2016, the parties agreed to adjourn that preliminary
injunction hearing until after the Court decided Defendants' forthcoming motion to dismiss, which
was to be filed by November 2, 2016. (See ECF No. 23). Subsequently, Defendants requested a
five-day extension to file their motion to dismiss, and Defendants filed the instant motion on
November 7, 2016. (ECF No. 27). Therefore, Defendants' motion to dismiss is presently before
the Court.

DISCUSSION
Defendants argue that Plaintiffs' Complaint should be dismissed under Fed.R.Civ.P.
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12(b)(5),_ 12(b)(7), and 12(b)(6). The Court will address each of Defendants' arguments in tum.

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. I~:c: .Defendants' Motion to Dismiss Under Federal Rule of Civil Procedure ll(b)(S)
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-- ~issue/' -GrandEntm 't Grp.j•-~td:~·Y· St(lrMedia Saies, Inc., 988 F.2d 476, 488 (3d Cir. 1993). If a

·~· · "·~~~Jfutlilliat~cJthpi~~rili:iigf~¥.propedf Seiv00;. theciofu-tmustapplyatwo·step inquiry
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i, Ratzinger, 46 F.3d 1298, 1305 (3d

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·'cir~ 199SJ. :First, the~c~utts~ould~~termine..whether good cause _exists for a time extension.
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Id. If

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-·a plaintiff demonstrates g~ocFcatise,.the time to-serve process must be extended._ Id. In the absence
of good cause, _however,_ "thc;, _
C.Q~_. :qiay in its_ discr~ticm de~ide whether to dismiss the case without
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prejudice or extend time for service." Id.; McCurdy v. Am. Bd. ofPlastic Surgery, 157 F.3d 191,
196 (3d Cir. 1998). "District courts possess 'broad discretion' when evaluating a motion to dismiss

for insufficient service of process." Hoist v. New Jersey, 2013 WL 5467313, at *3 (D.N.J. Sept. 30,
2013) (internal citation omitted). "Where a plaintiff acts in good faith, but fails to effect proper

service of process, courts are reluctant to dismiss an action." Id. (internal citation omitted).
"Rather, courts will elect to quash service and grant plaintiff additional time to properly serve the
defendant." Id.

b. Analysis
First, Defendants argue that Plaintiffs' claims against Amir Cohen should be dismissed
under Fed.R.Civ.P. 12(b)(5) for insufficient service of process. Fed.R.Civ.P. 4(f) governs service of
an individual in a foreign country. In relevant part, Fed.R.Civ.P. 4(f) provides the acceptable means
of serving individuals in a foreign country: "Unless federal law provides otherwise, an individual ...
may be served at a place not within arty judicial district of the United States: (1) by any
internationally.agreed means of service that is reasonably calculated to give notice, such as those
authorized by the Hague Cop.vehtion on the Service Abroad of Judicial and Extrajudicial ·
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_·Docupi~nts; ... (3) by other 111eans not prohibited by international agreement, as the court orders."
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The Ii~glle:~onvention mentioned in Fed.R.Civ.P. 4(f)(l) is a multilateral, -. " - - : .
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at *2 (E.D .Pa. 1997). Israel is a signatory to the Hague .
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_::_~In- th~s case,-.Amir Coheri currently resides in Israel. (Deel. of Amir Cohen Ex~ A, ECF No.
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· - ~-_,~7..._4)?.Def~ndarits·argu~that Plaintiffs hav~failedto properly serve Amir Cohen in Israel. (Defs/
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a simplified way to-serve process abroad. See Friedman\7. ·-- _, .:·- 1

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ECFNo, 27). Defendants further arguethat Plaintiffs acted in bad faith by

·· representingto this Court that Plaintiffs personally served Amir Cohen at an address in Brooklyn.
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(Id. at 6-8). As a result, Defendants posit that Plaintiffs' claims against Amir Cohen should be
dismissed. (Id. at 3-8). In opposition, Plaintiffs argue that the Court should find that service has
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been effectuated on Amir Cohen under Fed.R.Civ.P.4(t)(3) due to Plaintiffs' service oftlie

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summons on Amir Cohen's counsel of record and service upon Shamir, LLC, of which Amir Cohen
is a fifty percent owner. (Pis.' Opp'n Br. at 12-16, ECF No. 29). In the alternative, Plaintiffs argue
that they have not acted in bad faith here and the Court should allow Plaintiffs a reasonable time to
serve Amit Cohen under the Hague Convention. (Id. at 16-18).
Due to Amir Cohen's foreign residence in Israel, Fed.R.Civ.P 4(t) applies to Plaintiffs'
service of the complaint on him. The Court is not persuaded that Plaintiffs have adequately proven
proper service on Defendant Amir Cohen under Fed. R. Civ. P. 4(t). Specifically, Plaintiffs have
failed to demonstrate that service of the complaint on Amit Cohen's counsel of record or service
upon Shamir, LLC is not barred by international agreement, as required by Fed.R.Civ.P.4(t)(3).
However, the time in which Plaintiffs are required to serve Defendants has not yet run. Federal
Rule ofCi~il Procedure 4(m) is clear that the ninety-day timeframe for service contained therein
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does:not apply to Fed.R.Civ.P. 4(t). Rather, service on a defendant in a foreign country is more···

_·,::F~~:;\ifppf~priately subject to a "flexible due diligence standard." In reBu}~I§itruded] Graphite Prod;_' _
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countr}r under the Hague Convention. See, e.g., In re Bulk [Extrudedf Graphite Prod. Antitrust_ . _ . ;:
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-·.:to effebt service in Germany under the Hague Convention); UnitedSiates'ex:reL--Thomas ~. Siemens - . ·

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AG,.708-E. Supp. 2d505, 516 (E.D~ Pa. 2010}(Pl~intiff recei~ed.sjt.rP.onth~ to effectuate serVic~in~" .
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.Germany under the Hague Convention). The Court is not persuaded that Plaintiffs have acted in ·_·
bad fa~th or have failed to act diligently such that a dismissal of Plaintiffs' claims is warranted, and
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as of this date, Plaintiffs have not failed to effect proper service under Fed.R.Civ.P. 4(t). Therefore,
the Court will not dismiss Plaintiffs' claims against Amir Cohen. Defendants' motion to dismiss
based on Fed.R.Civ.P. 12(b)(5) is denied.
The Court notes that Plaintiffs are required to properly serve Amir Cohen. The Court will
grant Defendants an extension of time to properly serve Amir Cohen under the Hague Convention.
However, if Plaintiffs do not complete proper service within one-hundred and twenty (120) days of
the date of this order, or show good cause why service has not been made prior to that date, the
action will be dismissed as to Amir Cohen.
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Defendants' Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(7)
ao Legal Standard

Federal Rule of Civil Procedure 12(b)(7) permits a court to dismiss a complaint for failure to
join a required party under Federal Rule of Civil Procedure 19. In reviewing a Rule 12(b)(7)
motion to dismiss, the court must accept all factual allegations in the complaint as true and draw all
reasonable inferences in favor of the non-moving party. See Jurimex Kommerz Transit G.MB.H. v.
Case. Corp~, 65 F;App'x·803,

895. (3~·Cir: 2003)~ -''The moving party must d~onstrate that a non-

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moving party is both necessary and iJ?.dispensab.le @der Rule .19 and, as such, must be joined in the .
action." Malibu Media,

ucv,. ]'Sq~~{i~o~"i.W£ 623048~.f ;ft7:(B.i-ri'No~'. :fo, 2013). If th~··· ·.-.•
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matterjurisdiction, ~he. c~urt, mus_t ~~~rni~~: ~~ _ c9mplaini ,!a.nney A{g~~¥<?1!!~1Y Scott, Inc. v. ·
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b.· Analysis; - _: ..

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Second, Defendantsirgu~ th~l--a~erAmfr:;¢ohcl'l:iS.4isJl1i~,seddi~o~ ~s ·1awsµit as- a result of ·

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Plaintiffs' insufficient servic_e of proc_ess ort: him,· Plaintiffs' Complaint should be. dismissed
pursuant to Fed.R.Civ.P.12(b)(7) because-A.mirCoh~ndsanec:ess_aryparty•.
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As discussed in the preceding section of this Opinion, Plaintiffs' claims against Amir Cohen
have not been dismissed. Amir Cohen is presently before this Court, and therefore, it is clear that
he is not an absent necessary or indispensable party contemplated by Fed.R.Civ.P. 19. As a result,

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Defendants' Motion to Dismiss under Fed. R. Civ. P. 12(b)(7) must fail.

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Defendants' Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(6)
a. Legal Standard
A motion under Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of a

complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). The defendant bears the burden of
showing that no claim has been presented. Hedges v. United States, 404 F.3d 744, 750 (3d Cir.
2005). When considering a Rule 12(b)(6) motion, a district court should conduct a three-part
analysis. See Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011). "First, the court must 'take
note of the elements a plaintiff must plead to state a claim."' Id. (quoting Ashcroft v. Iqbal, 56 U.S.
662, 675 (2009)). Second, the court must accept as true all of a plaintiffs well-pleaded factual
allegations and construe the complaint in the light most favorable to the plaintiff. Fowler v. UPMC

Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009); see also Connelly v. Lane Const. Corp., No. 14J792;.2016'WLl06159 (3d Cir~-Jan .. ll,2016). However, the court may disregard any conclusory .
. legal alleg~t~C?,ns. · P owler;·· 578 F .3d at 203. Finally, the court must determine whether the "facts are
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~~.~~i/=/·stiftiti~tftS~sh6w.thatplaintiffhas~ay':plati~ibleclaim for relief~"'

Id. at 211 (quoting Iqbal, 556

. y.s~~a(<>7.9=)-~:)fthe complaint does 1'lot demonstrate more than a "mere possibility of misconduct,"
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_:·>:<.the'~~iiiPlain(iinist be dismissed.· S~e··aelman v. State Farm Mut. Auto. Ins. Co., 583 F.3d ·187, 190
· (3d Cir. 2009) (quoting Iqbal, 556 U.S. at 679).

Analysis

,?>t~tly, Defendants.argue.thatPlaintiffs'~Compfai~t should. be dismissed pursuant to
. F~d_.R_.Cj~.r~ 12(b)(6) duet°' the applicability of a forum se~ection clause in the Non7

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Disclosure/Confidentiality Agreement selecting Illinois as the exclusive forum to resolve disputes
between Idingo LLC and Amir Cohen.
.. The Third Circuit has made it clear that "a 12(b)(6) motion for dismissal is a permissible
means of enforcing a forum selection clause that allows suit to be filed in another federal forum."

Salovaara v. Jackson Nat. Life Ins. Co., 246 F.3d 289, 298 (3d Cir. 2001). Federal courts apply
"federal law when determining the effect of forum selection clauses because ' [q]uestions of venue
and the enforcement of forum selection clauses are essentially procedural, rather than substantive, in
nature."' Wall St. Aubrey Golf, LLC v. Aubrey, 189 Fed. Appx. 82, 84 (3d Cir. 2006) (quoting

Jumara v. State Farm Ins. Co., 55 F.3d 873, 877 (3d Cir. 1995)).
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"Forum selection clauses are entitled to great weight, and are presumptively valid." Id. at 85

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(citing Coastal Steel Corp. v. Tilghman Wheelabrator Ltd., 709 F.2d 190, 202 (3d Cir. 1983)). The
Supreme Court has held that forum selection clauses are "prima facie valid and should be enforced
unless enforcement is shown by the resisting party to be 'unreasonable' under the circumstances."
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MIS Bremenv.. Zapata Off-Shore Co., 407 U.~. l; 10 (1972). A forum selection clause is
''unreasonable" where the party opposing its enforcement can make a "str~ng showing" that: (1)
-''the #ause-was'procured through 'fr~ud :cmp~erreaching"'; (2) its enforcement would contravene a
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focon~~me~t-tliai[tlieparty}willfd~·alfJ)t;r~tfoal purposesbe.deprlYecfof[its] day in court." Foster
··v~- ¢hes~peake_Jns: c_o., ~33 F.~dt.i,g,1;-~_2.19:(3~:.~ir. 1991) (internal citations omitted); see also

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co~ld not be enforced because it violated the public policy objective of New

. J ersey'-S entire controversy doctrine.· See.Liberty Ins. Cotp; _ Bulk Express Logistics, Inc., 2016
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In this case, it is undisputed that the parties agreed to a Non...Disclosure/Confidentiality
Agreement containing a forum selection clause whic~ states, "Any and all disputes arising under or
related to this agreement shall be adjudicated exclusively in Illinois." (Compl.

Ex~

A, ECF No. 1)

("Illinois Forum Selection Clause"). Defendants argue that this Court should dismiss all of
Plaintiffs' claims. against them due to the applicability of the Illinois Forum Selection Clause. 1
(Defs.' Mot. at 9-15, ECF No. 27). In opposition, Plaintiffs argue that the Illinois Forum Selection
Clause is unreasonable and not enforceable because it violates New Jersey's entire controversy
doctrine. (Pls.' Opp'n Br. at 21-25, ECF No. 29).
Plaintiffs cite McNeil/ v. Zoref, 291 N.J. Super. 213, 222-23 (App. Div. 1997) to

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demonstrate the policy objectives behind New Jersey's entire controversy doctrine. (Id. at 21-23).

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In McNeil/, the New Jersey Appellate Division noted that the entire controversy doctrine dictates

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that courts should strive to resolve "all claims against all potential defendants in one encompassing

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litigation." Id. at 222. Further, the court stated, ''The threefold objectives behind the doctrine are

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(1) to encourag~ the- comprehensive and conclusive determination of a legal controversy; (2) to
achieve party· fairness, including both parties before the court as well as prospective parties; and (3)

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· ··-'';ot6~promotejudicial economy and efficiencybyavoiding fragmented, multiple and duplicative

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. -,_ ·· -~:;,~lrfth.1.s;¢a~e-; the policy:objectives-oehind the New Jersey entire controversy doctrine deserve/:
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•.· this fo'nJin s¢1~tipn cfa~se, while Plaintiffs' ~hlims against Amir Cohen may be brought in Illinois,/
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Plaintiffs' claiit1s_against Shay Cohen and Shamir likely could not be brought in Illinois. As a

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The·parti.es~~Enipfoyment A~eel11ent cortta.ined a different forum selection Clause which states·,

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,'-~Any displ!tetelating to the employer-employee relationship between the worker and the employer
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will have· exclusive jurisdiction to the Regional Labor Court in Tel Aviv." (Compl. Ex. C, ECF ~o.
-1) ("TehAviv Fo:rum Selection Clause"). However, Defendants' arguments in support of its
-12(b)(6)inoti0nfo:r dismissal are not based on the Tel Aviv Forum Selection Clause.
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result, Plaintiffs' claims against Shay Cohen and Shamir would continue in this Court, and separate
cases involving extremely similar facts and claims would proceed in two court systems. This would
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result in fragmented and duplicative litigation. Additionally, the Court notes that, while Defendants

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seek dismissal of Plaintiffs' claims pursuant to·the Illinois Forum Selection Clause, Defendants

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concede in their reply brief that ''transferring the case to Illinois would be more inconvenient to all
parties. Thus, it does not make sense to transfer to Illinois." (Defs.' Reply Br. at 10, ECF No. 32).
It appears that all the relevant parties are presently before this Court, and none of the parties desire
that this case be transferred to Illinois. Enforcement of the Illinois Forum Selection Clause would
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run counter to the policy objectives behind New Jersey's entire controversy doctrine. Therefore, the

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Court finds that the Illinois Forum Selection Clause is unreasonable and declines to enforce it.

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Defendants' motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) will be denied.

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CONCLUSION
For the reasons stated herein, Defendants' motion is denied. An appropriate order will
follow.

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