Marsh USA Inc. v. Osterhage
Filing
25
OPINION & ORDER re: 15 MOTION to Dismiss . filed by Lorraine Osterhage, 18 LETTER MOTION for Oral Argument addressed to Judge Alison J. Nathan from Steven D. Pearson dated May 18, 2018. filed by Lorraine Osterhage. F or the reasons given above, the Court hereby grants Defendant's motion to dismiss the case under Rule 12(b)(7). Defendant's request for oral argument is hereby denied. This resolves docket items 15 and 18. The Clerk of Court is directed to enter judgment and mark this case as closed. SO ORDERED. (Signed by Judge Alison J. Nathan on 3/26/2019) (kv) Transmission to Orders and Judgments Clerk for processing.
Case 1:18-cv-03439-AJN Document 25 Filed 03/27/19 Page 1 of 15
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
Marsh USA Inc.,
Plaintiff,
18-cv-3439 (AJN)
-vOPINION & ORDER
Lorraine Osterhage,
Defendant.
ALISON J. NATHAN, District Judge:
Lorraine Osterhage, the Defendant, was previously employed by Marsh USA, Inc.
("Marsh"), the Plaintiff. After Osterhage left Marsh for another company, her former employer
sued to enforce provisions of a confidentiality agreement and a non-solicitation agreement (the
"Osterhage Agreements"). Defendant moved to dismiss Plaintiffs claims on the grounds that an
indispensable party could not be joined. In the alternative, Defendant asks this Court to stay the
action pending proceedings in Missouri state court, or, failing that, to dismiss one of Plaintiffs
claims for failure to state a claim. For the reasons given below, the Court grants Defendant's
motion to dismiss.
I.
Background
Plaintiff is a Delaware professional services firm with a principal place of business in
New York. Dkt. No. 1, Compl.
Compl.
,r 8.
Defendant is a resident and citizen of the State of Illinois.
,r 9.
The following facts are drawn from the paiiies' filings in this matter. In deciding a
motion to dismiss pursuant to Rule 12(b)(7) for failure to join a party, a court must assume all of
the facts in the complaint are true and draw all reasonable inferences in the plaintiffs favor. See
1
Case 1:18-cv-03439-AJN Document 25 Filed 03/27/19 Page 2 of 15
Toney-Dick v. Doar, No. 12-CV-9162 (KBF), 2013 WL 1314954, at *5 (S.D.N.Y. Mar. 18,
2013); SC Charles A. Wright and Arthur R. Miller, Federal Practice and Procedure§ 1359 (3d
ed. 2004) (on a Rule l 2(b )(7) motion, "a court must accept all factual allegations in the
complaint as true and draw inferences in favor of the non-moving party"). The Court looks to
Plaintiffs Complaint, and the Osterhage Agreements, which are attached to the Complaint, Dkt.
Nos. 1-1 & 1-2. The Court also considers the 2015 Administrator Agreement between Plaintiff
and a former customer, the American Council of Engineering Companies Business Insurance
Trust ("Council Trust"), which is incorporated by reference in the Complaint. See Dkt. No. 21-1
Ex. A, Administrator Agreement ("Admin. Agree."). In addition, on a Rule 12(b)(7) motion "the
Court may consider documents and facts outside the pleadings." Fagioli S.p.A. v. Gen. Elec.
Co., No. 14-cv-7055 (AJN), 2014 WL 12768461, at *l (S.D.N.Y. Nov. 25, 2014) (quoting
Toney-Dick, 2013 WL 1314954, at *7); see also SC Charles A. Wright and Arthur R. Miller,
Federal Practice and Procedure § 1359 (3d ed. 2004) (noting that in deciding a motion under
Rule 12(b)(7), "[t]he district judge is not limited to the pleadings"). At this stage there are no
factual disputes as to the document of the pleadings on which the Court relies here, a complaint
filed by the Council Trust in a related Missouri action against Plaintiff. Council Trust
Complaint, Dkt. No. 21-1.
A. The Osterhage Agreements
In 2008, while employed by Plaintiff, Defendant signed the Confidentiality Agreement
and Non-Solicitation Agreement with her employer. The Confidentiality Agreement provides a
fairly broad definition of confidential information and trade secrets, including any client
information and any information relating to any client. Dkt. No. 1-1, Confidentiality Agreement
("Conf. Agree.")
,r Definitions
l(iii) & (v). Defendant agreed, inter alia, that she would not use
2
Case 1:18-cv-03439-AJN Document 25 Filed 03/27/19 Page 3 of 15
or disclose this information to any other organization or person "while associated with [Marsh
USA] and for so long thereafter as the pertinent information or documentation remains
confidential." Conf. Agree. ,i 3. The Confidentiality Agreement contains a provision stating that
it is governed by New York law and that "any action or proceeding with respect to this
Agreement and my employment shall be brought exclusively" in New York state court or the
Southern District of New York. Conf. Agree. ,i 6(h).
Under the Non-Solicitation Agreement, Defendant agreed, inter alia, to a 12-month
prohibition on the solicitation and/or servicing of any Marsh clients or prospective clients. Dkt.
No. 1-2, Non-Solicitation Agreement ("Non-Solicit. Agree.") ,i,i 1-2. This limitation only
applied to clients with whom Defendant had had contact in the course of her employment or
about whom Defendant had obtained confidential information or trade secrets during the last two
years of her employment with Plaintiff. Id. The Non-Solicitation Agreement also contains a
provision stating that it is governed by New York law and that any action arising from the NonSolicitation Agreement or Defendant's employment may only be brought in New York state
court or the Southern District of New York. Non-Solicit. Agree. ,i 9.
B. Plaintifrs Agreement with the Council Trust
As part of her employment, Defendant serviced one of Plaintiffs clients, the Council
Trust. Compl. ,i,i 13-14, 23-24. The Council Trust is a program of the American Council of
Engineering Companies ("American Council"), a nationwide association of thousands of firms.
Compl. ,i 14. Pursuant to administrator agreements with the Council Trust, Plaintiff brokered
insurance policies to the member companies of the American Council. Id. The most recent such
agreement between Plaintiff and the Council Trust was the 2015 Administrator Agreement.
Compl. ,i 16; Admin. Agree.
3
Case 1:18-cv-03439-AJN Document 25 Filed 03/27/19 Page 4 of 15
The Administrator Agreement provides a series of restrictions on Plaintiffs conduct in
the event of termination or expiration without renewal. Admin. Agree.
,r 7.
In the event of
termination or expiration, the Administrator Agreement states that for a three-year period
"following termination of this Agreement" Plaintiff will not "interfere with or oppose" any
efforts by the Council Trust to switch a member firm of the American Council to a different
insurance program. Id. In addition, after expiration, for three years Plaintiff may not offer any
of a variety of insurance programs "to any affinity group comprised primarily of consulting
engineering companies that are members of [the American Council]." Id. However, even after
termination, the Agreement also provided that Plaintiff "shall not be restricted ... from
continuing as insurance broker and/or risk consultant for any firm that is a Program participant ..
. or from offering or providing insurance brokerage and/or risk consulting services to any other
firm other than on an affinity group basis[.]" Id. By its terms, the Administrator Agreement is
governed by Missouri law and "[a]ny suit, action or proceeding arising out of or relating to this
Agreement shall be brought exclusively in a state or federal court located in the State of
Missouri." Admin. Agree.
,r 16.
C. Non-Renewal of the 2015 Administration and Agreement and Aftermath
In "late 2017," the Council Trust informed Plaintiff that it would not renew the
Administrator Agreement, which was to expire on December 31, 201 7. Comp 1. ,r 31. The
Council Trust then hired another company, Greyling, as program administrator. Compl.
Defendant resigned from Plaintiff, effective November 30, 2017. Compl.
,r 33.
,r 32.
Plaintiff alleges
that Defendant began working for Greyling in or around December of 2017, immediately before
Greyling took over as administrator of the Council Trust. Compl.
,r,r 36-37.
Plaintiff was then
informed that a client was being transfe1Ted to Greyling and Defendant was the service provider.
4
Case 1:18-cv-03439-AJN Document 25 Filed 03/27/19 Page 5 of 15
Compl.
~
38. On February 1, 2018, Greyling put out a press release announcing Defendant's
hiring and stating that she would "be responsible for providing risk management and property &
casualty ins:urances services to engineering firms who participate in the [Council Trust]
Program" and that she would be "an incredible asset" to American Council members. Compl.
~
43. As a result, Plaintiff contends, Defendant will be servicing American Council members with
whom she had contact while working for Plaintiff and about whom she had access to confidential
and proprietary information.
On April 18, 2018, the day before Plaintiff brought this suit, the trustees of the Council
Trust brought suit against Plaintiff in Missouri state court, alleging that Plaintiff was violating
the Administrator Agreement by interfering with and opposing the Council Trust's efforts to
switch American Council firms over to Greyling. Council Trust Complaint~~ 16-28. The
Council Trust sought injunctive relief and damages in the Missouri action.
On April 19, 2018, Plaintiff brought this suit against Defendant for breach of the
Confidentiality Agreement and the Non-Solicitation Agreement, as well as unfair competition.
Compl. ~~ 45-66. Defendant moved to dismiss under Rule 12(b)(7) on May 14, 2018, arguing
that the Council Trust is an indispensable party that cannot be joined. Dkt. No. 15.
II.
Legal Standard
A Rule l 2(b)(7) motion to dismiss entails a two-step analysis. "First, the court must
determine whether an absent party belongs in the suit, i.e., whether the party qualifies as a
'necessary' party under Rule 19(a)." Viacom Int'!, Inc. v. Kearney, 212 F.3d 721, 724 (2d Cir.
2000) abrogated on other grounds as stated in Merrill Lynch & Co. v. Allegheny Energy, Inc.,
500 F.3d 171, 179 (2d Cir. 2007). The definition of a necessary party encompasses "[p ]ersons
having an interest in the controversy, and who ought to be made parties[.]" Id. (quoting
5
Case 1:18-cv-03439-AJN Document 25 Filed 03/27/19 Page 6 of 15
Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 124 (1968)). If a party is
not necessary under the Rule 19(a) analysis, then the motion to dismiss under Rule 12(b)(7) is
defeated. When a party is necessary, however, a court then must then assess whether "joinder of
the absent party is not feasible for jurisdictional or other reasons." Viacom, 212 F.3d at 725. For
example, joinder is infeasible if it would destroy a federal court's subject matter jurisdiction by
bringing into a case a non-diverse party. See Merrill Lynch, 500 F.3d at 179 ("joinder of nondiverse defendant under Rule 19(a) destroys jurisdiction" (quoting Provident Tradesmens Bank,
390 U.S. at 108)).
If j oinder of a necessary party would not be feasible, a court turns to the second step of
the analysis: assessing whether the party is truly "indispensable." Viacom, 212 F.3d at 725. This
requires that the court determine "whether, in equity and good conscience, the action should
proceed among the existing parties or should be dismissed." Rule l 9(b). This determination is
made with reference to a non-exhaustive list of factors in Rule 19(b)(1 )-(4). If a court concludes
that a party is indispensable, it should dismiss the case.
III.
Analysis
Defendant's principal argument is that the Council Trust is an indispensable pa1iy to this
suit and that because joining the Council Trust would destroy jurisdiction by rendering the
parties non-diverse, Plaintiff's suit should be dismissed. In the alternative, Defendant argues that
the case should be stayed pending the resolution of the Missouri state action. Finally, if the
Court does neither, Defendant argues that Plaintiff's unfair competition claim should be
dismissed under Rule 12(b)( 6) for failure to state a claim. Because the Comi agrees that the
Council Trust is an indispensable party, it is unnecessary to reach Defendant's arguments in the
alternative.
6
Case 1:18-cv-03439-AJN Document 25 Filed 03/27/19 Page 7 of 15
A. The Council Trust is a Necessary Party
Defendant argues that interpreting Plaintiffs claims would require interpretation of the
Administrator Agreement, which is directly at issue between Plaintiff and the Council Trust in
the Missouri litigation. Defendant contends that the Council Trust is a necessary party because
under Rule 19(a)(2)(i), this is a situation in which a "person claims an interest relating to the
subject of the action and is so situated that the disposition of the action in the person's absence
may ... as a practical matter impair or impede the person's ability to protect that interest." The
Court looks first to whether adjudicating Plaintiffs claims would implicate the Administrator
Agreement, then to whether the Council Trust is a necessary party whose joinder would be
infeasible.
1. Adjudicating Plaintiff's Claims Would Require Interpreting the Administrator
Agreement
Defendant argues that the Council Trust is a necessary party because in order to evaluate
Plaintiffs breach of contract claims under the Osterhage Agreements, the Court would first have
to interpret certain provisions of the Administrator Agreement. Specifically, Defendant argues
that the Court would need to interpret: (a) provisions of the Administrator Agreement limiting
Plaintiffs post-termination activity relative to American Council members; (b) a clause of the
Administrator Agreement that gives the Council Trust trustees access upon request to Plaintiffs
records concerning the Council Trust program; and (c) unspecified parts of the Administrator
Agreement relating to which companies counted as "clients" of Plaintiffs. Plaintiff counters that
the Osterhage Agreements and its own claims are entirely independent of the Administrator
Agreement. The Comi addresses each of Defendant's three arguments in tum.
As to the first argument, the Comi agrees with Defendant that determining whether the
Non-Solicitation Agreement is enforceable requires interpreting the Administrator Agreement.
7
Case 1:18-cv-03439-AJN Document 25 Filed 03/27/19 Page 8 of 15
As both of these contracts contain New York choice-of-law clauses, the Court looks to New
York law to determine enforceability. Under New York law, a non-compete agreement like the
Non-Solicitation Agreement is only enforceable if it is reasonable. Brown & Brown, Inc. v.
Johnson, 25 N.Y.3d 364,369 (2015). Such an agreement will only be considered reasonable if,
inter alia, it is "is no greater than is required for the protection of the legitimate interest of the
employer[.]" Id. (emphases in original); Heartland Sec. Corp. v. Gerstenblatt, No. 99-CV-3694
(WHP), 2000 WL 303274, at *5 (S.D.N.Y. Mar. 22, 2000) (while concerns about employee
mobility and free enterprise require a strict approach to such agreements, "the employer is
entitled to protection from unfair or illegal conduct that causes economic injury." (quoting Am.
Broad. Companies, Inc. v. Wolf, 52 N.Y.2d 394,404 (1981)). This determination "focuses on the
particular facts and circumstances giving context to the agreement." BDO Seidman v. Hirshberg,
93 N.Y.2d 382, 390 (1999). It is true, as Plaintiff contends, that protection of an employer's
client base can constitute a legitimate interest under this standard. See, e.g., Silipos, Inc. v.
Bickel, No. 06-CV-02205, 2006 WL 2265055, at *3 (S.D.N.Y. Aug. 8, 2006). However, in this
case, the extent to which Plaintiff is able to participate in the market for American Council
members is relevant to whether Plaintiff has a legitimate interest in prohibiting Defendant from
working in that market. See Int'! Bus. Machines Corp. v. Visentin, No. 11 CIV. 399 LAP, 2011
WL 672025, at *21 (S.D.N.Y. Feb. 16, 2011), ajf'd, 437 F. App'x 53 (2d Cir. 2011) (noncompete agreement was overbroad where it prohibited the employee from working in a market in
which the employer does not participate); see generally Am. Broad., 52 N.Y.2d at 404 (noncompete covenants must be reasonable in scope to be enforced). The Administrator Agreement
states that for three years post-termination, Plaintiff "shall not offer ... any affinity workers'
compensation insurance program and/or business property/casualty insurance program to any
8
Case 1:18-cv-03439-AJN Document 25 Filed 03/27/19 Page 9 of 15
affinity group comprised primarily of consulting engineering companies that are members of [the
American Council]." Admin. Agree.~ 7. However, Plaintiff is not restricted from "continuing
as insurance broker and/or risk consultant for any firm that that is a Program participant as of the
date of termination of this Agreement or from offering or providing insurance brokerage and/or
risk consulting services to any firm other than on an affinity group basis[.]" Admin. Agree.~ 7.
Interpreting the way in which these interlocking provisions interact is necessary to determining
the extent to which Plaintiff is able to participate in the market for American Council members,
and thus the scope of Plaintiffs legitimate interest in preventing Defendant from working with
those firms.
Similarly, the Administrator Agreement states that for three years after termination,
Plaintiff "will not interfere with or oppose any efforts of [the Council] Trust to switch any firm
that is or was a member of [the American Council] frorri. any affinity workers' compensation
insurance program and/or business property/casualty insurance program to a different insurance
program and (ii) it will direct its employees not to interfere with or oppose such effort."
Administrator Agreement ~ 7. Depending on the interpretation of this provision, this could have
implications for whether the scope of the Non-Solicitation Agreement is reasonable. See Am.
Broad. Companies, Inc. v. Wolf, 52 N.Y.2d at 404. If the Administrator Agreement prohibits
Plaintiff from interfering with the Council Trust's efforts to shift American Trust members to
Grayling, then Plaintiff might not have a legitimate interest in interfering with the ability of
Grayling's employee, Defendant, to participate in that process. Indeed it may even be that, as
Defendant argues, the instant suit could constitute prohibited interference. The Court takes no
position on whether these are correct interpretations of the Administrator Agreement. However,
this does mean that interpreting the Administrator Agreement's limitations on what Plaintiff may
9
Case 1:18-cv-03439-AJN Document 25 Filed 03/27/19 Page 10 of 15
or may not do post-termination is necessary to determine whether the Non-Solicitation
Agreement is sufficiently tailored to a legitimate interest of Plaintiffs.
As to Defendant's second argument, the Court agrees with the Defendant that it would
have to interpret the Administrator Agreement to determine whether, or simply to what extent,
Defendant violated the Confidentiality Agreement. As noted above, the Confidentiality
Agreement states that "I agree that I will not, while associated with the Company and/or so long
thereafter as the pertinent information or documentation remains confidential, for any purpose
whatsoever, directly or indirectly use, disseminate or disclose to any other person, organization
or entity Confidential Information or Trade Secrets[.]" Conf. Agree.
ii 3 (emphasis added).
Yet
as Defendant points out, the Administrator Agreement states that with respect to "[a]ll records
received or developed by Administrator in connection with its brokering of the Programs ...
upon termination of the [Administrator] Agreement, [Marsh] shall provide the [Council] Trust
with copies of all such records which the [Council] Trust requests." Admin. Agree.
ii S(a).
Interpreting the scope of that language is relevant to determining whether the information
Defendant is accused of using or divulging still falls under the Confidentiality Agreement, or
whether some or all of it would no longer qualify as confidential given the access that the
Council Trust was granted to program information. Therefore, adjudicating this breach of
contract claim also requires interpreting the Administrator Agreement.
Given the above, adjudicating Plaintiffs claims based on the Confidentiality Agreement
and the Non-Solicitation Agreement would require the interpretation of the Administrator
Agreement. Because the above two reasons are sufficient to conclude that this Court would need
to interpret the Administrator Agreement to address Plaintiffs breach of contract claims, it is
unnecessary to reach Defendant's third argument regarding interpretation of the term "client."
10
Case 1:18-cv-03439-AJN Document 25 Filed 03/27/19 Page 11 of 15
As to Plaintiffs unfair competition claim, adjudicating this claim also implicates
Defendant's contractual duties under the Osterhage Agreements, and thus the Administrator
Agreement as well. Plaintiffs Complaint explicitly lists Defendant's contractual duties under
both the Non-Solicitation Agreement and the Confidentiality Agreement as bases for its unfair
competition claim. Compl. 11 61-62. And while Plaintiff argues that its unfair competition
claim goes "beyond violations of [Defendant's] contractual agreements with Marsh," Dkt. No.
20, Pl. Br., at 11, it also argues that its unfair competition claim is a claim in the alternative based
in part on the "contract-based violations cited in the Complaint," id. Even beyond the significant
overlap between Plaintiffs contract and tort claims, Plaintiff expressly argues that its unfair
competition claim is an argument in the alternative that "would c?me squarely into play" if the
Osterhage Agreements were "in some way unenforceable." Id at 12. This indicates a
recognition of the fact that if the Osterhage Agreements are enforceable, this might bar some or
all of Plaintiffs tort claims as duplicative. See, e.g., See Orange County Choppers, Inc. v. Olaes
Enterprises, Inc., 497 F.Supp.2d 541, 558 (S.D.N.Y.2007) ("It is well-settled, however, that no
claim [for unfair competition] lies where its underlying allegations are merely a restatement,
albeit in slightly different language, of the implied contractual obligations asse1ied in the cause
of action for breach of contract." (citing Clark-Fitzpatrick, Inc. v. Long Island R. Co., 70 N.Y.2d
382, 390 (1987)). Therefore, since adjudicating Plaintiffs contract claims is necessary to
determine both the scope and substance of its tort claim, the resolution of Plaintiffs unfair
competition claim also requires interpreting the Administrator Agreement.
2. The Council Trust is a Necessary Party for Whom Joinder is Infeasible
Having determined that adjudicating Plaintiffs claims would require interpreting the
Administrator Agreement, the Court now turns to whether this renders the Council Trust a
11
Case 1:18-cv-03439-AJN Document 25 Filed 03/27/19 Page 12 of 15
necessary party. Under Rule l 9(a)(l )(B)(i), a party qualifies as a necessary party if, inter alia, it
"claims an interest relating to the subject of the action and is so situated that the disposition of
the action in the person's absence may ... as a practical matter impair or impede the person's
ability to protect." Most relevantly to the case at hand, "[i]fthe resolution of a plaintiffs claim
would require the definition of a non-party's rights under a contract, it is likely that the non-party
is necessary under Rule 19(a)." Jonesfilm v. Lion Gate Int'l, 299 F.3d 134, 141 (2d Cir. 2002)
(citing Peregrine Myanmar Ltd. v. Segal, 89 F.3d 41, 48 (2d Cir.1996)). For-the reasons given
above, resolving Plaintiffs claims would require defining the Council Trust's rights under the
Administrator Agreement. Doing so in the Council Trust's absence would thus impair or impede
its ability to protect its interest in the interpretation of its rights under the Administrator
Agreement. Id.; Peregrine Myanmar, 89 F.3d at 48 ("The key issue in deciding whether either
part of Rule 19(a) applies is the extent to which this case requires a determination of rights and
interests [of the non-party under a contract]."). This is particularly true in light of the pending
Missouri action in which the Administrator Agreement is in dispute. See Fagioli, 2014 WL
12768461, at *3; see also BRB Internacional S.A. v. Weinstein Co. LLC, No. l 7-CV-02065
(ALC) (KHP), 2018 WL 1111060, at *l (S.D.N.Y. Feb. 27, 2018) ("the risk of having another
court re-decide a party's rights and obligations under a contract 'is precisely what Rule 19 seeks
to avoid"' (quoting Global Discount Travel Servs., LLC v. Trans World Airlines, Inc., 960 F.
Supp. 701, 708-09 (S.D.N. Y 1997)). As a result, the Council Trust "clearly claims an interest in
the subject of this action, because any adjudication of the rights and obligations of the parties
under the [Administrator] Agreement in this Court is likely to affect the interests it is seeking to
enforce in th[e] other action[]." Fagioli, 2014 WL 12768461, at *3. Indeed, some of the very
same provisions for the Administrator Agreement are at issue in the Missouri state proceeding,
12
Case 1:18-cv-03439-AJN Document 25 Filed 03/27/19 Page 13 of 15
such as the meaning of the non-interference provision and the extent to which Plaintiff is able to
participate in the market for American Council members. See generally Council Trust
Complaint. Thus, adjudicating Plaintiffs claims "may impair the ability of [the Council Trust]
to protect the very interest that is the subject of those other proceedings." Fagioli, 2014 WL
12768461, at *3. The Council Trust is therefore a necessary party.
The parties do not dispute that joining the Council Trust would be infeasible because it
would destroy diversity. Pl. Br. at 8 ("Marsh agrees that if all of the [Council Trust] trustees
were joined to this action, there would not be complete diversity and this Court would lack
subject matter jurisdiction."). In fact, a previous action between the Council Trust and Plaintiff
was dismissed for lack of diversity jurisdiction. Alper v. Marsh, USA, Inc., 2018 WL 1726627,
at * 1 (E.D. Mo. Apr. 10, 2018). Therefore, joinder would be infeasible. See Merrill Lynch, 500
F.3d at 179.
B. The Council Trust Is an Indispensable Party
Having found that the Council Trust is both a necessary party and that its joinder is
infeasible, the Court now turns to whether it is truly indispensable. See Merrill Lynch, 500 F.3d
at 180. Under Rule 19(b), courts are to balance the following non-exhaustive factors:
(1) the extent to which a judgment rendered in the person's absence might prejudice that
person or the existing parties;
(2) the extent to which any prejudice could be lessened or avoided by:
(A) protective provisions in the judgment;
(B) shaping the relief; or
(C) other measures;
(3) whether a judgment rendered in the person's absence would be adequate; and
(4) whether the plaintiff would have an adequate remedy if the action were dismissed for
nonjoinder.
Weighing the above factors in light of the circumstances of this case, the Court concludes
that the Council Trust is an indispensable party. A judgment interpreting the Council Trust's
13
Case 1:18-cv-03439-AJN Document 25 Filed 03/27/19 Page 14 of 15
rights under the Administrator Agreement could plainly prejudice the Council Trust, particularly
in light of the ongoing litigation in Missouri. See, e.g., Fagioli, 2014 WL 12768461, at *3.
While allowing the litigation in Missouri to run its course might shed some light on the meaning
of the Administrator Agreement, it would not necessarily do so in a way that would be relevant
to the case at hand. Plaintiffs suggestion that the Court cabin its judgment to the parties to the
instant case risks creating unnecessary inconsistency or duplication. On the other hand, a
judgment in the absence of the Council Trust could be adequate to resolve the disputes of the
parties currently before the Court. Finally, Plaintiff likely has an adequate remedy if the action
were dismissed for nonjoinder. Defendant argues that if this action were dismissed, Plaintiff
could simply sue her in Missouri court. It is true, as Plaintiff points out, that the Confidentiality
Agreement and the Non-Solicitation Agreement include provisions requiring disputes arising
from the provisions to be adjudicated in New York. Pl. Br. at 1-2. Yet Defendant counters that
she would not invoke those provisions, particularly because they exist to protect Plaintiff, not
her, as she resides in Missouri. Dkt. No. 22, Def. Rep. Br. at 6-7. And there is no reason to
think that the parties could not waive this requirement in writing as provided for in the Osterhage
Agreements. Conf. Agree. ~6(i); Non-Solicit. Agree. ~ 10. All that aside, the Osterhage
Agreements expressly provide that claims could be brought in New York state courts, and
Plaintiff has provided no reason why this would not be feasible. Conf. Agree. ~6(h); NonSolicit. Agree.~ 9. Weighing these factors in the circumstances of this case, the Comi holds that
the Council Trust is an indispensable party.
IV. Conclusion
For the reasons given above, the Court hereby grants Defendant's motion to dismiss the
case under Rule 12(b)(7). Defendant's request for oral argument is hereby denied. This resolves
14
Case 1:18-cv-03439-AJN Document 25 Filed 03/27/19 Page 15 of 15
docket items 15 and 18. The Clerk of Court is directed to enter judgment and mark this case as
closed.
SO ORDERED.
Dated:
March~, 2019
New York, New York
United States District Judge
15
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?