Sirius Computer Solutions, Inc. v. Nordisk Systems, Inc.

Filing 30

ORDER AND OPINION: Granting Motion to Dismiss 16 . Nordisk's Counterclaim is DISMISSED. See, Formal Opinion. Signed on 2/2/2017 by Judge Ann L. Aiken. (rdr)

UNITED STATES DISTRICT COURT
DISTRICT OF OREGON

SIRIUS COMPUTER SOLUTIONS, INC.,

Case No. 3:16-cv-1641-AA,
OPINION AND ORDER

Plaintiff,

v.
NORDISK SYSTEMS, INC.,
Defendant.

AIKEN, Judge:
Plaintiff filed this action alleging claims for intentional interference with existing and

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prospective contract relations, misappropriation of trade secrets, equitable accounting, and
conversion. Plaintiff seeks economic and compensatory damages, punitive damages, unjust
enrichment damages, injunctive relief, and attorney's fees. Defendant filed a counterclaim
alleging tortious interference with contract, and plaintiff now seeks dismissal of defendant's
counterclaim. The motion is granted.
BACKGROUND
Plaintiff Sirius Computer Solutions, Inc. (Sirius) is a Texas IT corporation, and defendant
Nordisk Systems, Inc. (Nordisk) is an Oregon IT corporation in direct competition with Sirius.
OPINION AND ORDER

Plaintiffs claims and defendant's counterclaim arise from Nordisk's employment of Jason
Sparks, a former Sirius employee, in May of2015.
According to the complaint, in June 2014, Sirius hired Sparks as a Storage Solutions
Sales Specialist. Comp!.

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8. Sparks was responsible for interacting with and soliciting both

prospective and current Sirius customers to purchase IT business solutions. Comp!.

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8. As a

condition of his employment with Sirius, Sparks signed a "Confidentiality, Protection of
Customer Relationships and Non-Solicitation Agreement" (Agreement). Comp!.

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9-11. The

Agreement allegedly prohibited Sparks from soliciting known Sirius customers on behalf of
competitors and required Sparks to disclose his obligations to potential future employers. Comp!.
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12-14. Sirius alleges that, immediately prior to tendering his resignation at Sirius, Sparks

accessed and downloaded Sirius files containing confidential and propriety information and
disclosed that information for the benefit of Nordisk.
Sirius also alleges that in the months leading to May 2015, Sparks and Nordisk colluded
to solicit Sirius customers and employees and interfere with Sirius's relationships with existing
and prospective customers and employees. Comp!.

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30-43. Sirius alleges that this collusion

included the dissemination of protected information that belonged to Sirius.
Due to these alleged breaches of the Agreement, on August 6, 2015, Sirius filed suit
against Sparks in Bexar County, Texas (the Texas Lawsuit). Comp!.

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46; Am. Ans.

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56. Sirius

sought a temporary restraining order (TRO) to enjoin Sparks from soliciting or attempting to
solicit prospective customers of Sirius, and the Texas court granted the ex parte TRO. Comp!.

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47. Following entry of the TRO, Sparks removed the litigation to the United States District Court
for the Westem District of Texas and filed several counterclaims against Sirius, including claims

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OPINION AND ORDER

for wrongful injunction, malicious prosecution, breach of contract, and tortious interference.
Comp!. if 49.
On August 14, 2015, Sparks and Nordisk filed suit against Sirius in the District of
Oregon. Nordisk Systems, Inc., v. Sirius Computer Solutions, Inc., Case No. 03:15-cv-01540-HZ
(D. Or. 2015); Comp!.

if 50. Ultimately, Sparks withdrew as a plaintiff, and his claims were

transferred and consolidated with his counterclaims in the Texas action. Nordisk pursued claims
against Sirius for intentional interference with economic relations and abuse of process. Nordisk
essentially alleged that Sirius wrongfully sought an overbroad TRO that restrained Sparks from
completing his duties as a Nordisk employee. Upon motion by Sirius, District Judge Hernandez
dismissed Nordisk's claims on prudential standing grounds.
The Texas Lawsuit brought by Sirius against Sparks continued in the Western District of
Texas until May 13, 2016, when Sparks filed for Chapter 13 bankruptcy. On May 19, 2016, the
District Court in Texas stayed and administratively closed the proceeding. Comp!. if 53.
Following the stay of the Texas Lawsuit, on August 12, 2016, Sirius filed the instant suit
against Nordisk. In response, Nordisk asserted a counterclaim for tortious interference with
contract based on the TRO Sirius sought and obtained against Sparks. Am. Ans. irir 52-68.
DISCUSSION
Sirius moves to dismiss Nordisk's counterclaim on grounds that the claim is barred by
claim and issue preclusion. Sirius contends that Nordisk's counterclaim is essentially the same
claim as the intentional interference with contract claim dismissed by Judge Hernandez on
standing grounds, and that the dismissal bars Nordisk from raising the same claim in this action.
I agree.

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OPINION AND ORDER

Under the doctrine of issue preclusion, "once a court has decided an issue of fact or law
necessary to its judgment, that decision may preclude relitigation of the issue in a suit on a
different cause of action involving a party to the first case." Allen v. lvfcC111'1J', 449 U.S. 90, 94
(1980). Issue preclusion prevents a party from relitigating an issue decided in a previous action if
the following requirements are met: "(!) there was a full and fair opportunity to litigate the issue
in the previous action; (2) the issue was actually litigated in that action; (3) the issue was lost as a
result of a final judgment in that action; and (4) the person against whom collateral estoppel is
asserted in the present action was a party or in privity with a party in the previous action." In re
Palmer, 207 F.3d 566, 568 (9th Cir. 2000). "Issue preclusion applies to threshold jurisdictional

issues like standing as well as issues going to a case's merits." Nat 'I Ass 'n of Home Builders v.
Envtl. Prof. Agency, 786 F.3d 34, 41 (D.C. Cir. 2015) (citing Underwriters Nat'! Assurance Co.
v. NC. Life & Acc. & Health Ins. Guar. Ass'n, 455 U.S. 691, 706 (1982)).

Here, the issue decided in the previous action was whether Nordisk had prudential
standing to pursue an intentional tort claim against Sirius based on the allegations that Sirius
improperly obtained an overbroad TRO against Sparks and interfered with the employment
relationship between Nordisk and Sparks. In the previous action, Nordisk alleged that it had a
contractual relationship to Sparks to which Sirius was not a party. It also alleged that Sirius
intentionally and wrongfully interfered with the contractual relationship between Nordisk and
Sparks by seeking and obtaining an overbroad TRO, based on the non-solicitation agreement,
which "rendered Sparks unable to perform the job duties for Nordisk he was hired to perform."
Case No. 3:15-cv-1540-HZ (ECF No. 28 at 5). Nordisk alleged that it suffered damages from
Sirius's alleged interference, including the wages paid to Sparks and the loss of profits from sales
that would have been made by Sparks. Id (ECF No. 28 at 6). Judge Hernandez found that

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OPINION AND ORDER

Nordisk failed to establish prudential standing to pursue its claim, because Nordisk's claims
rested upon the rights and interests of Sparks, a third party. Id (ECF No. 39).
In this case, Nordisk makes the very same allegations as it did in the previous case.
Nordisk alleges that Sirius improperly interfered with "Nordisk's contractual rights to Sparks'
performance" by seeking and obtaining an overbroad TRO against Sparks based on "a void and
unenforceable non-solicitation agreement." Am. Ans.

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65. Nordisk had a full and fair

opportunity to litigate the issue of prudential standing in the previous action; the issue or
prudential standing was actually litigated in the previous action; Nordisk was found to lack
prudential standing as a result of a final judgment in that action; and, obviously, Nordisk was a
party to the previous action. Therefore, the requirements of issue preclusion are met.
Nordisk nonetheless argues that the "different facts presented" in the current lawsuit cure
any defect in standing. Def.'s Response at 14. Granted, "dismissal based on a curable defect in
jurisdiction is not generally considered adjudication on the merits for the purposes of issue
preclusion, thus permitting a 'second action on the same claim ... after correction of the
deficiency."' Pascua v. Option One J\£ortg. Corp., 2014 WL 7421504, at *7 (D. Haw. Dec. 31,
2014) (quoting Wolfi;on v. Bramber, 616 F.3d 1045, 1064 (9th Cir. 2010)). The curable defect
exception "permits litigants whose claims were dismissed on jurisdictional grounds to establish
jurisdiction in a subsequent case only if a material change following dismissal cured the original
jurisdictional deficiency." Nat'! Ass'n ofHome Builders, 786 F.3d at 41.
Nordisk claims that the bankruptcy protection sought by Sparks and Sirius's suit against
Nordisk, both occurring after the dismissal of Nordisk's claims against Sirius, establish that it
"has a sufficient stake in its counterclaim to establish standing." Def. 's Response at 15. I am
unpersuaded.

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OPINION AND ORDER

Regardless of whether Nordisk generally has more at stake now that Sirius is suing
Nordisk instead of Sparks, Nordisk's "new" facts do not impact Judge Hernandez's finding that
Nordisk lacked a stake in the underlying Agreement between Sparks and Sirius or the allegedly
improper TRO that formed the basis for Nordisk's intentional interference claim. Nordisk's
current intentional interference claim does not rest on the "new facts" of Sparks' bankruptcy
filing or Sirius' decision to sue Nordisk for damages allegedly arising from Sparks' breach of the
Agreement. Rather, as in the earlier proceeding, Nordisk's claims rest on the TRO Sirius
obtained against Sparks, based on the Agreement between Sirius and Sparks.
In finding that Nordisk lacked prudential standing, Judge Hernandez noted that Nordisk
did not allege that it had agreed to indemnify Sparks or otherwise entered into an agreement
granting it the legal right to stand in the shoes of Sparks. Case No. 3:15-cv-1540-HZ (ECF No.
39 at 9). Nordisk's "new" facts do not cure this jurisdictional defect found in the previous action.
While Nordisk argues that Sparks' bankruptcy proceeding had the "effect" of making it an
inclemnitor, Nordisk alleges no legal right to assume the rights of Sparks.
In sum, issue preclusion applies, and Nordisk lacks standing to raise its counterclaim.
CONCLUSION
Sirius's Motion to Dismiss (doc. 16) is GRANTED, and Norclisk's Counterclaim is
HEREBY DISMISSED.
IT IS SO ORDERED.
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Dated this _O'. clay of Januat?<; 2017. ~
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Ann Aiken
United States District Judge

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OPINION AND ORDER