SYNTHES, INC., et al v. GORDON

Filing 31

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE HARVEY BARTLE, III ON 10/16/17. 10/16/17 ENTERED AND COPIES E-MAILED.(kw, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
SYNTHES, INC., et al.

:
:
:
:
:
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v.
TY GORDON

CIVIL ACTION

NO. 17-3385

MEMORANDUM
Bartle, J.

October 16, 2017
Plaintiffs Synthes, Inc., DePuy Orthopaedics, Inc.,

Synthes USA, LLC, DePuy Spine, LLC, and DePuy Synthes Sales,
Inc. bring this diversity action against former employee Ty
Gordon for breach of a Confidentiality, Non-Solicitation, and
Non-Competition Agreement.

Plaintiffs seek injunctive relief

and damages, as well as attorneys’ fees and costs.

Before the

court is the motion of defendant to dismiss plaintiffs’ amended
complaint under Rules 12(b)(1) and 12(b)(2) of the Federal Rules
of Civil Procedure, or in the alternative, to transfer venue
under 28 U.S.C. § 1404(a).
I.
Under Rule 12(b)(1), a court must grant a motion to
dismiss if it lacks subject matter jurisdiction to hear a claim.
“A motion to dismiss for want of standing is . . . properly
brought pursuant to Rule 12(b)(1), because standing is a
jurisdictional matter.”

In re Schering Plough Corp.

Intron/Temodar Consumer Class Action, 678 F.3d 235, 243 (3d Cir.
2012) (quoting Ballentine v. United States, 486 F.3d 806, 810
(3d Cir. 2007)).

In evaluating a Rule 12(b)(1) motion, a court

must first determine whether the movant presents a facial or
factual attack.

Id.

In reviewing a facial challenge, which

contests the sufficiency of the pleadings, “the court must only
consider the allegations of the complaint and documents
referenced therein and attached thereto, in the light most
favorable to the plaintiff.”

Id. (quoting Gould Elec. Inc. v.

United States, 220 F.3d 169, 176 (3d Cir. 2000)).

In contrast,

when considering a factual attack the court may weigh and
consider evidence outside the pleadings.

Constitution Party of

Pa. v. Aichele, 757 F.3d 347, 358 (3d Cir. 2014).

Because no

answer to the amended complaint has been filed, we construe
defendant’s motion as a facial attack.

Id.

Rule 12(b)(2) directs the court to dismiss a case when
the court lacks personal jurisdiction over the defendant.

When

reviewing a motion to dismiss pursuant to Rule 12(b)(2), a court
must accept as true all allegations of jurisdictional fact made
by plaintiff and resolve all factual disputes in plaintiff’s
favor.

Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324,

330-31 (3d Cir. 2009).

Once a jurisdictional defense has been

raised, the plaintiff bears the burden of establishing the
court’s jurisdiction over the defendant.
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Id.

II.
We first turn to the factual allegations as set forth
in the amended complaint.

Plaintiffs are a group of affiliated

entities that design, manufacture, and sell medical devices,
including instrumentation and implants for use in orthopaedic
surgeries for broken bones, joint reconstruction and
replacement, and spinal and facial surgery.

On or about

November 13, 2007, Synthes hired defendant as a territory
assistant in the Jacksonville, Florida area, with principal
responsibility for Synthes’ trauma products.

Gordon was

promoted to sales consultant on or about December 19, 2009.
At the time of his initial hiring in 2007, defendant
executed a Confidentiality, Non-Solicitation and Non-Competition
Agreement (“2007 Agreement”) with Synthes (U.S.A.). 1

Thereafter,

defendant executed a second Confidentiality, Non-Solicitation
and Non-Competition Agreement (“2009 Agreement”) in
consideration of his promotion to Sales Consultant.

The

counter-signatory to that Agreement was Synthes USA Sales, LLC,
which subsequently assigned its rights under the contract to
plaintiff DePuy Synthes Sales, Inc.
Under the 2009 Agreement, Gordon was prohibited from
using or disclosing to third parties certain confidential

1. Plaintiffs’ counsel has advised the Court that plaintiffs
are not proceeding under the 2007 Agreement.
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information of Synthes both during and after his employment.

He

also agreed that he would not solicit, contact, or provide
services to several enumerated categories of current or
prospective customers of Synthes for a period of twelve months
following termination of his employment.
Defendant resigned from Synthes on or about May 29,
2017 to accept a sales representative position with Stryker, a
competitor of Synthes.

Plaintiffs allege that since at least

June 2017, defendant has violated the 2009 Agreement by
contacting and providing services to his former Synthes hospital
accounts on behalf of Stryker.

On July 28, 2017, plaintiffs

filed a one-count complaint against defendant seeking, as noted
above, injunctive relief and damages for breach of contract.
Thereafter, plaintiffs filed a verified amended complaint with
substantially similar allegations to the original complaint.
Plaintiffs have also moved for a preliminary injunction and for
expedited discovery.

In turn, defendant filed this motion to

dismiss the amended complaint.
III.
Defendant first asserts that the amended complaint
should be dismissed for lack of subject matter jurisdiction
under Rule 12(b)(1) because plaintiffs lack standing to bring
this action.

The gravamen of defendant’s argument is that the

only plaintiff with rights to enforce the 2009 Agreement is
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DePuy Synthes Sales, Inc., pursuant to the assignment of rights
from Synthes USA Sales, LLC.

According to defendant, DePuy

Synthes Sales, Inc. lacks standing to bring this action because
it does not make or sell any products, and therefore does not
have any business with which defendant can compete.
To assess defendant’s arguments, we begin with the
language of the 2009 Agreement itself.

That Agreement defines

“Synthes” broadly as:
Synthes USA Sales, LLC, its members, and its and their
parents, affiliates, subsidiaries, divisions, and
related companies or entities, and their respective
predecessors, successors and assigns, now existing or
hereafter created, including, but not limited to
Synthes Inc., Synthes USA HQ, Inc., Synthes USA
Products, LLC, Synthes USA, LLC and Norian Corporation
(collectively referred to herein as “Synthes”).
The 2009 Agreement also contains a third party beneficiary
clause:
I acknowledge that this Confidentiality,
Non-Solicitation and Non-Competition Agreement is
intended to benefit Synthes USA Sales, LLC, its
members, and its and their parents, affiliates,
subsidiaries, divisions, and related companies or
entities, now existing or hereafter created, including
but not limited to Synthes, Inc., Synthes USA HQ,
Inc., Synthes USA Products, LLC, Synthes USA, LLC and
Norian Corporation. I further acknowledge that the
intended beneficiaries of this Confidentiality,
Non-Solicitation and Non-Competition Agreement are
entitled to enforce the provisions of this agreement
by seeking injunctive relief or any other appropriate
remedy.
Most significantly, the 2009 Agreement contains an assignment
clause:
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I agree that Synthes USA Sales, LLC may assign all or
part of this Agreement to any direct or indirect
parent, affiliate, subsidiary, division, related
company or entity of Synthes USA Sales, LLC and to any
transferee of substantially all of the assets of
Synthes USA Sales, LLC and that any assignee shall
have the same rights as Synthes USA Sales, LLC.
As discussed above, defendant acknowledges that the
2009 Agreement was assigned to plaintiff DePuy Synthes Sales,
Inc.

Defendant consented to this assignment through his

execution of the 2009 Agreement and, contrary to defendant’s
assertion, this clause does not require prior notice to the
employee.

Under the assignment clause, “any assignee shall have

the same rights as Synthes USA Sales, LLC,” the entity with
which defendant executed the 2009 Agreement.

Defendant does not

contend that DePuy Synthes Sales, Inc. is not an affiliate of
Synthes USA Sales, LLC.

Thus even if DePuy Synthes Sales, Inc.

makes or sells no products, defendant’s argument that no
standing exists fails. 2

Each of plaintiffs is encompassed within

the broad definition of “Synthes” as well as the third party
beneficiary clause of the 2009 Agreement.

Accordingly, we find

that plaintiffs have standing to bring this action and will deny
defendant’s motion to dismiss under Rule 12(b)(1).

2. Plaintiffs challenge defendant’s characterization of the
business of DePuy Synthes Sales, Inc. Because this evidence is
irrelevant under the language of the 2009 Agreement, we need not
resolve this dispute and therefore consider this motion as a
facial, rather than factual, attack under Rule 12(b)(1).
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IV.
We turn next to defendant’s motion to dismiss for lack
of personal jurisdiction under Rule 12(b)(2).

The 2009

Agreement contains a choice of law and forum clause, which
states:

“I agree that this agreement shall exclusively be

enforced by any federal or state court of competent jurisdiction
in the Commonwealth of Pennsylvania and hereby consent to the
personal jurisdiction of these courts.”
It is well-established that personal jurisdiction is
waivable.

Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472

n.14 (1985); In re Howmedica Osteonics Corp., 867 F.3d 390, 398
n.3 (3d Cir. 2017).

A defendant may consent to personal

jurisdiction, and thereby waive his or her right to challenge
such jurisdiction in subsequent litigation through the execution
of a valid forum selection clause.

Burger King, 471 U.S. at 472

n.14; SKF USA Inc. v. Okkerse, 992 F. Supp. 2d 432, 441–42 (E.D.
Pa. 2014).

Forum selection clauses are prima facie valid and

should be enforced unless shown to be unreasonable under the
circumstances.

M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1,

10, 15 (1972); Foster v. Chesapeake Ins. Co., 933 F.2d 1207,
1219 (3d Cir. 1991); see also Atlantic Marine Const. Co. v. U.S.
Dist. Ct., 134 S. Ct. 568, 583 (2013).
As discussed above, we find that plaintiffs have
standing to enforce the provisions of the 2009 Agreement.
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Aside

from his standing arguments, defendant has not offered any other
reason why the forum selection clause in the 2009 Agreement
should not be enforced.

In the face of a valid and enforceable

forum selection clause, we need not analyze the defendant’s
contacts with the forum to determine jurisdiction.
Inc., 992 F. Supp. 2d at 443.

See SKF USA

We therefore conclude that this

court has personal jurisdiction over defendant and deny his
motion to dismiss under Rule 12(b)(2).
V.
Finally we turn to the defendant’s motion to transfer
this action to a different venue, namely to the Middle District
of Florida where the defendant resides and worked for Synthes.
Under 28 U.S.C. § 1404(a), a defendant may move for “the
convenience of parties and witnesses” and “in the interest of
justice” for a transfer to another district where the action
might have been brought.

In considering a motion under §

1404(a), a court must weigh a variety of private and public
interests to determine whether transfer is appropriate.
Jumara v. State

See

Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995).

However, where contracting parties have specified the
forum in which they will litigate disputes arising from their
contract, federal courts must honor the forum selection clause
relating to venue “[i]n all but the most unusual cases.”
Atlantic Marine Const. Co., 134 S. Ct. at 583.
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As the Supreme

Court in Atlantic Marine Construction Co. v. U.S. District Court
explained:
When parties agree to a forum-selection clause, they
waive the right to challenge the preselected forum as
inconvenient or less convenient for themselves or
their witnesses, or for their pursuit of the
litigation. A court accordingly must deem the
private-interest factors to weigh entirely in favor of
the preselected forum. . . .
As a consequence, a district court may consider
arguments about public-interest factors only. Because
those factors will rarely defeat a transfer motion,
the practical result is that forum-selection clauses
should control except in unusual cases.
134 S. Ct. at 582.

The public interest factors to be considered

under Atlantic Marine include:

(1) “the enforceability of the

judgment”; (2) “the relative administrative difficulty in the
two fora resulting from court congestion”; (3) “the local
interest in deciding local controversies at home”; (4) “the
public policies of the fora”; and (5) “the familiarity of the
trial judge with the applicable state law in diversity cases.”
In re Howmedica, 867 F.3d at 402 (quoting Jumara, 55 F.3d at
879).
As discussed above, the 2009 Agreement contains a
forum selection clause providing it “shall exclusively be
enforced” in Pennsylvania.

As a result, defendant has waived

his right to challenge venue here based on private interests.
See Atlantic Marine Const. Co., 134 S. Ct. at 582.

Defendant’s

assertion that there is a public interest in deciding this
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controversy “at home” in Florida, without more, does not meet
his burden to demonstrate that the public interest factors
”overwhelmingly” weigh in favor of transfer.
Marine Const. Co., 134 S. Ct. at 583.

See Atlantic

Moreover, we find that

Pennsylvania has an interest in enforcing a voluntarily
negotiated contract such as the one involved here that
explicitly designates the application of Pennsylvania law.
SKF USA Inc., 992 F. Supp. 2d at 441.

See

We therefore will uphold

the forum selection clause to which the parties assented in the
2009 Agreement and will deny defendant’s motion to transfer
under 28 U.S.C. § 1404(a).

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