Clarity Research and Consulting, LLC v. OmniWest, LLC et al

Filing 23

ORDER DISMISSING as MOOT Defendant Emir Muhovic's 10 Motion to Dismiss for Lack of Jurisdiction; ORDER that Plaintiff Clarity Research and Consulting LLCand Defendant Onmi West, LLC shall file, within 10 (TEN) DAYS of this Order, a list of their respective members and the citizenship of those members as of the date of removal; ORDER DENYING Defendant Omni West's 9 Motion to Dismiss for Lack of Jurisdiction. Signed by Judge Sam Sparks. (klw)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS 2017 ArR 26
AUSTIN DIVISION

CLARITY RESEARCH AND
CONSULTING, LLC,
Plaintiff,

3:

[

I

CAUSE NO.: A-17-CA-00203-SS

-vs-

OMNI WEST, LLC, MARC
JABLONSKI, SCOTT YOST, and EMIR
MUHOVIC.
Defendants.

ORDER
BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause,

and specifically Defendant OmniWest, LLC (OmniWest)'s Motion to Dismiss [#9], Plaintiff
Clarity Research and Consulting, LLC (Clarity)'s Response [#17] in opposition, OmniWest's

Reply [#19] in support, and Clarity's Sur-Reply [#20] in opposition.

Having reviewed the

documents, the governing law, and the file as a whole, the Court now enters the following

opinion and orders.

Background
Clarity brings this action against OmniWest1 for breach of contract, misappropriation of
trade secrets, tortious interference with contracts, tortious interference with prospective business

relationships, business disparagement, and conspiracy.
Pet.)

See

Not. Removal [#1-1] Ex. A (Orig.

35-50.

¶IJ

In addition to OmniWest, Clarity's originally brought claims against Marc Jablonski, the CEO and
managing member of OmniWest; Scott Yost, a member of OmniWest; and Emir Muhovic, President of 360
Weliness, LLC. However, on March 24, 2017, Clarity moved to dismiss its claims against Jablonski, Yost, and
Muhovic without prejudice. See Unopposed Mot. Dismiss Without Prejudice [#16] at 1. The Court granted
Clarity's motion on March 28, 2017. See Order of Mar. 28, 2017. Thus, OmniWest is the sole remaining defendant.
1

-1-

I.

Facts
Clarity is a scientific and clinical research company, incorporated under Delaware law,

that partners with healthcare providers to develop, administer, and execute research studies. Id.

¶ 13. Its principal place of business is located in Austin, Texas. Id. ¶

1.

OmniWest is an Arizona limited liability company that "coordinates and administers
medical study services between companies that develop medical studies and participating
healthcare providers." Mot. Dismiss [#9] at 2.

Its principal place of business is located in

Scottsdale, Arizona. Orig. Pet. ¶ 2.
OnmiWest entered into a Subcontractor Master Management and Administrative Services
Agreement (Agreement) with Safe Harbor Compliance and Clinical Services, LLC (Safe
Harbor), effective August 1, 2015. Resp. [#17] at 3;

see

id. [#17-1] Ex. A (Agreement). Safe

Harbor "supervises and coordinates the management and administration of healthcare research
and medical study services for various healthcare provider customers.

. .

." Agreement at 1. As

part of the Agreement, OmniWest was "to assist [Safe Harbor] with the coordination,
supervision, management and administration" of certain healthcare clinical trial studies. Id. The

Agreement lists OmniWest's "Duties and Responsibilities":

(b) . . . {Omni West] shall use reasonable efforts to perform its duties in a
competent and timely fashion.

(d) [OnmiWest] represents and warrants. . . each professional who shall provide
professional services for the Studies . . . shall (i) be, as applicable, duly licensed
as required by state and federal law, (ii) have certification, training and
credentialing appropriate for the professional services performed . . . , and
(iii) have professional insurance coverage.

-2-

(e)

... [OmniWest] shall procure and maintain{] comprehensive general liability

insurance coverage and workers'
insurance carriers.
Id. at 2;

see also

REASONABLE

compensation insurance coverage with

Reply [#191 at 2. In general, the Agreement required OmniWest to "USE

JUDGMENT IN

RENDERING THE

SERVICES

FOR [SAFE

HARBOR].. . ." Agreement at 3. The Agreement also included a "Confidential Information"
clause, prohibiting OmniWest and Safe Harbor from disclosing, using, copying, or permitting to
be copied confidential information; a "Patient Information" clause, requiring OmniWest and Safe

Harbor to "comply with all applicable privacy and security laws and regulations"; and a

"Materials" clause, providing OmniWest will submit for review and approval all materials of
Safe Harbor before using, distributing, or display any such materials. Id. at 3;

see also

Sur-Reply

[#20] at 2. Finally, the Agreement included the following forum selection clause:

This Agreement shall be construed and enforced in accordance with the laws of
the State of Texas, excluding any conflict of law provision which would refer to
the law of another jurisdiction, and the Parties agree that venue of any litigation
under this Agreement shall be in Travis County, Texas.

Agreement at 6.

Effective January 1, 2016, OmniWest, Safe Harbor, and Clarity entered in a First

Amendment to the Agreement (Amendment).

Resp. [#17-1] Ex. B (Amendment).

The

Amendment assigned the Agreement from Safe Harbor to Clarity and incorporated a "Code of
Conduct": OmniWest "hereby consents to the assignment of the Agreement to [Clarity] such that
all references to [Safe Harbor] in the Agreement and Code of Conduct

. . .

Clarity upon assignment of the Agreement from [Safe Harbor] to Clarity.

shall be changed to

. .

." Amendment at

1-2.

After the parties executed the Amendment, Mark Jablonski and Scott Yost, members of
OmniWest, visited Clarity's offices in Austin, Texas, approximately five times. Resp. [#17-1]

-3-

(Hurwitz Aff.) ¶ 7. The purpose of these meetings was to discuss: "(1) issues related to the
Agreement between Clarity and OmniWest; (2) business operations of Clarity and OmniWest;
(3) training on studies and protocols for OmniWest; (4) business opportunities for Clarity and

OmniWest; and (5) administrative issues related to Clarity and OmniWest' s relationship." Id.
Further, in performing its duties under the Agreement, OmniWest recruited no less than 21

compensated study investigators located in Texas. Id. ¶ 8.
In late 2016, Clarity claims it discovered OmniWest violated the Agreement.
¶J

2 1-33.

Specifically,

Clarity

alleges

Omni West

used

Clarity's

Orig. Pet.

confidential

customer/investigator information and lists to attempt to lure away its customers/investigators to
its competitors and has made "disparaging remarks to [Clarity's] customers/investigators

indicating that it is going out of business, no longer conducting research studies, and is filing for
bankruptcy." Id.

II.

¶IJ

25, 28.

Procedural Posture
Clarity filed its Original Petition in state court on January 20, 2017, alleging breach of

contract, misappropriation of trade secrets, tortious interference with contracts, tortious

interference with prospective business relationships, business disparagement, and conspiracy
claims against OmniWest, Jablonski, Yost, and Muhovic.

See

Orig. Pet. ¶ 35-49. OmniWest

timely removed to this Court on March 3, 2017. As noted above, on March 28, 2017, this Court
granted Clarity's unopposed motion to dismiss its claims against Jablonski, Yost, and Muhovic

without prejudice.2

See

Order of Mar. 28, 2017 [#18] at

1.

On March 10, 2017, OmniWest moved to dismiss Plaintiff's Original Petition for lack of
personal jurisdiction and improper venue under 28 U.S.C.

2

§

1406. Mot. Dismiss [#9] at 1. In the

Because Emir Muhovic is no longer a party to this lawsuit, his Motion to Dismiss for Lack of Jurisdiction
[#10] is DISMISSED AS MOOT.

-4-

alternative, Omni West moved to transfer the case under 28 U.S.C.

§

1404(a) or dismiss the case

under the doctrine offorum non conveniens. Id. The motion has been fully briefed and is now
ripe for this Court's review. In addition, although not discussed by either party, the Court will

determine whether subject matter jurisdiction exists over this dispute.

Analysis

Personal Jurisdiction

I.

OnmiWest moves to dismiss Clarity's Original Petition based on lack of personal
jurisdiction under Federal Rule of Civil Procedure

1

2(b)(2). To determine whether a federal

district court has personal jurisdiction over a nonresident defendant, the court considers first

whether exercising jurisdiction over the defendant comports with due process. Religious Tech.
Ctr.

v.

Liebreich, 339 F.3d 369, 373 (5th Cir. 2003). If the requirements of due process are

satisfied, the court then determines whether the exercise of jurisdiction is authorized by the

jurisdictional "long-arm" statute of the state in which the court sits. Id. Because the Texas longarm statute has been interpreted as extending to the limit of due process, the two inquiries are the
same for district courts in Texas. Id.; see also TEx. Civ. PRAc.

& REM. CoDE § 17.001.093.

The Due Process Clause requires a nonresident defendant be properly subject to the

personal jurisdiction of the court in which the defendant is sued. World-Wide Volkswagen Corp.
v.

Woodson, 444 U.S. 286, 291 (1980). The Supreme Court has articulated a two-pronged test to

determine whether a federal court may properly exercise jurisdiction over a nonresident
defendant: (1) the nonresident must have minimum contacts with the forum state, and
(2) subjecting the nonresident to jurisdiction must be consistent with "traditional notions of fair

play and substantial justice."

Int'l Shoe

Co. v. Washington, 326 U.S. 310, 316 (1945);

Freudensprung v. Offshore Technical Servs., Inc., 379 F.3d 327, 343 (5th Cir. 2004).

-5-

A defendant's "minimum contacts" may give rise to either general personal jurisdiction
or specific personal jurisdiction, depending on the nature of the suit and the defendant's

relationship to the forum state. Freudensprung, 379 F.3 d at 343. A court exercises general

jurisdiction over the defendant if the defendant has "continuous and systematic contacts" with
the forum, regardless of whether those contacts are related to the cause of action asserted in the
case. Id. Specific jurisdiction, by contrast, is based on the proposition "that 'the commission of

some single or occasional acts of the [defendant] in a state' may sometimes be enough to subject

the [defendant] to jurisdiction in that State's tribunals with respect to suits relating to that in-state

activity." Daimler AG

v.

Bauman, 134 S. Ct. 746, 754 (2014) (quoting Int'l Shoe, 326 U.S. at

318).
The plaintiff has the burden of making a prima facie case by showing a defendant has

sufficient "minimum contacts" with the forum state to justify the state's exercise of either
specific or general jurisdiction. Freudensprung, 379 F.3d at 343. If the plaintiff does so, the
burden shifts to the defendant to show such an exercise offends due process because it is not

consistent with traditional notions of fair play and substantial justice. Id. Finally, when a court
rules on a 12(b)(2) motion to dismiss for lack of personal jurisdiction without holding an
evidentiary hearing, it must accept the non-moving party's jurisdictional allegations as true and
resolve all factual disputes in its favor. Guidry v. US. Tobacco Co., 188 F.3d 619, 625 (5th Cir.
1999).
A.

General Jurisdiction
OmniWest claims it lacks the substantial, continuous, or systematic contact with Texas

required to establish general personal jurisdiction.

Mot. Dismiss [#9] at 4-5.

OmniWest is

incorporated under Arizona law and its principal place of business is in Arizona. Orig. Pet. ¶ 2.

Omni West's contacts with Texas include the following: OmniWest entered into the Agreement

with Clarity, a company based in Texas; OmniWest performed at least part of that Agreement in
Texas; and Omni West's agents made approximately five trips to Texas related to the Agreement.
See Hurwitz Aff. ¶IJ 5, 7-8.

The Court finds these contacts with Texas do not amount to the continuous and

systematic contracts required for this Court to exercise general personal jurisdiction over
OmniWest. Furthermore, Clarity does not argue this Court has general personal jurisdiction over
OmniWest. See Resp. [#17] at 9-11.
B.

Specific Jurisdiction
In the Fifth Circuit, courts generally look to three factors in analyzing specific

jurisdiction: "(1) whether the defendant has minimum contacts with the forum state, i.e., whether
it purposely directed its activities toward the forum state or purposefully availed itself of the

privileges of conducting activities there; (2) whether the plaintiff's cause of action arises out of

or results from the defendant's forum-related contacts; and (3) whether the exercise of personal

jurisdiction is fair and reasonable." McFadin
1.

v.

Gerber, 587 F.3d 753, 759 (5th Cir. 2009).

Purposeful Availment

A court may exercise specific jurisdiction over a nonresident defendant who

"purposefully avails itself of the privilege of conducting activities within the forum State, thus
invoking the benefits and protections of its laws."

Electrosource, Inc.

v.

Horizon Battery

Techns., Ltd., 176 F.3d 867, 871 (5th Cir. 1999) (internal citation omitted).

The purposeful

availment requirement "ensures that a defendant will not be haled into a jurisdiction solely as a

result of 'random,' 'fortuitous,' or 'attenuated' contacts, or of the 'unilateral activity of another
party or a third person." Id. (internal citation omitted). Because specific jurisdiction is analyzed

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on a claim-by-claim basis, the Court will first look to Clarity's contract claim and then to its tort
claims. Sezferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 275 (5th Cir. 2006).

a.

Contract Claim

In contract cases, the existence of a contract between a plaintiff and a nonresident

defendant alone is not sufficient to satisfy the purposeful availment prong. See Moncrief Oil

Int'l, Inc.

v.

OAO Gazprom, 481 F.3d 309, 311 (5th Cir. 2007) ("[M]erely contracting with a

resident of the forum state does not establish minimum contacts.").

However, courts

"consistently look[]to the place of contractual performance to determine whether the making of
a contract with a Texas resident is sufficiently purposeful to satisfy minimum contacts." Jones

v.

Petty-Ray Geophysical Geosource, Inc., 954 F.2d 1061, 1068 (5th Cir. 1992); see also Polythane
Sys., Inc. v. Marina Ventures Int'l, Ltd, 993 F.2d 1201, 1205 (5th Cir. 1993) ("[The] place where

the contract is performed is a 'weighty consideration

.

.

.

.")

(internal citation omitted). In

addition, "the place of contracting and the law governing the contract, while not necessarily

determinative, are relevant factors for determining purposeful activity." Jones, 954 F.2d at 1069.
Clarity argues OmniWest purposefully availed itself of the privileges of conducting

business in Texas because Jablonski and Yost, as agents of OmniWest, travelled to Texas for
meetings regarding the Agreement, and Omni West's performance under the Agreement included

recruitment of "no less than 21 compensated study investigators practicing medicine in

Texas."3

Resp. [#17] at 4-5, 10. Further, the Agreement includes a forum selection clause stating the

Agreement shall be enforced under Texas law and any litigation under the Agreement shall be in

OmniWest argues it "negotiated and signed the contract in Arizona and performed all services in
Arizona." Mot. Dismiss [#9] at 6; see id [#9-1] Ex. 1 (Jablonski Dccl.) ¶ 36; see id. [#9-2] Ex. 2 (Yost Decl.) ¶ 26.
This statement, however, directly contradicts Clarity's allegation that at least part of the Agreement was performed
in Texas. See Hurwitz Decl. ¶ 8; see also Resp. [#17] at 4-5, 10. At this stage, "conflicts between the facts
contained in the parties' affidavits must be resolved in the plaintiff's favor for purposes of determining whether a
prima facie case for personal jurisdiction exists." Johnston v. Multidata Sys. Intern. Corp. 523 F.3d 602, 609 (5th
Cir. 2008) (internal citation omitted).

Texas.

Agreement at 6.

Because OmniWest attended meetings in Texas regarding the

Agreement, the Agreement was partially performed in Texas, and the Agreement is governed by
Texas law, the Court finds Omni West purposefully availed itself of the privileges of conducting

business in Texas.

Tort Claims

b.

"When a nonresident defendant commits a tort within the state, or an act outside the state
that causes tortious injury within the state, that tortious conduct amounts to sufficient minimum
contacts with the state by the defendant to constitutionally permit courts within that state
exercise personal

[ ]

jurisdiction over the tortfeasor

.

.

.

."

Guidry,

. . .

to

188 F.3d at 628.

Additionally, "[e}ven an act done outside the state that has consequences or effects within the
state will suffice as a basis for jurisdiction in a suit arising from those consequences if the effects
are seriously harmful and were intended or highly likely to follow from the nonresident

defendant's conduct." Id. (internal citation omitted).
Clarity contends OmniWest engaged "in conduct designed to disrupt Clarity's business
by providing false information to third parties about Clarity's business, interfering with Clarity's

relationships with its customers and investigators, and engaging in egregious self-dealing," all of
which "caused harm to Clarity in Texas

.

. .

." Hurwitz Dccl. ¶ 9;

see

also Resp. [#17] at 6.

Further, Clarity pleads both OmniWest's efforts to spread defamatory statements regarding

Clarity's business and its tortious interference with Clarity's relationships took "place in Texas,
where the Clarity Research studies are analyzed." Orig. Pet.

¶IJ

29, 33. The Court finds these

allegations are sufficient to satisfy the purposeful availment requirement.
at 628.

See Guidry, 188

F.3d

2.

Nexus between Cause of Action and Contacts

To establish personal jurisdiction over a nonresident defendant, a plaintiff must also show

his cause of action arises out of or results from the defendant's forum-related contacts. See

Gerber, 587 F.3d at 759. Clarity argues its breach of contract and tort claims arise from the
duties and obligations of OmniWest under the Agreement, which was discussed and at least
partly performed in Texas. See Hurwitz Deci. ¶ 9; see also Resp. [#17] at 4-6, 10. Under these
facts and circumstances, the Court finds there is a nexus between Clarity's causes of action and

Omni West's contacts with Texas.
3.

Fair and Reasonable

Because Clarity successfully established OmniWest's minimum contacts and the
connection between those contacts and Clarity's causes of action, the burden shifts to Omni West
to show that exercising jurisdiction would be unfair or unreasonable. To determine whether the

exercise of personal jurisdiction is unreasonable, the court examines (1) the defendant's burden,
(2) the forum state's interest, (3) the plaintiff's interest in convenient and effective relief, (4) the

judicial system's interest in efficient resolution of controversies, and (5) the state's shared
interest in fundamental social policies. Ruston Gas Turbines, Inc.

v.

Donaldson Co., 9 F.3d 415,

421 (5thCir. 1993).

OmniWest claims the burden of having to litigate this case in Texas is great because
OmniWest's principal place of business is in Arizona and all of the witnesses, evidence, and
other documents are in Arizona. Mot. Dismiss [#9] at 8. OmniWest also states "none of the
work in dispute occurred in Texas

. . .

," and further argues the state of Texas does not have a

unique interest in this case because "no link exists between Clarity's allegations and Texas." Id.
However, as described above, Clarity has alleged part of the Agreement was performed in Texas

-10-

and has sufficiently shown a nexus exists between its causes of action and Omni West's contacts
in Texas. Therefore, after weighing the appropriate factors, the Court finds exercising personal

jurisdiction over OmniWest is fair and reasonable.
In sum, the Court rejects OmniWest's argument that the case should be dismissed due to
lack of personal jurisdiction.

II.

Improper Venue
OmniWest also argues this case should be dismissed for improper venue under 28
1406(a) or, in the alternative, transferred under 28 U.S.C.

§

§

U.s.c.

1404(a) or dismissed under the

doctrine offorum non conveniens. Mot. Dismiss [#9] at 8-11.
A.

Dismissal under § 1406
Section 1406 requires a district court to dismiss "a case laying venue in the wrong

division or district

. . .

." 28 U.S.C.

generally governed by 28 U.s.c

§

§

1406(a). The question of whether venue is "wrong" is

1391, which states venue is only proper in:

if all defendants are residents

(1) a judicial district in which any defendant resides,

of the State in which the district is located; (2) a judicial district in which a
substantial part of the events or omissions giving rise to the claim occurred, or a
substantial part of property that is the subject of the action is situated; or (3) if
there is no district in which an action may otherwise be brought as provided in
this section, any judicial district in which any defendant is subject to the court's
personal jurisdiction with respect to such action.
28 U.S.C.

§

1391(b). Further, "[w]hether the parties entered into a contract containing a forum-

selection clause has no bearing on whether a case falls into one of the categories of cases listed in
§

1391(b)." At!. Marine Const. Co., Inc.

v.

US. Dist. Ct. for

(2013). Thus, "a case filed in a district that falls within
§

1406(a) or Rule 12(b)(3)." Id.

-11-

W.

Dist. of Tex., 134 S. Ct. 568, 577

§ 1391

may not be dismissed under

Here, venue is proper because a substantial part of the events giving rise to Clarity's

claims occurred in this District. Jablonski and Yost visited Clarity's offices in Austin, Texas,
five times to discuss the Agreement. Hurwitz Aff. ¶ 7. In addition, part of the performance of
the Agreement took place here and Texas law governs the parties' obligations under the

Agreement. Id. ¶ 7; see also Agreement at 6. Thus, a substantial part of the events giving rise to

Clarity's claims occurred in the Western District of Texas, making venue proper under
§

1391(a)(2).

B.

Transfer under § 1404(a)
In the alternative, OmniWest moves to transfer this action under

§

1404(a).

Clarity

argues transfer is inappropriate because the Agreement's forum selection clause governs venue.
Section 1404(a) states,

"[for the convenience of the parties, in the interest of justice, a

district court may transfer any civil action to any other district where it might have been

brought.. . ." Generally, a court considering a § 1404(a) motion must "determine whether there
is an adequate alternative forum and,

if so, decide which forum is best-suited to the litigation by

considering a variety of private- and public-interest factors and giving deference to the plaintiff's
choice of forum." Barnett

v.

DynCorp Int'l, L.L.C., 831 F.3d 296, 300 (5th Cir. 2016). The

private factors include: (1) the relative ease of access to sources of proof; (2) the availability of

compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing
witnesses; and (4) all other practical problems that make trial of a case easy, expeditious, and
inexpensive. In re Volkswagen, AG, 371 F.3d 201, 203 (5th Cir. 2004).

The public factors

include: (1) the administrative difficulties flowing from court congestion; (2) the local interest in

having localized interests decided at home; (3) the familiarity of the forum with the law that will

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govern the case; and (4) the avoidance of unnecessary problems of conflict of laws or applying
the foreign law. Id.

However, the Supreme Court in Atlantic Marine explained that the existence of a forum

selection clause alters this analysis in two ways. Ati. Marine, 134 S. Ct. at 579. "First, the

plaintiffs choice of forum merits no weight," because "the plaintiff has effectively exercised its
'venue privilege' before a dispute arises." Id. at 580. Second, the "district court may consider
arguments about public-interest factors only," because the private-interest factors "weigh entirely
in favor of the preselected forum

. . .

." Id. at 582. Further, a valid forum selection clause is

"given controlling weight in all but the most exceptional cases." Id. (internal citation omitted).
Therefore, the Court must decide whether a valid forum selection clause exists and, if one
does, then consider the public interest factors of the
1.

§

1404(a) analysis.

The Agreement Includes a Valid Forum Selection Clause.

To determine

if a forum selection clause applies to the present case, the Court makes two

separate inquires: (1) whether the contact is valid and the forum-selection clause is enforceable,
and (2) whether the present case falls within the scope of the forum-selection clause. Sabal Ltd.

LP v. Deutsche Bank AG, No. 5:16-CV-300-DAE, 2016 WL 5080385, at *5 (W.D. Tex. Sep. 19,
2016); Mendoza

a.

v.

Microsoft, Inc.,

1

F. Supp. 3d 533, 542 (W.D. Tex. 2014).

The Agreement's Forum Selection Clause is Enforceable.

Forum selection clauses are presumptively valid and enforceable. Haynsworth

v.

The

Corp., 121 F.3d 956, 962 (5th Cir. 1997). Usually, the party disputing enforceability tries to
overcome the presumption by showing the clause is "unreasonable under the circumstances,"

which depends on the following factors:
(1) the incorporation of the forum selection clause into the agreement was the
product of fraud or overreaching; (2) the party seeking to escape enforcement will

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for all practical purposes be deprived of his day in court because of the grave
inconvenience or unfairness of the selected forum; (3) the fundamental unfairness
of the chosen law will deprive the plaintiff of a remedy; or (4) enforcement of the
forum selection clause would contravene a strong public policy of the forum state.
Id. at 963 (internal quotations and citation omitted).

Here, Omni West and Clarity both signed the Amendment assigning the Agreement from
Safe Harbor to Clarity.

Amendment at 3.

Agreement and its forum selection clause.

At that point, the parties became bound by the
Further, OnmiWest does not dispute that the

Agreement's forum selection clause is enforceable. See Reply [#19] at 1-4 (OmniWest only
argues the Agreement's forum selection clause does not apply to Clarity's claims). Therefore,
the Court finds the forum selection clause is enforceable against OmniWest and Clarity.
b.

Clarity's Claims Fall Within the Scope of the Agreement's Forum
Selection Clause.

Next, the Court "look[s] to the language of the parties' contract to determine which
causes of action are governed by the forum selection clause." Braspetro Oil Servs. Co.
(USA), Inc., 240 F.

v.

Modec

App'x 612, 616 (5th Cir. 2007) (internal citation omitted); see also Aerus

LLCv. Pro Team, Inc., No. Civ. A. 3:04cv-1985M, 2005 WL 1131093, at *1 (N.D. Tex. May
9, 2005) ("The court must examine the language

of the contract to determine which causes of

action are governed by the forum selection clause."). "If the substance of the plaintiff's claims,
stripped of their labels, does not fall within the scope of the forum selection clause, the clause

cannot apply." Marinechance Shipping, Ltd.

v.

Sebastian, 143 F.3d 216, 222 (5th Cir. 1998).

Accordingly, a forum selection clause can apply to both contract and tort claims. See id. ("We
find no persuasive support for [a contract/tort] distinction."); see also JetPay Merch. Servs., LLC
v.

Merrick Bank Corp., No. 3:13-CV-3101-L-BN, 2014 WL 798373, at *2 (N.D. Tex. Feb. 28,

-14-

2014) ("The scope of a forum selection clause is not limited solely to claims for breach of the

contract that contains it.")
Here, the forum selection clause states,
The Agreement shall be construed and enforced in accordance with the laws of
the State of Texas, excluding any conflict of law provision which would refer to
the law of another jurisdiction, and the Parties agree that venue of any litigation
under this Agreement shall be in Travis County, Texas.
Agreement at 6 (emphasis added). As such, if the dispute arises under the Agreement, the
dispute is within the scope of the forum-selection clause and the clause controls the venuetransfer inquiry.
Clarity brings five claims against OmniWest: breach of contract, misappropriation of

trade secrets, tortious interference with contracts, tortious interference with prospective business
relationships, business disparagement, and conspiracy. Because all of these claims arise under
the Agreement, they fall within the scope of the forum selection clause.
i.

Contract Claim

Omni West argues the forum selection clause in the Agreement does not cover the instant

action because Clarity's breach of contract claim does not arise under the parties' duties as
described in the Agreement. Resp. [#19] at 1-4. The Court disagrees. The Agreement requires
Omni West to: "use reasonable judgment in rendering [its] services"; not disclose, use, copy, or

permit to be copied Clarity's confidential or proprietary information; "comply with all applicable
privacy and security laws and regulations"; and submit for review and approval all materials of
Clarity before using, distributing, or displaying such materials. Agreement at 2-3.
Clarity claims OmniWest violated these duties in the Agreement by "intentionally and
fraudulently mispresent[ing] the services and products provided by [Clarity] in order to benefit

themselves and their business

. .

.

." Orig. Pet. ¶ 21.

-15-

Clarity also alleges OmniWest used

Clarity's confidential customer/investigator information and lists in violation of the Agreement.
Id. ¶ 25. These allegations are directly tied to provisions in the Agreement. Therefore, the Court

finds Clarity's breach of contract claim arises under the Agreement.
ii.

Tort Claims

Although the Fifth Circuit has not articulated a specific test for determining when tort
claims fall within the scope of a contract's forum selection clause, district courts within this
circuit usually look to three rules: (1) whether the tort claims "ultimately depend on the existence

of a contractual relationship between the parties"; (2) whether "resolution of the claims relates to
interpretation of the contract"; and (3) whether the claims "involv[e] the same operative facts as

a parallel claim for breach of contract." AlliantGroup, L.P.

v.

Mols, No. CV H-16-3 114, 2017

WL 432810, at *7 (S.D. Tex. Jan. 30, 2017) (internal citation omitted); see also Chalos & Co.,
P.C.

v.

Marine Managers, Ltd., et al., No. 14-2441, 2015 WL 5093469, at *5 (E.D. La. Aug. 28,

2015) (applying three rules to forum selection clause stating, "[amy dispute arising out of the

interpretation or the performance of this Contract").
Here, Clarity's tort claims depend on the existence of the contractual relationship

between Clarity and OmniWest and involve the same operative facts as Clarity's breach of
contract claim. For instance, Clarity argues OmniWest misappropriated Clarity's confidential

information and trade secrets "to jump start [a] new, directly competitive entity." Orig. Pet. ¶ 26.
Because

the

Agreement

contains

a

Confidential

Information

provision,

Clarity's

misappropriation claim relies on the existence of a contractual relationship between the parties,
and involves the same operative facts as its breach of contract claim. See, e.g. AlliantGroup,
2017 WL 432810, at *7 (holding misappropriation of trade secrets and tortious inference claims
fell within contract's forum selection clause). Similarly, Clarity's other non-contract claims fall

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within the Agreement's forum selection clause. See, e.g. Ghannoum v. Qatar Airways Q. C.S. C.,
No. CIV.A. 11-13-2994, 2014 WL 4354436, at *4 (S.D. Tex. Sept. 2, 2014) (finding tortious

interference and business disparagement claims fell within contract's forum selection clause).
In sum, the Agreement's forum selection clause is enforceable and Clarity's claims fall

within its scope.
2.

Public Interest Factors

In light of the existence of a valid forum selection clause, the Court considers only the

public interest factors of the

§

1404(a) analysis. Ati. Marine, 134 5. Ct. at 583. The public

factors include: (1) the administrative difficulties flowing from court congestion; (2) the local
interest in having localized interests decided at home; (3) the familiarity of the forum with the
law that will govern the case; and (4) the avoidance of unnecessary problems of conflict of laws
or applying the foreign law. Id. at 580. "Because those factors will rarely defeat a transfer

motion, the practical result is that forum-selection clauses should control except in unusual
cases." Id. at 583. "[S]uch cases will not be common." Id. This language from Atlantic Marine

"suggests quite a high burden of persuasion on the party seeking to avoid enforcement

of'

a

forum selection clause. Weber v. PACTXPP Techs., AG, 811 F.3d 758, 776 (5th Cir. 2016).
Here, OmniWest has not met that burden. OnmiWest argues the United States District

Court of Arizona has an interest in this litigation because the witnesses and evidence are in

Arizona and "the conduct at issue occurred" there. Mot. Dismiss [#9J; see also Reply [#19] at 7
("It is more efficient for the District of Arizona to resolve this dispute because it would avoid
out-of-state subpoenas, excessive witness travel, and increased litigation costs."). On the other
hand, Clarity has alleged that at least some of the events giving rise to its claims occurred in

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Texas: discussions relating to the Agreement and part of the performance of the Agreement. See

Hurwitz Aff. ¶IJ 7-8. Further, Clarity's office and principals are all in Texas. Resp. [#17] at 3.

After carefully considering the public interest factors, the Court finds transfer is not
warranted. OmniWest has not established this is an extraordinary case where the public interest
factors outweigh the Agreement's valid forum selection clause.
C.

Dismissal under Forum Non

Conveniens

OmniWest also argues in the alternative that the Court should dismiss this case under the
doctrine offorum non conveniens. Mot. Dismiss [#9] at 10. However, because "Section 1404(a)
is merely a codification of the doctrine offorum non conveniens," the Court need not perform the

substantively identical forum non conveniens analysis. Ati.
anything, transfer under

re Volkswagen

ofAm.,

§

Marine,

134 S. Ct. at 580.

If

1404(a) is a lesser standard than that offorum non conveniens. See In

Inc., 545 F.3d 304, 313 (5th Cir. 2008) (Section 1404(a) is "intended to

permit courts to grant transfers upon a lesser showing of inconvenience" than forum non
conveniens.)

After failing to establish transfer is appropriate under

§

1404(a), Omni West carmot

establish dismissal is appropriate underforum non conveniens.

III.

Subject Matter Jurisdiction
Though neither party discusses whether this Court has subject matter jurisdiction over the

case, the issue of subject matter jurisdiction can be raised sua sponte.
12(h)(3); see also Coury

v.

See Fed. R. Civ. P.

Prot, 85 F.3d 244, 248 (5th Cir. 1996). A federal court has subject

matter jurisdiction over civil cases in which the amount in controversy exceeds $75,000,
exclusive of interest and costs, and in which diversity of citizenship exists between the parties.
28 U.S.C.

§

1332. Section 1332 requires "complete diversity," which means "all persons on one

side of the controversy [must] be citizens of different states than all persons on the other side."

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See McLaughlin v. Miss. Power Co., 376 F.3d 344, 353 (5th Cir. 2004) (internal citation

omitted); see also Harvey

v.

Grey Wolf Drilling Co., 542 F.3d 1077, 1079 (5th Cir. 2008)

(internal quotations and citation omitted). The citizenship of unincorporated entities, such as a

limited liability company, depends on the citizenship of all of its members. Americold Really
Trust v. Conagra Foods, Inc., 136 S. Ct. 1012, 1015 (2016); Grey Wolf 542 F.3d at 1079.
This Order assumes all members of Clarity are citizens of Texas and all members of
Omni West are citizens of Arizona, notwithstanding the parties' failure to make specific

allegations as to their members' citizenship. To ensure subject matter jurisdiction exists, the
Court instructs Clarity and OmniWest to file, within 10 (TEN) DAYS of this Order, a list of their

respective members and the citizenship of those members as of the date of removal.

Conclusion
For the foregoing reasons, the Court finds jurisdiction exists over OmniWest and venue is

proper in the Western District of Texas.
Accordingly,
IT IS ORDERED that Defendant Emir Muhovic's Motion to Dismiss [#10] is

DISMISSED AS MOOT;
IT IS FURTHER ORDERED that Plaintiff Clarity Research and Consulting LLC

and Defendant Onmi West, LLC shall file, within 10 (TEN) DAYS of this Order, a list of

their respective members and the citizenship of those members as of the date of removal;
and
IT IS FINALLY ORDERED that Defendant Omni West's Motion to Dismiss [#9]
is DENIED.

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SIGNED this the

day of April 2017.

SAM SPARKS
UNITED STATES DISTRICT JUDGE

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