Western Institutional Review Board, Inc. v. Jenkins

Filing 26

ORDER signed by Judge Benjamin H. Settle denying 7 Motion to Expedite; granting in part and denying in part 10 Motion to Dismiss. Case is stayed for 90 days. (TG)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT TACOMA

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WESTERN INSTITUTIONAL REVIEW
BOARD, INC., a Delaware corporation,
Plaintiff,

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v.
CHRISTOPHER L. JENKINS, an
individual and Texas resident,
Defendant.

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CASE NO. 3:17-cv-05523-BHS
ORDER GRANTING IN PART
AND DENYING IN PART
DEFENDANT’S MOTION TO
DISMISS OR, IN THE
ALTERNATIVE, STAY SECONDFILED ACTION AND DENYING
PLAINTIFF’S MOTION TO
EXPEDITE DISCOVERY

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This matter comes before the Court on Defendant Christopher L. Jenkins’s

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(“Jenkins”) motion to dismiss or, in the alternative, stay second-filed action (Dkt. 10) and

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Plaintiff Western Institutional Review Board, Inc.’s (“WIRB”) motion to expedite

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discovery (Dkt. 7). The Court has considered the pleadings filed in support of and in

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opposition to the motions and the remainder of the file and hereby grants Jenkins’s

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motion in part and denies it in part and denies WIRB’s motion for the reasons stated

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herein.

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I. BACKGROUND

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The facts necessary to resolve the pending motion are largely undisputed.

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A.

The 2013 Contract

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On November 4, 2013, Jenkins, as “Employee” and as “Company,” executed an
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Employee Confidentiality, Invention Assignment, and Restrictive Covenant Agreement

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(“the 2013 Contract”). Dkt. 1 at 10, 14. Section 3 to the 2013 Contract, “Restrictive

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Covenants,” provides:

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3) Restrictive Covenants.
a. Non-Compete. Employee acknowledges that in the course of
employment with the Company Group [defined as “the Company or any of
its affiliates”], Employee has become familiar and/or will become familiar
with the Company Group’s trade secrets and with other Confidential
Information and that Employee’s services have been and/or will be of
special, unique and extraordinary value to the Company Group. Therefore,
Employee agrees that, in consideration of Employee’s employment with the
Company Group, for the period beginning on the date hereof and ending on
the two year anniversary of the date of termination . . . Employee shall not
directly or indirectly own, manage, control, participate in, consult with,
render services for, operate or in any manner engage . . . in any business in
the world that . . . may reasonably be construed to be competitive with the
business of the Company Group[.]
b. Non-Solicit. For the period on the date hereof and ending on the
three year anniversary of the date of termination . . . Employee agrees that
he or she will not . . . (i) call on or solicit any person or entity who or which
is, at that time, or has been within one year prior thereto, a customer or
prospect of the Company Group[.]
Id. at 11, 12.
Section 4, “Miscellaneous,” to the 2013 Contract includes an integration clause,
subsection (d), and a venue and choice of law clause, subsection (e), as follows:
d) This Agreement expresses the entire agreement of the Parties with
respect to the subject matter hereof.
e) This Agreement is to be governed by and construed according to
the laws of the State of Washington without regard to its conflict of laws
provisions. Any suit or proceeding arising from the subject matter of this
Agreement shall only be brought in the state or federal courts located in the
county in which the Company is headquartered, in the State of Washington.
The Parties agree that such a venue is appropriate and waive any and all
rights to contest the exclusive personal jurisdiction and venue of such
courts.
Dkt. 1 at 13.

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B.

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The 2015 Contract
In approximately November 2015, Jenkins ceased full-time employment and

transitioned to employment as an independent contractor. On December 14, 2015,
Jenkins, as “Contractor,” and WIRB’s parent company, WIRB—Copernicus Group, as
“Company,” executed a Contracted Services Agreement (“the 2015 Contract”). Dkt. 23 at

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16. Under “Miscellaneous Provisions,” the 2015 Contract includes the following non7

compete and non-solicit terms:
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g) Restrictive Covenants. During the Term of any SOW [Statement
of Work], and for one (1) year thereafter, Contractor shall not (i) provide
any services for any individual or entity to whom Contractor provided
Services pursuant to such SOW or to whom Contractor has been introduced
as a result of its relationship with Company (each a “Company Customer”),
or (ii) solicit, directly or indirectly, any Company Customer, in each case
without the prior written consent of Company; provided in each instance
that Contractor did not independently have a relationship with such
Company Customer in advance thereof.

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An integration clause to the 2015 Contract provides:

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k) Entire Agreement. This Agreement constitutes the entire
agreement of the Parties with respect to the subject matter hereof and
supersedes all other prior oral or written understandings and agreements
between the Parties.

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Dkt. 23 at 16. The 2015 Contract, unlike the 2013 Contract, does not include a choice of

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law and venue clause.

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C.

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The Release Letter
In July 2016, Jenkins began employment as the Director of the Office of Research

Support at the University of Texas at Austin. On November 23, 2016, Jenkins and Alan

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Lefkowitz, Chief Legal Officer to WIRB Copernicus Group, executed a release (“the

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Release Letter”) that reads in part:

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Reference is made to that certain Employee Confidentiality,
Invention Assignment, and Restrictive Covenant Agreement dated as of
11.4.13 (the “Agreement”) pursuant to which you are bound to noncompete against Western Institutional Review Board, Inc. and its affiliates
(collectively “Company”) pursuant to the provisions thereof. We hereby
notify you that effective immediately, the Company hereby releases [sic]
from such non-compete obligations.

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Dkt. 10-1 at 42. The parties dispute verbal representations made surrounding the
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execution of the Release Letter, but in email correspondences between Jenkins and Mr.
Lefkowitz prior to its execution, Jenkins thanked Mr. Lefkowitz for “consideration for

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this [release] in respects to my position at UT along with issuing the RFP for which WCG

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[WIRB Copernicus Group] can pursue without any potential conflict or impropriety.”

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Dkt. 10-1 at 41. Making use of an emoticon, Mr. Lefkowitz commented, “I just ask you

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to please not do not [sic] switch jobs in any time soon that would make me regret

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this[.]” Id. at 39.

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D.

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Clinical Biosafety Services, LLC
On February 6, 2017, Jenkins received notice from the University of Texas that his

employment would be terminated on March 5, 2017. On February 22, 2017, Jenkins filed

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a Certificate of Formation with the Texas Secretary of State to begin a new business,
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Clinical Biosafety Services, LLC. Dkt. 10-1 at 49. Clinical Biosafety Services thereafter
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contracted with ViroMed, a former client to WIRB. (The circumstances of the ViroMed
contract are disputed by the parties but are inconsequential to this motion.)

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E.

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Related proceedings in the District Court of Travis County, Texas
On May 17, 2017, WIRB and WIRB-Copernicus Group filed suit as co-plaintiffs

against Jenkins and Clinical Biosafety Services, seeking a temporary restraining order,
temporary injunction, and permanent injunction from a District Court in Travis County,
Texas. Dkt. 10-2. (Jenkins is a resident of Texas.) The introduction to the Texas motion

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summarizes the purpose of the motion:
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This case involves a knowing and intentional violation of written
non-solicitation and confidentiality agreements, which Plaintiffs
respectfully request that the Court immediately restrain in order to prevent
Plaintiffs from being irreparably harmed. . . . Contrary to the express terms
of Jenkins’ 2015 Contracted Services Agreement—which prohibits him
from directly or indirectly soliciting or performing services for Plaintiffs’
customers and disclosing or using confidential information—Defendant
Jenkins formed a new company . . . and not only has solicited Plaintiffs’
customers and actually performed work for at least one customer, but also
has misappropriated Plaintiffs’ proprietary forms . . . .

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Dkt. 10-2 at ¶8.
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The District Court of Travis County, Texas, granted the co-plaintiffs’ request for a
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temporary restraining order, which was ex parte, but less than two weeks later, on May
30, 2017, the same court denied the request for a temporary injunction. The case remains

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pending. 1

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F.

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Pending motion in the instant case
This case originates from Jenkins’s alleged breach of the 2013 Contract. See

generally, Dkt. 1. Jenkins seeks dismissal of the case, or in alternative, a stay, on three

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This procedural information was obtained via telephone conversation on September 6, 2017
with the Staff Attorney to the 419th Judicial District to the District Court of Travis County, Texas.

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legal bases: the “first to file” rule, forum non conveniens, and the Colorado River

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abstention doctrine. Dkt. 10 at 9-15. Jenkins also raises lack of personal jurisdiction,

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arguing that the sole basis for personal jurisdiction over him is the 2013 Contract, which

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is not enforceable. According to Jenkins, the 2013 Contract is not enforceable because:
(1) the 2015 Contract supersedes the 2013 Contract, given the 2015 Contract’s

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integration clause, (2) Jenkins was released from the 2013 Contract by CLO Lefkowitz’s
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Release Letter, and (3) the 2013 Contract was not supported by valid consideration in the
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first place. Id. at 15, 16; Dkt. 25 at 2-8.
II. DISCUSSION

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A district court has discretionary power to stay its proceedings. Lockyer v. Mirant

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Corp., 398 F.3d 1098, 1109 (9th Cir.2005). This power to stay is “incidental to the power

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inherent in every court to control the disposition of the causes on its docket with

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economy of time and effort for itself, for counsel, and for litigants.” Landis v. N. Am. Co.,

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299 U.S. 248, 254 (1936). This is best accomplished by the court’s “exercise of

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judgment, which must weigh competing interests and maintain an even balance.” Landis,

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299 U.S. at 254–55. When considering a motion to stay, the court weighs a series of
competing interests: (1) the possible damage that may result from the granting of the stay;

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(2) the hardship or inequity which a party may suffer in being required to go forward; and
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(3) the orderly course of justice measured in terms of the simplifying or complicating of
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issues, proof, and questions of law which could be expected to result from a stay. CMAX,
Inc. v. Hall, 300 F.2d 265, 268 (9th Cir.1962) (citing Landis, 299 U.S. at 254–55); see
also Lockyer, 398 F.3d at 1109.

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Applied here, the Court elects to exercise its discretion to stay these proceedings

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for a duration of 90 days. The purpose of the stay is for the parties to resolve the issue of

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whether the 2015 Contract supersedes the 2013 Contract. Addressing this issue requires

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interpretation of the 2015 Contract, which is before the District Court of Travis County,
Texas, not this Court.

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The stay is justified on multiple grounds. Resolving the issue of whether the 2015
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Contract supersedes the 2013 Contract may considerably simplify the issues in this case,
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which will preserve resources for the parties and the Court. The stay will also prevent
inconsistent or duplicative findings as the parties litigate the parallel cases. And if the

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2015 Contract does not supersede the 2013 Contract, resolving the issue now will allow

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the parties to litigate this case freely and without concern that their efforts are for naught.

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Finally, the stay is narrow in duration, just 90 days. Compare to Dependable Highway

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Exp., Inc. v. Navigators Inc. Co., 498 F.3d 1059, 1067 (9th Cir. 2007) (“Generally, stays

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should not be indefinite in nature.”)

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In light of the stay, the remainder of Jenkins’s motion is denied without prejudice.
Likewise, WIRB’s motion is denied because there is no need for expedited discovery at
this time.

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III. ORDER
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Therefore it is hereby ORDERED that (1) Jenkins’s motion to dismiss or, in the
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alternative, stay second-filed action (Dkt. 10) is GRANTED in part, (2) the case is
STAYED for 90 days and the parties are directed to seek a ruling by the District Court of
Travis County, Texas as to whether the 2015 Contract supersedes the 2013 Contract, and

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(3) Jenkins’s motion is otherwise DENIED in part without prejudice, and (4) WIRB’s

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motion (Dkt. 7) is DENIED.

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Dated this 26th day of September, 2017.

A

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BENJAMIN H. SETTLE
United States District Judge

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ORDER - 8