United States District Court, D. Minnesota
ECTG Limited, Trustwater, Ltd., Trustwater USA, Inc., Edmond O'Reilly and John Henry Brebbia, Plaintiffs,
John F. O'Shaughnessy, Jr., Cheryl O'Shaughnessy, Gerald O'Shaughnessy, Leparis D. Young and Maureen O'Shaughnessy Young, individually and as Trustees of the Leparis D. Young Revocable Trust, Maureen O'Shaughnessy Young and Leparis D. Young, as Trustees of the Maureen O'Shaughnessy Young Revocable Trust, Defendants.
Stanley E. Siegel, Jr., Esq. and Nilan, Johnson & Lewis, PA, counsel for plaintiffs.
Mark S. Enslin, Esq. and Lindquist & Vennum, PLLP, counsel for defendants.
DAVID S. DOTY, District Judge.
This matter is before the court upon the motion to dismiss by defendants John F. O'Shaughnessy, Jr., Cheryl O'Shaughnessy, Gerald O'Shaughnessy, Leparis D. Young, and Maureen O'Shaughnessy Young. Based on a review of the file, record, and proceedings herein, and for the following reasons, the motion is denied.
This business dispute arises from defendants' formation of a company allegedly using the proprietary and patented technology of plaintiffs ECTG Limited, Trustwater, Ltd., Trustwater USA, Inc.,  Edmond O'Reilly, and John Henry Brebbia. Trustwater manufactures and sells machines that generate cleaning and sanitizing products for use in the healthcare and hospitality industries. Am. Compl. ¶ 8. Trustwater uses its "proprietary and patented" Electrical-chemical Activation (ECA) technology in its products. Id . In 2008, non-party O Investments, LLC became a minority shareholder in ECTG. Id . ¶ 13; O'Shaughnessy Decl. Ex. A. John and Cheryl O'Shaughnessy signed a Subscription and Shareholders Agreement (Agreement) on behalf of O Investments. O'Shaughnessy Decl. Ex. A, at 1, 32. The Agreement includes a forum selection clause identifying Irish courts as the exclusive venue for disputes arising out of the Agreement. See id. § 10.14(b). Consistent with the Agreement, John O'Shaughnessy was appointed to the ECTG board. Am. Compl. ¶ 14; O'Shaughnessy Decl. Ex. A, § 9.4(a). Cheryl O'Shaughnessy became the Director of Communications/Public Relations of Trustwater USA. Am. Compl. ¶ 15.
In approximately 2010, defendants allegedly began conspiring to form a business that would compete with Trustwater by selling bottled cleaning products through retail establishments. Id . ¶¶ 30, 32. Plaintiffs allege that John and Cheryl O'Shaughnessy used the ECA technology to create the new business's products and that they recruited Trustwater employees to join them. Id . ¶¶ 30, 33, 45. Plaintiffs also allege that defendants usurped Trustwater business opportunities and diverted Trustwater funds to finance the new company. Id . ¶¶ 35-37, 39.
In December 2011, Cheryl O'Shaughnessy and others met with Gerald O'Shaughnessy - John O'Shaughnessy's brother - to discuss his possible investment in the new company. Id . ¶ 46. Defendants' investor presentation states that the new company had an "ECA experienced team" and that the company's product is based on "Trustwater technology." Id . ¶ 45. Plaintiffs allege that Gerald O'Shaughnessy ultimately invested in the new company. Id . ¶¶ 49-50.
On March 16, 2012, defendants formed Simple Science, LLC. Id . ¶ 55. Simple Science is registered with the Minnesota Secretary of State and lists John O'Shaughnessy as its manager. Id . John O'Shaughnessy resigned from the ECTG board on July 15, 2012. Id . ¶ 57. Other Trustwater employees also joined Simple Science. See id. ¶¶ 38, 41, 56. In late 2013, Simple Science began selling hand sanitizer online and in grocery stores under the name CleanSmart. Id . ¶ 59.
In December 2013, John O'Shaughnessy, Leparis Young, and Maureen O'Shaughnessy Young filed suit in this court alleging that ECTG breached certain promissory notes underlying the Agreement. Id . ¶ 63. Plaintiffs allege that the promissory note litigation was designed to "put [Trustwater] out of business." Id . ¶¶ 64, 84. In October 2014, John and Cheryl O'Shaughnessy and O Investments brought suit in Hennepin County, alleging that Trustwater USA and O'Reilly fraudulently induced them to enter into the Agreement. Bromen Decl. Ex. D.
On April 3, 2014, plaintiffs filed this suit. On August 28, 2014, plaintiffs filed an amended complaint alleging breach of fiduciary duty, tortious interference with prospective advantage, and misappropriation of trade secrets against John and Cheryl O'Shaughnessy; civil conspiracy against all defendants; aiding and abetting breach of fiduciary duty against Leparis Young, Maureen O'Shaughnessy Young, and Gerald O'Shaughnessy; and prima facie tort against all defendants. Defendants move to dismiss the case under the Agreement's forum selection clause or, alternatively, to dismiss certain counts for failure to state a claim.
To survive a motion to dismiss for failure to state a claim, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). "A claim has facial plausibility when the plaintiff [has pleaded] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). Although a complaint need not contain detailed factual allegations, it must raise a right to relief above the speculative level. Twombly, 550 U.S. at 555. ...