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Custom Conveyor Corporation v. Hyde

United States District Court, D. Minnesota

February 22, 2017

Custom Conveyor Corporation, Plaintiff,
Gregory Hyde, et al., Defendants.

          Mark V. Steffenson, Henningson & Snoxell, Ltd., Maple Grove, Minnesota, for Plaintiff.

          Randall E. Kahnke, Martin S. Chester, Marjan A. Batchelor, Faegre Baker Daniels LLP, Minneapolis, Minnesota, for Defendant Gregory Hyde.




         Defendant Gregory Hyde previously worked as a sales representative for Plaintiff Custom Conveyor Corporation (“CCC”), a Minnesota company that manufactures water and wastewater treatment systems. In 2016, Hyde, who resides in Georgia, accepted a position with Defendant Jim Myers & Sons, Inc. (“JMS”), one of CCC's direct competitors. CCC then commenced this action, alleging inter alia claims for misappropriation of trade secrets, conversion, and tortious interference with contract. Presently before the Court is Hyde's Motion to Dismiss for lack of personal jurisdiction. For the reasons that follow, the Court will deny the Motion.


         Hyde has resided in Georgia since 1956. In 2011, he interviewed with CCC in Minnesota after learning of a job opening through a colleague. The company later hired him as a sales manager, marketing and selling its products in various parts of the United States, although not in Minnesota.

         Hyde spent five years working as a CCC sales manager; during that time, he performed his duties from a home office and other locations in Georgia. His job involved only occasional travel to Minnesota (albeit sometimes for several days at a time) yet required near constant communication with CCC's Minnesota-based employees. According to records reviewed by Roger Hansen, CCC's Chief Financial Officer, Hyde exchanged more than 24, 500 emails with CCC's Minnesota personnel during his employment, an average of nearly 14 per day. Similarly, CCC's records reflect 851 phone calls between Hyde and Minnesota-based CCC employees during just his final year of employment, averaging three calls per day and 22 minutes per call.

         In April 2016, Hyde resigned from CCC and accepted a position with one of its competitors, North Carolina-based JMS. Several months later, CCC commenced this action in the Hennepin County District Court, which Defendants removed to this Court. The Complaint alleges that by virtue of his employment with CCC, Hyde became privy to the company's proprietary information, including its unique, “customized pricing scheme” that purportedly gives it a competitive advantage over others (such as JMS) in the marketplace. It further alleges that Hyde used external hard drives and cloud-based storage to copy this proprietary information from CCC's computer systems. And, it alleges that Hyde has disclosed this information to JMS, which has used it to obtain projects on which CCC also was bidding. Among other things, CCC seeks an injunction prohibiting dissemination of its (alleged) trade secrets, the return of any proprietary information held by Hyde or JMS, and an award of damages.

         Hyde now moves to dismiss the claims against him for lack of personal jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(2). His Motion has been fully briefed and is ripe for disposition.


         In order to survive Hyde's Motion, CCC must make only a prima facie showing of jurisdiction. E.g., Epps v. Stewart Info. Servs. Corp., 327 F.3d 642, 647 (8th Cir. 2003). This requires it to proffer “sufficient facts . . . to support a reasonable inference that [Hyde] can be subjected to jurisdiction within [Minnesota].” Creative Calling Solutions, Inc. v. LF Beauty, Ltd., 799 F.3d 975, 979 (8th Cir. 2015) (citation omitted); accord, e.g., Dairy Farmers of Am., Inc. v. Bassett & Walker Int'l, Inc., 702 F.3d 472, 475 (8th Cir. 2012) (citations omitted). CCC's showing “must be tested[] not by the pleadings alone, but by the affidavits and exhibits presented with the motion[] and in opposition thereto.” Dairy Farmers, 702 F.3d at 475 (citations omitted). Where, as here, the Court has not held an evidentiary hearing, it must “look at the facts in the light most favorable to the nonmoving party, and resolve all factual conflicts in favor of that party.” Pangaea, Inc. v. Flying Burrito LLC, 647 F.3d 741, 745 (8th Cir. 2011) (citation omitted). “The evidentiary showing required at the prima facie stage is minimal.” Johnson v. Arden, 614 F.3d 785, 794 (8th Cir. 2010) (citation omitted).


         To establish a prima facie case of personal jurisdiction, CCC must show that Minnesota's long-arm statute has been satisfied and that exercising jurisdiction would comport with the Due Process Clause of the Fourteenth Amendment. E.g., Creative Calling Solutions, 799 F.3d at 979. These two inquiries collapse into one, however, because Minnesota's long-arm statute extends jurisdiction to the outer limits of the Due Process Clause. E.g., Guinness Import Co. v. Mark VII ...

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