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St. Jude Medical Inc. v. Carter

Supreme Court of Minnesota

June 27, 2018

St. Jude Medical, Inc., Respondent,
v.
Heath Carter, et al., Appellants.

          Edward F. Fox, Kevin P. Hickey, Mark R. Bradford, Laurel J. Pugh, Bassford Remele, P.A., Minneapolis, Minnesota, for respondent.

          Robert L. Schnell, Jr., Martin S. Chester, Jeffrey P. Justman, Faegre Baker Daniels, LLP, Minneapolis, Minnesota, for appellants.

          Took no part, Thissen, J.

         SYLLABUS

         1. Although a court may, in its discretion, grant equitable relief consistent with the terms of a private agreement, private agreements cannot compel a grant of equitable relief.

         2. When a plaintiff fails to meet its burden to establish that irreparable harm will result if an injunction is not issued, a district court does not abuse its discretion by declining to grant a permanent injunction.

          OPINION

          HUDSON, JUSTICE.

         Respondent St. Jude Medical sued appellants Heath Carter and Boston Scientific Corporation after Carter left his job at St. Jude to work for Boston Scientific. St. Jude alleged, in relevant part, that Carter had violated his Employment Agreement with St. Jude. The Agreement expressly stated that if Carter breached its terms, St. Jude would suffer irreparable injury, St. Jude's remedy at law for damages would be inadequate, and St. Jude would be entitled to an injunction against Carter and his new employer. The district court found that although Carter breached the Agreement, St. Jude failed to demonstrate that it would suffer irreparable harm from that breach, and was therefore not entitled to an injunction. The court of appeals reversed, concluding that the district court should have considered the terms of the Agreement when deciding whether to enjoin Carter, and that the district court had erred by denying St. Jude any relief. We conclude that the district court was not required to find irreparable harm based solely on the language of a private agreement, and did not abuse its discretion by declining to grant an injunction in light of the absence of evidence of irreparable harm. We therefore reverse the court of appeals.

         FACTS

         This case centers on a dispute between St. Jude Medical (SJM) and its former employee Heath Carter. Carter began working for SJM in 2007, holding a variety of positions related to the company's electrophysiology (EP) products. EP products consist of two main types, capital products (large items intended for multiple uses over several years) and disposable products (small, inexpensive, single-use accessories to capital products). Carter worked with EP capital products at SJM, including working as part of a marketing team for 3 years before his departure.

         As part of his employment with SJM, Carter signed an Employment Agreement that included a non-disclosure covenant, a non-competition covenant, and a remedies clause. The remedies clause stated, in relevant part, that "[i]n the event [Carter] breaches the covenants contained in this Agreement, [he] recognizes that irreparable injury will result to SJM, that SJM's remedy at law for damages will be inadequate, and that SJM shall be entitled to an injunction to restrain the continuing breach by [Carter]."

         In August 2015, Carter resigned his position at SJM and began working for Boston Scientific Corporation. SJM and Boston Scientific are competitors in a variety of markets and product areas, including both capital and disposable EP products. At Boston Scientific, Carter's marketing role focuses on EP disposable products, rather than EP capital products. During the 1-year non-competition period, Boston Scientific instructed Carter not to be involved in any marketing of EP capital equipment, and prohibited him from interacting with customers.

         SJM filed suit against Carter and Boston Scientific in December 2015, alleging in relevant part that "Carter materially breached his Employment Agreement with SJM in violation of his noncompetition covenant by accepting employment with and working in a directly competitive position for Boston Scientific." In addition, SJM claimed that "Carter's employment in a directly competitive marketing management position with Boston Scientific also creates a direct risk and imminent threat that he either already has or will necessarily disclose, exploit and/or use SJM's Confidential Information on behalf of Boston Scientific to SJM's detriment, in violation of his Employment Agreement." As the district court noted, "SJM specifically and repeatedly disavowed any claim for money damages based on its breach of contract claim" against Carter, seeking "only an injunction."

         After a trial, the jury returned a divided verdict. The jury found that Carter had breached the Agreement, but that Boston Scientific did not intentionally cause the breach. The district court adopted the jury's findings as its own and received additional briefing from the parties regarding SJM's request for equitable relief. The district court also found that "[e]ven if the Court was not bound by the jury's finding that Mr. Carter breached his Employment Agreement, . . . the Court independently finds that Mr. Carter breached ...


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