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ProMove, Inc. v. Siepman

United States District Court, D. Minnesota

January 18, 2019

ProMove, Inc. and Logisys, Inc., Plaintiffs,
v.
Mark Siepman, Joseph Hammerslough, Sunset Transportation LV, Inc., and Tantara Transportation Group, Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS

          Wilhelmina M. Wright United States District Judge

         Plaintiffs ProMove, Inc., and Logisys, Inc. (collectively, Plaintiffs), brought this action against ProMove's former employees Mark Siepman and Joseph Hammerslough (the individual defendants) as well as Sunset Transportation LV, Inc., and Tantara Transportation Group (the corporate defendants), asserting multiple claims, including breach of contract, tortious interference with contract, and misappropriation of trade secrets. Defendants collectively move to dismiss for lack of personal jurisdiction or, alternatively, to transfer this case to the United States District Court for the District of Nevada. Defendants' motion to dismiss is granted in part and denied in part, and the motion to transfer venue is denied.

         BACKGROUND [1]

         ProMove is a Minnesota corporation with its principal place of business in Las Vegas, Nevada. Logisys, an affiliate of ProMove, is a Michigan corporation with its principal place of business in Chicago, Illinois.

         The individual defendants are residents of Las Vegas, Nevada, and former employees of ProMove in Las Vegas. Tantara Transportation Group is a Michigan corporation with its principal place of business in Canton, Michigan. Sunset Transportation LV, Inc., is a Nevada corporation with its principal place of business in Las Vegas, Nevada. Both corporate defendants are direct competitors of ProMove.

         Prior to September 2012, the individual defendants owned and operated Lightning Logistics, LLC, in Las Vegas. Logisys purchased Lightning Logistics and retained the individual defendants as employees. The individual defendants, who were ProMove employees for approximately five years, executed employment agreements with ProMove that included confidentiality and non-compete clauses, as well as a choice-of-law and forum-selection clause stating that each party to the agreement “irrevocably submits itself to the non-exclusive personal jurisdiction of the Federal and State courts sitting in Minnesota.” Plaintiffs allege that, while employed by ProMove, the individual defendants made preparations to leave ProMove with the intent to begin employment with the corporate defendants, including the solicitation of ProMove's employees and customers on behalf of the corporate defendants. Plaintiffs allege that the corporate defendants knowingly assisted with this preparation. Plaintiffs also allege that, before leaving ProMove, Hammerslough copied proprietary and confidential information from ProMove computers with the intent to benefit himself, the corporate defendants, or both.

         ANALYSIS

         I. Defendants' motion to dismiss for lack of personal jurisdiction

         Because Defendants move to dismiss for lack of personal jurisdiction, Plaintiffs must make a prima facie showing that personal jurisdiction exists. K-V Pharm. Co. v. J. Uriach & CIA, S.A., 648 F.3d 588, 591-92 (8th Cir. 2011). To do so, Plaintiffs must plead sufficient facts to support a reasonable inference that the Defendants can be subjected to jurisdiction within the forum state. Id. The evidentiary showing required at the prima facie stage is minimal, Johnson v. Arden, 614 F.3d 785, 794 (8th Cir. 2010), but a plaintiff's prima facie showing is “tested, not by the pleadings alone, but by the affidavits and exhibits” supporting and opposing the motion to dismiss, Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir. 2004) (internal quotation marks omitted). When determining whether personal jurisdiction exists, the Court views the evidence in the light most favorable to the plaintiffs, resolving all factual conflicts in the plaintiffs' favor. K-V Pharm., 648 F.3d at 592.

         Minnesota's long-arm statute extends jurisdiction to the maximum limit permitted by due process. Wessels, Arnold & Henderson v. Nat'l Med. Waste, Inc., 65 F.3d 1427, 1431 (8th Cir. 1995) (citing Minn. Stat. § 543.19). Because the Court applies state law when determining the bounds of its personal jurisdiction, Walden v. Fiore, 134 S.Ct. 1115, 1121 (2014), the Court need only determine whether its exercise of personal jurisdiction comports with due process, Wessels, 65 F.3d at 1431.

         Due process requires that a nonresident defendant have sufficient minimum contacts with the forum state such that personal jurisdiction over the defendant does not offend “traditional notions of fair play and substantial justice.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980) (internal quotation marks omitted). To meet this legal standard, a defendant must establish purposeful availment of the privilege of conducting activities within the forum state, which in turn invokes the benefits and protections of the forum state's laws. Fastpath, Inc. v. Arbela Techs. Corp., 760 F.3d 816, 821 (8th Cir. 2014). When there are multiple defendants, the Court must assess each defendant's contacts with the forum state. Calder v. Jones, 465 U.S. 783, 790 (1984).

         Personal jurisdiction over a defendant may be general or specific. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 n.15 (1985). Here, only specific jurisdiction is at issue.[2] Accordingly, the alleged injury must have occurred in the forum state or have some other connection to the forum state such that the defendant's activities have been purposefully directed toward the forum state. Steinbuch v. Cutler, 518 F.3d 580, 586 (8th Cir. 2008) (citing Burger King, 471 U.S. at 472).

         The Court considers three primary factors when deciding whether it has specific jurisdiction over the defendants: the nature and quality of such contacts with the forum state, the quantity of contacts, and the relation of the cause of action to the contacts. K-V Pharm., 648 F.3d at 592. Two secondary factors, the interest of the forum state in providing a forum for its residents and the convenience of the parties, also are germane to the Court's specific jurisdiction analysis. Id. Ultimately, whether the Court has personal jurisdiction over the defendants depends on the “totality of the circumstances.” Johnson, 614 F.3d at 794.

         A. ...


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