United States District Court, D. Minnesota
R. Petersen, Cohne Kinghorn, Salt Lake City, UT; Courtland C.
Merrill, Anthony Ostlund Baer & Louwagie, PA,
Minneapolis, MN, for Plaintiff RocketPower, Inc.
P. Brimmer and Adina R. Florea, Fafinski Mark & Johnson
P.A., Eden Prairie, MN, for Defendant Strio Consulting, Inc.
OPINION AND ORDER
C. Tostrud United States District Judge
this business-tort case is done, it may fill every square on
the civil procedure bingo card. It began life in California
state court, was removed to federal court in the Northern
District of California, and then was ordered transferred here
by that court. Before actually transferring the case, that
court also was presented with and denied as “a
half-baked . . . tactical ploy” a motion seeking
interlocutory appeal of the transfer order pursuant to 28
U.S.C. § 1292(b). ECF No. 32 at 2. Upon arrival here,
this case was consolidated with a second case already pending
in this District between the same parties “for all
purposes, including discovery, motions, hearings, and
trial.” Order at 2 [ECF No. 44].
of answering in this case, Defendant Strio Consulting seeks
dismissal of Plaintiff RocketPower's complaint on two
grounds pursuant to Federal Rule of Civil Procedure 12(b)(6).
First, Strio says that the federal district court that
transferred this case here decided already that
RocketPower's claims fail to the extent they are based on
California law. According to Strio, the law-of-the-case
doctrine forbids another federal district court from
revisiting that decision. Next, Strio argues that
RocketPower's claims in this case must be dismissed
because they may be asserted only as compulsory counterclaims
in response to Strio's complaint in the companion case
and not in a separate, parallel case. Strio's motion will
be denied. The transferor court did not decide the merits of
RocketPower's claims. Regarding Strio's second
argument, the claims RocketPower asserts in this case are not
compulsory counterclaims in the consolidated companion case.
Even if they were, the law would not preclude RocketPower
from asserting its claims in its own separate complaint under
the circumstances presented here.
basic facts leading to this dispute are easy to summarize.
RocketPower and Strio worked together to provide a variety of
worker-recruiting and related services to third-party
businesses. RocketPower and Strio's relationship involved
agreements of three types: an agreement between RocketPower
and Strio; agreements between RocketPower and Strio on one
side and workers on the other (“Worker
Agreements”); and agreements between RocketPower and
third-party businesses. In this case, RocketPower alleges
essentially that Strio interfered with RocketPower's
contractual relationships with third- party businesses and
“its ability to place talented individuals with”
these businesses. Am. Compl. ¶ 137 [ECF No. 1 at 30-49].
In the consolidated companion case, Strio is the plaintiff
and alleges that RocketPower failed to pay Strio in line with
their agreement. See generally Strio Consulting, Inc. v.
RocketPower, Inc., No. 19-cv-1048, Compl. [ECF No. 1].
As with most cases at this early stage, describing the
Parties' allegations in greater detail prompts questions
the pleadings do not answer, but some details are necessary
to resolving Strio's Rule 12(b)(6) motion.
“provides talent solutions to rapidly growing
companies, ” and Strio “is a consulting business
that provides back office services for RocketPower.”
Am. Compl. ¶¶ 5-6. Businesses “contract with
RocketPower for assistance with finding and hiring,
placement, management, and supervision of workers[.]”
Id. ¶ 8. The Parties have a verbal agreement to
work together to provide services to RocketPower's
clients. Id. ¶ 9. Pursuant to this agreement,
when a RocketPower client requests assistance in finding and
hiring a worker, RocketPower advertises the position and
begins soliciting qualified candidates to apply. Id.
¶ 12. Jointly, RocketPower and Strio then screen and
extend job offers to applicants. Id. ¶¶
13-15. Applicants who accept offers sign a Worker Agreement,
and Strio drafted the Worker Agreements at issue here.
Id. ¶ 15. Some of these Strio-drafted Worker
Agreements reference both RocketPower and Strio as the
employer; others refer only to Strio as the employer.
Id. ¶ 38. Whether the Worker Agreements
reference RocketPower or not, RocketPower alleges that all
workers hired as a result of this joint RocketPower/Strio
process were joint employees of RocketPower and Strio due to
their shared control of the worker. Id. ¶ 19.
In no case would a hired individual become an employee of
RocketPower's client, at least not right away. See
Id. ¶ 16.
complaint in this case focuses on the Strio-drafted Worker
Agreements, see generally Id. ¶¶ 100-144,
and two in particular: one signed by Paula-Anne Sherron on
July 10, 2018, and one signed by Christine Covert on January
29, 2018. Id. ¶¶ 62-99. Both the Sherron
and Covert Worker Agreements reference only Strio as the
employer, and both agreements contain identical
non-competition provisions. See Decl. of Mathew Caldwell, Ex.
D at 5-6, Ex. E at 5 [ECF No. 11-3]. In full, the
non-competition clause in each agreement reads as follows:
Non-Competition. During the term of this Agreement and for
one year after the termination of Consultant's employment
relationship with Strio for whatever reason, whether such
termination was by Strio or Consultant, and whether with or
without cause, Consultant agrees that he or she shall not, as
a principal, employer, stockholder, partner, agent,
consultant, independent contractor, employee or in any other
individual representative capacity:
1) Provide or attempt to provide directly or indirectly, or
advise others of the opportunity to provide, any Services to
a. To which, within six (6) months prior to termination of
Consultant's employment, Consultant has provided services
in any capacity on behalf of Strio, or
b. To which, within ninety (90) days prior to such
termination of Consultant's employment, Consultant has
been introduced or about which Consultant has received
information through Strio or through any Client for which
Consultant has performed Services in any capacity on behalf
of Strio or;
2) Retain or attempt to retain, directly or indirectly, for
Consultant or any other party, the Services of any person,
including any of Strio's employees, who was providing
services to or on behalf of Strio within ninety (90) day
[sic] before the termination of Consultant's employment,
and to whom Consultant has been introduced or about which
Consultant has performed Services in any capacity on behalf
of Strio. For purposes of this paragraph, the term