Anderson v. Century Products Co.

• Court: District Court, D. New Hampshire
• Decided: October 23, 1996
• Docket: CV-95-349-SD
• Status: Published

Opinion

Anderson v. Century Products Co. CV-95-349-SD 10/23/96 P UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF NEW HAMPSHIRE

Dana Anderson

v. Civil No. 95-349-SD

Century Products Company

O R D E R

This order addresses three motions now pending. Defendant

Century Products Company moves for: (1) dismissal of the

complaint on the basis that the court lacks personal jurisdiction

over Century; (2) transfer of the action to the Northern District

of Ohio pursuant to the change of venue provision of 28 U.S.C. §

1404(a); and (3) dismissal of the entire complaint pursuant to

Rule 12(b)(6), Fed. R. Civ. P., for failure to state a claim upon

which relief can be granted.

Factual Background

The events leading up to this controversy began in 1990 when

Dana Anderson, a New Hampshire resident, invented a foldable

infant stroller having a detachable seat which could be easily

transferred, without unstrapping the child, from the frame of the

stroller to a car, where it functioned as a child safety car seat. In mid-year of 1990, Anderson sent inquiry to the Ohio

offices of Century, who was in the business of manufacturing and

selling both infant car seats and infant strollers, to ascertain

interest in his invention. Century responded with a letter sent

to Anderson's New Hampshire residence inviting him to submit for

further consideration a description of his idea, along with

materials, drawings, and/or samples, on condition, however, that

he execute Century's Idea Submission Policy (ISP) form (Exhibit B

attached to Motion to Dismiss]. The ISP form purported to

"control the conditions under which ideas are submitted to

[Century]." In June of 1990, Anderson executed and returned the

ISP form, along with drawings and a written description of his

invention (Exhibit C ) .

One month later. Century sent word to Anderson that "after

further consideration of your invention, it does not fit into our

marketing plans at this time." Here is the rub of the factual

dispute between the parties. Anderson alleges that, shortly

after sending the rejection letter. Century began manufacturing

and marketing an infant stroller substantially identical to

Anderson's invention. According to Anderson, Century used his

idea without his knowledge and authority to develop this new line

of infant strollers. Century, however, denies using Anderson's

idea, claiming independent development of similar products for

2 more than a decade before learning of Anderson and his idea.

By way of an eight-count complaint, Anderson brings action

against Century. The basic harm for which Anderson seeks redress

is Century's unpermitted and uncompensated use of his idea for

the detachable infant seat. Plaintiff seeks redress under eight

legal theories: breach of contract and unjust enrichment (Counts

I and V); fraud (Count III); breach of fiduciary duties and

misappropriation of confidential information (Counts II and IV);

conversion (Count VI); violation of New Hampshire's Uniform Trade

Secret Act (Count VII); and, finally, violation of New

Hampshire's Consumer Protection Laws (Count VIII). Century

responds with various motions which are the subject of this

order.

Discussion

1. Jurisdiction

Defendant's first motion urges dismissal on the ground that

exercise of personal jurisdiction over Century by this court

violates Century's due process rights.

_____ a. Standard of Review

When personal jurisdiction is contested, the plaintiff bears

the burden of demonstrating that jurisdiction over the defendant

3 is proper. Sawtelle v. Farrell, 70 F.3d 1381, 1387 (1st Cir.

1995). To carry the burden when, as in this case, there has been

no evidentiary hearing, the plaintiff must make a prima facie

showing of personal jurisdiction by offering "evidence that, if

credited, is enough to support findings of all facts essential to

personal jurisdiction." Bolt v. Gar-Tec Products, Inc., 967 F.2d

671, 675 (1st Cir. 1992). In meeting this standard, the

plaintiff "ordinarily cannot rest upon the pleadings, but is

obliged to adduce evidence of specific facts." Foster-Miller,

Inc. v. Babcock & Wilcox Canada, 46 F.3d 138, 145 (1st Cir.

19 95); accord United Elec. Workers v. 163 Pleasant Street Corp.,

987 F.2d 39, 44 (1st Cir. 1993). However, the court "must accept

the plaintiff's (properly documented) evidentiary proffers as

true" and make its ruling as a matter of law. Foster-Miller,

Inc., supra, 46 F.3d at 145. An evidentiary hearing is reguired

only if the court determines that it would be unfair to the

defendant to resolve the issue without reguiring more of the

plaintiff than a prima facie showing of jurisdiction. Id. at

146.

b. Analysis

When subject matter jurisdiction is premised on diversity, a

federal court may assert personal jurisdiction over a nonresident

4 defendant only if the plaintiff establishes both that: (1) the

forum state's long-arm statute authorizes the exercise of

jurisdiction over the defendant, and (2) the defendant has

sufficient "minimum contacts" with the forum state such that the

court's jurisdiction does not offend the defendant's due process

rights. Sawtelle, supra, 70 F.3d at 1387; Kowalski v. Doherty,

Wallace, Pillsbury & Murphy, 787 F.2d 7, 8 (1st Cir. 1986) .

c. New Hampshire's Long-Arm Statute _

Because Century is a foreign corporation, incorporated for

profit under the laws of Ohio, New Hampshire Revised Statutes

Annotated (RSA) § 293-A:15.10 (Supp. 1995) is the controlling

long-arm statute. See McClary v. Erie Engine & Mfg. Co., 856 F.

Supp. 52, 55 (D.N.H. 1994). The New Hampshire corporate long-arm

statute has been interpreted "to authorize jurisdiction over

foreign corporations to the full extent allowed by federal law."

Id. Therefore, the statutory authority reguirement for assertion

of jurisdiction collapses into the "minimum contacts" analysis,

and satisfaction of the latter renders jurisdiction proper under

the New Hampshire long-arm statute.

d. Constitutional Analysis: Due Process _

When a court asserts personal jurisdiction over a defendant.

5 it is exercising power which, like all government exercises of

power, is subject to constitutional limits. See Foster-Miller,

Inc., supra, 46 F.3d at 143. Here, those limits stem from the

Due Process Clause of the Fourteenth Amendment. See Helicopteros

Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 413-14 (1984)

(citing Pennover v. Neff, 95 U.S. 714 (1877)). For the court to

properly assert personal jurisdiction, the defendant must have

had "certain minimum contacts with [the forum] such that the

maintenance of the suit does not offend 'traditional notions of

fair play and substantial justice.'" Helicopteros, supra, 466

U.S. at 414 (guoting International Shoe Co. v. Washington, 326

U.S. 310, 316 (1945)); accord Burnham v. Superior Court of Cal.,

County of Marin, 495 U.S. 604, 618 (1990). Minimum contacts

analysis focuses on the expectations of the defendant reguiring

that his conduct bear such a "substantial connection with the

forum [s]tate" that the defendant "should reasonably anticipate

being haled into court there." Burger King Corp. v. Rudzewicz,

471 U.S. 462, 473-75 (1985) (internal guotations omitted).

In this case, plaintiff alleges multiple causes of action,

some sounding in tort and others in contract. Personal

jurisdiction over the defendant must be proper for each and every

cause of action in the complaint. Nelson v. R. Greenspan & Co.,

613 F. Supp. 342, 346 (E.D. Mo. 1985); Debrecen! v. Bru-Jell

6 Leasing Corp., 710 F. Supp. 15, 19 (D. Mass. 1989) ("Where one

complaint contains two claims . . . there must be an independent

basis for the assertion of personal jurisdiction for each claim.

Jurisdiction over one claim does not imply jurisdiction over

another."). "For purposes of jurisdictional disputes, each count

must be considered as though it constituted a separate

complaint." Jack O'Donnell Chevrolet, Inc. v. Shankles, 276 F.

Supp. 998, 1002 (N.D. 111. 1967). Jurisdiction for plaintiff's

contract causes of action is more problematic, and the court will

begin discussion there.

The First Circuit uses a three-part test to determine

whether the defendant has had sufficient minimum contacts with

the forum state to support personal jurisdiction:

First, the claim underlying the litigation must directly arise out of, or relate to, the defendant's forum-state activities. Second, the defendant's in­ state contacts must represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state's laws and making the defendant's involuntary presence before the state's courts foreseeable. Third, the exercise of jurisdiction must, in light of the Gestalt factors, be reasonable.

United Elec. Workers, supra, 960 F.2d at 1089; accord Sawtelle,

supra, 70 F.3d at 1388.

The "relatedness" inguiry is whether plaintiff's claims

arise out of, or relate to, defendant's New Hampshire activities.

Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201, 206 (1st Cir.

7 1994). This requirement focuses on the causal nexus between the

defendant's forum-based contacts and the injury underlying

plaintiff's cause of action. Century's only relevant contact is

the mailing of its ISP form to plaintiff's New Hampshire

residence. The First Circuit has observed that the "transmission

of information into [the forum] by way of . . . mail is

unquestionably a contact for purposes of our analysis."

Sawtelle, supra, 70 F.3d at 1381. But the issue is whether that

contact is a sufficiently meaningful causative element of

plaintiff's injury such that the two are "related."

The First Circuit recently addressed how tight the causal

nexus must be to justify a finding of relatedness. Nowak v. Tak

How Investments, Ltd., 94 F.3d 708, 712-16 Cir. 1996). The court

made clear that, while obviously necessary, it is not enough that

the contacts and the injury are linked together in a single

causal chain, thereby being "but for" related; rather, the two

links must be sufficiently close, and not too remote. However,

the court left unclear how much more than "but for" causation is

required. While indicating that proximate causation should be

the benchmark, the court, nonetheless, went on to hold that

relatedness could be found even where the contacts and the injury

are not proximately situated in the causal chain. So, under

Nowak, relatedness means a causal relation that lies somewhere in between the "but for" and proximate standards.

In a case such as this, where the injury arises out of

contract breach, proximate causation need not be demonstrated.

If proximate causation were required, the following argument

advanced by Century would have to be accepted as dispositive of

the relatedness issue. For purposes of locating the direct cause

of plaintiff's loss of contract rights. Century would distinguish

between its New Hampshire contact of mailing the form and its

activity at its Ohio offices which constitute contract breach.

Mailing the form to a New Hampshire resident led directly to

formation of contractual ties between the parties and thus

directly caused the existence of rights in the plaintiff, but not

their infringement. What directly caused infringement of

plaintiff's rights, so the argument goes, was Century's activity

that constituted contract breach, and that occurred at Century's

Ohio offices, where it allegedly used plaintiff's idea without

compensation or permission. Thus, the causal chain from

Century's New Hampshire contacts to plaintiff's injury was

severed by intervening causal forces, namely the Ohio breach

activity, precluding a proximate cause relation between the

contacts and the injury. If proximate causation is required,

relatedness cannot be satisfied in a case such as this where

breach occurs out of state. There is some support for this view of relatedness. See

Kenney v. Hoover, 909 F. Supp. 34 (D. Mass. 1995) (holding that a

Massachusetts federal court could not exercise jurisdiction over

defendant because breach occurred in Maine). However, this view

goes against the great weight of authority holding that

relatedness can be satisfied even if the acts constituting breach

occurred outside the forum. As the Second Circuit has noted,

reguiring that the acts of breach occur in the forum before

relatedness is found may lead to the "unusual result that [a

forum's courts] would have jurisdiction of only certain claims

arising from the breach of an otherwise indivisible contract."

Hoffritz For Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 59 (2d

Cir. 1985). The First Circuit, in Hahn v. Vermont Law School,

698 F.2d 48 (1st Cir. 1983), likewise refused to take so

stringent a view of relatedness. The Hahn court held that, on

the facts of the case, relatedness was satisfied notwithstanding

that the act of breach occurred outside the forum. While Nowak

directs proximate causation as the benchmark, Nowak, supra, 94

F.3d at 712-16, that standard cannot be reguired in a case such

as this because, under Hahn, relatedness is met even if acts of

breach occur outside the forum so long as defendant's in-forum

activities are "instrumental in the formation of the contract."

United Elec. Workers v. 163 Pleasant Street Corp., 960 F.2d 1080,

10 1089 (1st Cir. 1992) .

Where, as here, the defendant sends a written offer into the

forum with the intent that it be accepted and executed there,

that forum contact is clearly instrumental in the formation of

the contract. See Hahn, supra. Thus, under First Circuit

caselaw, Hahn, supra, 698 F.2d at 50-52; Nowak, supra, 94 F.3d at

712-16, Century's New Hampshire contacts and the injury suffered

are close enough on the causal chain to be related. As the first

requirement of minimum contacts has been met, the court now turns

its attention to the second.

Insofar as "[t]he function of the purposeful availment

requirement is to assure that personal jurisdiction is not

premised solely upon a defendant's 'random, isolated, or

fortuitous' contacts with the forum state," Sawtelle, supra, 70

F.3d at 1391 (quoting Keeton v. Hustler Magazine, Inc., 465 U.S.

770, 774 (1984)), "the cornerstones upon which the concept of

purposeful availment rest are voluntariness and foreseeability."

Id. (citing Ticketmaster, supra, 26 F.3d at 207). As such, the

jurisdictional inquiry is not merely a quantitative arithmetic

endeavor, but rather a qualitative one of weight and merit.

Pritzker, supra, 42 F.3d at 61. One contact, if sufficiently

meaningful, may be enough.

However, simply establishing a contact with the forum by

11 contracting with one of its residents, without more, does not

necessarily satisfy the purposeful availment requirement.

Whittaker Corp. v. United Aircraft Corp., 482 F.2d 1079, 1083-85

(1st Cir. 1973). Rather, the Supreme Court has directed courts

to employ a "contract-plus" analysis. Burger King, supra, 471

U.S. at 479. According to the First Circuit, this involves

evaluating "all of the communications and transactions between

the parties, before, during, and after the consummation of the

contract, to determine the degree and types of contacts the

defendant has with the forum, apart from the contract alone."

Ganis Corp. of California v. Jackson, 822 F.2d 194, 198 (1st Cir.

1987). Evaluation of these contacts must reveal a decision by

the nonresident to interject himself into the local economy as a

market participant. Bond Leather Co. v. O.T. Shoe Mfg. Co., 7 64

F .2d 928, 933 (1st Cir. 1985)

Here, beyond the contract, there is minimal activity of

Century indicating a decision to become a willing participant in

the New Hampshire markets. By mailing the contract to plaintiff

in New Hampshire, Century arguably was shopping in the New

Hampshire market in intellectual property. It entered into a

contractual arrangement to review plaintiff's idea for purposes

of deciding whether or not to purchase it. Browsers are market

participants no less than buyers.

12 However, there is no indication that Century regularly

shopped in New Hampshire markets, nor that this incident was part

of Century's general design to reap the fruits of these markets.

Rather, the record indicates that this was an isolated

occurrence, or one-stop shopping. The First Circuit has "evinced

a special concern for formulating a jurisdictional rule that

would protect wholly passive purchasers, who do no more than

place an order with an out of state merchant and await delivery."

Id. at 933. Not only was Century merely a browser instead of a

purchaser, but contact between the parties was initiated by

plaintiff, not Century. This isolated contact with New Hampshire

does not constitute a decision to participate in the local

economy. Thus, defendant has not purposefully availed itself of

the privilege of doing business in New Hampshire. With respect

to plaintiff's contract claim, defendant's due process rights

impede the jurisdictional power of this court.

However, the jurisdictional issue weighs in favor of

plaintiff with respect to his tort claims. While Century engaged

in minimal activity in New Hampshire, for purposes of minimum

contacts "it is not always necessary that the defendant's conduct

take place in the forum state." Helitzer v. Helitzer, 761 F.2d

582, 585-86 (10th Cir. 1985) (citing R. C a s a d , J u r i s d i c t i o n in C ivil

A ctions 5 2.05 (1983)). Sometimes it may be sufficient if his

13 conduct elsewhere causes an effect in the forum. The general

rule is if defendant, through out-of-state conduct, intentionally

causes a tortious injury in the forum, jurisdiction will lie for

claims arising from that injury. Hugel v. McNeil, 886 F.2d 1, 4

(1st Cir. 1989); see also Rivera v. Bank One, 145 F.R.D. 614

(D.P.R. 1993) (finding sufficient contacts where act of defendant

outside the state caused a tortious injury within the state).

Locating the injury situs of Century's alleged torts is

somewhat difficult. This is not a case of physical injury which

has a definite spatial guality. Rather, the injury at issue is

purely economic in nature, making it difficult to pinpoint

exactly where the injury occurs. See Kowalski, supra, 787 F.2d

at 10-11 (discussing difference between physical and economic

injury). Further, this difficulty cannot be ameliorated by

looking to where state law defines the situs of tortious injury.

Minimum contacts analysis is a matter of federal constitutional

law, and its resolution cannot turn on state law definitions

having no independent significance beyond setting the scope of

jurisdiction.

Nonetheless, some courts have held that, for purposes of

constitutional inguiry, the situs of tortious injury arising from

interference with intellectual property is the place of

plaintiff's residence. Crosfield Hastech, Inc. v. Harris Corp.

14 672 F. Supp. 580, 587 (D.N.H. 1987) . As one court has noted,

[d]amage to intellectual property rights (infringement of a

patent, trademark or copyright) by definition takes place where

the owner suffers the damage.'" Dakota Indus., Inc. v. Dakota

Sportswear, Inc., 946 F.2d 1384, 1388 (8th Cir. 1991) (guoting

Acrison, Inc. v. Control & Metering Ltd., 730 F. Supp. 1445, 1448

(N.D. 111. 1990)) (emphasis in Acrison) . These courts reason

that, with respect to intellectual property protected under state

law, the state of plaintiff's residence is the creator of the

rights infringed. See Paolino v. Channel Home Centers, 668 F.2d

721, 724 n.2 (3d Cir. 1981) (noting that "[s]ince intellectual

property cannot have a physical situs the law of the state of

residence of the person who initially developed and protected the

secret appears to be the obvious starting point for its

protection"). When a nonresident interferes with intellectual

property, it is foreseeable that the state creator would reach

out through its courts to protect and ensure possession of rights

it has bestowed upon its citizens.

Here, the rights possessed by plaintiff in his idea were

born of New Hampshire law. Upon Century's alleged tortious

interference with those rights, plaintiff need look no further

than New Hampshire courts to pursue redress from his injury.

Thus, jurisdiction for plaintiff's tort cause of action is proper

15 under the well-established rule that one who knowingly causes

tortious injury in a forum cannot invoke constitutional

protections to avoid being hailed into court there. Calder v.

Jones, 465 U.S. 783, 790 (1984).

When, as here, some causes of action are jurisdictionally

sound and others are not, precedent provides scant guidance on

the proper course to follow. Sc h w a r z e r , Ta s h i m a , W a g s t a f f e , Ca l i f o r n i a

P r a ct ice G u i d e , Fed er al C ivil P ro c e d u r e B efore T rial 5 3:91, at 3-18

(1994). There are three possibilities: the court could (1)

dismiss only the jurisdictionally improper claim while retaining

jurisdiction over the others; (2) permit trial for the entire

case because jurisdictional reguirements are satisfied for one of

the claims; or (3) dismiss the entire case because part of it is

jurisdictionally defective. Examination of the course the law

has taken on this issue is in order.

Under the doctrine of pendent personal jurisdiction, some

courts have retained jurisdiction over the entire case

notwithstanding the jurisdictional defect for one of the causes

of action. See Amtrol, Inc. v. Vent-Rite Valve Corp., 646 F.

Supp. 1168, 1173-76 (D. Mass. 1986). The doctrine had its origin

in federal guestion cases where state law claims were tacked onto

federal causes of action under pendent subject matter

jurisdiction. Robinson v. Penn Central Co., 484 F.2d 553, 553-56

16 (3rd Cir. 1973). Since subject matter jurisdiction rested on the

existence of a federal question. Rule 4 of the Federal Rules of

Civil Procedure, as opposed to state long arm statutes, governed

statutory authorization to exercise personal jurisdiction over

the defendant. Once Rule 4 was satisfied for the federal cause

of action, the issue became whether Rule 4 required an

independent basis for the assertion of personal jurisdiction over

the pendent state law claims, or whether jurisdiction over

defendant for the federal cause of action automatically, and

without more, attached for the state claims as well. Several

courts denied needing an independent basis for each claim and

held that Rule 4 authorized exercise of jurisdiction over the

entire case, including all pendent state claims, so long as

jurisdictional requirements for the federal cause of action were

met. See Amtrol, supra 646 F. Supp. at 1173-76 (D. Mass. 1986)

(discussing much of the caselaw dealing with the issue of pendent

personal jurisdiction). Such a view of the legitimate reach of

personal jurisdiction under federal rules was not, however,

without dissenters. See Connors v. Marontha Coal Co., 670 F.

Supp. 45, 47 (D.D.C. 1987) ("Although federal courts can exercise

pendent subject matter jurisdiction to bring a claim ordinarily

outside the court's limited jurisdiction within the subject

matter jurisdiction of the court, there is no analogous concept

17 of pendent personal jurisdiction.") (citation omitted); Debreceni

v. Bru-Jell Leasing Corp., 710 F. Supp. 15, 19 (D. Mass. 1989) .

The doctrine of pendent personal jurisdiction was

subsequently borrowed in aid of interpreting state long-arm

statutes. Courts began to hold that if jurisdiction over some

claims in a complaint would otherwise fall under the state long-

arm statute, those claims could, nonetheless, ride piggyback on

other of the claims whose long-arm jurisdiction was upheld. Val

Leasing, Inc. v. Hutson, 674 F. Supp. 53, 56 (D. Mass. 1987).

Under this interpretation, as long as the long-arm statute

authorized jurisdiction for one cause of action in a complaint,

jurisdiction over all the causes of action was proper.

However, as the doctrine has its roots in construction of

jurisdictional statutes, it is unclear whether the "good as to

one, good as to all" rule has a place on the constitutional side

of the jurisdiction inquiry. There are both statutory and

constitutional requirements for proper jurisdiction, and the

doctrine under discussion has, to date, been employed to satisfy

only the former. Using the doctrine to bring within the court's

jurisdiction claims that do not otherwise satisfy constitutional

requirements is more problematic. After all, statutory

requirements are defined simply by legislative will, whereas

constitutional requirements are defined by individual right.

18 Given this, projection of the rule from the statutory into the

constitutional elements of the jurisdiction inquiry is by no

means manifest. And thus far no courts have explicitly made such

a projection, much less justified it.

The courts that pioneered the doctrine as an interpretation

of Rule 4 did not offer opinion about exercising pendent personal

jurisdiction over claims that would otherwise fail constitutional

requirements, nor did they need to. Since the "anchor" cause of

action was a federal question, constitutional limitations on

jurisdiction were less stringent, and the defendant need only

have minimum contacts with the United States, not the forum

location of the federal court. In these pioneer cases, minimum

contact with the United States was clear, and constitutional

requirements were independently met for both the anchor federal

claim and the state claims. Robinson, supra, 484 F.2d at 554

("the issue is primarily a matter of interpretation of [federal

jurisdictional rules] since it is not disputed that Congress

could constitutionally expand service of process of federal

courts throughout the United States"). These courts employed

pendent personal jurisdiction to satisfy only statutory and not

constitutional requirements.

While marginally more helpful, the cases extending the

doctrine to state long-arm statutes do not bring its

19 constitutional significance into the sharp focus that is

appropriate. One court, after holding that the state long-arm

statute permitted pendent personal jurisdiction, simply never

reached the constitutional inguiry, leaving unanswered the

propriety of pendent personal jurisdiction over claims for which

constitutional reguirements are otherwise not met. Val Leasing,

supra, 674 F. Supp. at 56 (concluding no more than that

"Massachusetts law permits pendent personal jurisdiction").

Another court, while reaching the constitutional elements of the

jurisdiction inguiry. Home Owners Funding Corp. of America v.

Century Bank, 695 F. Supp 1343, 1345-46 (D. Mass. 1988), did not

make clear whether jurisdiction was improper for the pendent

cause of action under both the state long-arm statute and the

constitution or just under the long-arm statute. Id.; see also

Murphy v. Erwin-Wasev, Inc., 460 F.2d 661, 663-64 (1st Cir. 1972)

(holding that jurisdiction for plaintiff's contract claim was

proper under Massachusetts long-arm statute simply because

jurisdiction over plaintiff's tort claim was proper, but failing

to dismiss whether constitutional reguirements for assertion of

jurisdiction were or were not met for contract claim). If

jurisdiction for the pendent cause of action was only improper

under the statute, but in all other respects proper under the

Constitution, then the court only relied on the doctrine to

20 correct the statutory defect. However, the court's discussion

was unclear on this issue.

As far as this court is aware, the district court in Nelson

v. R. Greenspan & Co., 613 F. Supp. 342 (D. Mo. 1985), has cast

the one clear vote in favor of turning pendent personal

jurisdiction into a constitutional doctrine. But see Jack

O'Donnell Chevrolet, supra, 276 F. Supp. 1002 ("We must

separately consider the three counts in which defendant is named,

since sustenance of jurisdiction over one would not necessarily

confer jurisdiction over others."). Having found sufficient

minimum contacts to support personal jurisdiction for one count

in the complaint, the court stated "personal jurisdiction is also

appropriate as to Count II, even though defendant's contacts with

[the forum] might not be sufficient for them to be subject to

personal jurisdiction in [the forum] with respect to Count II

alone." Id. at 346. The court reasoned that "plaintiff's breach

of contract claim is based on the same core facts as the fraud

claim and reguiring plaintiff to bring the contract claim in

another forum would result in unnecessarily duplicative

litigation and a waste of judicial resources." Id.

Despite any ambiguity as to whether said doctrine can

sanction jurisdiction for a claim not otherwise justifiable under

the Constitution, this case calls out for its application. To

21 justify this, it is necessary to examine why the fact that New

Hampshire felt the "effects" of defendant's conduct is

dispositive of the jurisdiction issue for the tort claim and not

the contract claim, even though both arise from the same harmful

effects; namely, the uncompensated loss of proprietary rights in

plaintiff's idea. The most apparent difference, and the one that

hasconstitutional significance between the two causes ofaction,

is the source of the rights at issue. With respect to torts, the

state creates the rights, whereas the parties themselves are the

source of contractual rights. When the state defines rights

against tortious conduct, it is publicly proclaiming its will to

deter that specific conduct, and when ignored by individuals

engaging in proscribed conduct, the state has a heightened

interest in judicially redressing any injurious effects felt

within its border. As the Supreme Court has noted:

A state has an especial interest in exercising judicial jurisdiction over those who commit torts within its territory. This is because torts involve wrongful conduct which a state seeks to deter, and against which it attempts to afford protection, by providing that a tort-feasor shall be liable for damages which are the proximate result of his torts.

Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 776 (1984).

Given the state's "especial interest," it becomes more

foreseeable that the state would call upon the wrongdoer to

22 defend his actions and set things within the state's borders to

right.

However, the state feeling the brunt of the effects from

contract breach has not suffered such an affront to its

interests. Lakeside Bridge & Steel v. Mountain State Constr.,

597 F.2d 596, 602 n.ll (7th Cir. 1979) ("The forum state has a

lesser interest in protecting a corporation in an interstate

contract dispute . . . because the effects of a commercial

contract are unlikely to involve danger to persons or things

within the state's borders."). Because the source of the

infringed right is the parties, not the state, the state has not

sought to deter the specific conduct constituting breach, but

rather has remained ambivalent about the rightfulness or

wrongfulness of such conduct. The state's interest is implicated

only if the conduct can be characterized as a broken promise, and

it is only the broken promise that the state seeks to deter. In

a contract dispute, states feeling the effects of specific

conduct that is in itself harmless have no special connection

with the case such as would support exercise of jurisdiction over

one causing such effects. Rather, the defendant must have other

ties and connections with the state. If this reasoning is

formalistic, it is, nonetheless, the only apparent justification

for a set of jurisdictional rules under which a state that

23 suffers the effects of tortious conduct may assert jurisdiction,

whereas a state that feels the effects of contract breach may not

necessarily do so.

But when, as here, the specific conduct constituting breach

of contract is also tortious, the state has expressed its

deference interest by making such conduct the subject of tort

liability. It should not matter for jurisdictional purposes

whether the plaintiff chooses to characterize the conduct as a

breach of contract or tortious or both, because the state's

deference interest remains constant. After all, by any other

name, a rose is still a rose. If there is jurisdiction over the

tort based on the state's "especial interest" in deterring the

specific conduct, then so too will jurisdiction over contract

claims arising from that same conduct be proper. This result

obtains even though the forum contacts related to the contract

claim are, by themselves, insufficient to support jurisdiction.1

1During the course of litigation, if plaintiff is unable to sustain the burden of proving the tortious nature of the conduct, the guestion arises whether the court is divested of jurisdiction over the rest of the case. In Val Leasing, supra, 674 F. Supp. at 56, the court held that judgment over defendant on the "anchor" claim does not remove the foundation for exercising personal jurisdiction with respect to the pendent claims. However, the Val Leasing court was discussing the proper results under the state long-arm statute. Whether this approach, however, has a place in constitutional analysis of the jurisdiction issue depends on the exact nature and content of the defendant's rights protected by the Due Process Clause. If the clause protects an interest

24 Therefore,the court denies in its entirety defendant's motion to

dismiss for lack of personal jurisdiction.

2. Transfer

Century urges this court to transfer the case to federal

court in Ohio pursuant to 28 U.S.C. § 1404(a), which provides

that "for the convenience of parties and witnesses, in the

interest of justice, a district court may transfer any civil

action to any other district or division where it might have been

brought." Circumstances justify transfer if plaintiff's choice

against "inconvenient litigation" in a forum with which the defendant has no minimum contacts. United States v. Morton, 467 U.S. 822, 828 (1984), then retaining jurisdiction despite loss on the anchor claim would not violate due process. After all, courts often assert jurisdiction based on allegations that the defendant caused a tortious injury in the forum, even though it may turn out that the conduct was not tortious after all, and thus that the defendant had never established minimum contacts there. If this does not violate due process, then it should not make a constitutional difference that a pendent claim is added, because the incremental inconvenience of defending the additional claim is minimal, even if the defendant cannot do so successfully. However, if the Due Process Clause protects the interest in "not being subject to the binding judgments of a forum with which [defendant] has established no meaningful contacts, ties, or relations," Burger King, supra, 471 U.S. at 472, then the case must be dismissed once the "anchor" claim falls. Once it becomes apparent that the conduct was not tortious, negating the existence of minimum contacts, then no binding judgments may be issued against the defendant, and the pendent claim must be dismissed. Nonetheless, this issue does not have to be resolved unless and until it is established that Century's conduct cannot be labeled tortious.

25 of forum poses a greater inconvenience relative to the forum to

which transfer is sought. How much more inconvenience must be

shown to justify transfer and, conversely, how much deference is

due plaintiff's initial choice of forum is not clearly

established in this circuit. But see Royal Bed and Spring Co. v.

Famossul Industria e Comercio de Moveis, Ltda., 906 F.2d 45, 52

(1st Cir. 1990) (discussing deference due plaintiff's choice of

forum under 1404(a)'s predecessor doctrine of forum non

conveniens). In other circuits, the plaintiff's choice of forum

is held in "varying degree of esteem." C harles W r i g h t , A rthur

M i l l e r , E dward H. C o o p e r , e t a l . , F e d e r a l Practice and Procedure § 384 8, at

376 (2d ed. 1986) .

Some courts hold that section 1404 (a) should be liberally

construed and are easily persuaded that defendant's right under

section 1404(a) to seek a transfer outweighs plaintiff's right to

choose a forum. See A.C. Samford, Inc. v. United States, 226 F.

Supp. 72 (M.D. G a . 1963). Given two litigants, each seeking to

litigate in their forum of choice, these courts find no reason to

defer to the plaintiff's choice simply because he is the

plaintiff. Levine v. Arnold Transit Co., 459 F. Supp 233, 235

(N.D. 111. 1978) ("Why, under 1404(a), one side's preference

should carry greater weight than the other's escapes us . . .

."). Under this standard, if the defendant can show that his

26 chosen forum is marginally more convenient than the plaintiff's

chosen forum, transfer will be granted.

This court declines to read section 1404 (a) as an utter

defeat of plaintiff's right to litigate in his forum of choice,

but takes guidance from cases such as Ford Motor Co. v. Ryan

Ferguson, 182 F.2d 329 (2d Cir. 1950), that hold plaintiff's

choice in high esteem. Federal forum rules, wrought from

considerations of efficiency and convenience, confer on plaintiff

the initial choice of forum under the presumption that the chosen

forum is the most convenient. However, section 1404(a) was

enacted under the recognition that sometimes the plaintiff's

choice, while possibly more convenient for him, results in a net

inconvenience after factoring in the burden imposed on defendant.

All States Freight v. Modarelli, 196 F.2d 1010, 1011 (3d Cir.

1952) ("The purpose of the limitation [on the plaintiff's

privilege of choosing forum] is clearly to make the inevitably

uncomfortable . . . judicial process cheaper and more convenient

and, if possible, more prompt."). In addition, the plaintiff's

choice of forum may have nothing to do with convenience but

rather results from an effort to "vex, harass, or oppress" the

defendant. Holiday Rambler Corp. v. American Motors Corps., 254

F. Supp 137, 139 (W.D. Mich. 1966). Thus section 1404(a)

modifies the plaintiff's right to litigate in a forum of his

27 choosing by giving the court a trump card.

If, however, courts read section 1404(a) as a strict

limitation on plaintiff's right such that his choice is given no

presumptive force, then a net decrease in efficiency will result.

In every case, courts and litigants must labor to judge which is

the more convenient of two forums. Any efficiency gained from

the transfer would be outweighed by efficiency lost from laboring

over the transfer guestion in every case. However, a presumption

in favor of plaintiff eases the burden of administering section

1404(a) while, at the same time, leaves room to transfer cases

from forum that are so grossly inconvenient that labor expended

on the section 1404(a) issue is outweighed by the efficiency

losses that would result were the case not transferred. The

better rule, then, is that defendant must show plaintiff's choice

of forum to be substantially more inconvenient than the

alternative proposed by defendant.

A consideration of the factors relevant to determining

whether Century has met its burden persuades this court that

transfer should not be granted. At the outset, the presumption

enjoyed by plaintiff is particularly strong here because his

chosen forum is also his home forum. Piper Aircraft Co. v.

Revno, 454 U.S. 235, 255 (1981). When the home forum has been

chosen, the choice more likely represents considerations of

28 convenience rather than vexation or harassment, id. making the

hurdles obstructing transfer that much higher.

Section 1404(a) directs the court to first consider the

convenience of the parties. At best, this factor is a wash.

Granted, it would be inconvenient for Century to litigate this

case in New Hampshire due to the business disruption caused by

having to uproot a "multitude" of employees from Ohio to New

Hampshire. Certainly no less so, it would be burdensome for

plaintiff to litigate in Ohio, because he would have to bear the

financial burden of transporting himself and his witnesses there,

as well as leaving his two jobs for the occasion. Since there is

a presumption in favor of plaintiff's choice, transfer is not

appropriate where its effect is merely to shift the inconvenience

from one party to the other. It is Century upon whom the burden

mu st fall.

Furthermore, weighing the relative inconveniences to the

parties reguires more than adding up costs in dollars and cents.

There is a gualitative component to the balance as well which

focuses on the comparative financial strength of the parties,

A.C. Samford, supra, 226 F. Supp. at 78, because the costs of

litigation should be placed on the party in the best position to

absorb and spread them. AMF, Inc. v. Computer Automation, Inc.,

532 F. Supp. 1335, 1342 (S.D. Ohio 1982). Clearly that party is

29 Century. In today's business world, the expense of defending

lawsuits, both meritorious and nonmeritorious, is an inevitable,

yet unfortunate, cost of doing business which can, in turn, be

defrayed by passing it on to the ultimate consumer. However,

individuals such as the plaintiff, who is not necessarily in the

business of inventing things, must alone bear the costs of

litigation. If transfer renders the costs of litigation

prohibitive, plaintiff may be effectively denied the right to

pursue a remedy. Therefore, even if it would cost Century more

to defend this suit in New Hampshire than it would for plaintiff

to litigate in Ohio, the relative financial strength of the

parties counsels against transfer.

Section 1404(a) also reguires the court to consider the

conveniences of witnesses, because justice is better served when

the testimony of witnesses is live, rather than by deposition.

Chicago Rock Island and Pacific Railroad Co. v. Igoe, 220 F.2d

299 (7th Cir. 1955). Section 1404(a) serves these ends by

securing a more convenient forum for witnesses to appear with

their live testimony. But if appearance of witnesses can be

secured regardless of the forum's location through court order or

persuasion by an employer who is a party to the action, this

factor becomes less important. Furthermore, courts have held

that this factor is not merely a battle of numbers favoring the

30 party that can provide the longest list of witnesses it plans to

call. LaCroix v. American Horse Show Assoc., 853 F. Supp. 992,

1001 (N.D. Ohio 1994) . Rather, the focus is on the key

witnesses, because loss of live testimony of less central

witnesses is not so great a price for honoring plaintiff's

choice. This factor thus considers the convenience of key

witnesses who cannot be compelled or persuaded to appear in a

distant forum.

Plaintiff claims that Century stole his idea, and Century

claims that it developed and marketed the product independently

long before it received any drawings from plaintiff. Thus

Century's employees who were involved in the alleged independent

development and marketing of the product are certainly "key

witnesses." Of this group of key witnesses. Century claims that

about half are no longer employees, and thus the inconvenience of

New Hampshire to them would force Century to present their

testimony by deposition. However, given that half the group of

key witnesses are still employees and can be persuaded to appear

in New Hampshire, the testimony of the non-employees may be

duplicative, and Century has provided no reason to believe

otherwise. Their deposition testimony therefore would not result

in the harm at which section 1404(a) is aimed.

Century has failed to carry its burden of establishing such

31 substantial relative inconvenience, and this court denies the

motion to transfer.

3. Defendants' Motions Under Rule 12

Century has moved to dismiss all counts of plaintiff's

complaint pursuant to Rule 12(b)(6), Fed. R. Civ. P., for failure

to state a claim upon which relief can be granted. A Rule

12(b)(6) motion will be granted only if, accepting all of the

plaintiff's factual averments contained in the complaint as true,

and drawing every reasonable inference helpful to the plaintiff's

cause, "it appears beyond doubt that the plaintiff can prove no

set of facts in support of his claim which would entitle him to

relief." Rivera-Gomez v. de Castro, 843 F.2d 631, 635 (1st Cir.

1988). The court's inguiry is a limited one, focusing not on

"whether a plaintiff will ultimately prevail but whether the

claimant is entitled to offer evidence to support the claims."

Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). In making its

inguiry, the court must accept all of the factual averments

contained in the complaint as true, and draw every reasonable

inference in favor of the plaintiff. Garita Hotel Ltd.

Partnership v. Ponce Fed. Bank, 958 F.2d 15, 17 (1st Cir. 1992).

32 a. Waiver

At the outset. Century urges the court to dismiss pursuant

to Rule 12(b) all plaintiff's causes of action on grounds that

the plaintiff agreed to waive all rights except those arising

under patent law. The contract provision supposedly producing

this effect is contained in paragraph 9 of Century's ISP form

signed by plaintiff, which provides "[b]y reviewing your idea no

agreement to compensate you is being entered into by us, and you

agree to rely solely upon your rights under the patent laws."

Since none of the rights claimed by plaintiff arise under patent

laws. Century argues that the complaint fails to state a claim

upon which relief can be granted.

The issue is governed by New Hampshire law.2 To determine

the effect of this clause on the rights claimed by plaintiff, the

contract and tort causes of action must be distinguished. In the

2When, as here, parties do not "raise a conflict of law issue in this diversity suit . . . we see no reason to discuss the issue of choice of law," American Home Assurance Co. v. Stone, 61 F.3d 1321, 1324 (7th Circuit 1995), but will instead apply New Hampshire law. The parties are free to make their own choice of law through contractual arrangement. When neither party contests choice of law at trial, it is constructively eguivalent to designating choice of law by contract. Further, the law necessary to resolve the waiver issue is essentially the same in both Ohio and New Hampshire. Compare Collins v. Click Camera & Video, Inc., 86 Ohio Ap p . 3d 826, 832, 621 N.E.2d 1294, 1298 (1993) with New Hampshire Karting Assoc., 128 N.H. 102, 106, 509 A.2d 151, 153 (1986). Therefore, it is unnecessary to resolve the choice of law guestion.

33 eyes of New Hampshire law, contractual obligations are easier to

waive than those arising under tort law. Barnes, supra note 2,

128 N.H. at 106, 509 A.2d 153. As the First Circuit has noted,

"language necessary to waive contractual obligations may not be

sufficient to waive tort liability." Burten v. Milton Bradley

C o ., 763 F.2d 461, 465 (1st Cir. 1985) . The Burten court

reasoned that it is against public policy to permit parties to

easily contract out of obligations imposed by tort law. Id. at

467. The state's interest in shaping behavior and achieving

other substantive goals through tort law should not be easily

overridden by contractual arrangements. See supra note 2, 128

N.H. at 106, 509 A.2d 153 (noting tension between goals of

holding individuals to tort obligations and of allowing maximum

possible "freedom of choice" in allowing parties to "contract

freely about their affairs").

Thus there are two standards by which to judge the

effectiveness of waivers--one for tort obligations and the other

for contractual. Tort waivers must "clearly and unambiguously"

disclaim the waiving party's obligation to conform its conduct to

the reguirements of tort law. Burten, supra, 763 F.2d at 465;

Wright v. Loon Mountain Recreation Corp., 140 N.H. 166, ___ , 663

A.2d 1340, 1342 (1995) (holding that exculpatory language must

"clearly and specifically indicate the intent to release the

34 defendant from liability for personal injury caused by

defendant's negligence"). On the other hand, the content of

contractual obligations is defined by the parties' intent, and it

is there that the court must look to judge the effectiveness of

waiver of those obligations. Under standard rules of contract

interpretation, contractual language need not be clear and

unambiguous to be given effect, but rather a lower threshold of

clarity is applicable. The effect of the waiver in the ISP form

on Century's tort liability will be discussed first, then

Century's contractual obligations to plaintiff, if any, will be

addressed.

The general language of this provision of the ISP form is

not of sufficient clarity to waive Century's tort liability. To

constitute a clear and unambiguous waiver, the language must

disclaim the specific obligation that the waiving party seeks to

avoid. See Burten, supra, 763 F.2d at 466 (holding that contract

clause purporting to limit plaintiff to "such rights as I may

have under U.S. Patent laws" did not preclude recovery for

tortious misappropriation of trade secret); see also Audlev v.

Melton, 138 N.H. 416, 418, 640 A.2d 772, 779 (1994) (holding that

promise to hold defendants "free of any or all liability" did not

release defendants from liability for negligence because language

was too general). If a party refuses to conform his conduct to

35 the requirements of tort law, he should have to bear the costs of

forewarning other market participants with which he hopes to

deal. Thus the waiving party has the responsibility of

announcing his disclaimer in language that leaves no doubts as to

the specific conduct he wishes to hold above the state's tort

law. General language in paragraph 9 of the ISP form attempting,

in one broad sweep, to nullify all plaintiff's rights except

those that arise under patent law does not discharge Century's

responsibility of explicit candor to the inventor community, and

all plaintiff's tort claims will not be bundled up and discarded.

Century would cut with an axe where it should be doing so with a

scalpel.

Century's ISP form does, however, contain a more specific

clause purporting to disclaim a specific tort obligation to which

the discussion will now turn. Paragraph 8 of Century's ISP form

contains a clause warning that "no confidential relationship is

being established" between the parties. Century contends this

disclaimer precludes liability for trade secret misappropriation,

as well as for breach of fiduciary duty. Counts IV and II, based

respectively on the two above theories of liability, should fall

under Rule 1 2 (b) according to Century.

Count IV is premised on tort law protection to the owner of

a trade secret for the misappropriation of his ideas. Id. at

36 462. Tort law defines the essence of the wrong as the "breach of

the duty not to disclose or to use without permission

confidential information acquired from another." Id. (quoting

Jet Spray Cooler, Inc. v. Crampton, 377 Mass. 159, 165, 385

N.E.2d 1349, 1354 (1979)). However, the duty not to disclose or

impermissibly use only arises in the context of a confidential

relationship. In the absence of such, the parties are merely

competitors. And, while possibly constituting poor business

ethics, the appropriation of a competitor's trade secrets takes

place outside the common law's strictures in the world of free

market competition. Plaintiff must show that he shared a

confidential relationship with defendant, possessed a trade

secret, and disclosed it to defendant, and that defendant made

use of the disclosure in breach of the confidence reposed in him.

R e s t a t e m e n t of T orts § 757 (1939) .

A confidential relationship may arise by operation of law

from the affiliation of the parties and the context in which the

disclosures are offered. Burten, supra, 763 F.2d at 463. But

courts hold that an implied confidential relationship can be

defeated if the parties, by agreement, expressly disclaim any

such relationship. As one treatise on the subject has noted:

A disclosure expressly received in confidence may create a confidential relationship. Conversely, express disclaimer by the disclosee of a confidential relationship from the outset will

37 dispel the existence of such a relationship.

R. Milgrim, Trade Secrets § 4.03 at 4-18 (1984). However, as it

purports to waive tort liability, the language must clearly and

explicitly indicate unwillingness to enter the relationship.

This is the standard to which Century's waiver of confidential

relationship must be held.

The First Circuit in Burten considered a waiver, similar to

the one at issue here, purporting to negate any confidential

relation between the parties. Burten, supra, 763 F.2d at 464-67.

The clause there boldly and comprehensively disclaimed the

existence of "any relationship" between defendant and plaintiff.

Nonetheless, the court held that this language does not manifest

the reguisite clarity and explicitness. Id. at 466. The court

reasoned that "relationship" can be understood as referring to

the ties between the parties only during defendant's review of

plaintiff's idea. Read this way, the waiver was silent as to the

nature of the ties and obligations that arose after completion of

the review procedure when defendant decided to make affirmative

use of the ideas submitted.

In the instant action. Century did use some of the buzz

words that were absent from the waiver held insufficient in

Burten. While the Burten waiver was of "any relationship," the

more specific waiver here disclaims "any confidential

38 relationship." Although this waiver is more explicit than the

Burten waiver, it is neither unambiguous nor certain. There is

nothing magical about the invocation of "confidential." If, as

the Burten court held, "any relationship" may refer only to ties

during the review procedure, so too may "confidential

relationship" be read that way, thus excluding from the waiver's

coverage any ties and obligations that arose after Century

decided to affirmatively use the idea. This reading is

buttressed by the language of the waiver clause, "It may be

necessary to consult with industry experts. Therefore, no

confidential relationship is being established between us." The

waiver appears to only address Century's potential liability for

failure to maintain secrecy by consulting industry experts in aid

of the review procedure, rather than for disrespecting

plaintiff's proprietary rights should they decide to use the

idea. Granted, this may be only one of several reasonable

understandings of the language, but this is enough for the court

to hold that the language does not constitute a clear and

unambiguous waiver and that Count IV and Count II will not be

dismissed under Rule 12 (b) .

It is a closer call whether the waivers contained in the ISP

form negate any contractual obligations to honor the plaintiff's

proprietary rights in the idea should Century decide to use it.

39 and thus whether plaintiff's breach of contract claim (Count I)

should be dismissed under Rule 1 2 (b). As indicated earlier,

waiver of contractual obligations need not be "clear and

unambiguous" so long as it manifests the parties' intent to bind

themselves to the waiver. Under New Hampshire law, the intent of

the parties is determined from the plain meaning of language used

unless there is an ambiguity. Echo Consulting Services v. North

Conway Bank, 140 N.H. 566, 569, 669 A.2d 227, 230 (1995). If the

language contains more than one reasonable meaning, the contract

is considered ambiguous, and extrinsic evidence is admissible for

clarification. Gamble v. University System of New Hampshire, 136

N.H. 9, 13, 610 A.2d 357, 361 (1992).

The language of Century's form, taken as a whole, is

susceptible to two reasonable interpretations concerning the

contractual rights of the parties should Century decide to use

the idea. The general disclaimer in paragraph 9 may be an

uneguivocal disclaimer of contractual obligations to compensate

plaintiff, regardless of whether Century decides to use the idea.

On the other hand, the point may be to deny any such obligation

to plaintiff, not upon affirmative use of his idea, but rather

for merely undertaking a review. This is supported by paragraph

13 of the form, which provides, "If we are interested in your

idea, you agree to negotiate with us for rights thereto," and

40 indicates that Century's decision to use the idea carried with it

an obligation to honor plaintiff's proprietary rights. Since

there are two reasonable interpretations, the contract is, by

law, ambiguous.

Under New Hampshire law, ambiguities are resolved by the

court as a matter of law. Id., 610 A.2d at 361. Given a choice

between two reasonable interpretations of a contract. New

Hampshire courts "will, where possible, avoid construing the

contract in a manner that leads to harsh and unreasonable results

or places one party at the mercy of others." Id. (quoting Thiem

v. Thomas, 119 N.H. 598, 604, 406 A.2d 115, 119 (1979)). Taking

cue from this principle of construction, this court declines to

read this contract as an uneguivocal waiver of any obligation to

provide any compensation under any condition. Such

interpretation must rest on the assumption that plaintiff

submitted his idea with no expectation of compensation beyond

what was provided as a matter of grace and generosity from

Century. In refusing to entertain such an unreasonable

assumption, this court concurs with the First Circuit when it

pronounced, "We are hard pressed to understand why . . .

inventors would submit their ideas for consideration and thereby

waive all rights to compensation for their work." Burten, supra,

763 F.2d at 467.

41 When each of two parties to a contract have conflicting

expectations, those of one party are not inherently entitled to a

preference in contract construction. And contrary to plaintiff's

expectations. Century may very well have expected to use the idea

free from any contractual rights of the plaintiff. However,

Century must have known plaintiff expected to be paid for use of

the idea. And Century should not profit by receiving ideas

submitted under known expectation of payment, while at the same

time arguing that such expectations are misguided because its

disclaimer shields it from any obligations to pay. To avoid such

harsh results, this court interprets the ambiguous language of

the contract to impose an obligation on Century to respect

plaintiff's proprietary rights in the idea. Therefore,

plaintiff's breach of contract claim (Count I) will not be

b. Conversion

Having ruled that plaintiff's tort and contract claims are

not nullified by the alleged waivers in the ISP form, the court

will now briefly consider Century's further arguments for

dismissal under Rule 1 2 (b). The first of these is that the

conversion claim (Count VI) fails because plaintiff had no

legally protectable property interest in his idea.

42 It is settled New Hampshire law that "conversion is an

intentional exercise of dominion or control over a chattel which

so seriously interferes with the right of another to control it

that the actor may justly be required to pay the other the full

value of the chattel." Curtis Mfg. Co. v. Plasti-Clip Corp., 888

F. Supp. 1212, 1233 (D.N.H. 1994) (quoting LFC Leasing & Fin.

Corp. v. Ashuelot N a t '1 Bank, 120 N.H. 638, 640, 419 A.2d 1120,

1121 (1980)). With respect to conversion of intangible rights,

the R estatement notes: "the law is evidently undergoing a process

of expansion." R estatement (Se c o n d ) o f T o r t s § 2 42 , comment b

(1979). As part of the process of expanding the category of

interests that are protected under conversion law, this court in

Curtis, supra, 888 F. Supp. at 1233, held that the design of a

plastic clip device could be the subject of conversion. This

court found protection due under the general rule,

where ideas are formulated with labor and inventive genius, as in the case of literary works or scientific researches, they are protected. Where they constitute instruments of fair and effective commercial competition, those who develop them may gather their fruits under the protection of the law.

Id. (quoting Pearson v. Dodd, 410 F.2d 701, 707-08 (D.C. Cir.),

cert, denied, 395 U.S. 947 (1969)). There is not so large a

difference in the levels of "labor and inventive genius"

exhibited by a "plastic clip device," on the one hand, and a

43 design for a baby carriage, on the other, that this court could

hold that the former is entitled to protection as a matter of law

and the latter is not. At the very least, it is a jury guestion.

c. Uniform Trade Secret Act of New Hampshire

Next, Century claims that Count VII, brought under the

Uniform Trade Secret Act of New Hampshire (UTSA), RSA 350-B:l,

should be dismissed because plaintiff's idea does not meet the

statutory definition of "trade secret." That term's definition

has evaded precise standards, but "has come to embody a wide

spectrum . . . of information." Kubik, Inc. v. Hull, 56 Mich.

App. 335, 345, 224 N.W.2d 80, 86 (Mich. App. 1974). One of the

benchmark reguirements under the UTSA is that the information not

be readily ascertainable to competitors or the public generally,

RSA 350-B:l, IV, which, according to Century, does not hold true

of plaintiff's design. This seems a peculiar argument for

Century, given that it currently has a patent pending for

essentially the same design. Also, determining whether

information is readily ascertainable to the public reguires the

types of factual judgment that are left to "juries not courts."

Zoecon Indus, v. The American Stockman Tag Co., 713 F.2d 1174,

1179 (7th Cir. 1983). The second statutory reguirement, that the

information be "the subject of efforts that are reasonable under

44 the circumstances to maintain its secrecy," requires similar

factual judgment. The proper forum for Century's arguments

concerning plaintiff's lack of a trade secret is the jury, not

this court, and it is to the jury that this court defers

resolution of the UTSA claim.

d. New Hampshire Consumer Protection Act

Lastly, Century seeks dismissal of Count VIII brought under

New Hampshire's Consumer Protection Act, RSA 358-A (1993), on the

ground that Century's conduct is not covered by the Act. The Act

casts a wide net. Gilmore v. Bradgate Assoc., Inc., 135 N.H.

234, 604 A.2d 555, 557 (1992). In Curtis, this court held that

the Act covered the conduct of a seller of products who

wrongfully appropriated another's idea in designing those

products. Curtis, supra, 888 F. Supp. at 1217. The facts of

Curtis are almost identical to the facts here, which therefore

are controlled by Curtis's holding. Plaintiff's Consumer

Protection Act cause of action will not be dismissed under Rule

12 (b) .

____________________________ Conclusion

For the foregoing reasons, the court denies defendant's

motion to dismiss for lack of personal jurisdiction and to

45 transfer the case to the Northern District of Ohio, and denies

defendant's motion to dismiss as to Counts I through VII of the

complaint.

SO ORDERED.

Shane Devine, Senior Judge United States District Court

October 23, 1996

cc: Paul M. DeCarolis, Esg. Eugene A. Feher, Esg. W. Wright Danenbarger, Esg. Michael E. Sobel, Esg.