Display Works, LLC v. Bartley

182 F. Supp. 3d 166, 2016 U.S. Dist. LEXIS 55136, 2016 WL 1644451
CourtDistrict Court, D. New Jersey
DecidedApril 25, 2016
DocketCivil Action No. 16-583
StatusPublished
Cited by100 cases

This text of 182 F. Supp. 3d 166 (Display Works, LLC v. Bartley) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Display Works, LLC v. Bartley, 182 F. Supp. 3d 166, 2016 U.S. Dist. LEXIS 55136, 2016 WL 1644451 (D.N.J. 2016).

Opinion

OPINION

MADELINE COX ARLEO, UNITED STATES DISTRICT JUDGE

THIS MATTER comes before the Court on Defendants Michael Bartley and Derse, Inc,’s (“Derse”) (collectively, “Defendants”) motion to dismiss Plaintiff Display Works, LLC’s (“Display Works” or “Plaintiff’) complaint for lack of personal jurisdiction under Fed. R. Civ. P. 12(b)(2). Dkt. No. 13, Because the Court finds that it has specific jurisdiction over Bartley, but it does not have personal jurisdiction over Derse, the motion is GRANTED IN PART and DENIED IN PART.

I, Factual Background

In this suit, Display Works sues its former west coast executive, Michael Bartley, and his new employer, Derse, for breach of his employment contract, tortious interference, and defamation. This motion challenges the Court’s jurisdiction over Defendants.

Display Works creates customized exhibits for its clients’ use at trade shows arid marketing events. Compl. ¶ 1, Dkt. No. 1. It is a Maryland company with a principal place of business in New Jersey. Id. ¶ 6,

Derse, a Display Works competitor, is incorporated in Wisconsin and has its principal place of business in Milwaukee. Id. ¶ 7; Beckett Deck ¶¶2-3, Dkt. No. 13-3. It is registered to transact business in New Jersey and maintains a designated agent for serve of process in the state. Compl. ¶ 7.

Bartley, a California resident, was Display Works’ Vice President of Operations on the West Coast from 2008 to 2016. Id. ¶¶ 8, 19. In 2008, Bartley entered into an Employment Agreement which contained an attached Non-Competition, Non-Solicitation, and Non-Disclosure Agreement (“Non-Compete Agreement”). Id. ¶ 14. Together, in relevant part, the Agreements prohibited Bartley from hiring, soliciting, accepting work from, inducing, or having an interest in any Display Works employees or customers after he left the company. Id. The Non-Compete Agreement prohibited Bartley from disclosing the company’s confidential proprietary and protected information. Id. ¶ 15. The Employment Agreement also prohibited Bartley from making any unfavorable, disparaging, or negative comments about Display Works after his employment ended. Id. ¶ 16.

During his employment, Bartley operated out of Display Works’ California office, but maintained contacts with the New Jersey headquarters in several ways. He reported directly to Display Works’ officers in New Jersey, he e-mailed and engaged in telephone calls with Display Works’ New Jersey headquarters thousands of times, he participated in strategy and management meetings via teleconferences with individuals in New Jersey, and, at least on one occasion, he was physically present in New Jersey. See Bartley Decl. ¶ 32, Dkt. No. 21-2.

On January 7, 2016, Bartley unexpectedly resigned from Display Works. Compl. [171]*171¶ 31. At the time of his resignation, he was in possession of thumb drives allegedly containing confidential and propriety company information and several personal emails containing client information. Id. ¶¶ 37-38. He never returned them. Id. ¶ 38.

On January 11th, Display Works received a letter from Derse’s attorneys indicating that Bartley began working for Derse and that the covenants imposed in Bartley’s Employment and Non-Compete Agreements were “invalid as a matter of law.” Id. ¶ 41.

Over the next few weeks, several other Display Works employees resigned and began working for Derse. Id. ¶¶ 42, 47, 52. Display Works also obtained e-mails between Bartley, the other employees, and Derse management discussing ways they could transition their Display Works clients to Derse. Id. ¶¶ 43-46. The e-mails indicated that Bartley and the former employees had contacted several clients. Id. ¶ 48. Display Works then started receiving calls from several concerned clients. See id. ¶ 49. The clients stated that they were told by Derse representatives that Display Works was having financial problems, was near financial insolvency, and its continued presence in the market was questionable, among other negative comments. Id. ¶¶ 49-51.

Display Works alleges that, in the three weeks after Bartley’s resignation, five employees left to join Derse, and that Bartley and Derse representatives have approached over two-dozen customers and clients that account for roughly $7 million in sales. Id. ¶ 53.

II. Procedural History

On February. 2, 2016, Display Works filed a complaint alleging causes of action for (1) breach of contract; (2) misappropriation of confidential information and trade secrets; (3) tortious interference with business relations and economic advantage; (4) tortious interference with contract; (5) breach of fiduciary duty; (6) violations of the New Jersey Trade Secrets Act, N.J.S.A. § 56:15; (7) civil conspiracy; (8) violations of the Lanham Act § 43(a)(1), 15 U.S.C. § 1125(a); (9) trade libel and disparagement; and (10) unfair competition.1 Dkt. No. 1. On February 10th, the Court granted Display Works’ application for a Temporary Restraining Order (“TRO”) and Order to Show Cause, which enjoined Derse and Bartley from soliciting Display Works’ customers or employees or divulging any confidential information in anticipation of a preliminary injunction hearing. Dkt. No. 5.

On February 16th, Defendants filed a motion to dismiss for lack of personal jurisdiction under Fed. R. Civ. P. 12(b)(2). Dkt. No. 13. In response, the Court extended the TRO and held a joint hearing on the motion to dismiss and preliminary injunction on February 26th. See Dkt. No. 24. Given the Court’s inability to resolve the personal jurisdiction motion based on the briefing and affidavits provided, the Court further extended the TRO through March 17th and ordered the parties to engage in expedited jurisdictional discovery. Dkt. Nos. 38, 53. The Court held a hearing on March 17th and ordered the restraints on Derse dissolved due to lack of' jurisdiction 'but maintained the restraints on Bartley. Dkt. No. 75. The instant opinion expounds upon the Court’s reasons as set forth on the record that day.

III. Applicable Law

On a motion to dismiss for lack of personal jurisdiction under Federal [172]*172Rule of Civil Procedure 12(b)(2), the plaintiff bears the burden of establishing the court’s jurisdiction over the defendant. Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir.2004). Although the plaintiff must ultimately prove personal jurisdiction by a preponderance of the evidence, such a showing is unnecessary at the early stages of litigation. Mellon Bank (E.) PSFS, Nat. Ass’n v. Farino, 960 F.2d 1217, 1223 (3d Cir.1992). Rather, the plaintiff must “pres-ente ] a prima facie case for the exercise of personal jurisdiction by establishing with reasonable particularity sufficient contacts between the defendant and the forum state.” Id. at 1223. Once the plaintiff meets this burden, the burden shifts to the defendant to establish the presence of other considerations that would render the exercise of personal jurisdiction unreasonable. Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 150 (3d Cir.1992).

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Bluebook (online)
182 F. Supp. 3d 166, 2016 U.S. Dist. LEXIS 55136, 2016 WL 1644451, Counsel Stack Legal Research, https://law.counselstack.com/opinion/display-works-llc-v-bartley-njd-2016.