Meridian Imaging Solutions, Inc. v. Omni Business Solutions LLC

250 F. Supp. 3d 13, 2017 U.S. Dist. LEXIS 63436
CourtDistrict Court, E.D. Virginia
DecidedApril 25, 2017
DocketCase No. 1:17-cv-186
StatusPublished
Cited by14 cases

This text of 250 F. Supp. 3d 13 (Meridian Imaging Solutions, Inc. v. Omni Business Solutions LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Meridian Imaging Solutions, Inc. v. Omni Business Solutions LLC, 250 F. Supp. 3d 13, 2017 U.S. Dist. LEXIS 63436 (E.D. Va. 2017).

Opinion

MEMORANDUM OPINION

T. S. Ellis, III, United States District Judge

In this trade secrets and unfair competition case, defendant William Christopher Brumlow (“Brumlow”) has moved to dismiss all claims against him pursuant to Rule 12(b)(3), Fed. R. Civ. P., or, in the alternative, to stay the proceedings against him and compel arbitration pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 3 & 4. Although Brumlow did not sign the pertinent arbitration agreement, he nonetheless seeks to enforce that agreement against one of the signatories and its parent company.

For the reasons that follow, Brumlow’s Rule* 12(b)(3) motion must be denied, and his motion to compel arbitration and stay proceedings must be granted in part and denied in part.

I.

It is unnecessary to-delve into the facts to conclude that Brumlow’s Rule 12(b)(3)1 motion is a nonstarter. Brumlow [16]*16incorrectly contends that “[a] motion to dismiss for improper venue concerning a forum-selection clause is properly brought under Fed. R. Civ. P. 12(b)(3).” D. Mem. at ll.2 The Supreme Court has recently and explicitly rejected this argument. Atl. Marine Constr. Co. v. U.S. Dist. Ct. for W. Dist. of Tex., — U.S. -, 134 S.Ct. 568, 577, 187 L.Ed.2d 487 (2013) (“[Defendant] contends that a party may enforce a forum-selection clause by seeking dismissal of the suit under ... Rule 12(b)(3). We disagree.”). In Atlantic Marine, the Supreme Court held that “Rule 12(b)(3) [is] not [a] proper mechanism[] to enforce a forum-selection clause,” id. at 580, because “a forum-selection clause does not render venue in a court ... ‘improper’ within the moaning of ,.. Rule 12(b)(3),” id. at 579.3 Thus where, as here, a party seeks “to enforce a forum-selection clause pointing to a state or foreign forum,” Rule 12(b)(3) has no application, and typically the “appropriate” procedure is to seek dismissal pursuant to “the residual doctrine of forum non conveniens[.]” Id. at 580. Put simply, Supreme Court precedent forecloses Brumlow’s Rule 12(b)(3) motion, and thus the motion must be denied.

Because Brumlow has not argued forum non conveniens and the Complaint does not suggest any basis for such an argument, the following analysis is properly limited to Brumlow’s motion to stay or compel arbitration, pursuant to the FAA, 9 U.S.C. §§ 3 & 4.4

II.5

Plaintiffs in this action are Konica Minolta Business Solutions U.S.A., Inc. (“Konica”) and its recently-acquired, wholly-owned subsidiary, Meridian Imaging Solutions, Inc. (“Meridian”).

The six named defendants are:

• two LLCs, OMNI Business Solutions LLC and OMNI Business Systems LLC (collectively, “OMNI”),
[17]*17• three former Meridian employees, Greg Conroy, Scott Westfall, and Ed Lovatt, and
• the movant, William Christopher Brumlow, an employee of a nonparty company, Ricoh Americas Corporation (“Ricoh”), which company is currently in arbitration against Meridian for claims arising out of the same nucleus of operative facts as is alleged in the Complaint.

The basis for subject matter jurisdiction is federal question and supplemental jurisdiction, pursuant to 28 U.S.C. §§ 1331 & 1367. Compl. ¶¶ 24-26. The Complaint alleges the following nine counts.

• Count I: Violation of the Federal Defense of Trade Secrets Act, 18 U.S.C. § 1832 et seq, (brought by both plaintiffs against all defendants);
• Count II: Unfair Competition under Maryland law (brought by both plaintiffs against all defendants);
• Count III: Tortious Interference (brought by only Meridian against Brumlow, the OMNI defendants, Con-roy, and Westfall);
• Count IV: Breach of the Duties of Confidential Relationship and. Loyalty (brought by both plaintiffs against- defendants Conroy, Westfall, and Lo-vatt);
• Count V: Conversion (brought by both plaintiffs against all defendants); •
• Count VI: ' Unjust Enrichment (brought by both plaintiffs against all defendants);
• Count VII: Quantum Meruit (brought by both plaintiffs against' all defendants);
• Count VIII: Violation of the Virginia Uniform Trade Secret Act (brought by both plaintiffs against all defendants); and
• Count IX: Civil Conspiracy—statutory and common law (brought by both plaintiffs against all defendants).

Distilled to its essence, the Complaint alleges that defendants stole plaintiffs’ business information and customers. Specifically, the Complaint alleges, in pertinent part, the following.

• From the late 1990s to mid-March 2016, Meridian was an Authorized dealer for Ricoh. Compl. ¶ 3.
• Meridian and Ricoh' executed their most recent dealer agreement in 2007 (the “Ricoh Agreement”).6 Compl. Ex. 3.
• In mid-March 2016, Konica acquired Meridian. Compl. ¶ 4.
• On March 17, 2016, Ricoh terminated the Ricoh Agreement. Id. ¶ 74.
• Meridian and the OMNI defendants are competitors. They each provide office technology, hardware, software, IT services, and document management solutions to customers in Maryland, Virginia, and the District of Columbia. Id. ¶ 28.
• Defendants Conroy,, Westfall, and Lo-vatt formerly worked together at Meridian, and they currently work together at OMNI Business Solutions to compete directly with Meridian. Id. ¶ 21.
• Brumlow, a major account consultant at Ricoh,7 allegedly worked closely with Conroy, Westfall and Lovatt, both in their former capacities as Meridian employees and in their current roles as employees of OMNIJd ¶ 23.8
[18]*18• Between January and June 2016, Con-roy, while still employed by Meridian, ■ allegedly spoke with the President of OMNI Business Systems about forming an affiliate of OMNI Business Systems to compete directly with Meridian as an authorized Ricoh-brand dealer. Id. ¶ 42.
• Before his departure from Meridian in June 2016, Conroy used Meridian’s computer systems to access Meridian’s confidential files, including business intelligence and information classified as trade secrets. Conroy allegedly obtained these trade secrets for use as an OMNI employee. Id. ¶ 50.

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250 F. Supp. 3d 13, 2017 U.S. Dist. LEXIS 63436, Counsel Stack Legal Research, https://law.counselstack.com/opinion/meridian-imaging-solutions-inc-v-omni-business-solutions-llc-vaed-2017.