UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ______________________________ ) MODIS, INC., ) ) Plaintiff, ) ) v. ) Civil Action No. 09-1051 (RWR) ) INFOTRAN SYSTEMS, INC et al., ) ) ) Defendants. ) ______________________________)
MEMORANDUM OPINION AND ORDER
Plaintiff Modis, Inc. (“Modis”) brings this diversity action
for damages and injunctive relief against defendants Infotran
Systems, Inc. (“Infotran”) and Tien H. Tran (“Tran”), alleging
breach of contract. The defendants move to dismiss for lack of
subject matter jurisdiction, arguing that the complaint failed to
allege sufficient facts to satisfy the jurisdictional amount in
controversy requirement necessary for diversity jurisdiction.
Because the plaintiff has amply supplemented the complaint with
facts supporting the assertion that the amount in controversy
exceeds $75,000, the defendants’ motion to dismiss will be
denied.
BACKGROUND
Modis is an information technology service provider that
contracts with other entities to provide staffing for “complex IT
challenges,” and staffing for work on various computer systems -2-
and databases. (Compl. ¶¶ 6, 10.) Modis contracted with
Computer Science Corporation (“CSC”) to provide information
technology support to CSC in connection with CSC’s contract to
perform work for the United States Customs and Immigration
Services (“USCIS”). (Id. ¶ 6.)
In April 2006, Modis recruited Tran to work as an
independent contractor at CSC to support the information
technology work that CSC was performing for the USCIS. Modis
required Tran on behalf of his company, Infotran, to sign an
Independent Contractor Agreement that restricted the use of
confidential information and that contained a non-compete
provision. Tran agreed to refrain from soliciting or accepting
employment from any client of Modis (including CSC) or from any
entity or person with whom Tran had personal contact or whom he
met while providing services for CSC without the written consent
of Modis “during the term of [the] Agreement and for a period of
one (1) year thereafter[.]” (Compl. ¶¶ 12-13, 28-30.) The
Agreement provided that if the defendants breached the
restrictive covenants, Modis would be entitled to injunctive
relief and a fee equal to 125 percent of the fee that Modis would
have earned if it had provided the services. (Id. ¶ 31; Pl.’s
Opp’n to Defs.’ Mot. to Dismiss (“Pl.’s Opp’n”) at 6.)
In May 2009, the defendants gave to Modis a letter stating
that they were terminating their relationship with Modis. -3-
(Compl. ¶ 34.) Modis then filed the one-count breach of contract
complaint in this matter against both defendants, alleging that
the defendants are currently competing with Modis for placement
opportunities with CSC. (Id. ¶ 35.) The complaint seeks
injunctive and compensatory relief, and it asserts that “the
amount in controversy exceeds $75,000, exclusive of interests and
costs.” (Id. ¶ 8.)
The defendants have moved under Federal Rule of Civil
Procedure 12(b)(1) to dismiss the complaint, arguing that the
court lacks jurisdiction because the complaint fails to provide a
sufficient factual basis to support that the amount in
controversy exceeds $75,000. (Defs.’ Mem. in Supp. of Mot. to
Dismiss at 1.) The plaintiff opposes, arguing that the complaint
contains a good-faith assertion that the amount in controversy
exceeds $75,000, and its opposition provides ample supplemental
facts supporting the claimed amount. (Pl.’s Opp’n at 1-2.)
DISCUSSION
The complaint alleges diversity jurisdiction under 28 U.S.C.
§ 1332(a)(1), which provides for federal jurisdiction over civil
actions between citizens of different states where the amount in
controversy, exclusive of interest and costs, exceeds $75,000.
See 28 U.S.C. § 1332(a). “Before a court may address the merits
of a complaint, it must assure that it has jurisdiction to
entertain the claims.” Highland Renovation Corp. v. Hanover Ins. -4-
Group, 620 F. Supp. 2d 79, 81 (D.D.C. 2009) (quoting Osseiran v.
Int'l Fin. Corp., 498 F. Supp. 2d 139, 143 (D.D.C. 2007) (quoting
Rodriguez v. Nat’l Ctr. for Missing & Exploited Children, Civil
Action No. 03-120 (RWR), 2005 WL 736526, at *6 (D.D.C. Mar. 31,
2005)).
A court must accept all of the factual allegations in the
complaint as true in considering whether to dismiss a complaint
for lack of subject matter jurisdiction, but may consider
materials outside the pleadings. See Jerome Stevens Pharms.,
Inc. v. FDA, 402 F.3d 1249, 1253-54 (D.C. Cir. 2005). “When the
defendant challenges the jurisdictional amount, plaintiff must
come forward with some facts in support of her assertion that the
jurisdictional amount has been met.” Mace v. Domash, 550 F.
Supp. 2d 101, 104 (D.D.C. 2008). When determining a
jurisdictional challenge based upon an insufficient amount in
controversy, a court “may consider the complaint supplemented by
undisputed facts evidenced in the record, or the complaint
supplemented by undisputed facts plus the court’s resolution of
disputed facts.” Herbert v. National Acad. of Sciences, 974 F.2d
192, 197 (D.C. Cir. 1992); see also Highland Renovation Corp.,
620 F. Supp. 2d at 81 (quoting Coalition for Underground
Expansion v. Mineta, 333 F.3d 193, 198 (D.C. Cir. 2003) (quoting
Herbert v. Nat’l Acad. of Sciences, 974 F.2d 192, 197 (D.C. Cir.
1992)). When assessing whether a claim meets the amount in -5-
controversy requirement, “the sum claimed by the plaintiff
controls if the claim is apparently made in good faith.” St.
Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288 (1938)
(footnotes omitted). However, where it appears certain that the
claim asserted in the complaint will be for less than the
jurisdictional amount, even if the claim was made in good faith,
dismissal is justified. Hunter v. Dist. of Columbia, 384 F.
Supp. 2d 257, 260 (D.D.C. 2005). Courts should be “very
confident that a party cannot recover the jurisdictional amount
before dismissing the case for want of jurisdiction.” Rosenboro
v. Kim, 994 F.2d 13, 17 (D.C. Cir. 1993).
Here, the defendants provide no evidence showing that the
amount in controversy is certain to be less than $75,000. In
addition, Modis attached to its opposition the declaration of Tim
Martin, the sales director for Modis’ Governmental Services
Group, who asserts personal knowledge that Tran has contracted
directly with CSC and is directly competing with Modis.1 Martin
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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ______________________________ ) MODIS, INC., ) ) Plaintiff, ) ) v. ) Civil Action No. 09-1051 (RWR) ) INFOTRAN SYSTEMS, INC et al., ) ) ) Defendants. ) ______________________________)
MEMORANDUM OPINION AND ORDER
Plaintiff Modis, Inc. (“Modis”) brings this diversity action
for damages and injunctive relief against defendants Infotran
Systems, Inc. (“Infotran”) and Tien H. Tran (“Tran”), alleging
breach of contract. The defendants move to dismiss for lack of
subject matter jurisdiction, arguing that the complaint failed to
allege sufficient facts to satisfy the jurisdictional amount in
controversy requirement necessary for diversity jurisdiction.
Because the plaintiff has amply supplemented the complaint with
facts supporting the assertion that the amount in controversy
exceeds $75,000, the defendants’ motion to dismiss will be
denied.
BACKGROUND
Modis is an information technology service provider that
contracts with other entities to provide staffing for “complex IT
challenges,” and staffing for work on various computer systems -2-
and databases. (Compl. ¶¶ 6, 10.) Modis contracted with
Computer Science Corporation (“CSC”) to provide information
technology support to CSC in connection with CSC’s contract to
perform work for the United States Customs and Immigration
Services (“USCIS”). (Id. ¶ 6.)
In April 2006, Modis recruited Tran to work as an
independent contractor at CSC to support the information
technology work that CSC was performing for the USCIS. Modis
required Tran on behalf of his company, Infotran, to sign an
Independent Contractor Agreement that restricted the use of
confidential information and that contained a non-compete
provision. Tran agreed to refrain from soliciting or accepting
employment from any client of Modis (including CSC) or from any
entity or person with whom Tran had personal contact or whom he
met while providing services for CSC without the written consent
of Modis “during the term of [the] Agreement and for a period of
one (1) year thereafter[.]” (Compl. ¶¶ 12-13, 28-30.) The
Agreement provided that if the defendants breached the
restrictive covenants, Modis would be entitled to injunctive
relief and a fee equal to 125 percent of the fee that Modis would
have earned if it had provided the services. (Id. ¶ 31; Pl.’s
Opp’n to Defs.’ Mot. to Dismiss (“Pl.’s Opp’n”) at 6.)
In May 2009, the defendants gave to Modis a letter stating
that they were terminating their relationship with Modis. -3-
(Compl. ¶ 34.) Modis then filed the one-count breach of contract
complaint in this matter against both defendants, alleging that
the defendants are currently competing with Modis for placement
opportunities with CSC. (Id. ¶ 35.) The complaint seeks
injunctive and compensatory relief, and it asserts that “the
amount in controversy exceeds $75,000, exclusive of interests and
costs.” (Id. ¶ 8.)
The defendants have moved under Federal Rule of Civil
Procedure 12(b)(1) to dismiss the complaint, arguing that the
court lacks jurisdiction because the complaint fails to provide a
sufficient factual basis to support that the amount in
controversy exceeds $75,000. (Defs.’ Mem. in Supp. of Mot. to
Dismiss at 1.) The plaintiff opposes, arguing that the complaint
contains a good-faith assertion that the amount in controversy
exceeds $75,000, and its opposition provides ample supplemental
facts supporting the claimed amount. (Pl.’s Opp’n at 1-2.)
DISCUSSION
The complaint alleges diversity jurisdiction under 28 U.S.C.
§ 1332(a)(1), which provides for federal jurisdiction over civil
actions between citizens of different states where the amount in
controversy, exclusive of interest and costs, exceeds $75,000.
See 28 U.S.C. § 1332(a). “Before a court may address the merits
of a complaint, it must assure that it has jurisdiction to
entertain the claims.” Highland Renovation Corp. v. Hanover Ins. -4-
Group, 620 F. Supp. 2d 79, 81 (D.D.C. 2009) (quoting Osseiran v.
Int'l Fin. Corp., 498 F. Supp. 2d 139, 143 (D.D.C. 2007) (quoting
Rodriguez v. Nat’l Ctr. for Missing & Exploited Children, Civil
Action No. 03-120 (RWR), 2005 WL 736526, at *6 (D.D.C. Mar. 31,
2005)).
A court must accept all of the factual allegations in the
complaint as true in considering whether to dismiss a complaint
for lack of subject matter jurisdiction, but may consider
materials outside the pleadings. See Jerome Stevens Pharms.,
Inc. v. FDA, 402 F.3d 1249, 1253-54 (D.C. Cir. 2005). “When the
defendant challenges the jurisdictional amount, plaintiff must
come forward with some facts in support of her assertion that the
jurisdictional amount has been met.” Mace v. Domash, 550 F.
Supp. 2d 101, 104 (D.D.C. 2008). When determining a
jurisdictional challenge based upon an insufficient amount in
controversy, a court “may consider the complaint supplemented by
undisputed facts evidenced in the record, or the complaint
supplemented by undisputed facts plus the court’s resolution of
disputed facts.” Herbert v. National Acad. of Sciences, 974 F.2d
192, 197 (D.C. Cir. 1992); see also Highland Renovation Corp.,
620 F. Supp. 2d at 81 (quoting Coalition for Underground
Expansion v. Mineta, 333 F.3d 193, 198 (D.C. Cir. 2003) (quoting
Herbert v. Nat’l Acad. of Sciences, 974 F.2d 192, 197 (D.C. Cir.
1992)). When assessing whether a claim meets the amount in -5-
controversy requirement, “the sum claimed by the plaintiff
controls if the claim is apparently made in good faith.” St.
Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288 (1938)
(footnotes omitted). However, where it appears certain that the
claim asserted in the complaint will be for less than the
jurisdictional amount, even if the claim was made in good faith,
dismissal is justified. Hunter v. Dist. of Columbia, 384 F.
Supp. 2d 257, 260 (D.D.C. 2005). Courts should be “very
confident that a party cannot recover the jurisdictional amount
before dismissing the case for want of jurisdiction.” Rosenboro
v. Kim, 994 F.2d 13, 17 (D.C. Cir. 1993).
Here, the defendants provide no evidence showing that the
amount in controversy is certain to be less than $75,000. In
addition, Modis attached to its opposition the declaration of Tim
Martin, the sales director for Modis’ Governmental Services
Group, who asserts personal knowledge that Tran has contracted
directly with CSC and is directly competing with Modis.1 Martin
believes that Tran has been violating the Agreement since October
2008, and reports that Tran generated $328,708.96 in revenue for
Modis from CSC in 2008. (Pl.’s Opp’n, Ex. 1 ¶ 3.) Whether
1 Defendants do not dispute that they have contracted directly with CSC. In an interesting twist, their reply, attaching a copy of an email from Martin, reflects that Modis urged defendants to contract directly with CSC as a small business front for Modis. It seems that defendants have stopped playing along as a pass-through, and Modis is putting the squeeze on defendants for fronting as Modis urged but not sharing the revenue. -6-
viewed as an estimate of lost revenues or a valuation of the
competing services, this provides a good faith basis for
asserting the required amount in controversy. So does Martin’s
belief that defendants bill at $130 per hour and would have
earned at least $420,700 from CSC that can be recovered by Modis
under the Agreement. (Id. ¶ 3.) Modis has provided facts
showing that the requisite jurisdictional amount has been alleged
in good faith. The defendants’ motion to dismiss will be denied.
CONCLUSION AND ORDER
Because the plaintiff has come forward with facts supporting
a good faith assertion that the amount in controversy exceeds
$75,000, it is hereby
ORDERED that the defendants’ motion [4] to dismiss this case
for lack of jurisdiction be, and hereby is, DENIED.
SIGNED this 15th day of December, 2009.
/s/ RICHARD W. ROBERTS United States District Judge