Production Group International, Inc. v. Goldman

337 F. Supp. 2d 788, 2004 U.S. Dist. LEXIS 19158, 2004 WL 2181752
CourtDistrict Court, E.D. Virginia
DecidedSeptember 23, 2004
Docket1:04 CV 686
StatusPublished
Cited by36 cases

This text of 337 F. Supp. 2d 788 (Production Group International, Inc. v. Goldman) 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
Production Group International, Inc. v. Goldman, 337 F. Supp. 2d 788, 2004 U.S. Dist. LEXIS 19158, 2004 WL 2181752 (E.D. Va. 2004).

Opinion

MEMORANDUM OPINION

ELLIS, District Judge.

At issue in this diversity breach of contract case are questions of personal jurisdiction, venue, and transfer of venue.

I. 1

Plaintiff Production Group International, Inc. is a Delaware corporation headquartered in Alexandria, Virginia, with over two dozen offices throughout the United States, including three in Florida. Plaintiff creates, produces, and manages promotional events for its corporate clients. Defendant Michael Goldman, a longtime Florida resident, worked in plaintiffs Orlando, Florida office as an event producer from May 1998 until March 2004.

*792 The business relationship between the parties commenced in or around May 1998 with a series of recruiting meetings in Orlando. During the course of the meetings, defendant was interviewed by three of plaintiffs employees, two from plaintiffs Orlando office and one from its Virginia headquarters. As result of the meetings, plaintiff made defendant an offer of employment conditioned on defendant’s signing a “Code of Conduct Agreement” prohibiting him from (1) “solicit[ing] or divert[ing]” any of plaintiffs clients for eighteen months after termination of employment, or (2) “divulg[ing],” at any time during employment or after termination, information related to plaintiffs business operations. The agreement was drafted in Virginia, but contained neither choice-of-law nor choice-of-forum clauses. Defendant received the agreement via U.S. mail at his home in Florida, where he signed and delivered it to his supervisor in Orlando. During the ensuing six-year period of employment, defendant communicated frequently with plaintiffs Virginia employees on business matters, and made three trips to plaintiffs Virginia headquarters for business meetings.

In late 2002 or early 2003, defendant, via teleconference and email, assisted some of plaintiffs Virginia-based employees (“the Virginia team”) with the creation of a sales pitch for Red Bull GmbH (“Red Bull”), an Austrian energy-drink manufacturer with an American subsidiary headquartered in Santa Monica, California. As a result of the sales pitch, Red Bull hired plaintiff to produce and manage two promotional motorcycle racing events in 2003, the first in October in Dallas, Texas, and the second in November in Las Vegas, Nevada. From his Florida office, defendant served as the executive producer of both events.

In late 2003 or early 2004, defendant— again, through electronic means of communication — helped the Virginia team plan a series of similar events for Red Bull to take place in the summer of 2004. In March 2004, however, defendant resigned his employment with plaintiff and began working for MJM Creative Services (“MJM”), a Florida-based competitor of plaintiffs, where he allegedly used the plans he helped plaintiffs Virginia team generate to solicit and divert Red Bull’s patronage from plaintiff to MJM.

In June 2004, plaintiff filed this diversity action for breach of the Code of Conduct Agreement’s non-solicitation and confidentiality clauses. Defendant now moves to dismiss for lack of personal jurisdiction and for improper venue, or, in the alternative, for transfer of venue to the Middle District of Florida. For the reasons that follow, this motion must be denied.

II.

A. Personal Jurisdiction

Defendant contends that his alleged contacts with the Commonwealth of Virginia — accepting and maintaining employment with a Virginia-based company, communicating regularly with Virginia-based colleagues on business matters, and traveling to Virginia three times for business purposes — are insufficient to establish personal jurisdiction under either the Virginia long-arm statute, Va.Code § 8.01-328.1, or the Due Process Clause of the Fourteenth Amendment.

When a defendant challenges a court’s exercise of personal jurisdiction, the plaintiff ordinarily must “prove the existence of a ground for jurisdiction by a preponderance of the evidence.” Combs v. Bakker, 886 F.2d 673, 676 (4th Cir.1989). But when, as here, a court addresses the question solely on the basis of threshold motion papers, pleadings, and supporting memoranda, the plaintiffs burden is mere *793 ly to make a prima facie showing of a sufficient jurisdictional basis. Id. Under such circumstances, a court must construe all relevant pleading allegations in the light most favorable to the plaintiff and draw all reasonable inferences for the existence of jurisdiction. Id; see also Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 59-60 (4th Cir.1993). 2

Resolution of a personal jurisdiction challenge by a non-resident defendant requires a two-step inquiry. Ellicott Mach. Corp., Inc. v. John Holland Party Ltd., 995 F.2d 474, 477 (4th Cir.1993); English & Smith v. Metzger, 901 F.2d 36, 38 (4th Cir.1990). First, a court must assess whether Virginia’s long-arm statute authorizes jurisdiction over the defendant in the circumstances presented. Ellicott, 995 F.2d at 477. Second, it must determine whether due process forbids the exercise of jurisdiction in those circumstances. Id.; English & Smith, 901 F.2d at 38. This two-step jurisdictional analysis, applied here, compels the conclusion that personal jurisdiction is proper in this case.

1. Virginia’s Long-Arm Statute

Plaintiffs argument in favor of personal jurisdiction relies exclusively on subsection (A)(1) of the Virginia long-arm statute, which provides for the exercise of personal jurisdiction over a defendant “transacting any business” in Virginia, provided that the cause of action asserted “arises from” the business transacted. Va. Code § 8.01-328.1(A)(1) (2004). 3 Virginia’s long-arm statute is a “single act” statute, which means that even a single act of business can confer jurisdiction provided that it is “significant” and demonstrates “purposeful activity” in Virginia. John G. Kolbe, Inc. v. Chromodern Chair Co., Inc., 211 Va. 736, 180 S.E.2d 664, 667 (1971); DeSantis v. Hafner Creations, Inc., 949 F.Supp. 419, 424 (E.D.Va.1996). While no bright-line rule, exists to distinguish the level of activity sufficient to confer jurisdiction from the level that falls short, it is clear that merely entering into a contract with a resident party will not subject a nonresident defendant to personal jurisdiction in the resident’s forum unless some substantial part of contractual formation or performance occurs in Virginia. 4

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337 F. Supp. 2d 788, 2004 U.S. Dist. LEXIS 19158, 2004 WL 2181752, Counsel Stack Legal Research, https://law.counselstack.com/opinion/production-group-international-inc-v-goldman-vaed-2004.