Skillsoft Corp. v. Harcourt General, Inc.

770 A.2d 1115, 146 N.H. 305, 2001 N.H. LEXIS 78
CourtSupreme Court of New Hampshire
DecidedApril 18, 2001
DocketNo. 98-514
StatusPublished
Cited by6 cases

This text of 770 A.2d 1115 (Skillsoft Corp. v. Harcourt General, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of New Hampshire primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Skillsoft Corp. v. Harcourt General, Inc., 770 A.2d 1115, 146 N.H. 305, 2001 N.H. LEXIS 78 (N.H. 2001).

Opinion

NADEAU, J.

The defendants, Harcourt General, Inc. (Harcourt) and its subsidiary, National Education Training Group, Inc. (NET), appeal an order of the Superior Court (Hampsey, J.) denying their motion to dismiss for lack of specific personal jurisdiction. The plaintiffs in this declaratory judgment action are Skillsoft Corporation (Skillsoft), a New Hampshire corporation, and its officers, Charles E. Moran, a New Hampshire resident, and Mark Townsend, a resident of the Commonwealth of Massachusetts. We reverse.

The factual background follows. Harcourt is a Delaware corporation with its principal place of business in Chestnut Hill, Massachusetts. NET is a subsidiary of Harcourt, organized under the laws of the State of Nevada. Its principal place of business is in Naperville, Illinois.

Moran is president and chief executive officer (CEO) of Skillsoft. He is also the former president and CEO of NET. Townsend is Skillsoft’s vice president of product development and former vice president for advanced technology at NET.

In early 1995, Moran began consulting for NET, and on May 12, 1995, he was offered employment with NET. During the course of employment negotiations, Moran made it clear that he would accept the position only if he could work one or two days a week from his home in Bedford, New Hampshire. Accordingly, NET shipped the necessary supplies and equipment for Moran to work at home, including a computer and a fax machine. The company also paid for Moran’s weekly commute between New Hampshire and Illinois. During the course of his employment Moran regularly communicated with various NET employees via fax and telephone.

In May 1997, Harcourt acquired NET. This, however, did not affect Moran’s working arrangement. Nevertheless, in June 1997, and again in October 1997, Moran informed Harcourt and NET representatives that he intended to resign and pursue other oppor[307]*307tunities. On November 5, 1997, representatives of Harcourt faxed a standard severance agreement to Moran’s home in New Hampshire for his review. It contained restrictive covenants against Moran divulging NET’s “trade secrets or confidential or proprietary-information,” soliciting NET employees for eighteen months, and affiliating with two of NET’s competitors. Moran refused to accept the severance agreement. The record does not contain any severance agreement ever agreed upon by the parties. In fact, the plaintiffs concede that any alleged restrictions on their business activities are “unsupported by . . . contract.”

Following Moran’s refusal to sign the proposed severance agreement, Harcourt’s legal department sent a letter to Moran’s California counsel indicating Harcourt’s concerns regarding the possibility that Moran breached his corporate fiduciary duties and his obligations under the Illinois Trade Secrets Act. In a January 30, 1998 letter sent from Harcourt directly to Moran, Harcourt expressed additional concerns regarding Moran’s fiduciary duties and the possibility of a continued employee exodus from NET orchestrated by Moran. Finally, in a March 11, 1998 letter from counsel to Moran, Harcourt indicated that the plaintiffs had violated Illinois law by, among other things, breaching fiduciary duties, stealing trade secrets, impermissibly competing with NET and inducing employees to leave NET for jobs with Skillsoft. This letter indicated that Harcourt was prepared to file a lawsuit against the plaintiffs.

On April 17, 1998, the plaintiffs filed a petition for declaratory judgment in superior court, seeking a declaration of their rights in connection with this dispute. On May 5, 1998, the defendants moved to dismiss for lack of personal jurisdiction. The court denied the defendants’ motion, and this appeal followed.

“The plaintiff bears the burden of demonstrating facts sufficient to establish personal jurisdiction over the defendant.” Phelps v. Kingston, 130 N.H. 166, 170 (1987). The plaintiff must offer affirmative proof to substantiate facts that relate to personal jurisdiction. See Brother Records v. HarperCollins Publishers, 141 N.H. 322, 324 (1996), cert. denied, 520 U.S. 1103 (1997). On May 15, 1998, the plaintiffs supplied numerous affidavits substantiating the facts above as well as other facts relative to the employment relationships involved. We look to those affidavits to determine if personal jurisdiction is appropriate.

Ordinarily, “[d]etermining whether a court may exercise personal jurisdiction over a defendant requires a two-part analysis. First, the State’s long-arm statute must authorize such jurisdiction. Second, the requirements of the federal Due Process Clause must be [308]*308satisfied.” Staffing Network, Inc. v. Pietropaolo, 145 N.H. 456, 457 (2000) (citation omitted). Here, however, the defendants do not dispute the applicability of the long-arm statute. Instead, they argue that the superior court’s ruling violated the Due Process Clause of the Fourteenth Amendment of the Federal Constitution. Thus, we focus only upon the constitutional question.

“The federal Due Process Clause permits the exercise of personal jurisdiction over a defendant if the defendant has certain minimum contacts such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Id. (quotation omitted). “Whether constitutionally adequate contacts exist depends on the relationship among the defendant, the forum, and the litigation.” Id. (quotation omitted). While jurisdiction can be general or specific, the plaintiffs argue only that jurisdiction is specific, and we accordingly limit our inquiry. In determining whether sufficient minimum contacts for specific personal jurisdiction exist, we engage in a tripartite inquiry. We look to see if: (1) the contacts relate to the cause of action; (2) the defendants have purposefully availed themselves of the protections of New Hampshire law; and (3) it would be fair and reasonable to require the defendant to defend the suit in New Hampshire. See id. at 458-59, While “[e]ach defendant’s contacts with the forum state must be assessed individually,” Brother Records, 141 N.H. at 325, in this case, where Harcourt is the parent company of NET, the defendants do not attempt to distinguish themselves for purposes of our inquiry. Because we conclude that the only relevant contacts are letters sent by Harcourt in its management of NET personnel, we will conduct only one inquiry.

First, we must determine if the contacts relate to the litigation; that is, the cause of action must arise from the defendants’ contacts with New Hampshire. This “requirement is not met merely because a plaintiff’s cause of action arose out of the general relationship between the parties; rather, the action must directly arise out of the specific contacts between the defendant and the forum state.” Sawtelle v. Farrell, 70 F.3d 1381, 1389 (1st Cir. 1995).

The cause of action in this case is the plaintiffs’ request for a declaration of their right to hire the defendants’ employees and a finding that they have not breached any duty to defendants. Importantly, this is not a contract dispute, as a contract never existed between the parties relative to the alleged rights and duties here at issue. Therefore, the typical contacts that we look to relative [309]*309to contract formation do not aid our analysis in this case. Cf. Staffing Network, 145 N.H.

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Bluebook (online)
770 A.2d 1115, 146 N.H. 305, 2001 N.H. LEXIS 78, Counsel Stack Legal Research, https://law.counselstack.com/opinion/skillsoft-corp-v-harcourt-general-inc-nh-2001.