Unified Brands, Inc. v. Teders

868 F. Supp. 2d 572, 2012 WL 2369300, 2012 U.S. Dist. LEXIS 88238
CourtDistrict Court, S.D. Mississippi
DecidedJune 19, 2012
DocketCivil Action No. 3:11-cv-63-WHB-LRA
StatusPublished
Cited by9 cases

This text of 868 F. Supp. 2d 572 (Unified Brands, Inc. v. Teders) is published on Counsel Stack Legal Research, covering District Court, S.D. Mississippi primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Unified Brands, Inc. v. Teders, 868 F. Supp. 2d 572, 2012 WL 2369300, 2012 U.S. Dist. LEXIS 88238 (S.D. Miss. 2012).

Opinion

OPINION AND ORDER

WILLIAM H. BARBOUR, JR., District Judge.

This cause is before the Court on the Motion of Defendants, American Equipment Corporation a/k/a and d/b/a American Cook Systems and Troy Holder, to Dismiss, which is brought pursuant to Rules 12(b)(2) and 12(b)(6) of the Federal Rules of Civil Procedure. Having considered the pleadings as well as supporting and opposing authorities, the Court finds the Motion is not well taken and should be denied.

[576]*576I. Factual Background and Procedural History

Plaintiff, Unified Brands, Inc. (“Unified”), is a company engaged in the manufacturing and marketing of food service equipment. In 2010, Unified purchased a company named Intek. At or around the same time as the purchase, Michael Teders (“Teders”), who had then been an executive of Intek, entered an employment contract with that company. The purported purpose of the contract was to retain Teders’s services to both Intek and Unified during the purchase period, as well as during the ensuing period of transition. According to Unified, the employment contract Teders entered with Intek contained a post-restrictive covenant under which he was prohibited from working for any enterprise that engaged in the sale or production of steam cooking equipment for one year.

In August of 2010, Teders began working for Unified as its National Sales Manager. In conjunction with this position, Unified and Teders entered another employment contract under which Teders agreed to maintain the confidentiality of certain business information belonging to Unified for a two-year period following the termination of his employment. Teders also agreed, that for a one-year period following termination, he would not: (1) work for any competitor of Unified and/or Intek; (2) solicit existing customers or active prospects of Unified and/or Intek; and (3) solicit or accept business from any present customer of Unified with which he had contact, or about which he had received information, from Unified.

Unified alleges that in December of 2010, Teders “secretly negotiated” and agreed to accept an employment and/or ownership contract with Defendant, American Equipment Corporation a/k/a and d/b/a American Cook Systems (“AEC”), and with its principal owner, Troy Holder (“Holder”). AEC is identified as a competitor company, which is engaged in the production and sale of commercial steam cooking equipment. Unified further alleges that before announcing his resignation, Teders accessed a laptop computer that had been provided to him by Unified, and downloaded a substantial amount of its sensitive and confidential business information, including pricing information and customer lists. Finally, Unified alleges that after becoming associated with AEC, Teders “solicited, suggested and otherwise encouraged” both its customers and those of Intek to do business with AEC, instead of Unified, in direct violation of the employment contracts he had entered with Unified and Intek.

In February of 2011, Unified filed a lawsuit against Teders in this Court, and an Amended Complaint was later filed by which AEC and Holder were named as additional defendants. Relevant to the matters currently before the Court, the Amended Complaint alleges the following claims against AEC and Holder: violations of the Computer Fraud and Abuse Act (“CFAA”), specifically 18 U.S.C. §§ 1030(a)(2), 1030(a)(4), and 1030(a)(5);1 misappropriation of trade secrets; tortious interference; and negligent supervision. AEC and Holder have now moved for the dismissal of the Amended Complaint, as alleged against them, on the grounds of lack of personal jurisdiction and/or for failure to state a claim upon which relief may be granted.

[577]*577II. Discussion

A. Motion to Dismiss for Lack of Personal Jurisdiction

Under Rule 12(b)(2) of the Federal Rules of Civil Procedure, a lawsuit may be dismissed for lack of personal jurisdiction. “When a nonresident defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing the district court’s jurisdiction over the nonresident.” Jobe v. ATR Mktg., Inc., 87 F.3d 751, 753 (5th Cir.1996). A plaintiff satisfies this burden “by presenting a prima facie case for personal jurisdiction.” Colwell Realty Invs., Inc. v. Triple T Inns of Az., Inc., 785 F.2d 1330, 1333 (5th Cir. 1986). When considering whether the plaintiff has met its burden, the “allegations contained in the complaint, except insofar as controverted by opposing affidavits, must be taken as true.” Id. Thus, the Court may consider matters outside the complaint, including affidavits, when determining whether personal jurisdiction exists. Jobe, 87 F.3d at 753.

In the case sub judice, federal subject matter jurisdiction is based on both 28 U.S.C. § 1331 (federal question) and 28 U.S.C. § 1332 (diversity). Regardless of the statute under which subject matter jurisdiction is exercised, the personal jurisdiction analysis would be the same. The rationale for this conclusion is that in cases in which federal subject matter jurisdiction is based on a federal question, the Court must first look to the service of process provisions of the statute giving rise to the federal question. See e.g. Omni Capital Int’l v. Rudolf Wolff & Co., 484 U.S. 97, 105-06, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987). When the federal statute is silent with regard to service of process, as with the CFAA here, a federal court may exercise personal jurisdiction “over only those defendants who are subject to the jurisdiction of courts of the state in which the court sits.” Point Landing, Inc. v. Omni Capital Int’l, Ltd., 795 F.2d 415, 419 (5th Cir.1986). See also DeMelo v. Toche Marine, Inc., 711 F.2d 1260, 1266 (5th Cir.1983) (explaining: “[W]hen a federal question case is based upon a federal statute that is silent as to service of process, and a state long-arm statute is therefore utilized to serve an out-of-state defendant, Rule 4(e) [of the Federal Rules of Civil Procedure] requires that the state’s standard of amenability to jurisdiction apply.”). Accordingly, the Court applies the personal jurisdiction analysis used in diversity of citizenship cases to both the federal as well as state law claims alleged by Unified.

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868 F. Supp. 2d 572, 2012 WL 2369300, 2012 U.S. Dist. LEXIS 88238, Counsel Stack Legal Research, https://law.counselstack.com/opinion/unified-brands-inc-v-teders-mssd-2012.