Wilcox v. Hansen, et al. CV-11-551-PB 4/13/12
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Wilcox Industries Corp.
v. Case N o . 11-cv-551-PB Opinion N o . 2012 DNH 072 Mark Hansen, Advanced Life Support Technologies, Inc.
MEMORANDUM AND ORDER
Wilcox Industries Corp. (“Wilcox”), a New Hampshire
corporation, is suing the Virginia-based Advanced Life Support
Technologies, Inc. (“ALST”) and its president and founder, Mark
Hansen. Wilcox claims that ALST is liable for misappropriation
of trade secrets, common-law unfair competition, violation of
the New Hampshire Consumer Protection Act, and intentional
interference with contractual relations. Wilcox asserts that
its claims against ALST arise out of ALST’s contacts with New
Hampshire while the parties were involved in a two-year
consulting relationship. ALST moves to dismiss the complaint
for lack of personal jurisdiction.1 For the reasons provided
below, I deny the motion.
1 Hansen and ALST also move to dismiss the complaint for failure to state a claim upon which relief may be granted. Doc. N o . 1 1 . Alternatively, they move for entry of an order pursuant to Rule 12(e), requiring Wilcox to provide a more definite statement as 1 I. BACKGROUND
Hansen formed ALST in 2006, while he was employed at Wilcox
as Vice President of Virginia Beach Operations. When his
employment at Wilcox ended in 2007, Hansen and Wilcox initiated
discussions about entering into a consulting agreement, whereby
ALST would serve as a consultant for Wilcox in the design and
manufacture of its respirator systems and provide training and
support for those systems to Wilcox’s customers. Teetzel Decl.
¶¶ 5-6, Doc. N o . 19-8. During those discussions, Hansen acted
on behalf of ALST. Id. He sent emails to Wilcox’s employees in
New Hampshire from his personal email address expressing his
interest in providing consulting services to Wilcox. See Doc.
N o . 19-9; Doc. N o . 19-10. He also communicated with them via
telephone. Teetzel Decl. ¶ 5 , Doc. N o . 19-8.
Wilcox proposed that the parties sign a formal consulting
agreement. Id. ¶ 7 . The proposed agreement named ALST as the
“consultant” and Hansen as “the sole representative” of ALST who
would provide the services outlined in the agreement. See Doc.
N o . 19-11 at 3 . ALST, however, refused to sign that agreement
and indicated that it would not sign any type of formal
agreement. Teetzel Decl. ¶ 8 , Doc. N o . 19-8.
to Counts I and V of the complaint. Doc. N o . 1 2 . I will rule on those motions in a separate order.
2 Hansen subsequently negotiated an informal consulting
arrangement with Wilcox. As was the case during the
negotiations that predated the proposed formal agreement, Hansen
communicated with Wilcox from his personal, as opposed to the
company’s, email address. See Doc. N o . 19-12. Once the
agreement was reached, he stated, “I am ready to go to work!”
Id. ALST later submitted invoices for Hansen’s services to
Wilcox and Wilcox made payments to ALST. See Doc. N o . 19-4;
Doc. N o . 19-5.
In the course of the consulting relationship, Hansen
traveled to Wilcox’s New Hampshire facility to participate in
meetings about the development of Wilcox’s next-generation
PATRIOT life support device. Teetzel Decl. ¶ 1 0 , Doc. N o . 19-8.
During that time, Hansen also traveled with Wilcox’s employees
to various customer locations throughout the world to market
Wilcox’s current PATRIOT product and to train customers on how
to use the device. West Aff. ¶ 8 , Doc. N o . 19-2. Through those
activities, Hansen was allegedly entrusted with trade secrets
that he and ALST subsequently misappropriated and used to
compete unfairly against Wilcox. While purporting to train
Wilcox’s customers and market the life support systems on
Wilcox’s behalf, Hansen also allegedly marketed ALST to Wilcox’s
3 customers and promoted products and services that competed with
Wilcox.
Shortly after the consulting relationship ended in 2009,
ALST began marketing and selling its own hybrid life support
system. Wilcox contends that ALST’s device incorporates
confidential design and mechanical aspects of Wilcox’s next-
generation PATRIOT product that were discussed at meetings that
Hansen attended in New Hampshire and in communications directed
to and from New Hampshire. See Teetzel Decl. ¶¶ 10-11, Doc. N o .
19-8. Wilcox also alleges that ALST used Wilcox’s confidential
customer information, which Hansen learned of in the course of
the consulting relationship, to solicit business from Wilcox’s
existing customers and make harmful statements about Wilcox.
II. STANDARDS OF REVIEW
A. Motion to Dismiss
In objecting to a motion to dismiss for lack of personal
jurisdiction, the plaintiff bears the burden of persuading
the court that personal jurisdiction exists. Astro-Med, Inc.
v . Nihon Kohden Am., Inc., 591 F.3d 1 , 8 (1st Cir. 2009).
Because I have not held a hearing on the motion, Wilcox must
make a prima facie showing that the court has personal
jurisdiction over ALST. Cossaboon v . M e . Med. Ctr., 600 F.3d 4 2 5 , 31 (1st Cir. 2010). A prima facie showing requires the
plaintiff to “proffer[] evidence which, if credited, is
sufficient to support findings of all facts essential to
personal jurisdiction.” Lechoslaw v . Bank of Am., N.A., 618
F.3d 4 9 , 54 (1st Cir. 2010) (internal quotation marks
omitted). I will consider Wilcox’s facts to the extent they
are supported by the evidence and consider the facts offered
by ALST “to the extent that they are uncontradicted.”
Cossaboon, 600 F.3d at 31 (internal quotation marks omitted).
Despite the liberality of the prima facie standard, I will
not “credit conclusory allegations or draw farfetched
inferences.” Negron-Torres v . Verizon Commc’ns, 478 F.3d 1 9 ,
23 (1st Cir. 2007).
B. Personal Jurisdiction
Personal jurisdiction in a diversity action over a non-
resident defendant depends on satisfying both the requirements of
the forum state’s long-arm statute and the due process
requirements of the Fourteenth Amendment. See Cossaboon, 600
F.3d at 29 n.1; N . Laminate Sales, Inc. v . Davis, 403 F.3d 1 4 , 24
(1st Cir. 2005). New Hampshire’s long-arm statutes, RSA § 293-
A:15.10 and RSA § 510:4, extend personal jurisdiction to the
5 extent allowed by due process. 2 Hemenway v . Hemenway, 159 N.H.
680, 685 (2010); see also N . Laminate Sales, 403 F.3d at 2 4 ; Jet
Wine & Spirits, Inc. v . Bacardi & Co., Ltd., 298 F.3d 1 , 7 (1st
Cir. 2002).
A court may exercise either general or specific personal
jurisdiction, depending on the nature of the defendant’s
contacts with the forum state. Carreras v . PMG Collins, LLC,
660 F.3d 549, 552 (1st Cir. 2011). In this case, Wilcox asserts
that specific personal jurisdiction applies.3 Specific personal
jurisdiction has three parts. Adelson v . Hananel, 652 F.3d 7 5 ,
80 (1st Cir. 2011). The first part asks “whether the asserted
causes of action arise from or relate to the defendant’s
contacts with the forum;” the second asks “whether the defendant
purposefully availed itself of the protections of the forum’s
laws by means of those contacts, such that the defendant could
reasonably foresee being haled into the forum’s courts;” and the
third asks “whether an exercise of jurisdiction is consistent
2 RSA is an abbreviation for New Hampshire Revised Statutes Annotated. 3 ALST argues that Wilcox limited itself to a claim of general jurisdiction because it asserted in its complaint that Hansen was ALST’s alter ego. This argument is obviously incorrect. Alter ego liability can serve as a basis for either general or specific jurisdiction in an appropriate case. Here, it is quite clear that Wilcox is basing its personal jurisdiction argument on a claim that the court has specific personal jurisdiction over ALST. 6 with principles of justice and fair play” in light of the so-
called gestalt factors. Carreras, 660 F.3d at 554 (internal
quotation marks and citations omitted). All three requirements
must be satisfied to support a finding of specific personal
jurisdiction. Negron-Torres, 478 F.3d at 2 5 .
II. ANALYSIS
ALST contends that Wilcox has not made a prima facie showing
that this court has personal jurisdiction over ALST.
Specifically, ALST argues that the evidence Wilcox submitted in
support of personal jurisdiction establishes, at most, that
Hansen entered into the consulting agreement with Wilcox not on
behalf of ALST but in his personal capacity. Accordingly, ALST
argues, Hansen’s conduct in New Hampshire that gave rise to this
suit is not attributable to ALST. Because the record evidence,
viewed in the light most favorable to Wilcox, establishes a prima
facie case for personal jurisdiction, I deny ALST’s motion.
A. ALST’s Contacts with the Forum
To establish that ALST had sufficient minimum contacts with
New Hampshire such that the exercise of personal jurisdiction
would be proper, Wilcox may rely on “actions imputed to [ALST]
through its agents — as indeed it must, because any action
legally attributed to a corporation is that of one agent or 7 another.” Jet Wine & Spirits, 298 F.3d at 7 ; see United Elec.,
Radio & Mach. Workers of Am. v . 163 Pleasant S t . Corp., 960 F.2d
1080, 1090 (1st Cir. 1992) (due to the nature of the corporate
form, “the contacts of a corporation’s agent can subject the
corporation to personal jurisdiction”). The disputed issue is
whether Hansen acted on behalf of ALST in providing consulting
services to Wilcox such that his resulting contacts with New
Hampshire can be imputed to ALST.
Wilcox contends that it entered into a consulting
arrangement with ALST through Hansen as its agent. Wilcox
further asserts that Hansen, as the sole representative of ALST
who provided the agreed-upon services, attended meetings in New
Hampshire where he was entrusted with Wilcox’s trade secrets
that he and ALST subsequently misappropriated. In addition,
Wilcox asserts that ALST, through Hansen, directed email and
telephone communications to New Hampshire-based employees of
Wilcox discussing those trade secrets.
ALST disputes that Hansen acted on behalf of the company
when he entered into the consulting arrangement and provided
services to Wilcox. ALST argues that the evidence Wilcox
submitted in support of personal jurisdiction establishes, at
most, that the two companies contemplated entering into a
consulting agreement, but that ALST refused to sign i t . 8 According to ALST, the evidence shows that Hansen then entered
into a consulting arrangement with Wilcox not on behalf of ALST
but in his personal capacity. Accordingly, his conduct in New
Hampshire that gave rise to this suit is not attributable to
ALST.
Evidence in the record, viewed in the light most favorable
to Wilcox, supports Wilcox’s assertions that Hansen acted on
behalf of ALST. ALST does not dispute that Hansen acted as its
agent in attempting to negotiate a formal agreement between the
two companies. That agreement named ALST as the consultant and
Hansen as the sole representative of ALST who would provide
consulting services to Wilcox. See Doc. N o . 19-11 at 3 . When
ALST refused to sign the agreement, Hansen continued to
negotiate with Wilcox on an informal consulting arrangement.
Nothing in the record suggests that Hansen began acting in a
personal capacity rather than as ALST’s agent when he negotiated
the informal agreement with Wilcox.
In arguing otherwise, ALST makes much of the fact that
Hansen used his personal, as opposed to the company’s, email
address in the subsequent communications with Wilcox, and
stated, “I am ready to go to work,” as evidence that he was
acting in his personal capacity. See Doc. N o . 19-12. ALST,
however, fails to mention that Hansen used the same email 9 address during the initial negotiations between Wilcox and ALST
that predated the proposed formal agreement, and that in those
emails, he similarly referred to himself as the person who would
provide the consulting services to Wilcox. See Doc. N o . 19-9.
In any event, the fact that ALST submitted invoices to
Wilcox for Hansen’s consulting services and that Wilcox made
payments directly to ALST is sufficient to show that Hansen
acted as ALST’s agent in providing those services. By knowingly
accepting the benefits of the arrangement, ALST ratified
Hansen’s actions, such that they are treated as having been
authorized from the outset. See Daynard v . Ness, Motley,
Loadholt, Richardson & Poole, P.A., 290 F.3d 4 2 , 55 (1st Cir.
2002) (“Whether or not an agent is initially authorized to act
on behalf of a principal, the agent’s actions may be attributed
to the principal, for purposes of personal jurisdiction, if the
principal later ratifies the agent’s conduct.”); Inn Foods,
Inc. v . Equitable Co-op. Bank, 45 F.3d 5 9 4 , 598 n.7 (1st Cir.
1995) (noting that “benefits received are certainly strong
evidence that the principal acquiesced in the agent’s
transaction”). Therefore, it is consistent with due process to
attribute to ALST Hansen’s contacts with New Hampshire in the
course of the consulting arrangement.
10 B. Personal Jurisdiction over Misappropriation Claim
With respect to its misappropriation claim, Wilcox has made
a prima facie showing that this court has personal jurisdiction
over ALST. Wilcox has satisfied its burden to demonstrate that
the claim is related to ALST’s contacts in New Hampshire, that
ALST purposefully availed itself of the benefits of conducting
business in the forum, and that the exercise of jurisdiction is
reasonable. I discuss each element in turn.
1. Relatedness
The relatedness inquiry asks whether “the cause of action
[underlying the litigation] either arises directly out o f , or is
related t o , the defendant’s forum-based contacts.” Harlow v .
Children’s Hosp., 432 F.3d 5 0 , 61 (1st Cir. 2005). Wilcox’s
asserted causes of action against ALST sound in tort.
Therefore, the court “must probe the causal nexus between the
defendant’s contacts and the plaintiff’s cause of action.”
Phillips Exeter Acad. v . Howard Phillips Fund, Inc., 196 F.3d
284, 289 (1st Cir. 1999). In undertaking this inquiry, courts
ordinarily ask both whether “the injury would not have occurred
‘but for’ the defendant’s forum-state activity” (cause in fact)
and whether “the defendant’s in-state conduct gave birth to the
cause of action” (proximate cause). Mass. Sch. of Law v . Am.
Bar Ass’n, 142 F.3d 2 6 , 35 (1st Cir. 1998). “Although ‘strict 11 adherence to a proximate cause standard in all circumstances is
unnecessarily restrictive,’ in most cases, ‘the proximate cause
standard better comports with the relatedness inquiry because it
so easily correlates to foreseeability, a significant component
of the jurisdictional inquiry.’” Harlow, 432 F.3d at 61
(quoting Nowak v . Tak How Invs., Ltd., 94 F.3d 7 0 8 , 715 (1st
Cir. 1996)).
The relatedness inquiry begins “by identifying the alleged
contacts, since there can be no requisite nexus between the
contacts and the cause of action if no contacts exist.” United
States v . Swiss Am. Bank, Ltd., 274 F.3d 6 1 0 , 621 (1st Cir.
2001). ALST’s relevant contacts with New Hampshire are as
follows: (1) travel to Wilcox’s New Hampshire facility to
participate in meetings about the development of Wilcox’s next-
generation PATRIOT life support device; and (2) email and
telephone communications between Wilcox and ALST discussing
design and improvements to the device.
Wilcox’s claim that ALST misappropriated its trade secrets
arises directly out of those contacts with New Hampshire. It
was during those meetings and communications that Wilcox
entrusted ALST with its confidential trade secret information.
Hence, the relationship between Wilcox’s misappropriation claim
and ALST’s contacts with the forum is neither attenuated nor 12 indirect. See United Elec. Workers, 960 F.2d at 1089. Rather,
ALST’s acquisition of Wilcox’s trade secrets through its actions
in New Hampshire forms an “important, or at least material,
element of proof in the plaintiff’s case.” Id. (internal
quotations and alterations omitted). Although actual
misappropriation of trade secrets occurred elsewhere, ALST’s
conduct in New Hampshire “gave birth to the cause of action.”
See Mass. Sch. of Law, 142 F.3d at 3 5 . Hence, the relatedness
requirement is easily satisfied with respect to Wilcox’s
misappropriation claim.
2. Purposeful Availment
By engaging in a consulting arrangement with a New
Hampshire corporation, ALST purposefully availed itself of the
privilege of conducting business activities in this forum. “The
function of the purposeful availment requirement is to assure
that personal jurisdiction is not premised solely upon a
defendant’s ‘random, isolated, or fortuitous’ contacts with the
forum state.” Sawtelle v . Farrell, 70 F.3d 1381, 1391 (1st Cir.
1995) (citing Keeton v . Hustler Magazine, Inc., 465 U.S. 7 7 0 ,
774 (1984)). Hence, the cornerstones of purposeful availment
are voluntariness and foreseeability. Id.
Here, ALST’s communications directed to New Hampshire and
its travel to the state to attend meetings at Wilcox’s facility 13 were not random, isolated, or fortuitous. Those contacts were
knowing and purposeful. At the time it entered into the
consulting arrangement, ALST knew that Wilcox was a New
Hampshire corporation. Thus, ALST could have foreseen that,
should a claim arise out of Hansen’s actions on behalf of the
company in New Hampshire, it would likely be haled into court in
the forum.
3. The Gestalt Factors
Lastly, I consider whether it is fair and reasonable to
subject ALST to the authority of a court in New Hampshire. The
relevant factors for consideration include “(1) the defendant’s
burden of appearing, (2) the forum state’s interest in
adjudicating the dispute, (3) the plaintiff’s interest in
obtaining convenient and effective relief, (4) the judicial
system’s interest in obtaining the most effective resolution of
the controversy, and (5) the common interests of all sovereigns
in promoting substantive social policies.” United Elec. Radio &
Mach. Workers of Am. v . 163 Pleasant S t . Corp., 987 F.2d 3 9 , 46
(1st Cir. 1993).
First, ALST’s burden of litigating this case in New
Hampshire falls short of reaching constitutional significance.
The sole representative of ALST with knowledge and involvement
in the underlying facts of this case is Hansen, ALST’s co- 14 defendant who has submitted to the jurisdiction of this court.
Moreover, ALST has not demonstrated any unique burden of
litigating in the state. See Pritzker v . Yari, 42 F.3d 5 3 , 64
(1st Cir. 1994) (“[I]nsofar as staging a defense in a foreign
jurisdiction is almost always inconvenient and/or costly, we
think this factor is only meaningful where a party can
demonstrate some kind of special or unusual burden.”).
Second, New Hampshire has a demonstrable interest in
adjudicating the dispute. As the First Circuit has observed,
“[t]he purpose of [this] inquiry is not to compare the forum’s
interest to that of some other jurisdiction, but to determine
the extent to which the forum has an interest.” Foster–Miller,
Inc. v . Babcock & Wilcox Canada, 46 F.3d 1 3 8 , 151 (1st Cir.
1995) (emphasis in original). New Hampshire has a strong
interest in the prosecution of a case where an out-of-state
defendant came into the state, obtained trade secrets from a New
Hampshire business, and then injured that business by
misappropriating its trade secrets. Hence, this factor also
cuts in favor of jurisdiction.
Third, Wilcox has a considerable interest in obtaining
convenient and effective relief in its home state. I need not
dwell on this factor because “plaintiff’s choice of forum must
15 be accorded a degree of deference with respect to the issue of
its own convenience.” Sawtelle, 70 F.3d at 1395.
Fourth, the judicial system’s interest in obtaining the
most effective resolution of the controversy does not appear to
cut in either direction here, as is frequently the case. See Jet
Wine & Spirits, 298 F.3d at 1 2 ; Sawtelle, 70 F.3d at 1395;
Ticketmaster-N.Y., Inc. v . Alioto, 26 F.3d 2 0 1 , 211 (1st Cir.
1994).
The fifth and last of the gestalt factors, which implicates
the common interests of all sovereigns in promoting substantive
social policies, weighs in favor of jurisdiction. “Here, the
most prominent policy implicated is the ability of a state to
provide a convenient forum for its residents to redress injuries
inflicted by out-of-forum actors.” Sawtelle, 70 F.3d at 1395.
When a company does business in New Hampshire or directs its
actions at New Hampshire from outside the state, “it might
frustrate the relevant state substantive social policies (those
embodied in its contract and tort law) to insulate [that
company] from the legal consequences of its actions.” Jet Wine
& Spirits, 298 F.3d at 1 2 . Hence, this factor weighs in favor
of the exercise of jurisdiction as well.
16 In sum, relatedness, purposeful availment, and the gestalt
factors all support the exercise of personal jurisdiction over
ALST with respect to Wilcox’s misappropriation claim.
C. Pendent Personal Jurisdiction over Remaining Claims
In addition to the trade secrets misappropriation claim,
Wilcox asserts that ALST is liable for common-law unfair
competition, violation of the New Hampshire Consumer Protection
Act, and intentional interference with contractual relations. I
need not decide whether Wilcox has established jurisdiction over
ALST with respect to those claims because I will exercise
pendent personal jurisdiction over them.
The doctrine of pendent personal jurisdiction provides that
“a district court has discretion to exercise personal
jurisdiction over a claim that it ordinarily lacks personal
jurisdiction over only when that claim arises out of the same
common nucleus of operative fact as does a claim that is within
the in personam jurisdiction power of the court.” 4A Charles
Alan Wright & Arthur R. Miller, Federal Practice and Procedure §
1069.7 (3d ed. 2010); see Aftokinito Properties, Inc. v .
Millbrook Ventures, LLC, 09-CV-415-JD, 2010 WL 3168318, at *6
(D.N.H. May 2 5 , 2010); GT Solar Inc. v . Goi, CIV. 08-CV-249-JL,
2009 WL 3417587, at *12 (D.N.H. Oct. 1 6 , 2009); D’Jamoos v .
Atlas Aircraft Ctr., Inc., 669 F. Supp. 2d 1 6 7 , 174 (D.N.H. 17 2009); see also Action Embroidery Corp. v . Atlantic Embroidery,
Inc., 368 F.3d 1174, 1181 (9th Cir. 2004) (“When a defendant
must appear in a forum to defend against one claim, it is often
reasonable to compel that defendant to answer other claims in
the same suit arising out of a common nucleus of operative
facts. We believe that judicial economy, avoidance of piecemeal
litigation, and overall convenience of the parties is best
served by adopting this doctrine.”); United States v . Botefuhr,
309 F.3d 1263, 1273 (10th Cir. 2002) (“[T]he majority of federal
district courts and every circuit court of appeals to address
the question have upheld the application of pendent personal
jurisdiction . . . . ” ) .
Wilcox’s remaining claims against ALST arise from the same
nucleus of facts as the misappropriation claim, namely, ALST’s
actions in the course of the consulting relationship with
Wilcox. Specifically, the common nucleus is the allegation that
ALST, through its contacts with New Hampshire, had access t o ,
used improper means to obtain, and subsequently misappropriated
the proprietary information regarding Wilcox’s next-generation
PATRIOT device and its customers. Therefore, I will exercise
pendent personal jurisdiction over Wilcox’s remaining claims.
18 IV. CONCLUSION
For the aforementioned reasons, I deny ALST’s motion to
dismiss for lack of personal jurisdiction (Doc. N o . 1 0 ) .
SO ORDERED.
/s/Paul Barbadoro Paul Barbadoro United States District Judge
April 1 3 , 2012
cc: Jeremy T . Walker, Esq. Nicholas F. Casolero, Esq. Stephen B . Mosier, Esq. Todd A . Sullivan, Esq.