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New South Equip. Mats, LLC v. Keener

United States District Court, S.D. Mississippi, Jackson Division

November 5, 2013

NEW SOUTH EQUIPMENT MATS, LLC, PLAINTIFF
v.
JON M. KEENER, DEFENDANT

Page 523

For New South Equipment Mats, LLC, Plaintiff: Gaines Michael Massey, Robert T. Higginbotham, Jr., LEAD ATTORNEYS, James Wilbourn Vise, MASSEY, HIGGINBOTHAM, VISE & PHILLIPS, PA, Flowood, MS; Todd W. Hood, HOOD LAW FIRM, PLLC, Flowood, MS.

For Jon M. Keener, Defendant: Armin J. Moeller, Jr., LEAD ATTORNEY, Ernest Russell Turner, BALCH & BINGHAM, LLP - Jackson, Jackson, MS; Andrew G. May - PHV, PRO HAC VICE, Athanasios (Tom) Papadopoulos - PHV, NEAL, GERBER & EISENBERG, LLP, Chicago, IL.

OPINION

Page 524

MEMORANDUM OPINION AND ORDER

Tom S. Lee, UNITED STATES DISTRICT JUDGE.

This cause is before the court on the motion of defendant Jon M. Keener to dismiss pursuant to Rules 12(b)(2) and 12(b)(6) of the Federal Rules of Civil Procedure. Plaintiff New South Equipment Mats, LLC (New South) has responded to the motion and the court, having considered the memoranda of authorities submitted by the parties, concludes, first, that Keener's objection to personal jurisdiction is without merit, and second, that his motion to dismiss certain counts of the complaint for failure to state a claim should be granted in part and denied in part.

Keener, a resident of Wisconsin, was employed with New South from 2010 until March 2013, when he accepted a position with Sterling Lumber Company, Inc. Upon becoming employed by New South, Keener executed a Confidentiality and Non-Solicitation Agreement which provided that during his employment and for a period of twenty-four months thereafter, Keener " [would] not directly or indirectly solicit or otherwise induce any employees of [New South] to leave their employment with [New South], nor [would] [Keener] directly or indirectly solicit or otherwise induce any of [New South's] customers, accounts, suppliers or contacts to reduce or cease doing business with [New South]." The Agreement further reflected Keener's acknowledgment that during his employment, he would necessarily be entrusted with confidential business information and trade secrets, " including but not limited to the identity of accounts, suppliers, customers and others having business dealings with the Company, pricing information pertaining to the Company's business, and other information," and he agreed that such information was the exclusive property of New South. The Agreement recited that Keener would never disclose or use any of New South's confidential information and trade secrets " in any manner which is adverse to the interests of the company, and that he shall return any and all originals and copies ... in any format whatsoever, containing or pertaining to said information to the Company immediately upon the termination of his employment for any reason."

Following Keener's departure from New South, New South filed the present action, alleging that Keener breached the confidentiality provision of the Agreement by " copying and misappropriating data relating to New South's confidential business information and trade secrets," and specifically

Page 525

by " transferr[ing] all of his Outlook Contacts and New South-related clients and vendors to [an] external hard drive and ... send[ing] information and New South's customer list to his personal email account." It further alleged that Keener had " been in contact with New South's competitors regarding some of New South's customers, the availability of New South's product, and disclosed and delivered highly confidential communications between New South and New South's clients to New South's competitor, Sterling Lumber, which now possesses New South's proprietary, confidential and trade secret information."

Keener has moved for dismissal of New South's complaint pursuant to Rule 12(b)(1), arguing that Mississippi lacks personal jurisdiction over Keener because Keener does not have sufficient minimum contacts with Mississippi to comport with due process under the Fourteenth Amendment. The basic principles on which his motion are based are well-settled.

Personal jurisdiction comports with due process when first, the defendant has the requisite minimum contacts with the forum state and second, requiring the defendant to submit to jurisdiction in the forum state would not infringe on " traditional notions of fair play and substantial justice." Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 105, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987); Internat'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). A non-resident defendant establishes such minimum contacts by purposefully availing himself of the benefits of the forum state, so that he " should reasonably anticipate being haled into court" there. [Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 2182, 85 L.Ed.2d 528 (1985)]; World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980).
Personal jurisdiction may be " specific" or " general" . For specific personal jurisdiction, a plaintiff makes a prima facie showing of minimum contacts when his claim arises from the defendant's contact with the forum. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). For general personal jurisdiction, a plaintiff makes the requisite showing when that defendant's contacts are " continuous and systematic," so that the exercise of jurisdiction is proper irrespective of the claim's relationship to the defendant's contact with the forum. Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485, 63 Ohio Law Abs. 146 (1952).

Companion Property and Cas. Ins. Co. v. Palermo, 723 F.3d 557, 559 -60 (5th Cir. 2013). Keener contends, and New South does not dispute, that he has not had sufficient contacts with Mississippi to be subject to general jurisdiction in Mississippi. Beyond that, while Keener implicitly acknowledges he had significant contacts with Mississippi in connection with his employment with New South, he argues that the present cause of action does not arise out of those contacts; and he maintains that he has had no contacts with Mississippi related to the alleged breach of the Agreement, upon which all of New South's claims are based. In the court's opinion, however, it is immaterial whether Keener had sufficient contacts with Mississippi to support an exercise of specific jurisdiction, as he has consented to personal jurisdiction in this forum.

The parties' Confidentiality and Non-Solicitation Agreement includes a forum selection clause, which states:

(a) Governing Law. The employment relationship between the parties, including

Page 526

but not limited to this Agreement, shall be governed by and construed in all respects in accordance with the laws of the State of Mississippi, and any suit or action arising out of or in connection with same employment relationship or its termination, or this Agreement or any breach hereof, shall be brought and maintained in the federal or state courts of Madison County, Mississippi, and the parties consent to said venue and jurisdiction. ...

Personal jurisdiction can be waived by an enforceable forum selection clause in which the parties consent to personal jurisdiction in a specified forum. Rudzewicz, 471 U.S. at 473 n.14. The Court in Rudzewicz stated:

[B]ecause the personal jurisdiction requirement is a waivable right, there are a " variety of legal arrangements" by which a litigant may give " express or implied consent to the personal jurisdiction of the court." Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, [456 U.S. 694, 702, 102 S.Ct. 2099, 2105, 72 L.Ed.2d 492 (1982)]. For example, particularly in the commercial context, parties frequently stipulate in advance to submit their controversies for resolution within a particular jurisdiction. See National Equipment Rental, Ltd. v. Szukhent, 375 U.S. 311, 84 S.Ct. 411, 11 L.Ed.2d 354 (1964). Where such forum-selection provisions have been obtained through " freely negotiated" agreements and are not " unreasonable and unjust," The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15, 92 S.Ct. 1907, 1916, 32 L.Ed.2d 513 (1972), their enforcement does not offend due process.

Rudzewicz, 471 U.S. at 473, 105 S.Ct. 2174. See Sunday Riley Modern Skin Care, L.L.C. v. Maesa, Civ. Action No. H-12-1650, 2013 WL 5231860, at *7 (S.D. Tex. Sept. 12, 2013) (" A party who signs a contract with a forum selection clause has either consented to personal jurisdiction or waived the requirements for personal jurisdiction in a selected forum where the clause was obtained through freely negotiated agreements and is not unreasonable or unjust." ) (citing Rudzewicz, 471 U.S. at 473, 472 n.14).

The Fifth Circuit has repeatedly recognized that mandatory forum selection clauses such as that at issue here are presumed to be valid and enforceable, [1] so that the party seeking to bar enforcement bears the heavy burden of demonstrating that the clause is unreasonable under the circumstances. Afram Carriers, Inc. v. Moeykens, 145 F.3d 298, 301 (5th Cir. 1998). The ...


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