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Fusion Industries LLC v. Whalen

United States District Court, W.D. Oklahoma

November 6, 2019




         Now before the Court is Defendants' Motion to Dismiss for Lack of Personal Jurisdiction, as well as Plaintiff's Response and Defendants' Reply thereto. (Dkt. Nos. 3, 4, 7.) The motion is now at issue.

         I. Introduction

         Plaintiff is an Oklahoma-based company, with headquarters in Oklahoma City, that mainly provides “electrical infrastructure installation and support services to electric cooperatives and electric utility companies.” (Dkt. No. 1-2, p. 1.) Despite its Oklahoma roots though, Plaintiff also maintains an office in Texas. In 2017, Plaintiff hired both Defendants-two Texas residents-to work in its Texas office.

         During their time with Plaintiff, Defendants spent most of their time in Texas. Defendant Whalen did come to Oklahoma for some business meetings, and even obtained an Electrical Journeyman License in the state. (Dkt. No. 4, pp. 3-4.) Nonetheless, for the most part, Defendants' interactions with Oklahoma were electronic. These communications included reaching out to Oklahoma for various aspects of their work, including to fill their staffing needs. (Id. at 3.) Additionally, Defendants' employment agreements are governed by Oklahoma law.

         Both Defendants resigned in May 2019. According to Plaintiff, though, before resigning, they began soliciting regular customers and inducing them to do business with Plaintiff's competitor, for whom Defendants went to work soon after resigning. And, after they resigned, they began soliciting Plaintiff's employees to transition with them to Plaintiff's competitor. (Dkt. No. 4-1, p. 4.)

         Plaintiff then filed this suit, which accuses Defendants of breach of contract, tortious interference, and violations of the Oklahoma Uniform Trade Secrets Act, as well as the Oklahoma Deceptive Trade Practices Act. (See Dkt. No. 1-2.) Defendants, however, now move to dismiss this case-maintaining that Oklahoma cannot exercise personal jurisdiction over them.

         II. Standard

         When a court's jurisdiction is contested, the plaintiff has the burden of proving jurisdiction exists. Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir. 1995). But in the preliminary stages of litigation, the plaintiff's burden is light. Doe v. Nat'l Med. Servs., 974 F.2d 143, 145 (10th Cir. 1992). Where, as here, a district court considers a pre-trial motion to dismiss for lack of personal jurisdiction without conducting an evidentiary hearing, the plaintiff need only make a prima facie showing of personal jurisdiction to defeat the motion. OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir. 1998); Wenz, 55 F.3d at 1505. And when evaluating the prima facie case, all factual disputes must be resolved in favor of the plaintiff in determining whether it has made the requisite showing. Wenz, 55 F.3d at 1505.

         To demonstrate personal jurisdiction over a nonresident defendant, a plaintiff must satisfy the requirements of the forum's long arm statute, as well as the federal Constitution. Equifax Servs., Inc. v. Hitz, 905 F.2d 1355, 1357 (10th Cir. 1990). Oklahoma's long arm statute is coextensive with the constitutional limitations imposed by due process. Rambo v. Am. S. Ins. Co., 839 F.2d 1415, 1416-17 (10th Cir. 1988). Therefore, if jurisdiction is consistent with due process, Oklahoma's long arm statute authorizes jurisdiction over a nonresident defendant. Due process requirements are satisfied when personal jurisdiction is asserted over a nonresident defendant that has certain minimum contacts with the forum state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985).

         Here, minimum contacts may be demonstrated by showing a defendant's contacts with the forum warrant the exercise of specific jurisdiction. [*] Generally, courts may exercise specific jurisdiction if “the nonresident defendant ‘purposefully directed' its activities at the forum state.” Dudnikov v. Chalk & Vermillion Fine Arts, Inc., 514 F.3d 1063, 1071 (10th Cir. 2008). Purposeful direction exists when there is “an intentional action . . . expressly aimed at the forum state . . . with [the] knowledge that the brunt of the injury would be felt in the forum state.” Dudnikov, 514 F.3d at 1072. Also, a plaintiff's “injuries must arise out of defendant's forum-related activities.” Id. at 1071 (internal quotations and citations omitted). The relationship between a defendant and the forum state, moreover, “must arise out of contacts that the defendant himself creates with the forum State.” Walden v. Fiore, 571 U.S. 277, 284 (2014) (internal quotation marks and citations omitted). Thus, “a plaintiff's contacts with the forum State cannot be decisive in determining whether the defendant's due process rights are violated.” Id. at 279 (internal quotation marks and citations omitted).

         III. Discussion

         Taking Plaintiff's facts as true, the Court must first determine whether Plaintiff has demonstrated Defendants' minimum contacts with Oklahoma. According to Plaintiff, Defendants agreed to work for Plaintiff-an Oklahoma-based company with headquarters in Oklahoma City-in 2017. For both Defendants, their employment contracts are governed by Oklahoma law, and they were directed to contact Oklahoma-based contacts with any questions or concerns about the contract.

         Both Defendants also reached out to Oklahoma for different aspects of their work, including to fill their staffing needs. Defendant Whalen, moreover, attended business development meetings at Plaintiff's main office in Oklahoma, and obtained an Electrical Engineering Journeyman License in Oklahoma. And, perhaps most importantly, Plaintiff alleges that Defendants illegally solicited Plaintiff's regular customers, as well as its employees-all in an effort to damage Plaintiff in Oklahoma. Upon ...

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