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Trinity Video Communications, Inc. v. Carey

United States District Court, W.D. Kentucky, Louisville Division

April 4, 2017

TRINITY VIDEO COMMUNICATIONS, INC., Plaintiff,
v.
ELI JOHN CAREY, et al., Defendants.

          MEMORANDUM OPINION

          Thomas B. Russell, Senior Judge.

         Trinity Video Communications, Inc. filed this breach-of-contract action against five of its former employees after that group left Trinity and accepted employment with one of its competitors. Pursuant to Federal Rule of Civil Procedure 12(b)(2), the former employees move to dismiss Trinity's action for lack of personal jurisdiction over them. Trinity opposes that motion. Having reviewed the record before it, the Court cannot, consistent with constitutional limitations, exercise personal jurisdiction over the former employees based on their sparse contacts with Kentucky. Accordingly, the former employees' Motion to Dismiss, [R. 4], is GRANTED.

         I.

         A.

         Trinity Video Communications, Inc. is a Kentucky corporation in the business of offering sophisticated video communication services to other entities on a contract basis. [R. 1-1 at 3, 5, ¶¶ 1, 7 (Complaint).] Trinity employs highly skilled and trained information technology personnel to provide those services. [Id. at 5, ¶ 9.] Until recently, Trinity had a contract with Federal Bureau of Investigation to provide on-site IT support at the Criminal Justice Information Services (CJIS) Complex in Clarksburg, West Virginia. [Id., ¶¶ 10-11; see also R. 8-1 at 3, ¶ 7 (Mills' Affidavit).]

         To service that contract, Trinity sought out, through advertisements in a local West Virginia publication, candidates with the necessary experience. [R. 8-1 at 3, ¶ 7.] Eli John Carey, Rodney S. Mills, Crystal Borey, Jennifer Walker, and Michael E. Gower, all of whom reside in West Virginia, responded to the advertisements. [Id., ¶¶ 7-8.] Trinity interviewed them at the CJIS Complex and, in due course, hired them too. [Id.] The five employees signed at-will employment agreements, which contained noncompetition and non-disclosure clauses and a choice-of-law provision favoring Kentucky, shortly after their respective dates of hire. [R. 1-1 at 11-14 (Carey's Employment Agreement); id. at 16-18 (Mills' Employment Agreement); id. at 20-23 (Borey's Employment Agreement); id. at 25-27 (Walker's Employment Agreement); id. at 29-30 (Gower's Employment Agreement).]

         While in Trinity's employ, Carey, Mills, Borey, Walker, and Gower worked exclusively at the CJIS Complex in West Virginia. [R. 4-2 at 2, ¶ 4 (Mills' Affidavit); id. at 4, ¶ 4 (Borey's Affidavit); id. at 5, ¶ 4 (Walker's Affidavit); id. at 6, ¶ 4 (Carey's Affidavit); id. at 8, ¶ 4 (Gower's Affidavit).] A manager supervised their work and conducted annual performance reviews from that location. [R. 8-1 at 4, ¶¶ 11-12.] Although their compensation, fringe benefits, and company e-mail accounts were administered from Trinity's headquarters in Kentucky, [R. 6-2 at 2-3, ¶¶ 4-6 (Kolb's Affidavit)], none of them has ever travelled there to conduct business, attend meetings, or participate in social events, [R. 8-1 at 5, ¶ 13; see also R. 4-2 at 4, ¶ 4; id. at 5, ¶ 4; id. at 6, ¶ 4; id. at 8, ¶ 4].

         Unfortunately, in October 2016, the FBI decided not to renew its contract with Trinity. [R. 1-1 at 5, ¶ 11.] Instead, the FBI awarded a similar contract to Trinity's competitor, General Dynamics Information Technology, Inc. (GDIT). [Id.] GDIT, in turn, approached Carey, Mills, Borey, Walker, and Gower, and offered to employ them to service the new contract. [Id., ¶ 12.] Trinity immediately contacted Carey, Mills, Borey, Walker, and Gower to advise them that accepting employment with GDIT would violate the non-competition clauses in their respective employment agreements. [Id. at 6, ¶¶ 13- 14.] Nonetheless, each resigned and accepted GDIT's offer. [Id., ¶ 15.]

         B.

         Shortly thereafter, Trinity filed this breach-of-contract action against Carey, Mills, Borey, Walker, and Gower in Jefferson County Circuit Court, hoping to secure monetary damages and injunctive relief. [Id. at 6-8, ¶¶ 16-27.] Relying on 28 U.S.C. § 1441(a), the former employees removed Trinity's action to this Court. [See R. 1 (Notice of Removal).] Pursuant to Federal Rule of Civil Procedure 12(b)(2), the former employees seek to dismiss that action for lack of personal jurisdiction over them. [See R. 4 (Motion to Dismiss).] Trinity opposes that motion.[1] [See R. 6 (Response).]

         II.

         Under Federal Rule of Civil Procedure 12(b)(2), a litigant may challenge the Court's authority to entertain an action against him for lack of personal jurisdiction. See Fed. R. Civ. P. 12(b)(2). Personal jurisdiction comes in two forms: general and specific. Miller v. AXA Winterthur Ins. Co., 694 F.3d 675, 678-79 (6th Cir. 2012). General jurisdiction involves affiliations so “continuous and systematic” with a forum as render the person “essentially at home” there, thus allowing courts in that forum to exercise jurisdiction over “any and all claims” against him. Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011) (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 317 (1945)). Specific jurisdiction, on the other hand, arises from “minimum contacts” between a person and the forum, and permits the forum's courts to adjudicate “issues deriving from, or connected with, ” those particular contacts. Id. (quoting Arthur T. von Mehren & Donald T. Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 Harv. L. Rev. 1121, 1136 (1966)). The instant action relies on the latter of those two types of personal jurisdiction.

         In diversity cases, the Court's exercise of specific personal jurisdiction must not only be authorized by the forum state's long-arm statute, but also must comport with the Due Process Clause of the Fourteenth Amendment. Daimler AG v. Bauman, ___ U.S. ___, ___, 134 S.Ct. 746, 753 (2014); accord Brunner v. Hampson, 441 F.3d 457, 463 (6th Cir. 2006). Kentucky's long-arm statute permits courts to exercise personal jurisdiction, in pertinent part, over any nonresident who directly or indirectly transacts “any business in this Commonwealth.” Ky. Rev. Stat. § 454.210(2)(a)(1); see also Caesars Riverboat Casino, LLC v. Beach, 336 S.W.3d 51, 57-58 (Ky. 2011). With respect to the due-process inquiry, the Court employs a three-pronged test to determine whether a nonresident has the requisite “minimum contacts” with the forum state:

First, the defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state. Second, the cause of action must arise from the defendant's activities there. Finally, the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with ...

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