Procedural Posture

Plaintiff former employee sued defendant employer’s president in state court, alleging fraudulent concealment, negligent misrepresentation, interference with economic advantage, breach of contract and the implied covenant of good faith and fair dealing, promissory estoppel, and violation of Cal. Bus. & Prof. Code § 17200 et seq. After removal to federal court, the litigation attorney san diego president moved to dismiss pursuant to Fed. R. Civ. P. 12(b)(2) and (6).

Overview

Pursuant to 28 U.S.C.S. § 1404(a), the district court sua sponte transferred the action to another judicial district because even though the employee alleged that false representations about the employer’s product were made to him in the forum state and that he entered into his employment contract there, all of the remaining Jones factors weighed in favor of transferring the action to the other judicial district. The president’s only actual contact with the forum state was a one-hour interview with the employee, that interview did not result in a job offer to the employee at that time, and the employee was hired by the employer only after he traveled to the other district. Moreover, the debtor acknowledged that technical documents related to the research and development of the product and relevant witnesses with respect to the employer’s corporate affairs were located in the other district. The employer’s bankruptcy proceeding was also pending in the other district, and there was likely to be overlap between the two proceedings. Assuming that the court could have exercised personal jurisdiction over the president, the exercise of such jurisdiction would have been unreasonable.

Outcome

The clerk was directed to transfer the action to another judicial district. Determination of the president’s motions was deferred to the transferee court.

Procedural Posture

Plaintiff company sued defendant individuals, alleging, inter alia, misappropriation of trade secrets in violation of Cal. Civ. Code § 3426.1. The court modified an existing preliminary injunction to remove language prohibiting two individuals from retaining certain property and carrying out certain business activities. The company moved for the reconsideration of that order.

Overview

The company had shown reasonable diligence in pursuing the facts regarding its claims against one individual where it had investigated his laptop’s contents immediately upon gaining possession. However, it failed to offer any explanation as to why it took months to review the other individual’s laptop. The company demonstrated that it was likely to succeed against that individual where at least some of the files copied to CDs appeared to be information protected by the injunction. The company had not shown a likelihood of success against the other individual given the lack of explanation as to his job functions. As for irreparable harm, a presumption of such harm was unwarranted against one individual. The balance of equities tipped in the individuals’ favor given their employment situations. In sum, while the company demonstrated a likelihood of success on the merits as to the misappropriation claim against one individual, its showing of irreparable harm was factually deficient. With respect to the claims against the other individual, the company had demonstrated neither a likelihood of success nor a likelihood of irreparable harm.

Outcome

The motion for reconsideration was denied without prejudice.