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Premier Group, Inc. v. Bolingbroke

United States District Court, D. Colorado

July 27, 2015

THE PREMIER GROUP, INC. Plaintiff,
v.
DARREN BOYD BOLINGBROKE, HEIDI McNULTY, MICHAEL SHANE COLLARD, JOSEPH R. SIMMONS, JAMES J. HUBBARD, KIMSITH BOUN, MARIA ALVARADO, and DHS GROUP, LLC, Defendants.

ORDER

PHILIP A. BRIMMER UNITED STATES DISTRICT JUDGE

This matter is before the Court on the defendants’ Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue or, Alternatively, to Transfer Venue [Docket No. 28].

I. BACKGROUND[1]

Plaintiff is a staffing firm founded in 2008 that provides temporary, “temp-to-hire, ” and direct hire employees in the accounting, information technology, and construction industries. Docket No. 1 at 3-4, ¶¶ 15-16. Plaintiff is headquartered in Denver, Colorado with additional offices in Colorado Springs, Colorado, Austin, Texas, and Midvale, Utah (the “Utah office”). Id. at 4, ¶ 16. Defendants Darren Bolingbroke, Heidi McNulty, Michael Collard, Joseph Simmons, James Hubbard, Kimsith Boun, and Maria Alvarado (collectively, the “individual defendants”) are former employees of plaintiff who worked in the Utah office. Id. at 4-5, ¶¶ 18-24. Each individual defendant submitted a declaration, stating “I have worked exclusively in and for the Utah Branch of Premier.” See, e.g, Docket No. 28-1 at 2, ¶¶ 3-4. In the course of their employment with plaintiff, plaintiff alleges that Mr. Bolingbroke and Ms. McNulty signed an Employee Non-Compete Agreement (the “non-compete agreement”). Docket No. 1 at 6, ¶ 31. The non-compete agreement prohibits the signatory from engaging in a competitive business within a 50 mile radius during his or her employment with plaintiff and for one year thereafter. Docket No. 1-3 at 1-2. Defendants deny that Mr. Bolingbroke and Ms. McNulty signed such an agreement. Each of the individual defendants acknowledged receiving a copy of plaintiff’s employee handbook, which prohibits, among other things, employees from improperly using or disclosing plaintiff’s trade secrets or confidential business information. Docket No. 1 at 6-7, ¶ 33.

Defendant DHS Group LLC (“DHS”) is a limited liability company organized under the laws of Utah. Id. at 3, ¶ 12. DHS was was allegedly formed in April 2015 by defendants Bolingbroke, McNulty, and Collard to purchase plaintiff’s Utah office. Id. at 5-6, ¶¶ 27-30.

In June 2015, plaintiff discovered that multiple clients had recently ceased doing business with plaintiff. Id. at 7, ¶¶ 34-35. Plaintiff’s complaint does not specify whether the identified former clients were clients of the Utah office or of plaintiff’s other offices. Plaintiff alleges that the individual defendants are diverting these clients to DHS. Id. at 7-8, ¶ 36. Plaintiff also discovered a business plan [Docket No. 1-6] on a company laptop that was issued to Ms. McNulty. The business plan is for a company to be run and staffed by the individual defendants and whose business model consists of a staffing firm “based in Salt Lake City” and providing the placement of workers “in Utah.” Docket No. 1-6 at 3. The business plan includes financial information from “Plaintiff’s internal financial records regarding Plaintiff’s Utah Branch” and, according to plaintiff, sets forth a plan to either purchase the Utah office from plaintiff or “raid Plaintiff’s customers in Utah.” Docket No. 1 at 8, ¶¶ 37-40. Plaintiff alleges that the sources of certain portions of the business plan were (1) a document prepared by one of plaintiff’s owners, (2) plaintiff’s confidential internal policies and analysis documents, and (3) plaintiff’s internal profit and loss spreadsheets.[2] Id. at 9, ¶¶ 44-45.

Plaintiff accuses defendants, before their termination, of changing the assignment dates of every Utah worker in plaintiff’s computer system. Id. at 9-10, ¶ 47. Plaintiff also accuses the individual defendants of changing the voicemail messages on their company-issued cell phones to eliminate any reference to plaintiff. Id. at 10, ¶ 49. And plaintiff accuses Mr. Collard of collecting a salary from plaintiff, but not actually working at the Utah office. Id. at 10, ¶¶ 50-51.

Plaintiff recently analyzed the laptop computers and other information stored at the Utah office. Id. at 11, ¶ 54. Plaintiff discovered multiple instances where Mr. Bolingbroke, Ms. McNulty, and Mr. Collard forwarded to their personal email accounts customer invoicing data, customer lists, Utah office budget information, Utah office payroll information, and emails from plaintiff’s customers. Id. at 11-14, ¶ 54. Plaintiff discovered minutes from weekly meetings between the individual defendants at one of their homes where the Utah office was discussed, which plaintiff contends evidences a conspiracy to take customer data, defraud plaintiff, and build a competing enterprise. Id. at 14-15, ¶¶ 55-56. Plaintiff also alleges that Ms. McNulty contacted one of plaintiff’s Utah workers with a message that plaintiff was going out of business and that Ms. McNulty was starting her own company. Id. at 15, ¶ 57. Plaintiff claims that the foregoing facts establish that defendants have “formed a competing business, have diverted and continue to divert business from Plaintiff to their new competing enterprise, and are using confidential, proprietary and/or trade secret information belonging to Plaintiff to illegally raid Plaintiff’s business in Utah and defraud Plaintiff.” Id. at 15, ¶ 58.

On July 9, 2015, plaintiff terminated the individual defendants’ employment and demanded that they return all property in their possession belonging to plaintiff. Id. at 10, ¶ 48. Mr. Bolingbroke returned to the Utah office that day and provided plaintiff with a Letter of Intent to purchase the assets of plaintiff’s “Utah operations.” Docket No. 1-7 at 1.

On July 11, 2015, plaintiff filed the present case. Docket No. 1. Plaintiff brings state-law claims against Mr. Bolingbroke and Ms. McNulty for breach of contract for violating the non-compete agreements and against all defendants for quantum meruit/unjust enrichment, conversion and civil theft, misappropriation of trade secrets, breach of employees’ duty of loyalty/fiduciary duty to employer, intentional interference with contracts and prospective business relations, civil conspiracy, and fraudulent concealment. Id. at 16-29. Plaintiff also brings a federal claim against all defendants for multiple violations of the Computer Fraud and Abuse Act (“CFAA”). 18 U.S.C. § 1030. Plaintiff seeks monetary and injunctive relief, in the latter case requesting that defendants be required to return property belonging to plaintiff, including computer equipment and plaintiff’s proprietary business information. See Id. at 17-18, ¶ 74.

Plaintiff filed a motion for a temporary restraining order (“TRO”) and preliminary injunction along with its complaint. Docket No. 2. The parties reached an agreement with respect to plaintiff’s request for a TRO. Docket No. 9 at 1; see also Docket No. 22-1. Defendants, however, terminated the agreement, Docket No. 22-6 at 1, which led plaintiff to file a renewed motion for a TRO and preliminary injunction. Docket No. 22. The Court has set a hearing on plaintiff’s motions for preliminary injunction for Tuesday, July 28, 2015. Docket No. 33.

On July 21, 2015, defendants filed the present motion. Docket No. 28. Defendants argue that this case should be dismissed for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2) and should be dismissed or, in the alternative, transferred, for improper venue pursuant to Rule 12(b)(3). Id. at 1. On July 23, 2015, per the Court’s request, plaintiff filed a response brief. Docket No. 35. On July 24, 2015, defendants filed a reply. Docket No. 36.

II. STANDARD OF REVIEW

The purpose of a motion to dismiss under Rule 12(b)(2) is to determine whether the Court has personal jurisdiction. The plaintiff bears the burden of establishing personal jurisdiction over defendants. Rambo v. Am. S. Ins. Co., 839 F.2d 1415, 1417 (10th Cir. 1988). The plaintiff can satisfy its burden by making a prima facie showing of personal jurisdiction. Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1070 (10th Cir. 2008). The Court will accept the well-pleaded allegations of the complaint as true to determine whether plaintiff has made a prima facie showing that personal jurisdiction exists. AST Sports Sci., Inc. v. CLF Distribution Ltd., 514 F.3d 1054, 1057 (10th Cir. 2008). If the presence or absence of personal jurisdiction can be established by reference to the complaint, the Court need not look further. Id. The plaintiff, however, may also make this prima facie showing by putting forth evidence that, if proven to be true, would support jurisdiction over the defendant. Dudnikov, 514 F.3d at 1070. “[A]ny factual disputes in the parties’ affidavits must be resolved in plaintiffs’ favor.” Id.

In reviewing a motion to dismiss for improper venue pursuant to Rule 12(b)(3), “[a]ll well-pleaded allegations in the complaint bearing on the venue question generally are taken as true, unless contradicted by the defendant’s affidavits. A district court may examine facts outside the complaint to determine whether its venue is proper.” Hancock v. Am. Tel. & Tel. Co., Inc., 701 F.3d 1248, 1260-61 (10th Cir. 2012) (quoting 5B Charles Alan Wright et al., Federal Practice & Procedure § 1352 (3d ed. 2015)). “[T]he court must draw all reasonable inferences and resolve all factual conflicts in favor of the plaintiff.” Id. at 1261 (quotation and citation omitted). Where the parties have presented contrary evidence, it may be appropriate for the court to hold an evidentiary hearing. Id.

III. ANALYSIS

Although personal jurisdiction “is typically decided in advance of venue . . . neither personal jurisdiction nor venue is fundamentally preliminary. . . . Accordingly, when there is a sound prudential justification for doing so . . . a court may reverse the normal order of considering personal jurisdiction and venue.” Leroy v. Great W. United Corp., 443 U.S. 173, 180 (1979). A prudential justification for addressing venue first exists in this matter. There are numerous issues raised by defendants’ personal jurisdiction arguments, whereas there is but a single question the Court must resolve in determining whether venue is proper in this District. See Id. at 181 (avoiding the “more difficult” question of personal jurisdiction where it was “so clear that venue was improper”).

A. Venue

Pursuant to § 1391(b), venue in a civil action lies in

(1) a judicial district in which any defendant resides, . . .; (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; or (3) if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in ...

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