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GeoDecisions v. Data Transfer Solutions

November 15, 2010

GEODECISIONS, A DIVISION OF GANNETT FLEMING, INC., PLAINTIFF
v.
DATA TRANSFER SOLUTIONS, LLC, D/B/A DTS, DEFENDANT



The opinion of the court was delivered by: Chief Judge Kane

MEMORANDUM

On October 26, 2010, Defendant Data Transfer Solutions, LLC ("DTS") filed a motion to dismiss, supported by affidavit, challenging the Court's personal jurisdiction over DTS. (See Doc. No. 11.) On November 9, 2010, Plaintiff GeoDecisions ("GeoDecisions") filed a brief in opposition to the motion to dismiss. (Doc. No. 21.) The Court held oral argument on the motion on November 10, 2010. Because the Court finds that it has personal jurisdiction over DTS in this case, the motion will be denied. Accordingly, the temporary restraining order entered by the Court on October 22, 2010 (Doc. No. 6), will be reinstated pending the preliminary injunction hearing to be held on November 29, 2010.

I. BACKGROUND*fn1

GeoDecisions is a division of Gannett Fleming, Inc., a Delaware corporation, and has its principal place of business in Camp Hill, Pennsylvania. (Doc. No. 1 ¶ 1.) DTS is a Florida corporation and has its principal place of business in Orlando, Florida. (Id. ¶ 2.) Both companies are direct competitors in the information technology field and have historically competed for projects throughout the United States. (Id. ¶ 13.)

Kevin Switala is employed by GeoDecisions and works in Pennsylvania. In April 2010, Switala attended an industry meeting in California where he met David Buckley, a DTS Vice President. Approximately one week later, on April 27, 2010, Switala received an email from Buckley regarding the possibility of DTS and GeoDecisions teaming up on an upcoming project in the San Diego, California, region. After further discussions in May 2010, GeoDecisions prepared and emailed to DTS in Florida the Mutual Nondisclosure Agreement ("Agreement") which is now at issue in this case. Trey Fragala, DTS' Chief Operating Officer, signed and emailed the Agreement to Switala in Pennsylvania. Switala forwarded the agreement to GeoDecisions' headquarters in Camp Hill, Pennsylvania, where it was signed by DTS' President Anthony Pietropola. The Agreement was to be effective for two years and included, inter alia, a prohibition against disclosing confidential information exchanged between the two companies and a two-year agreement not to solicit for employment or employ any person employed by the other company. (Doc. No. 1 ¶¶ 29-30, 34.) The Agreement also included a choice-of-law provision that specified that it was to be governed and construed in accordance with the laws of the Commonwealth of Pennsylvania. (Id. ¶ 35.)

In October 2010, DTS hired Connie Gurchiek, a GeoDecisions Vice President, who resides in Sarasota, Florida. (See Doc. No. 21 at 4.) Prior to leaving GeoDecisions, Gurchiek identified to DTS other GeoDecisions employees which DTS might be interested in hiring. (Id.) One such employee identified by Gurchiek was Don Kiel, a 17-year employee of GeoDecisions located in State College, Pennsylvania. (Id.) It is Kiel's testimony that, prior to tendering her resignation to GeoDecisions, Gurchiek called Kiel on October 11, 2010, and urged him to contact DTS. Kiel was previously aware of DTS through his professional line of work. (Doc. No. 22-2 at 14.) On October 12, 2010, Kiel called Allen Ibaugh, DTS' Chief Executive Officer, and expressed his interest to join DTS. During the next week, Kiel and DTS exchanged several telephone calls and emails. According to Kiel's testimony, it is unclear whether any of these phone calls occurred while he was outside Pennsylvania, yet some calls may have been through Kiel's home phone in Pennsylvania. (See Doc. No. 22-2 at 20.) On October 18, 2010, based upon Kiel's interaction with DTS via telephone and email, Kiel received a letter at his home address in Pennsylvania from DTS offering him a position as "Senior Project Manager in [its] Pennsylvania office." (Doc. No. 21 at 4, 6; Doc. No. 22-2 at 39.) On October 20, 2010, Kiel accepted the offer by signing and returning the letter to DTS. (Doc. No. 21 at 6.) DTS responded by sending him, at his Pennsylvania home address, a "new employee" packet of forms to be completed. (Id.)

During his deposition, Ibaugh corroborated Kiel's testimony that DTS had extended an offer of employment and that Kiel had accepted that offer. (Doc. No. 23-2 at 20.) The only remaining issue to be determined regarding Kiel's employment was his start date. (Id.) Both Ibaugh and Fragala testified that it was their belief that Kiel would likely continue to work out of his home in State College, Pennsylvania. (Id. at 21; Doc. No. 24-2 at 26-27.)

As a result of DTS' alleged breach of the Agreement by, inter alia, attempting to hire Kiel, GeoDecisions filed the present action on October 22, 2010. (Doc. No. 1.)

II. DISCUSSION

"Under Federal Rule of Civil Procedure 4(k), a District Court typically exercises personal jurisdiction according to the law of the state where it sits." O'Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 316 (3d Cir. 2007). As stated by the Third Circuit Court of Appeals:

Whether a district court has personal jurisdiction over a nonresident defendant is a two-part inquiry. First, there must be a statutory basis for exercising jurisdiction over the nonresident defendant in accordance with the law of the forum state. Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330 (3d Cir. 2009). Second, the nonresident must have minimum contacts with the forum state sufficient to satisfy constitutional due process. Id.

Eurofins Pharma US Holdings v. BioAlliance Pharma SA, - - F.3d - - - -, No. 09-3790, 2010 WL 3960583, at *4 (3d Cir. Oct. 12, 2010). Here, the Pennsylvania long-arm statute provides for jurisdiction "based on the most minimum contact with th[e] Commonwealth allowed under the Constitution of the United States." 42 Pa. Cons. Stat. Ann. § 5322(b); O'Connor, 496 F.3d at 316. Thus, in determining whether personal jurisdiction exists, the Court asks whether, under the Due Process Clause, DTS has "certain minimum contacts with [Pennsylvania] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." See Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation omitted).

"Minimum contacts can be analyzed in the context of general jurisdiction or specific jurisdiction." Metcalfe, 566 F.3d at 334; see Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15 & n.8, 9 (1984). In the present case, GeoDecisions asserts that DTS has the necessary Pennsylvania contacts needed to support both types of jurisdiction. The Court will address each in turn. See Metcalfe, 566 F.3d at 334 ("Because general and specific jurisdiction are ...


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