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Synthes, Inc., v. Gordon

United States District Court, E.D. Pennsylvania

October 16, 2017

SYNTHES, INC., et al.
v.
TY GORDON

          MEMORANDUM

          Bartle, J.

         Plaintiffs Synthes, Inc., DePuy Orthopaedics, Inc., Synthes USA, LLC, DePuy Spine, LLC, and DePuy Synthes Sales, Inc. bring this diversity action against former employee Ty Gordon for breach of a Confidentiality, Non-Solicitation, and Non-Competition Agreement. Plaintiffs seek injunctive relief and damages, as well as attorneys' fees and costs. Before the court is the motion of defendant to dismiss plaintiffs' amended complaint under Rules 12(b)(1) and 12(b)(2) of the Federal Rules of Civil Procedure, or in the alternative, to transfer venue under 28 U.S.C. § 1404(a).

         I.

         Under Rule 12(b)(1), a court must grant a motion to dismiss if it lacks subject matter jurisdiction to hear a claim. “A motion to dismiss for want of standing is . . . properly brought pursuant to Rule 12(b)(1), because standing is a jurisdictional matter.” In re Schering Plough Corp. Intron/Temodar Consumer Class Action, 678 F.3d 235, 243 (3d Cir. 2012) (quoting Ballentine v. United States, 486 F.3d 806, 810 (3d Cir. 2007)). In evaluating a Rule 12(b)(1) motion, a court must first determine whether the movant presents a facial or factual attack. Id. In reviewing a facial challenge, which contests the sufficiency of the pleadings, “the court must only consider the allegations of the complaint and documents referenced therein and attached thereto, in the light most favorable to the plaintiff.” Id. (quoting Gould Elec. Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000)). In contrast, when considering a factual attack the court may weigh and consider evidence outside the pleadings. Constitution Party of Pa. v. Aichele, 757 F.3d 347, 358 (3d Cir. 2014). Because no answer to the amended complaint has been filed, we construe defendant's motion as a facial attack. Id.

         Rule 12(b)(2) directs the court to dismiss a case when the court lacks personal jurisdiction over the defendant. When reviewing a motion to dismiss pursuant to Rule 12(b)(2), a court must accept as true all allegations of jurisdictional fact made by plaintiff and resolve all factual disputes in plaintiff's favor. Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330-31 (3d Cir. 2009). Once a jurisdictional defense has been raised, the plaintiff bears the burden of establishing the court's jurisdiction over the defendant. Id.

         II.

         We first turn to the factual allegations as set forth in the amended complaint. Plaintiffs are a group of affiliated entities that design, manufacture, and sell medical devices, including instrumentation and implants for use in orthopaedic surgeries for broken bones, joint reconstruction and replacement, and spinal and facial surgery. On or about November 13, 2007, Synthes hired defendant as a territory assistant in the Jacksonville, Florida area, with principal responsibility for Synthes' trauma products. Gordon was promoted to sales consultant on or about December 19, 2009.

         At the time of his initial hiring in 2007, defendant executed a Confidentiality, Non-Solicitation and Non-Competition Agreement (“2007 Agreement”) with Synthes (U.S.A.).[1] Thereafter, defendant executed a second Confidentiality, Non-Solicitation and Non-Competition Agreement (“2009 Agreement”) in consideration of his promotion to Sales Consultant. The counter-signatory to that Agreement was Synthes USA Sales, LLC, which subsequently assigned its rights under the contract to plaintiff DePuy Synthes Sales, Inc.

         Under the 2009 Agreement, Gordon was prohibited from using or disclosing to third parties certain confidential information of Synthes both during and after his employment. He also agreed that he would not solicit, contact, or provide services to several enumerated categories of current or prospective customers of Synthes for a period of twelve months following termination of his employment.

         Defendant resigned from Synthes on or about May 29, 2017 to accept a sales representative position with Stryker, a competitor of Synthes. Plaintiffs allege that since at least June 2017, defendant has violated the 2009 Agreement by contacting and providing services to his former Synthes hospital accounts on behalf of Stryker. On July 28, 2017, plaintiffs filed a one-count complaint against defendant seeking, as noted above, injunctive relief and damages for breach of contract. Thereafter, plaintiffs filed a verified amended complaint with substantially similar allegations to the original complaint. Plaintiffs have also moved for a preliminary injunction and for expedited discovery. In turn, defendant filed this motion to dismiss the amended complaint.

         III.

         Defendant first asserts that the amended complaint should be dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) because plaintiffs lack standing to bring this action. The gravamen of defendant's argument is that the only plaintiff with rights to enforce the 2009 Agreement is DePuy Synthes Sales, Inc., pursuant to the assignment of rights from Synthes USA Sales, LLC. According to defendant, DePuy Synthes Sales, Inc. lacks standing to bring this action because it does not make or sell any products, and therefore does not have any business with which defendant can compete.

         To assess defendant's arguments, we begin with the language of the 2009 Agreement itself. That Agreement defines “Synthes” broadly as:

Synthes USA Sales, LLC, its members, and its and their parents, affiliates, subsidiaries, divisions, and related companies or entities, and their respective predecessors, successors and assigns, now existing or hereafter created, including, but not limited to Synthes Inc., Synthes USA HQ, Inc., Synthes USA Products, LLC, Synthes USA, LLC and ...

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