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Freightquote.com v. BAH Express

November 17, 2008

FREIGHTQUOTE.COM, PLAINTIFF,
v.
BAH EXPRESS, INC., ET. AL, DEFENDANTS.



The opinion of the court was delivered by: Carlos Murguia United States District Judge

MEMORANDUM AND ORDER

Plaintiff Freightquote.com, Inc. ("Freightquote") brings this case against defendants BAH Express, Inc. ("BAH") and Lisa Walker, alleging breach of a covenant not to solicit, breach of contract, and tortious interference. This case is pending before the court on defendant BAH Express, Inc.'s Motion to Dismiss the Plaintiff's Petition for Lack of Personal Jurisdiction Under Federal Rule of Civil Procedure 12(b)(2) (Doc. 2). Because plaintiff's allegations support personal jurisdiction, the court denies defendant BAH's motion.

I. Factual Background

Plaintiff, a broker of shipping services, is a Delaware corporation with its principle place of business in Kansas. It is the parent company of Rockwell Transportation Services ("Rockwell"), which operates shipping services in Georgia. Defendant BAH is a Georgia corporation with its principle place of business in Georgia. Defendant Lisa Walker is a resident of Georgia. Until March 4, 2008, she worked for Rockwell.

Plaintiff requires its employees to execute non-solicitation/non-competition agreements. Employees agree not to work for a competitor for one year after termination of their employment and not to solicit the business of plaintiff's clients for two years. The agreements state that all disputes are governed by the laws of Kansas and that employees expressly submit to the exclusive personal jurisdiction and venue of Kansas state and federal courts. Defendant Walker entered into such an agreement with plaintiff.

Defendant Walker resigned from her employment with plaintiff on March 4, 2008. She began working for defendant BAH, a direct business competitor of plaintiff. Plaintiff brings this action against defendant Walker for breach of the non-solicitation agreement and against defendant BAH for tortious interference with the agreement.

II. Personal Jurisdiction

A plaintiff bears the burden of establishing personal jurisdiction over a defendant. Fed. Deposit Ins. Corp. v. Oaklawn Apartments, 959 F.2d 170, 174 (10th Cir. 1992). To demonstrate personal jurisdiction sufficient to defeat a motion to dismiss, a plaintiff need only make a prima facie showing that jurisdiction exists. Ten Mile Indus. Park v. W. Plains Serv. Co., 810 F.2d 1518, 1524 (10th Cir. 1987). "In ascertaining the facts necessary to establish jurisdiction, the district court must accept as true the allegations set forth in the complaint to the extent they are uncontroverted by the defendant's affidavits." Id. However, the plaintiff has the "duty to support jurisdictional allegations in a complaint by competent proof of the supporting facts if the jurisdictional allegations are challenged by an appropriate pleading." Pytlik v. Prof'l Res. Ltd., 887 F.2d 1371, 1376 (10th Cir. 1989). The complaint and any affidavits submitted are to be construed, and any doubts are to be resolved, in the light most favorable to the plaintiff. Fed. Deposit, 959 F.2d at 174. Each of defendant's contacts with the forum state must be assessed individually. Keeton v. Hustler Magazine, 465 U.S. 770, 781 n.13 (1984); Traffas v. Bridge Capital Corp., No. 90-1304-C, 1990 WL 251740, at *7 (D. Kan. Dec. 3, 1990).

In analyzing a motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2), the court must determine whether the defendant's conduct falls within one of the provisions of the Kansas long-arm statute, Kan. Stat. Ann. § 60-308, and whether the exercise of jurisdiction would offend the constitutional guarantee of due process. See Equifax Servs., Inc. v. Hitz, 905 F.2d 1355, 1357 (10th Cir. 1990). However, "these inquiries are for all intents and purposes the same because the Kansas long-arm statute . . . has been liberally construed by the Kansas courts to assert personal jurisdiction to the full extent permitted by the due process clause." Flannagan v. Bader, 905 F. Supp. 933, 936 (D. Kan. 1995). Therefore, the court proceeds directly to the constitutional inquiry. See OMI Holdings, Inc. v. Royal Ins. Co. of Can., 149 F.3d 1086, 1090 (10th Cir. 1998) (citation omitted); Federated Rural Elec. Ins. Corp. v. Kootenai Elec. Coop., 17 F.3d 1302, 1304--05 (10th Cir. 1994).

"The [Constitutional] 'minimum contacts' standard may be met in one of two ways." OMI Holdings, 149 F.3d at 1090. First, a court may exercise specific jurisdiction over a nonresident defendant where "the defendant has 'purposefully directed' his activities at residents of the forum, and the litigation results from alleged injuries that arise out of or are related to those activities." Id. at 1090--91 (quoting Burger King, 471 U.S. at 472; Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 109 (1987)). Where no nexus is alleged to exist between the defendant's forum-related activities and the injury sustained, a court may nevertheless exercise "general" jurisdiction over a nonresident defendant whose contacts with the forum state are so pervasive that personal jurisdiction is conferred by the "continuous and systematic" nature of the defendant's in-state activities. Id. Plaintiff alleges that the court has both specific and general jurisdiction over defendant BAH.

a. Specific Jurisdiction

Consistent with due process, specific jurisdiction may be conferred over a nonresident defendant where the court's exercise of jurisdiction directly arises from the defendant's forum-related activities. To determine whether specific jurisdiction is appropriate, the court must first decide whether the defendant has such minimum contacts within the forum state "that he should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). Second, the court must then consider whether the exercise of personal jurisdiction offends "traditional notions of fair play and substantial justice." Asahi Metal, 480 U.S. at 113. This inquiry requires a determination of whether the district court's exercise of personal jurisdiction over a defendant with minimum contacts is reasonable in light of the circumstances surrounding the case. Pro Axess, Inc. v. Orlux Distribution, Inc., 428 F.3d 1270, 1279 (10th Cir. 2005).

1. Minimum Contacts

The minimum contacts standard requires (1) that the out-of-state defendant "purposefully directed" its activities at residents of the forum state, and (2) that the plaintiff's injuries "arise out of" defendant's forum-related activities. Burger King, 471 U.S. at 472; Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1071 (10th Cir. 2008). The shared aim of the "purposeful direction" doctrine is to ensure that an out-of-state defendant is not bound to appear to account for ...


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