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Cratetech, Inc. v. Stockbox Logistics, LLC

United States District Court, D. Kansas

April 16, 2015

CRATETECH, INC., Plaintiff,
v.
STOCKBOX LOGISTICS, LLC, et al., Defendants.

MEMORANDUM AND ORDER

MONTI L. BELOT, District Judge.

This case comes before the court on defendants StockBox Logistics (StockBox) and Your Container Services' (YCS) motion to dismiss for lack of personal jurisdiction. (Doc. 14). The motion is fully briefed and ripe for decision. (Docs. 15, 21, 30). Defendants' motion is denied for the reasons herein. I. Facts

Plaintiff CrateTech is a Washington corporation with its principal place of business in Washington and also has locations in Wichita, Chicago and North Carolina. CrateTech is a crating and packaging supply company that specializes in the custom packaging of items, including aerospace products. CrateTech is the owner of the trademark CRATETECH. Defendant Daniel McDonald is a resident of Kansas and was employed by CrateTech until August 31, 2014. Defendant Ryan Haskin is a resident of Kansas and a past employee of Logistics Resource, Inc. (LRI).

During McDonald's employment, McDonald signed an Employee Confidentiality Agreement (Agreement) in which he agreed that upon his separation he would not compete with CrateTech for two years. The Agreement also required McDonald to protect the confidentiality of CrateTech's proprietary business information and not disclose the information without specific authorization from CrateTech.

On March 19, 2014, McDonald and Haskin formed defendant StockBox, a Texas limited liability company. McDonald and Haskin approached CrateTech with the proposition that StockBox enter into a licensing agreement with CrateTech. Under the proposed terms of the licensing agreement, StockBox would buy CrateTech containers to sell to customers in Texas. Ultimately, negotiations failed and a licensing agreement was not executed.

Between March and July 2014, McDonald and Haskin solicited Triumph, CrateTech's customer located in Texas, by email. The email stated that StockBox was formed for CrateTech customers in Texas and that McDonald, as an officer of CrateTech, was responsible for the newly formed entity in Texas.

On July 17, 2014, McDonald and Haskin acquired defendant Your Container Solutions (YCS). YCS is a Texas corporation that produces shipping containers.

Before his termination in August 2014, McDonald allegedly misappropriated CrateTech confidential and trade secret information by taking hard copies of financial data and a CrateTech laptop containing trade secret information. In addition, McDonald allegedly transmitted by email CrateTech's business and financial information, customer lists, product drawings, product cost information, product pricing, employee information and email addresses.

CrateTech filed a complaint against McDonald, Haskin, StockBox and YCS alleging claims of misappropriation of trade secrets, unfair competition, trademark infringement, conversion, and civil conspiracy.[1]

II. Analysis

StockBox and YCS move to dismiss the claims against them for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). It is well established that under a Rule 12(b)(2) motion to dismiss, CrateTech must make a prima facie showing that the court has personal jurisdiction over StockBox and YCS. See Intercon, Inc. v. Bell Atl. Internet Solutions, Inc., 205 F.3d 1244, 1247 (10th Cir. 2000). The court must accept CrateTech's allegations as true and resolve all factual disputes in its favor notwithstanding contrary positions by StockBox and YCS. Heating and Cooling Master Marketers Network, Inc. v. Contractor Success Group, Inc., 935 F.Supp. 1167, 1169 (D. Kan. 1996).

A federal court sitting in diversity applies the law of the forum state. Marcus Food Co. v. Crown Meat Co., Inc., 779 F.Supp. 514, 518 (D. Kan. 1991). Therefore, the court applies Kansas personal jurisdiction rules. To establish personal jurisdiction, CrateTech must show that: 1) the jurisdiction is authorized under Kansas law and 2) the exercise of such jurisdiction would not offend due process. See Trujillo v. Williams, 465 F.3d 1210, 1217 (10th Cir. 2006).

A. Kansas Long-Arm Statute

The Kansas long-arm statute specifies that a party submits to the jurisdiction of Kansas if the cause of action against it "arises from the doing of any of [eleven particular] acts, " including committing a tortious act in the state. K.S.A. 60-308(b). The Tenth Circuit has interpreted the Kansas long-arm statute "to allow jurisdiction to the full extent permitted by due process, " such that these two inquiries become duplicative. Federated Rural Elec. Ins. Corp. v. Kootenai Elec. Coop., 17 ...


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