Allegiant Mktg. Grp., Inc. v. Direct Innovations, LLC
| Decision Date | 26 August 2015 |
| Docket Number | Case No. CIV-15-40-D |
| Parties | ALLEGIANT MARKETING GROUP, INC., an Oklahoma corporation, Plaintiff, v. DIRECT INNOVATIONS, LLC, a Texas limited liability company, STRIKE MARKETING, LLC a Texas limited liability company, McCARTHY COMPANIES, INC., a Texas corporation, and AMBERLY ALLEN, Defendants. |
| Court | U.S. District Court — Western District of Oklahoma |
In this action, Allegiant Marketing Group, Inc. (Allegiant) brings a host of complaints against Defendants Direct Innovations, LLC, Strike Marketing, LLC, McCarthy Companies, Inc. and Amberly Allen, alleging Defendants usurped and misappropriated its proprietary and confidential information, namely, its "Mystery Mania" direct mailer program, which offers discount vouchers and price certificates to consumers/potential customers. This matter comes before the Court on (1) Direct Innovations and Allen's Motion to Dismiss for Lack of Personal Jurisdiction or, Alternatively, Motion to Transfer [Doc. No. 18] and (2) Defendants McCarthyCompanies and Strike Marketing's Motion to Dismiss [Doc. No. 38]. Allegiant has responded to the motions and the matter is now at issue.
This case and its companion, Weisgarber Investments, Inc., et al. v. Direct Innovations, LLC, et al., No. CIV-15-190-D, arise out of a failed business relationship between Allegiant, its related entities, and Defendant Allen and her company, Direct Innovations, LLC. The following facts are taken from the Complaint and the parties' submissions, all of which are viewed in the light most favorable to Allegiant. AST Sports Science, Inc. v. CLF Distribution Ltd., 514 F.3d 1054, 1056 (10th Cir. 2008) ().1
Allegiant is a full service mail provider. As part of its business, it develops and manages various marketing programs whereby promotional materials are distributed to consumers on behalf of Allegiant's clients. Notable among these marketing programs is "Mystery Mania," a program under which prospective customers receive discount vouchers and prize certificates. Allegiant is the owner of copyrights in the"Mystery Mania" program and other proprietary mailers used in connection with it.
Defendant Allen is the founder, president and sole shareholder of Defendant Direct Innovations, LLC, a Texas direct-mail company that provides "turnkey" direct marketing products to car dealers and advertising agencies. Because of Allegiant's prior experience in developing proprietary marketing materials for automobile dealerships, Allen contacted Allegiant about doing business together. Allen first became acquainted with Allegiant through social media contact with Eric Weisgarber, a director and shareholder of Allegiant.
After several discussions, Allegiant and Direct Innovations entered into a "Licensing Agreement for Direct Mail Piece" (the Agreement) under which Allegiant granted Direct Innovations the use of, among other proprietary items, the "Mystery Mania" program. The Agreement contained a forum selection clause, entitled "Recitals," which stated:
Both parties agree that in the event cause arises to seek court redress, that this agreement will be interpreted and governed by the laws of the State of Oklahoma and that any actions will be brought in the State of Oklahoma. Direct Innovations agrees to pay all reasonable attorney's fees and costs incurred by Allegiant Marketing Group, Inc. to defend Allegiant Marketing Group's copyright under this agreement. In the event that any portion of this agreement and license becomes unenforceable, it shall be severed and all other portions shall remain in effect.
See Declaration of Amberly Allen, Ex. 1 [Doc. No. 20] (emphasis added). Allen, onbehalf of Direct Innovations, signed the Agreement. Allen was also given access to a proprietary database, which contained names and contact information of individuals and entities in the automotive industry. The parties subsequently terminated the Agreement in November, 2013.
According to Allegiant, Direct Innovations merged with Strike Marketing and was acquired by McCarthy in 2014. After the acquisition, McCarthy appointed Allen as Director of Sales. Allegiant contends Defendants continued to promote and advertise the "Mystery Mania" program without Allegiant's consent, and despite the Agreement's termination, to unlawfully compete with Allegiant. Allegiant further states Allen has unlawfully maintained possession of Allegiant's proprietary database and continues to use it in connection with her business.
Defendants argue they are not subject to personal jurisdiction in Oklahoma because they have no substantial contacts with Oklahoma and it would be unfairly burdensome to require them to defend against Allegiant's claims in Oklahoma. Allegiant states Direct Innovations and Allen consented to jurisdiction in Oklahoma via the aforementioned forum selection clause and the other defendants, as successor entities, thus waived the right to contest personal jurisdiction in this Court. Allegiant also argues it has established a prima facie showing of personal jurisdiction and the exercise of jurisdiction would not offend traditional notions of fair play andsubstantial justice.
The plaintiff bears the burden of establishing personal jurisdiction. OMI Holdings v. Royal Ins. Co. of Can., 149 F.3d 1086, 1091 (10th Cir. 1998). This burden is light in the preliminary stages of litigation. Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir.1995). When there has been no evidentiary hearing, a plaintiff must only present competent proof in the form of affidavits and other written materials that, if true, would establish a prima facie showing that jurisdiction is proper. Id. To defeat such a showing by the plaintiff, a defendant must come forward with a "compelling case" that other considerations render jurisdiction unreasonable. OMI Holdings, 149 F.3d at 1091 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)); Rambo v. American Southern Ins. Co., 839 F.2d 1415, 1417 (10th Cir.1988). In the absence of a hearing, the Court accepts a plaintiff's well-pled allegations in a complaint - as opposed to conclusory allegations - as true to the extent they are not controverted by the defendant's affidavits. Wenz, 55 F.3d at 1505; ConocoPhillips Co. v. Jump Oil Co., 948 F. Supp. 2d 1272, 1277 (N.D. Okla. 2013). If there is a factual dispute, it is preliminarily resolved in the plaintiff's favor. AST Sports Science, 514 F.3d at 1056.
To obtain personal jurisdiction over a nonresident defendant in a diversity action, a plaintiff must show jurisdiction is proper under the laws of the forum state and the exercise of jurisdiction does not offend the Due Process Clause of the Fourteenth Amendment. Soma Medical Intern. v. Standard Chartered Bank, 196 F.3d 1292, 1295 (10th Cir. 1999). Oklahoma's long-arm statute, 12 OKLA. STAT. § 2004(F), provides "[a] court of this state may exercise jurisdiction on any basis consistent with the Constitution of this state and the Constitution of the United States." The long-arm statute is coextensive with the constitutional limitations imposed by the Due Process Clause. Rambo, 839 F.2d at 1416. Therefore, if jurisdiction is consistent with the Due Process Clause, Oklahoma's long arm statute authorizes jurisdiction over a nonresident defendant.
Personal jurisdiction may either be general or specific. A court may not exercise general jurisdiction over a nonresident unless the defendant has "continuous and systematic" business contact with the forum state. Employers Mut. Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153, 1160 n. 5 (10th Cir. 2010); Lively v. IJAM, Inc., 2005 OK CIV APP 29 ¶ 26, 114 P.3d 487, 494. The Supreme Court recently reiterated this standard in Daimler AG v. Bauman, ___ U.S. ___, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014), wherein it stated general jurisdiction refers to a court's powerto hear claims against a nonresident when its "affiliation with the State are so continuous and systematic' as to render [it] essentially at home in the forum state." Id. at 751 (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. ___, ___, 131 S.Ct. 2846, 2851, 180 L.Ed.2d 796 (2011)(emphasis added)).
In assessing contacts with a forum for purposes of general jurisdiction, the Tenth Circuit considers such factors as: "(1) whether the corporation solicits business in the State through a local office or agents; (2) whether the corporation sends agents into the state on a regular basis to solicit business; (3) the extent to which the corporation holds itself out as doing business in the forum state, through advertisements, listings or bank accounts; and (4) the volume of business conducted in the state by the corporation." Trierweiler v. Croxton and Trench Holding Corp., 90 F.3d 1523, 1533 (10th Cir. 1996). The facts cited to support general jurisdiction must be extensive and persuasive. Lively, 114 P.3d at 494. If general jurisdiction is found, "all causes of action against the defendant, whether or not related to the defendant's activities in that state, may be pursued in [the forum's] courts." Id. (citation omitted).
A specific jurisdiction analysis involves a two-step inquiry. First, a court must consider whether the defendant's conduct and connection with the forum are such that he should reasonably anticipate being haled into court there. Second, if thedefendant's actions create sufficient minimum contacts, the court must then consider whether the exercise of personal jurisdiction over the defendant offends traditional notions of fair play and substantial justice. Melea, Ltd. v. Jawer SA, 511 F.3d 1060, 1065 (10th Cir. 2007); Boatright Family, LLC v. Reservation Center, Inc., No. CIV-13-192-D, 2015 WL 2345299 at *2 (W.D. Okla. May 14, 2015) (citing Benton v. Cameco Corp., 375 F.3d 1070, 1075 (10th Cir. 2004)). "Minimum...
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