Amx Int'l Inc. v. Battelle Energy Alliance Llc

• Decision Date: 07 October 2010
• Docket Number: Case No. 1:09–CV–210–BLW.
• Citation: 744 F.Supp.2d 1087
• Parties: AMX INTERNATIONAL, INC., an Idaho corporation, Plaintiff,v.BATTELLE ENERGY ALLIANCE, LLC, a Delaware limited liability company, Defendant.
• Court: U.S. District Court — District of Idaho

744 F.Supp.2d 1087

AMX INTERNATIONAL, INC., an Idaho corporation, Plaintiff,

v.BATTELLE ENERGY ALLIANCE, LLC, a Delaware limited liability company, Defendant.

Case No. 1:09–CV–210–BLW.

United States District Court, D. Idaho.

Oct. 7, 2010.

Michael D. Gaffney, John Michael Avondet, Beard St. Clair Gaffney PA, Idaho Falls, ID, for Plaintiff.Lee Radford, Kimberly D. Evans Ross, Moffatt Thomas Barrett Rock & Fields, Idaho Falls, ID, David Jensen Dance, Moffatt Thomas Barrett Rock & Fields, Chtd., Pocatello, ID, for Defendant.

MEMORANDUM DECISION AND ORDER

B. LYNN WINMILL, Chief Judge.

INTRODUCTION

Before the Court is Defendant Battelle Energy Alliance, LLC's Motion for Summary Judgment (Docket No. 29.) Oral argument was held on August 25, 2010, and the motion is at issue. For the reasons expressed below, the Court will grant Battelle's Motion for Summary Judgment.

BACKGROUND

Plaintiff AMX International, Inc. operates a business and information technology consulting company. It contracts with private companies and government entities to provide software and other computer consulting, support, and training services. The services AMX offers include the provision of technology support staff. AMX hires IT professionals, and then subcontracts their services to its clients.

When hired, all AMX employees sign non-competition agreements that prohibit them from “[d]irectly or indirectly working as or for an Active Client” for a period of 12 months following employment with AMX. See, e.g., William R. Newland Non–Competition Agreement, Dkt. 29–18. An Active Client is: “a person, business or entity that AMX has sent an invoice to or concerning within the prior 24 months and who is listed in the invoice as the ‘client’ or under the ‘Bill to.’ ” Id.

In March 2006, AMX began providing its employees' IT services to Battelle. Typically, AMX service contracts contain an Employment Recruitment provision prohibiting the client from soliciting or hiring AMX employees. But Battelle has a policy against the inclusion of such clauses in its services contracts, and AMX never requested that its standard no-hire provision be included in any of its contracts with Battelle. Therefore, no contract barred Battelle from hiring former AMX employees. AMX admitted this, according to Battelle, by noting in an internal company email, “there is nothing that restricts [Battelle] from hiring AMX employees.” May 23, 2007 Email from Brent Stacey to Jay Price at PLA008, Dkt. 29–9. Battelle, however, did know that each AMX employee subcontracted to Battelle had a non-competition agreement with AMX, which prohibited the employee from working directly for Battelle.

It is undisputed that former AMX employees applied for jobs working directly for Battelle and were hired. In 2008, AMX filed a suit against former employee Trevor Ball to enforce Ball's covenant not to compete. The state court denied AMX's request for preliminary injunctive relief, and AMX withdrew its complaint.

AMX now alleges that Battelle tortiously interfered with its employee non-competition agreements by “hir[ing] away AMX employees assigned to work at the BEA worksite.” Am. Compl. ¶ 29, Dkt. 20. AMX complains that Battelle's conduct—recruiting and inducing AMX employees to breach their non-competition agreements—“has deprived AMX of no less than $2 million in fees to date.” Id. ¶ 24. Battelle seeks summary judgement on AMX's claim.

LEGAL STANDARD

One of the principal purposes of the summary judgment “is to isolate and dispose of factually unsupported claims ....” Celotex Corp. v. Catrett, 477 U.S. 317, 323–24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). It is “not a disfavored procedural shortcut,” but is instead the “principal tool[ ] by which factually insufficient claims or defenses [can] be isolated and prevented from going to trial with the attendant unwarranted consumption of public and private resources.” Id. at 327, 106 S.Ct. 2548. “[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

The evidence must be viewed in the light most favorable to the non-moving party, and the Court must not make credibility findings. Id. at 255, 106 S.Ct. 2505. Direct testimony of the non-movant must be believed, however implausible. Leslie v. Grupo ICA, 198 F.3d 1152, 1159 (9th Cir.1999). On the other hand, the Court is not required to adopt unreasonable inferences from circumstantial evidence. McLaughlin v. Liu, 849 F.2d 1205, 1208 (9th Cir.1988).

The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir.2001) (en banc). To carry this burden, the moving party need not introduce any affirmative evidence (such as affidavits or deposition excerpts) but may simply point out the absence of evidence to support the nonmoving party's case. Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 532 (9th Cir.2000).

This shifts the burden to the non-moving party to produce evidence sufficient to support a jury verdict in her favor. Id. at 256–57, 106 S.Ct. 2505. The non-moving party must go beyond the pleadings and show “by her affidavits, or by the depositions, answers to interrogatories, or admissions on file” that a genuine issue of material fact exists. Celotex, 477 U.S. at 324, 106 S.Ct. 2548.

However, the Court is “not required to comb through the record to find some reason to deny a motion for summary judgment.” Carmen v. San Francisco Unified Sch. Dist., 237 F.3d 1026, 1029 (9th Cir.2001) (quoting Forsberg v. Pac. Northwest Bell Tel. Co., 840 F.2d 1409, 1418 (9th Cir.1988)). Instead, the “party opposing summary judgment must direct [the Court's] attention to specific triable facts.” Southern California Gas Co. v. City of Santa Ana, 336 F.3d 885, 889 (9th Cir.2003).

ANALYSIS

Four elements must be proven in order to establish a prima facie case of tortious interference with contract. The plaintiff must show that 1) there was a contract in existence; 2) the defendant knew of the contract; 3) the defendant intentionally interfered with the contract, causing a breach; and 4) injury to the plaintiff resulted from the breach. Magic Valley Truck Brokers, Inc. v. Meyer, 133 Idaho 110, 982 P.2d 945, 950 (Idaho Ct.App.1999).

In this case, AMX asserts that Battelle tortiously interfered with the AMX employees' noncompete agreements. To prevail on this claim, AMX must prove that Battelle, with knowledge of the agreements, engaged AMX employees to perform work that violated their noncompete agreements. Magic Valley Truck Brokers v. Meyer, 133 Idaho 110, 982 P.2d 945, 951 (Idaho Ct.App.1999).

1. Battelle Was a Stranger to the Noncompete Agreements.

A claim for tortious interference with contract, however, also requires proof that the defendant is a stranger to the contract with which the defendant allegedly interfered and to the business relationship giving rise to the contract. BECO Constr. Co., Inc. v. J–U–B Engineers, 145 Idaho 719, 184 P.3d 844 (2008). Battelle insists it is not a stranger to the noncompetition agreements and therefore cannot be liable for tortious interference with the covenants not to compete.

In BECO, the Idaho Supreme Court applied the “stranger to the contract” doctrine in a suit by a general contractor for a city development project against the city and the project engineer hired by the city to monitor the project's progress. 184 P.3d at 847. The contractor alleged the project engineer interfered with the construction contract by conducting unnecessary testing and unreasonably shutting down the project. The court held that the project engineer could not be liable for tortious interference with the construction contract because the project engineer was acting as the city's agent and for the city's benefit, and therefore it was not a stranger to the contract. Id. at 850.

Application of BECO here is unclear. If Battelle had been acting as an agent of AMX or of AMX's employees, BECO would clearly dictate granting summary judgment in favor of Battelle. But Battelle was neither an agent of AMX or AMX's employees. In an effort to accommodate the facts of this case, it urges the Court to take a more expansive view of the court's holding in BECO. It contends that under Idaho law, an entity that “has any beneficial or economic interest in, or control over” the business relationship underlying the allegedly disrupted contract, is not a stranger to the contract and cannot be held liable for interference with that relationship. Battelle Br. at 6 (emphasis in original).

Based on a careful review of BECO, the Court does not believe the Idaho Supreme Court intended to articulate such a broad rule. The BECO opinion must be construed in light of its facts. Hash v. U.S., 454 F.Supp.2d 1066, 1072 (D.Idaho 2006) (quoting Bashore v. Adolf, 41 Idaho 84, 238 P. 534 (1925)). As explained by the Idaho Supreme Court, “[t]here is a pronounced line of demarcation between what is said in an opinion and what is decided by it.” Id. (internal quotation marks omitted). In BECO, the court held that the defendant was not a stranger to the contract because he acted as an agent of a contracting party. It did not discuss the immunity of an entity who was neither a party to the contract nor an agent to a contracting party.

Every decision cited by BECO to support its holding is equally inapplicable. Jenkins v. Boise Cascade Corp., 141 Idaho 233, 108 P.3d 380, 390 (2005); Leon v. Boise State Univ., 125 Idaho 365, 870 P.2d 1324, 1328–29 (1994); Ostrander v. Farm Bureau Mut. Ins. Co. of Idaho, 123 Idaho 650, 851 P.2d 946, 950 (1993). In those cases, it was clear the defendant was either a contracting party or its agent who could not be liable for interference. None...