Ardent Techs. v. Advent SVCS LLC
| Docket Number | 3:23-cv-137 |
| Decision Date | 29 August 2023 |
| Parties | ARDENT TECHNOLOGIES INC., et al., Plaintiffs, v. ADVENT SVCS LLC, et al. Defendants, |
| Court | U.S. District Court — Southern District of Ohio |
ENTRY AND ORDER DENYING DEFENDANTS' MOTION TO DISMISS PLAINTIFFS' COMPLAINT OR, IN THE ALTERNATIVE, FOR CHANGE OF VENUE (DOC. NO. 9)
Presently before the Court is the Motion to Dismiss Plaintiffs' Complaint or, in the Alternative, for Change of Venue filed by Advent Svcs LLC d/b/a Advent Services (“Advent”) and its sole member, Tomas Santos-Alejandro (“Santos-Alejandro”) (collectively, “Defendants”). (Doc. No. 9.) Ardent Technologies Inc. (“ATI”) and its founder and CEO, Srinivas Appalaneni (“Appalaneni”) (collectively, “Plaintiffs”), brought the instant Complaint (the “Complaint”) against Defendants alleging five causes of action. (Doc. No. 1.) Defendants argue that this Court lacks personal jurisdiction over them in all respects. (Doc. No. 9.) In the alternative, the Motion submits that this case should be transferred to the Northern District of Florida. (Id.) In their response to Defendants' Motion (the “Response”) Plaintiffs argue that the Court holds both general and specific jurisdiction over Defendants. (Doc. No. 10) Plaintiffs further posit that maintaining venue in the Southern District of Ohio will best serve the interest of justice. (Id.) For the reasons stated below, the Court DENIES the Motion.
On May 19, 2023, Plaintiffs, filed their Complaint against Defendants in the Southern District of Ohio pursuant to 28 U.S.C. § 1332. (Doc. No. 1.) ATI and Advent are both businesses in the information technology industry that work to secure federal contracts. (Id. at PageID 2.) Specifically, ATI and Advent pursue federal contracts through their affiliation with the federal government's 8(a) program (the “8(a) Program”), as established under the Small Business Act.[1](Id.) ATI is an Ohio corporation with its principal place of business in Dayton Ohio and Appalaneni is domiciled in Ohio. (Id. at PageID 4.) Advent is a Florida limited liability company with its principal place of business in Lynn Haven, Florida and Santos-Alejandro is domiciled in Florida. (Id.)
The Complaint alleges that Appalaneni and Santos-Alejandro were introduced by a mutual acquaintance in 2019, shortly after ATI outgrew the regulatory qualifications for participation in the 8(a) Program.[2] (Id. at PageID 7.) In or around February of 2020, Appalaneni and Santos-Alejandro agreed to establish a joint venture between ATI and Advent whereby the businesses would compete for federal contracts together. (Id.) This joint venture would provide ATI with access to 8(a) Program contracts it outgrew and provide Advent, a qualified but unseasoned federal contractor, the benefit of ATI's resources, reputation, and expertise. (Id.)
Appalaneni further alleges that, from the outset, Advent used its mutually beneficial relationship with ATI to establish a presence in Ohio. (Doc. No. 10-2, at ¶ 14.) For purposes of pursuing federal contracts in Ohio, Advent executed a lease agreement for use of ATI's office space in Dayton, Ohio. (Id., at ¶ 7, Ex. 1.) Advent has since ceased using ATI's office address. However, Advent continues to publicly represent a presence in Dayton, Ohio. (Doc. No. 10-2, at ¶ 14, Ex. 3.)
By 2021 the Parties sought to further formalize their joint venture through the 8(a) Program's “mentor-protege” initiative.[3] (Id. at PagelD 8.) In November of 2021, Santos-Alejandro traveled to Dayton, on Appalaneni's invitation, to meet ATI's corporate team and negotiate terms of ATI's and Advent's prospective mentor-protege arrangement. (Id.) The terms negotiated at this meeting would ensure that Advent had ATI's administrative support, access to ATI's resources, and that Advent would be awarded all of ATI's remaining 8(a) Program contracts. (Id.; see also Doc. No. 1-1 at PageID 22-23.) Additionally, the joint venture would expand to provide Appalaneni a 49% equity interest in Advent. (Doc. No. 1 at PageID 8; see also Doc. No. 1-1 at PageID 23.) On November 16, 2021, Appalaneni commemorated these proposed terms in an email to Santos-Alejandro. (Doc. No. 1-1 at PageID 22-23.) After returning to Florida, Santos-Alejandro responded, iterating that he and Advent were “thrilled to partner with” Appalaneni and ATI. (Id.)
The 8(a) Program forbids a mentor company in any mentor-protege arrangement owning more than a 40% equity interest their protege company. (Doc. No. 1 at PageID 9.) Upon realizing this, the Parties quickly modified the terms of their mentor-protege arrangement to provide Appalaneni a 40% equity interest in Advent. (Id.) On January 27, 2022, ATI and Advent submitted their executed mentor-protege agreement to the federal government's Small Business Administration for approval in accordance with the 8(a) Program. (Id.; see also Doc. No. 1-2 at PageID 24-31.)
The Parties' mentor-protege agreement reified the terms allegedly negotiated between November and January 27, 2022, for the Parties' business relationship going forward. (Doc. No. 1-2 at Page ID 24-30.) The agreement proposed to the federal government that ATI would provide Advent with resources and assistance, including access to ATI's personnel, federal contracts, and capital. (Id. at PageID 25-27.) In return, Advent would “. . . convey to the Mentor an equity interest of 40% in the Protege firm per the SBA guidelines.” (Id. at PageID 25.) The federal government approved the Parties' proposed mentor-protege agreement on February 2, 2022. (Doc. No. 1 at PageID 9.)
Even still, the Parties' business relationship soured within the year. (Id. at PageID 11-13.) In August of 2022, the Parties disagreed as to the adequacy of ATI's performance pursuant to the approved mentor-protege arrangement. (Id. at PageID 11.) By October of 2022, Santos-Alejandro allegedly conveyed to Appalaneni his desire to renegotiate the terms of their joint venture. (Id. at PageID 12.) In November of 2022, Santos-Alejandro suggested renegotiation in person during a visit to Dayton, Ohio, but Appalaneni refused. (Id.) Santos-Alejandro and Appalaneni later aired their final grievances with one another and effectively ended their joint venture. (Doc. No. 1-4 at PageID 33-34; Doc. No. 1-5 at PageID 35-37.) The Complaint alleges that Advent nonetheless continues to solicit ATI's employees for employment opportunities with Advent. (Doc. No. 1 at PageID 13-15)
The Complaint alleges five counts: (1) breach of contract, (2) promissory estoppel, (3) unjust enrichment, (4) declaratory judgment for specific performance on the allegedly breached contract, and (5) tortious interference with a business/contractual relationship. (Doc. No. 1 at PageID 4.) On July 11, 2023, Defendants filed the present Motion. (Doc. No. 9.) On August 1, 2023, Plaintiffs filed their Response (Doc. No. 10) and on August 15, 2023, Defendants filed their Reply (Doc. No. 11). The Motion is now fully briefed and ripe for review and decision.
The party asserting a court's personal jurisdiction over an opposing party generally bears the burden of showing that such jurisdiction exists. CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1261-62 (6th Cir. 1996); AlixPartners, LLP v. Brewington, 836 F.3d 543, 547 (6th Cir. 2016) (). Where, as in the present case, a court considers a “Rule 12(b)(2) motion solely on written submissions, the plaintiff's burden is relatively slight, and the plaintiff must make only a prima facie showing that personal jurisdiction exists in order to defeat dismissal.” AlixPartners, 836 F.3d at 548-49 (internal quotation marks omitted). “The plaintiff meets this burden by setting forth specific facts showing that the court has jurisdiction.” Id. (internal quotation marks omitted). “The pleadings and affidavits submitted must be viewed in a light most favorable to the plaintiff, and the district court should not weigh the controverting assertions of the party seeking dismissal.” Id. (internal quotation marks omitted); see also Kerry Steel, Inc. v. Paragon Indus., Inc., 106 F.3d 147, 153 (6th Cir. 1997) ().
On a motion for transfer of venue, the moving party generally bears the burden of showing that (1) the transferor and transferee courts constitute proper venues, (2) transfer will serve the convenience of the parties and witnesses, and (3) the transfer will better serve the interest of justice. Centerville ALF, Inc. v. Balanced Care Corp., 197 F.Supp.2d 1039, 1049 (S.D. Ohio 2002) (citing U.S v. Northrop Corp., F.Supp. 330, 332 (S.D. Ohio 1992)); U.S. v. Cinemark USA, Inc., 66 F.Supp.2d 881, 887 (N.D. Ohio 1999).[4] Regarding the second and third prongs of the moving party's burden, “there is no definitive list of factors that must be considered.” Centerville, 197 F.Supp.2d at 1049. Rather, district courts have broad discretion in determining whether a transfer is appropriate on balance. Zimmer Enter., Inc. v. Atlandia Imports, Inc., 478 F.Supp.2d 983, 990 (S.D. Ohio 2007) (citing Fox v. Massey-Ferguson, Inc, No. 93-CV-74615-DT 1994 U.S. Dist. LEXIS 8285, at *5, 1995 WL 307485, at *2 (E.D. Mich. Mar. 14, 1994)). “A motion for...
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