Digital Generation, Inc. v. Boring

• Decision Date: 24 April 2012
• Docket Number: Civil Action No. 3:12–CV–00329–L.
• Citation: 869 F.Supp.2d 761
• Parties: DIGITAL GENERATION, INC. f/k/a, DG FastChannel, Inc., Plaintiff, v. Steven A. BORING, Defendant.
• Court: U.S. District Court — Northern District of Texas

869 F.Supp.2d 761

DIGITAL GENERATION, INC. f/k/a, DG FastChannel, Inc., Plaintiff,

v.Steven A. BORING, Defendant.

Civil Action No. 3:12–CV–00329–L.

United States District Court,

N.D. Texas,

Dallas Division.

April 24, 2012.

Keith Miles Aurzada, Bradley James Purcell, Thomas J. Adair, Dallas, TX, Curtis Allen Garrett, James F. Bogan, III, Atlanta, GA, for Plaintiff.

Buena Vista Lyons, Allyn J. Lowell, Dallas, TX, for Defendant.

MEMORANDUM OPINION AND ORDER

SAM A. LINDSAY, District Judge.

Before the court is Plaintiff's Motion for Preliminary Injunction in Aid of Arbitration (Doc. 5), filed February 1, 2012; Defendant's Motion to Dismiss Plaintiff's Verified Complaint or in the Alternative to Stay the Proceedings (Doc. 13), filed February 24, 2012; Defendant's Motion to Strike Plaintiff's Reply Brief in Support of Motion for Preliminary Injunction (Doc. 25), filed March 30, 2012; and Plaintiff's Motion for Leave to file Recast Reply Brief (Doc. 28), filed April 3, 2012. After considering the motions, record, and applicable law, the court denies Defendant's Motion to Dismiss Plaintiff's Verified Complaint and denies as moot its Alternative [Request] to Stay the Proceedings (Doc. 13); denies Plaintiff's Motion for Preliminary Injunction in Aid of Arbitration (Doc. 5); grants Plaintiff's Motion for Leave to file Recast Reply Brief (Doc. 28); denies as moot Defendant's Motion to Strike Plaintiff's Reply Brief in Support of Motion for Preliminary Injunction (Doc. 25); and dismisses this action with prejudice.

I. Background

Plaintiff Digital Generation, Inc. f/k/a DG FastChannel, Inc. (“DG”) commenced this action on January 31, 2012, against former employee Steven A. Boring (“Boring”), seeking only injunctive relief in the form of an ex parte temporary restraining order (“TRO”) and preliminary injunction. DG also initiated a related arbitration against Boring in Dallas, Texas. The exact status of the arbitration is unclear but according to the parties' briefing, they “are currently working within the arbitration forum as mandated by their arbitration agreement.” Def.'s Resp. 4. The arbitration and this action both stem from DG's belief that Boring has or will breach an employment agreement that precludes him from: (1) soliciting, for a period of twelve months after leaving DG, DG's customers or prospective customers with whom he had contact regarding DG's business during the previous two years; (2) disclosing confidential information defined as “any trade secret, confidential, proprietary, or non-public information and materials concerning [DG] or its clients”; and (3) recruiting other DG employees for a period of one year after leaving the company. Pl.'s Compl., Ex. A, ¶¶ 2, 4, and 5.

DG provides advertising and related services. Boring joined DG in 2004 as a regional sales manager for DG's Detroit office after his former employer was acquired by DG. According to DG, Boring oversaw or participated in a majority of DG's advertising sales to its clients in the Detroit area and was responsible for advertising that DG provided to two of its biggest clients, General Motors (“GM”) and Chrysler Group (“Chrysler”). DG contends that Boring was also privy to certain information that DG considers confidential, including marketing strategies, client lists, and DG employee contact information. Boring signed the employment agreement at issue that forms the basis for DG's Complaint and request for injunctive relief on March 7, 2011.

Later that same year on December 16, 2011, Boring received an offer of employment from Extreme Reach, another advertising agency in the Detroit area that DG contends is in direct competition with it. Boring accepted the offer of employment and notified DG on December 19, 2011, of his resignation and decision to work for Extreme Reach. Before leaving DG, Boring requested that he be able to access a folder on his DG laptop that contained personal information. DG discovered that the folder accessed by Boring contained personal information, as well as information that DG considers confidential, including: an internal DG presentation regardinghigh definition advertising; holiday client mailing lists for 2010 and 2011; a DG employee contact sheet containing employee cell phone numbers; a pricing document; a GM high definition rate reduction agency letter; and a sales report regarding November pricing for the Detroit area. It is not clear from DG's motion or pleadings whether this discovery was before or after Boring left the company. It is also unclear whether Boring took copies of these materials with him when he left the company.

Boring started working for Extreme Reach on January 3, 2012, as its regional director of sales. On January 19, 2012, Extreme Reach issued a press release stating that it intended to open a Detroit office to expand its presence to the Detroit automobile industry hub. On January 25, 2012, DG received information from an unspecified source that Boring and Chris Palmer (“Palmer”), another former DG employee, had visited Goodby Silverstein & Partners (“Goodby”). According to DG's complaint, Goodby provides a large volume of advertising for GM. DG therefore contends that “it appears that Mr. Boring is directly soliciting GM to move its advertising business from DG to Extreme Reach, in violation of the non-solicitation provision of the Employment Agreement.” Pl.'s Compl. 8, ¶ 23. In addition, DG contended that “[i]f Mr. Boring is permitted to recruit personnel from DG to Extreme Reach, DG's Detroit office will wither, the relationships it has developed with advertisers will diminish, if not terminate altogether, and DG will be irreparably harmed.” Pl.'s Compl. 12, ¶ 40.

In its February 2, 2012, 2012 WL 315480, memorandum opinion and order, the court denied without prejudice DG's request for an ex parte TRO that would have restrained Boring, for a period of fourteen days, from violating the employment agreement. The court, however, delayed ruling on Plaintiff's Motion for Preliminary Injunction in Aid of Arbitration until after service had been effected on Defendant Boring and he had an opportunity to file an answer in the action and a response to Plaintiff's motion. Since the court's ruling denying its request for an ex parte TRO, DG submitted additional evidence, first on March 23, 2012, in conjunction with its reply brief, and again on April 3, 2012, in an effort to correct the deficiencies noted in the court's prior order and Boring's response, and to establish that Boring has solicited DG clients, disclosed confidential information, and recruited DG employees in violation of his employment agreement. As explained herein, however, the new evidence was not submitted until sometime after Boring had already responded to DG's motion for a preliminary injunction.

On February 24, 2012, Boring moved to dismiss this action for lack of personal jurisdiction. Alternatively, Boring requested that the court stay the case pending arbitration if it is determined that the court has personal jurisdiction. On March 9, 2012, Boring responded and objected to Plaintiff's Motion for Preliminary Injunction in Aid of Arbitration, arguing that the court lacks personal jurisdiction over him, and DG has not met its burden for a preliminary injunction. On March 3, 2012, Boring also moved to strike the reply filed by DG in support of its request for injunctive relief on the grounds that it exceeded the page limit for replies in violation of the court's local rules. On April 3, 2012, DG responded to Boring's motion for strike and sought leave to file a “recast” or amended reply that conformed with the local rule requirement regarding page limits. On the same day, DG submitted additional declaration testimony to support its contention that Boring recruited a DG employee in violation of his employment agreement. The supplemental materials were filed without leave of court and withoutconferring with Boring. Before considering the parties' argument regarding the injunctive relief requested by DG, the court first determines whether it has personal jurisdiction over Boring.

II. Personal JurisdictionA. Standard for Motion to Dismiss for Lack of Personal Jurisdiction

On a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing a prima facie case for the court's jurisdiction over a nonresident defendant. See Ham v. La Cienega Music Co., 4 F.3d 413, 415 (5th Cir.1993); Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir.1985). When the court rules on the motion without an evidentiary hearing, the plaintiff may establish personal jurisdiction by presenting a prima facie case that personal jurisdiction is proper, id.; proof by a preponderance of the evidence is not required. International Truck and Engine Corp. v. Quintana, 259 F.Supp.2d 553, 556 (N.D.Tex.2003) (citing WNS, Inc. v. Farrow, 884 F.2d 200, 203 (5th Cir.1989)). The court may determine the jurisdictional issue by receiving affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery. Stuart, 772 F.2d at 1192. Uncontroverted allegations in a plaintiff's complaint must be taken as true, and conflicts between the facts contained in the parties' affidavits must be resolved in favor of the plaintiff. Bullion v. Gillespie, 895 F.2d 213, 217 (5th Cir.1990). After a plaintiff makes his prima facie case, the burden then shifts to the defendant to present “a compelling case that the presence of some other consideration would render jurisdiction unreasonable.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985).

A federal court has jurisdiction over a nonresident defendant if the state long-arm statute confers personal jurisdiction over that defendant, and if the exercise of jurisdiction is consistent with due process under the United States Constitution. Ruston Gas Turbines, Inc. v. Donaldson Co., Inc., 9 F.3d 415, 418 (5th...