Healthcare Servs. Grp. v. Moreta
| Decision Date | 15 November 2019 |
| Docket Number | CIVIL ACTION NO. 19-2260 |
| Parties | HEALTHCARE SERVICES GROUP, INC., Plaintiff, v. MILCIADES MORETA, and SERENE HEALTH SERVICES LLC, Defendants. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
MEMORANDUM
This case arises out of the alleged violation of a non-compete provision in an employment contract. Defendant Milciades Moreta worked for plaintiff Healthcare Services Group, Inc. ("HCSG") for approximately one year as a Housekeeping Account Manager at the Brigham Health and Rehabilitation Center in Newburyport, Massachusetts, before resigning to join defendant Serene Health Services LLC in a similar role at the same medical facility. Presently before the Court is Defendants' Motion to Dismiss Pursuant to Fed. R. Civ. [sic] 12(b)(2) or, in the Alternative, Motion to Transfer Venue. For the reasons set forth below, the Court denies the motion.
On April 3, 2018 defendant Milciades Moreta was hired as a Housekeeping Account Manager by HCSG. Compl. ¶ 18. HCSG, a contractor that provides services related to "housekeeping, laundry, environmental, and dining/nutrition to long-term care and acute-care health care facilities," assigned Moreta to work at Brigham Health. Compl. ¶¶ 2, 8. During his tenure as an Account Manager, Moreta signed two restrictive covenants [sic] agreements ("RCAs") with HCSG: the first upon his initial hiring; the second in exchange for an increase in bi-weekly pay, from $1,200 to $1,300, on August 20, 2018. Compl. Ex. B ("Moreta RCAs"). Each RCA prevented the employee from accepting "employment related to housekeeping, laundry, linen, and/or food services by any facility [or at any facility] in which Employee has worked, or been directly responsible for," for two years after leaving HCSG. Compl. ¶¶ 20-21; Moreta RCAs ¶¶ 6-7.
On April 3, 2019, the contract between HCSG and Brigham Health ended, and Serene, a competitor of HCSG, became the new housekeeping contractor for Brigham Health. Compl. ¶¶ 29-30. Because its contract with Brigham Health ended, HCSG offered Moreta an Account Manager position and increased pay at another facility that HCSG served, but Moreta declined on the ground that the new facility was unfamiliar and too far from his home. Id. ¶¶ 32-33; Defs.' Mot. Dismiss 4. Soon thereafter, Moreta accepted a position similar to that of Account Manager with Serene, overseeing housekeeping services at Brigham Health. Id. ¶¶ 32-33. This move to Serene, plaintiff alleges, violated the non-compete provision of the RCAs.
Importantly, the RCAs contain a forum selection clause that provides that Moreta consents to personal jurisdiction in Pennsylvania courts.1 Moreta RCAs ¶ 8.B. The RCAs also include a choice-of-law provision designating Pennsylvania law. Id. ¶ 14.
On May 16, 2019 plaintiff filed a Complaint in the Court of Common Pleas of BucksCounty, asserting claims for the following: breach of contract against Moreta (Count II);2 tortious interference with contractual relations against Serene (Count III); and an injunction prohibiting Moreta from working as an employee for Serene at Brigham Health and prohibiting Serene from employing Moreta at Brigham Health (Count IV). Compl. ¶¶ 48-70.
Defendants filed a Notice of Removal in this Court on May 23, 2019 (Document No. 1). Defendants then filed a Motion to Dismiss Pursuant to Fed. R. Civ. [sic] 12(b)(2) or, in the Alternative, Motion to Transfer Venue (Document No. 8, filed June 6, 2019). The motion is fully briefed and ripe for decision.3
"A district court sitting in diversity may assert personal jurisdiction over a nonresident defendant to the extent allowed under the law of the forum state." Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330 (3d Cir. 2009). Pennsylvania's long-arm statute provides for personal jurisdiction to the fullest extent allowed under the Constitution's due process clause. 42 Pa. C.S. § 5322. Courts reviewing a motion to dismiss for lack of personal jurisdiction "must accept all of the plaintiff's allegations as true and construe disputed facts in favor of the plaintiff." Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 142 n.1 (3d Cir. 1992).
There are two types of personal jurisdiction over a defendant: general and specific. General jurisdiction exists where the defendant has contacts with the forum state that "are so 'continuous and systematic' as to render [the defendant] essentially at home in the forum State."Daimler AG v. Bauman, 571 U.S. 117, 127 (2014) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011) (internal quotation marks omitted)). General jurisdiction does not require the underlying cause of action to be related to defendant's activities in the state. Goodyear, 564 U.S. at 919.
In contrast, specific jurisdiction "depends on an affiliation between the forum and the underlying controversy" and is "confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction." Id. (citations omitted). To establish specific jurisdiction, plaintiff must satisfy three requirements. Plaintiff must show that (1) the defendant "purposefully directed [its] activities at the forum"; (2) the litigation arises out of or relates to at least one of those activities; and (3) once the first two requirements are satisfied, the court may exercise jurisdiction if doing so would comport with traditional notions of "fair play and substantial justice." D'Jamoos ex rel. Estate of Weingeroff v. Pilatus Aircraft Ltd., 566 F.3d 94, 102 (3d Cir. 2009) (internal quotation marks omitted).
These requirements for personal jurisdiction may also be waived by the parties. "[L]itigants can give 'express or implied consent to the personal jurisdiction of the court' through a 'variety of legal arrangements,' including forum selection clauses in contracts executed by the parties." Skold v. Galderma Labs., L.P., 99 F. Supp. 3d 585 (E.D. Pa. 2015) (quoting Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 703 (1982)).
28 U.S.C. § 1404(a) provides that a federal district court may transfer a case when three conditions are met: (1) the civil action could have been properly brought initially in the proposed transferee federal court; (2) transfer will be more convenient for both the parties and the witnesses; and (3) the transfer will be in the "interest of justice." See Jumara v. State Farm Ins.Co., 55 F.3d 873, 879 (3d Cir. 1995); Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970).
Although "[t]he decision to transfer is in the court's discretion, . . . a transfer is not to be liberally granted" under § 1404(a). Shutte, 431 F.2d at 25 (quoting Handlos v. Litton Indus., Inc., 304 F. Supp. 347, 352 (E.D. Wis. 1969)); see Jumara, 55 F.3d at 879 (). Accordingly, once a court considering transfer determines that a case could have been properly filed in another district, the court must evaluate "all relevant factors," including "the private and public interests protected by the language of § 1404(a)." Jumara, 55 F.3d at 879. Ultimately, the party moving to transfer bears the burden to demonstrate that transfer is appropriate. Id. at 879.
In cases where the plaintiff and defendant are bound by an enforceable forum selection clause, the Court's calculus under the § 1404(a) inquiry changes. See Atl. Marine Constr. Co. v. U.S. Dist. Court for W. Dist. of Tex., 571 U.S. 49, 63 (2013). Under these circumstances, courts "deem the private-interest factors to weigh entirely in favor of the preselected forum" and only consider whether the public interest factors "overwhelmingly" favor transfer, because the plaintiff and defendant have already privately agreed to a forum. Id. at 64, 67. However, in cases where some defendants are bound by the forum selection clause and others are not, the Third Circuit applies a further-modified § 1404(a) transfer analysis, which is analyzed at infra p. 13. See In re: Howmedica Osteonics Corp., 867 F.3d 390, 403 (3d Cir. 2017).
Defendants argue that this case should be dismissed because the Court lacks personal jurisdiction over both defendants. Alternatively, defendants contend that the case should be transferred to the District of Massachusetts for the convenience of the parties. The Court rejectsboth arguments. Moreta and Serene each consented to the Court's personal jurisdiction and transfer is not warranted under § 1404(a).
A party may consent to personal jurisdiction by signing a contract that contains a forum selection clause. Compagnie des Bauxites de Guinee, 456 U.S. at 703-04. Forum selection clauses are "prima facie valid and should be enforced unless enforcement is shown by the resisting party to be 'unreasonable' under the circumstances." M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972). Enforcement is unreasonable when the moving party "establishes (1) that [the provision] is the result of fraud or overreaching, (2) that enforcement would violate a strong public policy of the forum, or (3) that enforcement would in the particular circumstances of the case result in litigation in a jurisdiction so seriously inconvenient as to be unreasonable." Coastal Steel Corp v. Tilgman Wheelabrator, Ltd., 709 F.2d 190, 202 (3d Cir. 1983). The Supreme Court in M/S Bremen held that the moving party must make a "strong showing" that a forum selection clause is unreasonable under the circumstances. 407 U.S. at 15.
Moreta argues that enforcement of the RCA forum selection clause would be unreasonable because the provision was obtained by fraud or overreach, and enforcement would be unreasonably inconvenient. The Court rejects these arguments, noting that my colleague, Judge Slomsky, in a similar case between HCSG and...
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