Medtronic Sofamor Danek, Inc. v. Gannon
| Decision Date | 16 October 2017 |
| Docket Number | Case No. 0:17-cv-00943 (SRN/FLN) |
| Parties | Medtronic Sofamor Danek, Inc., Medtronic Sofamor Danek USA, Inc., and Medtronic, Inc., Plaintiffs, v. Patrick B. Gannon, Defendant. |
| Court | U.S. District Court — District of Minnesota |
Jonathan S. Parritz, Melissa R. Muro LaMere, Wayne S. Moskowitz, and William Z. Pentelovitch, Maslon LLP, 90 South Seventh Street, Suite 3300, Minneapolis, Minnesota 55402, for Plaintiffs.
Anthony Barrett Haller and Leigh Ann Buziak, Blank Rome LLP, One Logan Square, 130 North Eighteenth Street, Philadelphia, Pennsylvania 19103, Mary L. Knoblauch, Anthony Ostlund Baer & Louwagie PA, 90 South Seventh Street, Suite 3600, Minneapolis, Minnesota 55402, for Defendant.
This matter is before the Court on two motions: Defendant's Renewed Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue or, in the Alternative, to Transfer [Doc. No. 4] ("Motion to Dismiss"), and Plaintiffs' Motion to Remand [Doc. No. 13].
Defendant Patrick Gannon ("Gannon") removed this case to federal court from Anoka County District Court where it was originally filed. Plaintiffs Medtronic, Inc., Medtronic Sofamor Danek, Inc., and Medtronic Sofamor Danek USA, Inc. (collectively "Medtronic") maintain that Gannon is bound to litigate this claim in Minnesota state court by a valid forum selection clause in his employment contract. The Court finds that the forum selection clause is binding and grants Medtronic's Motion to Remand. Consequently, the Court does not reach Gannon's Motion to Dismiss.
28 U.S.C. § 1441 generally provides a defendant in a state civil case the right to remove that case to federal district court, assuming the case could have been brought there originally. See Martin v. Franklin Capital Corp., 546 U.S. 132, 134 (2005). In turn, the plaintiff may move to have the case remanded if subject matter jurisdiction is lacking, or if some other defect makes removal improper. See 28 U.S.C. § 1447(c). The party seeking removal and opposing remand has the burden to demonstrate federal jurisdiction, and all doubts should be resolved in favor of remand. In re Bus. Men's Assurance Co. of Am., 992 F.2d 181, 183 (8th Cir. 1993). "In addition to the notice of removal and its exhibits, to determine whether there is jurisdiction, the court may consider documents submitted after the notice of removal as well as those attached to subsequent motions." In re Trusts, 241 F. Supp. 3d 905, 914 (D. Minn. 2017) (quoting Guggenberger v. Starkey Labs., Inc., No. 16-cv-2021, 2016 WL 7479542, at *5 (D. Minn. Dec. 29, 2016)); see also Willingham v. Morgan, 395 U.S. 402, 407-08, 407 n.3 (1969) (); Pudlowski v. St. Louis Rams, LLC, 829 F.3d 963, 964-65 (8th Cir. 2016) (per curiam) (same).
Courts to have considered the issue, including the Eighth Circuit, have concluded that removal in the face of a valid forum selection clause fixing venue in the state courts is the sort of defect that qualifies a case for remand. See, e.g., iNet Directories, LLC v. Developershed, Inc., 394 F.3d 1081, 1082 (8th Cir. 2005); Waters v. Browning-Ferris Indus., Inc., 252 F.3d 796, 797 (5th Cir. 2001); Karl Koch Erecting Co. v. N.Y. Convention Ctr. Dev. Corp., 838 F.2d 656, 659 (2d Cir. 1988). Eighth Circuit precedent requires any waiver of the right to remand to be "clear and unequivocal." Weltman v. Silna, 879 F.2d 425, 427 (8th Cir. 1989).
On March 3, 2015, Gannon began an employment relationship with Medtronic by signing three documents: the Offer Letter, the Employee Agreement, and the Repayment Agreement. (See Notice of Removal, Ex. 1, pt. 1 [Doc. No. 1-1], at 49-63; pt. 2 [Doc. No. 1-2], at 278.)1 Each document's contents will be explored below, but at the outset it should be noted that the Employee Agreement contains a forum selection clause, mandating that litigation of disputes "arising out of or related to this Agreement" take place in Minnesota state court. (Id., pt. 1, at 57.) Gannon is a Massachusetts citizen, and has lived in Massachusetts during all times relevant to this Order. (Gannon Decl. [Doc. No. 8], at 1-2.)
In late 2016, Gannon left his employment with Medtronic and returned to his prior employer, DePuy Spine. (Notice of Removal, Ex. 1, pt. 1, at 23.) Medtronic brought suit in Anoka County District Court in the state of Minnesota, alleging that Gannon breached the restrictive covenant in the Employee Agreement and that DePuy Spine intentionally interfered with the contract between Gannon and Medtronic. (Id. at 43-45.) Medtronic later filed an Amended Complaint, which added an additional count against Gannon. (Id., pt. 2, at 156-84.) Count five of the Amended Complaint seeks damages for Gannon's failure "to perform his repayment obligations under the Repayment Agreement" between Gannon and Medtronic. (Id. at 181.)2
Gannon moved to dismiss count five of the Amended Complaint for lack of personal jurisdiction. (Id. at 258-74.) Before the state court could rule on that motion, however, the parties settled counts one through four of the Amended Complaint. (Id., pt. 3 [Doc. No. 1-3], at 115-123.) With DePuy Spine no longer part of the case, Gannon removed to this Court on the basis of diversity jurisdiction. (Notice of Removal [Doc. No. 1].)3 He then renewed his motion to dismiss for lack of personal jurisdiction, and further moved fordismissal based on improper venue or transfer to the federal district court for the District of Massachusetts. (See Def.'s Mem. in Supp. of Renewed Notice of Mot. to Dismiss for Lack of Personal Jurisdiction and Improper Venue, or, in the Alternative, to Transfer [Doc. No. 6] ("Def.'s Mem. in Supp."), at 1.) Medtronic moved to remand to Minnesota state court, arguing that Gannon is bound by the forum selection clause in the Employee Agreement. (See Mem. in Supp. of Pl.'s Mot. to Remand to Anoka County District Court [Doc. No. 15] ("Pl.'s Mem. in Supp."), at 1-2.)
Gannon signed the Offer Letter, Employee Agreement, and Repayment Agreement on the same day. (See Notice of Removal, Ex. 1, pt. 1, at 49-63; pt. 2, at 278.) The Offer Letter represents itself as "a formal offer of employment at Medtronic." (Id., pt. 1, at 60.) It states that "[t]his offer is contingent upon your signing the attached Employee Agreement and the Sales Guarantee Repayment Agreement." (Id. at 61.) The Offer Letter includes basic information about the employment, including start date, compensation structure, vacation time, and training. (Id. at 60-62.) Gannon signed under a passage that states, "I, Patrick Gannon, accept this offer of employment and agree to the terms and conditions outlined in this letter." (Id. at 63.)
The Repayment Agreement is a one-page document that sets out the terms of Gannon's compensation under a sales guarantee arrangement. (Id., pt. 2, at 278.) Medtronic promised to pay Gannon $900,000 over a three-year guarantee period, on the condition that, "if [Gannon] voluntarily terminates from Medtronic during the GuaranteePeriod or within one year after the end of the Guarantee Period, [Gannon] must pay back to Medtronic the difference between" Gannon's earned commissions and his payments under the guarantee plan. (Id.) Count five of the Amended Complaint alleges that Gannon violated the Repayment Agreement by leaving before the guarantee period had ended and failing to repay the difference between his earned commissions and the sales guarantee. (Id. at 181.) The Offer Letter also describes the parameters of this sales guarantee plan, but does not specify the payment amount. (Id., pt. 1, at 60-61.) The Repayment Agreement itself does not mention forum selection. (Id., pt. 2, at 278.)
The Employee Agreement is the largest document of the three and primarily deals with confidentiality, the restrictive covenant, and proprietary inventions. (Id. at 49-59.) The Employee Agreement includes the following forum selection clause:
Any dispute arising out of or related to this Agreement, or any breach or alleged breach hereof, shall be exclusively decided by a state court in the State of Minnesota. Employee irrevocably waives Employee's right, if any, to have any disputes between Employee and MEDTRONIC arising out of or related to this Agreement decided in any jurisdiction or venue other than a state court in the State of Minnesota. Employee hereby irrevocably consents to the personal jurisdiction of the state courts in the State of Minnesota for the purposes of any action arising out of or related to this Agreement.
(Id. at 57.) The Employee Agreement also states, in § 8.4, that "nothing in this Agreement invalidates, renders null or void, or otherwise affects any term or provision of any MEDTRONIC compensation or benefit plan or any agreements related thereto." (Id. at 58.)
Gannon argues that the forum selection clause from the Employee Agreement cannot apply to Medtronic's suit under the Repayment Agreement. (Def.'s Mem. in Supp., at 10-18.) Gannon further argues that the Minnesota courts cannot exercise personal jurisdictionover him without the forum selection clause, and that the case should therefore be dismissed or transferred to the District of Massachusetts. (Id. at 7-10, 20-24.)
Medtronic makes no claim that Minnesota can independently exercise personal jurisdiction over Gannon, but moves to remand solely on the basis of the forum selection clause in the Employee Agreement. (See Mem. in Opp. to Def.'s Renewed Mot. to Dismiss for Lack of Personal Jurisdiction and Improper Venue or, in the Alternative, to Transfer [Doc. No. 19] (Pl.'s Mem. in Opp."), at 1-2; Pl.'s Mem. in Supp., at 1-2) Medtronic argues that the three contractual documents that Gannon signed on March 2, 2015, should be read together as one contract. (Pl.'s Mem. in...
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