Minnesota Min. and Mfg. Co. v. Rynne, 81-1118
| Decision Date | 21 October 1981 |
| Docket Number | No. 81-1118,81-1118 |
| Parties | 1981-2 Trade Cases 64,332 MINNESOTA MINING AND MANUFACTURING COMPANY, corporation of Delaware, Plaintiff-Appellee, v. George B. RYNNE, an individual; Eco-Chem, Inc., a Minnesota corporation; Eco-Chem, Ltd., a Georgia corporation; Macdermid of Bristol, Inc., a Connecticut corporation, Defendants-Appellants. Civ. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Harry N. Ray, Ltd., Harry N. Ray, Minneapolis, Minn., for defendants-appellants.
Merchant, Gould, Smith, Coell, Welter & Schmidt, P.A., Norman P. Friederichs, Minneapolis, Minn., for plaintiff-appellee.
Before BRIGHT, Circuit Judge, GIBSON, Senior Circuit Judge, and ROSS, Circuit Judge.
Minnesota Mining and Manufacturing Corporation (hereinafter 3M) filed suit against George B. Rynne, a former employee, on September 3, 1980, for violation of an employment agreement and misappropriation of trade secret information. The complaint also named as defendants Eco-Chem, Inc., Eco-Chem, Ltd., and Macdermid of Bristol, Inc. The complaint alleged that George Rynne misappropriated certain proprietary information in conducting business through Eco-Chem, Inc. Eco-Chem, Inc. subsequently merged into Eco-Chem, Ltd., a Georgia corporation.
On September 9, 1980, Eco-Chem, Ltd., Eco-Chem, Inc., George Rynne, and his wife Stephanie Rynne filed an action against 3M in the United States District Court for the Northern District of Georgia, alleging breach of contract and antitrust causes of action. The plaintiffs in that suit alleged that they had the right to carry on their business free from interference by 3M.
On November 26, 1980, on motion of 3M, the Minnesota district court enjoined Rynne et al. from proceeding with the Georgia action. At the same time, the court denied a motion by Rynne et al. to dismiss 3M's action for lack of diversity jurisdiction or, in the alternative, to transfer the action under 28 U.S.C. § 1404(a).
In granting 3M's motion for a preliminary injunction, the Minnesota court found that the Georgia action arose out of the same operative facts as the Minnesota controversy. The court found that there were no "extraordinary circumstances" present which would remove this case from the general rule that "the first court obtaining jurisdiction over the parties will adjudicate the controversy," thereby avoiding "vexatious litigation of the same subject matter, as well as judicial and economic waste ...."
In the motion of Rynne et al. to dismiss 3M's action, the movants alleged that at the time 3M filed its action, both 3M and Eco-Chem, Inc. were Minnesota citizens for diversity purposes and that, therefore, the federal court lacked subject matter jurisdiction. In denying the motion for dismissal, the court considered alternative rationales, either of which supported the determination that it had subject matter jurisdiction to proceed in the case.
The first basis for the decision was a finding of a de facto merger between Eco-Chem, Inc. and Eco-Chem, Ltd. whereby Eco-Chem, Inc. acquired Georgia citizenship at the time the de facto merger took place. The second and alternative basis was a finding that Eco-Chem, Inc. was not a necessary party to the...
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