Neopart Transit, LLC v. Mgmt. Consulting, Inc.
| Decision Date | 23 February 2017 |
| Docket Number | CIVIL ACTION No. 16-3103 |
| Parties | NEOPART TRANSIT, LLC, Plaintiff, v. MANAGEMENT CONSULTING, INC., JESHUA SMITH AND ROBERT MONTGOMERY, Defendants. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Memorandum
Plaintiff Neopart Transit, LLC ("Neopart") brings suit against Management Consulting, Inc. ("Mancon") as well as two individual defendants, Jeshua Smith and Robert Montgomery (the "Individual Defendants"). Neopart makes eleven separate allegations in its Complaint, sounding in both tort and contract, including Misappropriation of Trade Secrets, violation of the Defend Trade Secrets Act, Unfair Competition, Breach of Contract, Conversion, and Intentional Infliction with Prospective Business Advantage. Mancon and the Individual Defendants move to dismiss this suit for lack of personal jurisdiction over the Individual Defendants, as well as improper venue, and failure to state a claim on which relief can be granted. I exercise jurisdiction over this dispute pursuant to federal question jurisdiction, 28 U.S.C. § 1331, and supplemental jurisdiction, 28 U.S.C. § 1367.
Plaintiff Neopart and Defendant Mancon are competitors in the parts management and supply chain services market. Neopart deals primarily with transit authorities and bus manufacturers to provide bus parts and parts management services. Mancon's line of business is broader—they provide a wide array of services including staffing and industrial products, as well as transit parts management. Neopart is a Delaware limited liability company with its principal place of business in Sinking Springs, Pennsylvania.1 Undisputed Facts ¶ 1, Joint Statement as to Undisputed and Disputed Facts Relevant to Personal Jurisdiction and Venue ("JSF"), ECF No. 60. Mancon is a Virginia corporation with its principal place of business in Virginia Beach, Virginia. Undisputed Facts ¶ 5, JSF.
From 2010 until 2015, Neopart provided parts management services for transit buses at the Rochester-Genesee Regional Transport Authority ("RGRTA") in Rochester, New York. Undisputed Facts ¶ 3, JSF. The RGRTA is a public benefit corporation of the State of New York. N.Y. Pub. Auth. Law § 1299-dd. Neopart provided these services to the RGRTA pursuant to a Parts Management Services Agreement dated February 12, 2010. Undisputed Facts ¶ 3, JSF. To effectuate performance of this contract, Neopart hired several individuals to carry out work at the RGRTA, including the Individual Defendants Jeshua Smith and Robert Montgomery.2 Smith and Montgomery were already working at the RGRTA facility, although as employees of NAPA Auto Parts, the previous owner of the parts management service contract. Defs.' Disputed Facts ¶ 2-3, JSF. They are both residents of New York. Undisputed Facts ¶ 9, JSF.
Although Pennsylvania personnel participated in the recruitment and hiring process, Neopart interviewed and hired Smith and Montgomery in New York for employment in New York. Undisputed Facts ¶ 10, JSF. As a condition of their employment, both IndividualDefendants signed Confidentiality Agreements. Compl. ¶ 42-43, ECF No. 1. These agreements did not contain choice-of-law or forum selection provisions. Neither Smith nor Montgomery signed employment agreements. Although neither Individual Defendant was ever assigned to work outside of New York, both attended a one-day training session in Honey Brook, Pennsylvania in March 2011.
In December 2014, the RGRTA decided to seek new bids for its parts management contract. It issued a request for proposals to which both Neopart and Mancon, among others, submitted bids. Undisputed Facts ¶ 7, JSF. On April 28, 2015, Mancon was awarded the RGRTA contract. Compl. ¶ 25. Neopart claims that Mancon, which allegedly had never provided parts management services for transit buses before, colluded with New Flyer, a transit bus parts distributor, to undermine Neopart's bid and secure the contract for itself. Compl. ¶ 20-24. Neopart claims that Mancon's request for proposal to the RGRTA required the use of confidential information and trade secrets that belonged to Neopart. Compl. ¶ 33. These trade secrets are "Neopart's methods of identifying unique supplier that provide parts for transit buses; its pricing arrangements with suppliers; its methods of storeroom operations; the identities and compensation or employees; and its unique inventory management." Compl. ¶ 26. These alleged trade secrets were created and stored at Neopart's headquarters in Pennsylvania. Pl.'s Resp. Mot. Dismiss 12, ECF No. 27.
As servicers of the RGRTA parts management contract had done in the past, Mancon sought to hire employees who already worked at the RGRTA. On May 22, 2015, in the midst of this turnover process, Neopart alleges that Mancon obtained copies of Neopart's trade secrets from the RGRTA. Compl. ¶ 36. Neopart claims that on June 17 and June 22, 2015, Mancon requested and Montgomery and Smith provided access to Neopart's trade secrets and otherconfidential information. Compl. ¶ 44-51. Neopart alleges that these requests were sent by Mancon to the personal email addresses of Smith and Montgomery. Neopart also alleges that on July 7, 2015, Montgomery provided Mancon with a credit application for one of Neopart's suppliers, in violation of his Confidentiality Agreement. Compl. ¶ 50. Further, in Montgomery's final days of employment with Neopart, Neopart alleges that he downloaded email files and other documents to a thumb drive and gave it to Robert Whitley, a Mancon executive. Pl.'s Disputed Facts ¶ 15, JSF; Montgomery Dep. 80:17-81:20; 109:2-10. Neopart claims that all of this occurred while Montgomery and Smith were still employees of Neopart. Compl. ¶ 51. On August 12, 2015, Montgomery and Smith left their positions with Neopart and became employees of Mancon. Compl. ¶ 51.
On June 17, 2016, Neopart filed a Complaint in this Court against Mancon and eight individuals. ECF No. 1. On July 13, 2016, Mancon and the eight individuals moved to dismiss Neopart's Complaint in its entirety. ECF No. 15. On November 16, 2016, the parties voluntarily dismissed six of the individuals named in the Complaint, leaving only Jeshua Smith and Robert Montgomery as individual defendants. ECF No. 37. Neopart now asserts eleven claims against Mancon and the Individual Defendants, separately and collectively: (1) Misappropriation of Trade Secrets in violation of the Pennsylvania Uniform Trade Secrets Act, 12 Pa.C.S. §5301, et seq, ("PUTSA"), as to all Defendants; (2) Violation of the Defend Trade Secrets Act of 2016, 18 U.S.C. §1836, as to all Defendants; (3) Unfair Competition as to Mancon; (4) Breach of Contract as to the Individual Defendants; (5) Unjust Enrichment as to all Defendants; (6) Breach of Fiduciary Duty as to the Individual Defendants; (7) Aiding and Abetting the Breach of Fiduciary Duty as to all Defendants; (8) Conversion as to all Defendants; (9) Civil Conspiracy as to all Defendants; (10) Intentional Interference with Prospective Business Advantage as to allDefendants; and (11) Preliminary and Permanent Injunction pursuant to 12 Pa.C.S. § 5303 as to all Defendants. ECF No 1.
Mancon moves to dismiss this action primarily on two grounds: lack of personal jurisdiction over the Individual Defendants pursuant to Fed. R. Civ. P. 12(b)(2), and improper venue pursuant to Fed. R. Civ. P. 12(b)(3).3 In the alternative, Mancon moves to dismiss several claims pursuant to Fed. R. Civ. P. 12(b)(6). Mancon asserts that New York law applies to this action and it moves to dismiss Counts I, VIII and XI as not cognizable under New York law. Further in the alternative, Mancon moves to dismiss Counts V, VI, VII and IX as not cognizable under Pennsylvania law, in the event Pennsylvania law applies to this action.
According to Fed. R. Civ. P. 12(b)(2), a court must grant a motion to dismiss if it lackspersonal jurisdiction. "To survive a motion to dismiss for lack of personal jurisdiction, a plaintiff bears the burden of establishing the court's jurisdiction over the moving defendants." Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004). When a court restricts its review of the motion to affidavits and written evidence and does not hold an evidentiary hearing, the plaintiff need only make a prima facie showing that jurisdiction is proper. Id.; see also Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 142 n. 1 (3d Cir. 1992). At this stage, a plaintiff is entitled to have disputed facts construed in his or her favor. Pinker v. Roche Holdings Ltd., 292 F.3d 361, 368 (3d Cir. 2002) (citation omitted).4 Plaintiff, however, must support allegations with affidavits or other competent evidence. See Dayhoff Inc. v. H.J. Heinz Co., 86 F.3d 1287, 1302 (3d Cir. 1996).
A federal court sitting in Pennsylvania may exercise jurisdiction over nonresident defendants to the extent provided under Pennsylvania law. See Fed. R. Civ. P. 4(k)(1). Pennsylvania's long-arm statute is co-extensive with the due process requirements of the United States Constitution. See 42 Pa. C.S.A. § 5322(b); Mellon Bank (East) PSFS, Nat'l Ass'n v. Farino, 960 F.2d 1217, 1221 (3d Cir. 1992). Thus, a court may exercise personal jurisdiction over a defendant as long as the defendant has "certain minimum contacts with . . . [Pennsylvania] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 316 (3d Cir. 2007) (internal quotations and citation omitted). Analysis of personal jurisdiction requires a court to "examine the relationship among the [defendants], the forum, and the litigation." Miller YachtSales, Inc., 384 F.3d at 96 (internal quotations and citation omitted).
A court may have either general or specific personal jurisdiction over a nonresident defendant. Dollar Sav. Bank v. First Sec. Bank of Utah, N.A., 746...
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