Nucor Corp. v. Bell
| Decision Date | 30 January 2007 |
| Docket Number | C.A. No. 2:06-cv-02972-PMD. |
| Citation | 482 F.Supp.2d 714 |
| Parties | NUCOR CORPORATION, Plaintiff, v. John BELL and Severcorr, LLC, Defendants. |
| Court | U.S. District Court — District of South Carolina |
Adams and Bernstein, Charleston, SC, William L. Rikard, Jr., Parker Poe Adams and Bernstein, Charlotte, NC, for Plaintiff.
Greg Horton, William C. Cleveland, Buist Moore Smythe and McGee, Charleston, SC, Jeffrey P. Macharg, Joseph F. Rodkey, Jr., Tarek F. Abdalla, Reed Smith Shaw and McClay, Pittsburgh, PA, Wilbur O. Colom, Colom Law Firm, Columbus, MS, for Defendants.
This matter is before the court on Defendants John Bell ("Bell") and SeverCorr, LLC's ("SeverCorr") (collectively "Defendants") Motion pursuant to Fed.R.Civ.P. 12(b)(2) and 12(b)(6) to dismiss in part Plaintiff Nucor Corporation's ("Plaintiff' or "Nucor") Complaint. Defendants seek to dismiss all claims against SeverCorr for lack of personal jurisdiction. Defendants also seek to dismiss Counts II, III, and V — X of plaintiff's Complaint as to Bell. Plaintiff has timely responded to this motion.
The facts of this case, as alleged by the amended verified Complaint, are as follows:
Nucor manufactures steel products in the United States. In 1987, Nucor hired Bell as a melt-shop manager. In 1995, Bell became the melt-shop manager of Nucor's Berkeley County plant. In May 2004, Bell became General Manager of Steelmaking Technologies. Through his long-employment with Nucor, Bell became knowledgeable in almost all of Nucor's operations. Significantly, Bell was responsible for developing new steelmaking processes, including the use of vacuum degassers in the electric arc furnace ("EAF") steelmaking process.
Over the course of his employment, Bell signed at least three documents wherein he agreed, among other things, to keep secret and not use or reveal outside of Nucor, his knowledge of Nucor's confidential information, operations, and processes.1 Under the First Confidentiality Agreement, dated October 19, 1987, Bell agreed not to disclose to any other person, or use to Nucor's detriment, any of Nucor's confidential information and trade secrets, and further agreed that his obligations under the agreement would continue after the termination of his employment with Nucor. The Second Confidentiality Agreement, dated November 23, 1999, is identical to the first. In the Third Confidentiality Agreement, dated October 29, 2005, Bell agreed not to use or disclose Nucor's confidential information for a minimum of 20 years following termination of his employment, and further agreed that for a period of one year following his termination, he would not "encourage or solicit any employee or consultant of [Nucor] to leave [Nucor] for any reason (except for the bona fide firing of Company personnel within the scope of my employment)." The Third Confidentiality agreement is, by its terms, governed by the law of Indiana. On March 31, 2006, Bell resigned his employment with Nucor.
SeverCorr is a steel company that was organized in 2004 and is building a startup steel mill in Columbus, Mississippi. SeverCorr's mill will be similar to, and a direct competitor of, Nucor. On April 1, 2006, one day following his resignation, Bell was formally offered a position with SeverCorr as its Executive Vice President and General Manager of Operations. Bell officially accepted SeverCorr's offer of employment on April 3, 2006. In this new position, Bell is responsible for, or has substantial involvement in, the management of steelmaking processes; the purchasing of raw materials and adoption of processes to minimize costs and maximize efficiencies; implementation of new technologies and processes for steelmaking; hiring and staffing decisions; decisions regarding plant and equipment selection, layout and design at SeverCorr's facility in Columbus, Mississippi; research and development; marketing and pricing; and customer specifications.
Nucor alleges that, prior to his resignation, Bell and SeverCorr conspired for Bell to take confidential information from Nucor and to solicit employees away from Nucor. On several occasions between March 30, 2006 and April 1, 2006, Bell downloaded for his and SeverCorr's use from the computer assigned to him at Nucor numerous documents containing Nucor's trade secrets and/or confidential information concerning Nucor's operations, production, processes, methodologies, and personnel maintained on the Nucor computer system. Nucor alleges that Bell has disclosed and used and will, in his position at SeverCorr, inevitably disclose and use Nucor's trade secrets and/or confidential information. Moreover, as an agent of SeverCorr, Bell has solicited and recruited several Nucor employees in South Carolina to leave Nucor and join the employ of SeverCorr.2
Nucor filed its verified Complaint against SeverCorr and Bell in Court of Common Pleas of Charleston County, South Carolina on October 6, 2006. Defendants removed the matter to federal district court based on diversity jurisdiction on October 17, 2006. On January 19, 2007, with the permission of the court, Nucor filed an amended verified Complaint. The amended Complaint asserts eleven causes of action: (I) Misappropriation of Trade Secrets, in violation of South Carolina Trade Secrets Act, S.C.Code § 39-8-10, et. seq.; (II) Breach of Contract; (III) Breach of Duty of Loyalty;3 (IV) Computer Fraud and Abuse, in violation of 18 U.S.C. § 1030(a)(5)(B); (V) Tortious Interference with Relations; (VI) Unfair Trade Practices in violation of S.C.Code § 39-5-20, et. seq.; (VII) Conspiracy; (VIII) Conversion; (IX) Unjust Enrichment; and (X) Imposition of Constructive Trust; (XI) Injunctive Relief.
First, Defendants move to dismiss SeverCorr from this action for lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure. They assert that the amended verified Complaint does not allege that SeverCorr has any business contacts and/or presence in South Carolina. Moreover, they claim that there is no allegation that SeverCorr took any action by which it purposefully availed itself of this State, or that Sever-Corr made any attempt to invoke the benefits and protections of South Carolina's laws.
When personal jurisdiction is challenged by the defendant, the plaintiff has the, burden of showing that jurisdiction exists. See In re Celotex Corp., 124 F.3d 619, 628 (4th Cir.1997). When the court decides a pretrial personal jurisdiction dismissal motion without an evidentiary hearing, the plaintiff needs only prove a prima facie case of personal jurisdiction. Combs v. Bakker, 886 F.2d 673, 675 (4th Cir.1989). In making this determination, the court looks to the complaint and any supporting affidavits. See In re Celotex Corp., 124 F.3d at 628. Further, "the court must construe all relevant pleading allegations in the light most favorable to the plaintiff, assume credibility, and draw the most favorable inferences for the existence of jurisdiction." Combs, 886 F.2d at 676.
To validly assert personal jurisdiction over a non-resident defendant, two conditions must be satisfied. Christian Sci. Bd. of Dirs. of the First Church of Christ v. Nolan, 259 F.3d 209, 215 (4th Cir.2001). First, the exercise of jurisdiction must be authorized by the long-arm statute of the forum state, and second, the exercise of personal jurisdiction must not "overstep the bounds" of Fourteenth Amendment due process. Anita's New Mexico Style Mexican Food, Inc. v. Anita's Mexican Foods Corp., 201 F.3d 314, 317 (4th Cir.2000). South Carolina's longarm statute has been construed to extend to the outer limits allowed by the Due Process Clause. Foster v. Arletty 3 Sarl, 278 F.3d 409, 414 (4th Cir.2002). "Consequently, the statutory inquiry necessarily merges with the constitutional inquiry, and the two inquiries essentially become one." ESAB Group, Inc. v. Centricut, Inc., 126 F.3d 617, 623 (4th Cir.1997) (internal quotation marks omitted). The question, then, is whether SeverCorr has sufficient "minimum contacts with [South Carolina] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (citations omitted).
States may assert general jurisdiction over a defendant when the plaintiff's cause of action does not arise from the defendant's contacts with the forum state. Plaintiff must prove that the defendant's contacts are "continuous and systematic" to support the exercise of general personal jurisdiction over the defendant. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415-16, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). In this case, Nucor makes no claims that Sever-Corr's contacts with South Carolina are continuous and systematic. Therefore, if jurisdiction exists, it is specific in nature and the court need not address general jurisdiction
In order for specific jurisdiction to exist, the controversy must "arise out of or relate to" the defendant's contacts with the forum state. Id. at 414, 104 S.Ct. 1868. The Fourth Circuit has applied a three-part test when evaluating the propriety of exercising specific jurisdiction: (1) whether and to what extent the defendant "purposely availed" itself of the privileges of conducting activities in the forum state, and thus invoked the benefits and protections of its laws; (2) whether the plaintiff's claim arises out of those forum-related activities; and (3) whether the exercise of jurisdiction is constitutionally "reasonable." Nolan, 259 F.3d at...
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