Optimas OE Sols., LLC v. Grimes
| Decision Date | 30 July 2020 |
| Docket Number | 20 C 251 |
| Parties | OPTIMAS OE SOLUTIONS, LLC, Plaintiff, v. ADAM GRIMES, JAMIE KUNTZ, GERALD ABRAHAM, and WURTH GROUP OF NORTH AMERICA, INC., Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
MEMORANDUM OPINION AND ORDER
Optimas OE Solutions, LLC brings this suit against Wurth Group of North America, Inc., and former Optimas employees Adam Grimes, Jamie Kuntz, and Gerald Abraham for matters arising from their hiring and employment by Wurth. Doc. 1. The complaint alleges breach of contract against Grimes, Kuntz, and Abraham (collectively, "Individual Defendants"); tortious interference with contract and unfair competition against Wurth; and violations of the Illinois Trade Secrets Act ("ITSA"), 765 ILCS 1065/1 et seq., and the Defend Trade Secrets Act ("DTSA"), 18 U.S.C. § 1836 et seq., against all Defendants. Doc. 1. Defendants move to dismiss for lack of personal jurisdiction under Civil Rule 12(b)(2) and improper venue under Civil Rule 12(b)(3), or, in the alternative, to transfer the case to the Southern District of Indiana under 28 U.S.C. § 1404(a), or, in the second alternative, to dismiss certain claims under Civil Rule 12(b)(6). Docs. 22, 42. The motions are denied.
In resolving the Rule 12(b)(2), Rule 12(b)(3), and § 1404(a) motions, the court considers the complaint's well-pleaded allegations and the evidentiary materials submitted by both sides, including exhibits submitted in conjunction with Optimas's preliminary injunction motion (which will be resolved in a separate opinion). See Deb v. SIRVA, Inc., 832 F.3d 800, 809 (7th Cir. 2016) (); Faulkenberg v. CB Tax Franchise Sys., LP, 637 F.3d 801, 809-10 (7th Cir. 2011) () (internal quotation marks and alteration omitted). The court must accept Optimas's factual allegations and resolve all factual disputes in its favor. See Felland v. Clifton, 682 F.3d 665, 672 (7th Cir. 2012) ( ) (citation omitted); Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782-83 (7th Cir. 2003); Carter v. Baldwin, 2017 WL 3310976, at *1 (N.D. Ill. Aug. 3, 2017).
In resolving the Rule 12(b)(6) motion, the court assumes the truth of the complaint's well-pleaded factual allegations, though not its legal conclusions. See Zahn v. N. Am. Power & Gas, LLC, 815 F.3d 1082, 1087 (7th Cir. 2016). The court must also consider "documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice," along with additional facts set forth in Optimas's brief opposing dismissal, so long as those additional facts "are consistent with the pleadings." Phillips v. Prudential Ins. Co. of Am., 714 F.3d 1017, 1019-20 (7th Cir. 2013).
As to all the motions, the facts are set forth as favorably to Optimas as the materials allow. See Pierce v. Zoetis, Inc., 818 F.3d 274, 277 (7th Cir. 2016). In setting forth the facts at this stage, the court does not vouch for their accuracy. See Goldberg v. United States, 881 F.3d 529, 531 (7th Cir. 2018). Facts outside the pleadings that may be considered in support of dismissal or transfer under Rules 12(b)(2) and 12(b)(3) and § 1404(a) may not be used to support dismissal under Rule 12(b)(6).
Optimas is a company headquartered in Glenview, Illinois. Doc. 1 at ¶ 17. Individual Defendants are Indiana citizens. Id. at ¶¶ 18-20. Wurth is a company headquartered in New Jersey. Id. at ¶ 21. Wurth Industry of North America ("WINA") is a division of Wurth. Ibid. Kuntz joined Optimas in August 1999, Abraham in July 2002, and Grimes in August 2002. Id. at ¶¶ 18-20. All three left Optimas on January 3, 2020 for jobs at Wurth. Id. at ¶¶ 18-20, 64, 70, 93-95.
Defendants argue that Wurth is not a proper defendant because—contrary to the complaint's allegations—WINA, not Wurth, employs Individual Defendants. Doc. 23 at 1 n.1. That argument cannot be considered in support of Defendants' Rule 12(b)(6) motion because the complaint, whose allegations must be taken as true under Rule 12(b)(6), alleges that Individual Defendants went to work for Wurth. Doc. 1 at ¶¶ 64, 70, 93-95. And as Defendants acknowledge, the argument does not materially affect their other motions. Doc. 23 at 1 n.1 ().
Optimas is a provider of integrated supply chain solutions and engineering support, with a focus on delivering fasteners to worldwide companies. Doc. 1 at ¶ 27. Optimas bothmanufacturers fasteners and distributes fasteners manufactured by its suppliers. Id. at ¶ 28. Optimas formed in June 2015 as a spin-off of Anixter Inc., when Anixter divested its fasteners division. Id. at ¶ 29. Optimas sells fasteners directly to its customers. Id. at ¶ 30. The customers incorporate Optimas's parts into their end products—for example, an Optimas bolt may be incorporated into an engine that will be placed in an 18-wheeler heavy-duty truck. Ibid.
A large percentage of Optimas's North American business is conducted through multi-year contracts. Id. at ¶ 31. The contracts are extensively negotiated, and Optimas almost never sells its products for list price, instead relying on historic pricing, rebates, quantity, and other contractual terms to set its pricing. Ibid. That is, customer pricing is not standard, and Optimas protects the secrecy of its pricing through non-disclosure covenants in its contracts with its customers and suppliers. Ibid. The cycle to win a new contract with a customer takes some eighteen months, often starting within a year after a customer signed an existing contract. Id. at ¶ 32. Because the contracts are typically demand-driven and non-exclusive, customers continually solicit competing offers from competitors, driving prices down. Id. at ¶ 33.
One of Optimas's largest customers is Cummins, a major engine and power generation company. Id. at ¶ 34. (The complaint refers to Cummins as "Customer A.") Optimas has enjoyed a 35-year relationship with Cummins. Ibid. Optimas enters into multi-year contracts with Cummins, supplying it products worldwide, and that business accounts for tens of millions of dollars of annual sales. Ibid.
Optimas employed Individual Defendants to manage and oversee its Cummins business. Id. at ¶ 35. Individual Defendants' work at Optimas was almost entirely Cummins-related. Ibid.
In his last five years with Optimas, Grimes was a Program Manager for Cummins. Id. at ¶ 36. In this role, Grimes: (a) drove all aspects of Optimas's business with Cummins; (b)managed the profitability of that business; (c) identified the financial sales forecast for Cummins by providing internal reports to Optimas's leadership group throughout the year; (d) participated in contract negotiations with Cummins; (e) identified and quantified new business opportunities; (f) understood Cummins's customer needs and provided strategic solutions; (g) provided customer and sales support and worked very closely with Cummins to understand and respond to customer inquiries and requests; (h) partnered with Cummins to ascertain and understand its technical needs to ensure that product specifications met its demands; (i) understood Optimas's financial challenges related to managing the Cummins business; (j) worked with Optimas's internal engineering team to develop solutions to Cummins's technical needs; and (k) developed business, logistic, sales, and other strategies to ensure that Optimas maintained and grew its Cummins business. Ibid. Grimes's role gave him particular insight into Optimas's Cummins business, including knowledge of: the suppliers Optimas uses to support the Cummins business and the volume of fasteners each supplier provides; how suppliers supply products to Cummins's plants; where excess or obsolete inventory is located; where global opportunities exist; and the extent of Optimas's engineering work with Cummins. Id. at ¶ 41. Grimes was heavily involved in Optimas's contract negotiations with Cummins, which included participating in a face-to-face meeting with Cummins in Illinois in February 2019 and attending several meetings with Optimas's CEO and other leaders concerning the Cummins client relationship in May, August, and September 2019. Id. at ¶ 43.
In her last role with Optimas, Kuntz was a Strategic Business Analyst tasked to work with Cummins. Id. at ¶ 37. In that role, Kuntz: (a) executed a range of sales-reporting functions designed to achieve client service and satisfaction; (b) prepared sales reports and analyzed data; (c) worked with cross-departmental teams to ensure that sales activities stayed on schedule; (d)assisted in the development and refinement of sustainable processes and practices for price increase activity; (e) resolved item pricing questions and problems; (f) performed weekly margin reviews for changes in cost or price and worked with Grimes to adjust prices; (g) reviewed inventory positions to ensure that gap and expedited purchases were minimized; (h) worked with Cummins to review parts that had become obsolete and to help develop a draw-down...
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