Roquette America, Inc. v. Gerber

• Decision Date: 19 June 2002
• Docket Number: No. 00-1076.,00-1076.
• Parties: ROQUETTE AMERICA, INC., a Delaware Corporation, and Roquete Freres, a French Corporation, Plaintiffs-Appellees, v. Laurent GERBER, a French Citizen; Amylum Belgium N.V., a Belgian Corporation; Amylum Group Services, a Belgian Corporation; Amylum France SAS, a French Corporation; Amylum SPI Europe, a French Corporation; and Carole Piwnica, a Belgian Citizen, Defendants-Appellants.
• Court: Iowa Court of Appeals

651 N.W.2d 896

ROQUETTE AMERICA, INC., a Delaware Corporation, and Roquete Freres, a French Corporation, Plaintiffs-Appellees, v. Laurent GERBER, a French Citizen; Amylum Belgium N.V., a Belgian Corporation; Amylum Group Services, a Belgian Corporation; Amylum France SAS, a French Corporation; Amylum SPI Europe, a French Corporation; and Carole Piwnica, a Belgian Citizen, Defendants-Appellants.

No. 00-1076.

Court of Appeals of Iowa.

June 19, 2002.

Mark Weinhardt, Mark McCormick, and Steven M. Colloton of Belin Lamson McCormick Zumbach Flynn, Des Moines, Jonathan K. Cooperman and Frank C. DiPrisco of Kelley, Drye & Warren, New York, New York, and James P. Hoffman, Keokuk, for appellants.

Oleg Rivkin, Eric Lindquist, and Kristen D. Perrault of Fox, Haran & Camerini, L.L.P., New York, New York, and Joseph R. Gunderson and Edward C. Poulsen of Genderson, Sharp, Trout & Rhein, P.C., Des Moines, for appellees.

Heard by MAHAN, P.J., and ZIMMER and EISENHAUER, JJ.

MAHAN, P.J.

Defendants appeal the decision of the district court that denied their motion to dismiss a tort action that alleged breach of a covenant not to compete, misappropriation of trade secrets, and intentional interference with contractual relations. They claim their motion to dismiss should have been granted due to lack of personal jurisdiction and forum non conveniens. We reverse the district court.

I. Facts

Roquette Freres (Roquette) is a French corporation which manufactures starches and starch derivatives, such as sorbitol, primarily for distribution in Europe. Roquette America, Inc. (RAI) is a Delaware corporation which is a wholly-owned subsidiary of Roquette. RAI produces starches and starch derivatives at plants in Keokuk, Iowa, and Gurnee, Illinois, for distribution in North America.

Laurent Gerber, a French citizen, began employment with Roquette in 1976. With the agreement of Roquette, in 1993 Gerber accepted the position of Vice President— Operations of RAI in Iowa for a period of four years. Upon the request of the CEO of RAI, Robert Ireland, Gerber signed a covenant not to compete on March 15, 1994. The covenant prohibited Gerber from obtaining employment with a competitor for a period of two years after he ceased working for RAI. Gerber left his employment with RAI in September 1997 and returned to France to become Roquette's deputy technical director.

In April 1998 Gerber was contacted by a Belgian corporate recruitment firm on behalf of the Amylum Group, a group of multinational companies which also manufactures starches and starch derivatives, primarily for distribution in Europe. When an RAI employee was in France in August 1998, Gerber obtained a document that dealt with liquid sorbitol production. Gerber received the document after he had resigned from Roquette, but while he was still working there. In November 1998 Gerber began working for the Amylum Group,

II. Decision in District Court

On March 23, 1999, RAI and Roquette filed suit in Iowa district court against Gerber; Amylum Belgium, N.V., a Belgian corporation; Amylum Group Services, a Belgian corporation; Amylum France SAS, a French corporation; Amylum SPI Europe, a French corporation; and Carole Piwnica, a Belgian citizen and chairperson of Amylum Belgium. Piwnica and the Amylum corporations together will be called the Amylum Group.

Plaintiffs raised claims against Gerber alleging breach of a noncompetition covenant, breach of a nondisclosure covenant, and breach of fiduciary duty. Plaintiffs claimed the Amylum Group had engaged in intentional interference with contractual relations and procurement of breach of fiduciary duty. Plaintiffs claimed all defendants had engaged in statutory and common law misappropriation of trade secrets and conversion. Plaintiffs' claims were based on a theory that Gerber disclosed trade secrets while employed by the Amylum Group, and that the Amylum Group used this information to advance its market position, particularly in the sale of sorbitol in the United States.

Defendants filed a motion to dismiss based on international comity, lack of personal jurisdiction, and forum non conveniens. They asserted the case should be tried in Europe, where the alleged torts occurred and where most of the witnesses lived. The district court permitted discovery in conjunction with the motion, which resulted in the filing of extensive depositions and exhibits. In addition, a four-day hearing was held on the motion.

On May 25, 2000, the district court entered a ruling denying the motion to dismiss. The district court concluded:

A review of the facts established in conjunction with the Defendants' Motion to Dismiss leads this court to conclude that all three of the requirements of Calder exist in this suit. The defendants committed one or more intentional torts expressly aimed at this jurisdiction and the brunt of the harm is felt here. This court has personal jurisdiction over the defendants.¹

The court also determined Iowa was not an inconvenient forum. No postruling motions were filed. Defendants sought an interlocutory appeal, and this request was granted by the supreme court.

III. Scope of Review

When reviewing a ruling on a motion to dismiss due to lack of personal jurisdiction, we accept as true the allegations of the petition and the contents of uncontroverted affidavits. Hodges v. Hodges, 572 N.W.2d 549, 551 (Iowa 1997). The district court's findings of fact have the effect of a jury verdict and are subject to challenge only if not supported by substantial evidence in the record. Twaddle v. Twaddle, 582 N.W.2d 518, 519 (Iowa Ct.App.1998). We are not bound by the court's application of legal principles or its conclusions of law. Id.

IV. Personal Jurisdiction

A. Background

Under the Due Process Clause of the Fourteenth Amendment, personal jurisdiction over a nonresident defendant only exists when the defendant has "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Hodges, 572 N.W.2d at 551 (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102 (1945)). The contacts are sufficient if the defendant "should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490, 501 (1980). This "fair warning" requirement is satisfied if the defendants have purposely directed their activities at residents of the forum, and the litigation results from alleged injuries that arise out of or relate to those activities. Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283, 1298 (1958). A nonresident defendant should not be haled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 2183, 85 L.Ed.2d 528, 542 (1985).

Under Iowa Rule of Civil Procedure 1.306, Iowa's jurisdiction reaches to the widest due process parameters of the federal constitution. Meyers v. Kallestead, 476 N.W.2d 65, 67 (Iowa 1991). When a defendant raises a challenge on these grounds, the plaintiff has the burden to present a prima facie showing of personal jurisdiction. State ex rel. Houk v. Grewing, 586 N.W.2d 224, 226 (Iowa Ct. App.1998). Once the plaintiff establishes a prima facie case, the defendant has the burden of producing evidence to rebut that showing. Id.

In determining whether a party's contacts with Iowa are sufficient to confer jurisdiction, we consider the following factors:

(1) the quantity of the contacts;

(2) the nature and quality of the contacts;

(3) the source of and connection of the cause of action with those contacts;

(4) the interest of the forum state; and

(5) the convenience of the parties.

Cascade Lumber Co. v. Edward Rose Bldg. Co., 596 N.W.2d 90, 92 (Iowa 1999). The first three factors are the most important. Id.

B. Direct Contacts

It is clear defendants have no direct contacts with Iowa. They have no offices, agents, employees, or property in Iowa, and they neither ship nor receive products from Iowa. While Gerber formerly lived in Iowa, he had been living in France for about one and one-half years at the time the suit was filed. Thus, the first two factors, the quantity and quality of contacts, weigh against the assertion of jurisdiction in Iowa. See Guinness Import Co. v. Mark VII Distrib., Inc., 153 F.3d 607, 614 (8th Cir.1998).

C. Calder "Effects" Test

The third factor distinguishes whether jurisdiction is specific or general. EFCO Corp. v. Aluma Sys., USA, Inc., 983 F.Supp. 816, 820 (S.D.Iowa 1997). The Eighth Circuit has stated:

Specific jurisdiction refers to jurisdiction over causes of action arising from or related to a defendant's actions within the forum state, while general jurisdiction refers to the power of a state to adjudicate any cause of action involving a particular defendant, regardless of where the cause of action arose.

Bell Paper Box, Inc. v. U.S. Kids, Inc., 22 F.3d 816, 819 (8th Cir.1994); see also Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-16, 104 S.Ct. 1868, 1872-73, 80 L.Ed.2d 404, 411-12 (1984)

.

Plaintiffs claim Iowa has specific jurisdiction over defendants under the "effects" test found in Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984). In Calder, the United States Supreme Court determined California had personal jurisdiction over a suit brought in California against Florida defendants who had engaged in an intentional tort (libel) by publishing an article in California, which they knew would have an impact upon the individual plaintiff, who lived and worked in California. Id. at 789, 104 S.Ct. at 1487, 79 L.Ed.2d at 812. The court noted the brunt of the harm to plaintiff was suffered in California. Id. at 788-89, 104 S.Ct. at 1487, 79 L.Ed.2d at 812. The court concluded that under these...