U.S. Surgical Corp. v. Imagyn Med. Technologies, 3:98CV216 (AHN).

• Decision Date: 10 September 1998
• Docket Number: No. 3:98CV216 (AHN).,3:98CV216 (AHN).
• Citation: 25 F.Supp.2d 40
• Court: U.S. District Court — District of Connecticut
• Parties: UNITED STATES SURGICAL CORP. v. IMAGYN MEDICAL TECHNOLOGIES, INC., et al.

25 F.Supp.2d 40

UNITED STATES SURGICAL CORP. v. IMAGYN MEDICAL TECHNOLOGIES, INC., et al.

No. 3:98CV216 (AHN).

United States District Court, D. Connecticut.

September 10, 1998.

Ronald J. Cohen, Timothy P. Jensen, Tyler, Cooper & Alcorn, New Haven, CT, G. Brian Busey, Kenneth W. Irvin, Morrison & Foerster, Washington, DC, Harlod J. McElhinny, Carolyn M. Wiggin, Russell B. Hill, Michael A. Jacobs, Morrison & Foerster, San Francisco, CA, for Plaintiff.

Hugh F. Keefe, Lynch, Traub, Keefe & Errante, New Haven, CT, Edward R. Scofield, Zeldes, Needle & Cooper, Bridgeport, CT, J. Alan Galbraith, David C. Kiernan, Sharon L. Davis, Philip Andrew Sechler, Williams & Connolly, Washington, DC, for U.S. Surgical Corp.

RULING ON DEFENDANTS' MOTIONS TO DISMISS OR TRANSFER

NEVAS, District Judge.

The plaintiff, United States Surgical Corporation ("USSC"), brings this diversity action against defendant Imagyn Medical Technologies, Inc. ("Imagyn") for tortious interference with contractual relations and unfair competition, and against defendant Ryan Tamura ("Tamura") for breach of contract. Now pending before the court are Imagyn's Motion for Transfer of Action and Tamura's Motion to Dismiss for Lack of Personal Jurisdiction or, in the alternative, for Transfer of Action.

For the reasons set forth below, Imagyn's motion [doc. #6] is GRANTED, Tamura's motion [doc. #9] is GRANTED in part and DENIED in part, and this action is hereby ORDERED transferred to the Central District of California.

FACTS

USSC is a corporation organized and existing under the laws of the state of Delaware with its principal place of business in Norwalk, Connecticut. (See First. Am. Compl. ¶ 1.) It specializes in developing, manufacturing and selling medical products and technologies which improve patient care and lower the costs of health care. (See id. ¶ 2.) Specifically, USSC specializes in manufacturing and selling surgical instruments used in laparoscopic surgery. (Id.)

Imagyn is a corporation organized and existing under the laws of the state of Delaware, with its principal place of business in Newport Beach, California. (See id. ¶ 3.) Imagyn also manufactures and sells medical and surgical devices, specifically those used in laparoscopic surgery, and is thus one of USSC's direct competitors. (Id.)

Tamura, who resides in Trabuco Canyon, California, was employed by USSC as a salesperson from September, 1991 to December, 1997. (See id. ¶ 4.) Currently, he is employed by Imagyn in the same capacity. (Id.)

During his employment with USSC, Tamura was provided with, and had access to, trade secrets, customer lists, customer usage and other account history information, pricing policies, operational methods, surgeon contacts, marketing plans and strategies, product development techniques and plans, sales and personnel performance information, business and personnel acquisition plans, and pending research projects. (See id. ¶ 9.) Because of his specialized training¹ and sales duties, USSC entrusted Tamura with, inter alia, the identities and backgrounds of customers interested in purchasing USSC products, the amounts and types of products requested, the prices charged and the profit margins for such products, the identities of suppliers from whom USSC obtained supplies, and the prices charged by these vendors. (See id. ¶ 10.)

On September 9, 1991, at the start of his employment with USSC, Tamura signed an employment contract. (See id. ¶ 12.) Under this contract, he agreed that he would not "perform salesperson services" in competition with USSC during his employment there and for a period of two years following his termination. (See id. ¶ 14.) He further agreed that, following his termination, he would keep secret and would not disclose the confidential information of USSC or any of its subsidiaries. (See id. ¶ 15.) Lastly, he agreed that, for a period of two years following his termination, he would not solicit or encourage any USSC employees to leave the company and also that he would not solicit employees who had left the company less than one year earlier. (See id. ¶ 16.)

On or about December 17, 1997, Tamura tendered his resignation, to be effective on December 30, 1997. (See id. ¶ 17.) At the time, he was employed as a "full-line" sales-person for Auto Suture Company, a division of USSC which sells various medical and surgical instruments. (See id. ¶ 8.)

Presently, Tamura is employed by Imagyn as a sales manager, selling products in direct competition with USSC in a geographic area almost identical to the area in which he worked when he was employed by USSC. (See id. ¶¶ 18-19.) According to USSC, since Tamura started with Imagyn, he has contacted one or more USSC employees in an effort to recruit them for Imagyn. (See id. ¶ 20.) In addition, USSC claims that Tamura, in the course of his employment with Imagyn, has disseminated false information about USSC. (See id. ¶ 21.) Also, USSC alleges that Tamura, in his position as a sales manager, will rely upon, and use for Imagyn's benefit, confidential information that he learned during his employment with USSC. (See id. ¶ 19.)

In Count One, USSC asserts a breach of contract claim against Tamura, alleging that he breached his covenant not to compete, his covenant not to use or disclose confidential USSC information and his covenant not to solicit USSC employees. (See id. ¶¶ 24-26.) USSC further claims that it has suffered and will continue to suffer irreparable harm because Tamura continues to use confidential USSC information to improve Imagyn's sales. (See id. ¶¶ 27-28.) Count Two asserts that Imagyn, despite its knowledge and familiarity with USSC's standard employment agreement, deliberately and improperly induced a breach of this agreement by "(a) obtaining Tamura's services to sell its competitive products, (b) gaining access to [USSC's] confidential information, and (c) gaining a conduit through which to solicit other [USSC] employees." (Id. ¶ 32.) According to USSC, Imagyn, in order to gain a competitive advantage, is scheming to obtain both access to confidential USSC information and a means to solicit other USSC employees.² (See id. ¶ 33.) Lastly, Count Three incorporates the allegations in Count Two and claims that these allegations support a cause of action against Imagyn for unfair competition. (See id. ¶¶ 36-39.)

DISCUSSION

Imagyn moves to transfer venue to the Central District of California because (1) venue is not proper in this district; and (2) the convenience of the parties favors transfer. Tamura joins these arguments, but also argues, in the first instance, that the court lacks personal jurisdiction over him.

I. Imagyn's Motion to Transfer Venue

Under 28 U.S.C. § 1391(a), venue is proper in a diversity case in "a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred."³ 28 U.S.C.A. § 1391(a) (West Supp.1998). The plaintiff's chosen forum need not have the "most substantial contacts to the dispute." Neufeld v. Neufeld, 910 F.Supp. 977, 986 (S.D.N.Y.1996) (citation and internal quotations marks omitted). Rather, "it is sufficient that a substantial part of the events occurred [in the forum state], even if a greater part of the events occurred elsewhere." Id. In other words, the court should not consider which of two or more potential forums is the best one, but should simply decide whether the forum in question had a "substantial connection" to the plaintiff's claims. See Setco Enterprises Corp. v. Robbins, 19 F.3d 1278, 1281 (8th Cir.1994).

None of USSC's claims against Imagyn have a substantial nexus to this district. USSC reliance on Tamura's employment contract, which was executed in Connecticut, is not persuasive. Regardless of whether this contract is sufficient to establish a nexus between Tamura and Connecticut, it is insufficient to establish one between Imagyn and Connecticut. All of the alleged tortious conduct engaged in by Imagyn occurred in California. For that matter, while Tamura's employment contract was executed in Connecticut, all of his conduct which allegedly breached this contract also occurred in California. Thus, Connecticut's only connection to Imagyn is that it is the state where Tamura signed the employment contract with which Imagyn is alleged to have interfered. This certainly does not amount to the substantial connection necessary to establish proper venue.⁴

II. Tamura's Motion to Dismiss

Tamura claims that the court lacks personal jurisdiction over him because he does not have sufficient contacts with this district. The court disagrees.

In a diversity action, a federal district court looks to state law to determine if there is personal jurisdiction over a foreign individual. Arrowsmith v. United Press International, 320 F.2d 219, 231 (2d Cir.1963); Fuehrer v. Owens-Corning Fiberglas Corp., 673 F.Supp. 1150, 1153 (D.Conn.1986); Air Kaman, Inc. v. Penn-Aire Aviation Inc., 542 F.Supp. 2, 3 (D.Conn.1981). This requires a two tiered inquiry: (1) does the Connecticut long-arm statute reach the foreign individual; and, if so, (2) does the statute's jurisdictional reach as applied to that foreign individual meet the "minimum contacts" requirement to satisfy constitutional due process. See Fuehrer, 673 F.Supp. at 1153; Air Kaman, 542 F.Supp. at 3; McFaddin v. National Executive Search, Inc., 354 F.Supp. 1166, 1168 (D.Conn.1973); see also World Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); International Shoe Co. v. State of Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The plaintiff need only make a prima facie showing, through affidavits and other materials, that the two tiered inquiry is satisfied. See Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir.1985); Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir.1981). Regardless of the controverting evidence put forth by the defendant, the court must...