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Champion Food Service, LLC v. Vista Food Exchange

United States District Court, Sixth Circuit

August 7, 2013

Champion Food Service, LLC, Plaintiff,
v.
Vista Food Exchange, et al. Defendants.

MEMORANDUM OPINION AND ORDER

DAVID D. DOWD, Jr., District Judge.

Pending before this Court is Defendant Joshua Newman's 12(b)(2) motion to dismiss for lack of personal jurisdiction. R. 13. Plaintiff opposed the motion (R. 26) and Defendant replied (R. 32). For the following reasons, Defendant's motion is DENIED.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff Champion Foodservice, LLC ("Champion") filed the First Amended Complaint on May 2, 2013, in the Court of Common Pleas of Crawford County, Ohio. Complaint R. 1-1, PageID#: 7. The action names Matthew Gibson ("Gibson"), Innovative Food Service, LLC ("Innovative"), Vista Food Exchange ("Vista"), and Joshua Newman ("Newman"), a resident of California, as Defendants. Id. Notice of Removal was filed May 29, 2013. R. 1.

As it relates to the justification for jurisdiction, Plaintiff's allegations are as follows. Champion hired Matthew Gibson as its President and CEO who was "responsible for preparing Champion's bid proposal to" the Ohio Association of Foodbanks ("OAF"), "which was due on March 1, 2013." Complaint, R. 1-1, ¶ 6, 11. However, on February 26, 2013, Mr. Gibson "abruptly and without notice terminated his employment with Champion." Id. ¶ 12. On February 28, 2013, "Champion contacted Defendant Newman, " an employee acting on behalf of Vista, "and inquired specifically as to whether Vista was working with Gibson on a bid." Id. ¶ 16.

Newman told Champion he was not working with Gibson. Id. In reality, Newman (who held himself out to be "Division Sales Manager" of "Vista Food Exchange Ohio") and Gibson (who held himself out to be "Director of Sales & Marketing" at Vista), on behalf of Vista, submitted a bid to the OAF program, which Champion alleges utilized Champion's trade secrets. R. 26-3, PageID#: 346. All Defendants acted in concert and were "aware that Gibson possessed [Champion's] confidential trade secrets and proprietary information" and colluded to use this information for Vista to submits its own OAF bid at the expense of Champion. R. 1-1, ¶ 22, 24.

Champion alleges Gibson refused to return a laptop computer provided to him by Champion to use "while he served as the President and [CEO] of Champion." Id. ¶¶ 7, 13, 14. After the complaint was filed, Gibson, "acting for himself and on behalf of all Defendants... intentionally wiped' the computer memory and hard drive, thereby erasing all data related not only to Champion's business operations, but also related to Defendants' wrongful actions evidencing Champion's claims in this lawsuit against them." Id. ¶ 27.

DEFENDANT'S MOTION

Defendant's 12(b)(2) motion argues (1) the fiduciary shield doctrine protects Newman from jurisdiction, (2) Ohio's long-arm statute does not authorize jurisdiction over Newman, and (3) exercising jurisdiction over Newman violates due process. Plaintiff Champion responds that (1) the fiduciary shield doctrine does not apply to Defendant, and his actions extend beyond actions taken in his official capacity, (2) Ohio's long-arm statute provides four separate grounds for jurisdiction, and (3) exercising jurisdiction over Newman does not violate due process. See R. 26. Defendant in his reply contends Plaintiff has failed to establish jurisdiction under the four separate grounds of the long-arm statute, and reasserts his fiduciary shield defense and constitutional due process objection to jurisdiction. See R. 32.

LAW

In overcoming a 12(b)(2) motion, the "plaintiff bears the burden of establishing the existence of jurisdiction." Air Products and Controls, Inc. v. Safetech Intern., Inc., 503 F.3d 544, 549 (6th Cir. 2007) (citing Serras v. First Tenn. Bank Nat'l Ass'n, 875 F.2d 1212, 1214 (6th Cir. 1989)). But when a district court "relies solely on written submissions and affidavits... the burden on the plaintiff is relatively slight.'" Id. (internal quotations, citation omitted). In determining whether a plaintiff has set out a prima facie case that jurisdiction is appropriate, "the pleadings and affidavits submitted must be viewed in a light most favorable to the plaintiff, and the district court should not weigh the controverting assertions of the party seeking dismissal.'" Id. (citing Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991)).

"In analyzing personal jurisdiction in diversity actions... federal courts must look to the law of the forum state to determine the reach of the district court's personal jurisdiction over parties, subject to constitutional due process requirements." Air Products, 503 F.3d at 550. A district court must engage in a two-part inquiry. First, the court must analyze whether the forum state's "long-arm statute[] authorize[s] the exercise of jurisdiction over Defendant[]." Id. Next, "the court must determine whether exercise of that jurisdiction comports with constitutional due process." Id.

Ohio's long-arm statute provides, in relevant part:

(A) A court may exercise personal jurisdiction over a person who acts directly or by an agent, as to a cause of ...

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