Ajuba Int'l, L.L.C. v. Saharia

871 F.Supp.2d 671

AJUBA INTERNATIONAL, L.L.C., Ajuba Solutions (India) Private, Ltd., and Miramed Global Services, Inc., Plaintiffs,

v.Devendra Kumar SAHARIA, Adroit Global Solutions India Private Ltd., Adroit Global Solutions, Inc., and AGS Health, Inc., Defendants.

Case No. 11–12936.

United States District Court,

E.D. Michigan,

Southern Division.

May 14, 2012.

Patrick F. Hickey, Andrew J. Kolozsvary, Dykema Gossett, Detroit, MI, for Plaintiffs.

Frederick R. Juckniess, Gregory L. Curtner, Ann Arbor, MI, for Defendants.

OPINION AND ORDER GRANTING–IN–PART AND DENYING–IN–PART DEFENDANTS' MOTION TO DISMISS AND DENYING DEFENDANTS' MOTION TO STAY

MARIANNE O. BATTANI, District Judge.

This matter is before the Court on Defendants' Motion to Dismiss the Amended Complaint (Doc. 16) and Motion to Stay (Doc. 17). The Court heard oral argument on March 8, 2012, and at the conclusion of the hearing took the motions under advisement. For the reasons that follow, Defendants' motion to dismiss is GRANTED–IN–PART and DENIED–IN–PART and their motion to stay is DENIED.

I. STATEMENT OF FACTSA. Plaintiff Parties—The “Ajuba” Entities

MiraMed Global Services, Inc. (“MiraMed”) is a Michigan corporation having its principal place of business in Jackson, Michigan. MiraMed owns Ajuba International, L.L.C. (“Ajuba International”). Ajuba International is a Michigan limited liability company having its principal place of business in Jackson, Michigan. Ajuba International owns non-party Ajuba Solutions Mauritius Ltd., which in turn wholly owns Ajuba Solutions (India) Private, Ltd., (“Ajuba India”). Ajuba India is an Indian corporation having its principal place of business in Chennai, India.

Ajuba International and Ajuba India are separate but related entities that, together, provide revenue cycle outsourcing services to healthcare systems, hospitals, academic and medical centers, and billing and receivables management companies. Ajuba International manages business development and is in privity with its clients whereas Ajuba India delivers the back-end services. In other words, the Ajuba entities are outsourcing companies which handle billing for health care businesses operating in the United States.

B. Defendant Parties—Saharia and the “AGS” Entities

Defendant Devendra Kumar Saharia (“Saharia”), a former Michigan resident, is a citizen and current resident of India. Defendant Adroit Global Solutions India Private Ltd. (“AGS India”) is a corporation organized under the laws of India, having its principal place of business in India. Adroit Global Solutions, Inc. (“AGS US”) is a Delaware corporation that has no operations, assets, or place of business. AGS Health, Inc. (“AGS Health”) is a Delaware corporation, having its principal place of business in New York.

C. Saharia's Relationship with the Ajuba Entities

In 2000, Saharia co-founded Ajuba International's predecessor company. In July 2005, Saharia sold his ownership stake in that company to MiraMed. MiraMed would not purchase Saharia's stake unless he signed a three-year employment agreement and a three-year non-compete agreement. Saharia agreed, executing an Employment Agreement (“2005 Employment Agreement”) and a Noncompetition Agreement (“2005 Noncompetition Agreement”) with Ajuba International on July 8, 2005. (Doc. 11 Ex. A; Ex. B)

The 2005 Noncompetition Agreement prohibited Saharia from competing with Ajuba International or soliciting its employees. (Doc. 11 Ex. A at § 2). The agreement further prohibited Saharia from disparaging Ajuba International while the agreement is “in effect and indefinitely thereafter.” ( Id. at § 4). The agreement also contains confidentiality obligations that purport to survive (ad infinitum) the July 8, 2008 termination date and a Michigan forum selection clause. ( Id. at §§ 3, 5(E)).

The 2005 Employment Agreement provided that Saharia was employed as President of Ajuba India and appointed President–International for Ajuba International. (Doc. 11 Ex. B at § 2.1). The agreement expressly acknowledged that the 2005 Noncompetition Agreement was a separate contract not covered or superseded by the subject matter of the Employment Agreement. ( Id. at § 9.8). It also contained on-going confidentiality and non-disparagement provisions, as well as a Michigan forum selection clause. ( Id. at §§ 3.1, 9.13, 9.15).

Upon the expiration of the 2005 Employment and 2005 Noncompetition Agreements, on November 1, 2008, Saharia entered into a new Employment Agreement (“2008 Employment Agreement”) with Ajuba India. (Doc. 11 Ex. C). Ajuba International was not a party to this agreement. It did, however, sign the agreement in its capacity as a parent granting its subsidiary the authority to enter into the contract with Saharia. ( Id. at p. 10). The 2008 Employment Agreement reflected Saharia's continued employment as President of Ajuba India. Although it contains confidentiality and non-disparagement provisions, it does not include any non-compete or nonsolicitation obligations. ( Id. at §§ 3.1, 7.12). The agreement also contains an integration clause which states that the 2008 Employment Agreement “contains the entire agreement and understanding of the parties and supersedes all prior and contemporaneous agreements, arrangements, and understandings relating to the subject matter of this Agreement entered into between the Company, Parent and the Employee.” ( Id. at § 7.8).

In January 2009, after fellow co-founder Nader Samii left Ajuba International, Saharia took on all of Samii's duties managing Ajuba International's employees and business processes in the United States. (Doc. 22 Ex. A at ¶¶ 7–15). He often negotiated and executed agreements on behalf of Ajuba International and had access to its trade secrets and confidential information. ( Id.).

D. Saharia Competes with the Ajuba Entities

On March 31, 2011, Saharia resigned from Ajuba India. Unbeknownst to Plaintiffs, while serving as President of Ajuba India and acting as an agent or de facto officer of Ajuba International, Saharia established AGS India to compete directly with Plaintiffs. Saharia orchestrated a covert scheme to secure departures of key management personnel from Ajuba India, interfered with Plaintiffs' business relationships to advance his and AGS' interests, and misappropriated trade secrets and other confidential information. (Doc. 11 at ¶¶ 69–98). Armed with Plaintiffs' former employees and trade secrets, Saharia then created the U.S.-based AGS entities and began an international campaign to compete against Plaintiffs. As a result, at least one major customer has terminated its contract with Ajuba International and transferred that business to Defendants. ( Id. at ¶ 97).

E. The Federal Lawsuit

On July 7, 2011, Plaintiffs filed a ten-count Complaint against Defendants in the United States District Court for Eastern District of Michigan. (Doc. 1). On October 17, 2011, Plaintiffs filed a First Amended Complaint with eleven counts. (Doc. 11). In response, Defendants' filed a Motion to Dismiss under Rules 12(b)(1), (2), (6), and the common law doctrine of forum non conveniens. (Doc. 16). Defendants also filed a Motion to Stay under the Colorado River abstention doctrine. (Doc. 17). These motions are now before the Court.

F. The Indian Lawsuit

On September 8, 2011, Ajuba India filed a related action in the High Court of Judicature at Madras, India, including a thirty-page “plaint” alleging the same conduct as the federal complaint and seeking the similar relief against Saharia and AGS India, plus nineteen other individual parties who reside in India. (Doc. 18 Ex. E). The other individuals named as defendants are the former employees of Ajuba India who allegedly went to work for AGS India. Ajuba International and MiraMed are not named as plaintiffs and AGS Health and AGS U.S. are not named as defendants.

II. STANDARDS OF REVIEWA. Defendants' Motion to Dismiss

1. Rule 12(b)(1)

Under Rule 12(b)(1), a defendant may move to dismiss the action for lack of subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). “Subject matter jurisdiction is always a threshold determination.” American Telecom Co., L.L.C. v. Republic of Lebanon, 501 F.3d 534, 537 (6th Cir.2007) (citation omitted). The Supreme Court has explained, “Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute ... [thus] [i]t is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishingthe contrary rests upon the party asserting jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) (citations omitted). Accordingly, when the defendant challenges subject matter jurisdiction, the plaintiff bears the burden of establishing jurisdiction. Moir v. Greater Cleveland Regional Transit Auth., 895 F.2d 266, 269 (6th Cir.1990) (citation omitted).

2. Rule 12(b)(2)

Before an answer is filed, a defendant may move to dismiss for lack of personal jurisdiction over the defendant. Fed.R.Civ.P. 12(b)(2). “Where personal jurisdiction is challenged in a 12(b) motion, the plaintiff has the burden of establishing that jurisdiction exists.” Am. Greetings Corp. v. Cohn, 839 F.2d 1164, 1168 (6th Cir.1988). A motion to dismiss for lack of personal jurisdiction leaves the Court with three options: “it may decide the motion upon the affidavits alone; it may permit discovery in aid of deciding the motion; or it may conduct an evidentiary hearing to resolve any apparent factual questions.” Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir.1991) (citation omitted). The district court has considerable discretion in this decision and will be reversed only for abuse of discretion. Id. The method the court selects will affect the magnitude of the burden on the plaintiff to avoid dismissal. Serras v. First Tenn. Bank Nat'l Ass'n, 875 F.2d 1212, 1214 (6th Cir.1989).

Where the court relies solely on the parties' affidavits...