Knapp v. Depuy Synthes Sales Inc.

983 F.Supp.2d 1171

Gregory KNAPP, Plaintiff,

v.DEPUY SYNTHES SALES INC., Defendant.

No. 13–cv–01153 TLN–DAD.

United States District Court, E.D. California.

Oct. 18, 2013.

Gina Marie Devito, Angeles L. Guevara, Devito Law Group, Sausalito, CA, for Plaintiff.

Anthony B. Haller, Blank Rome LLP, Philadelphia, PA, Kathy Poursanae, Blank Rome, LLP, Los Angeles, CA, for Defendant.

ORDER

TROY L. NUNLEY, District Judge.

This matter is before the Court on Defendant, Depuy Synthes Sales Inc.'s (“Defendant”) motion to dismiss for lack of jurisdiction under the Declaratory Judgment Act. ( See Def.'s Mot. to Dismiss, ECF 7.) Plaintiff, Gregory Knapp (“Plaintiff”) opposes the motion. ( See Pl.'s Opp'n to Def.'s Mot to Dismiss, ECF 14.) For the reasons set forth below, Defendant's motion is GRANTED.¹

BACKGROUND

Plaintiff filed this preemptive action under the Declaratory Judgment Act on June 07, 2013. (Pl.'s Compl., ECF 1.) Plaintiff seeks a declaration from the court that the non-competition and non-solicitation agreement he signed with Defendant, his previous employer, is unenforceable. ( Id. at 13:26–28.)

Defendant employed Plaintiff as a medical sales consultant beginning in 1989. ( Id. ¶ 37.) Plaintiff resigned on June 07, 2013, the same day he filed the instant action. ( Id. ¶ 56.) Plaintiff's sales territory consisted of Kaiser in Folsom in Sacramento County and Placer County, Mercy Folsom in Sacramento County, Mercy General in Sacramento County, Sutter Auburn Faith in Placer County, Sutter Roseville Medical Center in Placer County, and Sutter Surgical Hospital in Sutter County. ( Id. ¶ 39.)

Prior to resigning, “in consideration of significant beneficial changes in the terms and conditions of [his] employment with” Defendant, Plaintiff signed an agreement that, prior to eighteen months after the termination of his employment with Defendant, he would not solicit any of Defendant's customers within his assigned territory. ( Id. ¶ 57; see also Def.'s Request for Judicial Notice, ECF 9, Ex. A.) Specifically, the agreement provided that Plaintiff would not “solicit[ ], contact[ ], call[ ] on, transact[ ], or engage [ ] in any business activity, either directly or indirectly, with any [c]ustomer with whom he had any dealings on behalf of [Defendant] at any time during the one (1) year period immediately preceding the termination of his employment.” ( Id. ¶ 26c; RJN, Ex. A.) The agreement also contained a choice of law and forum selection clause, which provides that the “agreement will be governed by Pennsylvania law applicable to contracts entered into and performed in Pennsylvania” and “can be enforced by any federal or state court of competent jurisdiction in the Commonwealth of Pennsylvania ....” (RJN, Ex A.)

Immediately after his resignation from Defendant, Plaintiff accepted employment with K2M, Defendant's direct competitor. (ECF 1 ¶¶ 72, 75.) Plaintiff asserts that he “has been forced to bring this action because of Defendant's prior attempts ... to enforce the same or similar restrictive covenants in the Agreement against other former California employees, ...” ( Id. ¶ 78.)

Plaintiff asserts one claim for Declaratory relief under the Declaratory Judgment Act, 28 U.S.C. § 2201 and Federal Rule of Civil Procedure 57, and one claim for unfair business practices under California Business and Professions Code §§ 16600 & 17200 et seq. ( Id. ¶¶ 88–104.) Plaintiff seeks a judicial declaration that the claim is unenforceable and for a determination by the Court that the use and threatened enforcement of the restrictive covenant violates California Business and Professions Code §§ 16600 & 17200 et seq.

Five days after Plaintiff filed his complaint, Defendant “filed its own complaint in the Eastern District of Pennsylvania” (“Pennsylvania action”). ( compare Pl.'s Compl., ECF 1 with RJN, Ex. A.) In the Pennsylvania action, Defendant seeks relief against Knapp not only for his breach of the non-solicitation agreement, but also for misappropriation of Defendant's trade secrets and breach of fiduciary duty. (RJN, Ex. A.) Thus, Defendant maintains that the Pennsylvania litigation will resolve not only the present dispute, but also the additional claims Defendant asserts against Plaintiff.

STANDARD

Federal Rule of Civil Procedure 8(a) requires that a pleading contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” See Ashcroft v. Iqbal, 556 U.S. 662, 678–79, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Under notice pleading in federal court, the complaint must “give the defendant fair notice of what the claim ... is and the grounds upon which it rests.” Bell Atlantic v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal quotations omitted). “This simplified notice pleading standard relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims.” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002).

On a motion to dismiss, the factual allegations of the complaint must be accepted as true. Cruz v. Beto, 405 U.S. 319, 322, 92 S.Ct. 1079, 31 L.Ed.2d 263 (1972). A court is bound to give plaintiff the benefit of every reasonable inference to be drawn from the “well-pleaded” allegations of the complaint. Retail Clerks Int'l Ass'n v. Schermerhorn, 373 U.S. 746, 753 n. 6, 83 S.Ct. 1461, 10 L.Ed.2d 678 (1963). A plaintiff need not allege “ ‘specific facts' beyond those necessary to state his claim and the grounds showing entitlement to relief.” Twombly, 550 U.S. at 570, 127 S.Ct. 1955. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (citing Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955 (2007)).

Nevertheless, a court “need not assume the truth of legal conclusions cast in the form of factual allegations.” United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n. 2 (9th Cir.1986). While Rule 8(a) does not require detailed factual allegations, “it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. A pleading is insufficient if it offers mere “labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955;see also Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”). Moreover, it is inappropriate to assume that the plaintiff “can prove facts that it has not alleged or that the defendants have violated the ... laws in ways that have not been alleged[.]” Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983).

Ultimately, a court may not dismiss a complaint in which the plaintiff has alleged “enough facts to state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 697, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). Only where a plaintiff has failed to “nudge[ ] [his or her] claims ... across the line from conceivable to plausible[,]” is the complaint properly dismissed. Id. at 680, 129 S.Ct. 1937. While the plausibility requirement is not akin to a probability requirement, it demands more than “a sheer possibility that a defendant has acted unlawfully.” Id. at 678, 129 S.Ct. 1937. This plausibility inquiry is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679, 129 S.Ct. 1937.

In ruling upon a motion to dismiss, the court may consider only the complaint, any exhibits thereto, and matters which may be judicially noticed pursuant to Federal Rule of Evidence 201. See Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir.1988); Isuzu Motors Ltd. v. Consumers Union of United States, Inc., 12 F.Supp.2d 1035, 1042 (C.D.Cal.1998).

If a complaint fails to state a plausible claim, “ ‘[a] district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.’ ” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir.2000) (en banc) (quoting Doe v. United States, 58 F.3d 494, 497 (9th Cir.1995)); see also Gardner v. Martino, 563 F.3d 981 (9th Cir.2009) (finding no abuse of discretion in denying leave to amend when amendment would be futile). Although a district court should freely give leave to amend when justice so requires under Rule 15(a)(2), “the court's discretion to deny such leave is ‘particularly broad’ where the plaintiff has previously amended its complaint[.]” Ecological Rights Found. v. Pac. Gas & Elec. Co., 713 F.3d 502, 520 (9th Cir.2013) (quoting Miller v. Yokohama Tire Corp., 358 F.3d 616, 622 (9th Cir.2004)).

ANALYSIS

Defendant asserts that the court should “decline jurisdiction under the Declaratory Judgment Act in favor of the Pennsylvania [l]itigation to avoid needless decisions of Pennsylvania state law, ...” (ECF 8 at 4:4–6.) Defendant maintains that declining jurisdiction would properly prevent Plaintiff from “preemptive and anticipatory forum shopping depriving Depuy Synthes, the natural plaintiff, of its choice of forum, and [would] promote judicial economy by allowing the more-comprehensive Pennsylvania [l]itigation to proceed, which will resolve all disputes at issue in this case.” ( Id. at 4:6–9.)

Plaintiff concedes that the court has discretion to decline jurisdiction, but argues that the court should exercise jurisdiction in the instant case because Plaintiff filed his complaint prior to Defendant filing its complaint in the Pennsylvania litigation. (Pl.'s Opp'n to Def.'s Mot. to Dismiss, ECF 14 at 3:20–21.) Plaintiff attempts...