Western Boxed Meats Distributors, Inc. et al v. Parker et al, No. 3:2017cv05156 - Document 27 (W.D. Wash. 2017)
Court Description: ORDER granting in part and denying in part 15 Motion to Dismiss signed by Judge Benjamin H. Settle.(TG)
Download PDF
<![CDATA[
Western Boxed Meats Distributors, Inc. et al v. Parker et al Doc. 27 1 2 3 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA 4 5 6 WESTERN BOXED MEATS DISTRIBUTORS, INC. and SAND DOLLAR HOLDINGS, INC., 7 8 9 Plaintiffs, v. CASE NO. C17-5156 BHS ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO DISMISS WILLIAM L. PARKER, et al., Defendants. 10 11 This matter comes before the Court on the motion to dismiss of Defendants 12 William Parker, Brian Parker, Double B Food Distributors, Caytie Zielinski, Bernice 13 Cazares, Christopher Murphy, Christi Sanchez, and Morgan Torres (collectively 14 “Defendants”). Dkt. 15. The Court has considered the pleadings filed in support of and 15 in opposition to the motion and the remainder of the file and hereby rules as follows: 16 I. PROCEDURAL HISTORY 17 On March 2, 2017, Plaintiffs Western Boxed Meats Distributers, Inc. (“WBX”) 18 and Sand Dollar Holdings, Inc. filed a complaint against William Parker and Brian Parker 19 (“Parkers”) and Double B Food Distributors (“Double B”). Dkt. 1. On March 16, 2017, 20 WBX filed a first amended complaint to include Caytie Zielinski, Bernice Cazares, 21 Christopher Murphy, Christi Sanchez, and Morgan Torres (collectively “Non-Parker 22 ORDER - 1 Dockets.Justia.com 1 Defendants”) and four unnamed individuals as defendants. Dkt. 8 (“Compl.”). Plaintiffs 2 assert claims for declaratory judgment, breach of contract, breach of covenant of good 3 faith and fair dealing, breach of fiduciary duty, tortious interference with economic 4 relations, conversion, promissory estoppel, unjust enrichment, accounting, trade secret 5 misappropriation, violations of the Defense of Trade Secrets Act (“DTSA”), and 6 violations of the Computer Fraud and Abuse Act (“CFAA”). 7 8 On May 4, 2017, Defendants filed a motion to dismiss. Dkt. 15. On May 22, 2017, WBX responded. Dkt. 17. On May 26, 2017, Defendants replied. Dkt. 18. 9 10 II. FACTUAL BACKGROUND This case concerns an alleged scheme by the individual defendants, all former 11 employees of WBX, to form and operate their own company, Double B, to compete with 12 WBX. WBX alleges that Defendants are competing with WBX for their own benefit 13 using WBX’s confidential, proprietary, and trade secret information (collectively 14 “Confidential Information”), and that doing so violates the individual defendants’ 15 contractual and employment obligations to WBX. WBX seeks to enforce those 16 obligations and to mitigate harm to its business. While the facts of this case are disputed 17 by the parties, the Court accepts as true the allegations in the complaint for purposes of 18 this motion. 19 WBX is “a distributor of meat, seafood, and dairy products to retailers and other 20 distributors.” Compl. ¶ 15. WBX is an Oregon corporation with its principal place of 21 business in Portland, Oregon, and a sales office in Puyallup, Washington (“Puyallup 22 Sales Office”). Compl. ¶¶ 3, 16. Sand Dollar Holdings is a Delaware corporation with ORDER - 2 1 its principal place of business in National City, California. Id. ¶ 4. All individual 2 defendants are Washington residents, and former Washington employees of the Puyallup 3 Sales Office. Id. ¶¶ 5, 6, 8–12. 4 The Parkers were hired as co-managers of the Puyallup Sales Office in February 5 2010. Id. ¶ 16. Caytie Zielinski (“Zielinski”), Christopher Murphy (“Murphy”), Morgan 6 Torres (“Torres”), Christi Sanchez (“Sanchez”), and Bernice Cazares (“Cazares”) were 7 hired in February 2010, October 2010, November 2015, March 2016, and June 2016, 8 respectively, to perform sales in the Puyallup Sales Office. Id. ¶¶ 17–21. “As a 9 condition of employment,” the individual defendants entered into various agreements 10 11 with WBX. Id. ¶¶ 23, 24, 26. Every individual defendant executed their own “Acknowledgments and Receipts” 12 (“Acknowledgements”) at or around the time of hiring. Id. ¶ 24; Dkt. 8-4 (William 13 Parker); Dkt. 8-5 (Brian Parker); Dkt 8-6 (Zielinski); Dkt. 8-8 (Cazares); Dkt. 8-10 14 (Murphy); Dkt. 8-12 (Sanchez); Dkt. 8-14 (Torres). Sand Dollar Holdings is an “express 15 intended third-party beneficiary” of the Parkers’ and Zielinski’s acknowledgments. 16 Compl. ¶ 24. Defendants’ Acknowledgments prohibit them from using or disclosing 17 Confidential Information outside of the scope of their employment with WBX, and 18 further prohibit them from using or disclosing Confidential Information “to any other 19 individual, company, or entity” after their employment with WBX has ended. Dkts. 8-4, 20 8-5, 8-6, 8-8, 8-10, 8-12. 21 22 The Parkers, Zielinski, and Murphy additionally executed their own non-compete agreements (“Non-Competes”) at or around the time of hiring. Id. ¶ 23; Dkt. 8-1 ORDER - 3 1 (William Parker); Dkt. 8-2 (Brian Parker); Dkt. 8-3 (Zielinski); Dkt. 8-11 (Murphy). The 2 Parkers’ and Zielinski’s Non-Competes prohibit them from “directly or indirectly 3 [engaging] in the food brokerage business that competes directly with [WBX] in the state 4 of Oregon” during their employment and for a year after their employment has ended. 5 Dkts. 8-1, 8-2, 8-3. Murphy’s Non-Compete prohibits him from engaging “in any 6 business or enterprise which competes with the business of [WBX], within the states of 7 Oregon, Washington, Idaho, Hawaii and/or Northern California.” Dkt. 8-11 at 1. The 8 Non-Competes also govern these defendants’ use of Confidential Information, 9 prohibiting them from ever using or disclosing Confidential Information and requiring 10 them to return any and all copies of Confidential Information to WBX at the end of their 11 employment. See Dkts. 8-1, 8-2, 8-3, 8-11. 12 Cazares, Sanchez, and Torres additionally executed confidentiality agreements 13 (“Confidentiality Agreements”) at or around the time of hiring which prohibit them from 14 directly or indirectly competing with WBX during their employment. See Dkt. 8-9 at 1 15 (Cazares); Dkt. 8-11 at 1 (Sanchez); Dkt. 8-13 at 1 (Torres). The Confidentiality 16 Agreements also prohibit these defendants from using or disclosing Confidential 17 Information outside the scope of their employment or without authorization. See id. 18 “As a further condition of employment,” the Parkers also executed an 19 Employment Agreement (“Parkers’ Employment Agreement”) at or around the time of 20 their hiring. Compl. ¶ 26; see also Dkt. 8-7. The Employment Agreement prohibits them 21 from directly or indirectly competing with WBX during their employment and further 22 governs their use of Confidential Information by prohibiting them from using or ORDER - 4 1 disclosing Confidential Information outside the scope of their employment or without 2 authorization. See Dkt. 8-7 at 3. While the Parkers’ numerous agreements govern 3 similar conduct, the Parkers’ Employment Agreement does not reference or incorporate 4 any of their other agreements with WBX. 5 6 7 Notably, the Parkers’ Employment Agreement also includes a forum selection clause which reads in full: 8 If any dispute should arise under this Agreement the parties will first try and resolve it voluntarily but if they should fail to do so the matter will be resolved in the State Courts of Multnomah County Oregon. 9 Dkt. 8-7 at 4. None of Defendants’ other agreements with WBX contain a forum 10 selection clause. Dkt. 17 at 5. 11 In the course of their employment with WBX, all individual defendants “had 12 access to, and became acquainted with” WBX’s Confidential Information, including 13 information about WBX’s customers and vendors, pricing, marketing, and “methods of 14 doing business.” Compl. ¶ 22. On February 13, 2017, Zielinski emailed the Parkers 15 stating “we are in,” allegedly in reference to joining Double B. Id. Also on or around 16 February 13, 2017, individual defendants began to access, print, and then delete 17 Confidential Information from WBX computers. Id. ¶ 39. Between February 18 and 22, 18 2017, the individual defendants, without the authority of WBX, deleted a combined 612 19 files from WBX computers, some of which contained Confidential Information including 20 price lists and customer order guides. Id. ¶ 34. While still employed at the Puyallup 21 Sales Office, the individual defendants discouraged customers and vendors from dealing 22 ORDER - 5 1 with WBX and encouraged them to take their business to Double B or other distributors. 2 Id. ¶¶ 27–28. 3 On February 21, 2017, the Parkers tendered their resignation from WBX. Id. ¶ 29. 4 That same day, the Parkers and Zielinski printed Confidential Information from WBX 5 computers, including call lists identifying WBX customers and their contact information. 6 Id. ¶¶ 29, 33. The next day, February 22, 2017, under the encouragement of the Parkers 7 and Zielinski, the Non-Parker Defendants also all tendered their resignations from WBX. 8 Id. ¶¶ 32, 38. That same day, the Parkers contacted WBX customers Fiesta Foods and 9 Three Bears without authority from WBX to solicit them as potential customers for 10 11 Double B. Id. ¶¶ 30, 31. On February 24, 2017, three days after their resignation, the Parkers formed 12 Double B to compete with WBX. Id. ¶ 35. Double B is a Washington limited liability 13 company with its headquarters in Pierce County, Washington. Id. ¶ 7. The individual 14 defendants are all employees of Double B. Id. ¶¶ 35, 65, 75, 84. As Double B 15 employees, the individual defendants have solicited WBX customers using WBX 16 Confidential Information. Id. ¶ 37. The individual defendants have retained the 17 Confidential Information removed from WBX without its authority, and further intend to 18 use and disclose, have used and disclosed, or are using and disclosing that information to 19 compete with WBX for their own benefit and the benefit of Double B. Id. ¶ 41. 20 21 22 ORDER - 6 1 2 III. A. DISCUSSION Standard 3 Defendants move for dismissal under the doctrine of forum non conveniens. 4 Dismissal under forum non conveniens is discretionary, and should be evaluated by 5 balancing public interest factors with the private interests of the parties. Piper Aircraft 6 Co. v. Reyno, 454 U.S. 235, 237 (1981). The public interest factors to be considered are 7 (1) the local interest in the lawsuit, (2) the court’s familiarity with the governing law, (3) the burden on local courts and juries, (4) congestion in the court, and (5) the costs of resolving a dispute unrelated to a particular forum. 8 9 Boston Telecommunications Group, Inc. v. Wood, 588 F.3d 1201, 1211 (9th Cir. 2009) 10 (quoting Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163, 1181 (9th Cir. 2006)). See 11 also Atl. Marine Const. Co. v. U.S. Dist. Court for Western Dist. Of Texas, 134 S. Ct. 12 568, 581 n.6 (2013) (quoting Piper, 454 U.S. at 241 n.6); Creative Tech Ltd. v. Aztech 13 Sys. PTE, 61 F.3d 696, 703–04 (9th Cir. 1995). The private interest factors to be 14 considered are: 15 16 17 18 (1) the residence of the parties and the witnesses; (2) the forum’s convenience to the litigants; (3) access to physical evidence and other sources of proof; (4) whether unwilling witnesses can be compelled to testify; (5) the cost of bringing witnesses to trial; (6) the enforceability of the judgment; and (7) all other practical problems that make trial of a case easy, expeditious and inexpensive. 19 Boston Telecom., 588 F.3d at 1206–07 (9th Cir. 2009) (quoting Lueck v. Sundstrand 20 Corp., 236 F.3d 1137, 1145 (9th Cir. 2001)); see Atl. Marine 134 S. Ct. at 581, n. 6 21 (quoting Piper, 454 U.S. at 241, n. 6); Creative Tech, 61 F.3d at 703–04. The Court must 22 also honor Plaintiffs’ venue privilege and “give some weight to plaintiff’s choice of ORDER - 7 1 forum.” Boston Telecom., 588 F.3d at 1206–07 (citing Norwood v. Kirkpatrick, 349 U.S. 2 29, 32 (1955)). 3 The presence of a forum selection clause requires that the Court adjust its usual 4 forum non conveniens analysis in three ways. See Atl. Marine, 134 S. Ct. at 581. See 5 also In re Orange, S.A., 818 F.3d 956, 961 (9th Cir.) cert. denied sub nom. Orange, S.A. 6 v. U.S. Dist. Court for N. Dist. of California, 137 S. Ct. 282 (2016). First, “the plaintiff’s 7 choice of forum merits no weight” and the burden is placed on the plaintiff to show that 8 plaintiff’s contractual obligation under the forum selection clause should not be enforced. 9 Atl. Marine, 134 S. Ct. at 581–82. Second, the court should consider only the public 10 interests opposing dismissal. Id. Third, the original venue’s choice of law rules will not 11 follow the case to the contractually forum—“a factor that in some circumstances may 12 affect public interest considerations.” Id. 13 Further, a “forum selection clause [should be] given controlling weight in all but 14 the most exceptional circumstances” where enforcement would be unreasonable, or 15 where public interest factors “overwhelmingly disfavor” dismissal. Id. at 581 (quoting 16 Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 33 (KENNEDY, J., concurring)); see 17 also Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972); Argueta v. Banco 18 Mexicano, S.A., 87 F.3d 320, 325 (9th Cir. 1996). Enforcement of a forum selection 19 clause is unreasonable if (1) the clause is the result of fraud, undue influence, or 20 overreaching; (2) trial in the contractually forum “would be so difficult and inconvenient 21 that [a party] would effectively be denied a meaningful day in court”; or (3) enforcement 22 of the clause would contravene a strong public interest of the original forum. Argueta, 87 ORDER - 8 1 F.3d 320 at 325 (citing Bremen, 401 U.S. 1 at 12–13, 15, 18) (quoting Pelleport Investors 2 Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273, 281 (9th Cir. 1984)). 3 B. 4 Enforceability of the Forum Selection Clause Defendants argue that the forum selection clause found in the Parkers’ 5 Employment Agreement is enforceable because enforcement would not be unreasonable 6 and “forum selection clauses should control except in unusual cases.” Dkt. 15 at 5 7 (quoting Atl. Marine, 134 S. Ct. at 582). On the other hand, WBX argues that this is the 8 “unusual case” where a forum selection clause should not be enforced. Dkt. 17 at 2. 9 However, there is nothing “unusual” about the Parkers’ contractual relationship with 10 WBX, and this Court sees no reason to deprive the Parkers of the benefit of their bargain 11 or to release WBX from its contractual obligation. WBX does not dispute that the forum 12 selection clause is valid and has failed to carry its burden to show that public interest 13 factors “overwhelmingly disfavor” dismissal. Dkt. 17 at 4; Dkt. 18 at 5. 14 WBX fails to show that the first set of factors—local interests—weigh against 15 dismissal of this action. WBX argues that “Washington has a far greater interest” than 16 Oregon, because it involves the alleged “malicious and intentional conversion of trade 17 secrets by Washington residents in Washington.” Dkt. 17 at 5. However, they also note 18 that Oregon “may have an interest in punishing foreign citizens for stealing from an 19 Oregon company.” Dkt. 17 at 4. WBX fails to show how Washington’s interest in 20 protecting its businesses is any greater than Oregon’s interest in doing the same. Further, 21 for this interest factor “we ask only if there is an identifiable local interest in the 22 ORDER - 9 1 controversy,” which WBX admits there is, “not whether another forum also has an 2 interest.” Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163, 1182 (9th Cir. 2006). 3 WBX similarly fails to show that the second factor, unfamiliarity with governing 4 law, weighs against dismissal. WBX argues that it is “not in the public interest to ask an 5 Oregon Superior Court to decide questions of Federal and Washington law” under which 6 they bring their claims. Dkt. 17 at 5. However, as discussed below, the Court will not 7 dismiss WBX’s federal claims, so an Oregon State court will not have to decide questions 8 of federal law in this case. Further, an Oregon State court may not have to decide 9 questions of Washington law either, because Washington law may not govern these 10 claims if they are brought again in the contractually forum. The Court’s choice-of-law 11 rules will not follow this action to Oregon State court; that court will instead apply 12 Oregon choice-of-law rules, and in doing so, may determine that Oregon law should 13 govern. The Court does not find that the possibility of an Oregon State court needing to 14 apply Washington law is so unfavorable as to relieve WBX of its contractual obligation 15 to litigate there. 16 WBX presents no argument or evidence regarding the remaining factors: the 17 burden on Oregon courts and juries, the congestion of the Oregon State courts, or the 18 costs of resolving a dispute unrelated to the forum. On the contrary, WBX actually 19 admits that the dispute is not unrelated to Oregon. Dkt. 17 at 4. Therefore, WBX has 20 failed to carry its burden of proof to show that this is the “unusual case” in which a forum 21 selection clause should not be enforced. 22 ORDER - 10 1 2 C. Applying the Forum Selection Clause to Non-Party Defendants Defendants rely heavily on Manetti to argue that the forum selection clause in the 3 Parkers’ Employment Agreement binds Double B and Non-Parker Defendants, even 4 though they are not parties to it. They argue that their alleged conduct and employment 5 relationships with WBX are “essentially identical” to that of the Parkers and are “closely 6 related to the Parkers’ employment relationship with WBX.” Dkt. 15 at 6; Dkt. 18 at 9. 7 Defendants further argue that Double B and Non-Parker Defendants are entitled to 8 enforcement of the clause because they all consent to the jurisdiction of the contractually 9 forum. Dkt. 15 at 7; Dkt. 18 at 8–9. However, Defendants misapply the holding and 10 principle of Manetti. 11 Manetti establishes that “a range of transaction participants, parties, and 12 non-parties” can be bound by a forum selection clause where their alleged conduct is 13 “closely related to the contractual relationship” containing the clause. Manetti, 858 F.2d 14 at 514 n.5 (emphasis added). The Ninth Circuit has narrowly applied Manetti to conduct 15 that is closely related to the contract containing the forum selection clause—not to its 16 signatories or their conduct. See Holland America Line Inc. v. Wartsila North America, 17 Inc., 485 F.3d 450, 456 (9th Cir. 2007) (forum selection clauses in contracts between the 18 plaintiff and a French classification society applied equally to the society’s non-signatory 19 Canadian and American providers because “any transaction between those entities and 20 [the plaintiff] took place as part of the larger contractual relationship between [the 21 plaintiff] and the society”); TAAG Linhas Aereas de Angola v. Transamerica Airlines, 22 Inc., 915 F.2d 1351, 1352–54 (9th Cir. 1990) (An airline, its parent company, and several ORDER - 11 1 of its officers who all allegedly “failed to pay commissions due under [an] agreement” 2 that only the airline signed were all bound by the forum selection clause therein); 3 Manetti, 858 F.2d at 511–13 (the forum selection clause in an exclusive dealership 4 contract signed only by one defendant applied equally to its parent company and its 5 American subsidiary, and several of their officers who all allegedly interfered with and 6 attempted to terminate the contract); Adema Techs Inc. v. Wacker Chemie AG, No. 7 13-CV-05599-BLF, 2014 WL 3615799 (N.D. Cal. July 22, 2014 ), aff’d 657 F. App’x 8 661 (forum selection clause applied equally to defendant chemical company and its 9 non-signatory parent company which was “alleged to have been the primary contact after 10 polysilicon shipments commenced under the supply agreement” signed by defendant). 11 1. 12 In this case, Double B’s alleged conduct is closely related to the Parkers’ 13 Employment Agreement. The Parkers allegedly formed Double B with the purpose of 14 competing with WBX, in direct defiance of the “Payment and Obligations After 15 Termination” and “Competitive Activities” provisions of the Employment Agreement. 16 Compl. ¶ 34; see also Dkt. 8-7 at 3–4. Further, WBX alleges that the Parkers, through 17 Double B, are continuing to misuse WBX’s confidential information and trade secrets, in 18 direct defiance of the “Proprietary Information Obligations” provision of the Parkers’ 19 Employment Agreement. Compl. ¶¶ 41, 104–105, 111; see also Dkt. 8-7 at 3. In this 20 way Double B is closely related to the Parkers’ Employment Agreement because the 21 Parkers are allegedly using the corporation to violate the terms therein. Pursuant to 22 Manetti, the forum selection clause binds Double B. Therefore, any claims against ORDER - 12 Double B 1 Double B within the scope of the forum selection clause must be dismissed in favor of the 2 contractually forum. 3 2. 4 Conversely, the forum selection clause does not bind Non-Parker Defendants Non-Parker Defendants 5 because their alleged conduct is not closely related to the Parkers’ Employment 6 Agreement and they are otherwise not entitled to enforce it. Non-Parker Defendants each 7 have their own contracts with WBX, and none are party to or third-party beneficiaries of 8 the Parkers’ Employment Agreement. This Court therefore refuses to dismiss any claims 9 against the Non-Parker Defendants absent a showing that venue is otherwise improper. 10 In Holland America and TAAG, the non-signatories were parent companies or 11 subsidiaries of the signatory party who were responsible for acting pursuant to or in 12 furtherance of the contract, but as independent non-signatory employees, Non-Parker 13 Defendants have no responsibility to follow or further the terms of the Parkers’ 14 Employment Agreement. See Holland America, 485 F.3d at 454 (American and 15 Canadian entities of a French classification society performed services pursuant to the 16 society’s contracts with American and Canadian clients); TAAG, 915 F.2d at 1352 (the 17 parent corporation of an airline and its officers were allegedly responsible to pay 18 commissions owed by the airline pursuant to its contract with another airline). Unlike the 19 non-signatories in Holland America or TAAG, who were parts of the larger contractual 20 relationship with the signatory party, Non-Parker Defendants have no role in the 21 contractual relationship between the Parkers and WBX. Further, unlike in Manetti, 22 Non-Parker Defendants’ alleged conduct did not directly interfere with or violate the ORDER - 13 1 terms of the Employment Agreement. See Manetti, 858 F.2d at 511–14 (plaintiff 2 distributor alleged that defendants “sought to terminate [their] exclusive dealership 3 [contract]” and committed various torts to bring distribution “within [the defendants’] 4 corporate structure” instead). 5 Defendants’ argument that Non-Parker Defendants’ conduct is closely related to 6 the Parkers’ Employment Agreement because their conduct, employment relationships, 7 and contracts are all “essentially identical and tethered to the Parkers’ employment 8 relationship with WBX” are unpersuasive. Dkt. 15 at 6; See also Dkt. 18 at 9–10. While 9 Defendants cite to Adema Techs. to assert that “it is settled law in the Ninth Circuit that 10 parties . . . that are closely related to a party subject to a forum selection clause may also 11 be subject to the clause,” this proposition is an inaccurate construction of Ninth Circuit 12 law. Dkt. 18 at 5. In Adema Techs., the court applied a forum selection clause to 13 defendant’s non-signatory parent company because its conduct was “closely related to the 14 contractual relationship” between defendant and plaintiff—not because the parent 15 company was closely related to defendant. Adema Techs., 2014 WL 3615799 at *6 16 (emphasis added). A non-signatory who is closely related to the signatory party may also 17 be closely related to that party’s contract containing a forum selection clause, and in that 18 case they are bound by the clause—but they are bound by their relation to the contract, 19 not by their relation to the party. Non-Parker Defendants’ alleged conduct may be 20 similar, even “identical” to that alleged against the Parkers, but that does not make them 21 “closely related” pursuant to Manetti. 22 ORDER - 14 1 Defendants fail to make any showing that Non-Parker Defendants’ conduct is 2 related to the Parkers’ Employment Agreement. On the contrary, Defendants’ reply 3 recognizes that Non-Parker Defendants’ alleged conduct relates to their own independent 4 contracts with WBX, but argues nonetheless that the forum selection clause should bind 5 Non-Parkers Defendants because those independent contracts are “essentially identical” 6 to those of the Parkers. Dkt. 18 at 10. Defendants cite to City of Los Angeles ex rel. 7 Knudsen v. Sprint Sols., Inc., No. CV 16 -7512-DSF (AJWx), 2017 WL 1398640 (C.D. 8 Cal. Apr. 18, 2017), for the proposition that the forum selection clause should apply to 9 “closely related contracts that are all part of the same dispute between the same 10 contracting parties.” Id. at *1. However, the Parkers and Non-Parker Defendants are not 11 “the same contracting parties.” WBX contracted separately with each defendant, and 12 each defendant’s contractual relationship with WBX (except for the Parkers’ 13 Employment Agreement, which was entered into by both William and Brian Parker) is 14 independent from WBX’s contracts with the others. In fact, the Court finds that the 15 contracts are not “essentially identical” because only the Parkers’ Employment 16 Agreement contains a forum selection clause. The similarity of the Non-Parker 17 Defendants’ conduct and contracts to the Parkers’ does not make them “closely related” 18 pursuant to Manetti, because those similarities do not create a relationship between the 19 Non-Parker Defendants and the Parkers’ Employment Agreement. 20 Defendants also argue that the benefit of the forum selection clause should be 21 extended to the Non-Parker Defendants because they all consent to the jurisdiction of the 22 contractually forum. Dkt. 15 at 7; Dkt. 18 at 8–9. In doing so, Defendants rely on TAAG ORDER - 15 1 and the Third Circuit’s decision in Coastal Steel Corp. v. Tilghman Wheelabrator Ltd., 2 709 F.2d 190 (3rd Cir. 1983). However, the Third Circuit itself has refused to extend 3 Coastal Steel to entitle a non-signatory with a separate and independent contractual 4 relationship to enforcement of a forum selection clause. See Dayhoff Inc. v. H.J. Heinz 5 Co., 86 F.3d 1287, 1297 (3rd Cir. 1996). This Court agrees with the Third Circuit’s 6 decision in Dayoff. 7 In Dayoff, the Third Circuit rejected the argument that a non-signatory with a 8 separate and independent contractual relationship with the plaintiff was entitled to 9 enforcement of a forum selection clause because they had consented to the contractually 10 forum. 86 F.3d at 1297. The Third Circuit recognized that allowing a non-signatory’s 11 consent to entitle them to enforce a forum selection clause essentially gives them “the 12 option to accept or reject” a benefit they did not bargain for, while forcing the signatory 13 party to “accede to [the non-signatory’s] wishes.” Id. Non-Parker Defendants are asking 14 the Court to give them that option. However, Non-Parker Defendants each have their 15 own contracts with WBX, none of which preselect a forum. The Court will not give 16 Non-Parker Defendants the choice to accept or reject a forum selection clause that they 17 did not bargain for because “the very fact that [they] would have such a choice belies the 18 existence of” their separate agreements with WBX. Id. 19 Additionally, the Court does not find its decision conflicts with that of the Ninth 20 Circuit in TAAG. First, unlike Non-Parker Defendants, the non-signatory defendants in 21 TAAG would be closely related pursuant to Manetti, so they would be bound by the 22 forum selection clause regardless. See supra p. 9. Second, it was not argued in TAAG ORDER - 16 1 that the non-signatory defendants had their own independent contracts with the plaintiff 2 such as Non-Parker Defendants have with WBX. Therefore the determination in TAAG 3 that it would “not be unreasonable or unjust to enforce” a forum selection clause for 4 non-signatory defendants did not risk usurping those defendants’ other contractual 5 relations by conferring on them a benefit they did not bargain for, or otherwise promote 6 forum shopping by giving the defendants an option to accept or reject a forum selection 7 clause at will. TAAG, 915 F.2d at 1354. Those risks are present in this case and the 8 Court finds it necessary to avoid them by refusing to allow Non-Parker Defendants to 9 enforce a forum selection clause they are not party to merely because they consent to the 10 jurisdiction of the contractually forum. 11 D. 12 Scope of the Forum Selection Clause Having determined that the forum selection clause in the Parkers’ Employment 13 Agreement is valid and enforceable as to the Parkers and Double B, the Court must now 14 determine whether it applies to all or just some of the claims against them. 15 According to the Parkers’ Employment Agreement, the forum selection clause 16 applies to any claims that “arise under” the contract. The Ninth Circuit in Mediterranean 17 Enterprises, Inc. v. Ssangyong Corp., 708 F.2d 1458, 1464 (9th Cir. 1983), found that the 18 “arising out of” language in an arbitration agreement which “omits reference to disputes 19 ‘relating to’ an agreement” is “intended to cover a much narrower scope of disputes, i.e., 20 only those relating to the interpretation and performance of [a] contract itself.” Id. The 21 Ninth Circuit has extended their holding in Mediterranean Enterprises to agreements 22 containing forum selection clauses. See e.g. Rey v. Rey, 666 F. App’x 675, 676 (9th Cir. ORDER - 17 1 2016) (citing Mediterranean Enterprises for the proposition that the “stemming under” 2 language of a forum selection clause made it narrow in scope). Therefore, the “arising 3 under” language of the forum selection clause narrows its scope to include only those 4 claims which ‘“cannot be adjudicated without analyzing whether the parties were in 5 compliance’ with the agreement containing the clause.” Rey, 666 F. App’x at 676 6 (quoting Manetti, 858 F.2d at 514). 7 1. 8 Defendants argue that the forum selection clause applies to all claims against the 9 Claims Against The Parkers Parkers because “each of [WBX’s] thirteen claims involve interpretation of the 10 Employment Agreement,” and “none of the claims could go forward had the contract not 11 existed.” Dkt. 15 at 5–6. 12 The Court finds that WBX’s third claim for breach of contract plainly arises under 13 the Parkers’ Employment Agreement because it alleges that the Parkers “breached, are 14 breaching, and are threatening to breach, their Employment Agreement.” Compl. ¶ 56. 15 Conversely, WBX’s claims for declaratory judgment, first two claims for breach 16 of contract, and claim for promissory estoppel do not arise under the Parkers’ 17 Employment Agreement because they explicitly arise under independent and unrelated 18 contracts. Claim one against the Parkers for declaratory judgment asserts that “WBX is 19 entitled to declaratory judgment … under [the Parkers’] Non-Competes” and claim two 20 asserts that “WBX is entitled to declaratory judgment … under [the Parkers’] 21 Acknowledgments.” Compl. ¶ ¶ 44, 45 (emphasis added). Similarly, claim one against 22 the Parkers for breach of contract alleges that they “breached, are breaching, and are ORDER - 18 1 threatening to breach, their respective Non-Competes” and claim two alleges that they 2 “breached, are breaching, and are threatening to breach, their respective 3 Acknowledgments.” Compl. ¶¶ 48, 52 (emphasis added). Finally, the claim against the 4 Parkers for promissory estoppel seeks to enforce “the restrictive covenants in [the 5 Parkers’] Non-Competes [and] Acknowledgments.” Compl. ¶ 89 (emphasis added). As 6 such, these claims are not within the scope of the Parkers’ Employment Agreement. 7 WBX’s claim for breach of covenant of good faith and fair dealing is essentially 8 an extension of its breach of contract claims above. “Generally, there is an implied 9 covenant of good faith and fair dealing in every contract,” a breach of which occurs 10 “when either party violates, nullifies or significantly impairs any benefit of the contract.” 11 Id. Therefore, this claim arises separately under each of the Parkers’ contracts with 12 WBX. This claim arises under the Parkers’ Employment Agreement only to the extent 13 that it alleges a violation of the covenant implied therein. Like the breach of contract 14 claims above, this claim is not within the scope of the forum selection clause with respect 15 to alleged violations of the Parkers’ other agreements with WBX. 16 WBX’s claim for breach of fiduciary duty arises under the scope of the forum 17 selection clause because it requires evaluating the Parkers’ compliance with the duties 18 created by their employment relationships with WBX. To breach a fiduciary duty is to 19 violate the “duty of utmost good faith, confidence, trust, and candor” owed to another. 20 Duty, Black’s Law Dictionary (10th ed. 2014). In this case, the Parkers’ fiduciary duties 21 to WBX arise from their employment relationships, which are a product of all of their 22 agreements with WBX. Therefore, this claim cannot be adjudicated without analyzing ORDER - 19 1 the Parkers’ compliance with the duties owed under each of their agreements, including 2 the Employment Agreement. 3 WBX’s claim for conversion also falls within the scope of the forum selection 4 clause because it requires analyzing whether the Parkers’ use of Confidential Information 5 violates their Employment Agreement. A claim for conversion can be premised on 6 wrongful detainment by refusing to return property to the rightful owner, destruction or 7 alteration, wrongful taking, wrongful transfer, or misuse of another’s property. 16 Wash. 8 Prac., Tort Law And Practice § 14:16 (4th ed.). This claim is premised on the Parkers’ 9 “misappropriating, using, and failing to return WBX Confidential Information.” Compl. 10 ¶ 72. Adjudicating this claim requires determining whether or not this conduct is 11 wrongful, which necessarily requires analyzing the Parkers’ compliance with each of 12 their agreements with WBX, including their Employment Agreement, because they all 13 govern the Parkers’ use of Confidential Information. 14 WBX’s claims against the Parkers for tortious interference with economic 15 relations, unjust enrichment, accounting, and trade secret misappropriation, respectively, 16 arise from the same alleged wrongful use of Confidential Information. Compl. ¶¶ 81, 93, 17 98, 105. Therefore, for the reasons above, these claims also fall within the scope of the 18 forum selection clause because they cannot be adjudicated without analyzing the Parkers’ 19 Employment Agreement. 20 Finally, WBX’s claims for violations of the DTSA and CFAA are not within the 21 scope of the forum selection clause. Defendants argue that these claims involve 22 interpretation of the Parkers’ Employment Agreement because they are “premised upon ORDER - 20 1 an alleged improper use of WBX’s confidential information, and the Parkers’ 2 Employment Agreement contains a clause regarding permitted use of WBX’s 3 confidential information.” Dkt. 15 at 5–6. This argument is unpersuasive because these 4 claims do not allege that the Parkers’ use of Confidential Information violates the 5 Parkers’ Employment Agreement. Instead, these claims are premised on the Parkers’ use 6 of Confidential Information being improper under the DTSA and CFAA. See Compl. ¶¶ 7 111–12, 114–16. 1 8 2. 9 WBX’s claims against Double B for breach of fiduciary duty, conversion, and Claims Against Double B 10 tortious interference with economic relations fall within the scope of the forum selection 11 clause only to the extent that they rely on the liability of the Parkers. These claims are all 12 premised on the liability of the individual defendants, including the Parkers, under the 13 doctrine of respondeat superior. 2 WBX’s claim against Double B for trade secret 14 misappropriation is also premised on the liability of the Parkers, alleging that Double B 15 acquired WBX’s trade secrets “by improper means, namely, through conversion and a 16 breach of the [individual defendants’] contractual and fiduciary obligations to WBX.” 17 Compl. ¶ 105. As discussed above, the Parkers’ liability for these claims is determined 18 by their compliance with their Employment Agreement. Consequently, these claims 19 against Double B will also require analyzing the Parkers’ compliance with their 20 21 1 Defendants’ claim for injunctive relief is intentionally omitted. Injunctive relief is not a “claim for relief” but rather the relief itself. As such, this Court will not consider it on this motion. Compl. ¶ 117. 2 22 The Court does not address whether a claim for breach of fiduciary duty can be imputed to an employer under a theory of respondeat superior. ORDER - 21 1 Employment Agreement. However, because claims against Non-Parker Defendants are 2 not subject to the forum selection clause, these claims against Double B which rely on the 3 liability of Non-Parker Defendants are not within the scope of the forum selection clause. 4 WBX’s claim against Double B for unjust enrichment is not within the scope of 5 the forum selection clause because it is based on the independent conduct of Double B. 6 Unlike the claims above, this claim is premised on Double B’s own “use of WBX’s 7 confidential information, WBX customer and vendor relationships, and WBX goodwill,” 8 not on the Parkers’ conduct. Double B’s independent conduct is not governed by the 9 Parkers’ Employment Agreement because Double B is not party to it. Therefore, this 10 claim does not involve interpretation of the Parkers’ Employment Agreement. 11 12 Finally, WBX’s DTSA claim is not within the scope of the forum selection clause for the same reasons that the claim against the Parkers is not. 13 3. 14 Non-Parker Defendants are not subject to the forum selection clause, so neither are Claims Against Non-Parker Defendants 15 the claims against them. Each Non-Parker Defendant has their own independent 16 contractual and employment relationship with WBX which confers rights and duties to 17 them individually. Any claims against Non-Parker Defendants arise under their 18 independent contracts or from their individual conduct, not from the Parkers’ 19 Employment Agreement. 20 E. 21 22 Stay of This Action In their reply, Defendants raise the issue of staying this action “until the Oregon case is resolved.” Dkt. 18 at 11. This is not an appropriate method to request a stay. ORDER - 22 1 “Issues raised for the first time in the reply brief are waived.” Bazuaye v. I.N.S., 79 F.3d 2 118, 120 (9th Cir. 1996) (citing Eberle v. City of Anaheim, 901 F.2d 814, 818 (9th Cir. 3 1990)). The Court will not consider a request to which WBX has had no opportunity to 4 respond or object to. Defendants’ request for stay is denied without prejudice. 5 Defendants may move to stay this action by filing an appropriate motion with the Court. 6 F. 7 Conclusion The forum selection clause is valid and the Parkers are entitled to enforce it. Any 8 claims against the Parkers within the scope of the forum selection clause must be 9 dismissed in favor of the contractually selected forum. Therefore, Defendants’ motion to 10 dismiss WBX’s claims against the Parkers for breach of the Parkers’ Employment 11 Agreement, breach of covenant of good faith and fair dealing implied in the Parkers’ 12 Employment Agreement, breach of fiduciary duty, unjust enrichment, tortious 13 interference with economic relations, accounting, and trade secret misappropriation is 14 granted. The motion is denied as to the remaining claims. 15 The forum selection clause also applies to the claims against Double B to the 16 extent that they are based on respondeat superior liability for the claims against the 17 Parkers that are being dismissed. Any such claims against Double B must also be 18 dismissed in favor of the contractually selected forum. Therefore, Defendants’ motion to 19 dismiss WBX’s claims against Double B for breach of fiduciary duty, conversion, and 20 tortious interference with economic relations is granted to the extent that they are 21 premised on the Parkers’ conduct. Defendants’ motion to dismiss is denied for the 22 remaining claims against Double B. ORDER - 23 1 Non-Parker Defendants are not bound by the forum selection clause and are 2 otherwise not entitled to enforce it. Therefore, without a showing that venue is otherwise 3 improper, Defendants’ motion to dismiss is denied for all claims against Non-Parker 4 Defendants. 5 6 7 8 9 IV. ORDER Therefore, it is hereby ORDERED that Defendants’ motion (Dkt. 15) is GRANTED in part and DENIED in part as follows: 1. Claims against the Parkers for breach of their Employment Agreement, breach of covenant of good faith and fair dealing implied in their Employment 10 Agreement, breach of fiduciary duty, conversion, tortious interference with economic 11 relations, accounting, unjust enrichment, and trade secret misappropriation are 12 DISMISSED without prejudice; 13 2. Claims against Double B for breach of fiduciary duty, conversion, tortious 14 interference with economic relations, and trade secret misappropriation are DISMISSED 15 without prejudice to the extent that they are premised on the Parkers’ conduct; 16 3. Defendants’ motion to dismiss is DENIED as to the remaining claims; and 17 4. Defendants’ motion to stay is DENIED without prejudice. 18 Dated this 18th day of July, 2017. 19 A BENJAMIN H. SETTLE United States District Judge 20 21 22 ORDER - 24
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
