United States District Court, D. Maryland.
All Risks, LTD.
MEMORANDUM TO COUNSEL
L. RUSSELL, III, JUDGE
before the Court is Defendant Luke Butler’s Motion to
Dismiss Amended Complaint or to Stay (ECF No. 15). The Motion
is ripe for disposition. No hearing is necessary.
See Local Rule 105.6 (D.Md. 2016). For the reasons
stated below, the Court will deny the Motion.
All Risks, LTD. (“All Risks”) is a Maryland
corporation with its principal place of business in Hunt
Valley, Maryland. (Am. Compl. ¶ 3, ECF No. 13). All
Risks is an independent wholesale insurance broker that
operates nationwide. (Id.). Beginning in July, 2013,
Butler, a Louisiana resident, worked as an insurance broker
for All Risks in its Metairie, Louisiana office.
(Id. ¶¶ 4, 10, 24). Butler specialized in
insurance products relating to “Oil & Gas[, ]
Downhole Tools[, ] Public Entities[, ] and Large Total
Insured Value Catastrophe Exposed Property.”
(Id. ¶ 24).
Butler began his employment with All Risks, he signed a
Brokerage Agreement (the “Agreement”) that
governed his terms and conditions of employment.
(Id. ¶ 10). The Agreement contains two
principal restrictive covenants. The first, section 4, is a
non-solicitation provision that prohibits Butler, for two
years following the termination of his employment, from
soliciting or accepting the business of certain entities for
the purpose of providing competing insurance services.
(Pl.’s Opp’n Mot. Dismiss Ex. A, § 4, ECF
No. 17-1). The second, section 3, is a confidentiality
provision that prohibits Butler from disclosing confidential
information during, and for two years after, his employment
with All Risks. (Id. § 3). Additionally, in
section 13, the Agreement contains forum-selection of
choice-of-law provisions under which Butler agreed that any
disputes related to the Agreement would be litigated in
accordance with Maryland law and under the exclusive
jurisdiction of Maryland courts. (Id. § 13).
Risks alleges that on August 28, 2015, Butler used his All
Risks email account to transfer confidential information to
his personal email account. (Am. Compl. ¶ 30). Two days
later, Butler resigned and began working for IUG “in
the same (or a very similar) capacity as he worked for All
Risks.” (Id. ¶¶ 28, 29). According
to All Risks, Butler began flouting his non-solicitation and
confidentiality obligations almost immediately after
commencing his employment with IUG. (See id.
¶¶ 30, 32).
parties filed separate suits in different forums. On August
28, 2015, the same day All Risks alleges Butler transferred
confidential information to his personal email account,
Butler filed suit in Louisiana state court, seeking a
declaratory judgment that sections 4 and 13 of the Agreement
are unenforceable under Louisiana law (the “Louisiana
Action”). (See Def.’s Mot. Dismiss
Am. Compl. or Stay Ex. 2, at 2-6, ECF No. 15-5). On October
21, 2015, All Risks filed an Answer and Reconventional Demand
(“Counterclaim”). (Id. Ex. 3, ECF No.
15-6). In its Counterclaim, All Risks raises claims for
violation of the federal Computer Fraud and Abuse Act
(“CFAA”) (Count I), the Louisiana Uniform Trade
Secrets Act (Count II), and the Louisiana Unfair Trade
Practices Act (Count III). (Id.). All Risks also
asserts claims for breach of confidentiality agreement (Count
IV) and fiduciary duty (Count V). (Id.). For relief,
All Risks seeks preliminary and permanent injunctive relief
and compensatory damages. (Id.). Butler filed a
Motion for Summary Judgment on November 10, 2015.
(Id. Ex. 4, ECF No. 15-7). A week later, Butler
answered All Risks’s Counterclaim. (Id. Ex. 5,
ECF No. 15-8).
September 8, 2015, All Risks sued Butler in the Circuit Court
for Baltimore County, Maryland, raising the following claims:
preliminary and permanent injunctive relief (Count I); breach
of contract - restrictive covenants (Count II); tortious
interference with existing and prospective contractual
business relationships (Count III); misappropriation of trade
secrets/ confidential information under § 11-201 of the
Commercial Law Article of the Maryland Code (Count IV);
unfair competition (Count V); and negligence based on breach
of fiduciary duty (Count VI). (ECF No. 2). All Risks seeks
compensatory and exemplary damages, as well as preliminary
and permanent injunctive relief. (Id.).
removed All Risks’s Complaint to this Court on October
15, 2015 based on diversity jurisdiction under 28 U.S.C.
§ 1332 (2012). (ECF No. 1). On October 21, 2015, Butler
filed a Motion to Dismiss or to Stay. (ECF No. 9). All Risks
then filed a timely Amended Complaint on November 6, 2015.
(ECF No. 13). Butler filed a Motion to Dismiss Amended
Complaint or to Stay on November 23, 2015. (ECF No. 15). All
Risks submitted an Opposition on December 10, 2015 (ECF No.
17), and Butler replied on December 28, 2015 (ECF No. 18).
moves to dismiss the Amended Complaint under Federal Rule of
Civil Procedure 12(b)(2), arguing this Court does not have
personal jurisdiction over him. When a non-resident defendant
challenges a court’s power to exercise personal
jurisdiction, “the jurisdictional question is to be
resolved by the judge, with the burden on the plaintiff
ultimately to prove grounds for jurisdiction by a
preponderance of the evidence.” Carefirst of Md.,
Inc. v. Carefirst Pregnancy Ctrs. Inc., 334 F.3d 390,
396 (4th Cir. 2003) (citing Mylan Labs., Inc. v. Akzo,
N.V., 2 F.3d 56, 59-60 (4th Cir. 1993)). “Yet
when, as here, the district court decides a pretrial personal
jurisdiction dismissal motion without an evidentiary hearing,
the plaintiff need prove only a prima facie case of personal
jurisdiction.” Mylan Labs., 2 F.3d at 60
(citing Combs v. Bakker, 886 F.2d 673, 676 (4th Cir.
1989)). In determining whether the plaintiff has proved a
prima facie case of personal jurisdiction, the Court
“must draw all reasonable inferences arising from the
proof, and resolve all factual disputes, in the
plaintiff’s favor.” Id. (citing
Combs, 886 F.2d at 676). Additionally, a court is
permitted to consider evidence outside the pleadings when
resolving a Rule 12(b)(2) motion. Structural Pres. Sys.,
LLC v. Andrews, 931 F.Supp.2d 667, 671 (D.Md. 2013)
(citing Silo Point II LLC v. Suffolk Const. Co., 578
F.Supp.2d 807, 809 (D.Md. 2008)).
Process Clause of the United States Constitution protects an
individual’s right not to be subject to the judgments
of a forum that cannot assert personal jurisdiction over the
individual. See Burger King Corp. v. Rudzewicz, 471
U.S. 462, 472 (1985). The personal jurisdiction requirement,
however, is a waivable right, and “there are a
‘variety of legal arrangements’ by which a
litigant may give ‘express or implied consent to the
personal jurisdiction of the court.’”
Id. at 472 n.14 (quoting Ins. Corp. of Ir. v.
Compagnie des Bauxites de Guinee, 456 U.S. 694, 703
(1982)). One such arrangement is when a non-resident
defendant agrees to a contract with a forum-selection clause.
See id.; CoStar Realty Info., Inc. v.
Field, 612 F.Supp.2d 660, 668 (D.Md. 2009) (“[A]
valid forum selection clause, standing alone, is enough to
confer personal jurisdiction on a nonresident
Maryland law,  “a forum-selection clause is
presumptively valid and enforceable, ” but “a
court may deny enforcement of such a clause upon a clear
showing that, in the particular circumstance, enforcement
would be unreasonable.” Gilman v. Wheat, First
Sec., Inc., 692 A.2d 454, 462-63 (Md. 1997). A
forum-selection clause is unreasonable if: “(i) it was
induced by fraud or overreaching, (ii) the contractually
selected forum is so unfair and inconvenient as, for all
practical purposes, to deprive the plaintiff of a remedy or
of its day in court, or (iii) enforcement would contravene a
strong public policy of the State where the action is
filed.” Id. at 463. Absent a finding of
unreasonableness, a court should enforce a mandatory
forum-selection clause. See Vulcan Chem. Techs., Inc. v.
Barker, 297 F.3d 332, 339 (4th Cir. 2002).
Court concludes the Agreement’s forum-selection clause
is not unreasonable. First, there is no indication that All
Risks used fraud or overreaching to induce Butler to sign the
Agreement. Second, Butler contends that Louisiana would be a
more convenient forum because the witnesses and evidence are
located in Louisiana. Butler discounts the high burden
associated with showing a forum-selection clause is
unreasonable based on unfairness and inconvenience- there
must be a clear showing that litigating in the forum
identified in the forum-selection clause would be so unfair
and inconvenient that the plaintiff is effectively deprived
of a remedy or a day in court. Gilman, 692 A.2d at
463. The Court finds no such showing. Third, enforcing the
forum-selection clause would not contravene a strong public
policy of Maryland because absent a clear showing of
unreasonableness, Maryland presumes forum-selection clauses
are valid and enforceable. See id. at 462-63. Butler
argues enforcing the forum-selection clause would ...