D2L Ltd. v. Biggs

          MEMORANDUM

          Catherine C. Blake United States District Judge

         Pending before the court is defendant OneLogin, Inc.'s ("OneLogin") motion to dismiss the complaint for lack of personal jurisdiction, or, in the alternative, for failure to state a claim. (ECF No. 7). For the reasons outlined below, OneLogin's motion will be granted for lack of personal jurisdiction. The issues have been briefed and no oral argument is necessary. See Local Rule 105.6 (D.Md. 2018).

         BACKGROUND

         D2L Ltd. ("D2L") is a "global cloud software company" incorporated in Maryland and headquartered in Canada. (Compl. ¶¶ 1, 4, ECF No. 1-1; Def.'s Reply Ex. 1 at 3, ECF No. 23-1). OneLogin, a Delaware corporation headquartered in California, is a "cloud-based identity and access management provider." (Compl. ¶ 2; Huger Aff. ¶¶ 2, ECF No. 7-2). Defendant Kevin T. Biggs ("Biggs"), a California resident, worked as Senior Vice President of Worldwide Sales for D2L from August 2014 through October 2017. (Compl. ¶¶ 2, 6; Biggs Aff. ¶ 2, ECF No. 7-3). As a D2L employee, Biggs signed an Employee Confidentiality, Inventions and Non-Compete Agreement ("Non-Solicitation Agreement"). (Compl. ¶¶3, 10). Biggs executed the Non-Solicitation Agreement in California. (Biggs Aff. ¶ 3). The Non-Solicitation Agreement prohibited Biggs from "directly or indirectly, solicit[ing] for employment, employing] or otherwise engag[ing] the services of, any representatives, contractors, employees, distributors or consultants of D2L" for a period of nine months after his employment with D2L terminated. (Compl. ¶ 11). In executing the Non-Solicitation Agreement, Biggs also consented to suit in the State of Maryland for any disputes arising out of the Agreement. (Id. ¶ 18; id. Ex. A ["Non-Solicitation Agreement"] at p. 13).

         When D2L terminated Biggs's employment in October 2017, Biggs executed a Release, which reaffirmed his obligation to abide by all of the conditions of the Non-Solicitation Agreement. (Compl. ¶ 25; id. Ex. B ["Release"] at p. 18). After leaving D2L, Biggs began working for OneLogin. On May 1, 2018, D2L corresponded with Biggs, reaffirming his obligations under the Non-Solicitation Agreement. (Compl. ¶28). On May 1, 2018, D2L also "advised OneLogin about Defendant Biggs' continuing obligations to D2L." (Id. ¶ 29).

         On July 17, 2018, D2L brought suit against Biggs and OneLogin in the Circuit Court for Baltimore County, Maryland, alleging: breach of the Non-Solicitation Agreement (Count I); and intentional interference with contract (Count II). (Id. ¶¶ 33-56; Notice of Removal, ECF No. 1). On September 28, 2018, defendants Biggs and OneLogin removed the case to this court. (Notice of Removal).

         STANDARD OF REVIEW

         "When personal jurisdiction is properly challenged under Rule 12(b)(2), 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 Maryland, Inc. v. Carefirst Pregnancy Centers, 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)). If the court resolves the personal jurisdiction question without an evidentiary hearing, "the plaintiff need only make a prima facie showing of personal jurisdiction." Carefirst, 334 F.3d at 396 (citing Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989)). In assessing whether the plaintiff has carried this burden, the court resolves all disputed facts and reasonable inferences in the plaintiffs favor. Carefirst, 334 F.3d at 396 (citing Mylan Labs, 2 F.3d at 60).

         ANALYSIS

         Personal Jurisdiction

         For a federal court to exercise personal jurisdiction over a foreign defendant, two hurdles must be surpassed. First, the forum state's long-arm statute must be satisfied. Second, the forum state's exercise of personal jurisdiction must comport with due process. Consulting Engineers Corp. v. Geometric Ltd., 561 F.3d 273, 277 (4th Cir. 2009). The Maryland long-arm statute "authorize[s] the exercise of personal jurisdiction to the full extent allowable under the Due Process Clause." CSR, Ltd. v. Taylor, 411 Md. 457, 473 (2009) (quoting Bond v. Messerman, 391 Md. 706, 721 (2006)). The court's statutory inquiry therefore merges with the court's analysis of the Due Process Clause. Carefirst, 334 F.3d at 396-97. Because the court finds that the exercise of personal jurisdiction over OneLogin would offend the Due Process Clause, the court need not resolve whether § 6-103(b)(4) of Maryland's long-arm statute, the provision D2L argues is applicable, would grant jurisdiction. Md. Code Ann., Cts. & Jud. Proc. § 6-103(b)(4).^[1]

         Consonant with the Due Process Clause, the court may exercise personal jurisdiction over a nonresident defendant if the defendant has sufficient "minimum contacts" with the forum so that haling the defendant to court in the forum state "does not offend traditional notions of fair play and substantial justice." Int'lShoe Co. v. Washington, 326 U.S. 310, 316 (1945). The standard for the court's exercise of personal jurisdiction varies based on whether the defendant's contacts with the forum state are the genesis of the cause of action. Carefirst, 334 F.3d at 397. If the suit arises out of the defendant's contacts with the forum state, the court may exercise specific jurisdiction. Id. To determine whether specific jurisdiction exists, the court considers: "(1) the extent to which the defendant purposefully availed itself of the privilege of conducting activities in the forum state; (2) whether the plaintiffs claims [arose] out of those activities; and (3) whether the exercise of personal jurisdiction is constitutionally reasonable." Universal Leather, LLC v. Koro AR, S.A., 773. F.3d 553, 559 (4th Cir. 2014) (citing Tire Eng 'g v. Shandong Linglong Rubber Co., 682F.3d292, 301-02 (4th Cir. 2012)).

         If, however, the defendant's contacts with the forum state do not give rise to the cause of action, the plaintiff must show that the court has general jurisdiction over the defendant. Id. General jurisdiction is appropriate when the defendant's contacts with the forum state are so "continuous and systematic" as to as to "render [the nonresident defendant] essentially at home in the forum State." Daimler AG v. Bauman, 571 U.S. 117, 127 (2014) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)). D2L does not set forth any clear argument that general jurisdiction exists, nor could it based on the facts alleged. A corporation's place of incorporation and principal place of business are the two paradigmatic bases for general jurisdiction. Daimler, SIX U.S. at 137. Absent one of these two bases, it may be possible to establish general jurisdiction in an "exceptional case." Id. at 139 n.19. But the corporation's operations in the forum state must be "so substantial and of such a nature as to render the corporation at home in that State." Id. The mere sale of products within the forum state is insufficient. Goodyear, 564 U.S. at 930 n.6. OneLogin is neither incorporated nor headquartered in Maryland and D2L has set forth no factual allegations that establish OneLogin is "comparable to a domestic enterprise" of Maryland. Daimler, 571 U.S. at 133 ii.ll. Accordingly, the court focuses its analysis on whether specific jurisdiction exists.

         Specific jurisdiction cannot be exercised unless there is an "affiliation between the forum and the underlying controversy, principally, [an] activity or occurrence that takes place in the forum state." Bristol-Myers Squibb Co. v. Superior Court,137 S.Ct. 1773, 1781 (2017) (quoting Goodyear, 564 U.S. at 919). The Supreme court's personal jurisdiction jurisprudence makes clear that specific jurisdiction is premised on the defendant's contacts with the forum state, not the defendant's contacts with individuals from the forum state, or the plaintiffs contacts with the forum state. Walden v. Fiore, 571 US. 277, 284-85 (2014). The Fourth Circuit has held that when the brunt of the harm of tortious conduct is felt within, and specifically aimed at, the forum state, this may inform the jurisdictional analysis.^[2] But the mere causation of harm within the forum state alone cannot support jurisdiction, instead, it must be "accompanied by the defendant's own contacts with the state." Geometric Ltd., 561 F.3d at 280-81 (citing ESAB Group, Inc. v. Centricut, Inc., ...