Workman Securities Corp. v. Phillip Roy Financial Servs., LLC, 2010 WL 155525 (D. Minn. Jan. 11, 2010) (full-text).
John Leonard worked as a sales representative for defendant Phillip Roy, an insurance planning services company. As part of that relationship Leonard signed a confidentiality agreement pertaining to certain customer lists, trade secrets, and proprietary information. At some point, not specifically mentioned in the case, Leonard became a registered representative of Plaintiff Workman, while still receiving client referrals from Phillip Roy. Phillip Roy’s president, Phillip Wasserman, determined that Leonard was violating his confidentiality agreement and threatened litigation. Workman preemptively filed this lawsuit seeking a declaration that it had not violated either the Minnesota or Florida Trade Secrets Act and that it had not tortiously interfered with Phillip Roy’s business.
Trial Court Proceedings
Minnesota’s long-arm statute authorizes jurisdiction over nonresidents to the full extent permitted by the due process clause, therefore determining jurisdiction over Phillip Roy is based on finding minimum contacts with the forum state so that exercising jurisdiction over the defendant will not offend traditional notions of fair play and substantial justice. According to the Court, Phillip Roy (composed of Phillip Services, headquartered and incorporated in Florida, and Phillip Consulting, headquartered in Florida and incorporated in Delaware) had no contacts with Minnesota, and therefore, Minnesota lacked jurisdiction over the defendant.
Plaintiff argued that the Court may exercise specific jurisdiction over Phillip Roy based on 1) Wasserman’s communications with Workman regarding the dispute that gave rise to this action, and 2) the sale of Phillip Roy products to Minnesota residents by Workman. The Court rejected both arguments holding that Wasserman had not subjected his company to the jurisdiction of Minnesota simply by threatening to sue a Minnesota resident in Florida over events that occurred in Florida. Similarly, there was no legal support for the exercise of jurisdiction over a company related to the sale of its products in a forum by the adversary in a civil action. Plaintiff then contended that even if there was no known basis for jurisdiction over the defendant it should be allowed to conduct jurisdictional discovery based on the existence of a website maintained by Defendant that could lead to a finding of minimum contacts.
In Lakin v. Prudential Sec., Inc., the Eight Circuit held that the district court had abused its discretion in refusing to permit the plaintiff to conduct jurisdictional discovery to determine the quantity of the defendant’s contacts with the forum state through its website, however the website in that case was classified by the court as “sophisticated” and “interactive,” demonstrating that the defendant could have used the site to engage residents of the forum in continuous and systematic contacts.
The Court in the instant case noted that the website maintained by Phillip Roy consisted of a single page with a phone number for Phillip Roy, a 22-word message from a dog named “Little A,” who invites the reader to request a “powerful free special report on Annuities,” and a link to a blog. The blog consisted of posts by Wasserman on topics ranging from “the Donald” to recent terrorist attacks. The Court denied Plaintiff’s request for jurisdictional discovery based on the website finding no similarities between Defendant’s site and the one discussed in Lakin. Phillip Roy’s website “is less sophisticated than a typical teenager’s Facebook page,” and provides no information about Phillip Roy other than its phone number. The website is not capable of injecting the Defendant into the forum and creating meaningful contacts and relationships with its residents.
- ↑ 348 F.3d 704 (8th Cir. 2003).