Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Cheney v. IPD Analytics

October 20, 2008

CLARK S. CHENEY, PLAINTIFF,
v.
IPD ANALYTICS, LLC, ET AL., DEFENDANTS.



The opinion of the court was delivered by: John D. Bates United States District Judge

MEMORANDUM OPINION

Plaintiff Clark Cheney brings this action against his former employer IPD Analytics, LLC ("IPD" or "the Company"), its chief executive officer, Howard Krass, and the principal shareholder Intellectual Property Development, Inc. (collectively, "defendants") in the wake of the termination of his employment with IPD. The core of the action is a non-competition provision in Cheney's employment contract with IPD. Cheney has filed a motion for a preliminary injunction that would require IPD to produce detailed contact information for each of its subscribers, authorize Cheney to contact those entities, and further declare that Cheney may solicit IPD's current and former employees to join him in a legal practice in competition with IPD. See Pl.'s Mot. for Prelim. Inj. at 1-2. In response, defendants have moved to dismiss this action, or in the alternative to transfer, on the grounds of improper venue and lack of personal jurisdiction. See Defs.' Mot. to Dismiss at 1. A hearing on the motions was held on September 26, 2008. For the reasons explained below, the Court will grant defendants' request to transfer this action to the United States District Court for the Southern District of Florida, pursuant to 28 U.S.C. § 1404(a), and deny Cheney's motion for preliminary injunction without prejudice.

BACKGROUND*fn1

IPD is a Florida company engaged in the business of publishing and selling a subscription to institutional investors, known as "Wall Street newsletters," providing research reports and analyses of patent litigation involving public companies for investment purposes. See First Krass Decl. ¶¶ 2, 7; First Cheney Decl. ¶¶ 5, 9. To that end, IPD recruits patent attorneys to provide analyses of patent litigation, typically lawyers who have served as law clerks on the U.S. Court of Appeals for the Federal Circuit. Second Cheney Decl. ¶ 5. Krass recruited Cheney, a former Federal Circuit law clerk, in late 2005 and early 2006 to join IPD. Second Cheney Decl. ¶ 1. Cheney was then an associate at Dewey Ballantine LLP in the District of Columbia, and on track to become a partner. See First Cheney Decl. ¶ 4. In January 2006, Cheney traveled to the Company's office in Bay Harbor Islands -- a suburb of Miami -- for a multi-day interview with Krass and IPD's director, Mark Mamolen. Compl. ¶ 15.

By email dated February 3, 2006, captioned "Offer of Employment," Krass offered Cheney a position as an analyst with IPD, and set forth the following salary package: a base salary of $200,000 per year, payment of moving expenses up to $10,000, a signing bonus of $10,000, a bonus of $20,000 if he purchased a full-time residence in Florida, a performance- based bonus of $50,000 for calendar year 2006, future annual bonuses in an amount to be determined, and health and disability insurance. See First Cheney Decl., Ex. C ("Offer of Employment"). The offer further stated: "It is contemplated that in the event you achieve a performance level comparable to the other Company Analysts, as part of your bonus package for calendar year 2007, the Company will provide an opportunity for you to obtain equity in the Company that would vest over subsequent years." Id. The offer concluded with the qualification that "[y]our employment pursuant to this offer is contingent on your execution of an Employment Agreement which is a condition of this offer and of your continued employment with the Company." Id.

Cheney accepted minutes later, writing from the District of Columbia:

Dear Howard, It is my honor to accept your offer as described in your message below. Thanks very much for your effort in putting it together. I'm excited to dig into the work at IPD Analytics, I'm excited to join the team that you have assembled, and I'm looking forward to getting to know you better as we work together.

First Cheney Decl., Ex. C. In response, Krass promised to "send . . . the Employment Agreement on Monday." Id. Cheney signed the Employment Agreement three days later while still in the District of Columbia. Second Cheney Decl. ¶ 2. Krass signed the Agreement in Florida on March 6, 2006. Employment Agreement at 4.

The Employment Agreement contains three paragraphs whose purpose is to prevent Cheney from competing with IPD in the event of his departure: a confidentiality provision, a non-competition provision, and a non-solicitation provision. They state, in relevant part:

1.2 Confidential Information. As used herein, the term "Confidential Information" means all information of a confidential nature . . . which is not generally known to the public and which relates to the business of the Company, including without limitation . . . client lists. . . . Employee acknowledges that the business of the Company is highly competitive and that the services to be performed by Employee for the Company are unique . . . Employee will hold all Confidential Information in strictest confidence and will:

(a) not . . . use . . . any Confidential Information other than as necessary for Employee's performance of Employee's responsibilities as an employee of the Company . . .

Employee also agrees that in connection with this Section 1.2, Employee also will be bound by the provisions of Section 1.4. Employee further acknowledges and agrees that the Company's conduct in providing Employee with Confidential Information . . . gives rise to the Company's interest in restraining employee from competing against the Company as set forth in Section 1.4, and that Employee's agreement in Section 1.4 is designed to enforce Employee's agreement in this Section 1.2.

1.4 Non-Competition. Employee agrees that during the Employment Term and for a period of one (1) year thereafter, for any reason, Employee will not, directly or indirectly, in any State of the United States, or any country in the world where the Company engages or proposes to engage in Business . . . (i) become employed by . . . or in any other way provide services that compete with the Company's Business for any entity that was a customer of the Company at any time during the Employment Term, (ii) compete with the Company in Business, or (iii) participate in the ownership, management, operation, financing, or control of, or be employed by or consult for or otherwise render services to, any . . . entity that competes with the Company in Business. For the purposes of this Section 1.4, "Business" shall mean (x) providing or planning to provide research and/or analysis, for investment purposes, of pending litigation and/or intellectual property issues, throughout the United States or in any country in the world, and (y) any other portion of the Company's business in which Employee actively participated or regarding which Employee received Confidential Information . . . .

1.5 Non-Solicitation/Non-Hire of Employees. Employee agrees that, during the Employment Term and for a period of two (2) years thereafter, Employee shall not . . . (a) solicit for employment or hire, or attempt to solicit for employment or hire, any person who is employed by . . . the Company, or (b) otherwise interfere with the relationship between any such person and the Company.

Employment Agreement ¶¶ 1.2, 1.4 and 1.5 (emphasis in original). The Employment Agreement further includes a forum selection clause to provide for exclusive venue in Florida for any litigation arising out of the Agreement:

Any litigation or arbitration between the parties which arises out of this Agreement shall be instituted and prosecuted only in the appropriate state or federal court or other tribunal situated in Miami, Florida. Parties hereby submit to the exclusive jurisdiction of such courts and tribunals for purposes of any such action and the enforcement of any judgment or order arising therefrom. Parties hereby waive any right to a change of venue and any and all objections to the jurisdiction of the state and federal courts and other tribunals located in Miami, Florida.

Id.¶ 1.8.

The Subscription Agreement that subscribers are required to sign also contains a provision that prevents former IPD employees from providing competing services to subscribers during the subscription period or for one year thereafter. This provision, entitled "Non-Hire," provides that "[d]uring the term of this Agreement and for a period of one year thereafter the Subscriber shall not employ or contract with any current personnel of IPD Analytics or former personnel of IPD Analytics who had been employed by IPD Analytics within the one year period immediately preceding such employment or contract with the undersigned." Subscription Agreement ¶ 4. No forum selection clause is contained in this document.

Cheney moved to Florida soon after accepting, and formally commenced working for IPD in March 2006. First Cheney Decl. ¶ 8. There were no significant changes in the terms and conditions of his employment until the end of that year. In December 2006, IPD announced that it was instituting a 401(k) plan ("Plan"), established under a separate Plan document. Compl. ¶ 28. The Plan document designated IPD as the Plan Administrator, and Krass as the Trustee. Id. ¶ 28. The Plan obligated IPD to match employee contributions using a certain formula and to deposit the matches in a special "safe harbor" account. Id. ¶ 29. Cheney allegedly made the maximum contributions in 2006 and 2007; however, he contends IPD failed to make full matching contributions with respect to Cheney and other IPD employees. Id. ¶¶ 30-33. In 2008, IPD allegedly failed to provide Cheney with any matching contributions at all. Id. ¶ 24.

During Cheney's tenure at IPD, he conducted legal research and wrote reports attempting to predict outcomes of cases, responded to inquiries from subscribers about his reports, and traveled to the District of Columbia to observe Federal Circuit and International Trade Commission hearings. First Cheney Decl. ΒΆΒΆ 9-11; Second Cheney Decl. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.