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Clarity Research and Consulting, LLC v. Omniwest, LLC

United States District Court, W.D. Texas, Austin Division

April 27, 2017




         BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and specifically Defendant OmniWest, LLC (OmniWest)'s Motion to Dismiss [#9], Plaintiff Clarity Research and Consulting, LLC (Clarity)'s Response [#17] in opposition, OmniWest's Reply [#19] in support, and Clarity's Sur-Reply [#20] in opposition. Having reviewed the documents, the governing law, and the file as a whole, the Court now enters the following opinion and orders.


         Clarity brings this action against OmniWest[1] for breach of contract, misappropriation of trade secrets, tortious interference with contracts, tortious interference with prospective business relationships, business disparagement, and conspiracy. See Not. Removal [#1-1] Ex. A (Orig. Pet.) ¶¶ 35-50.

         I. Facts

         Clarity is a scientific and clinical research company, incorporated under Delaware law, that partners with healthcare providers to develop, administer, and execute research studies. Id. ¶ 13. Its principal place of business is located in Austin, Texas. Id. ¶ 1.

         OmniWest is an Arizona limited liability company that "coordinates and administers medical study services between companies that develop medical studies and participating healthcare providers." Mot. Dismiss [#9] at 2. Its principal place of business is located in Scottsdale, Arizona. Orig. Pet. ¶ 2.

         OmniWest entered into a Subcontractor Master Management and Administrative Services Agreement (Agreement) with Safe Harbor Compliance and Clinical Services, LLC (Safe Harbor), effective August 1, 2015. Resp. [#17] at 3; see Id. [#17-1] Ex. A (Agreement). Safe Harbor "supervises and coordinates the management and administration of healthcare research and medical study services for various healthcare provider customers . ..." Agreement at 1. As part of the Agreement, OmniWest was "to assist [Safe Harbor] with the coordination, supervision, management and administration" of certain healthcare clinical trial studies. Id. The Agreement lists OmniWest's "Duties and Responsibilities":

(b) . . . [OmniWest] shall use reasonable efforts to perform its duties in a competent and timely fashion.
(d) [OmniWest] represents and warrants . . . each professional who shall provide professional services for the Studies . . . shall (i) be, as applicable, duly licensed as required by state and federal law, (ii) have certification, training and credentialing appropriate for the professional services performed . . ., and (iii) have professional insurance coverage ....
(e) ... [OmniWest] shall procure and maintain[ ] comprehensive general liability insurance coverage and workers' compensation insurance coverage with insurance carriers....

Id. at 2; see also Reply [#19] at 2. In general, the Agreement required OmniWest to "USE REASONABLE JUDGMENT IN RENDERING THE SERVICES FOR [SAFE HARBOR] . . . ." Agreement at 3. The Agreement also included a "Confidential Information" clause, prohibiting OmniWest and Safe Harbor from disclosing, using, copying, or permitting to be copied confidential information; a "Patient Information" clause, requiring OmniWest and Safe Harbor to "comply with all applicable privacy and security laws and regulations"; and a "Materials" clause, providing OmniWest will submit for review and approval all materials of Safe Harbor before using, distributing, or display any such materials. Id. at 3; see also Sur-Reply [#20] at 2. Finally, the Agreement included the following forum selection clause:

This Agreement shall be construed and enforced in accordance with the laws of the State of Texas, excluding any conflict of law provision which would refer to the law of another jurisdiction, and the Parties agree that venue of any litigation under this Agreement shall be in Travis County, Texas.

Agreement at 6.

         Effective January 1, 2016, OmniWest, Safe Harbor, and Clarity entered in a First Amendment to the Agreement (Amendment). Resp. [#17-1] Ex. B (Amendment). The Amendment assigned the Agreement from Safe Harbor to Clarity and incorporated a "Code of Conduct": OmniWest "hereby consents to the assignment of the Agreement to [Clarity] such that all references to [Safe Harbor] in the Agreement and Code of Conduct. . . shall be changed to Clarity upon assignment of the Agreement from [Safe Harbor] to Clarity . . . ." Amendment at 1-2.

         After the parties executed the Amendment, Mark Jablonski and Scott Yost, members of OmniWest, visited Clarity's offices in Austin, Texas, approximately five times. Resp. [#17-1] (Hurwitz Aff.) ¶ 7. The purpose of these meetings was to discuss: "(1) issues related to the Agreement between Clarity and OmniWest; (2) business operations of Clarity and OmniWest; (3) training on studies and protocols for OmniWest; (4) business opportunities for Clarity and OmniWest; and (5) administrative issues related to Clarity and OmniWest's relationship." Id. Further, in performing its duties under the Agreement, OmniWest recruited no less than 21 compensated study investigators located in Texas. Id. ¶ 8.

         In late 2016, Clarity claims it discovered OmniWest violated the Agreement. Orig. Pet. ¶¶ 21-33. Specifically, Clarity alleges OmniWest used Clarity's confidential customer/investigator information and lists to attempt to lure away its customers/investigators to its competitors and has made "disparaging remarks to [Clarity's] customers/investigators indicating that it is going out of business, no longer conducting research studies, and is filing for bankruptcy." Id. ¶¶ 25, 28.

         II. Procedural Posture

         Clarity filed its Original Petition in state court on January 20, 2017, alleging breach of contract, misappropriation of trade secrets, tortious interference with contracts, tortious interference with prospective business relationships, business disparagement, and conspiracy claims against OmniWest, Jablonski, Yost, and Muhovic. See Orig. Pet. ¶ 35-49. OmniWest timely removed to this Court on March 3, 2017. As noted above, on March 28, 2017, this Court granted Clarity's unopposed motion to dismiss its claims against Jablonski, Yost, and Muhovic without prejudice.[2] See Order of Mar. 28, 2017 [#18] at 1.

         On March 10, 2017, OmniWest moved to dismiss Plaintiffs Original Petition for lack of personal jurisdiction and improper venue under 28 U.S.C. § 1406. Mot. Dismiss [#9] at 1. In the alternative, OmniWest moved to transfer the case under 28 U.S.C. § 1404(a) or dismiss the case under the doctrine of forum non conveniens. Id. The motion has been fully briefed and is now ripe for this Court's review. In addition, although not discussed by either party, the Court will determine whether subject matter jurisdiction exists over this dispute.


         I. Personal Jurisdiction

         OmniWest moves to dismiss Clarity's Original Petition based on lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). To determine whether a federal district court has personal jurisdiction over a nonresident defendant, the court considers first whether exercising jurisdiction over the defendant comports with due process. Religious Tech. Or. v. Liebreich, 339 F.3d 369, 373 (5th Cir. 2003). If the requirements of due process are satisfied, the court then determines whether the exercise of jurisdiction is authorized by the jurisdictional "long-arm" statute of the state in which the court sits. Id. Because the Texas long-arm statute has been interpreted as extending to the limit of due process, the two inquiries are the same for district courts in Texas. Id; see also Tex. Civ. Prac. & Rem. Code §§ 17.001-093.

         The Due Process Clause requires a nonresident defendant be properly subject to the personal jurisdiction of the court in which the defendant is sued. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980). The Supreme Court has articulated a two-pronged test to determine whether a federal court may properly exercise jurisdiction over a nonresident defendant: (1) the nonresident must have minimum contacts with the forum state, and (2) subjecting the nonresident to jurisdiction must be consistent with "traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945); Freudensprung v. Offshore Technical Servs., Inc., 379 F.3d 327, 343 (5th Cir. 2004).

         A defendant's "minimum contacts" may give rise to either general personal jurisdiction or specific personal jurisdiction, depending on the nature of the suit and the defendant's relationship to the forum state. Freudensprung, 379 F.3d at 343. A court exercises general jurisdiction over the defendant if the defendant has "continuous and systematic contacts" with the forum, regardless of whether those contacts are related to the cause of action asserted in the case. Id. Specific jurisdiction, by contrast, is based on the proposition "that 'the commission of some single or occasional acts of the [defendant] in a state' may sometimes be enough to subject the [defendant] to jurisdiction in that State's tribunals with respect to suits relating to that in-state activity." Daimler AG v. Bauman, 134 S.Ct. 746, 754 (2014) (quoting Int'l Shoe, 326 U.S. at 318).

         The plaintiff has the burden of making a prima facie case by showing a defendant has sufficient "minimum contacts" with the forum state to justify the state's exercise of either specific or general jurisdiction. Freudensprung, 379 F.3d at 343. If the plaintiff does so, the burden shifts to the defendant to show such an exercise offends due process because it is not consistent with traditional notions of fair play and substantial justice. Id. Finally, when a court rules on a 12(b)(2) motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, it must accept the non-moving party's jurisdictional allegations as true and resolve all factual disputes in its favor. Guidry v. U.S. Tobacco Co., 188 F.3d 619, 625 (5th Cir. 1999).

         A. General Jurisdiction

         OmniWest claims it lacks the substantial, continuous, or systematic contact with Texas required to establish general personal jurisdiction. Mot. Dismiss [#9] at 4-5. OmniWest is incorporated under Arizona law and ...

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