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Primacy Engineering, Inc. v. San Engineering, Chi Won Lee, and JK Oceanics, LLC

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

July 29, 2019




         Before the Court is Defendant SAN Engineering's (“SAN”) Motion to Dismiss, (Dkt. 33). Plaintiff Primacy Engineering, Inc. (“Primacy”) filed a response, (Dkt. 43), and SAN replied, (Dkt. 48). After the briefing was complete, the parties participated in a phone conference to offer additional argument on the motion. (See Dkts. 49, 50). Having considered the parties' briefs and arguments, the record, and the relevant law, the Court finds that SAN's motion should be granted.

         I. BACKGROUND

         This is a trade secrets case involving a mix of American and South Korean companies. (Compl., Dkt. 1, at 1).[1] Primacy, a company that specializes in marine industrial equipment for military use, (id. at 4), alleges as follows. Before 2017, a company called GMB (USA), Inc. (“GMB-USA”) had for years supplied a South Korean military contractor, Hanjin Heavy Industries Corporation (“Hanjin”), with components to make marine hovercraft vehicles for the Republic of Korea Navy. (Id. at 1). In 2017, Primacy bought many of GMB-USA's assets, which included a trade-secret technical data package that GMB-USA had created in its work for Hanjin. (Id. at 1-2).

         Defendant Chi Won Lee worked for GMB-USA from 2011 until 2015, when he went to work for SAN, a competitor. (Id. at 2). He also founded a Korean company called Oceanics, through which he has disrupted Primacy's relationships with its suppliers. (Id. at 9). Two years later, SAN outbid Primacy for Hanjin's contract, which it could not have done so without learning Primacy's trade secrets from Lee. (Id. at 2, 10). All of this conduct-Lee's defection for SAN, his alleged trade-secrets disclosure to SAN, and SAN's use of that information to bid for the Hanjin contract-took place in South Korea. (Id. at 9-10).

         Nonetheless, Primacy sued Lee and SAN in this Court, along with an Austin-based company called JK Oceanics that allegedly used Primacy's trade secrets to help SAN perform its Hanjin contract. (Id. at 11). SAN needs parts from the United States but requires a cooperative U.S. partner to secure those parts and ship them to Korea. (Id.). Enter JK Oceanics, operated by another allegedly disgruntled formed GMB-USA employee named Ji Min Justin Kwon (“Kwon”). (Id.). Primacy alleges that SAN is sending Kwon misappropriated trade-secret information so that he will know what parts to acquire for it. (Id. at 11-12).

         To remedy the misappropriation of its trade secrets, Primacy sued SAN in Korean court. (Mot., Dkt. 33, at 2). Primacy then also sued SAN, Lee, and JK Oceanics in this Court. (Compl., Dkt. 1, at 1). SAN now asks the Court to dismiss all of Primacy's claims against it for lack of personal jurisdiction and on the ground of forum non conveniens. (Mot., Dkt. 33, at 3, 9). Because the Court finds that dismissal is appropriate on the ground of forum non conveniens, it does not decide whether it has personal jurisdiction over SAN.


         The doctrine of forum non conveniens “proceeds from the premise that in n rare circumstances, federal courts can relinquish their jurisdiction in favor of another forum.” DTEX, LLC v. BBVA Bancomer, S.A., 508 F.3d 785, 794 (5th Cir. 2007) (cleaned up). Whether to do so involves two steps. First, the court must determine whether there exists an adequate alternative forum. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 n.22 (1981). If so, then the court must determine which forum is best suited to the litigation according to “private and public interest factors.” DTEX, 508 F.3d at 794 (citation and quotation marks omitted).

         The “private interest” factors include:

(i) the relative ease of access to sources of proof; (ii) availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; (iii) possibility of view of the premises, if view would be appropriate to the action; (iv) all other practical problems that make trial of a case easy, expeditious and inexpensive.

Moreno v. LG Elecs., USA Inc., 800 F.3d 692, 699 (5th Cir. 2015) (cleaned up). Courts also look at the enforceability of a judgment obtained in the alternate forum and “whether the plaintiff has sought to vex, harass, or oppress the defendant.” Id. (cleaned up).

         The “public interest” factors include:

(i) the administrative difficulties flowing from court congestion; (ii) the local interest in having localized controversies resolved at home; (iii) the interest in having a trial of a diversity case in a forum that is familiar with the law that must govern the action; (iv) the avoidance of unnecessary problems in conflicts of law, or in application of ...

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