Challenge
Defended two individuals, domiciled in New Jersey who were sued for $1.1 million in Illinois State Court. The Defendants were two former employees of the Plaintiff. They were sued for breach of contract, tortious interference, defamation, and conversion arising out of their employment.
Plaintiff alleged the Defendants entered into a Non-Circumvention Agreement and a Confidentiality Agreement (together, the “Agreements”) as a condition of their employment. Plaintiff claimed the Agreements were executed in Plaintiff’s offices in Cook County in the State of Illinois.
Plaintiff alleged the Defendants breached the Agreements when they resigned from Plaintiff’s employment in 2016. In particular, Defendants allegedly canceled the accounts of Plaintiff’s customers using fraudulent cancellation letters and took the accounts to their new employment. Defendants also allegedly extracted all of Plaintiff’s data, transferred it to their personal flash drives, and destroyed the hard disks in Plaintiff’s computer system. Further, Defendants allegedly wrongfully obtained and stole Plaintiff’s confidential information, including customer lists, contract terms, methods of operations, marketing plans, software specifications, software code, and financial information. In addition, Defendants allegedly provided false information to Plaintiff’s clients, including that Plaintiff was bankrupt and closing. Plaintiff alleged that Defendants’ actions caused it to lose customer accounts with a value of over $1.1 million.
Solution
We represented the Defendants in Illinois State Court proceedings. We immediately filed an application to remove the case from Illinois State Court to the United District Court for the Northern District of Illinois. A full Pre-Answer Motion to Dismiss was then filed on behalf of the Defendants. We moved to dismiss each cause of action in the Plaintiff’s claim based on failure to state a claim and improper venue. We also moved to dismiss Plaintiff’s claim arguing that the United District Court for the Northern District of Illinois lacked personal jurisdiction over the Defendants.
Plaintiff claimed the Agreements were entered into by the Defendants and executed in Plaintiff’s offices in Cook County in the State of Illinois. Plaintiff failed to produce executed versions of the Agreements. Defendants submitted affidavits in support of their Pre-Answer Motion to Dismiss. Defendants in their affidavits denied signing any of the Agreements in the State of Illinois. Defendants stated they were managers of the Plaintiff’s satellite office which was in New York, New York. Defendants were domiciled in the State of New Jersey and performed all work duties in New York City while they were employed by the Plaintiff. Plaintiff failed to submit an affidavit or produce alternative evidence to rebut these assertions.
Result
Following the fully submitted Pre-Answer Motion to Dismiss on behalf of the Defendants, the United District Court for the Northern District of Illinois decided the matter on the motion papers. The Court did not require oral argument. The United District Court for the Northern District of Illinois dismissed the entire lawsuit against the Defendants. The Court decided that the United District Court for the Northern District of Illinois did not have personal jurisdiction over the Defendants. Plaintiff never subsequently appealed the Court’s ruling. We saved the Defendants from having a judgment of $1.1 million against them both individually.