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Race Winning Brands, Inc. v. Crawford

United States District Court, N.D. Ohio, Eastern Division.
May 4, 2022
601 F. Supp. 3d 279 (N.D. Ohio 2022)

Opinion

Case No. 1:21-cv-00725

2022-05-04

RACE WINNING BRANDS, INC., Plaintiff, v. Sean CRAWFORD, et al., Defendants.

Dale A. Nowak, Stephen H. Jett, Buckingham, Doolittle & Burroughs, Cleveland, OH, for Plaintiff. Allyson R. Cady, Andrew G. Fiorella, Benesch, Friedlander, Coplan & Aronoff, Cleveland, OH, Jordan B. Leader, Proskauer Rose, New York, NY, Tiffany M. Woo, U.S. Federal Trade Commission, Washington, DC, Todd J. Ohlms, Proskauer Rose, Chicago, IL, for Defendants. John Doe, Pro Se.


Dale A. Nowak, Stephen H. Jett, Buckingham, Doolittle & Burroughs, Cleveland, OH, for Plaintiff.

Allyson R. Cady, Andrew G. Fiorella, Benesch, Friedlander, Coplan & Aronoff, Cleveland, OH, Jordan B. Leader, Proskauer Rose, New York, NY, Tiffany M. Woo, U.S. Federal Trade Commission, Washington, DC, Todd J. Ohlms, Proskauer Rose, Chicago, IL, for Defendants.

John Doe, Pro Se.

OPINION AND ORDER

J. Philip Calabrese, United States District Judge

Plaintiff Race Winning Brands filed suit against its former employees Sean Crawford, Evan Perkins, and Mark Gearhart, alleging violations of State contract and trade secret laws. According to the complaint, following the termination of their employment, Defendants misappropriated Plaintiff's proprietary confidential and trade secret information and agreed to work for Plaintiff's direct competitor, in breach of their contractual obligations. Defendants move to dismiss the claims against them or, in the alternative, to transfer the claims to federal courts in Delaware and California. For the reasons that follow, the Court GRANTS Defendants’ motion (ECF No. 15) and DISMISSES all claims against Defendants Crawford, Gearhart, and Perkins.

STATEMENT OF FACTS

Taking the facts alleged in the complaint as true and construing them in Plaintiff's favor, as the Court must on the motion before it, Plaintiff bases its claims on the following facts.

Race Winning Brands manufactures racing and high-performance parts sold in automotive and powersports markets. (ECF No. 1-1, ¶ 2, PageID #11.) Sean Crawford, Mark Gearhart, and Evan Perkins are former employees of Race Winning Brands. (Id. , ¶¶ 3–5, PageID #11.) Mr. Crawford worked for Race Winning Brands in its Mentor, Ohio headquarters, while Mr. Perkins and Mr. Gearhart worked out of home offices from their residences in California. (Id. , ¶¶ 4–6, PageID #11–12.) After leaving Race Winning Brands’ employment, all three Defendants agreed to work for Race Winning Brands’ direct competitor, Holley Performance Parts, Inc. (Id. , ¶¶ 3, 33–35, PageID #11 & #18.)

A. Defendant Sean Crawford

In January 2006, Race Winning Brands hired Sean Crawford to work in its Mentor, Ohio office. (Id. , ¶ 27, PageID #16.) In March 2017, while working as the Director of Marketing, Mr. Crawford entered into a written confidentiality agreement with Race Winning Brands. (Id. , ¶ 28, PageID #17.) Later, Mr. Crawford was promoted to President of Race Winning's J.E. Pistons Division. (Id. ) Also in March 2017, Mr. Crawford entered into a stock grant agreement that contained confidentiality provisions and restrictions against unfair competition for two years following the termination of his employment. (Id. , ¶ 30, PageID #7.) In reliance on those agreements, Race Winning Brands entrusted Mr. Crawford with proprietary confidential and trade secret information. (Id. , ¶ 31, PageID #17.)

Before Mr. Crawford terminated his employment with Race Winning Brands, Mr. Crawford accessed or copied Race Winning Brands’ monthly sales forecast and J.E. Piston's website updates. (Id. , ¶ 32, PageID #18.) Additionally, Mr. Crawford visited its Google drive throughout April and May 2020. (Id. ) To the extent such visits were done for a reason other than the performance of his duties as an employee of Race Winning Brands, the visits were made without Race Winning Brands’ consent. (Id. ) Either before leaving Race Winning Brands’ employment or immediately following termination, Mr. Crawford agreed to work for Holley Performance Parts. (Id. , ¶ 34, PageID #18.)

B. Defendant Evan Perkins

In September 2017, Race Winning Brands hired Evan Perkins to work from his home in California as Race Winning Brands’ Manager of Content Marketing. (Id. , ¶ 19, PageID #15.) As part of his employment, Mr. Perkins entered into a written confidentiality agreement with Race Winning Brands and received access to Race Winning Brands’ confidential information and trade secrets. (Id. , ¶¶ 19–20 & 22, PageID #15–16.)

Effective May 5, 2020, Mr. Perkins terminated his employment with Race Winning Brands. (Id. , ¶ 23, PageID #16.) Before leaving Race Winning Brands’ employment, on May 4 and 5, 2020, Mr. Perkins performed a full backup of his Race Winning Brands computer to an external digital hard drive. (Id. , ¶ 24, PageID #16.) Further, Mr. Perkins deleted all emails from his Race Winning Brands computer before returning it. (Id. , ¶ 25, PageID #16.) Either before leaving Race Winning's employment or immediately following termination, Mr. Perkins agreed to work for Holley Performance Parts. (Id. , ¶ 34, PageID #18.)

C. Defendant Mark Gearhart

In April 2016, Race Winning Brands hired Mark Gearhart to work from his home in California. (Id. , ¶ 10, PageID #13.) In March 2017, while working as the Manager of Marketing, Mr. Gearhart entered into a written confidentiality agreement with Race Winning Brands. (Id. , ¶ 11, PageID #13.) In addition to protecting Race Winning Brands’ confidential information, the confidentiality agreement contained a non-solicitation clause providing that Mr. Gearhart would not directly or indirectly induce or attempt to induce any Race Winning Brands employee to change his or her employment with Race Winning Brands for one year following termination of his employment. (Id. , ¶¶ 11–12, PageID #13.) In reliance on the confidentiality agreement, Race Winning Brands entrusted Mr. Gearhart with proprietary confidential and trade secret information. (Id. , ¶ 13, PageID #13.)

On March 27, 2020, Race Winning Brands terminated Mr. Gearhart's employment. (Id. , ¶ 14, PageID #14.) After learning of Race Winning Brands’ decision to terminate his employment, Mr. Gearhart announced that he would be taking co-worker Evan Perkins with him to his new employer. (Id. , ¶ 14, PageID #14.) Between March 31, 2020 and May 14, 2020, without Race Winning Brands’ consent, Mr. Gearhart accessed Race Winning Brands’ database and downloaded confidential information and trade secrets on sixteen occasions. (Id. , ¶ 15, PageID #14.) Mr. Gearhart also "scrubbed" one of the Race Winning Brands computers in his possession before returning it to Race Winning Brands, thereby erasing information identifying him as the past user of the computer. (Id. , ¶ 17, PageID #14.) Further, Mr. Gearhart refused to provide Race Winning Brands with the passwords for all computers he used as an employee of the company. (Id., ¶ 18, PageID #14.) Either before leaving Race Winning Brands’ employment or immediately following termination, Mr. Gearhart agreed to work for Holley Performance Parts. (Id. , ¶ 33, PageID #18.)

D. John and Jane Doe Defendants

According to the complaint, unknown individuals induced Defendants Crawford, Perkins, and Gearhart to work for Holley Performance Parts in breach of their contractual duties to Race Winning Brands. (Id. , ¶¶ 74, 77, & 80, PageID #25–26.)

STATEMENT OF THE CASE

Plaintiff filed this action in State court, and Defendants removed based on diversity jurisdiction. (ECF No. 1.) Plaintiff asserts seven claims, naming as Defendants Sean Crawford, Evan Perkins, Mark Gearhart, and six John and Jane Does. (ECF No. 1-1, PageID #10.) Against Defendants Crawford, Perkins, and Gearhart, Plaintiff alleges breach of contract; unjust enrichment; tortious interference in contract; unfair competition and misappropriation or threatened misappropriation of trade secrets; civil theft and conversion; and spoliation of evidence. (Id. , PageID #22–24 & #26–29.) Plaintiff also alleges tortious interference with contract against the John and Jane Doe Defendants. (Id. , PageID #24–26.)

Defendants move to dismiss the claims against Mr. Crawford, Mr. Perkins, and Mr. Gearhart under Rule 12(b)(6) pursuant to the forum-selection clauses in the parties’ relevant agreements. (ECF No. 15, PageID #118–19.) Alternatively, under 28 U.S.C. § 1404(a), Defendants move to transfer the claims against Mr. Crawford and Mr. Perkins to the District of Delaware and the claims against Mr. Gearhart to the Central District of California. (Id. ) Finally, Defendants move to dismiss all claims under Rule 12(b)(6) for various additional reasons. (Id. , PageID #119.)

ANALYSIS

At the motion to dismiss stage, a complaint must "contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). In assessing plausibility, the Court construes factual allegations in the complaint in the light most favorable to the plaintiff, accepts the allegations of the complaint as true, and draws all reasonable inferences in the plaintiff's favor. Wilburn v. United States , 616 F. App'x 848, 852 (6th Cir. 2015).

I. Venue

Based on forum-selection clauses continued in various agreements, Defendants move to dismiss the claims against Crawford, Perkins, and Gearhart. (ECF No. 15, PageID #118–19.) In the alternative, Defendants seek to transfer the claims against Crawford and Perkins to the District of Delaware and the claims against Gearhart to the Central District of California, pursuant to 28 U.S.C. § 1404(a). (Id. )

I.A. Relevant Agreements

Several agreements Race Winning Brands entered into with Mr. Crawford, Mr. Perkins, and Mr. Gearhart bear on the motion before Court. On a motion to dismiss, in addition to the allegations in the complaint, courts "may consider exhibits attached to the complaint, public records, items appearing in the record of the case, and exhibits attached to defendant's motion to dismiss, so long as they are referred to in the complaint and are central to the claims contained therein." DeShetler v. FCA US LLC , No. 3:18 CV 78, 2018 WL 6257377, at *4 (N.D. Ohio Nov. 30, 2018) (quoting Gavitt v. Born , 835 F.3d 623, 640 (6th Cir. 2016) ).

Though the complaint does not attach confidentiality agreements Race Winning Brands entered into with Mr. Crawford and Mr. Perkins or its stock grant agreement with Mr. Crawford, it refers to them and the allegations of the complaint put them in issue in Plaintiff's claims against Defendants. (ECF No. 1-1, ¶¶ 11, 20, 28 & 30, PageID #13, #15, & #17.) Further, Defendants attached the agreements to their motion. (ECF Nos. 15-3 & 15-5.) Because the documents are central to the dispute between the parties, the Court considers them in connection with Defendants’ motion without converting the motion to one for summary judgment.

I.A.1. Confidentiality Agreement

Both Mr. Crawford and Mr. Perkins executed the same confidentiality agreement. The forum-selection clause of the confidentiality agreement provides that Delaware law governs the agreement's interpretation and provides for the resolution of disputes in Delaware:

8. Governing Law and Jurisdiction. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application hereto of the laws of any jurisdiction other than the State of Delaware. In furtherance of the foregoing, the internal law of the State of Delaware shall control the interpretation and construction of this Agreement, even though under any other jurisdiction's choice of law or conflict of law analysis the substantive law of some other jurisdiction may ordinarily apply. You irrevocably submit to the exclusive jurisdiction of the state or federal courts located in the State of Delaware for the purposes of any suit, action or other proceeding arising out of this Agreement, any related agreement or any transaction contemplated hereby or thereby. You also agree that service of any process, summons, notice or document by U.S. registered mail shall be

effective service of process for any action, suit or proceeding. You also irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement, any related document or transactions contemplated hereby and thereby in the state or federal courts located in the State of Delaware and hereby agree not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

(ECF No. 15-1, PageID #177–78.)

I.A.2. Stock Grant Agreement

Mr. Crawford entered into a stock grant agreement with Performance Products Investors, LLC (ECF No. 15-3, PageID #157), of which Race Winning Brands was an intended third-party beneficiary (ECF No. 1, ¶ 30, PageID #18). Mr. Crawford entered into the stock grant agreement four days after entering into the confidentiality agreement. (Compare ECF No. 15-3, PageID #166 with ECF No. 15-5, PageID #179.)

In relevant part, the stock grant agreement contains restrictions on unfair competition for two years following Mr. Crawford's termination of employment with Race Winning Brands. (ECF No. 15-3, PageID #164–65.) However, the agreement does not preempt any of Mr. Crawford's prior agreements with Race Winning Brands related to non-competition, non-solicitation, non-interference with business relations, or confidentiality; rather, those agreements remain in full force and effect. (Id. , PageID #164–65.) The stock grant agreement does not contain a forum-selection clause. (See ECF No. 15-3.)

I.A.3. Separation Agreement

Defendants also attach to their motion Race Winning Brands’ separation agreement with Mr. Gearhart. (ECF No. 15-4.) Defendants argue that the separation agreement is integral to the complaint, though Plaintiff did not refer to it. (ECF No. 15-1, PageID #133.) In its reply to Defendants’ motion, Plaintiff does not contest that its claims against Mr. Gearhart arise from the separation agreement. (ECF No. 18, PageID #229 n.2 & #232.) Accordingly, the Court considers the separation agreement in connection with Defendants’ motion, again without converting the motion to one for summary judgment.

Mr. Gearhart entered into the separation agreement with Race Winning Brands on March 27, 2020, the date his employment terminated. (ECF No. 15-4, PageID #168.) The separation agreement contains a clause providing that Ohio law governs its interpretation but providing for the resolution of disputes in California:

J. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio. Any action to enforce this Agreement shall be properly venued in a state or federal court of competent jurisdiction within the State of California.

(Id. , PageID #172.) Additionally, the separation agreement contains a confidentiality provision. (Id. , PageID #171–72.) Further, the separation agreement provides that it supersedes any and all prior agreements concerning its subject matter. (Id. , PageID #172.)

I.B. Enforceability of the Forum-Selection Clauses

Before giving effect to a forum-selection clause, the Court must determine whether it is enforceable. North v. McNamara , 47 F. Supp. 3d 635, 647 (S.D. Ohio 2014). "The party opposing the forum selection clause bears the burden of showing that the clause should not be enforced." Id. (quoting Wong v. PartyGaming, Ltd. , 589 F.3d 821, 828 (6th Cir. 2009) ). Plaintiff makes no argument regarding the enforceability of the forum-selection clause in either the confidentiality agreement or the separation agreement. Therefore, the Court determines they are enforceable.

I.C. Scope of the Forum-Selection Clauses

"Determining whether the forum-selection clause governs this suit" presents a separate issue "of contract interpretation." Holtzman v. Village Green Mgmt. Co. , No. 2:19-cv-11150, 2020 WL 264331, at *10 (E.D. Mich. Jan. 17, 2020) (citing 8 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 3803.1 ). To interpret the clause, the Court uses "ordinary contract principles." Id. (citing In re Delta America Re Ins. Co. , 900 F.2d 890, 892 (6th Cir. 1990) ).

I.C.1. Confidentiality Agreement

Defendants contend that each and every claim against Mr. Perkins and Mr. Crawford is subject to the forum-selection clause in the confidentiality agreement with Race Winning Brands. (ECF No. 15-1, PageID #134–37.) In opposition, Plaintiff does not rebut that the forum-selection clause in the confidentiality agreement governs all claims against these Defendants. (See ECF No. 18, PageID #233–35.) Accordingly, Plaintiff has conceded this argument.

Even had Plaintiff not conceded the point, the Court determines that the forum-selection clause applies to all claims against Mr. Crawford and Mr. Perkins. Plaintiffs’ claims against these Defendants are based on allegations that each misappropriated Race Winning Brands’ confidential information. These claims clearly "arise out" of the confidentiality agreement.

One claim against Mr. Crawford, that he violated a non-competition promise, arises out of the stock grant agreement. (ECF No. 1-1, ¶¶ 30 & 35, PageID #17–18.) Nonetheless, the forum-selection clause in the confidentiality agreement governs this claim too. The forum-selection clause of the confidentiality agreement provides for exclusive jurisdiction in Delaware "for the purposes of any suit, action or other proceeding arising out of this Agreement," as well as for "any related agreement or any transaction contemplated hereby or thereby." (ECF No. 15-5, PageID #177–78.) Because Crawford signed the confidentiality agreement and stock grant agreement within a matter of days, Defendants argue that the agreements are interconnected and that the stock grant agreement is, therefore, either a "related agreement" or a "transaction contemplated" when the parties entered into the confidentiality agreement. (ECF No. 15-1, PageID #136.) The Court agrees.

I.C.2. Separation Agreement

Defendants contend that the claims against Mr. Gearhart arise out of the separation agreement Race Winning Brands entered into with him when it terminated his employment. (ECF No. 15-1, PageID #142–44.) In opposition, Plaintiff does not contest that its claims against Mr. Gearhart arise from the separation agreement and are governed by its forum-selection clause. (See ECF No. 18, PageID #229 n.2, #231–33, & #235.) Accordingly, Plaintiff has conceded this argument.

Even if Plaintiff's failure to address Defendants’ argument on this point is not viewed as a concession, the Court determines that the forum-selection clause applies to all claims against Mr. Gearhart. Defendants argue that the separation agreement governs all claims relating to confidentiality because the confidentiality provision in the separation agreement superseded the one in the confidentiality agreement. (ECF No. 15-1, PageID #142.) Further, Defendants argue that the separation agreement applies to the claim relating to solicitation because the separation agreement completely supersedes the confidentiality agreement, even though the separation agreement did not contain a non-solicitation provision. (Id. , PageID #143–44.) In the alternative, Defendants argue that the non-solicitation provision in the confidentiality agreement is voidable under California law. (Id. , PageID #143.) In the absence of any argument to the contrary, the Court determines that all claims against Mr. Gearhart are governed by the separation agreement and its forum-selection clause.

I.D. Exclusivity of the Forum-Selection Clauses

Having determined that the forum-selection clauses apply to the claims against Mr. Crawford, Mr. Perkins, and Mr. Gearhart, the Court considers whether the clauses establish the chosen forum as exclusive to others. "A forum selection clause is mandatory if it clearly indicates that jurisdiction is proper only in the selected forum. By contrast, a permissive forum selection clause merely authorizes jurisdiction in the specified forum, but does not require that forum to be the exclusive venue for litigation." Federal Deposit Ins. Corp. v. Paragon Mortg. Servs., Inc. , No. 1:15 CV 2485, 2016 WL 2646740, at *2 (N.D. Ohio May 10, 2016) (quotation omitted).

I.D.1. Confidentiality Agreement

Defendants maintain that the forum-selection clause contained in the confidentiality agreement is mandatory and enforceable. (ECF No. 15-1, PageID #133–34.) In response, Plaintiff does not rebut that the forum-selection clause in the confidentiality agreement is mandatory and enforceable. (See ECF No. 18, PageID #233–35.) Accordingly, Plaintiff has conceded this argument. Even if Plaintiff had not, the Court determines that the forum-selection clause is mandatory by its plain language, which requires the signatory to "irrevocably submit to the exclusive jurisdiction" of courts located in Delaware.

I.D.2. Separation Agreement

Defendants maintain that the forum-selection clause in the separation agreement is mandatory. (ECF No. 15-1, PageID #139–40; ECF No. 19, PageID #250–51.) Defendants point to two cases in which courts have determined that similar forum-selection clauses are mandatory. See Maintenance Engineers, Inc. v. G 2-V Enters., Inc. , No. EP-15-CV-00024-FM, 2015 WL 13049355, at *5 (W.D. Tex. Sept. 3, 2015) ("[P]roper venue for any dispute shall be in Teton County, Wyoming."); Travelers Prop. Cas. Co. of Am. v. Centimark, Corp. , No. 2:04-CV-0916, 2005 WL 1038842, at *3 (S.D. Ohio May 3, 2005) ("[J]urisdiction and venue of any dispute arising under/or pursuant to the terms of the Warranty shall be vested in courts sitting in Washington County, Pennsylvania.").

Plaintiff argues that the clause is merely permissive, not mandatory. (ECF No. 18, PageID #229–31.) Plaintiff distinguishes this case from Travelers on the basis that the forum-selection clause in Travelers specified the precise forum within Pennsylvania, while the forum-selection clause here identifies the State of California generally. (ECF No. 18, PageID #231.) To make meaning of this distinction, Plaintiff relies on Hitachi Medical Systems America, Inc. v. Bay Harbor MRI, Inc. , No. 5:09CV639, 2009 WL 2252875 (N.D. Ohio July 28, 2009). There, the court determined that the forum-selection clause at issue was permissive where the clause stated: "Each party consents to the jurisdiction of the federal and state courts located in Ohio." Id. at *1, *3. However, the language at issue in Hitachi provides only that the parties consented to jurisdiction in a particular State, not that the dispute "shall be properly venued" in that State. Plaintiff points to no case in which a court determined that a forum-selection clause dictating where venue "shall be" was permissive. Therefore, the Court determines that the forum-selection clause in the separation agreement is mandatory.

* * *

Accordingly, the Court determines that all Plaintiff's claims against Mr. Crawford and Mr. Perkins are governed by a mandatory and enforceable forum-selection clause contained in the confidentiality agreement. Similarly, the Court determines that a mandatory and enforceable forum-selection clause contained in the separation agreement governs all of Plaintiff's claims against Mr. Gearhart.

II. Remedy

Having determined that the forum-selection clauses are mandatory and enforceable and apply to all claims against the named Defendants, the Court must determine whether to retain, dismiss, or transfer the claims.

In Atlantic Marine Construction Co. v. U.S. District Court for the Western District of Texas , 571 U.S. 49, 60, 134 S.Ct. 568, 187 L.Ed.2d 487 (2013), the Supreme Court held that "the appropriate way to enforce a forum–selection clause" is to transfer the case to the proper district court under 28 U.S.C. § 1404(a). However, because the parties did not address whether dismissal under Rule 12(b)(6) was available as an alternative means of enforcing the forum-selection clause, the Court did not decide that matter. Id. at 61, 134 S.Ct. 568. Because this issue was not resolved, the Sixth Circuit held in Smith v. Aegon Companies Pension Plan , 769 F.3d 922, 933–94 (6th Cir. 2014), that whether to dismiss or transfer claims based on a valid forum-selection clause rests within the district court's discretion. See also Scepter, Inc. v. Nolan Transp. Grp., LLC , 352 F. Supp. 3d 825, 830 (M.D. Tenn. 2018) (same). Though Plaintiff argues that enforcement of a forum-selection clause through a motion to dismiss is inappropriate, Plaintiff supports its position with cases that predate the Atlantic Marine decision. (ECF No. 18, PageID #228.) Therefore, dismissal and transfer present viable options.

Plaintiff contends that its claims should not be dismissed or transferred because doing so would create litigation in at least two separate fora, and Ohio represents the only venue where jurisdiction is proper as to all Defendants. (ECF No. 18, PageID #229 n.2 & #234.) Therefore, dismissal or transfer would result in duplicative litigation and unnecessarily tax the resources of the courts and the parties. (Id. , PageID #234.) In support of the general proposition that courts should weigh the benefits of avoiding piecemeal and duplicative litigation and inconsistent judicial outcomes, Plaintiff cites two cases. Neither, however, involved a forum-selection clause. Accordingly, these cases provide little guidance here. See Pacific Life Ins. Co. v. U.S. Bank Nat'l Ass'n , No. 1:15-CV-416, 2016 WL 223683 (S.D. Ohio Jan. 19, 2016) (plaintiff sought transfer under Section 1404(a) to a more convenient forum); Sowell v. United Cos. Lending Corp. , No. 76389, 2000 WL 1036239 (Ohio Ct. App. July 27, 2000) (affirming trial court's stay pending bankruptcy proceedings).

As Defendants note, numerous courts have determined that Atlantic Marine requires the enforcement of forum-selection clauses notwithstanding objections grounded in fears of duplicative litigation or judicial economy. See, e.g. , Valspar Corp. v. E.I. DuPont de Nemours & Co. , 15 F. Supp. 3d 928, 934–35 (D. Minn. 2014) ("It is always more expeditious to try related claims in one forum rather than several, but allowing efficiency and economy to rule the day would effectively swallow Atlantic Marine ’s holding in every case with multiple defendants."); SSAB Alabama, Inc. v. Kem-Bonds, Inc. , No. 17-0175-WS-C, 2017 WL 6345809, at *6 (S.D. Ala. Dec. 12, 2017) (collecting cases). In the Court's view, Plaintiff has not shown that this case presents such exceptional circumstances that the Court should disregard Atlantic Marine ’s directive for courts to enforce valid forum-selection clauses. Atlantic Marine , 571 U.S. at 63, 134 S.Ct. 568.

Accordingly, the Court must decide whether to dismiss Plaintiff's claims or to transfer the claims to federal courts in Delaware and California under 28 U.S.C. § 1404(a). As a procedural note, 28 U.S.C. § 1404(a) permits a district court to "transfer any civil action to any other district or division where it might have been brought." By its terms, Section 1404 only authorizes the transfer of an entire action, not individual claims. Eastman Chem. Co. v. URS Corp. , No. 2:10-CV-218, 2012 WL 13006066, at *2 (E.D. Tenn. Mar. 28, 2012) (citing Chrysler Credit Corp. v. Country Chrysler, Inc. , 928 F.2d 1509, 1518 (10th Cir. 1991) ). In their motion, Defendants assume that claims against Mr. Crawford and Mr. Perkins could be transferred to one district and claims against Gearhart to another. But Defendants make no mention of how to accomplish such a result.

In this case, Defendants seek dismissal first and transfer only in the alternative. Plaintiff opposes each and expresses no preference should the Court find the clauses enforceable. In these circumstances, and because the forum-selection clauses preclude litigation in Ohio, the Court DISMISSES the claims against Defendants Crawford, Perkins, and Gearhart.

CONCLUSION

For the foregoing reasons, the Court GRANTS Defendants’ motion to dismiss (ECF No. 15) and DISMISSES WITHOUT PREJUDICE all claims against Defendants Crawford, Perkins, and Gearhart, based on the mandatory and enforceable forum-selection clauses that govern the claims against them. Because Plaintiff has not identified specific persons or entities as the Doe Defendants, and because Plaintiff's claims against the Doe Defendants derive from the claims against the individual Defendants, the Court DISMISSES WITHOUT PREJUDICE this action in its entirety.

SO ORDERED.


Summaries of

Race Winning Brands, Inc. v. Crawford

United States District Court, N.D. Ohio, Eastern Division.
May 4, 2022
601 F. Supp. 3d 279 (N.D. Ohio 2022)
Case details for

Race Winning Brands, Inc. v. Crawford

Case Details

Full title:RACE WINNING BRANDS, INC., Plaintiff, v. Sean CRAWFORD, et al., Defendants.

Court:United States District Court, N.D. Ohio, Eastern Division.

Date published: May 4, 2022

Citations

601 F. Supp. 3d 279 (N.D. Ohio 2022)

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