JANE TRICHE MILAZZO, District Judge.
Before the Court are Defendant Financial Guard, LLC's Motion to Dismiss (Doc. 12),Plaintiffs' Motion to Strike that Motion (Doc. 20), Defendant Daniel Dragan's Motion for Sanctions (Doc. 16), and Defendant Daniel Dragan's Motion to Dismiss for Lack of Jurisdiction and Improper Venue (Doc. 18). For the following reasons, Defendant Financial Guard, LLC's Motion to Dismiss is STRICKEN; Plaintiff's Motion to Strike is GRANTED; Defendant Dragan's Motion to Dismiss is DENIED; and Defendant Dragan's Motion for Sanctions is DENIED.
Plaintiffs, Eddie Sussmann, Sr. and Leading Edge Financial Services, LLC ("Leading Edge"), brought this action against former employee Daniel Dragan ("Dragan") and his company, Financial Guards, LLC ("Financial Guards"). In their Complaint, Plaintiffs allege that Dragan worked as an independent contractor managing IT and marketing for Leading Edge for many years before he was terminated on May 15, 2015. They allege that shortly after his termination, Dragan formed Defendant Financial Guards. Plaintiffs allege that Defendants then converted Plaintiffs' assets and confidential information and refused to return them. Plaintiffs allege that Defendants used the converted property to create websites and alter existing websites with the intention of confusing customers of Leading Edge and attracting customers to Financial Guards. They also allege that Defendants used the converted property to redirect incoming calls made to Plaintiffs to Financial Guards and to send emails to Plaintiffs' contacts. Plaintiffs bring claims against Defendants under the Computer Fraud and Abuse Act, the Louisiana Uniform Trade Secrets Act, Louisiana Unfair Trade Practices Act, the Lanham Act, and for conversion and injunctive relief.
In response, Defendant Financial Guards filed a Motion to Dismiss, averring that it has been dissolved. Plaintiffs have moved to strike that motion. In addition, Defendant Dragan filed a Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue and a Motion for Sanctions against Plaintiffs. This Court will address each motion in turn.
In its Motion to Dismiss, Financial Guards requests dismissal from this action because it has been dissolved and has no assets. Plaintiffs seek to strike this Motion because it was filed pro se by Defendant Dragan. Plaintiffs contend that Dragan is not an attorney and therefore cannot represent Financial Guards, a juridical entity, in this action. Indeed, the Fifth Circuit has stated that it is a "well-settled rule of law that a corporation cannot appear in federal court unless represented by a licensed attorney."
Next, Defendant Dragan, pro se, argues that this matter should be dismissed because this Court lacks personal jurisdiction over him or because venue is improper. This Court will consider each argument in turn
"Where a defendant challenges personal jurisdiction, the party seeking to invoke the power of the court bears the burden of proving that jurisdiction exists."
Jurisdiction over a non-resident defendant is proper when (1) the defendant is amenable to service of process under the long-arm statute of the forum state, and (2) the exercise of personal jurisdiction is consistent with the Due Process Clause of the Fourteenth Amendment.
"The Due Process Clause of the Fourteenth Amendment protects a corporation, as it does an individual, against being made subject to the binding judgments of a forum with which it has established no meaningful `contacts, ties, or relations.'"
"Minimum contacts" can be established through specific jurisdiction or general jurisdiction.
Defendant Dragan argues that this Court lacks personal jurisdiction over him because he has been a resident of the Florida since 2009, he does not possess a Louisiana insurance license, and he does not conduct business in Louisiana. He also states that the online accounts he managed as an independent contractor of Plaintiffs are hosted by servers in many states, none of which are Louisiana. Plaintiffs rebut that Defendant has sufficient minimum contacts with Louisiana because of the tortious conduct that he directed at Plaintiffs here.
In Calder v. Jones, the Supreme Court held that a California district court had personal jurisdiction over defendants "because of their intentional conduct in Florida calculated to cause injury to respondent in California."
"If a nonresident defendant has sufficient related or unrelated minimum contacts with the forum, we must then consider whether the `fairness' prong of the jurisdictional inquiry is satisfied."
Until his termination, Dragan had worked as a independent contractor of Plaintiff Leading Edge, a Louisiana company with its main office in Louisiana, for seven years. Since that time, Plaintiffs allege that Dragan has accessed telephone records of Plaintiffs and has converted Plaintiffs' confidential and proprietary trade secret information, including customer lists and contact information. Accordingly, a substantial part of the events giving rise to this lawsuit occurred in Louisiana. This Court holds that litigating this matter in Louisiana will not impose any undue burden on Defendant. In addition, this Court has a substantial interest in litigating matters involving tortious acts directed at its citizens.
Under Rule 12(b)(3), a party may assert by motion the defense of improper venue.
According to 28 U.S.C. § 1391(b) venue is proper in:
Plaintiffs have argued that venue is proper under the second prong of § 1391, in a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred. Plaintiffs argue that because Defendants tortious acts were directed at them in Orleans Parish where they conduct business, then venue is proper in that parish. This Court agrees. Taking the allegations of Plaintiffs' Complaint as true, this Court holds that venue is proper in light of the harm allegedly caused to Plaintiffs' business by Defendants in this venue.
Finally, Defendant Dragan, pro se, moves for sanctions against Plaintiffs for filing an "improper lawsuit which has no basis in law or fact and for violation of Rule 11(b)(1) and Rule 11(b)(2)." Plaintiffs defend this Motion on both procedural and substantive grounds.
First, Plaintiffs argue that Defendant's Motion should be denied because he failed to follow the procedural requirements of Rule 11. Specifically, Plaintiffs argue that despite giving notice of his intent to file a motion for sanctions, Defendant did not wait the mandatory twenty-one days before doing so.
Rule 11 states that:
Here, Defendant gave Plaintiffs notice of his intention to file a motion for sanctions on October 1, 2015. He then filed said motion on October 5, 2015. "Rule 11 sanctions must be served on the opposing party at least 21 days before the motion is filed in the district court. The plain language of the rule indicates that this notice and opportunity prior to filing is mandatory."
For the foregoing reasons, Defendant Financial Guard, LLC's Motion to Dismiss is STRICKEN and Plaintiff's Motion to Strike is GRANTED. In addition, Defendant Dragan's Motion to Dismiss and Motion for Sanctions are DENIED.