Astro-Med, Inc. v. Nihon Kohden America, Inc

Brief Fact Summary.

Plaintiff and Defendant enter into an agreement, which contained a non-competition provision and a forum selection clause, stating any dispute would be resolved in Rhode Island. Later, Defendant began to work for Nihon, a competitor of Plaintiff. Plaintiff brought suit against Defendant and Nihon alleging misappropriation of trade secrets and a breach of contract claim. At the conclusion of trial, Plaintiff was awarded damages, and Nihon appeals alleging improper venue.

Synopsis of Rule of Law.

Venue, in federal court, is proper in the judicial district is where a substantial part of the events gave rise to the action.

Facts.

Plaintiff, Astro-Med, Inc.,  a Rhode Island company, maintains its financial and marketing information confidential. Plaintiff hired Kevin Plant, Defendant. Under the employee agreement between the parties, there were a non-competition, non-disclosure provisions, and a forum selection clause, which stated Rhode Island would be the proper place for dispute resolution. Plaintiff provided Defendant with access to its confidential information, and Defendant requested Plaintiff to relocate him to Florida. Thereafter, Plaintiff relocated Defendant. After, Nihon Kohden America, Inc., a California corporation and competitor of Plaintiff, hired Defendant to sell its competing products in the same region. Nihon knew about the employment agreement between the parties. Plaintiff brought suit against Defendant and Nihon in the federal district court in Rhode Island on the grounds of breach of contract and the misappropriation of trade secrets. Plaintiff contended that Defendant created an unfair competition, causing tortious interference and misappropriation of trade secrets. At the completion of trial, Plaintiff was granted $375,800 in damages. Nihon appealed alleging that Rhode Island was not the proper venue, thus, the case should be dismissed or transferred.

Issue.

Whether venue, in federal court, is proper in the judicial district is where a substantial part of the events gave rise to the action.

Held.

Yes, venue, in federal court, is proper in the judicial district is where a substantial part of the events gave rise to the action.

Discussion.

Venue, in federal court, is proper in the judicial district is where a substantial part of the events gave rise to the action.  Courts must not focus to a final “triggering event” that gives rise to the cause of action, but rather, the court must focus on a “holistic view,” taking into consideration all of the events leading up to the cause of action when making the substantial-part evaluation. Uffner v. La Reunion Francaise, S.A., 244 F. 3d 38 (1st Cir. 2001). Furthermore, there may be many judicial districts may that satisfy the substantial-part requirement. However, the court is not required to determine which district is the best venue. In this case, Defendant resides in Florida, and Nihon, a California company, which resides in Rhode Island for venue purposes. The court must evaluate whether a substantial part of the events that occurred in the cause of action took place in the judicial district of Rhode Island. Plaintiff is headquartered in Rhode Island, Plaintiff negotiated the employment contract and hired Defendant in Rhode Island, Rhode Island is where the tortious interference and misappropriate of trade secrets took occurred, and Rhode Island is the district where the harm was suffered. Therefore, a substantial part of the events giving rise to the cause of action took place in Rhode Island, and venue is proper in Rhode Island.