75). TEl asserts that jurisdiction exists here because I. Holland knew or should have known that
if it hired McLean and allowed him to call on TEI’s customers, it was likely to get sued in
Illinois, yet it nonetheless chose to do so. There are two significant problems with this. First,
TEI reasons that the draft complaint and employment agreement enclosed with the November 29,
1999 letter put Holland on notice that suit was likely and that it would occur in Illinois, but I.
Holland was neither named in the complaint nor a party to the employment agreement; the
jurisdictional consent in the agreement bound only McLean. More importantly, taking the facts
in the light most favorable to TEI, 1. Holland received the complaint (and therefore learned about
the employment agreement between TEI and McLean, with its Illinois choice of law clause and
its personal jurisdiction consent clause), after I. Holland forged its relationship with McLean and
after McLean solicited TEI’s customers. Thus the acts upon which TEI seeks to impose specific
jurisdiction-the decision to hire McLean and to allow him to call on TEI’s customers—had
already been done before I. Holland supposedly availed itself of the protections of Illinois’ laws.
To impose personal jurisdiction after the fact under these circumstances would be neither
reasonable nor fair, particularly because McLean was not working in, or soliciting clients located
in Illinois. I. Holland’s motion to dismiss for lack of personal jurisdiction is granted.

Ata recent status hearing, the Court advised the parties that it would grant I. Holland’s
motion to dismiss for lack of personal jurisdiction and, in light of that, asked TEI to decide
whether it preferred to have the claims against I. Holland dismissed or instead transferred to the
District of New Jersey under 28 U.S.C. §1406. TEI has since advised the Court that it prefers
transfer. Accordingly, in lieu of an outright dismissal, the Court transfers the case against I.

Holland to the District of New Jersey.


1995 WL 404843, at *2 (N.D. Ill. July 7, 1995) (a district court should not countenance the
simultaneous litigation of essentially identical claims in two federal courts); Asset Allocation &
Mgt. Co. v. Western Employers Ins. Co., 892 F.2d 566, 573 (7th Cir. 1989) (same).

Having concluded that transfer is appropriate, the Court will not resolve the defendants’
motions to dismiss for failure to state a claim; those motions are better addressed to the transferee
court.

CONCLUSION

For the reasons explained above, the Court grants I, Holland’s motion to dismiss for
personal jurisdiction [Docket No. 11-1], however, in lieu of dismissal the Court will transfer the
case to the District of New Jersey pursuant to 28 U.S.C. §1406. I. Holland’s motion to transfer
pursuant to §1404(a) [11-2] is denied as moot. The Court grants McLean’s motion to transfer
[10-1]. The case against both defendants is transferred to the United States District Court for the
District of New Jersey. I. Holland’s motion to dismiss Counts 6, 7 and 8 for failure to state a
claim [11-3] and McLean’s motion to dismiss Counts 4 and 5 for failure to state a claim [10-2]

should be addressed to that court.

Dated: July 17, 2001

ATTHEW F. KENNELLY
United States District Judge


I, Holland, Ltd.” Draft Complaint, §21.' TEI copied I. Holland on both the letter and the
enclosures.

On December 27, 2000 TEI sued McLean for breach of the employment agreement,
violation of the Illinois Trade Secrets Act, tortious interference with contract, and tortious
interference with prospective business advantage. TEI also sued I. Holland for violation of the
ITSA, tortious interference with contract, and tortious interference with prospective business
advantage. Both McLean and I. Holland have moved to dismiss the tortious interference claims
against them for failure to state a claim. In addition, McLean has moved to transfer the case
under 28 U.S.C. §1404(a) to the District of New Jersey, and I, Holland has moved to dismiss for
lack of personal jurisdiction or alternatively to transfer under §1404(a) to the District of New
Jersey.

Personal jurisdiction is lacking as to I. Holland. Because this is a specific jurisdiction
case (TEI does not argue that general jurisdiction is appropriate), the issue is whether I. Holland
“has ‘purposefully established minimum contacts with [Illinois]’ and . .. whether, by traditional
standards, those contacts would make personal jurisdiction reasonable and fair under the
circumstances.” RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1277 (7th Cir. 1997) (quoting
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-77 (1985)). The answer is clearly no.
“Crucial to the minimum contacts analysis is showing that the defendant ‘should reasonably
anticipate being haled into court {in the forum State], because the defendant has * fully avail[ed]

itself of the privilege of conducting activities there.” Id. (quoting Burger King, 471 U.S. at 474-

‘This same allegation formed the basis for the claims TEI alleged in the complaint it
ultimately filed with the Court.


TEI continues to oppose McLean’s motion to transfer, in which McLean asks the Court to
transfer the case to the District of New Jersey pursuant to 28 U.S.C. §1404(a). TEI does not
dispute that venue would be proper in that forum, and therefore the question under §1404(a) is
whether McLean has established that the transfer would serve the convenience of the parties and
the witnesses and would be in the interest of justice. In evaluating the convenience of the parties
and witnesses, the Court considers: (1) the plaintiff's choice of forum; (2) the situs of material
events; (3) the relative ease of access to sources of proof; (4) the convenience of the witnesses;
and (5) the convenience of the parties of litigating in the respective forums. See, e.g., Brandon
Apparel Group, Inc. v. Quitman Manufacturing Co., 42 F. Supp. 2d 821, 833 (N.D. Ill. 1999).
The analysis of these concerns produces a mixed result. TEI chose this forum, which certainly
counts, though less so than it might if the litigation had a greater connection to Illinois, see
Letter-Rite, Inc. v. Computer Talk, Inc., 605 F.Supp. 717, 720 (N.D. Ill. 1985) (the plaintiff's
forum choice should not be lightly set aside, but if the litigation bears little relation to that forum,
transfer may be appropriate); Illinois’ only connection to the litigation is that TEI and McLean
signed the employment agreement here and TEI, an Illinois corporation, felt the economic impact
of the alleged breach in Illinois. But McLean lives and works in New Jersey; even when he
worked for TEI he was based out of New Jersey, covering a customer territory that included New
Jersey, parts of Pennsylvania, Maryland, Virginia, Delaware, North Carolina and South Carolina.
The sources of proof, including evidence of the relationship between I. Holland and McLean and
McLean’s dealings with TEI’s customers is likely to be in New Jersey and possibly Pennsylvania
and South Carolina. Similarly the customer witnesses will have to travel from Pennsylvania and

South Carolina; I. Holland’s principal will have to travel from England; McLean and any of his


Minute Order Form (06/97)

United States District Court, Northern District of Minois

Name of Assigned Judge Matthew F. Kennelly Sitting Judge if Other
or Magistrate Judge than Assigned Judge
CASE NUMBER 00 C 8125 DATE 7/17/2001
CASE Thomas Engineering, Inc. Vs. Steven McLean and I. Holland, Inc.
TITLE

[In the following box (a) indieate the party filing the motion, eg., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the
nature of the motion being presented.

(11)

MOTION:

DOCKET ENTRY:

qd) a Filed motion of [ use listing in “Motion” box above.]

(2) Oo Brief in support of motion due_.

(3) Oo Answer brief to motion due, . Reply to answer briefdue__

(4) a Ruling/Hearing on setfor___—_at

(5) Qa Status hearing{held/continued to] [set for/re-set for] on setfor_ at

(6) a Pretrial conference[held/continued to] [set for/re-set for] on__ set for__at___.

(7) Oo Trial[set for/re-set for] on _____ at

(8) Oo {Bench/Jury trial] [Hearing] held/continued to __—_ at

(9) a This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
COFRCP4(m) General Rule 21 CFRCP41(a)(1) Cl FRCP41(a)(2).

(10) a [Other docket entry] Enter memorandum opinion and order, for the reasons explained, the Court grants I.

Holland’s motion to dismiss for personal jurisdiction (11-1), however, jn lieu of dismissal the Court will transfer the
case to the District of New Jersey pursuant to 28 U.S.C. Section 1406. I. Holland’s motion to transfer pursuant to
Section 1404(a) (11-2) is denied as moot. The Court grants McLean’s motion to transfer (10-1). The case against both
defendants is transferred to the United States District Court for the District of New Jersey. I. Holland’s motion to
dismiss Counts 6,7 and 8 for failure to state a claim (11-3) and McLean’s motion to dismiss Counts 4 and 5 for failure

a [For further detail see order attached to the original minute order.]

MS

No notices required, advised in open court.

No notices required.

to state a claim (10-2) should be addressed to that court.
LL.
Notices mailed by judge's staff. |

‘otified counsel by telephone.
Docketing to mail notices.

Mail AO 450 form.

Copy to judge/magistrate judge.

GI JUL 17 PIS! 2?

dah mailed notice

mailing. My,

courtrooms
1 deputy's
initials

Date/time received in
central Clerk’s Office



employees will be in New Jersey and TEI and its employees will be in Illinois. Balancing the
convenience of the parties results in a draw: this is clearly a more convenient forum for TEI, and
New Jersey is clearly a more convenient forum for McLean. TEI argues that the employment
agreement requires the Court to deny McLean’s motion to transfer. Not so. “A clause in a
contract under which the parties agree to jurisdiction in a particular forum permits suit in that
forum. It does not compel it unless the parties use language evidencing a clear intent to limit
adjudication of the controversy to that particular forum.” Aznet Communications y, Digital
Partnership, Inc., No. 89 C 5332, 1989 WL 134784, at *1 (N.D. Ill. Oct. 13, 1989). See Walter
E. Heller & Co. v. James Godbe Co., 601 F.Supp. 319, 321 (N.D.III.1984). The parties here used
no such language.

At the end of the day, consideration of the “interests of justice” factor, which relates to
the efficient administration of the court system, see Coffey v. Van Dorn Iron Works, 796 F.2d
217, 221 (7th Cir. 1986), tips the scale. Because the case against I. Holland will proceed, if at
all, in the District of New Jersey,’ the Court’s refusal to transfer the case against McLean would
require the parties to litigate two cases involving the same facts and the same causes of action in
two different forums. Such duplicative litigation would truly be a waste of judicial resources.
The interests of justice are best served by having TEI prosecute its case against both defendants
in the same forum at the same time, and there appears to be only one place where that is possible:
the United States District Court for the District of New Jersey. Accordingly, the Court grants

McLean’s motion to transfer. See Applexion S.A. v. The Amalgamated Sugar Co., No. 95 C 858,

This would have been the case even if the Court had dismissed the claims against I.
Holland rather than transferring them under §1406.

6


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
* THOMAS ENGINEERING, INC., )
)
Plaintiff, y
)
v. ) Case No. 00 C 8125
)
STEVEN MCLEAN and I. )
HOLLAND, INC., y
) JUL 18 2001
Defendants. )

MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, District Judge:

Thomas Engineering Inc. is an Illinois corporation with its principal place of business in
Hoffman Estates, Illinois. TEI develops, manufactures and sells highly specialized tooling
products used to make pharmaceutical tablets, nutritional supplements, vitamins and over-the-
counter medications. Defendant Steve McLean worked for TEI as a sales engineer.

As acondition of his employment with TEI, on September 25, 1993, McLean signed an
employment agreement that prohibited him from using or disclosing any “confidential
information,” as that term was defined in the agreement, except as required as part of his duties
as a sales engineer for TEI. Employment Agreement, {{[2, B (a copy of the agreement is attached
as Exhibit 1 to TEI’s complaint). The agreement also contained a non-compete clause; by
signing, McLean agreed that for a period of two years after leaving the company he would not
render services to any person or entity in connection with the sale, merchandising or promotion

of products competing with TEI’s products to any customer of TEI for which he had been

responsible. Id., JE(a). To lessen the impact of the non-compete clause, TEI agreed that if after

9-0


leaving McLean was unable to find work solely because of his obligations under that clause, TEI
would pay him an amount equal to his base monthly salary beginning four months after his
termination and lasting for up to 20 consecutive months or until McLean was able to find a job
that would allow him to honor his agreement with TEL Jd., {E. Finally, the agreement provided
that disputes arising out of the agreement were governed by Illinois law and that McLean
submitted to personal jurisdiction in any court in the state of Illinois that had jurisdiction to hear
disputes arising under or out of the agreement. Id. 4G.

McLean left TEI on September 24, 1999. Shortly thereafter (some time before November
29, 1999), TEI learned from customers that McLean had solicited their business on behalf of I.
Holland, a British company that, like TEI, is in the business of developing, manufacturing and
selling highly specialized tooling products to be used in manufacturing pharmaceutical tablets,
nutritional supplements, vitamins and over-the-counter medications. On November 1, 1999 TEI
wrote to McLean reminding him of his obligations under the employment agreement, asking him
to stop representing I. Holland, and threatening to sue ifhe did not. On November 29, 1999, TEI
(this time through its attorney) again wrote to McLean demanding that he terminate his
relationship with I. Holland and return all confidential information he had taken from TEI; along
with this letter TEI enclosed a copy of the agreement as well as a draft complaint. The draft
complaint, which named only McLean as a defendant, alleged that “shortly [after McLean
resigned from TEI] two customers volunteered separately to [TEI’s] Sales Manager and General

Manager that McLean had been in their offices recently on behalf of one of [TEI’s] competitors,