Court Opinion

ID: 2666758
Source: CourtListenerOpinion
Date Created: 2014-04-04 12:37:32.978128+00
Date Added: 2024-06-11T13:24:22.852620
License: Public Domain

UNITED STATES DISTRICT COURT
                   FOR THE DISTRICT OF COLUMBIA
______________________________
                               )
MODIS, INC.,                   )
                               )
          Plaintiff,           )
                               )
          v.                   )    Civil Action No. 09-1051 (RWR)
                               )
INFOTRAN SYSTEMS, INC et al., )
                               )
                               )
          Defendants.          )
______________________________)

                  MEMORANDUM OPINION AND ORDER

     Plaintiff Modis, Inc. (“Modis”) brings this diversity action

for damages and injunctive relief against defendants Infotran

Systems, Inc. (“Infotran”) and Tien H. Tran (“Tran”), alleging

breach of contract.   The defendants move to dismiss for lack of

subject matter jurisdiction, arguing that the complaint failed to

allege sufficient facts to satisfy the jurisdictional amount in

controversy requirement necessary for diversity jurisdiction.

Because the plaintiff has amply supplemented the complaint with

facts supporting the assertion that the amount in controversy

exceeds $75,000, the defendants’ motion to dismiss will be

denied.

                            BACKGROUND

     Modis is an information technology service provider that

contracts with other entities to provide staffing for “complex IT

challenges,” and staffing for work on various computer systems
                                   -2-

and databases.   (Compl. ¶¶ 6, 10.)      Modis contracted with

Computer Science Corporation (“CSC”) to provide information

technology support to CSC in connection with CSC’s contract to

perform work for the United States Customs and Immigration

Services (“USCIS”).   (Id. ¶ 6.)

     In April 2006, Modis recruited Tran to work as an

independent contractor at CSC to support the information

technology work that CSC was performing for the USCIS.       Modis

required Tran on behalf of his company, Infotran, to sign an

Independent Contractor Agreement that restricted the use of

confidential information and that contained a non-compete

provision.   Tran agreed to refrain from soliciting or accepting

employment from any client of Modis (including CSC) or from any

entity or person with whom Tran had personal contact or whom he

met while providing services for CSC without the written consent

of Modis “during the term of [the] Agreement and for a period of

one (1) year thereafter[.]”   (Compl. ¶¶ 12-13, 28-30.)      The

Agreement provided that if the defendants breached the

restrictive covenants, Modis would be entitled to injunctive

relief and a fee equal to 125 percent of the fee that Modis would

have earned if it had provided the services.       (Id. ¶ 31; Pl.’s

Opp’n to Defs.’ Mot. to Dismiss (“Pl.’s Opp’n”) at 6.)

     In May 2009, the defendants gave to Modis a letter stating

that they were terminating their relationship with Modis.
                                 -3-

(Compl. ¶ 34.)   Modis then filed the one-count breach of contract

complaint in this matter against both defendants, alleging that

the defendants are currently competing with Modis for placement

opportunities with CSC.    (Id. ¶ 35.)    The complaint seeks

injunctive and compensatory relief, and it asserts that “the

amount in controversy exceeds $75,000, exclusive of interests and

costs.”   (Id. ¶ 8.)

     The defendants have moved under Federal Rule of Civil

Procedure 12(b)(1) to dismiss the complaint, arguing that the

court lacks jurisdiction because the complaint fails to provide a

sufficient factual basis to support that the amount in

controversy exceeds $75,000.    (Defs.’ Mem. in Supp. of Mot. to

Dismiss at 1.)   The plaintiff opposes, arguing that the complaint

contains a good-faith assertion that the amount in controversy

exceeds $75,000, and its opposition provides ample supplemental

facts supporting the claimed amount.      (Pl.’s Opp’n at 1-2.)

                             DISCUSSION

     The complaint alleges diversity jurisdiction under 28 U.S.C.

§ 1332(a)(1), which provides for federal jurisdiction over civil

actions between citizens of different states where the amount in

controversy, exclusive of interest and costs, exceeds $75,000.

See 28 U.S.C. § 1332(a).    “Before a court may address the merits

of a complaint, it must assure that it has jurisdiction to

entertain the claims.”    Highland Renovation Corp. v. Hanover Ins.
                                -4-

Group, 620 F. Supp. 2d 79, 81 (D.D.C. 2009) (quoting Osseiran v.

Int'l Fin. Corp., 498 F. Supp. 2d 139, 143 (D.D.C. 2007) (quoting

Rodriguez v. Nat’l Ctr. for Missing & Exploited Children, Civil

Action No. 03-120 (RWR), 2005 WL 736526, at *6 (D.D.C. Mar. 31,

2005)).

     A court must accept all of the factual allegations in the

complaint as true in considering whether to dismiss a complaint

for lack of subject matter jurisdiction, but may consider

materials outside the pleadings.   See Jerome Stevens Pharms.,

Inc. v. FDA, 402 F.3d 1249, 1253-54 (D.C. Cir. 2005).   “When the

defendant challenges the jurisdictional amount, plaintiff must

come forward with some facts in support of her assertion that the

jurisdictional amount has been met.”   Mace v. Domash, 550 F.

Supp. 2d 101, 104 (D.D.C. 2008).   When determining a

jurisdictional challenge based upon an insufficient amount in

controversy, a court “may consider the complaint supplemented by

undisputed facts evidenced in the record, or the complaint

supplemented by undisputed facts plus the court’s resolution of

disputed facts.”   Herbert v. National Acad. of Sciences, 974 F.2d

192, 197 (D.C. Cir. 1992); see also Highland Renovation Corp.,

620 F. Supp. 2d at 81 (quoting Coalition for Underground

Expansion v. Mineta, 333 F.3d 193, 198 (D.C. Cir. 2003) (quoting

Herbert v. Nat’l Acad. of Sciences, 974 F.2d 192, 197 (D.C. Cir.

1992)).   When assessing whether a claim meets the amount in
                                -5-

controversy requirement, “the sum claimed by the plaintiff

controls if the claim is apparently made in good faith.”    St.

Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288 (1938)

(footnotes omitted).   However, where it appears certain that the

claim asserted in the complaint will be for less than the

jurisdictional amount, even if the claim was made in good faith,

dismissal is justified.   Hunter v. Dist. of Columbia, 384 F.

Supp. 2d 257, 260 (D.D.C. 2005).   Courts should be “very

confident that a party cannot recover the jurisdictional amount

before dismissing the case for want of jurisdiction.”      Rosenboro

v. Kim, 994 F.2d 13, 17 (D.C. Cir. 1993).

     Here, the defendants provide no evidence showing that the

amount in controversy is certain to be less than $75,000.    In

addition, Modis attached to its opposition the declaration of Tim

Martin, the sales director for Modis’ Governmental Services

Group, who asserts personal knowledge that Tran has contracted

directly with CSC and is directly competing with Modis.1    Martin

believes that Tran has been violating the Agreement since October

2008, and reports that Tran generated $328,708.96 in revenue for

Modis from CSC in 2008.   (Pl.’s Opp’n, Ex. 1 ¶ 3.)   Whether

     1
       Defendants do not dispute that they have contracted
directly with CSC. In an interesting twist, their reply,
attaching a copy of an email from Martin, reflects that Modis
urged defendants to contract directly with CSC as a small
business front for Modis. It seems that defendants have stopped
playing along as a pass-through, and Modis is putting the squeeze
on defendants for fronting as Modis urged but not sharing the
revenue.
                                 -6-

viewed as an estimate of lost revenues or a valuation of the

competing services, this provides a good faith basis for

asserting the required amount in controversy.     So does Martin’s

belief that defendants bill at $130 per hour and would have

earned at least $420,700 from CSC that can be recovered by Modis

under the Agreement.    (Id. ¶ 3.)   Modis has provided facts

showing that the requisite jurisdictional amount has been alleged

in good faith.   The defendants’ motion to dismiss will be denied.

                        CONCLUSION AND ORDER

     Because the plaintiff has come forward with facts supporting

a good faith assertion that the amount in controversy exceeds

$75,000, it is hereby

     ORDERED that the defendants’ motion [4] to dismiss this case

for lack of jurisdiction be, and hereby is, DENIED.

     SIGNED this 15th day of December, 2009.

                                          /s/
                                RICHARD W. ROBERTS
                                United States District Judge