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Cabela's LLC v. Highby

United States District Court, D. Delaware

November 26, 2018

CABELA'S LLC, Plaintiff,
v.
MATTHEW HIGHBY and MOLLY HIGHBY, Defendants.

          MEMORANDUM ORDER

         Presently before the Court is Defendants' motion to dismiss based on lack of personal jurisdiction and improper venue, or in the alternative, to transfer to the District of Nebraska. (D.I. 5). I have considered the parties' briefing. (D.I. 6, 15, 18). I heard oral argument on October 24, 2018. (D.I. 67).

         I. BACKGROUND

         On July 31, 2018, Cabela's brought an action against Matthew Highby, Molly Highby, and Highby Outdoors, LLC (collectively "Defendants") in the Court of Chancery of the State of Delaware. (D.I. 1 ¶ 1). On August 9, 2018, Defendants removed the case from the Court of Chancery to this Court. (Id. at 5). On August 17, 2018, Defendants brought this motion to dismiss. Cabela's has voluntarily dismissed without prejudice its claims against Highby Outdoors, LLC. (D.I. 17).

         II. ANALYSIS

         A. Consent to Personal Jurisdiction and Venue

         Under Federal Rule of Civil Procedure 12(b)(2), a court must dismiss a case when it lacks personal jurisdiction over the defendant. Consent is one of the traditional bases for personal jurisdiction. Burnham v. Superior Court of Cat, Cty. of Marin, 495 U.S. 604, 617-18 (1990); see also 4 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1064 (3d ed. 2002). The central dispute here is whether Defendants have consented to Delaware jurisdiction and venue through prior agreements with Cabela's.

         The remaining Defendants, Matthew and Molly Highby, are former Cabela's employees. While employed, Cabela's periodically offered Defendants stock options and/or restricted stock units in exchange for entering into a Proprietary Matters Agreement ("PMA"). (D.I. 1-1 ¶ 21). Defendants each entered into a PMA with Cabela's in March 2016. The PMAs are substantively identical. (D.I. 1-1, Exs. 1-2). Paragraph 16 of the PMA provides:

(b) Jurisdiction, Venue, and Governing Law. As a corporation organized under the laws of the State of Delaware, Cabela's has an interest in having Delaware law applied to contracts with its employees, as well as disputes with them. Applying Delaware law in this fashion affords the parties predictability as to the law to be applied, as well as uniformity across Cabela's workforce. Consequently, this Agreement shall be considered executed and performable in Delaware and shall be governed by the laws of the State of Delaware, without regard for the conflicts of laws rules of Delaware or any other state. Any action relating to or arising out of this Agreement shall be brought only in a court of competent jurisdiction located in Delaware and the parties expressly consent to such venue. Employee consents to the personal jurisdiction of the courts located in Delaware over him or her.
(c) Survival. Employee's obligations hereunder shall survive the termination of Employee's employment with Company or any of its affiliates or termination of any other agreement or relationship between Employee and Company, and shall, likewise, continue to apply and be valid notwithstanding any change in the Employee's duties, responsibilities, position, or title. Nothing in this Agreement shall eliminate, reduce, or otherwise remove any legal duties or obligations that Employee would otherwise have to the Company through common law or statute.

(D.I. 1-1, Ex. 1 ¶ 16 (emphasis added)).

         In 2018, upon deciding to terminate their employment, Defendants each entered into a Confidential Severance Agreement and General Release ("Severance Agreement") with Cabela's. (D.I. 1-1 ¶ 31). Again, the Severance Agreements are substantively identical. (D.I. 1- 1, Exs. 4-5). The relevant paragraphs of the Severance Agreement provide:

17. Complete Agreement. This Agreement is a complete agreement between the parties and supersedes all prior discussions, negotiations, and agreements with regard to the subject matter herein, whether oral or written. However, Employee agrees that this Agreement shall not in any way affect, modify, or nullify any agreement(s) Employee may have entered into with Cabela 's that obligate Employee to protect Cabela's confidential information and/or to refrain from soliciting Cabela's employees or customers after Employee's employment is terminated, and/or to assign intellectual property to Cabela's, and that any such obligations contained in those agreement(s) remain in full force and effect to the extent permitted by law. This Agreement shall not be modified except by mutual agreement, in writing and signed by both parties. This Agreement shall be binding upon and for the benefit of the parties and their respective heirs, executors, administrators, successors, devisees, permissible assigns, personal representatives, and legal representatives.
20. Applicable Law. As a limited liability company organized under the laws of the State of Delaware, Cabela's has an interest in having Delaware law applied to contracts with its employees, as well as disputes with them. Applying Delaware law in this fashion affords the parties predictability as to the law to be applied, as well as uniformity across Cabela's workforce. Consequently, this Agreement shall be considered executed and performable in Delaware and shall be governed by the laws of the State of Delaware, without regard for the conflicts of laws rules of Delaware or any other state.

(D.I. 1-1, Ex. 4 ΒΆΒΆ 8, 17, 20 (emphasis added)). Notably, the Severance Agreement does not have the same provisions on consent to personal ...


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