692 F.Supp.3d 421
D. Del.2023Background
- Plaintiffs Deloitte Consulting LLP and Deloitte Development LLC (Delaware entities with NY principal place of business) allege Sagitec Solutions LLC (Nevada LLC, principal place Saint Paul, MN) copied Deloitte source code and trade secrets from uFACTS to build Sagitec’s Neosurance/PUA products.
- BearingPoint developed uFACTS; Deloitte later acquired and continued developing it; several former Deloitte employees were later hired by Sagitec.
- Sagitec negotiated and entered a May 1, 2020 contract with the Delaware Department of Labor to provide PUA software used principally by Delaware residents; the contract contains Delaware choice-of-law and a limited consent-to-jurisdiction clause and an indemnity for IP claims.
- Deloitte sued in D. Del. for copyright infringement, trade-secret misappropriation, unfair competition, and unjust enrichment; Sagitec moved to dismiss for lack of personal jurisdiction or, alternatively, to transfer to D. Minn.
- The court concluded Sagitec’s communications, solicitation, contract with the Delaware agency, and sale/availability of the accused software to Delaware residents constitute purposeful availment and an affiliation between the forum and the controversy.
- The court denied Sagitec’s motion to dismiss for lack of personal jurisdiction and denied the §1404(a) transfer request after balancing Jumara factors (no strong showing favoring transfer).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction (specific jurisdiction) | Sagitec purposefully directed activities at Delaware by soliciting the Delaware DOL, contracting to provide PUA software, and making the accused product available to Delaware residents. | Sagitec performed development/hosting outside Delaware, negotiated and executed the contract outside Delaware, and never physically entered Delaware—so no minimum contacts. | Denied dismissal. Court found purposeful availment and an affiliation between the forum and the claims; factual disputes resolved for plaintiff at this stage. |
| Transfer under 28 U.S.C. § 1404(a) | Plaintiffs oppose transfer; Delaware forum is appropriate given the sale to a Delaware agency and local corporate ties. | Sagitec prefers D. Minn. where it is headquartered and where much development/witnesses are located; transfer would be more convenient. | Denied transfer. Court balanced Jumara factors: plaintiff's choice disfavors transfer, convenience partly favors Minnesota but overall factors do not strongly favor transfer. |
Key Cases Cited
- IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254 (3d Cir. 1998) (two-step personal jurisdiction framework: state long-arm then due process)
- Int'l Shoe Co. v. Washington, 326 U.S. 310 (1945) (minimum contacts due process standard)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (purposeful availment and fairness factors for specific jurisdiction)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980) (reasonableness and foreseeability in jurisdiction analysis)
- Ford Motor Co. v. Montana Eighth Judicial District Court, 141 S. Ct. 1017 (2021) (requirement of an affiliation between forum and underlying controversy)
- Bristol-Myers Squibb Co. v. Superior Court, 582 U.S. 255 (2017) (specific jurisdiction requires connection between forum and claim)
- Walden v. Fiore, 571 U.S. 277 (2014) (contacts with forum must be defendant's own contacts, not mere effects on forum residents)
- Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995) (private and public interest factors for §1404(a) transfer analysis)
- O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312 (3d Cir. 2007) (plaintiff must make prima facie showing of jurisdiction; factual disputes resolved in plaintiff's favor)
- Grand Entm't Group, Ltd. v. Star Media Sales, Inc., 988 F.2d 476 (3d Cir. 1993) (contract alone doesn't automatically establish jurisdiction; look to prior negotiations and contemplated consequences)
- BP Chemicals Ltd. v. Formosa Chem. & Fibre Corp., 229 F.3d 254 (3d Cir. 2000) (informational communications in furtherance of contract may be insufficient for jurisdiction)