EmployBridge, LLC v. Riven Rock Staffing, LLC
1:16-cv-00833
D.N.M.Aug 17, 2016Background
- Plaintiffs EmployBridge and related entities allege non-competition, non-solicitation, and trade-secret breaches by former employees who operate a competing business in Albuquerque, NM.
- Defendants allegedly violated employment agreements by leaving for Riven Rock Staffing, LLC, located about three miles away.
- Plaintiffs assert diversity jurisdiction based on citizenship of parent companies and NM domicile of individuals; Riven Rock allegedly Nevada LLC with principal place in Albuquerque.
- Defendants move to dismiss for lack of subject matter jurisdiction, arguing no complete diversity.
- Amended Complaint adds a Defend Trade Secrets Act claim and asks the court to exercise supplemental jurisdiction over state-law claims.
- Court ultimately determines the motion to dismiss is moot because the Amended Complaint provides a basis for federal jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Amended Complaint establishes federal jurisdiction. | EmployBridge's amended pleading invokes federal question under DTSA. | Diversity concerns may still defeat jurisdiction; undisputed lack of complete diversity. | Yes; DTSA claim provides federal question jurisdiction. |
| Is Defendants’ Rule 12(b)(1) motion moot after amendment? | Amendment creates jurisdiction; mootness follows. | Jurisdiction remains questionable despite amendment. | Motion denied as moot due to amended complaint. |
| Should the court exercise supplemental jurisdiction over remaining state-law claims if federal claim fails? | Court should exercise supplemental jurisdiction. | If federal claim fails, state claims may be remanded. | Court leaves determination for discretionary §1367 review, not decided here. |
Key Cases Cited
- Carden v. Arkoma Associates, 494 U.S. 185 (1990) (complete diversity and amount in controversy prerequisites; well-pleaded complaint analysis)
- Siloam Springs Hotel, LLC v. Century Sur. Co., 781 F.3d 1233 (10th Cir. 2015) (LLC citizenship governed by members’ citizenship; diversity concerns raised)
- Nicodemus v. Union Pac. Corp., 318 F.3d 1231 (10th Cir. 2003) (federal-question jurisdiction test under 28 U.S.C. §1331)
- Stream Pollution Control Bd. Of State of Ind. v. U.S. Steel Corp., 512 F.2d 1036 (7th Cir. 1975) (jurisdictional amendments permitted; jurisdictional questions resolved by amended complaint)
- Smith v. City of Enid ex rel. Enid City Comm’n, 149 F.3d 1151 (10th Cir. 1998) (discretionary jurisdiction under ancillary/ supplemental claims)