Maui Toys v. Brown, 2014 Ohio 583

Maui Toys, Inc. is an Ohio corporation with its principal place of business in California; Kessler Services, Inc. is Nevada-based and their corporate records are intertwined.
Michael H. Brown, a California resident, served as Controller and Global Operations Manager for Maui and had frequent, regular contact with Maui’s Ohio operations; he signed confidentiality and separation agreements with California-based enforcement.
Zippy Toyz, LLC was formed by Brown and Gary Brown in California; Brown was the statutory agent for Zippy Toyz and later dissolved LLC and reincorporated as Zippy Toyz, Inc.
Maui filed suit in Ohio alleging breach of confidentiality, misappropriation of trade secrets, unfair competition, and related claims; defendants moved to dismiss for lack of personal jurisdiction under Civ.R. 12(B)(2).
The trial court denied the motion to dismiss, but subsequently dismissed on jurisdictional grounds and refused Maui’s Civ.R. 15(A) motion to add Zippy Toyz, Inc.; the case was remanded for jurisdictional development and to determine whether California is proper forum per a forum selection clause; Maui appeals.
The appellate court ultimately holds that Ohio has jurisdiction over Michael Brown and Zippy Toyz, LLC (and by extension Zippy Toyz, Inc. upon remand), but the record is incomplete to determine jurisdiction over Gary Brown; the matter is remanded for discovery and a jurisdictional hearing.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Ohio can exercise personal jurisdiction over Michael Brown	Maui asserts Brown transacted substantial Ohio business and caused tortious injuries in Ohio.	Defendants contend no personal jurisdiction; Brown’s activities were solely in California in a corporate capacity.	Ohio long-arm statute and due process permit jurisdiction over Brown.
Whether Brown’s contacts can be imputed to Zippy Toyz and Gary Brown	Brown’s actions as Maui’s controller constitute transacting business and torts by Zippy Toyz and Gary Brown.	Imputation through fiduciary shield and reverse piercing is improper given the record is incomplete.	Jurisdiction over Brown is established; imputation to Zippy Toyz and Gary Brown requires remand for further factual development.
Whether the Separation Agreement’s forum clause is mandatory or permissive	Clause should be construed to permit Maui to sue in Ohio for breach of confidentiality.	Clause is permissive; California may be forum if chosen.	Forum clause is permissive; not mandatory California venue.
Whether Maui should be granted leave to amend to replace Zippy Toyz, LLC with Zippy Toyz, Inc.	Leave to amend should be freely given to reflect corporate reincorporation.	Leave to amend is premature given unresolved jurisdictional issues.	Moot as to the initial issue; remanded for jurisdictional development; leave to amend related to Zippy Toyz, Inc. to be addressed on remand.

Kentucky Oaks Mall Co. v. Mitchell's Formal Wear, Inc., 53 Ohio St.3d 73 (1990) (transacting lease negotiations can constitute transacting business in Ohio)
Natl. Westminster Bank PLC v. Natl. Westminster Bank PLC, 126 Ohio App.3d 516 (1998) (transacting business and related activities can satisfy long-arm jurisdiction)
Goldstein v. Christiansen, 70 Ohio St.3d 232 (1994) (fiduciary shield exceptions to personal jurisdiction exist for corporate officers when torts occur in their official capacity)
S & R Recycling, Inc., 195 Ohio App.3d 744 (2011) (fiduciary shield and piercing considerations for jurisdictional analysis)
International Paper Co. v. Goldschmidt, 872 F.Supp.2d 624 (2012) (employee’s in-forum activities can demonstrate minimum contacts for jurisdiction)
Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (minimum contacts require purposeful availment and relatedness; not merely attenuated contacts)
Bird v. Parsons, 289 F.3d 865 (2002) (minimum contacts test—relates to purposefully availing and connections)