Retail Pipeline, LLC v. JDA Software Group, Inc.
2:17-cv-00067
| D. Vt. | Mar 30, 2018Background
- Plaintiffs Retail Pipeline (Vermont LLC) and Darryl Landvater (Vermont resident) allege JDA Software breached a Membership Interest Purchase Agreement (MIPA), an implied covenant, and committed constructive fraud by failing to integrate and market Flowcasting software and by withholding earn-out/retention payments.
- RPIG originally transferred Flowcasting (developed in Vermont) to Retail Pipeline; RedPrairie held a joint-venture interest that JDA acquired via merger in 2012.
- Plaintiffs negotiated and signed the MIPA (Defendant signed in Arizona; Plaintiffs signed in Vermont); MIPA governed by Delaware law and contemplated earn-outs tied to Landvater’s employment.
- Landvater worked remotely from Vermont as a JDA employee (had company email/access, supervised one remote tester, used an Essex Junction office); JDA provided some services and re-hired him under a short Retention Agreement.
- Defendant moved to dismiss for lack of personal jurisdiction; court permitted limited jurisdictional discovery and then considered whether Vermont courts have general or specific jurisdiction over JDA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Vermont has general jurisdiction over JDA | JDA’s ongoing business, Vermont customers, and employees establish sufficient continuous/systematic contacts | JDA is incorporated in Delaware, PPB in Arizona, very small Vermont revenue and minimal presence; Daimler precludes general jurisdiction here | Denied: general jurisdiction does not exist (contacts insufficient under Daimler/Brown) |
| Whether Vermont has specific jurisdiction based on MIPA and related dealings | JDA purposefully directed activities at Vermont by entering long-term agreements with a Vermont company/resident, knowing performance (and earn-out) would occur from Vermont | Plaintiffs’ Vermont activities were unilateral choices; agreements were negotiated elsewhere, choice-of-law favors Delaware/Arizona; contacts not sufficiently tied to Vermont | Held: specific jurisdiction exists — JDA purposefully availed itself and claims arise from those contacts |
| Whether Landvater’s remote employment and JDA’s provision of services create forum contacts | Remote performance, company access, supervision, and role tied to earn-out make Vermont a foreseeable forum | Hiring remote worker does not automatically create jurisdiction; JDA didn’t require work in Vermont | Held: remote employment plus contractual framework and JDA’s embrace of Vermont performance support purposeful direction toward Vermont |
| Whether exercising jurisdiction is reasonable (fairness factors) | Litigation in Vermont is reasonable given Plaintiffs’ residence, Vermont interest, and limited burden on JDA | Most witnesses/evidence outside Vermont; other fora (Arizona/Delaware) have stronger ties | Held: fairness factors (burden, forum interest, plaintiffs’ convenience) overall favor exercising specific jurisdiction in Vermont |
Key Cases Cited
- Brown v. Lockheed Martin Corp., 814 F.3d 619 (2d Cir. 2016) (applies Daimler standard and compares relative magnitude of in-state contacts for general jurisdiction)
- Daimler AG v. Bauman, 134 S. Ct. 746 (U.S. 2014) (corporations subject to general jurisdiction principally where incorporated or principal place of business)
- Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (U.S. 2011) (defines general jurisdiction standard for corporations)
- Int'l Shoe Co. v. Washington, 326 U.S. 310 (U.S. 1945) (minimum contacts and due process framework)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (contracts considered via prior negotiations, contemplated future consequences, and course of dealing for specific jurisdiction)
- Walden v. Fiore, 134 S. Ct. 1115 (U.S. 2014) (specific-jurisdiction inquiry focuses on defendant’s contacts with the forum, not plaintiffs’ contacts)
- Bristol-Myers Squibb Co. v. Super. Ct. of Cal., 137 S. Ct. 1773 (U.S. 2017) (requires an affiliation between the forum and the underlying controversy for specific jurisdiction)
- Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560 (2d Cir. 1996) (two-part jurisdictional inquiry: state long-arm and due process analysis)