2:19-cv-00900
W.D. Pa.Jun 25, 2020Background
- Ritchey Metals is a Pennsylvania alloy manufacturer with proprietary casting processes and trade secrets; James Reynolds was its CFO for ~40 years with unrestricted access to confidential information and listed a Canonsburg, PA address during employment.
- In February 2019 Reynolds left Ritchey and was promptly hired by Eastern Alloys, a New York alloy competitor; Ritchey alleges Reynolds immediately solicited Ritchey customers and provided Eastern with proprietary processes and specifications.
- Ritchey sent a cease-demand letter; it alleges continued solicitation, copying of production processes, and loss of business resulting from misappropriation and conspiracy between Reynolds and Eastern.
- Defendants moved to dismiss for lack of personal jurisdiction and improper venue, arguing no substantial contacts with Pennsylvania (Eastern is a New York corporation; Reynolds’s post-employment ties were allegedly to New York).
- The court evaluated specific jurisdiction using Calder and the Third Circuit’s IMO effects test, crediting allegations that Reynolds possessed/misappropriated secrets while resident in this district and that Eastern solicited Western Pennsylvania customers.
- Ruling: the court denied the motion to dismiss (found a prima facie case of specific jurisdiction over both defendants) and denied jurisdictional discovery as moot; defendants must file a responsive pleading within 14 days.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| General personal jurisdiction | Conceded insufficient facts for general jurisdiction | No substantial, continuous contacts with PA | Court agrees general jurisdiction not established (conceded) |
| Specific jurisdiction — Reynolds | Reynolds lived in PA while acquiring info; misappropriation originated in PA; conduct expressly aimed at forum (Calder/IMO) | Post-employment contacts lack PA orientation; harms directed at customers, not PA | Prima facie specific jurisdiction over Reynolds; contacts and harms centered in PA |
| Specific jurisdiction — Eastern Alloys | Hired Reynolds to obtain Ritchey’s secrets; has customers/sales territory in Western PA; solicited Ritchey’s customers | Eastern has no meaningful PA ties; alleged conduct targeted customers/suppliers outside PA | Prima facie specific jurisdiction over Eastern based on hiring, use of info, and targeting PA market |
| Jurisdictional discovery | Requested to develop jurisdictional facts | Opposed | Denied as moot because court found jurisdiction on existing record |
Key Cases Cited
- Calder v. Jones, 465 U.S. 783 (1984) (intentional torts expressly aimed at a forum can support specific jurisdiction)
- Walden v. Fiore, 571 U.S. 277 (2014) (jurisdictional contacts must be the defendant’s own contacts with the forum)
- IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254 (3d Cir. 1998) (adopting a three‑part effects test for specific jurisdiction in business torts)
- Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984) (minimum contacts due‑process standard)
- Int'l Shoe Co. v. Washington, 326 U.S. 310 (1945) (foundational minimum contacts doctrine)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (purposeful availment and relatedness inquiry)
- Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93 (3d Cir. 2004) (plaintiff’s prima facie standard at jurisdictional stage)
- Kehm Oil Co. v. Texaco, Inc., 537 F.3d 290 (3d Cir. 2008) (requiring suit‑related conduct purposely directed at the forum)
- Vizant Technologies v. Whitchurch, 97 F. Supp. 3d 618 (E.D. Pa. 2015) (similar misappropriation case finding specific jurisdiction under Calder/IMO)