Case Information
United States District Court Southern District of Texas ENTERED August 14, 2025 UNITED STATES DISTRICT COURT Nathan Ochsner, Clerk SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION
§
Phillip Rick Tucker and Neill §
Whiteley, §
§ Plaintiffs , § Civil Action No. 4:25-cv-02770 §
v. §
§
Cyberlux Corporation et al., §
§
Defendants . §
MEMORANDUM AND RECOMMENDATION
This opinion addresses several, but not all, pending motions in this breach-of-contract dispute between Plaintiffs Phillip Tucker and Neil Whiteley (“Plaintiffs”) and Defendant Cyberlux Corporation (“Cyberlux”). After the case was removed to this Court, Plaintiffs filed a motion to remand, Dkt. 17, and motion for emergency temporary restraining order (“TRO”) and preliminary injunction, Dkt. 20, to which Cyberlux filed a consolidated response, Dkt. 28.
Two of Cyberlux’s motions are addressed herein. One requests that the Court “confirm” the state court’s temporary restraining order had terminated. Dkt. 9. In the other, Cyberlux moves to dismiss for improper venue, or alternatively, to transfer the case to the U.S. District Court for the Middle District of North Carolina. Dkt. 7. Plaintiffs did not file a response to that motion but alluded to it in their motion to remand. Dkt. 17 at 11-12.
After considering the motions, Cyberlux’s response, the record, and the applicable law, it is recommended that Plaintiffs’ motion to remand (Dkt. 17) and motion for TRO and preliminary injunction (Dkt. 20) be denied.
Based on a contractual forum-selection clause, the Court further grants Cyberlux’s request to transfer this case to North Carolina. [1] See Dkt. 7. But the transfer should await the Court’s determination of whether to adopt the recommendations regarding remand and injunctive relief. Cyberlux’s motion to confirm the termination of the state court’s TRO (Dkt. 9) is denied as moot. The remaining motions, namely Plaintiffs’ motions that Cyberlux’s counsel “show authority” and seeking to disqualify Cyberlux’s counsel (Dkt. 23, 34), and Cyberlux’s motion to strike related evidence (Dkt. 38), should be carried with the case following its transfer.
Background
This suit ought to be a straightforward breach-of-contract dispute. But several of the parties’ submissions rely heavily on the course of proceedings in other cases, including one in Texas state court, and another in Virginia federal court. Thus, the following facts are taken from the record in this case and public filings from those other two cases. The Court takes judicial notice of those other cases and their filings.
A. In a different case filed by judgment creditors ( Atlantic Wave ), the state court appointed a receiver over Cyberlux. In July 2024, Atlantic Wave Holdings, LLC and Secure Community, LLC filed a petition in Harris County District Court to enforce a judgment obtained in the Circuit Court of the City of Richmond, Virginia, awarding $1,572,500.00 in damages, $177,126.19 in attorneys’ fees, and other relief against Cyberlux Corporation and Mark D. Schmidt. See Petition to Enforce Foreign Judgment, Atl. Wave Holdings, LLC v. Cyberlux Corp. , No. 2024-48085 (129th Jud. Dist. Ct., Harris Cnty., Tex. July 30, 2024) (hereinafter, the “ Atlantic Wave ” case). Cyberlux twice attempted to remove the case to federal court, but its attempts were unsuccessful. See Memorandum and Opinion on Remand, Atl. Wave Holdings, LLC v. Cyberlux Corp. , No. 4:25-cv-01689 (S.D. Tex. May 14, 2025); Dkt. 17-1.
On May 22, 2025, the state court signed an order appointing Robert W. Berleth as receiver to aid the plaintiffs’ attempts to collect on their June 23, 2023 judgment, of which the order states that $2,111,086.01 remained outstanding. Order Appointing Receiver , Atlantic Wave (signed May 22, 2025); Dkt. 28-10 at pdf-pages 195-214 of combined Dkt. 28. [2] The basis for the receivership was Tex. Prac. & Rem. Code § 31.002. See id. ¶ 8. The propriety of that order was and remains hotly contested.
Notably, Cyberlux filed a petition for writ of mandamus challenging the May 22, 2025 receivership order. Relators’ Petition for Writ of Mandamus and, Alternatively, Appellants’ Opening Brief on the Merits, In re Cyberlux Corp. , No. 01-25-00455-CV (Tex. App.—Houston [1st Dist.] June 20, 2025, orig. proceeding) (hereinafter “ In re Cyberlux ”). Among myriad contentions, Cyberlux argues that the receivership order improperly grants the receiver discretion to seize and dispose of any and all Cyberlux property, regardless of whether such property is subject to execution or levy or exceeds the amount of the outstanding judgment. See id. at 31-33.
The court of appeals stayed the receivership order until it could resolve Cyberlux’s request for broader stay throughout the appellate proceeding. Order, In re Cyberlux (signed June 30, 2025); Dkt. 28-4. By its terms, the interim stay extends to the “enforcement, utilization, or the taking [of] actions under the authority of the May 22, 2025 Order by the Receiver or any other persons or entities.” Order, In re Cyberlux (signed June 30, 2025); Dkt. 28-4. Atlantic Wave filed a motion to lift the interim stay, which is still pending as of this date. See Real Parties in Interests’ Motion to Lift Stay Imposed by this Court’s June 30, 2025 Order, In re Cyberlux (filed July 29, 2025).
B. A Cyberlux creditor filed a federal interpleader action in Virginia, naming Tucker and Whiteley as potential claimants.
A few days after Cyberlux filed its petition for mandamus, another entity, HII Mission Technologies Corp., filed a federal complaint in interpleader in Richmond, Virginia. Complaint, Dkt. 1, HII Mission Techs. Corp. v. Cyberlux Corp. , No. 3:25-cv-483 (E.D. Va. June 24, 2025) (hereinafter “Interpleader Suit” ); Dkt. 28-10 (headers illegible). The pleading asserts that HII’s predecessor subcontracted with Cyberlux to perform certain work for a federal contract. Id. ¶¶ 25-26. The pleading notes that Cyberlux had not completed all its obligations and met all conditions precedent to payment— including because HII was still awaiting the federal government’s payment for inventory that Cyberlux sent—but if the requirements are ultimately satisfied, then HII would owe up $2,486,557.29 in funds, with an “anticipate[d]” further sum of $23,012,113.64 that could become payable. See id. ¶¶ 40, 42, 46-47. Along with Cyberlux, the pleading names Atlantic Wave, Tucker, and Whiteley as Defendants with potential competing interests in the fund. See id. ¶¶ 57- 62, 74; see also Verified Claim Notification and Demand, Dkt. 1-14 at 56-63, Interpleader Suit (June 2, 2025 demand letter from Tucker’s and Whiteley’s counsel); Dkt. 28-11 at pdf-page 308 of combined Dkt. 28 (header illegible). Tucker later signed a motion, filed by Robert Bertleth—the Atlantic Wave receiver—requesting that HII be directed to deposit funds in the federal court’s registry. [3] See Joint Motion to Deposit Funds into Registry of Court and Memorandum in Support, Dkt. 25 at 1-3, 8, Interpleader Suit (July 17, 2025); Dkt. 28-13 at pdf-page 408 of combined Dkt. 28 (header illegible).
On August 4, 2025, HII filed an amended complaint that dropped Tucker and Whiteley as defendants. See Amended Complaint Dkt. 41, Interpleader Suit . That pleading, coupled with other developments, led the district court to deny the Atlantic Waver receiver’s motion seeking to compel deposit of the funds, but without prejudice to being renewed after the defendants are served. See Order, Dkt. 57, Interpleader Suit (Aug. 11, 2025).
C. Plaintiffs filed this breach-of-contract suit, seeking sums related to their employment.
On June 11, 2025, shortly after the Atlantic Wave receiver was appointed, but a couple of weeks before the Interpleader Suit began, Plaintiffs Tucker and Whiteley sued Cyberlux in state court, asserting that Cyberlux breached its contractual obligation to pay their promised salary, bonuses, and “incentive” amounts under their Employment Agreements. See Dkt. 1-2 at 11. The petition claims that Plaintiffs, together, are owed $1,860,017.08, including attorneys’ fees, and should be “entitled to participate” in the Atlantic Wave receivership, even though they filed the case as a new action. [4] See id. at 1, 4- 5. The petition also alludes to the HII action, by asserting that the Atlantic Wave receiver “has or will be in receipt of approximately $25 million from [Cyberlux’s] recent sale of drones.” Id. at 4.
On June 11, 2025, the state court granted Plaintiffs’ request for a TRO and receivership, which expired under its own terms on June 19. Dkt. 1-3 at 3. Cyberlux removed the case to this Court on June 13, 2025, asserting diversity jurisdiction. Dkt. 1 at 1-2. Defendant Mark Schmidt filed a motion to dismiss, Dkt. 5, 6, but he was later dismissed from the case. Dkt. 14.
Plaintiffs filed a motion to remand, which they amended once. Dkt. 15, 17. They also filed a motion for an “emergency” TRO, which they amended twice. Dkt. 18, 19, 20. The Court ordered expedited, consolidated briefing to address both motions. Dkt. 21. Cyberlux timely responded, Dkt. 28, but Plaintiffs failed to timely reply. Dkt. 36 (striking Dkt. 32 as untimely). Plaintiffs also filed a “motion to show authority” directed at Cyberlux’s counsel, Dkt. 23, to which Cyberlux recently responded, Dkt. 37, including by moving to strike Plaintiffs’ supporting declarations, Dkt. 38. Plaintiffs also filed a motion to disqualify Cyberlux’s counsel, Dkt. 34 (filed August 4, 2025), which is not yet ripe for resolution.
Analysis
I. Plaintiffs’ motion to remand is without merit.
Plaintiffs filed both an original and amended motion to remand this case.
See Dkt. 15, 17. They maintain that complete diversity of citizenship is lacking because Cyberlux’s principal place of business is Texas, where Plaintiffs are domiciled. Dkt. 17 at 7-8; see also Dkt. 24 (disclosing plaintiffs’ domicile). But as shown below, Cyberlux has now proved that its principal place of business is in North Carolina. That conclusion, together with Cyberlux’s Nevada state of incorporation, makes Cyberlux diverse from Plaintiffs, who are Texas citizens. The motion to remand should be denied.
A. As the removing party, Cyberlux must prove that jurisdiction exists.
A defendant can remove, to federal court, an action that was filed in state court if the action could originally have been filed in federal court. 28 U.S.C. § 1441(a). Federal courts, in turn, are authorized to hear cases that either (1) involve questions of federal law, 28 U.S.C. § 1331, or (2) “where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between ... citizens of different States,” id. § 1332(a)(1).
The removal statute must “be strictly construed and any doubt as to the
propriety of removal should be resolved in favor of remand.”
In re Hot-Hed
Inc.
,
B. Cyberlux has proved that the parties’ citizenships are diverse.
As a corporation, Cyberlux is “deemed to be a citizen of any State by
which it has been incorporated and of the state where it has its principal place
of business.” 28 U.S.C. § 1332 (c)(1). There is no dispute that Cyberlux is
incorporated in Nevada. Instead, the debate concerns Cyberlux’s principal
place of business. “Principal place of business” means the place where “a
corporation’s officers direct, control, and coordinate the corporation’s
activities”—i.e., its “nerve center.”
Hertz Corp.
Plaintiffs cite a 2022 offer of employment, which stated that their “principal place of employment shall be” at Cyberlux’s “corporate office” in Spring, Texas. Dkt. 17 at 7 (citing Dkt. 17-2 at 1). Plaintiffs equate that office with Cyberlux’s principal place of business.
But Cyberlux responds that the Texas facility merely represents the location where Plaintiffs worked for Catalyst Machineworks, LLC. See Dkt. 28 at 13 (addressing Dkt. 17-2, the March 30, 2022 offer of employment from Catalyst Machineworks). Cyberlux acquired Catalyst Machineworks in 2022, see Dkt. 17-3, which Plaintiffs then dissolved, allegedly without authority, see Dkt. 28 at 13-14; Dkt. 28-1 at 4 (Declaration of Mark D. Schmidt).
Additional, uncontroverted evidence proves that Cyberlux did not maintain or operate its headquarters at the Texas location. Cyberlux’s President and CEO, Mark D. Schmidt, offices at and makes final decisions from Cyberlux’s location at 800 Park Offices Drive, Suite 3209, Research Triangle Park, in North Carolina. Dkt. 28-1 at 3; see also id. at 4 (explaining that, every quarter, Chief Financial Officer David Downing travels to meet Schmidt in North Carolina to resolve budget matters). Cyberlux also maintains its corporate and financial records at its North Carolina headquarters, see id. at 4, the same location listed as Cyberlux’s principal office in its annual report and corporate disclosures, see Dkt. 28-1 at 12, 14. Together, this evidence demonstrates that Cyberlux’s nerve center—and thus, its principal place of business—is in North Carolina.
Cyberlux’s principal place of business in North Carolina and state of incorporation in Nevada make its citizenship diverse from Plaintiffs’. Plaintiff’s motion to remand and interrelated requests for attorneys’ fees should be denied.
II. Plaintiffs are not entitled to obtain a TRO or preliminary injunction appointing a receiver.
Plaintiffs also filed a motion for “emergency temporary restraining order” and preliminary injunction, Dkt. 18, which they amended multiple times, Dkt. 19, 20. The last version (Dkt. 20) moots and supersedes the earlier two filings (Dkt. 18, 19).
“The standards governing a request for a preliminary injunction and a
temporary restraining order are the same.”
United States v. Brooks
, 2006 WL
2323057, at *1 (S.D. Tex. Aug. 8, 2006). To obtain relief, a movant “must show
(1) a substantial likelihood of success on the merits, (2) a substantial threat of
irreparable harm absent the injunction, (3) that the harm she will suffer
without the injunction outweighs the cost to comply with the injunction, and
(4) that the injunction is in the public interest.”
Harrison v. Young
, 48 F.4th
331, 339 (5th Cir. 2022) (citing
Jefferson Cmty. Health Care Ctrs., Inc. v.
Jefferson Par. Gov’t
, 849 F.3d 615, 624 (5th Cir. 2017)). Due to its
“extraordinary” nature, courts cannot grant preliminary injunctive unless “the
movant has clearly carried the burden” of persuasion on all four factors.
See
Guy Carpenter & Co. v. Provenzale
, 334 F.3d 459, 464 (5th Cir. 2003).
Ultimately, the decision whether to grant such relief lies in the district court’s
sound discretion.
See Miss. Power & Light Co. v. United Gas Pipe Line Co.
,
Plaintiffs have failed to show entitlement to a TRO or preliminary
injunctive relief. This is a garden variety breach-of-contract claim that seeks
damages consisting of salary, net revenue incentive bonus, and other monetary
relief. Dkt. 20 at 11-17 (detailing various categories of damages). Except
in unusual circumstances, the monetary nature of such relief generally negates
a finding of irreparable harm.
See, e.g., SO Apartments, L.L.C. v. City of San
Antonio, Tex.,
Plaintiffs do not substantiate any such special circumstances. Instead, Plaintiffs reach for a nuclear alternative, asking this Court to “establish[ ] Identical Receivership as was in State Court prior to” removal. See Dkt. 20 at 18. This request is fundamentally flawed.
The receivership that Plaintiffs reference was created in Atlantic Wave , and even there, only under the Texas Turnover Statute, Tex. Civ. Prac. & Rem. Code § 31.002. Dkt. 28-10 at pdf-page 198 ¶ 8 of combined Dkt. 28. That statute is limited to requests by “[a] judgment creditor ” to “appoint a receiver with the authority to take possession of the [ judgment debtor’s ] nonexempt property, sell it, and pay the proceeds to the judgment creditor to the extent required to satisfy the judgment .” Tex. Civ. Prac. & Rem. Code § 31.002(a), (b)(3) (emphasis added). Plaintiffs have not obtained a judgment awarding them relief against Cyberlux and do not qualify as judgment creditors. This provision is wholly inapposite.
Plaintiffs cite no authority supporting their requested relief.
“[A]ppointment of a receivership is not a cause of action, but a remedy.”
Fundiciones Balaguer, S.A. v. Ferrell-Ross Roll Mfg., Inc.
,
The foregoing requirements are not met. As Cyberlux notes, Dkt. 28 at
18-19, courts have rejected similar requests to appoint a receiver before a
plaintiff has reduced his claims to judgment.
See Mendy v. Graham Packard,
LLC
, 2017 WL 9287495, at *2 (E.D. La. May 23, 2017) (citing,
inter alia
,
Netsphere
,
Moreover, as Cyberlux emphasizes, Plaintiffs have been working with the Atlantic Wave receiver and asserting their rights in other proceedings. See Dkt. 28 at 17-18. Plaintiffs were identified as potential claimants in the Virginia interpleader action and submitted filings requesting that Cyberlux’s creditor, HII, be directed to deposit over $25 million in funds in the registry of that court. See supra Background Part B; see also Complaint, Dkt. 1 at 2, 11- 12, 14, Interpleader Suit , No. 3:25-cv-483 (E.D. Va. Aug. 4, 2025); Dkt. 1-14 at 56-63, Interpleader Suit (June 2, 2025 demand letter from Tucker’s and Whiteley’s counsel); Dkt. 28-11 at 308-15 of combined pdf (same letter). While the latest pleading omits Plaintiffs’ names as potential claimants, Dkt. 41, Interpleader Suit (filed Aug. 4, 2025), Plaintiffs nonetheless supported Robert Bertleth, Cyberlux’s receiver in Atlantic Wave , in his quest to obtain the funds from HII and “accomplish a Global Settlement Agreement and Complete Release” involving numerous Cyberlux creditors—including Plaintiffs. See Joint Motion to Deposit Funds into Registry of Court and Memorandum in Support, Dkt. 25 at 1-2, Interpleader Suit (July 17, 2025); Dkt. 28-13 at pdf- page 408 of combined Dkt. 28 (header illegible). Yet the very receivership order invoked by the Atlantic Wave receiver had been stayed by a Texas intermediate appellate court. Order, In re Cyberlux (signed June 30, 2025); Dkt. 28-4.
No matter how those proceedings are resolved—whether the pending appeal of the Atlantic Wave receiver order, or the Interpleader Suit —Plaintiffs have come nowhere close to showing that creating a receivership is appropriate in this case. Plaintiffs’ stated desire to participate in the Atlantic Wave receivership or claim a piece of the funds potentially recoverable in the Interpleader Suit requires them to seek relief in those cases . This Court will not permit Plaintiffs to work an end run around those courts and their decisions by making baseless requests for relief here.
III. This Court need not confirm the termination of a state-court order that self-terminated.
Cyberlux, for its part, filed a “motion to confirm termination” of the state court’s TRO that appointed Berleth as receiver in this case. Dkt. 9. But the state-court’s ex parte TRO expired nearly two months ago, on June 19, 2025. See Dkt. 1-3 at 3 (“This Temporary Restraining Order shall continue in full force and effect until 1:30 p.m. on the 19th day of June 2025 ....”). There is no need to confirm what the order makes plain on its face. Cyberlux’s request to confirm the obvious is denied as moot.
IV. The proper forum for this case is the federal court in Durham, North Carolina.
Cyberlux moved to dismiss under Rule 12(b)(3) for improper venue or, alternatively, to transfer the case to North Carolina based on a forum-selection clause. Dkt. 7; Dkt. 8 at 3-7. Specifically, Cyberlux cites its Purchase Agreement with Catalyst, which states in key part, that
Any legal suit, action, proceeding, or dispute arising out of or related to this Agreement, the other Transaction Documents, or the transactions contemplated hereby or thereby may be instituted in the federal courts of the United States of America or the courts of the State of North Carolina in each case located in the city of Durham and county of Durham, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, proceeding, or dispute.
See Dkt. 8 at 2 (quoting Purchase Agreement § 8.08(a), attached at Dkt. 8-1 at 5-30). According to Cyberlux, this forum-selection clause is both mandatory and applies to Plaintiffs’ claims because they arise out of or are related to both the Purchase Agreement and the “transactions contemplated” in that Agreement. See Dkt. 8 at 4-5 (citing Dkt. 1-2 at 4, 15-16; Dkt. 8-1 at 10 (Purchase Agreement, Section 1.04, “Trigger Events”)). Plaintiffs failed to respond to Cyberlux’s motion. At most, they embed a passing challenge to the forum-selection clause in their motion to remand, asserting (without analyzing the clause in full) that it does not apply to their claims for breach of their Employment Agreements. Dkt. 17 at 10-11.
A. Forum selection clauses and 28 U.S.C. § 1404(a)
Although Cyberlux argues for dismissal under Rule 12(b)(3) for improper
venue,
see
Dkt. 8 at 3, that is not the correct vehicle for addressing the forum-
selection clause here. The Supreme Court has made clear that “[w]hether the
parties entered into a contract containing a forum-selection clause has no
bearing” on the propriety of venue.
Atl. Marine Constr. Co. v. U.S. Dist. Ct. for
W. Dist. of Tex.
,
Cyberlux has not asserted that venue is improper under § 1391(b). It also appears that venue may be proper here, as the district where a substantial part of the relevant acts and events occurred. See 28 U.S.C. § 1391(b)(2). Dismissal under Rule 12(b)(3) is therefore unavailable.
Instead, the forum-selection clause “may be enforced through a motion
to transfer under [28 U.S.C.] § 1404(a).”
See Atl. Marine Constr. Co.
, 571 U.S.
at 59-60. Section 1404(a) authorizes courts to transfer a case “[f]or the
convenience of parties and witnesses, in the interest of justice,” to another
federal district or division where it may have been brought. 28 U.S.C.
§ 1404(a). The statutory language contemplates weighing certain factors to
determine whether a transfer would serve “the convenience of parties and
witnesses” and promote “the interest of justice.”
See Atl. Marine Constr. Co.
,
“The calculus changes, however, when the parties’ contract contains a
valid forum-selection clause ....”
Id.
(quoting
Stewart Org., Inc. v. Ricoh Corp
.,
487 U.S. 22, 31 (1988)). In that instance, the law presumes that the
contractually-agreed forum serves the interests of justice.
See id.
Thus, “a
valid forum-selection clause should be given controlling weight in all but the
most exceptional cases.”
Id.
(quotation omitted). That leaves only certain
public-interest factors that in “rare cases” can justify “keeping a case despite
the existence of a valid and enforceable [forum-selection clause].”
Matthews v.
Tidewater, Inc.
,
B. Under North Carolina law, the clause specifying Durham, North Carolina as the proper forum is mandatory and exclusive.
Because the Purchase Agreement contains a choice-of-law provision, the
Court must first conduct a choice-of-law analysis. Before determining whether
a forum-selection clause is mandatory or permissive, a federal court sitting in
diversity applies the forum state’s choice-of-law rules to resolve which
substantive law will apply.
See Weber v. PACT XPP Techs., AG
,
In North Carolina, the use of words like “exclusive,” “sole,” or “only”
indicate that the contracting parties intended to make a forum exclusive.
See
LendingTree, LLC v. Anderson,
Because the forum-selection clause is mandatory, its enforceability
depends on federal law.
See PCL Civil Constructors, Inc. v. Arch Ins. Co.
, 979
F.3d 1070, 1074 (5th Cir. 2020). And federal law strongly presumes that the
clause is enforceable.
See Atl. Marine Constr. Co.
, 571 U.S. at 59-60
(mandatory forum-selection clauses must be “given controlling weight in all
but the most exceptional causes”);
Weber
,
Having failed to respond to Cyberlux’s motion to transfer, Plaintiffs do not challenge, and thus fail to rebut, the presumption that the forum-selection clause is enforceable. [7] Regardless, Cyberlux rightly asserts that the public interests favor having a North Carolina court apply North Carolina law to resolve a contract suit against a corporation principally based in North Carolina. See Dkt. 8 at 6.
Plaintiffs’ sole challenge—albeit raised only obliquely in their motion to remand, and not in a response to Cyberlux’s motion—claims that the forum- selection clause does not apply to the Employment Agreements underlying their breach-of-contract claims. See Dkt. 17 at 10-12. Cyberlux, however, contends that the clause governs Plaintiffs’ claims because they “aris[e] out of or [are] related to” the Purchase Agreement. See Dkt. 8 at 4. For two reasons, Cyberlux is correct.
First, as Cyberlux argues, Plaintiffs’ claims under the Employment Agreements, at minimum, relate to the Purchase Agreement. See Dkt. 8 at 2, 4. The forum-selection clause sweeps broadly, reaching not only claims arising out of the Purchase Agreement, but also those “related to” that agreement. The difference between those phrases is significant.
By using the phrase “arising out of or relating to,” the [clause] sets forth two alternative, separate, delineations of scope. On the one hand, “arising out of” signifies that the claim originates with the [Agreement itself]. By contrast, “relating to” signifies a broader connection between claims asserted and the [Agreement].
Rose Oil Co., Inc. v. PNC Bank, Nat’l Ass’n
,
Plaintiff’s claims hinge on portions of the Purchase Agreement.
According to their petition, Cyberlux failed to give them certain incentive
stock. Dkt. 1-2 at 4 (referencing “12.5 million Incentive Shares”). But the
petition acknowledges that Plaintiffs’ recovery depends on provisions of the
Purchase Agreement that define the value of and triggers for receiving those
incentive shares.
See id.
at 14-16 (quoting Purchase Agreement §§ 1.02,
1.03(c), and 1.04(a)); Dkt. 8-1 at 10 (Purchase Agreement). This
interdependence shows that Plaintiffs’ claims have a “significant relationship”
with, and would not exist, but-for specific provisions of the Purchase
Agreement specifying when the shares would be owed, and if so, how much
would be paid.
See Rose Oil
,
Second, Plaintiffs’ claims also arise out of the Purchase Agreement
because it incorporates their Employment Agreements by reference. In
contrast to the broad reach of “relating to,” “to fall within the scope of an
‘arising under’ clause, the cause of action must be based on the contract itself.”
EarthKind, LLC v. Lebermuth Co. Inc.
,
In sum, the Purchase Agreement’s clause specifying the federal and state courts in Durham, North Carolina as the exclusive forum is mandatory, enforceable, and applies to Plaintiffs’ claims. In lieu of dismissing the claims, this Court grants Cyberlux’s alternative request to transfer this case to the U.S. District Court in the Middle District of North Carolina, Durham Division, pursuant to 28 U.S.C. § 1404(a).
Recommendation and Order For the foregoing reasons, it is RECOMMENDED that Plaintiff Phillip Tucker and Neill Whiteley’s Amended Motion for Remand (Dkt. 17) be DENIED and the original motion (Dkt. 15) be DENIED AS MOOT .
It is further RECOMMENDED that Plaintiffs’ motion for temporary restraining order and preliminary injunctive relief (Dkt. 20) be DENIED and its prior versions (Dkt. 18, 19) be DENIED AS MOOT .
It is ORDERED that Defendant Cyberlux Corporation’s and Mark D. Schmidt’s motion to confirm termination of the state court’s TRO (Dkt. 9) is DENIED AS MOOT .
It is further ORDERED that Defendant Cyberlux Corporation’s and Mark D. Schmidt’s Rule 12(b)(3) motion to dismiss or, alternatively, to transfer venue (Dkt. 7, 8) be GRANTED IN PART . It is hereby ORDERED that this suit be TRANSFERRED to the U.S. District Court for the Middle District of North Carolina, Durham Division, pursuant to 28 U.S.C. § 1404(a)—but only after the Court determines whether to adopt the foregoing recommendations (regarding remand, TRO, and preliminary injunctive relief).
The parties have fourteen days from service of this Report and
Recommendation to file written objections. 28 U.S.C. § 636(b)(1); Fed.
R. Civ. P. 72(b). Failure to file timely objections will preclude
appellate review of factual findings and legal conclusions, except for
plain error.
Ortiz v. City of San Antonio Fire Dep’t
,
Signed on August 14, 2025, at Houston, Texas. n, Texas..
______________________________ ______________________________________________________________ Yvonne Y. Ho Yvooonnnnnne Y. Hooo United States Magistrate Judge Unniittted Statesss MMMagistrate Judge 25
Notes
[1] Unlike motions to remand and for injunctive relief, motions to transfer venue are
non-dispositive matters that U.S. Magistrate Judges can resolve by order.
See
Blanton v. Davis
,
[2] The CM/ECF headers of certain documents are illegible because they are superimposed on prior headers. Those documents are cited by reference to the page of the combined pdf that includes those items.
[3] Although Whiteley may have intended to join the motion, the filing uses Tucker’s signature instead of Whiteley’s. Dkt. 25 at 8, Interpleader Suit .
[4] Puzzlingly, Plaintiffs also styled their filing as a request to “extend receivership” that purportedly was set to expire the following day. Dkt. 1-2 at 2, 5 (alleging that “[r]eceivership is coming to an end tomorrow”). The only receivership, however, is the one in Atlantic Wave . Although later stayed, the receivership has not been terminated.
[5] Plaintiffs erroneously invoke the “clear and convincing evidence” standard, citing to Vantage Trailers . Dkt. 17 at 7.
[6] Section 64.001 of the Texas Civil Practice and Remedies Code similarly emphasizes
that “appointment of a receiver is a harsh, drastic, and extraordinary remedy, which
must be used cautiously.”
Perry v. Perry
,
[7] Plaintiffs’ passing reference to Texas’s fundamental policy imposing limits on enforcing non-competition clauses has no bearing on the forum-selection clause’s enforceability. Dkt. 17 at 11-12.