St. Jude Medical S.C., Inc., a Minnesota corporation, Plaintiff - Appellee
Biosense Webster, Inc., a California corporation; Johnson & Johnson, a New Jersey corporation; Jose B. de Castro, an individual, Defendants - Appellants
November 18, 2015
from United States District Court for the District of
Minnesota - Minneapolis.
Jude Medical S.C., Inc., a Minnesota corporation, Plaintiff -
Appellee: Mark R. Bradford, Nicole A. Delaney, Edward F. Fox,
BASSFORD & REMELE, Minneapolis, MN.
Biosense Webster, Inc., a California corporation, Johnson &
Johnson, a New Jersey corporation, Jose B. de Castro, an
individual, Defendants - Appellants: Joseph William Anthony,
Steven C. Kerbaugh, Mary L. Knoblauch, ANTHONY & OSTLUND,
SMITH, BYE, and BENTON, Circuit Judges.
Webster, Inc. (" Biosense" ), a subsidiary of
Johnson & Johnson, recruited and hired Jose B. de Castro
while de Castro was working for St. Jude Medical S.C., Inc.
(" St. Jude" ). St. Jude had signed a three-year
employment agreement with de Castro, which would not expire
for almost two more years. Soon after de Castro's
departure, Sequoia Hospital, a large St. Jude client, took
its business to Biosense. St. Jude sued de Castro and
Biosense alleging, among other things, state-law claims of
breach of contract and tortious interference. The district
court granted summary judgment to St. Jude
with respect to de Castro's breach and Biosense's
liability for tortious interference. After a jury trial on
damages, the district court entered judgments against de
Castro and Biosense and awarded damages for the cost of
replacing de Castro, lost profits from Sequoia Hospital, and
attorney's fees. Biosense and de Castro appeal. We
Jude and Biosense are competitive manufacturers of medical
equipment. Both companies employ sales representatives
assigned to specific geographical areas. In 2009, St. Jude
promoted de Castro from field engineer to sales
representative for an area including San Francisco and San
Jose, California. After two years as a sales representative,
in January 2011, St. Jude and de Castro executed a three-year
employment agreement. In relevant part, their agreement
limited St. Jude's ability to terminate de Castro and
prevented de Castro from leaving St. Jude during the term of
in 2011, after St. Jude and de Castro entered into the
agreement, Biosense began courting de Castro as a potential
employee. Biosense selected de Castro on the basis of his
relationship with Sequoia Hospital, a then-current St. Jude
client that Biosense desired to obtain. After multiple
meetings, Biosense offered to hire de Castro and promised to
defend him from the repercussions of terminating his
employment agreement with St. Jude before the term expired.
The day after de Castro resigned in February 2012, Biosense
filed a declaratory judgment action against St. Jude, asking
a federal court in California to declare the employment
agreement invalid. St. Jude, a Minnesota-based company,
sought application of the Minnesota choice-of-forum provision
in the employment agreement, and the California court
transferred the case to Minnesota.
district court in Minnesota granted summary judgment to St.
Jude on all issues except damages, which St. Jude tried to a
jury and to the court. The jury awarded St. Jude damages from
Biosense and de Castro for the cost of replacing de Castro
and for lost profits; the court awarded St. Jude
attorney's fees. After the trial, the district court
denied Biosense's motion for a judgment as a matter of
law with respect to damages for lost profits. Biosense and de
Castro appeal. We have jurisdiction to review this final
judgment of the district court pursuant to 28 U.S.C. §
and de Castro challenge the district court's grant of
summary judgment to St. Jude, arguing that (A) Minnesota
substantive law does not apply despite the written
choice-of-law provision and that (B) de Castro's
employment agreement with St. Jude was a restrictive covenant
rather than a valid term-of-years employment contract.
Biosense further argues that (C) St. Jude cannot recover
damages for lost profits on the basis of its
tortious-interference claim. Biosense also challenges the
district court's denial of its motion for judgment as a
matter of law, arguing that (D) the evidence at trial was
insufficient to support damages for lost profits. Our review
of these matters is de novo. Pittari v. Am. Eagle
Airlines, Inc., 468 F.3d 1056, 1061 (8th Cir. 2006);
St. Paul Fire & Marine Ins. Co. v. Schrum, 149 F.3d
878, 880 (8th Cir. 1998).
The Minnesota ...