United States District Court, D. Nebraska, Amarillo Division
MEMORANDUM OPINION AND ORDER
LOU ROBINSON UNITED STATES DISTRICT JUDGE
the Court is Defendant's Motion to Dismiss, or in the
Alternative, Motion to Transfer Duplicative Action,
filed on May 25, 2016. Plaintiff Universal Protection
Services (UPS) responded on June 15, 2016. On June 28, 2016,
defendant Thornburg filed Defendant's Joinder of
Co-Defendants' Motion to Dismiss, or in the Alternative,
Transfer Duplicative Action. The Court treats the
Defendant's Joinder as a motion to dismiss or in the
alternative motion to transfer. Defendants Mark Thornburg
(Thornburg), Mike Weatherl (Weatherl), and AgTac Services
(AgTac) then filed a Reply to Plaintiffs Reponse on June 29,
2016. Defendants Thornburg, Weatherl, and AgTac move pursuant
to the "first to file" rule to dismiss this suit.
In the alternative, Defendants move to transfer the entire
suit, or the issue of how and whether the two actions should
proceed, to the District of Nebraska. Thornburg, a Texas
resident, filed notice with this Court stating he "will
submit to the jurisdiction of the Court in Nebraska for the
purposes of the claims made against him by Plaintiffs
herein." Doc. 64, Defendant's Joinder of
Co-Defendants' Motion to Dismiss, or in the Alternative,
Transfer Duplicative Action. Defendants' Motions are
GRANTED IN PART and DENIED IN PART.
a national company that offers full-service security services
to various property types including office buildings,
corporate campuses, and distribution and manufacturing
facilities. AgTac is a direct competitor of UPS, providing
the same services to the same types of customers. AgTac
currently employs former UPS employees and services former
UPS customers across the country. UPS alleges that AgTac and
Weatherl, a former UPS employee who currently owns and
operates AgTac, lured UPS employees to breach employment
contracts and disclose confidential information.
Specifically, UPS alleges that current and former UPS
employees disclosed sensitive pricing information that
allowed AgTac to significantly underbid UPS and secure
business contracts with former UPS customers.
March 21, 2016, UPS sued Kelly Wavada (Wavada), Joel Lauffer
(Lauffer), Leeta Suhr (Suhr), Weatherl, and AgTac in the
District of Nebraska Lincoln Division (Nebraska Action).
Wavada and Lauffer are former UPS employees now employed by
AgTac. Wavada worked for UPS as a regional manager.
Wavada's region included Nebraska and Texas, among
others. UPS filed the Nebraska Action after AgTac underbid
UPS and obtained contracts with former UPS customers.
sued the Nebraska defendants for various causes of action.
Specifically, UPS sued Wavada for breach of employment
contract. UPS alleged Wavada breached the following
employment contract provisions: non-competition; conflicts;
non-solicitation of UPS customers and employees; and failure
to maintain confidential information. UPS sued Lauffer, Suhr,
and Weatherl for breach of employment contract for failure to
maintain confidential information. UPS also brought a cause
of action against Wavada, Lauffer, and Suhr for breach of the
duty of loyalty. Further, UPS brought causes of action
against all Nebraska defendants for tortious interference
with contractual relations (employee and customer contracts),
tortious interference with prospective economic advantage,
misappropriation of trade secrets, civil conspiracy, and
violation of the Computer Fraud and Abuse Act.
the Nebraska case was pending, UPS filed the instant suit
(Texas Action) on May 19, 2016, against Thornburg, Weatherl,
and AgTac. Thornburg works for UPS as the Director of
Security at the JBS USA beef processing plant in Dumas, Texas
(the Dumas Plant). Plaintiffs allege that Thornburg is also
registered as owner, manager, and employee for AgTac on the
Texas Department of Public Safety website. Wavada, while
working for UPS as a regional manager in Texas, became
familiar with the Dumas Plant and Thornburg. UPS brought the
Texas Action after AgTac underbid UPS and obtained a contract
with the Dumas Plant.
sues Thornburg for breach of the duty of loyalty and breach
of employment contract. UPS alleges that Thornburg breached
the failure to maintain confidential information and
conflicts clauses. Further, UPS sues Thornburg, Weatherl, and
AgTac for misappropriation of trade secrets, violation of the
Defend Trade Secrets Act, tortious interference with
contractual relations (employee contracts), tortious
interference with prospective business relationships, and
to the first to file rule, Defendants request that the Court
dismiss or transfer the Texas Action to the District of
Nebraska Lincoln Division, the court in which the first
action was filed.
Fifth Circuit adheres to the first-to-file rule when two
related cases are pending in two federal district courts.
Cadle Co. v. Whataburger of Alice, Inc., 174 F.3d
599, 603 (5th Cir. 1999). The first-to-file rule permits the
court with the later-filed action to refuse to hear the case
if the issues raised by both cases "substantially
overlap." See Id. "The rule rests on
principles of comity and sound judicial administration."
Id. (internal quotation marks omitted). The issues
presented in the two actions need not be identical and
complete identity of the parties is not required for
dismissal or transfer. See Save Power Ltd. v. Syntek Fin.
Corp., 121 F.3d 947, 949-50 (5th Cir. 1997). Rather,
"the crucial inquiry is one of substantial
overlap." Int'l Fid. Ins. Co. v. Sweet Little
Mex. Corp., 665 F.3d 671, 678 (5th Cir. 2011) (internal
quotation marks omitted).
motion invoking the first to file doctrine, the court must
determine the likelihood of substantial overlap between the
suit before it and the suit previously filed. If the
second-filed court finds that the issues are likely to
substantially overlap, it is up to the first-filed court to
resolve the question of whether both cases should proceed.
Mann Mfg., Inc. v. Hortex, Inc., 439 F.2d 403, 408
(5th Cir. 1971). "The first to file rule not only
determines which court may decide the merits of substantially
similar issues, but also establishes which court may decide
whether the second-filed suit must be dismissed, stayed, or
transferred and consolidated." Cadle Co., 714
F.3d at 606 (internal quotation marks omitted). If a
likelihood of substantial overlap exists, Nebraska is the
appropriate court to decide whether the Texas Action should
proceed or be dismissed, stayed, or transferred and
consolidated. See id.; Mann Mfg., Inc., 439 F.2d at
408; Am. Home Mortg. Servicing, Inc. v. Triad Guar. Ins.
Corp., 714 F.Supp.2d 648, 650 (N.D. Tex. 2010);
Marietta Drapery & Window Coverings Co. v. N. River
Ins. Co., 486 F.Supp.2d 1366, 1369-70 (N.D.Ga. 2007).
The Fifth Circuit reviews such decisions under an abuse of
discretion standard. See Save Power Ltd., 121 F.3d
Court must limit its inquiry to whether there is a likelihood
of substantial overlap between the two actions. District
courts look at factors such as whether the core issues are
the same or if much of the proof adduced would likely be
identical. See Int'l Fid. Ins. Co., 665 F.3d at
678 (citing Mann Mfg., Inc., 439 F.2d at 407). When
applying the first to file doctrine, district courts should
"exercise care to avoid interference with each
other's affairs as the concern manifestly is to avoid the
waste of duplication, to avoid rulings which may trench upon
the authority of sister courts, and to avoid piecemeal
resolution of issues that call for a uniform result."
Id. (quoting Sut ...