United States District Court, S.D. Indiana, Indianapolis Division
ORDER ON DEFENDANTS' MOTION TO DISMISS OR, IN THE
ALTERNATIVE, TO TRANSFER VENUE
WALTON PRATT, JUDGE
matter is before the Court on a Motion to Dismiss or, in the
Alternative, to Transfer Venue, filed pursuant to Federal
Rules of Civil Procedure 12(b)(2) and 12(b)(6) by Defendants
Talkdesk Inc. (“Talkdesk”), Danielle Morales
(“Morales”), Michael Strahan
(“Strahan”), Mark Hertel (“Hertel”),
and Ralph Manno (“Manno”) (collectively,
“Defendants”) (Filing No. 97). Plaintiff, Genesys
Telecommunications Laboratories, Inc.
(“Genesys”), initiated this lawsuit, seeking
injunctive relief and damages against the Defendants for
misappropriation of trade secrets, breach of contract, and
tortious interference with contract, among other things.
After Genesys filed its Second Amended Complaint, the
Defendants filed their Motion to Dismiss based on a lack of
personal jurisdiction and the failure to state a plausible
claim for relief. The Defendants alternatively ask the Court
to transfer this case to the Northern District of California.
For the following reasons, the Court grants in part
and denies in part the Motion to Dismiss and
declines to transfer the
case to the Northern District of California.
following facts are not necessarily objectively true, but as
required when reviewing a motion to dismiss, the Court
accepts as true all factual allegations in the Second Amended
Complaint (Filing No. 89) and draws all inferences in favor
of Genesys as the non-moving party. See Bielanski v.
County of Kane, 550 F.3d 632, 633 (7th Cir. 2008).
Genesys is a California corporation with a significant
presence in Indiana and is the successor to a former Indiana
company, Interactive Intelligence. Genesys conducts
substantial business in the state of Indiana and has
corporate offices in Indianapolis, Indiana. It employs more
than 800 employees in Indiana at its Indianapolis office. Its
corporate headquarters is in California. Since the early
1990s, Genesys has been a longstanding and market-leading
provider of cloud and on-premises customer experience and
contact center solutions. It offers customer-experience
platforms that enable enterprises to orchestrate and monitor
multimodal omnichannel journeys and interactions (Filing No.
89 at 1, 4, 7; Filing No. 98 at 7).
Talkdesk is a Delaware corporation with its headquarters in
California. Talkdesk is an upstart company in the cloud-based
call center software business. On October 3, 2018, Talkdesk
announced that it had raised $100 million in Series B
funding. Talkdesk is a direct competitor of Genesys, and it
does business across the United States, including in Indiana,
and employs personnel in Indiana (Filing No. 89 at 2, 4, 7;
Filing No. 98 at 7).
Manno was initially hired by Interactive Intelligence, now
part of Genesys, as a Director of Channel Sales in August
2004. He was most recently a Vice President of Sales at
Genesys. In that executive position, Manno oversaw all sales
activities in Genesys' mid-market segment and managed a
team of Area Directors and those Directors' Account
Executives. Manno, a citizen of Missouri, signed an
employment agreement containing an Indiana forum-selection
clause. Id. at 4. His executive employment with
Genesys ended on October 1, 2018. Manno is now employed as a
Vice President of Sales with Talkdesk (Filing No. 89 at
Hertel was initially hired by Interactive Intelligence, now
part of Genesys, as West Area Director in November 2013.
Hertel was most recently an Area Director of Sales at
Genesys. In that position, he oversaw all sales activities in
Genesys' West Region and managed a team of Account
Executives. Hertel, a citizen of California, signed an
employment agreement containing an Indiana forum-selection
clause and Indiana choice-of-law provision. Id. at
4-5. His employment with Genesys ended on September 28, 2018.
Hertel is now employed as a Vice President of Sales with
Talkdesk. Id. at 14, 17.
Strahan was initially hired by Interactive Intelligence, now
part of Genesys, as a Test Engineer in September 2000. He was
most recently an Area Director of Sales at Genesys. In that
position, he oversaw all sales activities in Genesys'
Central Region and managed a team of Account Executives.
Strahan, a resident of Indiana, signed an employment
agreement containing an Indiana forum-selection clause.
Id. at 4-5. Strahan's employment with Genesys
ended on September 30, 2018. He is now employed as a Vice
President of Sales with Talkdesk. Id. at 18- 19.
Morales was an Account Executive employed by Genesys. In that
position, she was responsible for making sales to
Genesys' customers and potential customers and managing
customer accounts and relationships. Morales is a citizen of
California. Morales resigned her employment with Genesys
effective September 28, 2018. She is now employed as an
Enterprise Account Executive with Talkdesk. Id. at
Hertel, Strahan, and Morales were highly-compensated, trusted
executives of Genesys and were entrusted by Genesys with
substantial trade secrets to perform their duties.
Id. at 3. Manno, Hertel, Strahan, and Morales each
entered into employment contracts that prohibited them from
disclosing confidential information, soliciting Genesys'
employees for a period of time after leaving employment with
Genesys, and soliciting Genesys' customers for a period
of time after leaving employment with Genesys.
began a targeted strategy aimed at its competitor, Genesys,
to recruit Genesys' sales employees in the Genesys
mid-market segment (Filing No. 89 at 2).
“Talkdesk's targeted raid of Genesys[']
mid-market segment, including all of its top leadership, was
carried out with the purpose of crippling Genesys[']
mid-market sales organization.” Id. at 49. In
a short time span beginning in September 2018, at least
fourteen Genesys employees targeted by Talkdesk left their
employment with Genesys and accepted employment with
Talkdesk. Half of the Genesys mid-market Vice Presidents left
Genesys for Talkdesk, two-thirds of the mid-market Area
Directors went to Talkdesk, and approximately a quarter of
the Genesys mid-market sales executives across the country
left Genesys to work for Talkdesk. A Technical Sales
Consultant also left Genesys for Talkdesk. Id. at 2.
Four of these former Genesys employees are Defendants
Morales, Strahan, Hertel, and Manno. During the recruiting
process, Talkdesk encouraged Genesys' employees to
conduct a demonstration using Genesys' products to
disclose and discuss proprietary and confidential information
relating to Genesys for the benefit of Talkdesk. Id.
around August 2018, Talkdesk CEO Tiago Paiva
(“Paiva”) personally recruited Strahan, Hertel,
Manno, and others during a conference call. Paiva encouraged
these Genesys executives to come to Talkdesk and build up
Talkdesk's sales organization contrary to their
contractual obligations to Genesys. Hertel and Strahan had
between six and ten conversations around this time, and the
two influenced each other to leave Genesys for Talkdesk.
Manno and Hertel had between ten and fifteen discussions,
during which Manno influenced Hertel to leave Genesys and
build Talkdesk's sales organization. Manno also informed
Hertel that he was recruiting others, including Strahan.
Id. at 7, 16, 19, 22.
still employed by Genesys but having committed to joining
Talkdesk, Manno, Hertel, and Strahan recruited other Genesys
personnel, including Morales, on behalf of and for the
benefit of Talkdesk. They continued these efforts after
joining Talkdesk. They accomplished this by utilizing their
trade secret knowledge of the Genesys team's performance,
compensation, level of job satisfaction, and account
relationships that they had learned in their leadership roles
at Genesys. Id. at 2-3, 8.
multiple former Genesys mid-market managers and sales
executives now at Talkdesk, Talkdesk began aggressively
targeting customers and prospects with whom the former
Genesys employees were familiar. Talkdesk utilized
Genesys' trade secrets in doing so. Within weeks of the
employees leaving, Talkdesk targeted and underbid Genesys on
multiple key opportunities for Genesys' customers.
Hertel, Strahan, and Manno misappropriated Genesys'
confidential information, including but not limited to
pricing, quote information, and product roadmap information,
and while employed by Talkdesk in senior sales roles, they
used this information to underbid Genesys for business.
Talkdesk usurped the business of Genesys' customers or
potential customers in California and Hawaii using
misappropriated trade secrets. The individual Defendants
breached their contractual agreements with Genesys by
disclosing confidential information and soliciting
Genesys' employees and customers (Filing No. 89 at 3, 8).
leaving Genesys to join Talkdesk, Morales secretly downloaded
more than 700 confidential and proprietary Genesys documents,
data, and materials constituting trade secrets. Id.
at 3. Beginning in early September and continuing until her
departure, Morales took Genesys' intellectual property,
account and sales plans, pricing information, territory
information, marketing information, customer account
information and documentation, product information, and
presentations. Among the files that Morales downloaded were
twenty-one files from a folder titled “Pricing, ”
nineteen files from a folder titled “QBR, ”
nearly fifty files from a folder titled “Competition,
” a folder titled “RFP Information, ”
nearly one hundred files from a folder titled
“Campaigns & Prospecting, ” nearly one
hundred files from a folder titled “Sales, ”
nearly fifty files from a folder titled “Accounts,
” and more than one hundred fifty files from a folder
titled “Product Information.” Morales took this
confidential, propriety, and trade secret information to
Talkdesk and has used this information for Talkdesk's
benefit. Id. at 3, 9-14.
to Morales, Hertel accessed and converted over 24, 000 of
Genesys' documents, many of which included confidential
and proprietary Genesys data and materials constituting trade
secrets, when he left Genesys and joined Talkdesk. Hertel
took Genesys' proprietary and confidential information
used for bids and used the information for the benefit of
Talkdesk in attempting to win business for Talkdesk. In
October 2018, Hertel disclosed Genesys' proprietary and
confidential information to a Talkdesk executive vice
president for the purpose of using the information in
Talkdesk's bid with a California customer. Genesys
demanded that Hertel cease his conduct, but he has persisted.
Id. at 3, 15, 17.
received communications from Talkdesk that identified
September 17, 2018 as his orientation and “Day
One”. Between September 17 and September 30, 2018,
Strahan continued to email customers on behalf of Genesys
from his Genesys email account. Unbeknownst to Genesys,
during this same period of time, Strahan also completed
training for Talkdesk, attended a sales conference on behalf
of and paid for by Talkdesk, listened in on at least four
live Talkdesk sales calls, listened to two other recorded
sales calls, and took a trip to New Jersey on behalf of
Talkdesk. Strahan was paid by Genesys up through his last day
of work with Genesys, which was September 30, 2018. Prior to
leaving his employment with Genesys, Strahan deleted several
files and documents from his computer drive. Strahan also
received and possessed Genesys' confidential information
and trade secrets and used this information to usurp business
for the benefit of Talkdesk. Id. at 19-20.
February 15, 2019, Genesys initiated this lawsuit (Filing No.
1). On July 2, 2019, Genesys filed a Second Amended
Complaint, which is the operative complaint (Filing No. 89).
In the Second Amended Complaint, Genesys requests injunctive
relief and damages for the Defendants' misappropriation
of trade secrets, breach of contract, and tortious
interference with contract among other things. On July 11,
2019, the Defendants filed the instant Motion to Dismiss
(Filing No. 97), arguing a lack of personal jurisdiction and
a failure to state a claim for relief. Alternatively, the
Defendants ask the Court to transfer the case to the Northern
District of California.
Rule of Civil Procedure 12(b)(2) allows a defendant to move
to dismiss a complaint where there is a “lack of
personal jurisdiction” over the defendant. Fed.R.Civ.P.
12(b)(2). When deciding a Rule 12(b)(2) motion, the court
accepts the factual allegations in the complaint and draws
all reasonable inferences in favor of the plaintiff if they
weigh on the issue of personal jurisdiction. Int'l
Medical Group, Inc. v. American Arbitration Ass'n,
149 F.Supp.2d 615, 623 (S.D. Ind. 2001). But where a
complaint consists of conclusory allegations unsupported by
factual assertions, the complaint fails even under the
liberal standard of Rule 12(b). Id.
considering a motion to dismiss for lack of personal
jurisdiction, the court examines the sufficiency of the
complaint, not the merits of the lawsuit. Id. The
complaint does not need to include factual allegations
concerning personal jurisdiction, but if the defendant moves
to dismiss the action under Rule 12(b)(2), the plaintiff
bears the burden of demonstrating the existence of personal
jurisdiction. Purdue Research Found. v.
Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir.
2003). The court may consider affidavits and all other
documentary evidence that have been filed, and any conflicts
must be resolved in favor of the plaintiff as the non-moving
party. Int'l Medical Group, 149 F.Supp.2d at
level of the plaintiff's burden to show personal
jurisdiction depends on whether an evidentiary hearing has
been held. Purdue Research, 338 F.3d at 782. Where a
hearing has been conducted, the plaintiff must show by a
preponderance of the evidence that personal jurisdiction
exists. Id. Where no hearing is conducted and the
motion to dismiss is decided solely on written materials, the
plaintiff must establish a prima facie case that
personal jurisdiction exists. Id.
Rule of Civil Procedure 12(b)(6) allows a defendant to move
to dismiss a complaint that has failed to “state a
claim upon which relief can be granted.” Fed.R.Civ.P.
12(b)(6). When deciding a motion to dismiss under Rule
12(b)(6), the Court accepts as true all factual allegations
in the complaint and draws all inferences in favor of the
plaintiff. Bielanski, 550 F.3d at 633. However,
courts “are not obliged to accept as true legal
conclusions or unsupported conclusions of fact.”
Hickey v. O'Bannon, 287 F.3d 656, 658 (7th Cir.
complaint must contain a “short and plain statement of
the claim showing that the pleader is entitled to
relief.” Fed.R.Civ.P. 8(a)(2). In Bell Atlantic
Corp. v. Twombly, the United States Supreme Court
explained that the complaint must allege facts that are
“enough to raise a right to relief above the
speculative level.” 550 U.S. 544, 555 (2007). Although
“detailed factual allegations” are not required,
mere “labels, ” “conclusions, ” or
“formulaic recitation[s] of the elements of a cause of
action” are insufficient. Id.; see also
Bissessur v. Ind. Univ. Bd. of Trs., 581 F.3d 599, 603
(7th Cir. 2009) (“it is not enough to give a threadbare
recitation of the elements of a claim without factual
support”). The allegations must “give the
defendant fair notice of what the . . . claim is and the
grounds upon which it rests.” Twombly, 550
U.S. at 555. Stated differently, the complaint must include
“enough facts to state a claim to relief that is
plausible on its face.” Hecker v. Deere &
Co., 556 F.3d 575, 580 (7th Cir. 2009) (citation and
quotation marks omitted). To be facially plausible, the
complaint must allow “the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (citing Twombly, 550 U.S. at 556).
Defendants seek dismissal of this action based on a lack of
personal jurisdiction over Talkdesk, Morales, Hertel, and
Manno and, alternatively, based on the failure to state a
claim for which relief can be granted. The Defendants also
alternatively ask the Court to transfer the case to the
Northern District of California.
another district court within the Seventh Circuit succinctly
noted, “jurisdiction is a threshold requirement that
must be satisfied before a court can pass judgments on the
merits.” Rawlins v. Select Specialty Hosp. of Nw.
Ind., Inc., 2014 U.S. Dist. LEXIS 57076, at *4 (N.D.
Ill. Apr. 23, 2014). “The court must satisfy itself
that it can exercise personal jurisdiction over [defendants]
before it addresses the merits of the case. Accordingly, the
court must consider [the] motion to dismiss for lack of
personal jurisdiction under Rule 12(b)(2) before it can
address the Rule 12(b)(3) and Rule 12(b)(6) motions.”
Id. at *5. “If the court determines that it
lacks personal jurisdiction over [defendants], it would be
improper for this court to reach the merits of the
case.” Id. “‘Without jurisdiction
the court cannot proceed at all in any cause. Jurisdiction is
the power to declare the law, and when it ceases to exist,
the only function remaining to the court is that of
announcing the fact and dismissing the cause.'”
United States v. Rachuy, 743 F.3d 205, 211 (7th Cir.
2014) (quoting Steel Co. v. Citizens for a Better
Env't, 523 U.S. 83, 94 (1998)). For this reason, the
Court first reviews the Defendants' Motion to Dismiss
under Rule 12(b)(2).
Personal Jurisdiction over Talkdesk, Morales, Hertel, and
jurisdiction is exercised on the basis of a federal statute
that does not authorize nationwide service of process, the
law requires a federal district court to determine if a court
of the state in which it sits would have personal
jurisdiction.” Philpot v. Dot Com Plus, LLC,
2015 U.S. Dist. LEXIS 105016, at *2-3 (S.D. Ind. Aug. 11,
2015) (citation omitted). Indiana's long-arm statute,
Indiana Trial Rule 4.4(A), governs personal jurisdiction in
Indiana. “Although Rule 4.4(A) enumerates eight bases
for the assertion of jurisdiction on the basis of a
defendant's actions, the rule also includes a provision
that ‘a court of this state may exercise jurisdiction
on any basis not inconsistent with the Constitutions of this
state or the United States.'” Annie Oakley
Enters. v. Sunset Tan Corporate & Consulting, LLC,
703 F.Supp.2d 881, 886 (N.D. Ind. 2010) (quoting Ind. R. Tr.
P. 4.4(A)). Therefore, a court has personal jurisdiction to
the limit allowed by the Federal Due Process Clause.
LinkAmerica Corp. v. Cox, 857 N.E.2d 961, 966-67
court to have personal jurisdiction over a defendant, the Due
Process Clause requires that the defendant have
“certain minimum contacts with [the state] such that
the maintenance of the suit does not offend
‘traditional notions of fair play and substantial
justice.'” Int'l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945) (quoting
Milliken v. Meyer, 311 U.S. 457, 463 (1940)).
federal due process standards, personal jurisdiction can be
either specific or general. “If the defendant's
contacts with the state are so ‘continuous and
systematic' that the defendant should reasonably
anticipate being haled into the courts of that state for any
matter, then the defendant is subject to general
jurisdiction.” LinkAmerica, 857 N.E.2d at 967
(citing Helicopteros Nacionales de Colombia, S.
A. v. Hall, 466 U.S. 408, 415 n.9 (1984)). “If the
defendant's contacts with the forum state are not
‘continuous and systematic,' specific jurisdiction
may be asserted if the controversy is related to or arises
out of the defendant's contacts with the forum
state.” Id. (citing Helicopteros, 466
U.S. at 418 & n.8). “Specific jurisdiction requires
that the defendant purposefully availed itself of the
privilege of conducting activities within the forum state so
that the defendant reasonably anticipates being haled into
court there.” Id. (citing Burger King
Corp. v. Rudzewicz, 471 U.S. 462, 474-75 (1985)).
jurisdiction exists when a defendant has deliberately
directed its activities toward the forum and the cause of
action results from alleged injuries that arise out of or
relate to those activities. See Burger King, 471
U.S. at 472. In Burger King, the Supreme Court
explained the ...