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INTEC USA LLC v. ENGLE

December 13, 2005.

Intec USA LLC, Plaintiff,
v.
Jonathan Engle, IBEX Technologies Limited, IBEX Industries Limited, IBEX Industries PTY Limited, IBEX Technologies PTY Limited, IBEX Thermal Processing Limited, IBEX DO Brazil, LTDA, and Illum Limited, Defendants.



The opinion of the court was delivered by: SUZANNE CONLON, District Judge

MEMORANDUM OPINION AND ORDER

Intec USA, LLC ("Intec") sues IBEX Technologies Limited, IBEX Industries Limited, IBEX Industries PTY Limited, IBEX Technologies PTY Limited, IBEX Thermal Processing Limited, IBEX DO Brazil, LTDA, Illum Limited, (collectively, "IBEX entities") and Jonathan Engle ("defendants") for tortious interference with contract (Count I), breach of contract (Count II), unfair trade practices (Count III), and civil conspiracy (Count IV). Intec seeks damages and injunctive relief. Defendants move to dismiss on the basis of forum non conveniens.

BACKGROUND

  Intec is a North Carolina limited liability company based in Durham County, North Carolina. Compl. ¶ 1. Intec is in the business of marketing, manufacturing and installing materials handling systems or systems that sort food products in order to change and stabilize the products' temperatures. Intec Resp. at p. 2. Jonathon Engle is a resident of New Zealand. Compl. at ¶ 2. IBEX Industries Limited, IBEX Technologies Limited, and Illum Limited are foreign companies with their principal places of business in New Zealand. Id. at ¶¶ 4-5, 10. IBEX Industries Pty Limited and IBEX Technologies Pty Limited are foreign companies with their principal places of business in Australia. Id. at ¶¶ 6-7. IBEX Thermal Processing Limited is a foreign company with its principal place of business in the United Kingdom. Id. at ¶ 8. IBEX Do Brazil LTDA is a foreign company with its principal place of business in Brazil. Id. at ¶ 9. Intec alleges that Jonathan Engle and his father, Raph Engle, own and control the IBEX entities. Id. at ¶ 12. It further alleges that defendants regularly do business in the United States. Id. at ¶¶ 2-10.

  Raph Engle, a citizen of New Zealand, developed materials handling technology for food products. Intec Resp. at p. 3. In the late 1980's Raph Engle came to the United States and created Intec Corporation. Id. In 1997, Raph Engle sold two-thirds of his business to Tim Flynn and John Smith, resulting in Intec. Id. The terms of the sale prohibited Raph from competing with Intec in the materials handling industry. Id. Following the sale, Raph Engle returned to New Zealand. In 2001, he retired from Intec. Id.

  Intec contends that while Raph Engle was an employee and officer of Intec, he began to compete with Intec and to divert business for his own benefit. Id. Specifically, Intec alleges Raph Engle transferred its trade secrets, customer contacts and technology to the IBEX entities while he was employed by Intec. Id. It alleges Raph and Jonathan Engle created the IBEX entities to compete with Intec. Id. Intec contends defendants improperly use its technology and trade secrets; contact Intec customers; disparage Intec's name; and pass off Intec technology as their own. Id. at pp. 3-5.

  In 2003, Intec initiated arbitration against Raph and Jonathon Engle. The arbitration was settled through two agreements: an award on agreed terms and a letter agreement. Id. at pp. 3-4. Raph Engle signed the award on agreed terms. Id. at p. 4. Defendants were not party to the award on agreed terms but Jonathon Engle signed the letter agreement in New Zealand on behalf of the IBEX entities. Id. at p. 4. Both agreements contain choice of law provisions stating that North Carolina law governs the terms of the agreements. The letter agreement states it "shall be governed by and construed, interpreted, and enforced in accordance with the laws of the State of North Carolina, without regard to principles of conflicts of law." Compl. at Ex. 2, ¶ 6. The agreements also contain promises by the Engles not to compete against Intec. Id.

  Intec contends defendants were aware of Raph Engle's contractual obligations and hired him in violation of the non-competition provisions. Compl. at ¶ 25. Intec originally filed suit in North Carolina against defendants as well as Raph Engle alleging claims for breach of contract, tortious interference, and unfair trade practices. Intec Resp. at p. 6. A magistrate judge in the North Carolina District Court recommended dismissal of the IBEX entities and Jonathon Engle based on lack of personal jurisdiction. Id. That suit remains pending in the Middle District of North Carolina, Intec USA. v. Jonathon Engle, et al., No. 05 C 2031. Intec also initiated an arbitration against Raph Engle in North Carolina.

  DISCUSSION

  The court may dismiss a case on forum non conveniens grounds when "it best serves the convenience of the parties and the ends of justice." Kamel v. Hill-Rom Company, Inc., 108 F.3d 799, 802 (7th Cir. 1997). A forum non conveniens analysis take place in two steps. First, an adequate forum must be available. Id.; In re Bridgestone/Firestone, Inc., 420 F.3d 702, 704 (7th Cir. 2005). Second, the court must balance the private interests of the litigants and the public interests of the forum to determine the superior venue. In re Bridgestone/Firestone, Inc, 420 F.3d at 704; Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947). The court has substantial flexibility in considering the relative flexibility of these factors. Wilson v. Humphreys (Cayman) Ltd., 916 F.2d 1239, 1245 (7th Cir. 1990). Dismissal is proper if the balance of conveniences suggests the chosen forum would unnecessarily burden the defendant or the court. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 256 (1981).

  A. Adequacy of alternative forum

  Defendants contend New Zealand is the superior forum for this case. An alternative forum is available if all parties are amenable to process and are within the forum's jurisdiction. Kamel, 108 F.3d at 803. In addition, an adequate forum mandates the parties will not be deprived of all remedies or treated unfairly. Id. The IBEX entities authorize Jonathon Engle to accept service of process in New Zealand on their behalf. Defendants Mem. at p. 6. Defendants also agree to submit to jurisdiction in New Zealand for the purpose of this lawsuit. Id. Accordingly, New Zealand is an available forum for this action. Kamel, 208 F.3d at 803. An alternative forum is inadequate only in rare circumstances where "the remedy provided by the alternative forum is so clearly inadequate or unsatisfactory that it is no remedy at all." Piper Aircraft Co. v. Reyno, 454 U.S. at 254 n. 22. Defendants state that New Zealand has a sophisticated legal system, similar to the United States. New Zealand had repeatedly been found to be an adequate forum. Luek v. Sundstrand Corp., 236 F.3d 1137 (9th Cir. 2001) (adequate remedy is available in New Zealand); Ashley v. Dow Corning Corp., 887 F. Supp. 1469, 1475 (N.D. Ala. 1995) (New Zealand court system is an adequate alternative forum); Stonnell v. Int'l Harvester Co., 478 N.E.2d 518 (Ill.App.Ct. 1985) (New Zealand provides adequate remedy). New Zealand provides an adequate forum.

  B. Private interest factors

  Private interests include ease of access to proof; witness convenience; availability of compulsory process for unwilling witnesses; the costs associated with witness attendance; and "all other practical problems that make trial of ...


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