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GREG MANNING AUCTIONS, INC. v. FULMER

August 23, 2005.

GREG MANNING AUCTIONS, INC., Plaintiff,
v.
CARLTON J. FULMER, MATTHEW BENNETT, INC., HARVEY BENNETT, PAULA BENNETT and JOHN DOES 1-10, Defendants.



The opinion of the court was delivered by: JOHN BISSELL, Chief Judge, District

OPINION

This matter comes before the Court on Defendants Carlton J. Fulmer ("Fulmer"), Matthew Bennett, Inc. ("MBI"), Harvey Bennett and Paula Bennett ("the Bennetts") (collectively "Defendants") motion to dismiss Greg Manning Auctions, Inc.'s ("Plaintiff" or "GMA") complaint for improper venue and lack of personal jurisdiction or alternatively, to transfer this matter to the District of Maryland. This Court has jurisdiction over this matter under 28 U.S.C. §§ 1331, 1332,*fn1 1367 and 18 U.S.C. § 1964(c). For the reasons set forth below, venue in the District of New Jersey is proper and Defendants' motion to dismiss the complaint for improper venue and lack of jurisdiction or alternatively, to transfer venue to the District of Maryland pursuant to 28 U.S.C. § 1404(a) is DENIED.

  FACTUAL BACKGROUND

  I. Parties

  Plaintiff GMA is a Delaware corporation with its principal offices located in West Caldwell, New Jersey. (Compl., ¶ 1.)

  Defendant MBI is a corporation with its principal place of business in Baltimore, Maryland. (Id., ¶ 3.)

  Defendant Carlton J. Fulmer was an employee of plaintiff GMA from July 1997 to April 2002. (Id., ¶ 2.) Fulmer became an employee of defendant MB in May 2002. (Id.) He currently resides in Kingsville, Maryland. (Id.)

  Defendants Harvey and Paula Bennett reside in Maryland, are married and are principal stockholders, officers and directors of MBI. (Id., ¶ 4.)

  II. Procedural History

  On May 4, 2004, Plaintiff filed a ten-count complaint*fn2 with this Court. On May 5, 2004 Plaintiff brought an application for an order to show cause seeking a preliminary injunction against Defendants requesting that the Court enjoin and restrain Defendants from utilizing information contained in an allegedly wrongfully obtained, confidential customer list. Plaintiff also requested that this Court issue an order preserving the computers allegedly used by Defendants to convert and meld Plaintiff's customer list into a new list. On June 16, 2004, the Court for reasons stated in its opinion and order denied Plaintiff's motion for a preliminary injunction and vacated temporary restraints. Greg Manning Auctions. Inc. v. Fulmer, Civ. No. 04-2076, slip op. at 11-14 (D.N.J. June 16, 2004).

  Subsequently, on November 4, 2004, Defendants filed a motion to dismiss Plaintiff's complaint for improper venue and lack of personal jurisdiction or alternatively, to transfer this matter to the District of Maryland. Following oral argument of the motion in December 2004 and pursuant to this Court's directive, the parties commenced discovery on the venue and jurisdiction issues.

  III. Factual Background

  Plaintiff GMA has been in the business of auctioning, selling and purchasing stamps since the 1960's. (Compl., ¶ 10). Defendant MB has been one of approximately five principal competitors of GMA for several years. (Id., ¶ 12). Both companies compete with each other to attract merchandise for auction and potential bidders to their auctions. (Id., ¶¶ 13-14).

  For years GMA has continually developed a customer list which it considers its most valuable asset. (Id., ¶ 15; Manning Cert., ¶ 3). Plaintiff claims that the list is worth in excess of $2,000,000.00. (Manning Cert., ¶ 4). Plaintiff contends that the customer list is a trade secret because it contains information about its customers that is not available from outside sources. (Compl., ¶ 16). Specifically, Plaintiff claims that the names, addresses and credit reports of its customers cannot be found in the public domain. (Id.) Additionally, Plaintiff proffers that the alleged wrongfully obtained customer list contains information identifying the customers who provide the highest volume of business and who purchase the greatest amount of stamps. (Manning Second Cert., ¶ 8). Plaintiff contends that the above information was allegedly obtained by Defendants through misappropriation for the purpose of engaging in unfair competition. (Pl.'s Br. at 9).

  Defendant Fulmer was employed by GMA for approximately five years and had access to the alleged confidential customer list. (Compl., ¶ 19). Plaintiff asserts that during his employment Fulmer agreed to abide by the provisions of GMA's employee handbook. (Id., ¶¶ 20-22; Compl., Ex. B). The employee handbook included a provision that any confidential information acquired during the course of employment would not be used for personal gain or the benefit of a third party. (Id., ¶¶ 21-22; Compl., Ex. B). The acknowledgment of receipt of GMA's employee handbook signed by defendant Fulmer, however, states that the handbook is neither a contract nor a legally binding document.*fn3 (Compl., Ex. A).

  GMA claims that most employees were provided access to its computer system because the access was necessary. (Manning Second Cert., ¶ 4). GMA further asserts that Fulmer was required to return to plaintiff any computer system information obtained during his employment upon leaving his position, pursuant to the Employee Handbook. (Id.) In addition, GMA claims that when Fulmer left GMA to work for MBI he copied the customer list and delivered it to MBI. (Id., ¶ 24). GMA alleges that Fulmer engaged in wrongful and tortious conduct in assisting with the melding of GMA's and MBI's customer lists. (Id., ¶ 27). GMA claims that approximately 30% of its customers were added to Defendant MBI's customer list. (Manning Second Cert., ¶ ...


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