St. Jude Medical S.C., Inc. v. Suchomel

Background

St. Jude Medical S.C., Inc. sued its former employee, Lucas Suchomel, for breach of contract. St. Jude alleged that Suchomel violated a two-year employment agreement by resigning before the term ended and beginning work for Farapulse, a competitor. St. Jude sought actual and compensatory damages of more than $1.5 million.

Suchomel signed an underlying Employee Agreement with Abbott Laboratories on behalf of itself and its subsidiaries. He also signed an Addendum that modified the underlying agreement. The Addendum identified St. Jude, Abbott Laboratories, and Abbott’s subsidiaries, divisions, units, or affiliates collectively as “ABBOTT,” and stated that it was an addendum to the Employee Agreement. It provided for a two-year employment term beginning April 1, 2019, selected Minnesota law, and required disputes to be heard in state or federal court in Ramsey County, Minnesota.

Motion to Dismiss

Suchomel moved to dismiss under Federal Rule of Civil Procedure 12. He argued that St. Jude lacked standing because it was not a party to the contract, that the court lacked personal jurisdiction over him because the forum-selection clause was invalid, and that St. Jude failed to plausibly state a breach-of-contract claim under California law.

Standing

The court denied the Rule 12(b)(1) portion of the motion. It read the Employee Agreement and Addendum together and concluded that the Addendum’s plain language made St. Jude a party to the contract. Because St. Jude was a contract party, the court held that it had standing to bring a breach-of-contract claim. The court noted that whether St. Jude or Abbott was Suchomel’s actual employer was a separate question that it did not need to decide.

Personal Jurisdiction

The court denied the Rule 12(b)(2) portion of the motion. The Addendum’s forum-selection clause required disputes arising from the agreements to be heard in Ramsey County, Minnesota. The court found the clause valid and enforceable. It rejected Suchomel’s arguments that Minnesota lacked a sufficient connection to the dispute and that enforcing the clause violated Minnesota public policy. Because Suchomel agreed to the valid forum-selection clause, the court held that he consented to personal jurisdiction in Minnesota.

Choice of Law and Failure to State a Claim

The court held that the Addendum’s Minnesota choice-of-law provision was valid and enforceable. It found that applying Minnesota law was constitutionally permissible because St. Jude was a party to the agreement and had significant contacts with Minnesota. The court also rejected Suchomel’s argument that the choice of Minnesota law was intended to evade California law.

The court denied the Rule 12(b)(6) portion of the motion because Suchomel’s failure-to-state-a-claim arguments relied entirely on California law, while Minnesota law governed the dispute. The court therefore did not reach the substance of those arguments under California law.

Disposition

The court ordered that Suchomel’s Motion to Dismiss was DENIED. Judge John R. Tunheim did not dismiss the action at this stage, and the opinion did not decide the ultimate merits of St. Jude’s breach-of-contract claim.