SingularDTV GmbH v. LeBeau

Background

SingularDTV GmbH alleged that LeBeau and Jackson improperly continued using its “SingularDTV” mark after their business relationship ended and interfered with its email systems and confidential information. SingularDTV asserted claims for trademark infringement and dilution under the Lanham Act, violations of the Computer Fraud and Abuse Act (CFAA), and violations of the Defend Trade Secrets Act (DTSA).

SingularDTV and Breaker LLC entered a 2017 Service and Development Agreement. The Agreement required Breaker to provide services, assigned intellectual-property rights developed by Breaker to SingularDTV, restricted Breaker from performing work for itself or others, and allowed Breaker to use the mark in connection with work performed under the Agreement. The Agreement provided that Swiss law governed and that “[t]he ordinary courts of the city of Zug, Switzerland, have exclusive jurisdiction for any disputes arising out of or in connection to” the Agreement.

The opinion states that Jackson was Breaker’s sole member and director, LeBeau was its de facto CEO, and both exercised total control over Breaker. After LeBeau was terminated as SingularDTV’s CEO and the Agreement was terminated, SingularDTV alleged that the defendants disabled its email services, accessed or forwarded certain emails, misappropriated sensitive information, and continued using the mark for Breaker projects.

Motion and legal standard

The defendants moved to dismiss under Federal Rules of Civil Procedure 12(b)(1), 12(b)(3), and 12(b)(6). The court treated the Rule 12(b)(3) motion based on the foreign forum-selection clause as a motion to dismiss for forum non conveniens, a doctrine allowing a court to dismiss when the parties agreed that another forum should hear the dispute.

The court applied a four-part analysis: whether the clause was reasonably communicated, whether it was mandatory or permissive, whether it covered the parties and claims, and whether the party opposing enforcement showed that enforcement would be unreasonable or unjust or resulted from fraud or overreaching. Because the parties had not briefed Swiss law, the court applied general American contract-law principles and federal precedent to interpret the clause’s scope. Federal law governed the clause’s enforceability.

Rulings

The court ruled that the defendants could invoke the forum-selection clause even though they were not signatories to the Agreement. It found that their close relationship with Breaker, their control over Breaker, their connection to the conduct at issue, and their stated consent to jurisdiction in Switzerland made enforcement of the clause foreseeable.

The court also ruled that the clause covered SingularDTV’s claims. It characterized the clause as broad because it covered disputes arising “out of” or “in connection to” the Agreement. The court held that the trademark claims were connected to the Agreement because Breaker’s relationship with SingularDTV was based on that contract, Breaker had been authorized to use the mark while performing contractual work, and the alleged continued use followed termination of that authorization.

The court reached the same conclusion for the CFAA and DTSA claims. It reasoned that Breaker’s relationship with the third-party email provider was created to perform work under the Agreement and that the Agreement imposed duties concerning SingularDTV’s confidential information. The alleged interference with email access and alleged misappropriation of information were therefore sufficiently connected to the Agreement.

Finally, the court held that SingularDTV had not rebutted the presumption that the forum-selection clause was enforceable. It rejected SingularDTV’s argument that the defendants had to prove that Swiss courts were an adequate alternative forum, explaining that, when a contract contains a valid forum-selection clause, the party opposing the chosen forum bears the burden of showing that enforcement is unwarranted. The court stated that SingularDTV had made no attempt to rebut that presumption.

Disposition

The court granted the defendants’ motion to dismiss the complaint on forum non conveniens grounds. It directed the Clerk of Court to close the motion at Docket 91 and close the case. Because the court enforced the forum-selection clause, it did not consider the defendants’ alternative motions under Rules 12(b)(1) and 12(b)(6).