Plaintiff Fintech Fund, FLP filed an action in federal court in the Southern District of Texas asserting claims under the federal Defend Trade Secrets Act and the Computer Fraud and Abuse Act against Ralph Horne, a citizen of the United Kingdom and CEO of a company to which Fintech had licensed certain financial technology. Fintech claimed that Horne used that relationship to access Fintech’s confidential and proprietary information illegally. Horne moved to dismiss the action (1) for lack of personal jurisdiction and (2) for lack of subject matter jurisdiction and improper venue because the matter was subject to an arbitration agreement.
The court rejected Horne’s personal and subject matter jurisdiction arguments, finding that the court had specific jurisdiction over him based on telephone calls he made and emails he sent as part of his allegedly wrongful conduct to a Fintech partner in Texas, and that it had subject matter jurisdiction because Fintech’s claims were for federal statutory violations. Fintech was less successful on the question of venue, however.
Fintech argued that the dispute was not arbitrable because the arbitration agreement was unenforceable and the claims at issue were not covered by it. Fintech said there was no meeting of the minds as to arbitration, as the relevant contract contained an irreconcilable internal inconsistency; the arbitration provision said that all claims against Horne and his company would be resolved by “arbitration under the London Court of International Arbitration (‘LCIA’) Rules,” while a choice of law provision in the same contract said that the courts of England and Wales would have exclusive jurisdiction over such claims. The court found that this apparent inconsistency could be resolved by interpreting them to require that any non-arbitrable claims and disputes regarding arbitrability be brought before courts in England or Wales, while any arbitrable claims must be submitted for arbitration in London. In either case, the agreed upon forum was in the United Kingdom, not the Southern District of Texas. Finding no justification for refusing to enforce the parties agreed upon forum, the court dismissed the action, leaving the question of arbitrability to be decided, if necessary, by a court in England or Wales. Fintech filed its notice of appeal on the same day that the district court entered its order.
Fintech Fund, FLP v. Horne, Civil Action No. H-18-1125 (S.D. Tex. July 6, 2018)
This post written by Jason Brost.
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