United States District Court, W.D. Arkansas, Fayetteville Division
MEMORANDUM OPINION AND ORDER
TIMOTHY L. BROOKS UNITED STATES DISTRICT JUDGE
before the Court are Defendants Cuker Interactive, LLC's
("Cuker") and Adel Atalla's Motion to Dismiss,
or, in the Alternative, Transfer (Doc. 7) and Brief in
Support (Doc. 8), Plaintiff Henry Law Firm's
("HLF") Response in Opposition (Doc. 11), and
Defendants' Reply (Doc. 12). For the reasons set forth
below, the Motion is DENIED.
to the Complaint (Doc. 1), HLF is a sole proprietorship with
its principal place of business in Fayetteville, Arkansas.
Defendant Cuker is a California limited liability company
that hired HLF to represent it in federal litigation in the
Western District of Arkansas, Fayetteville Division. The
undersigned presided over that case, and is therefore very
familiar with it. Defendant Atalla is President of Cuker and
personally guaranteed Cuker's financial obligations to
HLF under the legal services contract. Like Cuker, Mr. Atalla
is a citizen of California. The Court therefore has
jurisdiction over this matter pursuant to 28 U.S.C. §
1332, due to the fact that there is complete diversity of
citizenship among the parties, and the amount in controversy
exceeds $75, 000.00.
single Count in the Complaint alleges that Cuker now refuses
to pay HLF the legal fees that HLF earned in the underlying
lawsuit. It is necessary for the court to provide a little
background on that lawsuit in order to place the case at bar
in context. Cuker was sued by Wal-Mart Stores, Inc.
("Walmart") in the Circuit Court of Benton County,
Arkansas, in July of 2014. Cuker and Walmart had entered into
a consulting agreement in which Walmart had agreed to pay
Cuker a fixed fee in exchange for Cuker developing certain
functional aspects of Walmart's ASDA Groceries website.
The parties soon disagreed about such things as deadlines,
when installment payments were due, and whether certain
assignments were included in the scope of the contract.
Eventually, the parties' relationship soured to the point
that Walmart sued Cuker for breach of contract and
declaratory judgment. Cuker then removed the case to this
Court in August of 2014, and the matter was assigned Case
Number 5:14-CV-5262. By September of 2014, Cuker had filed an
answer to the complaint and six counterclaims against Walmart
for declaratory judgment, fraudulent inducement,
misappropriation of trade secrets, breach of contract, unjust
enrichment, and injunctive relief. Cuker also admitted in its
answer "that this Court has personal jurisdiction of the
parties and that this Court is a proper venue for this
case." Case Number 5:14-CV-5262, Doc. 9, p. 1.
Jurisdiction and venue were also admitted in Cuker's
counterclaims. See Id. at 11.
two years after the Walmart litigation began, Cuker's
legal team resigned from the case. Cuker's attorneys from
the law firm of Pillsbury Winthrop Shaw Pittman, LLP
("Pillsbury"), and from the law firm of Shults
& Brown, LLP, filed motions to withdraw, explaining that
Cuker had failed to comply with its obligations under the two
firms' legal services agreements. On February 8, 2016,
the Court allowed the attorneys to withdraw, but directed
Cuker to secure new counsel no later than March 25, 2016.
See Doc. 78.
at that point that Arkansas attorney Mark Henry of HLF was
hired to represent Cuker in the Walmart case. Mr. Henry
entered his appearance on Cuker's behalf on March 21,
2016, having signed a legal services contract with Cuker and
Mr. Atalla (as Cuker's personal guarantor) just the day
before. See No. 5:18-CV-5066, Doc. 1, pp. 6-8. The Walmart
litigation proceeded from there, with HLF taking the lead
role in litigating the case on Cuker's behalf. After a
bitter and contentious period of discovery, followed by
cross-motions for summary judgment, the case was finally
ready for trial on April 10, 2017, nearly three years after
the lawsuit commenced.
conclusion of the two-week-long trial, the jury returned a
verdict in Cuker's favor on its counterclaims and awarded
it a total of $12, 438, 665.00 in damages. The Court
personally observed that Mr. Henry acted as lead counsel to
Cuker during the trial, just as he had in the year preceding
trial. See also No. 5:18-CV-5066, Doc. 89-1, p. 2.
Once the trial was over, Walmart and Cuker entered into a
joint stipulation concerning Walmart's liability on one
of Cuker's counterclaims. This joint stipulation had the
effect of reducing the total jury award to Cuker to $10, 197,
065.00. See No. 5:14-CV-5262, Doc. 483, p. 9.
Walmart then filed a motion for judgment as a matter of law
under Federal Rule of Civil Procedure 50(b), and Cuker filed
a motion for attorney's fees and costs, as well as a
request for sanctions against Walmart. The Court ruled on all
post-trial motions in an omnibus order entered on March 31,
2018, see Id. at Doc. 524, granting in part and
denying in part Walmart's Rule 50(b) motion and further
reducing Cuker's damages award to $745, 021.00, see
Id. at Doc. 525. The Court granted Cuker's motion
for attorney's fees and costs, finding that Cuker was
entitled to an award of reasonable fees totaling $2, 174,
073.11. Id. at Doc. 524, p. 43.
ruling on Cuker's request for fees in the Walmart case,
the Court observed the following:
In especially complex litigation, or where the parties have
agreed on a particular rate, this Court has approved fees of
up to $350 per hour. Here, both the subject matter and the
legal issues were exceedingly complex, and Cuker's
counsel was among the best prepared that this Court has ever
Id. at Doc. 524, p. 41. The Court also opined that
Cuker's counsel had obtained "excellent
results" for their client, had "substantially
prevailed on the primary contract claims and defenses, "
and were "successful in convincing the jury that [Cuker]
should prevail across the board on its trade secret
claims." Id. at 42.
filed a notice of appeal in the Eighth Circuit as to the
reduction of the jury verdict, among other things. Walmart
then filed a cross-appeal. Those appeals are still awaiting
resolution. In the meantime, HLF filed the instant lawsuit,
alleging that its former client, Cuker, and Cuker's
president, Mr. Atalla, currently refuse to pay HLF's
legal bills for work completed during the Walmart litigation.
See No. 5:18-CV-5066, Doc. 1, p. 4. HLF therefore
demands payment for its share of the legal bills awarded by
the Court: $1, 200, 376.52. In response to HLF's
Complaint, Defendants move to dismiss the case, asserting a
lack of personal jurisdiction over each Defendant, or in the
alternative, they request that the case be transferred to a
district closer to home, the Southern District of California.
and Mr. Atalla are tired of litigating in Arkansas. They
remind the Court that they "just concluded proceedings
here" in the Walmart case, and they have "no desire
to continue litigating matters in this district"
Id. at Doc. 8, p. 1. They attempt to minimize
Cuker's contacts with Arkansas by insisting that
"Cuker's representatives traveled to Arkansas on
just a handful of occasions, including for the two-week
trial, two depositions, and a court-mandated settlement
conference." Id. at 2. They view Mr.
Atalla's contacts with Arkansas as "even less
substantial" than Cuker's, and they appear mystified
as how HLF could think it reasonable to sue Mr. Atalla
personally in this forum. Id. Defendants further
remind the Court that Mr. Atalla "was not a named party
in the Walmart Litigation and was not a client of Plaintiff
during [sic] at any point. Instead, he merely served as
guarantor of the contract between Cuker and Plaintiff."
the Court will review the legal standards governing both
personal jurisdiction and venue. Then the Court will consider
Defendants' request to dismiss, followed by their
alternative request to transfer the case to California.
allege personal jurisdiction, a 'plaintiff must state
sufficient facts in the complaint to support a reasonable
inference that the defendant can be subjected to jurisdiction
within the state.'" Wells Dairy, Inc. v. Food
Movers Int'l,607 F.3d 515, 518 (8th Cir. 2010)
(quoting Dever v. Hentzen Coatings, Inc., 380 F.3d
1070, 1072 (8th Cir. 2004)) (alteration omitted). The Court
"must view the evidence in the light most favorable to
the plaintiff and resolve all factual conflicts in the
plaintiffs favor." Digi-Tel Holdings, Inc. v. Proteq
Telecomm. (PTE), Ltd.,89 F.3d 519, 522 (8th Cir. 1996).
However, the Plaintiff bears the burden of proving sufficient
facts to support a prima facie showing of personal