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Gritzuk v. GCA Education Services, Inc.

United States District Court, D. South Carolina, Charleston Division

August 30, 2016

Stephen Gritzuk, Plaintiff,
v.
GCA Education Services, Inc., GCA Services Group, Inc., and Erie Acquisition Holdings, Inc., Defendants.

          ORDER

          PATRICK MICHAEL DUFFY United States District Judge.

         This matter is before the Court on Defendants GCA Education Services, Inc. and GCA Services Group, Inc.'s (collectively “GCA”) joint motion to transfer (ECF No. 18). For the reasons set forth herein, GCA's motion is denied.

         BACKGROUND

         This action arises out of a dispute over non-compete provisions contained in Plaintiff Stephen Gritzuk's employment agreement with GCA Services Group, Inc. and in his stock option agreement with Defendant Erie Acquisition Holdings, Inc. GCA is in the business of providing custodial and facilities management services. Gritzuk, a South Carolina resident, worked for GCA in operations and facilities management for specific sites in the educational sector, and he assisted with GCA's sales in that sector as well.

         In early July 2015, Gritzuk notified GCA that he intended to resign. After working two more weeks for GCA, he resigned on July 23. After his resignation, Gritzuk was hired by Harvard Maintenance, Inc., which is also in the business of providing facilities management services. Gritzuk alleges that his employment with Harvard Maintenance does not involve any work in educational sector facilities.

         In February 2016, Gritzuk received a letter from an attorney representing GCA stating that his employment with Harvard Maintenance violated the terms of his employment and stock option agreements. In this action, Gritzuk seeks a declaratory judgment that the provisions at issue are invalid and that he need not terminate or modify his employment at Harvard Maintenance.

         PROCEDURAL HISTORY

         Defendants removed this case on April 7, 2016. A week later, Erie filed a motion to dismiss for lack of personal jurisdiction. Gritzuk responded on May 2, and Erie replied on May 12. Then, on May 17, GCA filed a motion to transfer, to which Gritzuk responded on June 3. GCA filed a reply on June 13. The Court issued an order on June 28 granting Erie's motion to dismiss for lack of personal jurisdiction and requesting supplemental briefing on GCA's motion to transfer. Gritzuk filed his supplemental brief on July 5 and GCA filed their supplemental brief on July 6. Both sides filed their responses on July 11. Accordingly, this matter is now ripe for consideration.

         LEGAL STANDARD

         “Rule 19 of the Federal Rules of Civil Procedure sets forth a two-step inquiry for courts to determine whether a party is necessary and indispensable.” Home Buyers Warranty Corp. v. Hanna, 750 F.3d 427, 433 (4th Cir. 2014) (internal quotation marks omitted). “The first question under Rule 19(a) is whether a party is necessary to a proceeding because of its relationship to the matter under consideration.” Id. (quoting Teamsters Local Union No. 171 v. Keal Driveaway Co., 173 F.3d 915, 917 (4th Cir. 1999) (internal quotation marks omitted)). “Second, if the party is necessary . . . the court must decide under Rule 19(b) whether the proceeding can continue in that party's absence.” Id. (quoting Keal, 173 F.3d at 917-18 (internal quotation marks omitted)).

         “Rule 19 is not to be applied as a ‘procedural formula.'” Id. (quoting Provident Tradesman Bank & Trust Co. v. Patterson, 390 U.S. 102, 119 n.16 (1968)). “Decisions must be made pragmatically, in the context of the substance of each case.” Id. (quoting Patterson, 390 U.S. at 199 n.16) (internal quotation marks omitted). Additionally, “courts must take into account the possible prejudice ‘to all parties, including those not before it.'” Id. (quoting Owens-Ill., Inc. v. Meade, 186 F.3d 435, 441 (4th Cir. 1999)). “While dismissal of a case is a ‘drastic remedy that should be employed only sparingly, ' it is required if a non-joined party is both necessary and indispensable.” Id. (quoting Keal, 173 F.3d at 918).

         DISCUSSION

         Before addressing GCA's motion to transfer, the Court must examine whether this case can continue in Erie's absence. The Court notes at the outset that this case does not present a prototypical Rule 19 issue. Here, all three relevant parties were initially a part of the current litigation. However, Erie thereafter moved to dismiss for lack of personal jurisdiction, and the Court granted that motion. As a result of Erie's dismissal, the Court became concerned that there might be an indispensable-party issue pursuant to Rule 19. See Republic of Philippines v. Pimentel, 553 U.S. 851, 861 (2008) (“A court with proper jurisdiction may also consider sua sponte the absence of a required person and dismiss for failure to join.”).

         Because Erie cannot be joined, the Court must first determine whether Erie is a necessary party. The advisory ...


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