Advanced Bionics Corp. v. Medtronic, Inc., 29 Cal. 4th 697 (2002)

Mark Stultz was employed in Minnesota as a senior product specialist for Medtronic, a manufacturer of implantable neurostimulation devices, before resigning his employment and going to work for Advanced Bionics Corporation, one of Medtronic’s competitors located in Sylmar, California. Upon accepting employment with Medtronic, Stultz signed a non-competition agreement, which contained a choice-of-law provision invoking the laws of the state in which the employee was last employed by Medtronic. After Stultz arrived in California, he and Advanced Bionics immediately filed a declaratory relief action against Medtronic in California, alleging that the non-compete covenant violated California law. Two days later, Medtronic filed an action in Minnesota against Stultz and Advanced Bionics in which Medtronic succeeded in obtaining an injunction preventing Stultz from working on a competing product at Advanced Bionics. Shortly thereafter, the California court issued an order prohibiting Medtronic from taking any further steps in the Minnesota action. The California Supreme Court reversed the California Court of Appeal’s judgment upholding the trial court’s order restraining the parties in the Minnesota proceeding. The Supreme Court concluded that “enjoining proceedings in another state requires an exceptional circumstance [not present in this case] that outweighs the threat to judicial restraint and comity principles.” The Court further held that the Minnesota action did not divest California of jurisdiction and that “Advanced Bionics remains free to litigate the California action unless and until Medtronic demonstrates to the [trial court] that any Minnesota judgment is binding on the parties.”