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Genis v. Campbell

Superior Court of Massachusetts, Suffolk

January 9, 2018

Alfred R. GENIS
v.
Martin CAMPBELL et al.

          File Date: January 10, 2018

          MEMORANDUM OF DECISION AND ORDER ON DEFENDANTS’ MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION

          Janet L. Sanders, Justice of the Superior Court

         Alfred R. Genis commenced this action against Martin Campbell (Martin), David Campbell (David), and Pure Crystal, LLC (Pure Crystal), asserting that they, together with other unknown individuals, improperly disclosed his confidential information and trade secrets and failed to provide him equity in Pure Crystal as required by a 2013 agreement.[1] The matter is now before the Court on the named defendants’ motion to dismiss for lack of personal jurisdiction pursuant to Mass.R.Civ.P. 12(b)(2). For the reasons that follow, the motion is DENIED.

         BACKGROUND

         The following is taken from the affidavit that Genis filed in opposition to defendants’ motion, and the affidavits submitted by defendants to the extent they are not disputed by Genis or contradict his affidavit.

         Genis, a resident of Massachusetts, is one of the world’s leading diamond laboratory scientists. In May 2013, Genis delivered a professional paper at the International Technical Diamond Conference concerning the mass production of diamonds using chemical vapor deposition (CVD) technology for industrial applications. Martin, who owned Pure Crystal with his brother David, learned of this presentation and in early September 2013, reached out to Genis seeking assistance with Pure Crystal’s efforts to grow laboratory diamonds. The two agreed to meet to discuss a possible business relationship.

         On September 11, 2013, Martin flew from Ohio, where he and his brother reside, to Boston and met with Genis. At their meeting, Martin explained that Pure Crystal had purchased two microwave-powered plasma reactors capable of producing diamonds but lacked the software necessary to grow diamonds suitable for commercialization. He hoped Genis could help Pure Crystal create that software. Genis expressed interest in working with Martin but noted that he was more interested in developing diamonds utilizing direct-current (DC) reactor technology, which he believed to be superior. Genis also expressed that he wanted to keep Boston as his primary workplace because he had recently been diagnosed with throat cancer and needed to remain in the city for treatment. Martin indicated that Genis could remain in Boston and that in exchange for Genis’s assistance and technology, he would help Genis build a DC reactor. Following the meeting, they spoke by telephone on one or two more occasions in September to sort out the details of their business relationship, and Genis began providing the information Pure Crystal needed to grow diamonds in its reactors. That month, Genis received a paycheck from Pure Crystal.

         On October 4, 2013, Genis met with Martin and David at Pure Crystal’s office in Ohio and the three executed an agreement (October 2013 Agreement) that memorialized the discussions between Martin and Genis. The October 2013 Agreement provided that Genis would be paid $12, 500 per month by an unnamed entity owned by Martin and David, would be made Pure Crystal’s Chief Technology Officer (CTO), and would receive 25 percent of the shares of Pure Crystal for his services as CTO. The Agreement further provided that they would form two companies. The first, identified as "Reactor Building Company," would support Genis’s development of a DC reactor for purchase by Pure Crystal. Genis would own 45 percent of the company and Pure Crystal would pay Genis’s design and construction expenses. The second company, identified as "Diamond Application Company," would support the development and sale of technology for use of diamonds in non-gem applications. Genis would own 55 percent of the shares of this company. After executing the Agreement, Genis returned to Boston and continued his work for Pure Crystal. He received additional paychecks from Campbell Technology Resources, which was another company owned by Martin and David.

         In mid-October 2013, Martin and David formed a new Ohio-based company called Kimberlite Applied Science, LLC (Kimberlite) to serve as the Reactor Building Company identified in the October 2013 Agreement. Approximately a month later, Martin emailed Genis an Employment Agreement and a related Exclusive License Agreement for signature by Genis and Kimberlite, which Genis executed.[2] The Employment Agreement provided that Genis would be CTO of Kimberlite, receives an annual base salary of $150, 000, and holds a 45 percent equity interest in Kimberlite. In his role as CTO, Genis was required to "devote [his] full business time, attention, skill and energy to the business and affairs of [Kimberlite]," but would have the "right" to "act as an officer of (i) Pure Crystal, LLC ... in accordance with an employment agreement to be executed by Genis and Pure Crystal, and (ii) a limited liability company which will be an affiliate of [Kimberlite] and will be in the business of developing, marketing and/or selling Chemical Vapor Deposition single crystal diamond for non-gem applications [i.e., the Diamond Application Company referred to in the October 2013 Agreement] in accordance with an employment agreement to be executed by Genis and such company." Employment Agreement at ¶ 1.2. At some point thereafter, Kimberlite started paying Genis’s salary from its Ohio bank account.

         From October 2013 until early 2016, Genis worked full-time, mostly from his Massachusetts home, developing the technology for growing diamonds in Pure Crystal’s microwave reactors as well as developing a DC reactor for Kimberlite. In connection with his work for Pure Crystal, Genis engaged in hundreds of telephone and email communications with Martin and David about technical issues related to Pure Crystal’s microwave reactors. He also communicated extensively with David King and Larry Eckhart, both Pure Crystal engineers, by email and telephone. Genis participated in all these communications from his home in Massachusetts.

         In addition to communicating by telephone and email, Genis also spent significant time at his home analyzing samples of diamonds grown in Pure Crystal’s microwave reactors in Ohio. These samples were sent on a regular basis to Genis between 2014 and 2016. Genis reported his results by telephone and email and provided recommendations to improve the product. Additionally, during this time period, Genis arranged for the purchase of equipment and supplies for use in Pure Crystal’s microwave reactors. As a result of Genis’s work, Pure Crystal began producing high grade diamonds.

         In connection with his work for Kimberlite, Genis partnered with CVD Equipment Corporation (CEC), a company based in New York, to construct the DC reactor. Martin and other individuals from Pure Crystal were not heavily involved in the construction process. Martin primarily approved the purchase orders and paid CEC’s invoices. In late summer of September 2015, however, the development of the DC reactor encountered some problems and Martin instructed Genis to have CEC ship the DC reactor from New York to Ohio, even though CEC was in the process of resolving the issue at its New York facility.

         In January 2016, during a visit to Ohio, Martin informed Genis that he was negotiating the sale of Pure Crystal and its technology for $100 million. He told Genis that he should return to, and plan on remaining, in Boston to assist the prospective buyer’s diligence. Genis did as requested and began preparing presentation materials. During this time, Genis continued to provide technical assistance to Pure Crystal to help increase production load sizes.

         In late 2016, Genis learned that the "word on the street" was that Martin was sharing or selling the technology Genis had developed for Pure Crystal to others. Genis confronted Martin about this and their relationship became strained. Around this time, Martin put the development of the DC reactor on hold and told Genis that he and David were going to stop paying his salary through Kimberlite. Martin, however, ...


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