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I live in ID and have an old non-compete with a former client in AZ. I have an attorney handling the matter there. I want to preemptively fight it here too since the former client has issued a very threatening cease and desist letter in behalf of their client.

I am doing searches on Rocket Lawyer and other places for such a form but all they present is templates for a non-compete. Obviously I need to know the correct name of the instrument I am supposed to look for so that I can finally get successful search results.

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  • Are you looking to have the former client sign something to cancel the non-compete or waive some rights under it or do you think you can go to court and have it judged inoperative in ID? – George White Jun 30 '20 at 21:11
  • The latter. The former client is getting a tremendous amount of pressure from their own client to stage an expensive legal battle and will not sign anything or do anything to cancel the non-compete. – StartupGuy Jun 30 '20 at 21:26
  • Why do you think whatever you are planning to do will not provoke the legal battle? And do you understand that courts only deal with actual controversies? If you have not been threatened there may not be a controversy. – George White Jun 30 '20 at 22:41
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    You would be looking for a declaratory judgement. From an paper regarding patent law "In MedImmune, the Supreme Court evaluated DJ jurisdiction under a totality-of-the-circumstances test, where there must be “a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant relief.“3 Looking to the totality of the circumstances, courts analyze the contents of a cease-and-desist letter as a key factor—but often not the only factor—in assessing DJ jurisdiction. – George White Jul 1 '20 at 1:58
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    Please include a country tag. – Polygnome Jul 2 '20 at 23:04
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It is possible to file a lawsuit called a declaratory judgment action to determine the validity of a contract when this is disputed.

Often the non-compete would contain express terms stating which state's law would apply and in which court lawsuits could be commenced. In the absence of such a clause, the determination of which state's law and which forum is appropriate would be highly fact specific and is not easy to determine in the abstract.

If the work was done in AZ and then you moved to ID later, an AZ court (either state or under federal diversity jurisdiction) would be appropriate in most cases and AZ law would probably apply. You could be sued in ID in that case, but you probably couldn't initiate a lawsuit yourself in ID against the AZ client.

Procedural matters are generally governed by the law of the forum. In the absence of an express contractual agreement to the contrary, substantive maters are generally governed by the law of the state with the most significant connection to the dispute.

Also, to be clear, actually bringing a declaratory judgment action, as opposed to taking no action and waiting to see if the other side will actually sue, is often a better course of action. But, you and your attorney can confer to decide that.

Finally, a declaratory judgment action is not something that anyone should ever try to file without a lawyer.

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  • AZ is the state of jurisdiction for the agreement which is why I have hired an attorney for that matter. If I can get a favorable DJ in ID though it would make it so the AZ battle would not be worthwhile since I have no assets there of any kind but also it would make a legal battle in AZ pointless then since he would have to get another judgement here after that one to get to any assets here in ID. – StartupGuy Jul 2 '20 at 14:31
  • You seem to think that the DJ in ID would be less hard fought and complicated than a suit in AZ. I do not think that is the case. – George White Jul 3 '20 at 17:54
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    @StartupGuy A judgment or order entered in one state must be honored by every other state without re-litigation of the merits under the full faith and credit clause with procedures simplified under uniform state laws which is a trivial matter. Also, the ID judge would probably decline to get involved if the agreement specifies an AZ forum, or even just AZ law. – ohwilleke Jul 3 '20 at 19:53
  • @ohwilleke, thanks, that's useful information. – StartupGuy Jul 4 '20 at 7:01

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