Amicus Curiae Brief — IQVIA Inc., Petitioner v. Superior Court of California, Alameda County, et al.

No. 24-867

In the Supreme Court of the

United States

IQVIA INC.,

PETITIONER,

v.

SUPERIOR COURT OF CALIFORNIA, ALAMEDA COUNTY,

ET AL.

ON PETITION FOR WRIT OF CERTIORARI

TO THE COURT OF APPEAL OF CALIFORNIA,

FIRST APPELLATE DISTRICT

BRIEF FOR WASHINGTON LEGAL FOUNDATION

AS AMICUS CURIAE IN SUPPORT OF PETITIONER

CORY L. ANDREWS

WASHINGTON LEGAL

FOUNDATION

2009 Mass. Ave., NW

Washington, D.C. 20036

JUDD E. STONE II

Counsel of Record

CHRISTOPHER D. HILTON

ARI CUENIN

CODY C. COLL

STONE HILTON PLLC

600 Congress Ave., Ste. 2350

Austin, Texas 78701

judd@stonehilton.com

(737) 465-7248

Counsel for Amicus Curiae

QUE STION P RE SENTED

Does the Due Process Clause permit a state court to

exercise specific personal jurisdiction over an out-ofstate defendant in a preemptive action to deem a noncompete agreement unenforceable on the ground that

enforcement of the agreement would prohibit the out-ofstate plaintiff from working for an in-state employer?

(I)

TABL E OF C O NTENTS

Page

Questions presented ........................................................ I

Table of contents ............................................................ II

Table of authorities ...................................................... III

Interest of amicus curiae ................................................ 1

Summary of argument .................................................... 1

Argument ......................................................................... 2

I. Review Is Needed to Protect Federalism from

Encroachment by California’s Exercise of

Personal Jurisdiction. ......................................... 3

A. Review is needed to vindicate federalism

interests that inform and limit the scope of

specific personal jurisdiction. ....................... 3

B. Review is needed to prevent California from

exercising power extraterritorially. ............ 9

II. This Case Presents Important Issues About

Noncompete Agreements in a Good Vehicle to

Address Them. ................................................... 14

A. Review is needed to ensure that

noncompete agreements and their benefits

do not become a dead letter nationwide. ... 15

B. No vehicle problems foreclose this Court’s

review of the question presented. .............. 21

Conclusion ...................................................................... 23

(II)

III

TABL E OF AU THORI TIE S

Page(s)

Cases:

Axten v. John Foster, LLC,

No. G049665, 2015 WL 1383540 (Cal. App. 4th

Dist. Mar. 25, 2015) ................................................... 22

BMW of N. Am., Inc. v. Gore,

517 U.S. 559 (1996) .............................................. 10, 12

BNSF Ry. Co. v. Tyrrell,

581 U.S. 402 (2017) ...................................................... 1

Bond v. United States,

564 U.S. 211 (2011) .................................................. 4, 5

Bristol-Myers Squibb Co. v. Superior Court of

California, San Francisco Cty.,

582 U.S. 255 (2017) .................................... 1, 2, 6, 8, 12

Camps Newfound/Owatonna, Inc. v. Town of

Harrison,

520 U.S. 564 (1997) ............................................... 11-12

Charles Wolff Packing Co. v. Ct. of Indus. Rels.,

262 U.S. 522 (1923) .................................................... 14

First Tower Loan, LLC v. Broussard,

No. 3:15-cv-385, 2015 WL 13942412 n.6 (S.D.

Miss. July 7, 2015) ..................................................... 15

Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct.,

592 U.S. 351 (2021) ........................................ 1, 2, 8, 18

Franchise Tax Bd. v. Hyatt,

587 U.S. 230 (2019) .................................................. 5, 7

IV

Cases—Continued:

Page(s)

Franchise Tax Bd. v. Hyatt,

587 U.S. 230 (2019) .................................................. 5, 7

FTC v. Ticor Title Ins. Co.,

504 U.S. 621 (1992) ...................................................... 6

Gonzales v. Oregon,

546 U.S. 243 (2006) .................................................... 18

Gonzales v. Raich,

545 U.S. 1 (2005) ........................................................ 19

Gregory v. Ashcroft,

501 U.S. 452 (1991) .................................................. 4, 5

Healy v. Beer Inst.,

491 U.S. 324 (1989) ................................................ 9, 11

Helicopteros Nacionales de Colombia, S.A. v.

Hall,

466 U.S. 408 (1984) ...................................................... 3

Hertz Corp. v. Friend,

559 U.S. 77 (2010) ........................................................ 2

Hughes v. Oklahoma,

441 U.S. 322 (1979) .................................................... 10

Int’l Shoe Co. v. Washington,

326 U.S. 310 (1945) ...................................................... 2

J. McIntyre Mach., Ltd. v. Nicastro,

564 U.S. 873 (2011) ...................................................... 7

Mallory v. Norfolk S. Ry. Co.,

600 U.S. 122 (2023) .................................................. 7, 8

V

Cases—Continued:

Page(s)

Milwaukee Cnty. v. M.E. White Co.,

296 U.S. 268 (1935) .................................................... 11

Nat’l Pork Producers Council v. Ross,

598 U.S. 356 (2023) .................................................... 18

New York v. United States,

505 U.S. 144 (1992) .............................................. 2, 4, 5

Printz v. United States,

521 U.S. 898 (1997) ...................................................... 4

Props. of the Villages, Inc. v. Fed. Trade

Comm’n,

No. 5:24-cv-316-TJC-PRL, 2024 WL 3870380

(M.D. Fla. Aug. 15, 2024) ......................................... 20

Ryan LLC v. Fed. Trade Comm’n,

739 F. Supp. 3d 496 (N.D. Tex. 2024) ...................... 20

S.-Cent. Timber Dev., Inc. v. Wunnicke,

467 U.S. 82 (1984) .................................................. 9, 10

South Dakota v. Wayfair,

585 U.S. 162 (2018) .................................................... 18

State Farm Mut. Auto Ins. Co. v. Campbell,

538 U.S. 408 (2003) .................................................... 12

Sturges v. Crowninshield,

17 U.S. (4 Wheat) 122 (1819) .................................... 14

Sveen v. Melin,

584 U.S. 811 (2018) .................................................... 14

Torres v. Tex. DPS,

597 U.S. 580 (2022) .................................................... 18

VI

Cases—Continued:

Page(s)

United States v. Addyston Pipe & Steel Co.,

85 F. 271 (6th Cir. 1898) ........................................... 17

United States v. Lopez,

514 U.S. 549 (1995) ...................................................... 6

United States v. Windsor,

570 U.S. 744 (2013) .................................................... 18

V.L. v. E.L.,

577 U.S. 404 (2016) .................................................... 11

Walden v. Fiore,

571 U.S. 277 (2014) ...................................................... 1

World-Wide Volkswagen Corp. v. Woodson,

444 U.S. 286 (1980) ...................................... 1, 2, 6, 7, 9

Wright Med. Tech., Inc. v. Somers,

37 F. Supp. 2d 673 (D.N.J. 1999) ............................. 18

Constitutional Provisions and Statute:

U.S. CONST. art. I, § 8, cl. 3 ...................................... 9, 10

U.S. CONST. art. I, § 10, cl. 1 ........................................ 13

U.S. CONST. art. IV, § 1 ................................................ 11

U.S. CONST. art. VI, § 1 ................................................ 13

Cal. Bus. & Prof. Code § 16600.5(a) ............................ 12

Regulation and Rules:

89 Fed. Reg. 38,342 (May 7, 2024) ......... 3, 15, 16, 17, 20

Fed. R. Civ. Proc. 37.2 .................................................... 1

Fed. R. Civ. Proc. 37.6 .................................................... 1

Supreme Court Rule 10(c) ............................................. 3

VII

Other Authorities:

Kenneth S. Abraham & Robert L. Rabin,

Automated Vehicles and Manufacturer

Responsibility for Accidents: A New Legal

Regime for a New Era, 105 VA. L. REV. 127

(2019) ............................................................................ 8

Am. Investment Council, Comment on Proposed

Non-Compete Rule (Apr. 19, 2023) ......................... 16

John S. Baker, Jr., Respecting a State’s Tort

Law, While Confining its Reach to that State,

31 SETON HALL L. REV. 698 (2001) ......................... 13

Lynn A. Baker & Ernest A. Young, Federalism

and the Double Standard of Judicial Review,

51 DUKE L.J. 75 (2001) ................................... 5, 19, 20

BLACK’S LAW DICTIONARY (10th ed. 2014) ................ 15

Dissenting Statement of Andrew N. Ferguson,

In re Non-Compete Clause Rule (June 28,

2024) ..................................................................... 15, 17

S. Dodge & Scott Dodson, Personal

Jurisdiction and Aliens, 116 MICH. L. REV.

1205 (2018) ................................................................... 6

E. ALLAN FARNSWORTH, CONTRACTS (4th ed.

2004) ........................................................................... 13

Richard A. Epstein, The Constitutionality of

Proposition 8, 34 HARV. J.L. & PUB. POL’Y

879 (2011) ................................................................... 20

Allan Erbsen, Horizontal Federalism,

93 MINN. L. REV. 493 (2008) .................................... 11

VIII

Other Authorities—

Continued:

Page(s)

Katherine Florey, State Courts, State Territory,

State Power: Reflections on the

Extraterritoriality Principle in Choice of

Law and Legislation, 84 NOTRE DAME L.

REV. 1057 (2009) .......................................................... 9

Futures Indus. Ass’n Principal Traders Grp.,

Comment on Proposed Non-Compete Clause

Rule (Apr. 19, 2023) .................................................. 16

James G. Hodge, Jr., The Role of Federalism

and Public Health Law, 12 J.L. & HEALTH

309 (1997) ................................................................... 19

Vicki Jackson, Federalism and the Uses and

Limits of Law: Printz and Principle,

111 HARV. L. REV. 2180 (1998) ................................ 18

Larry D. Kramer, Putting the Politics Back

into the Political Safeguards of Federalism,

100 COLUM. L. REV. 215 (2000) .................................. 5

Earl M. Maltz, Slavery, Federalism, and the

Structure of the Constitution,

36 AM. J. LEGAL HIST. 466 (1992).............................. 6

Michael W. McConnell, Federalism: Evaluating

the Founders’ Design, 54 U. CHI. L. REV. 1484

(1987) .......................................................................... 19

Managed Funds Ass’n, Comment on Proposed

Non-Compete Rule (Apr. 19, 2023) ......................... 16

IX

Other Authorities—

Continued:

Page(s)

Margaret Meriwether Cordray, The Limits of

State Sovereignty and the Issue of Multiple

Punitive Damages Awards,

78 ORE. L. REV. 275 (1999) ....................................... 10

Edward L. Rubin & Malcolm Feeley,

Federalism: Some Notes on a National

Neurosis, 41 UCLA L. REV. 903 (1994) .................. 20

S. Rep. No. 109-14 (2005) ............................................. 12

Gil Seinfeld, Reflections on Comity in the Law

of American Federalism, 90 NOTRE DAME L.

REV. 1309 (2015) ........................................................ 10

THE FEDERALIST NO. 6 ................................................ 11

THE FEDERALIST No. 7 ................................................ 10

THE FEDERALIST NO. 10 .............................................. 11

THE FEDERALIST NO. 28 ................................................ 5

THE FEDERALIST No. 42 .............................................. 10

THE FEDERALIST NO. 44 .............................................. 14

THE FEDERALIST NO. 47................................................ 4

THE FEDERALIST NO. 51............................................ 4, 5

James Weinstein, The Federal Common Law

Origins of Judicial Jurisdiction:

Implications for Modern Doctrine, 90 VA. L.

REV. 169 (2004) ............................................................ 7

X

Ralph K. Winter, Jr., State Law, Shareholder

Protection, and the Theory of the

Corporation,

6 J. LEGAL STUD. 251 (1977) .................................... 20

I NTEREST OF AM IC US CU RIAE 1

Washington Legal Foundation (WLF) is a nonprofit,

public-interest law firm and policy center with supporters nationwide. WLF promotes and defends free enterprise, individual rights, a limited and accountable government, and the rule of law. WLF often appears before

this Court to stress the limits that both the Due Process

Clause and federalism impose on a state court’s exercise

of personal jurisdiction. See, e.g., Ford Motor Co. v.

Mont. Eighth Jud. Dist. Ct., 592 U.S. 351 (2021); BristolMyers Squibb Co. v. Superior Court of California, San

Francisco Cty., 582 U.S. 255 (2017); BNSF Ry. Co. v.

Tyrrell, 581 U.S. 402 (2017).

S UMMARY O F A RGUME NT

This Court’s precedents limit the ability of “state

court[s] to render a valid personal judgment against a

nonresident defendant.” World-Wide Volkswagen Corp.

v. Woodson, 444 U.S. 286, 291 (1980). In Walden v. Fiore,

571 U.S. 277 (2014), the Court limited specific personal

jurisdiction to cases in which a plaintiff’s claims arise

from a defendant’s contacts with the forum State. The

California Court of Appeal failed to follow these

precepts. It instead blessed the exercise of specific

jurisdiction to extend the reach of California’s near-total

ban on noncompete agreements to contracts formed

outside the State by non-California parties.

All parties’ counsel of record were timely notified via email on

March 7, 2025, of WLF’s intent to file this brief under Rule 37.2.

Under Rule 37.6, no counsel for any party authored this brief, in

whole or in part, nor did counsel for any party make a monetary

contribution intended to fund this brief in whole or part. No person

or entity other than amicus and its counsel contributed monetarily

to this brief’s preparation or submission.

1

(1)

2

That result contravenes the interests of federalism,

which in personal-jurisdiction cases can be “decisive.”

Bristol-Myers, 582 U.S. at 263. Those interests are

reflected in this Court’s precedents basing specific

personal jurisdiction on whether the defendant’s actions

in the forum State gave rise to the plaintiff’s claims.

Preventing one State from aggrandizing its interests at

the expense of other States was critical to “secure[ing] to

citizens the liberties that derive from the diffusion of

sovereign power.” New York v. United States, 505 U.S.

144, 181 (1992) (cleaned up).

Here, those interests are best served by ensuring

that one State cannot impose its policy preferences on

individuals who reside and do business outside the forum

State. Just as this Court favors jurisdictional limitations

in service of the “orderly administration of the laws,”

Int’l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945),

parties also benefit from predictability in knowing what

conduct will trigger a state court’s exercise of personal

jurisdiction, see Hertz Corp. v. Friend, 559 U.S. 77, 94-95

(2010). Parties expect “some minimum assurance as to

where that conduct will and will not render them liable

to suit.” World-Wide Volkswagen, 444 U.S. at 297. This

Court has long recognized that parties will “structure

their primary conduct” accordingly. Id. This Court’s

review is needed to prevent out-of-state employers from

having to choose between noncompete agreements

disfavored by California and being haled into court there.

A RGUMENT

The same federalism interests that animated the

Constitution are at play alongside the due process inquiry into whether plaintiffs’ claims “arise out of or relate to the defendant’s contacts.” Ford Motor Co., 592

U.S. at 359. The Court’s focus has long been on the

3

“relationship among the defendant, the forum, and the

litigation.” Helicopteros Nacionales de Colombia, S.A. v.

Hall, 466 U.S. 408, 414 (1984) (emphasis added). Review

is needed to protect against a state court’s exercise of

personal jurisdiction that contravenes those principles.

This case also presents a good vehicle to reaffirm personal-jurisdiction’s federalism limits. See S. Ct. R. 10(c).

This case implicates a hotly contested national debate

over noncompete agreements and their attendant benefits. See generally 89 Fed. Reg. 38,342 (May 7, 2024)

(publishing the Federal Trade Commission’s “Non-Compete Clause Rule”). Granting review presents an ideal

opportunity to preserve that policy debate without undue

pressure from dissenting States. And no vehicle problems impede review of the question presented.

I. Review Is Needed to Protect Federalism from

Encroachment by California’s Exercise of

Personal Jurisdiction.

The limits of specific personal jurisdiction are important for maintaining the constitutional structure envisioned in the Framers’ view of federalism. Granting review is necessary to protect federalism and to prevent

California from using its courts to exert its policy preferences extraterritorially.

A. Review is needed to vindicate the federalism

limits of specific personal jurisdiction.

Federalism protects against tyranny by diffusing

power not only vertically between the States and the federal government, but also horizontally among all fifty

States. The limits on personal jurisdiction ensure that no

one State can use its courts to reach outside its proper

sphere of influence and encroach on other States.

4

1. The Constitution’s Framers feared the accumulation of power in any single person or body. So much, in

fact, that the “accumulation of all powers, legislative, executive, and judiciary, in the same hands,” would “justly

be pronounced the very definition of tyranny.” THE FEDERALIST NO. 47, at 301 (James Madison) (Clinton Rossiter, ed. 1961). To foreclose that result, the Framers created the “compound republic of America,” in which “the

power surrendered by the people is first divided between

two distinct governments, and then the portion allotted

to each subdivided among distinct and separate departments.” THE FEDERALIST No. 51, at 323 (James Madison) (Clinton Rossiter, ed. 1961). Such federalism principles track the separation of powers. See New York, 505

U.S. at 181; see also Printz v. United States, 521 U.S.

898, 918-22 (1997).

But an equally important separation of power was the

division among the fifty States themselves. For the

Framers, this additional separation was necessary so

that “a double security arises to the rights of the people:

state and federal governments would “control each

other, at the same time that each will be controlled by

itself.” THE FEDERALIST NO. 51, at 323. That “structure

allows local policies ‘more sensitive to the diverse needs

of a heterogeneous society,’ permits ‘innovation and experimentation,’ enables greater citizen ‘involvement in

democratic processes,’ and makes government ‘more responsive by putting the States in competition for a mobile citizenry.’” Bond v. United States, 564 U.S. 211, 221

(2011) (quoting Gregory v. Ashcroft, 501 U.S. 452, 458

(1991)). Federalism thus “allows States to respond . . . to

the initiative of those who seek a voice in shaping the destiny of their own times without having to rely solely upon

5

the political processes that control a remote central

power.” Id.

The Framers believed that the States would compete

with one another for influence, guarding against “the

risk of tyranny and abuse from either front.” Gregory,

501 U.S. at 458-59 (citing THE FEDERALIST NO. 28, at

180-81 (Alexander Hamilton) (Clinton Rossiter, ed.

1961)). Maintaining proper separation among the components of our federal system was crucial to guard against

“danger from interested combinations of the majority.”

THE FEDERALIST NO. 51, at 324. Preserving each State’s

independence from one another was thus critical to the

Framers’ efforts to “secure to citizens the liberties that

derive from the diffusion of sovereign power.” New York,

505 U.S. at 181 (cleaned up).

Federalism, however, cannot work as intended without restraining States from unduly expanding their influence at the expense of others. The phenomenon where

one State exploits decentralized federal power at the expense of other States is known as “the problem of horizontal aggrandizement.” Lynn A. Baker & Ernest A.

Young, Federalism and the Double Standard of Judicial

Review, 51 DUKE L.J. 75, 117-21 (2001). Of course, “each

State’s equal dignity and sovereignty under the Constitution implies certain constitutional limitations on the

sovereignty of all of its sister States.” Franchise Tax Bd.

v. Hyatt, 587 U.S. 230, 245 (2019) (cleaned up). But the

Framers did not give the States “an untouchable domain

of judicially protected jurisdiction” to protect their interests. Larry D. Kramer, Putting the Politics Back into

the Political Safeguards of Federalism, 100 COLUM. L.

REV. 215, 286 (2000). The Framers instead relied on the

States’ “capacity to compete effectively for political authority” and “ability to influence national politics.” Id.

6

State courts are vital organs of political influence.

See, e.g., Earl M. Maltz, Slavery, Federalism, and the

Structure of the Constitution, 36 AM. J. LEGAL HIST.

466, 471 (1992) (explaining the “powerful influence” of

anti-slavery activists in state courts after Dred Scott).

And one way in which a State’s courts can exert influence

is through the exercise of personal jurisdiction, for to

“assert personal jurisdiction over a domestic defendant

is an intrusion on this authority of the home state.” William S. Dodge & Scott Dodson, Personal Jurisdiction

and Aliens, 116 MICH. L. REV. 1205, 1230 (2018). When

one State’s court exercises jurisdiction over the citizen of

another State, that forum State intrudes upon its sister

State’s sovereign prerogative to regulate its own citizens’ conduct. It also impedes that citizen’s ability to

seek protections from a jurisdiction that is politically accountable to him, contravening federalism’s aim “to assign political responsibility, not to obscure it.” FTC v. Ticor Title Ins. Co., 504 U.S. 621, 636 (1992). An inability

to hold “the government answerable to the citizens” was

“more dangerous than devolving too much authority to

the remote central power.” United States v. Lopez, 514

U.S. 549, 577 (1995).

This Court’s personal jurisdiction precedents provide

an important safeguard against those threats to federalism. Personal jurisdiction doctrine reflects a balance in

the “limitation on the sovereignty” of the fifty States.

World-Wide Volkswagen, 444 U.S. at 293. That doctrine

flows from “territorial limitations on the power of the respective States.” Bristol-Myers, 582 U.S. at 263 (cleaned

up). And it serves federalism by limiting the power of

state courts to regulate non-residents at the expense of

the sovereignty of other States. See World-Wide

Volkswagen, 444 U.S. at 292.

7

That is why this Court has long held that “the Due

Process Clause, acting as an instrument of interstate

federalism, may sometimes act to divest the State of its

power to render a valid judgment.” Id. at 294. The Due

Process Clause limits “the power of a sovereign to prescribe rules of conduct for those within its sphere.” J.

McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 879

(2011) (plurality opinion). No State had an absolute right

to regulate its citizens’ conduct exclusively: “the Constitution affirmatively altered the relationships between

the States, so that they no longer relate to each other

solely as foreign sovereigns.” Franchise Tax Bd., 587

U.S. at 245. But since the early days of the Republic,

judges have also aimed to “promote the harmony of the

states by ensuring that each state stayed within the

sphere of its authority and did not encroach upon the authority of other states.” James Weinstein, The Federal

Common Law Origins of Judicial Jurisdiction: Implications for Modern Doctrine, 90 VA. L. REV. 169, 196

(2004) (cleaned up). Indeed, some of the Nation’s earliest

jurisdiction cases “expressly identified the primary value

informing federal limitations on state courts as what we

would today call interstate federalism.” Id.

In short, federalism and personal jurisdiction go

hand-in-glove. Personal jurisdiction doctrine “acts to ensure that the States through their courts, do not reach

out beyond the limits imposed on them by their status as

coequal sovereigns in a federal system.” World-Wide

Volkswagen, 444 U.S. at 292. Because personal jurisdiction is primarily grounded in the Due Process Clause, it

has never independently raised a “problem sounding in

federalism when an out-of-state defendant submits to

suit in the forum State.” Mallory v. Norfolk S. Ry. Co.,

600 U.S. 122, 144 (2023). But the “federalism implications

8

of one State’s assertion of jurisdiction over the corporate

residents of another” must not be overlooked, id., and

may even “be decisive” under this Court’s precedents,

Bristol-Myers, 582 U.S. at 263.

2. Review is necessary to reinforce those principles

here. As noted above, the overreach of a state court at

the expense of other States’ sovereignty is not responsive to political checks. The out-of-state petitioner is not

“at home” in the forum State, and its officials are not politically accountable to that foreign entity. Ford Motor

Co., 592 U.S. at 359. Judicial review outside the statecourt system provides the only mechanism to assess

whether the requisite “affiliation between the forum

State and the underlying controversy” exists such that

petitioner is “subject to the State’s regulation.” Id.

(cleaned up). Nor is there any substitute for this Court’s

oversight in ensuring that state courts are not treating

specific jurisdiction as “a loose and spurious form of general jurisdiction.” See Bristol-Myers, 582 U.S. at 264.

Were it otherwise, one State could aggrandize its

powers at the expense of the others even if a defendant

has no operations within its borders. If state courts can

regulate the conduct of out-of-state companies where forum-state contacts are unrelated to the plaintiff’s claims,

then companies nationwide will have little choice but to

tailor their practices to anticipate suit in the forum State.

The forum State can thus effectively set the substantive

rules it wishes companies to follow. Cf., e.g., Kenneth S.

Abraham & Robert L. Rabin, Automated Vehicles and

Manufacturer Responsibility for Accidents: A New Legal Regime for a New Era, 105 VA. L. REV. 127, 133-34

(2019) (describing cohesive regulation with a “single national approach” as a solution for “the major

9

dissatisfaction of auto manufacturers” in variable and

unpredictable liability standards among States).

The forum State may perceive a benefit in uniform

regulation that Congress has not yet provided through

its Commerce Clause power to regulate the States. See

U.S. CONST. art. I, § 8, cl. 3. But even if the forum State

perceives benefit in that outcome, this Court’s precedent

holds that this interest is insufficient. The “essential attributes of sovereignty” retained by “each State” imply

“a limitation on the sovereignty of all of its sister States.”

World-Wide Volkswagen, 444 U.S. at 293. Consequently,

the Court’s review is necessary to ensure that “state

lines” remain [ ]relevant for jurisdiction purposes,” and

so that the courts “remain faithful to the principles of interstate federalism embodied in the Constitution.” Id.

B. Review is needed to prevent California from

imposing its policy choices extraterritorially.

As noted above, the Constitution strikes a balance between limiting actions that discriminate against fellow

States and maintaining “the autonomy of the individual

States within their respective spheres” on the other.

Healy v. Beer Inst., 491 U.S. 324, 335-36 (1989). In a federalist system, properly limiting States’ jurisdiction

“confin[es] each state to its proper sphere of authority.”

Katherine Florey, State Courts, State Territory, State

Power: Reflections on the Extraterritoriality Principle

in Choice of Law and Legislation, 84 NOTRE DAME L.

REV. 1057, 1093 (2009). The Constitution thus also restricts States from legislating extraterritorially. That is

so because “[u]nrepresented interests will often bear the

brunt of regulations imposed by one State having a significant effect on persons or operations in other States.”

S.-Cent. Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 92

(1984). When the “burden [of regulation] falls principally

10

upon those without the state, legislative action is not

likely to be subjected to those political restraints which

are normally exerted on legislation where it affects adversely some interests within the state.” Id. (cleaned up).

Thus, as here, a State’s legislative preferences can trigger “horizontal” threats to federalism like those noted in

Part I.

1. The Constitutional Convention was convened in

part as a response to the “Balkanization” that “plagued”

the States under the Articles of Confederation. Hughes

v. Oklahoma, 441 U.S. 322, 325-26 (1979). Fears of devolving into further commercial animosity provided

strong incentives to support the Constitution. See, e.g.,

THE FEDERALIST No. 7, at 62-63 (Alexander Hamilton)

(Clinton Rossiter, ed. 1961). To address that unique

problem, the States ceded to Congress the authority to

“regulate Commerce . . . among the several States.” U.S.

CONST. art. I, § 8, cl. 3. The Constitution thus guarded

against destructive trade disputes by establishing Congress as “a superintending authority over the reciprocal

trade” among the States. THE FEDERALIST No. 42, at

268 (James Madison) (Clinton Rossiter, ed. 1961).

As a tradeoff, States must “recognize, and sometimes

defer to, the laws, judgments, or interests of another.”

Gil Seinfeld, Reflections on Comity in the Law of American Federalism, 90 NOTRE DAME L. REV. 1309, 1309

(2015). “[W]hile an individual state may make policy

choices for its own state,” the Constitution does not permit a State to directly “impose those policy choices on the

other states.” Margaret Meriwether Cordray, The Limits of State Sovereignty and the Issue of Multiple Punitive Damages Awards, 78 ORE. L. REV. 275, 292 (1999)

(citing BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 56873 (1996)). This Court’s precedents balance the tension

11

between restrictions on state legislation that discriminates against other States versus “the autonomy of the

individual States within their respective spheres.”

Healy, 491 U.S. at 335-36. In practice, this balance

means that policy judgments in one State must often be

respected even if those in other States might disagree.

But the Framers also understood the States’ tendency “to aggrandize themselves at the expense of their

neighbors.” THE FEDERALIST NO. 6, at 60 (Alexander

Hamilton) (Clinton Rossiter, ed. 1961). They feared economic inequality among the States, the “most common

and durable source” of factions, as an existential threat

to the Union. THE FEDERALIST NO. 10, at 79 (James

Madison) (Clinton Rossiter, ed. 1961). The Framers thus

enshrined protections to guard against this outcome, ensuring that the individual States would become “integral

parts of a single nation.” V.L. v. E.L., 577 U.S. 404, 407

(2016) (per curiam) (quoting Milwaukee Cnty. v. M.E.

White Co., 296 U.S. 268, 277 (1935)).

The Full Faith and Credit Clause, for instance, requires each State to recognize the “public acts, records

and judicial proceedings of every other state.” U.S.

CONST. art. IV, § 1. That is so regardless of whether a

State “disagrees with the reasoning underlying the judgment or deems it to be wrong on the merits.” V.L., 577

U.S. at 407. Likewise, in the criminal-law context, the

Extradition Clause requires that States hand over a

criminal defendant to another State even if it believes

“that what the fugitive did was not wrong or that rendition would be unfair.” Allan Erbsen, Horizontal Federalism, 93 MINN. L. REV. 493, 546 (2008). The “dormant

Commerce Clause” likewise promotes healthy horizontal

federalism by disfavoring “state laws discriminating

against

interstate

commerce.”

Camps

12

Newfound/Owatonna, Inc. v. Town of Harrison, 520

U.S. 564, 575 (1997).

Personal jurisdiction also works in tandem with these

principles. As noted above, the Constitution forbids state

courts from exercising personal jurisdiction over other

States’ residents without a proven connection to the forum State. See, e.g., Bristol-Myers, 582 U.S. at 264 (requiring a connection between the defendant’s forumstate activity and the underlying controversy). This rule

“respect[s] the interests of other States” to exercise

their “own reasoned judgment” over conduct within their

respective borders. State Farm Mut. Auto Ins. Co. v.

Campbell, 538 U.S. 408, 422 (2003) (quoting BMW, 517

U.S. at 571). Comity dictates that each State must respect the sovereignty of the other States. As observed

when Congress enacted the Class Action Fairness Act,

when state courts “dictate the substantive laws of other

states by applying” a State’s laws outside its borders, it

is “a breach of federalism principles.” S. Rep. No. 109-14,

61 (2005), reprinted in 2005 U.S.C.C.A.N. 3, 57 (cleaned

up). Likewise, a jurisdictional ruling that allows a State

court to apply forum-state law to an out-of-state corporation doing business outside the State’s borders frustrates both comity and federalism.

2. Review is needed because this personal-jurisdiction dispute implicates the extraterritorial reach of state

legislative choices. In 2024, California amended its laws

to render a noncompete agreement “unenforceable regardless of where and when the contract was signed.”

Cal. Bus. & Prof. Code § 16600.5(a). The limits that this

Court has recognized for the exercise of jurisdiction over

out-of-state parties, see supra Part I.A, should have provided an important check on California’s ability to export

that policy nationwide.

13

But the decision below eviscerates those limits. Rather, as petitioners argue (at 30-33), the exercise of personal jurisdiction aligns with California’s policy aims of

prohibiting noncompete agreements. The Constitution

would forbid California from enforcing that policy choice

directly on the other forty-nine sovereign States. Yet it

is no less an affront to comity and federalism to achieve

that result indirectly by exercising personal jurisdiction

over an out-of-state defendant. See, e.g., John S. Baker,

Jr., Respecting a State’s Tort Law, While Confining its

Reach to that State, 31 SETON HALL L. REV. 698, 704

(2001) (“A federal problem arises when some states apply their laws beyond their own borders, resulting in increased costs in other states.”).

Review is especially warranted because the judgment

below contravenes principles of contract animating the

Constitution. As noted above, the Framers were especially mindful of economic tensions among the States and

saw contracts as the “legal underpinning of a dynamic

and expanding free enterprise system.” E. ALLAN

FARNSWORTH, CONTRACTS § 1.7 (4th ed. 2004). So concerned were the Framers with state laws that might relieve parties of their contractual obligations, they

drafted the Contracts Clause, which prohibits any State

from “impairing the Obligation of Contracts.” U.S.

CONST. art. I, § 10, cl. 1. And the Framers likewise preserved “[a]ll debts contracted and engagements entered

into, before the adoption of th[e] Constitution.” Id. art.

VI, § 1.

The Framers understood a party’s right to enforce a

valid contract as important to the harmony needed for a

healthy federalist system. As James Madison wrote, “impairing the obligation of contracts” was “contrary to the

first principles of the social compact, and to every

14

principle of sound legislation.” THE FEDERALIST NO. 44,

at 282 (James Madison) (Clinton Rossiter, ed. 1961). The

Framers “took the view that treating existing contracts

as ‘inviolable’ would benefit society by ensuring that all

persons could count on the ability to enforce promises

lawfully made to them—even if they or their agreements

later prove unpopular with some passing majority.”

Sveen v. Melin, 584 U.S. 811, 828 (2018) (Gorsuch, J., dissenting) (citing Sturges v. Crowninshield, 17 U.S. (4

Wheat) 122, 206 (1819)). The Framers thus understood

freedom of contract is the general rule with “restraint

the exception.” Charles Wolff Packing Co. v. Ct. of Indus.

Rels., 262 U.S. 522, 534 (1923). Review is necessary to

ensure that States treat contracts in keeping with the

Constitution.

II. This Case Presents Important Issues About

Noncompete Agreements in a Good Vehicle to

Address Them.

The noncompete agreements at issue here are part of

a larger and timely policy debate over the continued vitality of such contracts. The ruling below has implications far beyond the facts and parties of this case. As petitioner argues (at 31-34), the decision below states that

“respondent’s challenge to the validity of his contract directly affects California employers as well as the rights

of all California employers as well as the rights of all California companies who rely on the State’s prohibition on

noncompete agreements for protection.” Pet. 32 (cleaned

up). The answer to the question profoundly affects employers nationwide. And no vehicle problems foreclose

review of the question presented.

15

A. Review is needed to ensure that noncompete

agreements and their benefits do not become

a dead letter nationwide.

This case implicates a broader policy debate about

noncompete agreements, which carry many attendant

benefits for employers. The use of noncompetes raises

questions about what business practices constitute fair

competition throughout “a significant portion of the

American economy—indeed, nearly the entire economy.” Dissenting Statement of Andrew N. Ferguson, In

re Non-Compete Clause Rule 12 (June 28, 2024) (hereinafter “Ferguson Dissent”) (cleaned up). The answers to

such questions have implications far beyond the contours

of this case. At scale, employers have no real alternative

to noncompete agreements like those at issue in the underlying litigation. For instance, courts must consider

that at-will employment is the norm in forty-nine States.

See, e.g., First Tower Loan, LLC v. Broussard, No. 3:15cv-385, 2015 WL 13942412, at *2 n.6 (S.D. Miss. July 7,

2015) (citing BLACK’S LAW DICTIONARY (10th ed. 2014)).

It is unrealistic to expect companies seeking to protect

their investment in employees to start “forgoing at-will

employment” and begin relying instead on fixed-term

contracts to protect their investment in the employees

they hire and train. Contra 89 Fed. Reg. at 38,403.

The ruling below not only threatens the public benefits of noncompete agreements, it unduly chills the refinement of the law surrounding noncompete agreements to the detriment of companies and workers nationwide. Review is thus warranted because the resolution of

these issues has effects far beyond the immediate case.

1. Contrary to the views of California and the court

below, noncompete agreements carry significant public

benefit. To start, noncompete agreements can provide

16

protection of trade secrets and confidential information

and thus help protect valuable investments made by employers. Noncompete agreements help prevent employees from taking sensitive knowledge—like client lists,

pricing strategies, or proprietary processes—to competitors, safeguarding a company’s competitive edge. As an

attendant benefit, noncompete agreements encourage

innovation: by limiting the chance that innovations or

unique business methods will be immediately shared

with competitors, noncompete agreements can incentivize companies to invest in research and development. To

give just one industry example, numerous financial-services companies submitted public comments in opposition to proposed federal action on noncompete agreements, each explaining the significant resources used to

fuel proprietary tools and strategic innovations. See, e.g.,

Am. Investment Council, Comment on Proposed NonCompete Rule 19-20 (Apr. 19, 2023); Futures Indus.

Ass’n Principal Traders Grp., Comment on Proposed

Non-Compete Clause Rule 1-2 (Apr. 19, 2023); Managed

Funds Ass’n, Comment on Proposed Non-Compete Rule

4-5 (Apr. 19, 2023).

At the same time, noncompete agreements also allow

companies to retain the value of significant investments

in employee training. Companies often invest significant

time and resources in training employees; non-competes

reduce the risk of that investment walking out the door

to benefit a rival. As the Federal Trade Commission itself acknowledges, several studies have shown that noncompete agreements “increase employee human and

physical capital investment.” 89 Fed. Reg. at 38,433.

Companies are more likely to invest resources in training

employees when they can ensure that their competitors

cannot free-ride off their investments. See id.

17

Conversely, if employers were not able to rely on noncompete agreements, they are likely to “make fewer similar training investments.” Ferguson Dissent, supra, at

42. In practice, noncompete agreements help provide

predictability that stabilizes the workforce. They can deter employees from jumping ship to competitors, fostering longer-term employment and reducing turnover

costs.

Noncompete agreements benefit employees as well.

Noncompete agreements help give employees access to

specialized knowledge. Employers might be more willing

to share valuable skills or insider know-how with workers if they are confident it will not be used against them

later. In some industries, employers may reward employees for agreeing to the restriction with perks like

higher pay, bonuses, or promotions. See, e.g., U.S. Gov’t

Accountability Office, Noncompete Agreements 55-56

tbl. 14 (2023).

Because of these benefits for employers and employees alike, the market also benefits from noncompete

agreements. No one seriously disputes that noncompete

agreements can benefit competition by protecting companies’ confidential information. See 89 Fed. Reg. at

38,422. Indeed, for well over a century, courts have upheld noncompete agreements under the Sherman Act

based on their salutary competitive effects. See, e.g.,

United States v. Addyston Pipe & Steel Co., 85 F. 271,

281-82 (6th Cir. 1898). The Federal Trade Commission

has likewise acknowledged that noncompete agreements

may lead to cost savings for companies that could enable

lower prices for consumers. See 89 Fed. Reg. at 38,398

(“By suppressing workers’ earnings, non-competes decrease firms’ costs, which firms may theoretically pass

through to consumers in the form of lower prices.”).

18

Noncompete agreements can also promote business

growth. By protecting a company’s unique advantages in

its respective field, noncompete agreements can help

smaller firms or startups establish themselves in the

market without facing immediate threats from larger

competitors who seek to poach talent or ideas. Noncompete agreements serve the public interest by promoting

“stability and certainty” in the marketplace. Wright

Med. Tech., Inc. v. Somers, 37 F. Supp. 2d 673, 684

(D.N.J. 1999). Noncompete agreements can thus be especially beneficial in sectors like technology or sales,

where intellectual and relational capital are key.

2. Because of unique challenges in promoting horizontal federalism through political channels, see supra

Part I, judicial review is all the more important. Citizens

in one jurisdiction are not able to directly hold States accountable across the country. The Court’s recent cases

like Ford Motor Co. reflect the need for review to avoid

adverse effects on the federal system. After all, “[t]o

make political safeguards of federalism work, some

sense of enforceable lines must linger.” Vicki Jackson,

Federalism and the Uses and Limits of Law: Printz and

Principle, 111 HARV. L. REV. 2180, 2228 (1998).

This Court regularly grants certiorari as a judicial

check to maintain the bounds of federalism. See, e.g.,

Nat’l Pork Producers Council v. Ross, 598 U.S. 356

(2023) (concerning state agriculture laws whose practical

effect controlled commerce extraterritorially); Torres v.

Tex. DPS, 597 U.S. 580 (2022) (concerning state sovereign immunity and veterans’ benefits); South Dakota v.

Wayfair, 585 U.S. 162 (2018) (concerning taxation of outof-state sellers); United States v. Windsor, 570 U.S. 744

(2013) (concerning the federal Defense of Marriage Act);

Gonzales v. Oregon, 546 U.S. 243 (2006) (concerning

19

Oregon’s physician-assisted suicide laws and the Controlled Substances Act); Gonzales v. Raich, 545 U.S. 1

(2005) (concerning marijuana laws).

As petitioner argues (at 14), California is an outlier in

prohibiting noncompete agreements, which are permitted in the vast majority of States. The ruling below thus

puts out-of-state defendants to a choice: voluntarily

abandon the benefits of noncompete agreements or risk

being haled into court in another State. Especially for

small businesses, the risks and costs of prospective outof-state litigation may obviate many benefits of noncompete agreements. See supra Part II.A.1.

Judicial review thus provides a safeguard against encroachment by California on the policy choices of other

States. California’s restrictions may be popular in California, since “smaller units of government have an incentive . . . to adopt popular policies.” Michael W.

McConnell, Federalism: Evaluating the Founders’ Design, 54 U. CHI. L. REV. 1484, 1498-99 (1987). But preventing personal jurisdiction from unduly extending California’s policies would increase options that better balance competing interests nationwide. See James G.

Hodge, Jr., The Role of Federalism and Public Health

Law, 12 J.L. & HEALTH 309, 356 (1997) (explaining that,

compared to national policies, “state governments are

generally more responsive to the needs of their citizenry”). Federalism thus “provides an additional level of

freedom to individuals, beyond that provided by specific

guarantees of individual rights, by conferring the freedom to choose from among various diverse regulatory regimes the one that best suits the individual’s preferences.” Baker & Young, supra, at 1506. The “point of federalism” is “to allow normative disagreement amongst

the subordinate units so that different units can

20

subscribe to different value systems.” Edward L. Rubin

& Malcolm Feeley, Federalism: Some Notes on a National Neurosis, 41 UCLA L. REV. 903, 912 (1994).

This case arrives before the Court at a critical juncture for federalism. Recent federal actions to curtain

noncompete agreements at the national level have garnered significant public and judicial attention. See, e.g.,

Ryan LLC v. Fed. Trade Comm’n, 739 F. Supp. 3d 496,

521-22 (N.D. Tex. 2024); Props. of the Villages, Inc. v.

Fed. Trade Comm’n, No. 5:24-cv-316-TJC-PRL, 2024

WL 3870380, at *1 (M.D. Fla. Aug. 15, 2024). Those cases

enjoined the Federal Trade Commission from implementing a prohibition on noncompete agreements promulgated in 2024. See 89 Fed. Reg. 38342 (publishing the

“Non-Compete Clause Rule”).

Granting review in this case is necessary to preserve

vital state independence to address the role of noncompete agreements in the absence of a uniform national

rule. This “gradualist approach” serves the interests of

federalism because it “lowers the political temperature.”

Richard A. Epstein, The Constitutionality of Proposition 8, 34 HARV. J.L. & PUB. POL’Y 879, 881 (2011). And

it prevents the small minority of States like California

who disfavor noncompete agreements from imposing

their policy preference on the majority of States that allow such agreements. See Baker & Young, supra, at 110.

Only when “competition between legal systems exists

can we perceive which legal rules are most appropriate.”

Ralph K. Winter, Jr., State Law, Shareholder Protection, and the Theory of the Corporation, 6 J. LEGAL

STUD. 251, 276 (1977). Granting review limits States’

ability to expand their reach at the expense of other

States and protects out-of-state companies who lack the

21

resources and political influence to fight to preserve that

competition.

B. No vehicle problems foreclose this Court’s

review of the question presented.

This case presents a good vehicle to eliminate the disparity caused by the California court’s jurisdictional ruling. As petitioner has explained (at 25), this case involves

whether a State may exercise personal jurisdiction over

a defendant based solely on a noncompete agreement’s

being challenged in a former employee’s new place of

business in the forum State. This suit did not arise from

or relate to petitioner operating in California, employing

the former employee in California, or being physically located in California. In short, petitioner did everything

possible to avoid subjecting itself to California’s laws

consistent with this Court’s specific personal jurisdiction

precedents. The case turns solely on issues of law; as petitioner explains (at 27), there is no danger that a muddled factual record poses an obstacle to review. This

means that the Court can focus on the question presented and decide the narrow issue of whether a State’s

exercise of personal jurisdiction based solely on a noncompete agreement violates due process.

That this case arrives before the Court from a summary affirmance is no obstacle to review. As petitioners

explain, the Court of Appeal’s denial of the request for

review could only have rested on its agreement with the

superior court’s legal holding. Pet. 33. That is because no

plausible alternative grounds to affirm were presented

below or otherwise apparent from the record on the

court’s de novo jurisdictional review. Pet. 33.

For that reason, the decision in this case is likely to

influence other California courts. That is because of the

weight that California judges may give to nonbinding

22

appellate decisions addressing similar factual circumstances. “Although trial courts may not rely on unpublished opinions as authority, courts may may adopt

the analysis of an unpublished opinion as its own, if it

finds such analysis persuasive.” Axten v. John Foster,

LLC, No. G049665, 2015 WL 1383540, at *3 (Cal. App.

4th Dist. Mar. 25, 2015) (quoting trial court’s minute order). There, for instance, the trial court adopted a nonbinding California appellate decision because it had construed “almost the identical arbitration provision under

very similar facts,” had drawn “the same conclusion” as

the trial court, and had “distinguished the primary case

relied upon” by the defendant before the trial court. Id.

That trial court thus found “the analysis in that [appellate] case persuasive and adopt[ed] it as its own.” Id.

Here, the facts involve an out-of-state employer, a

routine noncompete agreement, and a former employee

seeking subsequent employment at one of the countless

employers operating in California. Given the high probability that the fact pattern here will present itself again,

it is reasonable to expect future California courts to follow the path of the Court of Appeal here. Indeed, American federalism presupposes that state courts will be

tempted to do so. See supra Part I. Because judicial review of state-court exercises of personal jurisdiction

forms an integral role in federalism, the posture in which

this case arrives poses no obstacle to review.

23

C O NCL USI O N

The Court should grant the petition.

Respectfully submitted.

CORY L. ANDREWS

WASHINGTON LEGAL

FOUNDATION

2009 Mass. Ave., NW

Washington, D.C. 20036

MARCH 2025

JUDD E. STONE II

Counsel of Record

CHRISTOPHER D. HILTON

ARI CUENIN

CODY C. COLL

STONE HILTON PLLC

600 Congress Ave.,

Ste. 2350

Austin, Texas 78701

judd@stonehilton.com

(737) 465-7248