West Series <strong>of</strong> Lockton Companies, LLC <strong>v.</strong> Eric Kaufman

[[COURTLISTENER_SUBOPINION {"id":"11426003","type":"010combined","part":"opinion","author":null,"source_field":"html_with_citations"}]]
United States Court of Appeals
For the Eighth Circuit
___________________________

No. 24-1072
___________________________

West Series of Lockton Companies, LLC; Lockton Investment Advisors, LLC;
Lockton Investment Securities, LLC, formerly known as Lockton Financial
Advisors, LLC

Plaintiffs - Appellees

Eric D. Kaufman

Defendant - Appellant
___________________________

No. 24-1074
___________________________

West Series of Lockton Companies, LLC; Lockton Investment Advisors, LLC;
Lockton Investment Securities, LLC, formerly known as Lockton Financial
Advisors, LLC; Lockton Partners, LLC

Plaintiffs - Appellees

Sallie F. Giblin

Defendant – Appellant
___________________________

No. 24-3528
___________________________

West Series of Lockton Companies, LLC; Lockton Investment Advisors, LLC;
Lockton Investment Securities, LLC, formerly known as Lockton Financial
Advisors, LLC; Lockton Partners, LLC

Plaintiffs - Appellees

Sallie F. Giblin

Defendant - Appellant

------------------------------

Bill Hardwick

Amicus on Behalf of Appellee(s)
___________________________

No. 25-1019
___________________________

West Series of Lockton Companies, LLC; Lockton Investment Advisors, LLC;
Lockton Investment Securities, LLC, formerly known as Lockton Financial
Advisors, LLC; Lockton Partners, LLC

Plaintiffs - Appellants

Sallie F. Giblin

Defendant - Appellee

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------------------------------

Bill Hardwick

Amicus on Behalf of Appellant(s)
___________________________

No. 25-1278
___________________________

West Series of Lockton Companies, LLC; Lockton Investment Advisors, LLC;
Lockton Investment Securities, LLC, formerly known as Lockton Financial
Advisors, LLC

Plaintiffs - Appellees

Eric D. Kaufman

Defendant - Appellant

------------------------------

Bill Hardwick

Amicus on Behalf of Appellee(s)
___________________________

No. 25-1369
___________________________

West Series of Lockton Companies, LLC; Lockton Investment Advisors, LLC;
Lockton Investment Securities, LLC, formerly known as Lockton Financial
Advisors, LLC

Plaintiffs - Appellants

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Eric D. Kaufman

Defendant - Appellee

------------------------------

Bill Hardwick

Amicus on Behalf of Appellant(s)
____________

Appeals from United States District Court
for the Western District of Missouri - Kansas City
____________

Submitted: January 13, 2026
Filed: August 26, 2026
____________

Before SHEPHERD, ARNOLD, and ERICKSON, Circuit Judges.
____________

SHEPHERD, Circuit Judge.

Eric Kaufman and Sallie Giblin (collectively, Members) are former members
of various Missouri limited liability companies (collectively, Lockton). Lockton is
a commercial-insurance brokerage and consulting organization. The Members
entered into membership agreements when they acquired their Lockton interests.
The operative versions of these agreements contain Missouri forum-selection and
choice-of-law clauses. They also include covenants purporting to prohibit the
Members from soliciting Lockton customers. And these contracts require the
Members to follow Lockton’s operating agreements, which provide that Lockton
members may terminate their interests on 30 days’ notice. But the Members left
Lockton, purporting to terminate their Lockton interests “effective immediately,”
and went to work for Lockton competitor Alliant. Lockton sued the Members in
federal district court in Missouri, seeking to clarify and assert their contractual

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entitlements (the Federal Actions). The Members sued Lockton in California state
court, seeking to avoid their agreements (the California Actions).

The district court presiding over the Federal Actions granted summary
judgment in Lockton’s favor on several of its claims. It concluded that the Missouri
forum-selection and choice-of-law clauses were enforceable and that the Members
had breached the forum-selection clauses by suing Lockton in California. The
district court also held that the customer-nonsolicitation covenants were
enforceable—at least to the limited extent Lockton sought to enforce them.

On other issues, the district court held for the Members. It granted them
summary judgment on Lockton’s claims that they breached the notice provision in
Lockton’s operating agreements; it also granted them summary judgment on related
breach-of-fiduciary-duty claims. As to the Members individually, it granted
Kaufman summary judgment on Lockton’s claim that he had breached contract
provisions preventing him from soliciting Lockton members and employees
post-departure. And it granted Giblin summary judgment on Lockton’s claims that
she had breached her non-solicitation commitments and tortiously interfered with
Lockton’s customer relationships.

The district court awarded Lockton the attorneys’ fees it had incurred in
prosecuting the Federal Actions. But it declined to award Lockton the attorneys’
fees it had incurred in defending the California Actions (either as attorneys’ fees
recoverable under the parties’ contracts or as damages for breaches of the
forum-selection clauses). Instead, it awarded Lockton only nominal damages for the
Members’ forum-selection-clause breaches. The district court also denied the
Members’ requests for fees. The Members appeal and Lockton cross appeals. This
Court has jurisdiction to hear the parties’ appeals and cross appeals under
28 U.S.C.
§ 1291
.

We affirm the district court’s decisions as to the enforceability of the
choice-of-law provisions, the enforceability and breaches of the forum-selection
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clauses, and the enforceability of the customer-nonsolicitation covenants. We
reverse the district court’s judgments as to the Members’ breaches of the operating
agreements’ 30-day notice provision and the Members’ breaches of fiduciary duties
and direct that the district court enter judgment in Lockton’s favor on these claims.
We vacate the nominal damages awards, and direct that on remand the district court
determine Lockton’s actual damages attributable to the Members’ breaches of the
forum-selection clauses. And we affirm the district court’s awards of fees and costs
to Lockton.

Lockton is headquartered in Missouri. And its constituent LLCs that are
parties to these cases are all organized under Missouri law. Lockton provides its
services to customers through producer members—who hold profit-sharing interests
in its LLCs—and associates—who are Lockton employees. Lockton has over 100
offices worldwide. Each of its United States offices is linked to a particular “series.”
Lockton tasks the producers in each series with managing and developing client
relationships.

The Members became Lockton producer members in 2007, when they entered
into member agreements with Lockton’s Pacific Series. 1 The Members also
executed member agreements with two other Lockton LLCs—Lockton Investment
Advisors and Lockton Investment Securities (formerly known as Lockton Financial
Advisors). In 2017, Giblin became a producer partner, signing a further agreement
with a fourth Lockton LLC—Lockton Partners, which afforded her additional
profit-sharing opportunities.

1
At the time, Lockton’s Pacific Series was known as the Southern California
Series of Lockton Companies, LLC. The Pacific Series was originally a party to
these cases. We granted a motion to substitute, so West Series of Lockton
Companies, LLC, now stands in the Pacific Series’ place.
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Before 2016, Lockton’s Pacific Series was domiciled in Illinois, and its
member agreement included Illinois choice-of-law and forum-selection provisions.
But in 2016, Lockton reorganized, and the Pacific Series redomiciled, becoming a
Missouri LLC. This reorganization came after Lockton lobbied Missouri’s
legislature for changes in Missouri’s LLC statutes in order to, as one member of the
President’s Advisory Group responsible for negotiating the Agreements put it, make
Lockton’s restrictive “covenant and other important provisions more friendly and
enforceable.” Following the reorganization, the Members executed amended
member agreements with the Pacific Series. The current versions of the Members’
agreements with the Pacific Series, Lockton Investment Advisors, and Lockton
Investment Securities (collectively with Giblin’s Lockton Partners agreement, the
Agreements), all include combined Missouri choice-of-law and forum-selection
clauses.

The combined forum-selection and choice-of-law provision in the Members’
Pacific Series Agreement reads:

Member and the Series agree that this Agreement shall be deemed to
have been made in the State of Missouri. This Agreement and all
disputes, claims or issues that in any way pertain to the interpretation,
validity or enforceability of, or otherwise arise out of or relate to this
Agreement, the Operating Agreement and/or Member’s membership in
the Series, including, without limitation, any disputes, claims or issues
arising out of the rights and interests of the Other Series, Affiliates and
Lockton Entities as set forth herein, shall be subject to, governed by,
and construed in accordance with the laws of the State of Missouri
without reference to choice of laws, irrespective of the fact that one or
both of the parties now is or may become a resident of a different state.
Any action involving any disputes, claims or issues that in any way
pertain to the interpretation, validity or enforceability of, or otherwise
arise out of or relate to this Agreement, the Operating Agreement and/or
Member’s membership in the Series, including, without limitation, any
disputes, claims or issues arising out of or relating to the rights and
interests of the Other Series, Affiliates and Lockton Entities as set forth
herein, shall be brought exclusively in any Federal Court in Kansas
City, Missouri or in the Circuit Court of Jackson County, Missouri;
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provided, however, the Series shall pay promptly, upon demand from
time-to-time by Member, reasonable out-of-pocket costs of travel to
attend proceedings in such forum. Such courts shall have exclusive
jurisdiction over these matters, and Member hereby agrees to be subject
to the personal jurisdiction of such courts. The parties hereto agree that
the provisions set forth in this Section . . . are fair and reasonable.

The other Agreements contain substantially similar provisions.

The Agreements also contain restrictive covenants purporting to prohibit the
Members from soliciting Lockton’s customers. The customer-nonsolicitation
covenant in the Members’ Pacific Series Agreements reads:

While Member is a Producer Member of the Series and for a period of
two (2) years following the sale of Member’s Producer Unit (which
occurs on the Buy-Sell Purchase Date):

(a) Member shall not, directly or indirectly, for himself or on
behalf of any other Person, solicit, induce, persuade or
encourage, or attempt to solicit, induce, persuade or encourage,
any of the Customer Accounts described below, if any such
Customer Account qualified as a Customer Account within the
six (6) month period immediately preceding the sale of
Member’s Producer Unit, to reduce, terminate or transfer to a
competitor any products or services that are the same or
substantially similar to, or directly competitive with, the products
or services provided by the Series, the Other Series or any
Affiliate. Member shall not, directly or indirectly, for himself or
on behalf of any other Person, (i) accept, service, or work on, or
attempt or threaten to accept, service or work on, any such
competitive business from any of the Customer Accounts that
Member may not solicit, or (ii) in any way do business with any
of the Customer Accounts that Member may not solicit to the
extent such business is the same or substantially similar to that
provided by the Series, the Other Series or any Affiliate. The
Customer Accounts to which this restriction applies are:

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(1) any of the Customer Accounts of the Series (A)
produced by Member, (B) solicited by Member (in the
case of prospective Customer Accounts), (C) serviced by
Member, (D) for or about which Member acquired or had
access to Confidential Information, or (E) with which
Member has or had business contact; and,

(2) any of the other Customer Accounts of the Series; and,

(3) any of the Customer Accounts of the Other Series (A)
produced by Member, (B) solicited by Member (in the
case of prospective Customer Accounts), (C) serviced by
Member, (D) for or about which Member acquired or had
access to Confidential Information, or (E) with which
Member has or had business contact; and,

(4) any of the other Customer Accounts of the Other
Series; and,

(5) any of the Customer Accounts of any Affiliate (A)
produced by Member, (B) solicited by Member (in the
case of prospective Customer Accounts), (C) serviced by
Member, (D) for or about which Member acquired or had
access to Confidential Information, or (E) with which
Member has or had business contact.

The remaining Agreements contain or incorporate similar covenants. Kaufman
agreed that these covenants would bind him for two years after leaving Lockton.
When Giblin acquired her Lockton Partners interest and became a producer partner,
she agreed she would be bound for four years.

Moreover, the Agreements required the Members to comply with the Lockton
entities’ operating agreements. The operating agreements generally set forth
procedures by which members’ Lockton interests “may” be terminated. 2 They

2
The Lockton Partners operating agreement does not include such termination
language.
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provide that producer members “may be terminated” as members “by such”
members “on thirty (30) days’ written notice.” They also list several mechanisms
through which Lockton may terminate members’ membership interests.

Further, the Agreements entitle the “prevailing party” in disputes between
Lockton and the Members relating to their Lockton memberships to recover awards
of attorneys’ fees. The fees provision in the Pacific Series Agreement states in
relevant part that:

If any Lockton Entity or Member engages counsel in connection with
any action involving or seeking to resolve any dispute, claim or issue
that in any way pertains to the interpretation, validity or enforceability
of, or otherwise arises out of, or relates to, this Agreement, the
Operating Agreement and/or Member’s membership in the Series,
including, without limitation, any action involving or seeking to resolve
any dispute, claim or issue arising out of the rights and interests of the
Other Series, Affiliates and Lockton Entities as set forth herein, the
prevailing party in any such action shall be entitled, in addition to any
other remedies set forth in this Agreement or otherwise available at law
or equity, to recover any and all reasonable costs and expenses incurred
in connection with such action, through all appeals, including
reasonable attorneys’ fees . . . .

Again, the other Agreements are similar. The Agreements also generally provide
that Lockton is entitled to money damages if the Members breach them.

The Members—apparently both very successful producers—earned millions
of dollars under their contracts with Lockton. Over their 15 years as Lockton
producers, Giblin and Kaufman received approximately $15.7 million and $14.3
million in profit distributions, respectively. They also received significant
compensation when Lockton Investment Advisors sold assets in 2021—Giblin
earned roughly $600,000, and Kaufman roughly $2 million, from that sale. And
when the Members left Lockton in 2022, Lockton repurchased their interests. Giblin
will receive over $2 million and Kaufman will receive over $700,000 in

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compensation from these transactions (though these amounts are apparently subject
to potential offsets).

The Members lived in California during their tenures with Lockton. They
also primarily serviced California-based clients. But at times they worked with
Missouri-based teams and support staff, and incurred Missouri tax obligations
(which Lockton paid on their behalf).

On July 18, 2022, Kaufman informed Lockton via email that he was resigning
“effective immediately.” Kaufman chose to leave Lockton after it sold a significant
portion of his book of business as part of its 2021 asset sales. He began working for
Alliant on or around July 20, 2022. Alliant competes with Lockton in the market for
insurance brokerage and consulting services.

On November 29, 2022, Giblin also notified Lockton that she was resigning
“[e]ffective immediately.” She began working for Alliant the same day. Giblin
alleges that she left Lockton after she was harassed and retaliated against because
she raised concerns about Lockton’s workplace culture and staffing procedures.

Kaufman sued Lockton in California state court on July 20, 2022. His
California suit seeks a declaration that the restrictive covenants—along with the
forum-selection and choice-of-law provisions—in the Agreements are
unenforceable. Lockton filed its federal suit against Kaufman in Missouri the same
day. Lockton’s complaint against Kaufman asserts five counts for relief. Count I is
a claim for breach of contract (alleging breaches of the Agreements and operating
agreements). Count II is a claim for tortious interference with Lockton’s prospective
economic advantage and prospective business relationships. Count III is a claim for
breach of fiduciary duty and/or the duty of loyalty. Count IV is a claim for
misappropriation of trade secrets, in violation of the Missouri Uniform Trade Secrets
Act (MUTSA) and the Defend Trade Secrets Act (DTSA). Count V is a claim for
declaratory relief (seeking declarations that the Agreements’ choice-of-law,
forum-selection, and non-solicitation provisions are enforceable).
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Lockton sued Giblin in federal district court in Missouri on November 30,
2022, asserting the same five claims it asserted against Kaufman. And Giblin sued
Lockton in California state court on December 22, 2022. Giblin’s California suit
seeks declarations that the restrictive covenants, forum-selection clauses, and
choice-of-law clauses in her Agreements are unenforceable. Giblin also asserts
claims for discrimination and retaliation.

Alliant is paying Members’ attorneys’ fees in the Federal Actions. It is also
funding the California Actions.

In the Federal Actions, the Members filed motions to dismiss contending that
Lockton’s DTSA and MUTSA claims did not pass muster under Federal Rule of
Civil Procedure 12(b)(6). The district court denied these motions. And in the
California Actions, Lockton filed motions to dismiss invoking the Agreements’
forum-selection clauses. The courts adjudicating the California Actions, applying
California procedural law, denied Lockton’s motions. They reasoned that the
Members’ claims—which challenged covenants not to compete—implicated
unwaivable California statutory rights, and that Lockton thus had to show that
requiring the Members to litigate their claims in Missouri would not diminish in any
way the substantive rights afforded under California law. The California courts
concluded that Lockton had not carried this burden because it had not shown the
Members’ rights were the same or greater under Missouri law than under California
law.

After receiving an adverse ruling in California on its motion to dismiss
Giblin’s suit, Lockton moved for partial summary judgment in the Federal Actions
on its claims for declarations that the Agreements’ forum-selection clauses were
enforceable. Lockton also moved the district court to certify any judgment it secured
on these claims as final under Federal Rule of Civil Procedure 54(b) and to enjoin
the California Actions.

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The district court, applying federal procedural law, concluded that the
forum-selection clauses were enforceable and granted Lockton partial summary
judgment on its claims for declarations that the clauses were enforceable. It also
certified its orders on these claims as final judgments. But it denied Lockton’s
requests to enjoin the California Actions.

The Members appealed the district court’s partial summary judgment orders
on the enforceability of the forum-selection clauses. They argued that the district
court improperly certified these orders as final judgments and that the district court
erred in determining that the forum-selection clauses were enforceable. We
consolidated the Members’ appeals and heard argument on November 19, 2024.

While the Members pursued their appeals on the forum-selection clauses’
enforceability, the Federal Actions proceeded apace, reaching their conclusion
before we issued an opinion in the interlocutory appeals. The district court
ultimately resolved several claims via summary judgment rulings. It held that
Lockton was entitled to summary judgment on its claims that the Agreements’
choice-of-law and customer-nonsolicitation covenants were enforceable—though,
in its summary judgment papers, Lockton requested only that the district court hold
its covenants were enforceable to a specific subset of Lockton customers with whom
the Members had personally dealt, and the district court only held that the
customer-nonsolicitation covenants were enforceable as so narrowed. It also held
that Lockton was entitled to summary judgment on its claims that the Members had
breached the Agreements’ forum-selection clauses. But it concluded that Lockton
was entitled only to nominal damages—not damages compensating Lockton for its
litigation expenses—for these breaches. It reasoned that the Agreements’
fee-shifting provisions governed, and that Lockton could seek its attorneys’ fees in
a follow-on fees motion after its suits had concluded.

The district court granted summary judgment in the Members’ favor on
Lockton’s claims that they had breached the operating agreements by failing to give
30 days’ notice of their departure and breached their fiduciary duties by going to
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work for Alliant before effectively terminating their Lockton membership interests.
The district court also granted Kaufman summary judgment on Lockton’s claims
that he breached contract provisions preventing him from soliciting Lockton
members and employees post-departure.3 And it granted Giblin summary judgment
on Lockton’s claims for tortious interference and for breach of the Agreements’
customer-nonsolicitation provisions. But the district court declined to do so for
Kaufman, concluding that genuine disputes of material fact precluded summary
judgment on these claims.

After the district court issued its summary judgment rulings, Lockton
voluntarily dismissed the balance of its claims (including its DTSA claims, on which
neither side had sought summary judgment).

Both parties then moved for attorneys’ fees. The district court held that
Lockton was the “prevailing party” in the Federal Actions for purposes of the
Agreements’ fee-shifting provisions. Because the district so concluded, it declined
to award the Members fees under the Agreements. Lockton hired three major law
firms to represent it in the Federal Actions: Gibson Dunn, Quinn Emanuel, and
Bryan Cave. Consequently, Lockton racked up sizable bills for legal services:
$4,923,855.93 in its suit against Giblin and $4,264,674.77 in its suit against
Kaufman. But Lockton paid up. The district court determined that Lockton was
entitled to receive reimbursement for all of the fees it had incurred and requested in
the Federal Actions. It reasoned that Lockton’s attorneys had obtained a large degree
of success in these high-stakes cases and that Lockton was justified in retaining
out-of-market counsel charging rates significantly higher than the median rates for
Missouri litigation attorneys.

3
The district court also granted summary judgment on Lockton’s parallel
claims against Giblin (though Lockton informed the district court before it issued its
summary judgment order in Giblin’s case that it was no longer pursuing these
claims).
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While the district court awarded Lockton the fees it had incurred in
prosecuting the Federal Actions, it declined to award Lockton the fees it had incurred
in the California Actions, reasoning that, under the Agreements, Lockton had to win
those suits first before recovering fees. The district court also rejected the Members’
alternative requests for fees under the DTSA. Further appeals and cross-appeals,
which we consolidated with the Members’ still-pending interlocutory appeals,
followed.

II.

“[E]very federal appellate court has a special obligation to ‘satisfy itself not
only of its own jurisdiction, but also that of the lower courts in a cause under
review.’” Alumax Mill Prods., Inc. v. Cong. Fin. Corp.,
912 F.2d 996
, 1002 (8th
Cir. 1990) (citation omitted). We begin by addressing that obligation, which is easily
discharged here. Contra post at 51-53.

Under
28 U.S.C. § 1331
, federal district courts “have original jurisdiction of
all civil actions arising under the Constitution, laws, or treaties of the United States.”
“Most directly, a case arises under federal law when federal law creates the cause of
action asserted.” Gunn v. Minton,
568 U.S. 251, 257
(2013). Federal law created
Lockton’s DTSA cause of action. See
18 U.S.C. § 1836
(b). The district court thus
had original jurisdiction over Lockton’s DTSA claim.

The district court had supplemental jurisdiction over the balance of Lockton’s
claims under
28 U.S.C. § 1367
(a). That statute provides that federal district courts
have, “in any civil action of which the district courts have original
jurisdiction, . . . supplemental jurisdiction over all other claims that are so related to
claims in the action within such original jurisdiction that they form part of the same
case or controversy under Article III of the United States Constitution.” State-law
claims are adequately related for supplemental jurisdiction purposes where “the
federal-law claims and state-law claims in the case ‘derive from a common nucleus
of operative fact’ and are ‘such that [the defendants] would ordinarily be expected
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to try them all in one judicial proceeding.’” S. Council of Indus. Workers v. Ford,
83 F.3d 966
, 969 (8th Cir. 1996) (citation omitted). Lockton’s state-law
claims—which, like Lockton’s DTSA claim, deal with the circumstances of the
Members’ departures from Lockton—satisfy that test. Nobody could seriously
argue otherwise.

In sum, the district court had subject matter jurisdiction over all of Lockton’s
claims. Yet the dissent contends that the district court’s judgments should be vacated
and these cases dismissed for want of subject matter jurisdiction. See post at 56.
The dissent’s primary concern is that Lockton asserted its DTSA claim to serve as a
jurisdictional hook. See post at 56 (characterizing Lockton’s DTSA claim as “a ruse
to get into federal court” and “circumvent” California state court rulings that had not
yet occurred). But Lockton was permitted to do just that, so long as its DTSA claim
was colorable.4 See Arbaugh v. Y & H Corp.,
546 U.S. 500, 513
(2006) (“A plaintiff
properly invokes § 1331 jurisdiction when she pleads a colorable claim ‘arising
under’ the Constitution or laws of the United States.”). Lockton’s DTSA claim
patently was: it even survived motions to dismiss in both Federal Actions.

Rather than contend that Lockton’s DTSA claim was not “colorable” in a
jurisdictional sense, the dissent faults Lockton for not litigating that claim as
vigorously as it litigated its state-law claims. See post at 53-55. But there is no
relative-vigor exception to federal subject matter jurisdiction. Lockton did not need
to, say, move for a preliminary injunction or for summary judgment on its DTSA
claim for the district court to have jurisdiction over Lockton’s suits. And ironically,
the Members fault Lockton for litigating its DTSA claim too vigorously: they

4
The dissent criticizes Lockton’s choice to sue the Members in federal district
court in Missouri as strategic. Post at 57. But Lockton did not forum shop any more
than the Members did. The Members sued Lockton in California for a reason. And
that reason was not that they viewed litigating in California courts as unfavorable to
their interests. The only difference between what the Members did and what
Lockton did is that they breached their contractual commitments when they sued
Lockton in their preferred forum.

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contend that it was unreasonable for Lockton’s counsel to spend literally “thousands
of hours” litigating the exact claim the dissent contends Lockton did not litigate.

The dissent blurs supplemental jurisdiction over state law claims, which the
district court exercised here, with original jurisdiction over state law claims.
Because Lockton asserted a colorable federal statutory claim, the dissent’s
substantiality analysis is misplaced. The dissent contends that Lockton’s state-law
claims do not satisfy the substantiality test set forth in Gunn, a case involving
original jurisdiction over state law claims. Post at 55-56. That test has no application
in this case. It governs whether federal courts have original jurisdiction over
state-law claims implicating federal issues. See Gunn,
568 U.S. at 258
. But whether
the district court had original jurisdiction over Lockton’s state-law claims is not and
never has been an issue in these cases. Lockton never invoked the district court’s
original jurisdiction by pointing to its state-law claims. And the district court did
not need original jurisdiction over those claims: it had supplemental jurisdiction over
them, because they are adequately related to the DTSA claim over which it did have
original jurisdiction. See
13 U.S.C. § 1367
(a). Nothing more was required.5

5
The dissent also suggests that, if the district court had jurisdiction, we should
nevertheless vacate its judgments and remand with instructions to abstain from
exercising jurisdiction under the Colorado River doctrine. That proposed
approach—disposing of these cases on a non-jurisdictional ground the parties have
not raised before us—runs afoul of basic principles of party presentation and
fairness. See Hunter v. Page Cnty.,
102 F.4th 853
, 874 n.12 (8th Cir. 2024) (“The
federal abstention doctrines are not jurisdictional.”). The dissent’s approach also
fails to grapple with the doctrine’s exacting requirements, which are not met here.
For instance, the dissent does not examine whether the California and Federal
Actions are actually parallel within the meaning of Colorado River. And that is for
good reason: they are not. They involve different claims, applying different law,
and seeking different relief. See Fru-Con Const. Corp. v. Controlled Air, Inc.,
574
F.3d 527, 535
(8th Cir. 2009) (“The prevailing view is that state and federal
proceedings are parallel for purposes of Colorado River abstention when
substantially similar parties are litigating substantially similar issues in both state
and federal court. This circuit requires more precision. . . . . [A] substantial
similarity must exist between the state and federal proceedings, which similarity
occurs when there is a substantial likelihood that the state proceeding will fully
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III.

The Members appeal many of the district court’s summary judgment rulings.
In particular, the Members contend that the district court erred in declaring that the
Agreements’ Missouri choice-of-law elections are enforceable, that the Agreements’
customer-nonsolicitation covenants are at least partially enforceable as to the
specific subset of customers Lockton identified, and that the Agreements’ Missouri
forum-selection clauses are enforceable. “We review the district court’s summary
judgment order[s] and its interpretation of state law de novo, applying the same
standards applied by the district court.” Bannister v. Bemis Co.,
556 F.3d 882, 884
(8th Cir. 2009). “[W]e will affirm [a] grant of summary judgment ‘if the record
indicates that there is no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law.’” Jackson v. Riebold,
815 F.3d
1114, 1119
(8th Cir. 2016) (citation omitted).

The Members first argue that the district court erred in declaring that the
Agreements’ Missouri choice-of-law clauses were enforceable. A federal court
exercising supplemental jurisdiction over state-law claims—as the district court was
here—must “apply the law of the forum state, including its choice of law rules.”

dispose of the claims presented in the federal court.”). Moreover, the dissent ignores
the factors that generally govern whether “exceptional circumstances” are present
for Colorado River purposes. See Federated Rural Elec. Ins. Corp. v. Ark. Elec.
Coops., Inc.,
48 F.3d 294, 297
(8th Cir. 1995) (recognizing that determining the
presence of “‘exceptional circumstances’ requires evaluation of several factors,” and
listing those factors). And those factors point toward exercising jurisdiction, not
away from it. Nothing about the dissent’s analysis suggests that this is one of those
rare circumstances where the presumption in favor of exercising jurisdiction is
overcome. See Fru-Con,
574 F.3d at 540
(noting federal courts’ “virtually
unflagging obligation” to exercise jurisdiction where it exists and observing that
jurisdiction may only be surrendered based on “the clearest of justifications”
(citation omitted)).
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Menuskin v. Williams,
145 F.3d 755, 761
(6th Cir. 1998); see also Cuellar-Aguilar
v. Deggeller Attractions, Inc.,
812 F.3d 614, 618
(8th Cir. 2015) (noting federal
courts’ obligation to look to state law for claims over which they exercise
supplemental jurisdiction). “[W]e review the district court’s application of the
state’s choice of law rules de novo.” Baxter Int’l, Inc. v. Morris,
976 F.2d 1189,
1195
(8th Cir. 1992).

“Missouri courts generally enforce contractual choice-of-law provisions.”
Surgical Synergies, Inc. v. Genesee Assocs., Inc.,
432 F.3d 870, 874
(8th Cir. 2005)
(citation omitted). But not always. See Sturgeon v. Allied Pros. Ins. Co.,
344
S.W.3d 205, 210
(Mo. Ct. App. 2011) (declining to honor California choice-of-law
clause).

Here, the parties seem to agree that Missouri courts would follow the approach
laid out in Restatement (Second) of Conflict of Laws § 187 (A.L.I. 1971) in
determining whether to enforce a choice-of-law clause. That position enjoys some
support. See Morris,
976 F.2d at 1195-96
; see also Armstrong Bus. Servs., Inc. v.
H & R Block,
96 S.W.3d 867, 871-73
(Mo. Ct. App. 2002) (determining that
contracts’ Missouri choice-of-law election was enforceable under § 187). However,
Missouri courts do not always apply § 187—indeed, in the 34 years following our
Morris decision, Missouri courts have frequently indicated that the enforceability of
a forum-selection clause is exclusively a matter of Missouri public policy that may
be decided without reference to § 187. See, e.g., Kagan v. Master Home Prods. Ltd.,
193 S.W.3d 401, 407
(Mo. Ct. App. 2006) (“We recognize that generally parties
may choose the state whose law will govern the interpretation of their contractual
rights and duties. So long as the application of this law is not contrary to a
fundamental policy of Missouri, we will honor the parties’ choice of law provision.”
(citation omitted)); Sturgeon,
344 S.W.3d at 210
(stating that Missouri courts will
honor choice-of-law provisions not contrary to fundamental Missouri policies);
Keeling v. Preferred Poultry Supply, LLC,
621 S.W.3d 672
, 678 (Mo. Ct. App.
2021) (same). And we have framed Missouri’s choice-of-law clause enforceability
test the same way: “Under Missouri law, a choice-of-law clause in a contract
-19-
generally is enforceable unless application of the agreed-to law is ‘contrary to a
fundamental policy of Missouri.’” H & R Block Tax Servs. LLC v. Franklin,
691
F.3d 941, 943
(8th Cir. 2012) (citation omitted).

Ultimately, it does not matter whether our inquiry focuses only on whether
the choice-of-law clauses at issue here contravene fundamental Missouri policy or
whether § 187 governs. Obviously, choice-of-law provisions selecting Missouri law
do not conflict with Missouri policy. See id. at 943-44. And if § 187 applies, the
Members have not made the showings it requires.

Here, to set aside their contractual choice of law under the relevant parts of
§187, the Members would have to show, among other things, that some other state
has a “materially greater interest” in the parties’ dispute than does Missouri, the state
whose law the parties selected. See Restatement (Second) of Conflict of Laws
§ 187(2)(b) (A.L.I. 1971). The Members argue that California fits the bill because
of the volume of contacts California has to the parties’ dispute and because
California has a strong interest in protecting California residents from what it views
as unfair restraints on trade.

We do not doubt that California has a strong interest in the parties’ dispute.
But California’s interest in protecting its residents from what it views as unfair
restrictions on trade is not “materially greater” than Missouri’s mirror-image interest
in protecting Missouri businesses from what it views as unfair competition. See
Emerson Elec. Co. v. Rogers,
418 F.3d 841, 842-43, 847
(8th Cir. 2005) (concluding
that a Missouri choice-of-law provision was enforceable in a restrictive covenant
dispute between a salesman and his former employer, notwithstanding the
salesman’s extensive Georgia contacts, because both Missouri and Georgia “ha[d] a
substantial interest in the validity of the covenant” and there was “no indication” that
“Georgia’s interest in the dispute [was] materially greater than that of Missouri”);
Stone Surgical, LLC v. Stryker Corp.,
858 F.3d 383, 391
(6th Cir. 2017) (“On
balance, Louisiana’s interest in protecting its employee from unfair non-compete
clauses is not materially greater than Michigan’s interest in protecting its businesses
-20-
from unfair competition.”); Down-Lite Int’l, Inc. v. Altbaier,
821 F. App’x 553
, 556
(6th Cir. 2020) (“California has a meaningful interest in protecting its resident from
Down-Lite’s desire to restrict competitive conduct. But that interest is not materially
greater than Ohio’s interest in protecting one of its closely held businesses operating
in the global economy.”). Because California’s interest in the parties’ dispute is not
materially greater than Missouri’s, the district court properly held the Members to
the choice-of-law elections they made in their Agreements.

The Members cite several cases that they say compel a contrary result. None
of their authorities is persuasive. Their strongest case is our decision in DCS
Sanitation Management, Inc. v. Castillo,
435 F.3d 892
(8th Cir. 2006). In Castillo,
a noncompete dispute between former employees working in Nebraska and their
former employer, a company organized under Delaware law and headquartered in
Ohio, we held that the district court correctly applied Nebraska law notwithstanding
an Ohio choice-of-law clause in the parties’ contracts.
Id. at 894-97
. We reasoned
that:

Nebraska clearly possesses a direct and substantial interest in the
employment of its citizens. The only relationship between Ohio and
the parties is the location of DCS’s corporate headquarters and principal
place of business in Ohio. The Agreements were not negotiated,
entered into, or performed in Ohio. Under these circumstances, the
district court properly concluded Ohio has no substantial relationship
to the parties or the transaction, and Nebraska has a greater material
interest in the Agreements.
Id. at 896
.

But Castillo’s facts are distinguishable from the facts present here. Lockton
is not simply headquartered in Missouri—its constituent companies are organized
under Missouri law. Moreover, the Members were not mere Lockton
employees—they collectively earned tens of millions of dollars from Lockton by

-21-
virtue of their profit-sharing ownership interests in these Missouri entities.6 That
fact gives the parties’ dispute a different dimension than run-of-the-mill noncompete
cases between employees and former employers—the Members are owners, 7 not
employees, and California does not take such a strong position against agreements
not to compete in those circumstances.8 In any event, we think that a mechanical
focus on the dispute’s contacts with California, as the Members apparently read
Castillo to require, is inappropriate here because it would give short shrift to the very
real interests of Missouri in protecting Missouri businesses that operate on a
nationwide or global scale. See, e.g., Rogers,
418 F.3d at 843, 847
(concluding that

6
The Members’ other cases are distinguishable for the same reason. See
Application Grp., Inc. v. Hunter Grp., Inc.,
61 Cal. App. 4th 881, 887
(1998);
Ascension Ins. Holdings, LLC v. Underwood, C.A. No. 9897-VCG,
2015 WL
356002
, at *3, *5 (Del. Ch. Jan. 28, 2015); LKQ Corp. v. Fengler, No. 12-CV-2741,
2012 WL 1405774
, at *1 (N.D. Ill. Apr. 23, 2012). Even if the Members’ ownership
interests are legal fictions, as the Members have taken great pains to suggest
throughout this litigation, that does not mean that they are legal fictions without
consequence.
7
The dissent makes much of the fact that Kaufman purportedly had negative
capital account balances when he left Lockton. See post at 59. That Lockton
charged Kaufman a share of the company’s business expenses does not mean that
Kaufman was a mere employee, as the dissent suggests.
8
Under California law, covenants not to compete are generally void. See
Cal.
Bus. & Prof. Code § 16600
(a) (“Except as provided in this chapter, every contract
by which anyone is restrained from engaging in a lawful profession, trade, or
business of any kind is to that extent void.”). But California permits covenants not
to compete in connection with sales of business interests.
Id.
§ 16601 (“[A]ny owner
of a business entity selling or otherwise disposing of all of his or her ownership
interest in the business entity . . . may agree with the buyer to refrain from carrying
on a similar business within a specified geographic area in which the business so
sold . . . carries on a like business therein.”). The takeaway is that California’s
interest in applying its laws is weaker in cases involving owners than in cases
involving employees, because covenants in the first sort of case are generally
consistent with California public policy.

-22-
there was “no indication” that Georgia had a greater interest in a noncompete dispute
between a company and its former employee despite the former employee’s Georgia
contacts); Stone Surgical, LLC,
858 F.3d at 390-91
(holding that Louisiana’s interest
in protecting employees from unfair noncompete agreements was not materially
greater than Michigan’s interest in protecting its businesses from unfair competition,
even though Louisiana had the “most significant relationship” to the parties’
agreements based on those agreements’ Louisiana contacts).

For these reasons, we hold that the district court did not err in determining that
the parties’ agreements to apply Missouri law to their disputes are enforceable.

Next, the Members argue that the district court erred in holding that the
customer-nonsolicitation provisions in their Agreements are enforceable as to the
subset of customers Lockton specifically identified. Because the Agreements’
Missouri choice-of-law selections are enforceable, this is a question of Missouri law.
“[W]e review th[is] question[] of Missouri law de novo.” Mayer Hoffman McCann,
P.C. v. Barton,
614 F.3d 893, 902
(8th Cir. 2010).

“Missouri courts [will] generally enforce a non-compete agreement if it is
demonstratively reasonable.” Whelan Sec. Co. v. Kennebrew,
379 S.W.3d 835, 841
(Mo. 2012). “A non-compete agreement is reasonable if it is no more restrictive
than is necessary to protect the legitimate interests of the employer.”
Id.
(citation
omitted). Moreover, such an agreement “must be narrowly tailored temporally and
geographically.”
Id. at 841-42
. But even “if the provisions of a non-compete clause
impose a restraint that is unreasonably broad,” a court may still “give effect to its
purpose by refusing to give effect to the unreasonable terms or modifying the terms
of the contract to be reasonable.”
Id. at 844
.

-23-
The district court indicated that the Agreements’ customer-nonsolicitation
covenants,9 as written, were broader than necessary to protect Lockton’s legitimate
interests because they facially applied to every single Lockton customer. But
Lockton did not seek to enforce the covenants as written—instead, it sought to
enforce the covenants only as to specific customers: 79 for Kaufman, and 49 for
Giblin. Lockton explained that it identified these customers “by gathering the
complete list[s] of Customer Accounts” that the Members were “credited [with]
as . . . producer[s] or joint venture partner[s] during [their] tenure[s] at Lockton” and
then “narrow[ing]” these lists “to the Customer Accounts that” the Members
“personally had produced, serviced, acquired or had access to Confidential
Information about, had business contact with, or (in the case of prospective
Customer Accounts) solicited within the six months preceding the termination of
[their] membership interest[s] in each of the Lockton plaintiffs and the sale[s] of
[their] Producer Unit[s].” The Members do not contend that Lockton’s lists identify
customers they never actually dealt with.

Consistent with the Missouri Supreme Court’s recognition that a court may
modify a restrictive covenant to make it reasonable, see Whelan,
379 S.W.3d at 844
,
the district court decided to enforce the restrictive covenants along the limited lines
Lockton requested. The Members argue that this was improper for two reasons.
Neither has merit.

First, the Members contend that the restrictive covenants are extremely
overbroad as drafted and that the district court thus exceeded its discretion when it
chose to modify the covenants instead of rejecting them out of hand. It is probably
true that the covenants as originally drafted do not comport with Missouri law, as
they purport to preclude the Members from soliciting all of Lockton’s and its
affiliates’ customers. See
id. at 843
(concluding that customer-nonsolicitation

9
Missouri courts treat agreements not to solicit customers as a form of
covenant not to compete. See Whelan,
379 S.W.3d at 842
(applying enforceability
standards for noncompetes to covenants not to solicit customers).
-24-
clauses purporting to prohibit the defendants from contacting all clients of “a large,
national corporation with 38 branches in 23 states” were overbroad).

None of this means that it was improper for the district court to modify the
Agreements. In attempting to argue otherwise, the Members point to Whelan’s
statement that “[t]he ability of courts to modify unreasonable non-compete
agreements does not prevent courts from refusing to enforce non-compete
agreements that are wholly unreasonable.”
Id.
at 844 n.6. But the Members identify
no appellate case holding that a trial court applying Missouri law erred in making
the discretionary choice to modify an overbroad noncompete agreement.

Instead, the Members rely principally on R. E. Harrington, Inc. v. Frick,
428
S.W.2d 945, 951
(Mo. Ct. App. 1968), 10 in which the Missouri Court of Appeals
stated that Missouri “courts have always refused to enforce totally unreasonable
contracts . . . for reasons of equity and common sense . . . .” We are not persuaded
that this principle has any bearing on the covenants at issue here, given that the
Missouri Supreme Court did not apply it in Whelan. Whelan involved restrictive
covenants similar in scope to the ones the Members challenge. 11 Just like the
Agreements’ customer-nonsolicitation covenants, the covenants in Whelan
purported to proscribe former employees of a large business from soliciting all the
business’s customers.
379 S.W.3d at 843
. But the Missouri Supreme Court did not

10
The Members also direct the Court to Leggett & Platt, Inc. v. Hollywood
Bed & Spring Mfg. Co., No. 20-05010-CV-S-BP,
2020 WL 13580657
(W.D. Mo.
May 15, 2020). In that case, the district court exercised its discretion not to modify
a noncompete agreement it viewed as unreasonable.
Id. at *10
. But a case standing
for the point that a court need not modify a restrictive covenant tells us very little
about when a court must not modify a restrictive covenant.
11
The Members point out that the customer-nonsolicitation covenants here
also purport to prohibit them from accepting and servicing covered client accounts.
We are not persuaded that these additional restrictions make the covenants at issue
here materially broader than those at issue in Whelan.

-25-
refuse to enforce the covenants outright. Rather, it modified them to apply to
customers with whom the former employees had actually dealt—the exact approach
the district court took here.
Id. at 844-45
. If the Whelan covenants were not so
“totally unreasonable” that a court could not enforce them, the same is true of the
covenants here.

Nevertheless, the Members argue that “‘reasons of equity and common-sense’
warranted outright rejection” of the covenants because “judicial modification of
extremely overbroad covenants is bad public policy because it unfairly favors
employers.” According to the Members, this is so because judicial modification
encourages employers to take a swing-for-the-fences approach when drafting
restrictive covenants. But the Members’ concerns seemingly apply to judicial
modification generally, and the Missouri Supreme Court has blessed judicial
modification as striking the appropriate balance between employee and employer
rights. See
id. at 844
(explaining that judicial modification serves the general
purpose of noncompete agreements—that is, “protect[ing] an employer from unfair
competition without imposing an unreasonable restraint on the former employee”).
The Members’ policy-grounded arguments are not responsive to Whelan, which we
must follow here. See Olmsted Med. Ctr. v. Cont’l Cas. Co.,
65 F.4th 1005, 1008
(8th Cir. 2023) (“When applying the substantive law of the forum state, we must
follow decisions of the state’s supreme court interpreting the forum’s law.”).

Second, the Members contend that Lockton’s covenants do not protect its
legitimate interests. As an initial matter, Lockton does have a legitimate interest
Missouri law entitles it to protect: its interest in its customer relationships and
goodwill. See Rogers,
418 F.3d at 845
(“Under Missouri law, covenants not to
compete may be enforced, for ‘an employer has a proprietary right in his stock of
customers and their good will.’” (citation omitted)); Whelan,
379 S.W.3d at 842
(“An employer has a legitimate interest in customer contacts to the extent it seeks to
protect against ‘the influence an employee acquires over his employer’s customers
through personal contact.’” (citation omitted)). Nevertheless, the Members argue
that the Agreements’ covenants are not necessary to protect this interest.
-26-
They first assert that contact information for Lockton’s clients is publicly
available and, to the extent that Lockton has an interest in the secrecy of its client
contact information, that interest is already protected by statutes such as the DTSA
and MUTSA. This argument attacks a straw man. Lockton’s protectable interest
here is not the secrecy of its customers’ contact information—rather, it is Lockton’s
customer relationships themselves. See, e.g., Whelan,
379 S.W.3d at 844
n.5 (“The
extent of Whelan’s legitimate interest in customer contacts is distinguishable from
the legitimate interest an employer may have in customer lists, which are protectable
as a trade secret and can include information about prospective customers.”);
Healthcare Servs. of the Ozarks, Inc. v. Copeland,
198 S.W.3d 604, 610
(Mo. 2006)
(recognizing that employers may impose restrictions on competition “to the extent
that the restrictions protect the employer’s trade secrets or customer contacts”
(emphasis added)); Mills v. Murray,
472 S.W.2d 6, 12
(Mo. Ct. App. 1971)
(describing an employer’s “proprietary right in his stock of customers and their good
will” with no reference to secrecy).

The Members next argue that Lockton does not subject its associates, who
have more day-to-day contact with its customers than do its producer members, to
the same restrictive covenants as it did the Members. But this difference in treatment
speaks to Lockton’s efforts to apply its restrictive covenants judiciously.
Differential treatment is obviously justified here: Lockton understandably expects
that its producer members, who own profit-sharing interests in Lockton, have
significantly more pull on its customers’ decision-making than do associates. (The
same is true in other industries, including the legal industry—partners in a law firm
are obviously differently situated from associates when it comes to building and
maintaining client relationships.) That Lockton evidently gives thought to whom
needs restricting does not make Lockton’s restrictions unreasonable.

Moreover, as Lockton points out, “[t]aken to its logical conclusion,” the
Members’ argument that Lockton’s covenants should not be enforced because they
are not applied to Lockton’s associates “would mean that a business could not have
restrictive covenants with any client-facing personnel unless it had covenants with
-27-
all of them.” No Missouri authority supports the proposition that an employer must
impose restrictive covenants on an all-or-nothing basis. To the contrary, Missouri
courts describe the “quality, frequency, and duration of an employee’s exposure to
an employer’s customers” as “crucial in determining [a] covenant’s reasonableness.”
Whelan,
379 S.W.3d at 842
(emphasis added) (citation omitted). The upshot is that
employers can, and indeed must, make reasoned distinctions among employees
(and/or owners) when deciding to impose restrictive covenants. Lockton did so here
because the quality of producer members’ contacts with its clients is different from
the quality of its associates’ contacts.

The Members’ next assert that Lockton’s producer members bear the primary
burden of developing and maintaining client relationships, such that Lockton’s
customers’ goodwill belongs to Lockton’s producer members, not Lockton itself.
Yes, Lockton tasks its producer members with developing and building customer
relationships. But that does not mean that Lockton lacks any legitimate interest in
those relationships.12 Instead, Lockton’s reliance on its producer members to
perform this work is precisely why restrictive covenants are justified here. See
id. at
842
(stressing the relevance of employees’ client contacts to the reasonableness of
restrictive covenants); Kessler-Heasley Artificial Limb Co. v. Kenney,
90 S.W.3d
181, 186
(Mo. Ct. App. 2002) (explaining that restrictive covenants to protect
“customer contacts” are warranted in the sales industry because “a customer’s
goodwill toward a company is often attached to the employer’s individual sales
representative” (citation omitted)). The Members’ argument does not square with
Missouri law. If it were true that employers have no legitimate interest in customer
relationships that it asked its employees to build, no business would ever have a

12
The Members cite only a single case (applying Massachusetts law) for the
proposition that a client-facing employee primarily owns a company client’s
goodwill. See Getman v. USI Holdings Corp., No. 05-3286-BLS2,
2005 WL
2183159
, at *3 (Mass. Super. Sept. 1, 2005). The Members also do not address the
fact that they agreed in their contracts that Lockton’s customers’ goodwill is a
Lockton asset. Even assuming Lockton would not own its client’s goodwill by
default, as the Members suggest, it is not clear why Lockton could not bargain for
that goodwill by paying its producer members millions of dollars, as it did here.
-28-
protectable interest in its customer relationships. Missouri law says otherwise. See
Whelan,
379 S.W.3d at 842
(recognizing that employers are entitled to “protect
against the ‘influence an employee acquires over his employer’s customers through
personal contact’” (citation omitted)); Kessler-Heasley,
90 S.W.3d at 186
(“Stock in
customers, also referred to as customer contacts, are a legitimate protectable
interest.”).

Finally, the Members complain that the customer-nonsolicitation covenants
go beyond preventing solicitation—they also purport to prohibit the Members from
accepting or servicing implicated client accounts. And the Members say that
Lockton has no legitimate interest in dictating who accepts or services accounts of
its former clients after they decide to switch brokerages. But Lockton is justified in
taking its former producer members out of its customers’ calculus when they are
deciding whether to make that switch. Again, Missouri law permits Lockton to do
precisely just that. See Kessler-Heasley,
90 S.W.3d at 184-87
(concluding that a
covenant that generally prohibited competition, not just solicitation, was enforceable
because it served an employer’s legitimate interest in protecting its customer base).
Unsurprisingly, the Members cite no case suggesting that a customer’s right to work
with individual former employees or owners of a company overrides that company’s
right to negotiate post-departure restrictions that protect its goodwill. If that were
really the law, no covenant to compete (including covenants not to solicit) would
ever be enforceable, and cases like Whelan and Kessler-Heasley would have come
out the other way. See generally Whelan,
379 S.W.3d 835
(holding that modified
nonsolicitation provisions were enforceable against employees who started business
competing against their former employer); Kessler-Heasley,
90 S.W.3d at 187
(“Employee violated the terms of the non-compete clause of his employment
agreement because he had already affected Employer’s customer base by treating
Employer’s former patients, the very thing Employer had sought to protect against
with the non-compete clause.”). For these reasons, we hold that the district court did
not err in holding the Agreements’ restrictive covenants enforceable as modified.

-29-
C.

The Members next argue that the district court erred in declaring that the
Agreements’ forum-selection clauses are enforceable and in concluding that
Appellants breached those clauses. According to the Members, the district court
erroneously applied federal procedural law, rather than California law, in concluding
that the forum-selection clauses were enforceable. The Members alternatively
contend that, even if the district court correctly concluded that federal procedural
law governs, it misapplied the federal standard. Per the Members, this standard
required the district court to consider California public policy. And if the district
court had done so (instead of looking exclusively to Missouri public policy), it would
have determined that the forum-selection clauses were unenforceable. Finally, the
Members assert that—whatever the governing standard is—genuine disputes of
material fact preclude summary judgment.

As an initial matter, the Members waived their argument that California law
governs the forum-selection clauses’ enforceability. In their responses to Lockton’s
motions for summary judgment on this issue, the Members relied on cases applying
federal procedural law. And they conceded that Lockton was asking the district
court to apply the correct body of law: both Members’ summary judgment papers
stated that “[a]s Lockton acknowledges, a federal court should not enforce a
forum-selection clause if it would be ‘unjust or unreasonable to do so.’” In other
words, both Members expressly invoked—and asked the district court to apply—the
federal test for forum-selection clause enforceability. See M/S Bremen v. Zapata
Off-Shore Co.,
407 U.S. 1, 15
(1972) (expressing federal forum-selection clause
enforceability standard). Moreover, in arguing that the district court should not
enjoin the California Actions based on the forum-selection clauses, the Members
contended that “[b]ecause California and federal law differ with respect to the
[forum-selection clause] enforceability issue, a ruling by this Court that the clause is
enforceable cannot have a preclusive effect” on the California Actions. The
Members’ clear understanding was that the district court would be applying the
federal test. The Members cannot now contend that it is California law—and not
-30-
federal law—that dictates whether the forum-selection clauses are enforceable.13
See Hiland Partners GP Holdings, LLC v. Nat’l Union Fire Ins. Co. of Pittsburgh,
847 F.3d 594, 598
(8th Cir. 2017) (“We will not ordinarily ‘consider arguments
raised for the first time on appeal.’” (citation omitted)).

Because the Members did not challenge the applicability of federal law in the
district court proceedings, we decline to hold that the district court erred “in applying
federal law to determine the enforceability of the forum selection clause[s], and we
likewise apply federal law in reviewing the enforceability of the forum selection
clause[s] in this case.” Union Elec. Co. v. Energy Ins. Mut. Ltd.,
689 F.3d 968, 971
(8th Cir. 2012).

Federal law favors the enforcement of forum-selection clauses. Indeed,
“[f]orum selection clauses are prima facie valid and are enforced unless they are
unjust or unreasonable or invalid for reasons such as fraud or overreaching.” M.B.
Rests., Inc. v. CKE Rests., Inc.,
183 F.3d 750
, 752 (8th Cir. 1999). Forum-selection
clauses are also unenforceable “if enforcement would contravene a strong public
policy of the forum in which suit is brought, whether declared by statute or by
judicial decision.” Bremen,
407 U.S. at 15
; see also Union Elec. Co.,
689 F.3d at
974
(“While Bremen provides the proper analysis for determining the enforceability

13
Waiver aside, California law would not apply, even under the Members’
own reasoning. The Members reason that California law applies because (1) the
Agreements “dictated that” Lockton’s declaratory-judgment claims “should be
resolved according to the Missouri choice-of-law clause[s],” (2) the enforceability
of those clauses must be analyzed under Restatement (Second) Conflict of Laws
§ 187(2)(b), and (3) “that analysis compels the conclusion that California law
governs the agreements—including the Missouri [forum-selection clauses].” As we
previously held, the Missouri choice-of-law provisions are enforceable and Missouri
law thus does govern the Agreements. See supra Section III.A. So if the Members
are right that the choice-of-law clauses drive the forum-selection-clause
enforceability analysis, Missouri law would govern. And the federal and Missouri
forum-selection-clause enforceability standards are the same. See High Life Sales
Co. v. Brown-Forman Corp.,
823 S.W.2d 493, 496-97
(Mo. 1992) (adopting the
Bremen standard).
-31-
of a forum selection clause, in this circuit, consideration of the public policy of the
forum state must be part of that analysis.”). A party challenging a forum-selection
clause must make a “strong showing that it should be set aside,” and “bear[s] a heavy
burden of proof.” Bremen,
407 U.S. at 15, 17
. Forum-selection clauses are found
unenforceable only “in unusual cases.” Atl. Marine Constr. Co. v. U.S. Dist. Ct. for
W. Dist. of Tex.,
571 U.S. 49, 64
(2013).

The Members assert that the district court erred by reading Bremen’s
reference to the “public policy of the forum in which suit is brought” too literally.
Here, because Lockton brought the Federal Actions in Missouri, the district court
determined that Missouri was the “forum in which suit is brought” and thus
considered whether the Agreements’ forum-selection clauses violated Missouri
public policy.

The Members point out, however, that the Federal Actions teed up the
forum-selection clauses’ enforceability in an atypical way. In those cases, Lockton
sued the Members in Missouri—the state designated in the forum-selection
clauses—and sought declarations that the Agreements’ forum-selection clauses were
enforceable. But it is far more common for courts to evaluate a forum-selection
clause’s enforceability in a different posture: where a suit is filed in some forum
other than the one the forum-selection clause designates, and where the defendant
files a motion to dismiss, transfer, or stay invoking the forum-selection clause in that
undesignated forum. And indeed, that’s what happened in Bremen. See
407 U.S. at
6
(reviewing ruling on motion to stay lodged in the undesignated forum). According
to the Members, the takeaway is that when Bremen instructs courts to consider the
“public policy of the forum in which suit is brought,” what it really means is that
courts are to consider the public policy of the undesignated forum in which suit is
brought in apparent violation of the forum-selection clause. Here, that would be
California.

But the Members did not make this argument before the district court. In their
summary judgment briefs, they asserted not that California supplies the relevant
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public policy for the Bremen analysis, but rather that the forum-selection clauses
violate Missouri’s strong public policy. Specifically, they argued:

As the Supreme Court stated in Bremen, “A contractual
choice-of-forum clause should be held unenforceable if enforcement
would contravene a strong public policy of the forum in which suit is
brought . . . .” In this case, enforcing the Missouri [forum-selection
clauses] would contravene Missouri’s public policy against enforcing
illegal contracts.

We thus consider the Members’ argument that the district court considered the
wrong state’s public policy waived. See Hiland Partners,
847 F.3d at 598
.

Even if we did not, the Members’ interpretation of Bremen does not persuade
us. First, the Members do not engage with the logic underpinning the Supreme
Court’s public policy discussion in Bremen. At least arguably, the only principle
that Bremen suggests is that courts owe some level of deference to the public policy
of the fora in which they sit, such that an American court may not act in a way that
is contrary to American public policy. Bremen does not clearly suggest that courts
ought to concern themselves with the public policies of other fora in which they do
not sit. Second, we are concerned that the Members’ proposed test—which would
require a court evaluating the enforceability of a forum-selection clause in the
context of a declaratory judgment action brought in the contractually designated
forum to consider the public policy of some undesignated forum—is not
administrable. In such a case, it would not necessarily be clear what the relevant
undesignated forum might be—a declaratory judgment action could be brought
before any suit was improperly brought in an undesignated forum (just as Lockton
brought suit against Giblin weeks before she sued it in California). Would the court
adjudicating the declaratory judgment action have to guess where a suit breaching
the forum-selection clause might be filed and consider the public policies of any
states in which such litigation could conceivably occur? That unwieldy approach
would make little sense.

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The Members also argue that they raised genuine disputes of material fact that
precluded summary judgment on Lockton’s claims that the forum-selection clauses
are enforceable. Specifically, they contend that their summary judgment evidence
would permit a trier of fact to find that enforcing the forum-selection clauses would
be “unfair, unlawful, unjust and/or unreasonable” such that, no matter whether
federal, Missouri, or California law governs the enforceability question, they were
entitled to a trial on the issue. They say their evidence shows that (1) Lockton
deliberately included Missouri forum-selection clauses in the Agreements to evade
California law and its limitations on restrictive covenants; (2) there was a significant
disparity in bargaining power between the Members and Lockton; (3) Lockton
presented the Agreements on a take-it-or-leave-it basis; (4) nobody represented the
Members’ interests when Lockton drafted the Agreements; (5) the Missouri
forum-selection clauses were part of standard contracts and did not figure centrally
in the parties’ negotiations; (6) Lockton has itself challenged forum-selection clauses
in other litigation; and (7) Lockton moved for summary judgment seeking to enforce
the forum-selection clauses only after the courts in the California Actions denied
Lockton’s motions to dismiss based on the forum-selection clauses.

But none of the purported factual disputes to which the Members point is
material. The Members’ facts—even accepted as true—are insufficient as a matter
of law for the Members to have carried their burden of showing the forum-selection
clauses are unenforceable under the Bremen standard. They do not permit the
conclusion that the forum-selection clauses are unjust or unreasonable or invalid
within the meaning of Bremen. See Carnival Cruise Lines, Inc. v. Shute,
499 U.S.
585, 593-95
(1991) (holding that a forum-selection clause was enforceable even
though the clause was not subject to negotiation, appeared in a form contract, and
was agreed upon by parties of obviously unequal bargaining power); M.B. Rests.,
183 F.3d at 753 (affirming the district court’s decision that a Utah forum-selection
clause was enforceable, notwithstanding the plaintiffs’ arguments that enforcing the
clause would diminish their rights under South Dakota law, where the plaintiffs
failed to allege “that the Utah court [was] biased or incompetent or unwilling to
apply South Dakota law if applicable”); Dominium Austin Partners, L.L.C. v.
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Emerson,
248 F.3d 720, 726
(8th Cir. 2001) (recognizing that an offer’s mere
take-it-or-leave-it status does not suffice as a matter of law to establish an unlawful
contract of adhesion). The district court did not err in deciding that the Missouri
forum-selection clauses are enforceable as a matter of law.

The Members’ facts even when considered collectively do not meet their
“heavy burden of proof.” See Bremen,
407 U.S. at 17
. Bremen has teeth, and
forum-selection clauses are found unenforceable only in “unusual cases.” Atl.
Marine,
571 U.S. at 64
. It would be unusual indeed if we concluded that the
forum-selection clauses were unenforceable here, where the Members made millions
under the Agreements containing them. The thousand-foot view is that the
forum-selection clauses here are transparently fairer than others courts have
validated. See, e.g., Carnival Cruise Lines,
499 U.S. at 593-95
(concluding that a
forum-selection provision in a non-negotiated contract imposed in the consumer
context was enforceable). It does not matter if the Agreements were presented on a
take-it-or-leave-it basis, that the Members played no part in their drafting, and
Lockton sought to adjudicate its disputes with its members nationwide in a single
forum it viewed as favorable to its interests. Those facts, even in combination, do
not clear Bremen’s high hurdle.

We affirm the district court’s judgments as to the enforceability of the
forum-selection clauses. And because the parties do not dispute that, if the
forum-selection clauses are enforceable, the Members breached them, we likewise
affirm the district court’s judgments as to the Members’ breaches of the
forum-selection clauses.

IV.

Next, Lockton argues that the district court erred in granting the Members
summary judgment on its claims that the Members breached the 30-day notice
provisions in its operating agreements (and their fiduciary duties) when they
purported to resign from Lockton “effective immediately” and immediately began
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working for Alliant. These claims turn on whether this notice provision is
permissive, as the district court held, or whether it is mandatory. “We review de
novo . . . the district court’s interpretation of a contract.” Jessep v. Jacobson Transp.
Co.,
350 F.3d 739, 741-42
(8th Cir. 2003).

Section 5.10 of Lockton’s operating agreements specifies seven ways in
which a producer member’s membership interest “may” be terminated. It
provides:14

Any Producer Member may be terminated as a Member:

(a) by such Series Member on thirty (30) days’ written notice
to the Series;

(b) by the Series (upon approval of the Series Manager and
the Executive Committee of the Series in which such Series
Member is a Member) without Cause on thirty (30) days’ written
notice to the Series Member;

(d) by the Series in the event the Series of which such Series
Member is a Member closes all its offices or the Series
discontinues its business; provided, however, the effective date
of termination under this subsection (d) shall be the last day of
the month during which the Series so closes its offices or
discontinues business;

(e) by the series as of the end of the month during which a
Series Member is deemed to be permanently and totally disabled.
For purposes of this Section 5.10, a Member shall be deemed to
be “permanently and totally disabled” if, because if [sic] ill
health, physical or mental disability or other causes beyond such

14
We draw this language from the operating agreement governing Lockton’s
Pacific Series. The other operating agreements, with the exception of the Lockton
Partners operating agreement, contain substantially similar language.
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Member’s control, the Member shall have been unable or
unwilling or shall have failed to substantially perform such
Member’s essential duties as a Producer Member for a period of
one hundred eighty (180) consecutive days in any Fiscal Year;

(f) by the Series or the Series Member upon the end of the
month during which such Series Member attains the age of
sixty-five (65); and

(g) by the Series (upon approval of the Series Manager and
the Executive Committee of the Series in which such Series
Member is a Member) for Cause.

The district court read the term “may” in the first sentence of this section as
permissive, in the sense that the list of termination mechanisms is non-exclusive. In
other words, on the district court’s reading, producer members may terminate their
interests by giving 30 days’ notice. Or, producer members may terminate their
interests in some other, unspecified way—including by resigning “effective
immediately” as the Members claimed to do here.

We respectfully disagree with the district court’s reading. As used in the
operating agreements, “may” is permissive in the sense that a producer member or
Lockton need not terminate the producer member’s interest at all. But the list
specifies the only conditions under which termination can occur. If it were
otherwise, the list of termination mechanisms in § 5.10 would serve no purpose. The
operating agreements should not be read that way. See Jacobson Warehouse Co. v.
Schnuck Markets, Inc.,
13 F.4th 659, 670
(8th Cir. 2021) (“Under Missouri contract
law, ‘people are presumed not to intend nullities,’ and a contract’s ‘preferred
construction is one that provides a reasonable meaning to each phrase and clause,
not one that leaves some of the provisions without function or sense.’” (citation
omitted)); see also Gen. Am. Life Ins. Co. v. Barrett,
847 S.W.2d 125, 133
(Mo. Ct.
App. 1993) (applying the expressio unius canon—i.e., the principle “that ‘the
expression of one thing is the exclusion of another’ or ‘the mention of one thing
implies exclusion of another.’” (citation omitted)). And it is hard to imagine that

-37-
the Members would really want “may” to mean what they say it does. If it were true
that they did not have to give Lockton notice of their intent to depart, that would
arguably imply that Lockton likewise would not be bound by its limitations on its
ability to terminate members and could terminate members for any reason at any
time.

The district court’s reading is also contrary to how courts typically read these
sorts of notice provisions. See, e.g., In re Popkin & Stern,
340 F.3d 709, 711, 714
(8th Cir. 2003) (construing partnership agreement providing that “[a]ny partner may
withdraw or retire from the Partnership at the end of any calendar month, after giving
the Partnership at least sixty (60) days’ notice in writing” to preclude instantaneously
effective resignation). And it is contrary to ordinary English usage. As Lockton
puts it, “[I]f a parent tells a child begging for a snack that he ‘may have a piece of
fruit, a granola bar, or a yogurt,’ the child would make himself an ice cream sundae
at his own peril.” Section 5.10 is unambiguous. It permits producer members to
terminate their interests in only one way: “on thirty . . . days’ written notice.”

Nevertheless, the Members make two arguments against holding them to this
requirement. First, they assert that “[r]equiring LLC members to remain members
for 30 days after they wish to leave is ‘involuntary servitude,’ which is outlawed by
the 13th Amendment.” Second and relatedly, they argue that this notice provision,
if given effect, would “make Section 5.10(a) an unbargained-for, worldwide
noncompete covenant.” These concerns are unfounded.

The Members’ suggestion that requiring LLC members to provide notice of
their intent to terminate membership interests that have earned them millions of
dollars is what the Thirteenth Amendment’s framers had in mind when they spoke
of involuntary servitude is without merit. See U.S. Const. amend. XIII (“Neither
slavery nor involuntary servitude, except as a punishment for crime whereof the
party shall have been duly convicted, shall exist within the United States, or any
place subject to their jurisdiction.”); United States v. Kozminski,
487 U.S. 931, 942
(1988) (“[T]he phrase ‘involuntary servitude’ was intended to extend ‘to cover those
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forms of compulsory labor akin to African slavery which in practical operation
would tend to produce like undesirable results.’” (citation omitted)).

The Thirteenth Amendment might present a problem if Lockton sought to
compel the Members to continue on as Lockton members through specific
performance. See, e.g., Dan Smith Softball v. Cayton, No. 5:20-cv-01661-EJD,
2020 WL 4349848
, at *2 (N.D. Cal. July 29, 2020) (recognizing that in view of the
Thirteenth Amendment it was “not possible” for the court to compel the defendant
to play for his original softball team, but that other remedies, including preventing
the defendant from playing for other teams, might be available). But Lockton seeks
no such relief.

We find the Members’ argument that the notice requirement operates as an
unlawful covenant not to compete similarly unpersuasive. Such notice requirements
are routine. Indeed, Missouri’s LLC statute prescribes a 90-day notice requirement
in default of any treatment of the issue within an entity’s operating agreement.
Mo.
Rev. Stat. § 347.121
(1). And the Members cite no case applying Missouri law to
hold that a notice provision in an LLC’s operating agreement functioned as an
unlawful noncompete agreement.

When it comes to Lockton’s claims that the Members breached the notice
provision and breached their fiduciary duties by going to work for a Lockton
competitor before effectively terminating their interests, the mandatory or
permissive nature of § 5.10(a)’s notice requirement is the entire ball game. The
Members do not dispute that, if § 5.10(a) required them to give 30 days’ notice
before departing Lockton, they did not do so. They also do not dispute that, if they
went to work for a Lockton competitor before the 30 days elapsed—as they
indisputably did—they breached the fiduciary duties they owed Lockton as Lockton
members.

We conclude that the district court erred in granting the Members summary
judgment on Lockton’s claims that the Members breached § 5.10 of the operating
-39-
agreements and their fiduciary duties. And we direct that, on remand, the district
court enter judgment in Lockton’s favor on these claims.

Both Lockton and the Members appeal aspects of the district court’s awards
of attorneys’ fees. Lockton contends that the district court erred in declining to
award it the attorneys’ fees it incurred in the California Actions. For their part, the
Members argue that they—and not Lockton—were entitled to fees for the Federal
Actions as the “prevailing party” under the parties’ contracts, but that, even if
Lockton was the prevailing party, the district court’s fee awards were unreasonable.
They also contend that they are entitled to attorneys’ fees they incurred in defending
Lockton’s voluntarily dismissed DTSA claims.

First, Lockton argues that the district court erred in awarding it only nominal
damages for the Members’ breaches of the Agreements’ forum-selection clauses,
rather than a fully compensatory award accounting for the attorneys’ fees and costs
they had incurred relating to the California Actions because of those breaches. We
review de novo questions of law bearing on a damages award. See Jo Ann Howard
& Assocs., P.C. v. Nat’l City Bank,
11 F.4th 876, 882
(8th Cir. 2021).

The Missouri Supreme Court does not appear to have addressed whether
attorneys’ fees and costs are available as damages for breach of a forum-selection
provision. We therefore must predict how the Missouri Supreme Court would rule
if presented with this issue. See Blankenship v. USA Truck, Inc.,
601 F.3d 852, 856
(8th Cir. 2010); see also Leonard v. Dorsey & Whitney LLP,
553 F.3d 609, 612
(8th
Cir. 2009) (explaining standards for Erie predictions).

We predict that the Missouri Supreme Court would recognize that attorneys’
fees and costs incurred as a direct result of a defendant’s breach of a forum-selection
-40-
clause are available as damages for that breach. Missouri follows the “American
Rule” of attorneys’ fees, under which “absent statutory authorization or contractual
agreement, with few exceptions, each litigant must bear his own . . . fee[s].” Trs. of
Clayton Terrace Subdivision v. 6 Clayton Terrace, LLC,
585 S.W.3d 269
, 285 (Mo.
2019) (citation omitted). But we think there is a difference between attorneys’ fees
qua attorneys’ fees—that is, fees incurred incidentally because a party is prosecuting
or defending some claim—and attorneys’ fees as damages—that is, fees that are not
just incidentally incurred, but that are themselves the harm a party contracted to
avoid. See, e.g., Rice v. Interfood, Inc., No. 4:13CV1171 HEA,
2015 WL 331787
,
at *2 (E.D. Mo. Jan. 23, 2015) (predicting that Missouri law would permit the
recovery of attorneys’ fees as damages for a breach of a covenant not to sue because
for such a breach “attorneys’ fees are the damages” and “the philosophical basis for
the [American] Rule is not applicable”); Namdar v. Fried,
340 A.3d 1184
, 1202 (Del.
Ch. 2025) (“[A] distinction exists between the primary relief that a party seeks for
breach of contract and the enforcement expenses the party incurs obtaining the
primary relief. The American Rule bars a party from recovering enforcement
expenses unless an exception applies. It does not bar a party from recovering
primary relief.”). Permitting recovery of the latter sort of “fees” is entirely consistent
with the general principles underlying Missouri damages law.

Under Missouri law, the fundamental purpose of awarding damages for
breach of contract is to make the non-breaching party whole. Ameristar Jet Charter,
Inc. v. Dodson Int’l Parts, Inc.,
155 S.W.3d 50, 54
(Mo. 2005) (“The goal of
awarding damages is to compensate a party for a legally recognized loss. A party
should be fully compensated for its loss, but not recover a windfall.” (citations
omitted)); see also Clayton Ctr. Assocs. v. Schindler Haughton Elevator Corp.,
731
F.2d 536, 540
(8th Cir. 1984) (“[T]he goal in awarding damages is . . . to place [the
injured party] in the position it would have enjoyed had the contract been fully
performed.”). Thus, a plaintiff asserting a breach-of-contract claim is entitled to
recover, among other types of damages, “‘[a]ctual damages’”—that is, “‘damages
[that] are compensatory and are measured by the loss or injury sustained’ as a direct

-41-
result of the [defendant’s] wrongful act.” Catroppa v. Metal Bldg. Supply, Inc.,
267
S.W.3d 812, 818
(Mo. Ct. App. 2008) (citation omitted).

The whole point of a forum-selection clause is that it confers a right not to be
sued in a particular place: it is an agreement to avoid a suit. See Namdar, 340 A.3d
at 1203-04 (recognizing that a “forum selection clause establishes a contractual right
not to be sued in the foreclosed forum”). When a plaintiff brings a suit in violation
of a forum-selection clause, that suit is itself the harm the plaintiff’s contractual
counterparty bargained to avoid. Under these circumstances, litigation costs
(including attorneys’ fees) are not just incidental—they are the exact harm that the
contract sought to prevent and are the “direct result of the [breaching party’s]
wrongful act.” Catroppa,
267 S.W.3d at 818
(citation omitted); see also Namdar,
340 A.3d at 1202 (“The expenses incurred in the foreclosed forum provide the
measure of damages the non-breaching party suffered from the breach of the
contractual right not to be sued there.”). In light of these principles, we predict that
the Missouri Supreme Court would allow the recovery of attorneys’ fees as damages
for a breach of a forum-selection clause.

Our conclusion is bolstered by the fact that Missouri law permits the recovery
of attorneys’ fees in analogous circumstances, where the fees are incurred in a suit
the recovering party had a right to avoid. For instance, Missouri courts permit
recovery of attorneys’ fees as damages for malicious prosecution (the idea
apparently being that the harm a malicious prosecution claim addresses is a suit the
plaintiff should not have had to face). See Turman v. Schneider Bailey, Inc.,
768
S.W.2d 108, 113
(Mo. Ct. App. 1988) (“Attorney fees are a compensable element of
damages in a suit for malicious prosecution.”). Similarly, Missouri recognizes an
exception to the American Rule where a defendant’s wrongful conduct has subjected
the plaintiff to collateral litigation with third parties. See Beavers v. McGinnis,
277
S.W.3d 308, 310
(Mo. Ct. App. 2009) (“The collateral litigation exception to the
American Rule allows a plaintiff to recover attorney fees that he expended in
collateral litigation with a third party as a result of the defendant’s wrongdoing.”);
see also Essex Contracting, Inc. v. Jefferson Cnty.,
277 S.W.3d 647, 657
(Mo. 2009)
-42-
(per curiam) (“Where the natural and proximate result of a wrong or breach of duty
is to involve the wronged party in collateral litigation, reasonable attorneys’ fees
necessarily and in good faith incurred in protecting himself from the injurious
consequence thereof are proper items of damages.” (citation omitted)). We think
the rationale for permitting the recovery of attorneys’ fees in these circumstances
equally supports permitting the recovery of attorneys’ fees as damages for the
breaches of the forum-selection clauses at issue here.

We do not read the Agreements’ fee-shifting provisions to take general
breach-of-contract damages off the table. The fee-shifting provisions in the
Agreements authorize the “prevailing party” in litigation between Lockton and the
Members “aris[ing] out of, or relat[ing] to . . . th[e] Agreement[s] . . . and/or” the
Members’ Lockton membership to recover “in addition to any other remedies set
forth in th[e] Agreement[s] or otherwise available at law . . . any and all reasonable
costs and expenses . . . including reasonable attorneys’ fees.” The Agreements also
authorize Lockton, “in the event of a breach . . . of th[e] Agreement[s] . . . to recover
from [the Members] any money damages that can be determined.” Here, that is what
the attorneys’ fees Lockton incurred as a direct result of the Members’ breaches of
the forum-selection clauses are.

We vacate the district court’s nominal damages awards and instruct the district
court to consider, on remand, the proper measure of Lockton’s damages for breaches
of the forum-selection clauses consistent with the principles expressed in this
opinion.

The Members argue that the district court erred in awarding Lockton the
attorneys’ fees it incurred in the Federal Actions under the Agreements’ fee-shifting
provisions. As previously noted, the Agreements entitle the “prevailing party” in
disputes between Lockton and the Members to recover “reasonable attorneys’ fees.”
As also noted, the Agreements provide that they are to be “construed in accordance
-43-
with the laws of the State of Missouri.” We have already determined that this
choice-of-law election is enforceable. See supra Section III.A. Thus, we look to
Missouri law in construing the Agreements’ fees provisions.

Because the Agreements do not define the term “prevailing party,” we rely on
the definition that Missouri law supplies. See DocMagic, Inc. v. Mortg. P’ship of
Am., L.L.C.,
729 F.3d 808, 812
(8th Cir. 2013) (looking to Missouri law for the
definition of “prevailing party” where the parties’ agreement left that term
undefined). Missouri law recognizes two approaches to determine a party’s
“prevailing party” status. “The first approach—‘main-issue analysis’—turns on
which party is ‘the party prevailing on the main issue in dispute, even though not
necessarily to the extent of its original contention.’”
Id. at 813
. (citation omitted).
“The second approach—‘net-prevailing-party analysis’—essentially arithmetically
calculates which party received ‘the most points’ and ‘at the end of the contest
[declares] [it] the winner.’”
Id.
(alterations in original) (citation omitted). “[W]e
review de novo the . . . legal question of which litigant is the prevailing party.”
Id.
at 812
. And “[w]e review for an abuse of discretion the district court’s actual award
of fees and costs.”
Id.
The district court did not err in concluding that Lockton was the prevailing
party. That is the result both the main-issue and net-prevailing-party approaches call
for here.

The district court held, and Lockton now argues, that the main issue in the
Federal Actions was “the enforceability of Lockton’s Agreements . . . including the
forum selection clause[s], restrictive covenants, and Missouri choice-of-law
provision[s].” The Members contend that the main issue was whether they breached
their nonsolicitation and confidentiality obligations under the Agreements—not
whether the nonsolicitation provisions (and the other provisions the Members
contend are part of Lockton’s “scheme” to hold them to those provisions, including
the forum-selection and choice-of-law provisions) are enforceable.

-44-
The district court did not err in concluding that the main issue here was the
enforceability of the parties’ contracts, rather than the Members’ alleged breaches.
Lockton is not simply trying to hold two former producers to their contractual
obligations. The record shows that Lockton spent approximately $9 million and
hired three large law firms—Gibson Dunn, Quinn Emanuel, and Bryan Cave—to
prosecute its claims. Similarly, Alliant hired a major firm, Morgan Lewis, and spent
millions of dollars bankrolling the Members’ defenses in the Federal Actions and
funding the Members’ claims in the California Actions (where the Members seek
declarations that the same contractual provisions at issue here are unenforceable).
The way the parties have conducted these suits undercuts the Members’ argument
that the Federal Actions are primarily about Lockton’s allegations that the Members
improperly peeled off a handful of Lockton customer accounts.

The Agreements’ enforceability (as distinct from the Members’ alleged
breaches) clearly matters to everyone involved. It is undisputed that the Members
filed suits challenging the Agreements’ restrictive covenants and related provisions
in California state court and that Alliant is funding the Members’ suits and defenses.
Moreover, as the district court found, a holding that Lockton’s covenants are
enforceable (even just as to Lockton customers with whom its producers actually
worked) sends a message to Lockton’s competitors about the likely outcome of
future attempts to raid Lockton for its producers. When the Federal Actions are
viewed in the full business context in which they were brought, we think it is
apparent that the main issue was—as the district court held—enforceability, not
breach.

The Members argue that even if enforceability was the main issue, they
prevailed on it, because the district court modified the nonsolicitation covenants to
restrict their application to a limited subset of Lockton’s customers—the customers
with whom the Members actually dealt. In support, the Members rely on Paradise
v. Midwest Asphalt Coatings, Inc.,
316 S.W.3d 327
(Mo. Ct. App. 2010). In that
case, the Missouri Court of Appeals held that, because the trial court modified the
underlying noncompete agreement, the defendant “did not prevail on its main issue
-45-
(i.e. the validity of the original non-compete agreement),” and therefore was “not
entitled to attorney fees.”
Id. at 330
. Paradise is distinguishable because, here, the
district court held that Lockton’s covenants were enforceable to the exact extent that
Lockton sought to enforce them. Lockton is the prevailing party precisely because
the district court awarded it the relief it requested. Moreover, the interests
underlying Lockton’s restrictive covenants are at their strongest when the issue is
the ability of the Members’ to solicit the customers with whom they actually
developed relationships. Cf. Whelan,
379 S.W.3d at 842
(recognizing an employer’s
legitimate interest in protecting against “the influence an employee acquires over his
employer’s customers through personal contact” (citation omitted)). So even though
the district court did not conclude that Lockton’s covenants were enforceable as
written, that does not mean that Lockton did not pick up a significant win—Lockton
secured a declaration that its covenants were enforceable where they count most.
The district court did not err in holding that Lockton prevailed on the main issue.

Lockton is also the prevailing party under a net-prevailing party analysis.
Lockton prevailed on its most significant claims. And, in light of our conclusions
that the Members breached their notice obligations and fiduciary duties, and that
Lockton is entitled to a full compensatory award for the Members’ breaches of the
forum-selection clauses, see supra Sections IV, V.A, we conclude that it was
Lockton that scored “the most points” here. DocMagic,
729 F.3d at 813
. Lockton
soundly won the Federal Actions. Both the main issue and net-prevailing party
analyses point in the same direction, and we thus hold that the district court did not
err in determining that Lockton was the prevailing party under the Agreements.

The Members also contend that the district court erred in calculating
Lockton’s fee awards of $4,923,855.93 in its suit against Giblin and $4,264,674.77
in its suit against Kaufman. They argue both that Lockton’s claimed hours and
billing rates were unreasonable.

-46-
i.

If things remained as they stood before the district court, the Members would
have a reasonable argument as to reasonable hours. Their argument on this issue
boils down to one basic point: the district court should have parsed between the hours
Lockton’s counsel spent on the issues Lockton did and did not prevail on. Missouri
law imposes no obligation to parse between hours spent litigating different claims
“if the claims for relief have a common core of facts and are based on related legal
theories and much of counsel’s time is devoted generally to the litigation as a whole
making it difficult to divide the hours expended on a claim-by-claim basis.”
Williams v. Fin. Plaza, Inc.,
78 S.W.3d 175, 185
(Mo. Ct. App. 2002). Here,
however, it would not have been “difficult to divide the hours expended on a
claim-by-claim basis,” at least after the district court entered its summary judgment
orders on May 6, 2024. In the proceedings before the district court, Lockton
prevailed on none of its claims that remained pending after that point. Those claims
were either dismissed by the district court on successive summary judgment motions
or voluntarily dismissed by Lockton. Cf. Riviera Distributors, Inc. v. Jones,
517
F.3d 926, 928
(7th Cir. 2008) (holding that the defendant was the prevailing party
on voluntarily dismissed copyright claims). Yet, as the Members note, Lockton
incurred over $1 million in additional fees prosecuting the Federal Actions after the
district court’s May 6th orders. A significant portion of these fees were clearly
disconnected from the claims on which Lockton actually prevailed before the district
court and seemingly would not have been reasonably incurred for purposes of the
Agreements’ fee-shifting provisions.

But this opinion changes the landscape. Lockton was in fact entitled to
summary judgment on several issues on which it lost after May 6, 2024. Such issues
include its claims that the Members breached their contractual notice obligations and
fiduciary duties, and Lockton’s contention that it was entitled to awards of its
California fees as damages for the Members’ breaches of the forum-selection
clauses. Lockton won on those issues before us. We thus cannot say it was
unreasonable for Lockton to litigate them before the district court. And for that
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reason, we cannot conclude that the Members’ proposed May 6th cutoff date for fees
holds water. The Members suggest no alternative cutoff date after May 6th, nor do
they offer the Court any other suggestion as to how it can go about the task of
identifying the hours Lockton unreasonably claimed. We also note that, at least in
the Giblin Federal Action, the Members did not even attempt to give the district
court the tools necessary to undertake what they now say is the required parsing
analysis: Giblin argued only that Lockton’s claimed hours were excessive because
of staffing inefficiencies, not that Lockton wasted time litigating particular claims.
We thus consider Giblin’s argument that the district court improperly awarded fees
related to claims on which Lockton did not prevail waived. See Hiland Partners,
847 F.3d at 598
. For these reasons, we decline to hold that the district court abused
its discretion in concluding that Lockton’s claimed hours were reasonably incurred.

ii.

The Members also contend that Lockton’s attorneys’ rates are unreasonable
because they significantly exceed the median rates charged in the Kansas City,
Missouri, market. According to the Members, Lockton was not entitled to recover
fees at the rates charged by its “big city lawyers.” 15 We find no error in the district
court’s rates analyses. The district court was entitled to “consider[] the prevailing
rate in the market from which attorneys have traveled where the attorneys were
‘leaders in the field’ with ‘extensive experience,’ [and] ‘able to handle the case in a
shorter length of time than a local lawyer, without comparable experience, would
have needed.’” Miller v. Dugan,
764 F.3d 826, 831
(8th Cir. 2014) (citation
omitted). The district court reasonably determined that these matters demanded
exceptionally skilled and qualified counsel from larger markets. Both sides hired
extremely skilled and competent counsel because that is what these bet-the-business
cases demanded. Moreover, the fact that Lockton received the business-critical
results it did here supports the reasonableness of the district court’s award, see

15
We note that Morgan Lewis attorneys based in San Francisco and Los
Angeles represent the Members.
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Bowolak v. Mercy E. Comtys.,
452 S.W.3d 688, 701
(Mo. Ct. App. 2014) (listing
factors informing the reasonableness of fee awards), as does the fact that Lockton
paid the rates its lawyers charged, see Moysis v. DTG Datanet,
278 F.3d 819, 828
(8th Cir. 2002) (recognizing that, while not dispositive, an attorney’s customary rate
may be evidence of reasonableness); First State Bank of St. Charles v. Frankel,
86
S.W.3d 161, 176
(Mo. Ct. App. 2002) (observing that the fact a client has paid his
attorney’s fees “indicat[es] reasonableness”), overruled on other grounds by
Badahman v. Catering St. Louis,
395 S.W.3d 29
(Mo. 2013). The district court did
not abuse its discretion in conducting its rates analyses.

We hold that the district court did not abuse its discretion when evaluating the
reasonableness of Lockton’s claimed hours or rates. We affirm the district court’s
awards of fees and costs to Lockton.

Finally, the Members argue that the district court erred in failing to award
them fees under the DTSA. Under the DTSA, “if a claim of the misappropriation
[of a trade secret] is made in bad faith, which may be established by circumstantial
evidence,” a court may “award reasonable attorney’s fees to the prevailing party.”
18 U.S.C. § 1836
(b)(3)(D). A fee award under this statute is discretionary. See
LQD Bus. Fin., LLC v. AKF, Inc.,
2025 WL 830444
, at *4 (7th Cir. Mar. 17, 2025).

We have not yet weighed in on what the term “bad faith” means in the context
of § 1836(b)(3)(D). Here, the district court applied the test set forth in Farmers Edge
Inc. v. Farmobile, LLC, No. 8:16CV191,
2018 WL 2869005
, at *12 (D. Neb. May
3, 2018). Under that test, “[w]hether a plaintiff asserted a trade secret
[misappropriation claim] in bad faith is determined by considering the: ‘(1) objective
speciousness of the plaintiff’s claim, and (2) [the] plaintiff’s subjective misconduct
in bringing or maintaining [the] claim . . . .’”
Id.
(second alteration in original).
Neither party challenges the district court’s decision to use this test or suggests that

-49-
“bad faith” requires anything else. We thus assume without deciding that the test as
described in Farmers Edge controls.

The district court did not abuse its discretion in declining to award the
Members fees under the DTSA—at a minimum because it could have reasonably
concluded from the records in these cases that Lockton did not engage in subjective
misconduct in bringing and maintaining its DTSA claims. See
id.
(recognizing that
bad faith requires subjective intent). The Members essentially argue that Lockton’s
DTSA claims were so weak that Lockton knew or must have known that it was
engaged in misconduct by prosecuting them. Even assuming that objective
speciousness conclusively shows subjective misconduct,16 this argument does not
persuade us. Lockton’s DTSA claims were at least plausible—they survived
motions to dismiss. Moreover, the Members never sought sanctions against Lockton
for pursuing the DTSA claims below (at least not prior to asserting its DTSA fee
requests post-judgment). And if Lockton’s claims were really so weak that Lockton
must have been aware they were meritless, the Members could have put Lockton to
its summary judgment burden. Yet they never did so—the Members’ DTSA fees
request was the first time they asked the district court to look at the merits of the
DTSA claims. The Members contend that the district court should not have attached
any weight to their decision not to pursue summary judgment on claims they now
contend rose to the level of misconduct. But they cite no authority for that point,
and this argument does not persuade us that the district court erred in its discretionary
choice not to award fees under the DTSA.

16
The Members’ subjective-bad-faith theory would be a non-starter in at least
one of the circuits that has considered the meaning of “bad faith” in the DTSA’s
fee-shifting provision: the Sixth Circuit has held that “a district court must find that
a party’s claim was meritless, that the party knew at a certain point that it was
meritless and nonetheless maintained it, and that the party brought or maintained
the claim for some improper purpose.” Shepard & Assocs., Inc. v. Lokring Tech.,
LLC, No. 24-3348,
2025 WL 1420931
, at *4 (6th Cir. May 16, 2025) (emphasis
added). At most, the Members argue simply that Lockton must have been aware of
the weakness of its DTSA claims.
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VI.

The Members requested that we take judicial notice of various California
judicial records. We took that request with the case. We did not find it necessary to
consider these records in our analysis here. We thus deny the Members’ request as
moot.

VII.

Based on the foregoing, we affirm the district court’s judgments as to the
enforceability of the Agreements’ choice-of-law provisions, the enforceability and
breaches of the forum-selection clauses, and the enforceability of the
customer-nonsolicitation covenants. We reverse the district court’s judgments as to
the Members’ breaches of the operating agreement’s 30-day notice provision and
the Members’ breaches of fiduciary duties, and direct that the district court enter
judgment in Lockton’s favor on these claims. We vacate the nominal damages
awards, and direct that on remand the district court determine Lockton’s actual
damages attributable to the Members’ breaches of the forum-selection clauses. We
affirm the district court’s awards of fees and costs. These cases are remanded for
further proceedings consistent with this opinion.

ERICKSON, Circuit Judge, dissenting.

Federal courts are courts of limited not general jurisdiction. Parties may not
confer subject matter jurisdiction upon a federal court by stipulation or agreement,
nor can the lack of jurisdiction be waived by the parties or ignored by the court. Pac.
Nat’l Ins. Co. v. Transport Ins. Co.,
341 F.2d 514, 516
(8th Cir. 1965). Lockton’s
asserted jurisdictional basis is federal question. But nowhere in the Court’s 51-page
decision does the Court (nor did the district court below) identify, analyze, or resolve
the merits of a “substantial” question of federal law. See Biscanin v. Merrill Lynch
& Co., Inc.,
407 F.3d 905, 906
(8th Cir. 2005) (quoting Franchise Tax Bd. v.
Construction Laborers Vacation Trust,
463 U.S. 1, 27-28
(1983) (“Federal-question
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jurisdiction exists when ‘the plaintiff’s right to relief necessarily depends on
resolution of a substantial question of federal law.’”)); see also Wullschleger v. Royal
Canin U.S.A., Inc.,
953 F.3d 519, 522
(8th Cir. 2020) (finding federal jurisdiction is
proper when the plaintiffs’ “dependence on federal law permeates the allegations
such that the [Missouri state law] claims cannot be adjudicated without reliance on
and explication of federal law”).

In describing the issue of jurisdiction in these cases as “easily
discharge[able],” the Court overlooks the fact that at no time did Lockton ask the
lower court or this Court to examine a “substantial” question of federal law. Instead,
the Court finds sufficient the mere pleading of a federal cause of action, which if
correct, will set the groundwork for lawyers to shoehorn cases with no substantial
issue of federal law into federal court. Here, as the Court notes, Lockton alleged,
among numerous state law claims, a single federal claim under the Defend Trade
Secrets Act (“DTSA”). While there is no dispute that Lockton identified a federal
cause of action, it is also indisputable that Lockton took no action on its federal
claim, nor can the Court point to an issue in these cases that involved a substantial
question of federal law. Unlike the Court, I believe jurisdiction premised on federal
question requires there be a claim involving a “substantial” question of federal law—
not merely the ability to identify a federal cause of action. With no substantial
question of federal law present, I believe subject matter jurisdiction is lacking and
the exercise of supplemental jurisdiction over Lockton’s state law claims was
improper.

An examination of the record reveals that Lockton’s identification of the
“DTSA” was simple gamesmanship to evade application of California law and the
adverse rulings that were piling up in the California courts. Any doubt that this was
the strategy was eliminated when the only action Lockton took related to its
purported federal claim was to file a stipulation for dismissal with prejudice. By
exercising jurisdiction over claims with no substantial federal issue, the Court
endorses a jurisdictional ruse that I believe is untenable. Because there is no

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substantial federal question in these cases, the Court’s conclusion that subject matter
jurisdiction exists is unsustainable.

Moreover, even if federal jurisdiction was properly established, this case is
more nuanced and complicated than the mere departure of two people who left
Lockton to work for a competing company. In this highly competitive and lucrative
industry, the ability to attract, recruit, and retain successful insurance producers is
invaluable and has been the subject of extensive litigation—in the California state
courts. The Court’s opinion paints an incomplete picture by tending to describe
Lockton as a victim, leaving the impression that Eric Kaufman’s and Sallie Giblin’s
conduct was legally unjustified and morally deplorable. The Court’s factual framing
of the cases includes facts favorable to its position and ignores or minimizes the
contrary evidence in the record. By taking this approach, the Court fails to fairly
address principles of comity, dismisses the materially greater interests California has
in the parties’ dispute, disregards evidence of forum shopping, and overlooks
Lockton’s gamesmanship and inconsistent litigation positions. I respectfully dissent.

1. Federal Court Jurisdiction

In its complaints, Lockton alleged the district court had subject matter
jurisdiction over a claim arising under the DTSA and supplemental jurisdiction over
the other four claims. See
18 U.S.C. § 1836
(c);
28 U.S.C. § 1331
. While the Court
contends that Lockton’s DTSA claim is “adequately related” to its state law claims,
it fails to explain how. Not only did Lockton not act on its DTSA claim and
voluntarily dismiss the claim, but it also voluntarily dismissed all state law claims
premised on the same operative allegations as the DTSA claim. Because federal
courts are courts of limited jurisdiction, empowered to hear cases only as provided
for under Article III of the Constitution or Congressional enactments, the existence
of subject matter jurisdiction is a question of law subject to de novo review. Great
Lakes Gas Transmission Ltd. P’ship v. Essar Steel Minn. LLC,
843 F.3d 325, 328
(8th Cir. 2016). Even if the parties have expended significant time, effort, and
expense before the issue of subject matter jurisdiction is raised, this Court has “a
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duty to determine the existence of subject matter jurisdiction at any time, even on
appeal.”
Id. at 334
.

For purposes of federal question jurisdiction, an action “arises under federal
law only when the plaintiff’s statement of his own cause of action shows that it is
based upon federal law.” Vaden v. Discover Bank,
556 U.S. 49, 60
(2009) (cleaned
up); see Dakota, Minn. & E. R.R. Corp. v. Schieffer,
711 F.3d 878, 880
(8th Cir.
2013) (explaining that when federal subject matter jurisdiction is based on ERISA
but the evidence fails to establish the existence of an ERISA plan, the claim must be
dismissed for lack of subject matter jurisdiction). In other words, subject matter
jurisdiction is not established merely because a plaintiff can point to a federal statute.
“[A] federal question must exist not in mere form but in substance, and not in mere
assertion, but in essence and effect.” Stanturf v. Sipes,
335 F.2d 224, 229
(8th Cir.
1964). The plaintiff bears the burden of asserting “facts that affirmatively and
plausibly suggest that the pleader has the right he claims (here, the right to
jurisdiction), rather than facts that are merely consistent with such a right.” Stalley
v. Catholic Health Initiatives,
509 F.3d 517, 521
(8th Cir. 2007). A complaint
asserting state law claims may be characterized as “arising under” federal law “if the
law governing the complaint is exclusively federal.” Vaden,
556 U.S. at 61
; cf.
McNeill v. Franke,
171 F.3d 561, 564
(8th Cir. 1999) (quoting Merrell Dow Pharm.
Inc. v. Thompson,
478 U.S. 804, 808
(1986) (stating “the mere presence of a federal
issue in a state cause of action does not automatically confer federal-question
jurisdiction”)). Lockton did not litigate a federal claim nor an issue of federal law
in these actions.

The last substantive claim Lockton alleged in each of the complaints was its
purported DTSA claim. Lockton did not conduct discovery or pursue relief related
to its DTSA claim. The record shows that federal law was not the source for the
causes of action Lockton sought to have adjudicated in federal court nor did
Lockton’s right to relief depend on resolution of a substantial question of federal
law. After Lockton was unsuccessful in convincing the California courts to dismiss
or stay the California actions, it sought a second bite at the apple in federal court.
-54-
To effectuate an end run around the adverse rulings in California, Lockton quickly
moved for summary judgment in federal court, seeking a declaration that the forum
selection clauses were enforceable as well as certification under Federal Rule of
Civil Procedure 54(b) in order to obtain a judgment with claim preclusive effect.
Lockton went so far as to ask the district court to enjoin the California suits.

Lockton’s next move was to obtain a declaration that the choice-of-law
provision and the restrictive covenants were valid and enforceable. That same day
it filed a separate motion seeking summary judgment on portions of its claims for
breach of contract and fiduciary duty. At no time did Lockton pursue relief under
federal law or any allegation related to its claim involving improper access, use, or
disclosure of a trade secret. Instead, the only action it ever took on the federal claim
was to file a stipulation for dismissal with prejudice. (Kaufman Dist. Ct. Dkt. 377;
Giblin Dist. Ct. Dkt. 386).

Consistent with the proceedings below, on appeal Lockton identified its “main
issue” as “upholding the enforceability of the non-solicitation covenants and the
choice-of-law and forum-selection clauses that govern the enforceability of those
covenants.” Red Br. p. i. Lockton reiterated in its statement of the case that it
prevailed “on its most important claims.” Id. at p. 17. It identified those “most
important claims” as the “three foundational contract rights,” consisting of the forum
selection clause, the choice-of-law provision, and the customer non-solicitation
clauses. Id. at 17-18. Again, in its argument section, Lockton maintained that the
district court correctly upheld the parties’ “key contractual obligations.” Id. at 27.
There is no mention of any issue of federal claim, let alone a substantial question of
federal law.

The “substantiality inquiry” looks “to the importance of the issue to the federal
system as a whole.” Gunn v. Minton,
568 U.S. 251, 260
(2013). Federal jurisdiction
is proper only if the federal issue surrounding the state law claims is “(1) necessarily
raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal
court without disrupting the federal-state balance approved by Congress.”
Id. at 258
.
-55-
None of Lockton’s state law claims implicated a disputed and substantial federal
issue. See Boyd v. Deadwood Tobacco Co.,
178 F.4th 1132
, 1146 (8th Cir. 2026)
(noting the validity and interpretation of a forum selection clause is a question of
state law). The claims Lockton litigated in the district court were purely state law
matters. Lockton’s DTSA claim was a ruse to get into federal court and circumvent
the California court’s rulings by having the same claims by the same parties
adjudicated in Missouri federal court.

Congress did not intend to provide a federal forum for breach of contract
cases. Great Lakes Gas Transmission Ltd. P’ship,
843 F.3d at 334
. Yet, that is
precisely the nature of these cases. Because none of the claims litigated in these
actions involve a substantial federal question and no other basis for federal
jurisdiction was asserted, subject matter jurisdiction is lacking. Without subject
matter jurisdiction, the district court and this Court lack the authority to decide the
parties’ state law claims. I would vacate the judgments of the district court and order
the dismissal of these cases for lack of jurisdiction. 17

2. Forum Shopping and Lockton’s Inconsistent and Irreconcilable
Litigation Positions

For years now, Lockton has endeavored to find a way to hamper the mobility
of those who sign an agreement to work for it. Until April 30, 2016, Lockton’s
member agreements provided that all disputes would be governed by Illinois law
and any enforcement action must be brought in federal court in Chicago, Illinois, or

17
The lack of federal court jurisdiction does not necessarily obviate the
contractual choice-of-law or forum selection clause provisions. The agreements set
forth two separate forums in Missouri for dispute resolution: federal court in Kansas
City, Missouri, or the Circuit Court of Jackson County, Missouri. Rather than
attempt to manufacture federal question jurisdiction and to avoid the appearance of
forum shopping, consistent with the terms of the agreements, Lockton could have
sought to have the very same state law claims it wanted adjudicated in these actions
adjudicated in Missouri state court.

-56-
the circuit court in Cook County, Illinois. At the time, Lockton selected Illinois over
Missouri, because it had encountered challenges enforcing its restrictive covenants
in the Missouri courts. After Lockton became unsatisfied with application of Illinois
law, Lockton launched an effort to change Missouri law in its favor. As
acknowledged by the Court, Lockton convinced the Missouri General Assembly to
change Missouri law to make restrictive covenants acceptable and enforcement
widely available. After successfully changing Missouri law, Lockton revised its
member agreements to designate Missouri as the governing law and forum for
disputes.

Lockton’s efforts to obtain a strategic advantage don’t end there. Its litigation
conduct demonstrates patent forum shopping. Evidence developed in the record
shows that when Lockton hired an employee from a competing insurance brokerage
firm, specifically Aon Risk Insurance Services, Lockton commenced suit in
California against Aon on behalf of the employee and sought a declaration that Aon’s
Illinois forum selection and choice-of-law provisions were unenforceable against the
California citizen who it hired to work for it. (Giblin Dist. Ct. Dckt. 84-4). Of note,
Lockton contended that it ought to be able to “fully compet[e] in the marketplace by
hiring former employees from Aon and conducting business with the clients who
would otherwise exercise their free will to choose Lockton as their insurance
broker.” Id. at 25. Even more, Lockton claimed that “[e]mployee mobility is an
essential and fundamental California public policy” and attempting to enforce
restrictive employee covenants is “unlawful behavior.” Id. at 3-4. Lockton asserted
Aon’s Illinois choice-of-law and forum selection provisions were a “scheme” to
improperly “circumvent” California’s public policy and court decisions, “make a
mockery of California fundamental public policy,” trap[] California employees, and
amounts to “unethical, oppressive, and unscrupulous” behavior. Id.

Yet, in these two actions involving former Lockton producers, Lockton claims
just the opposite. Lockton seeks to evade California law and the California courts.
The reason is simple: unlike the Missouri district court, California courts have
repeatedly declined to enforce Lockton’s Missouri forum selection clause against
-57-
California citizens living and working in California. See Request for Judicial Notice
(compiling five California cases involving former Lockton employees that found
Lockton’s forum selection provisions unenforceable but which this Court declined
to accept and consider because it “did not find it necessary to consider these records
in our analysis here”); see also Giblin Dist. Ct. Dckt. 63-8 (California Superior Court
order denying Lockton’s motion to dismiss and/or stay the California action and
finding Lockton’s restrictive covenants “appear to be unenforceable restraints on
trade pursuant to California law”); Kaufman Dist. Ct. Dkt 246-14 (California
Superior Court order denying Lockton’s motion to dismiss, finding Lockton failed
to show enforcement of the mandatory forum selection clause will not in any way
diminish Kaufman’s unwaivable statutory rights and noting “Lockton made no effort
to create lawful covenants,” as the covenants “extend to anywhere Kaufman could
reasonably conduct business with no geographic limitation”). In its decision, the
Court entirely ignores evidence in the record demonstrating Lockton’s conflicting
litigation positions, pertinent decisions in the California proceedings on the very
issues before the Court, and Lockton’s scheme to litigate in California only when it
wants to.

As noted earlier, the state law issues that Lockton sought to have adjudicated
in federal court have been and are currently being extensively litigated in California.
This is not a situation in which the legal landscape has evolved over time. Each of
the referenced actions were filed by Lockton within the same year—Lockton filed
suit on January 12, 2022, against Aon in California, which was not in compliance
with the employee’s contractual Illinois choice-of-law/forum selection provisions.
Lockton then turned around and filed the instant action in Missouri federal court
against Kaufman on July 20, 2022—after Kaufman had commenced suit in
California—and against Giblin on November 30, 2022. Each action pertains to the
exercise of jurisdiction over contractual provisions pertaining to California citizens
living and working in California who were servicing almost exclusively California
clients while working in the company’s California offices. Although replete with
examples in the record, neither the district court nor the Court pay any attention to
principles of federalism or comity.
-58-
While failing to consider principles of federalism and comity, to justify
application of Missouri law and venue in Missouri federal court, the Court pays great
attention to the “millions” Kaufman and Giblin earned while working at Lockton
and the purported ownership interests that they obtained through the agreements.
Contrary to the district court’s portrayal, both Kaufman and Giblin have asserted that
the “equity” and “ownership” interests that they received by way of the agreements
with Lockton are a sham. The record contains evidence disavowing Lockton’s claim
that in exchange for signing these agreements, producers obtained valuable
ownership interests in the company. For instance, Kaufman submitted a declaration
stating he was repeatedly told that the Lockton family “owns” Lockton. Kaufman
Dist. Ct. Dkt. 246-3. Lockton disclosed that the Lockton family owns 97.7% of
Lockton, Inc. Id. Kaufman also introduced letters from Lockton’s associate general
counsel informing Kaufman that he had negative capital account balances. Id.
Lockton told Kaufman that his final negative account balance was $441,707.623 and
after offsets he actually owed Lockton $351,099.61. Id. at Exh. 3. Lockton’s
associate counsel reiterated in a subsequent letter that Kaufman was indebted to
Lockton in the amount of $351,099.61 plus interest accruing as of October 1, 2022.
Id. at Exh. 4.

The Court, in discounting the volume of contacts California has to the parties’
dispute, finds that California’s interests are not materially greater than Missouri’s
interest in protecting “Missouri businesses” from what it views as unfair
competition, although the disputes in these cases center on conduct occurring in
brokerage offices operating and transacting business almost exclusively in
California. This Court sanctions Lockton’s forum shopping strategy of pursuing
relief in California when it hires a competitor’s employee who is subject to a
restrictive covenant but turning around and pursuing relief in Missouri district court
advocating for the application of Missouri law when a producer leaves Lockton.
Employee mobility as to insurance producers working in California should not
depend on whether a person leaves Lockton or goes to work for Lockton.

-59-
A unifying feature of the Supreme Court’s abstention cases is they balance
underlying principles of equity, comity, and federalism. When there are concurrent
actions seeking to litigate the same issues, the first-filed rule is “dominant” in
determining which federal court should proceed, and a “relevant” factor when
considering whether a federal court should defer to a pending state court action.
Smart v. Sunshine Potato Flakes, L.L.C.,
307 F.3d 684, 687
(8th Cir. 2002). Even if
Lockton had properly raised a federal issue, under the doctrine recognized in
Colorado River, a federal court, in exceptional circumstances, may defer to a
concurrent state court case when parallel state and federal actions exist. Colorado
River Water Conservation Dist. v. United States,
424 U.S. 800, 818
(1976). Here,
the concurrent federal and state actions involve the same operative facts and the same
parties. The “millions” Kaufman and Giblin earned, which the Court emphasizes,
occurred while they were residing in California, transacting business in California,
and servicing almost exclusively California-based clients. Kaufman and Giblin
asserted they travelled to Missouri no more than a handful of times over the 15 to 16
years they worked at Lockton and undoubtedly interacted with Lockton’s Missouri-
based executives in California far more often than in Missouri. Further, the
vexatious and contrived nature of the purported federal claim strongly favors
abstention, as does the need to safeguard the fundamental principles of equity,
comity, and federalism.

In short, there are many aspects of these cases that the Court overlooks in its
opinion. Exceptional circumstances contemplated by the creation of the Colorado
River doctrine have been established in these cases. They include: California’s
extensive and ongoing involvement in litigation over the same state law issues
pertaining to California citizens, like Kaufman and Giblin; Lockton’s decision to
avail itself of the jurisdiction of the California courts to adjudicate the rights of a
former competitor’s employee and advocate for exactly the opposite positions it took
in these cases; Kaufman’s first-filed action in California, and the extensive and
materially greater interests California has compared to the limited conduct in
Missouri. Under the circumstances, if Lockton had been able to properly establish
federal court jurisdiction, I believe the district court and this Court have wrongly
-60-
disregarded and ignored entirely the concurrent pending California proceedings and
the materially greater interests that California has in the parties’ disputes.
______________________________

-61-

West Series <strong>of</strong> Lockton Companies, LLC <strong>v.</strong> Eric Kaufman

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