Aristotle Int'l v. Acuant, Inc.

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ARISTOTLE INTERNATIONAL, INC., Plaintiff, v. ACUANT, INC. et al., Defendants.

No. 22-cv-741 (DLF)

United States District Court, District of Columbia

January 4, 2023

MEMORANDUM OPINION

DABNEY L. FRIEDRICH, United States District Judge

Aristotle International, Inc., brings this suit against Acuant, Inc., a company that contracted to resell Aristotle's identity verification service, and GB Group PLC, a competitor that acquired Acuant. See Compl. ¶¶ 20, 30 Dkt. 3. Aristotle alleges that the defendants misappropriated Aristotle's trade secrets in violation of the federal Defend Trade Secrets Act (DTSA) and D.C.'s Uniform Trade Secrets Act (DCUTSA). Id. ¶¶ 53-59, 61-65. It brings further claims against Acuant for breach of contract, id. ¶ 69-70, and against GB Group for interference with contractual relations, id. ¶ 77. Before the Court is the defendants' motion to dismiss for lack of personal jurisdiction and failure to state a claim. Dkts. 20, 27. For the reasons that follow, the Court will grant in part and deny in part the defendants' motion.

I. BACKGROUND^[1]

Aristotle provides consumer and voter data, data services, and analytics to customers including political organizations and businesses. Compl. ¶ 3. It also provides identity and age verification services through its Integrity division. Id. ¶ 9. Through that division, Aristotle has developed verification methodologies and compiled data spanning over a hundred countries, which it stores in its databases and uses to “provide clients with the most up-to-date data, best practices, and data quality.” Id. ¶¶ 10-12. Aristotle has implemented various procedures to protect the confidentiality of this information, including detailed employee policies, confidentiality agreements, physical protections at offices, technological protections, and contractual protections with customers and third-party partners. Id. ¶¶ 13-19.

In 2015, Aristotle entered into a contract with Acuant, a corporation providing identity verification, document authentication, and fraud prevention technology. Id. ¶¶ 4, 20. The contract allowed Acuant to resell XXXXX (paragraph 1). Id. ¶ 20. It laid out terms for such resale, including that Acuant must XXXXX (paragraph 2) and notify Aristotle of XXXXXX (paragraph 3). Id. ¶¶ 21-22. Furthermore, XXXXX Id. ¶ 23. The contract gave Aristotle 48 hours to decline approval (paragraph 4). Id. The contract also laid out the pricing structure that Aristotle used to provide services to Acuant. Id. ¶ 27.

In addition, the contract gave Acuant access to much of Aristotle's confidential information and required Acuant to hold that information “in strict confidence[,] take all reasonable precautions to protect” it, not divulge it to third parties, and not use it except as authorized. Id. ¶ 24. It further required Acuant to provide written notice to Aristotle if the confidential information was breached, Id. ¶ 26, and, upon the contract's termination, to “[i]mmediately” “return[] or destroy[]” the confidential information and provide written notice that it had done so, Id. ¶ 25. Under these conditions, Aristotle shared confidential information with Acuant related to its Integrity services. Id. ¶ 28. On August 11, 2021, for example, Acuant requested certain sensitive information about Aristotle's data coverage by country, which Aristotle provided. Id. ¶ 29.

On November 18, 2021, GB Group, a United Kingdom-based company that provides identity verification, document authentication, and fraud prevention technology services, announced that it would acquire Acuant for $736 million. Id. ¶¶ 5, 30. Before then, GB Group and Acuant engaged in discussions to facilitate GB Group's decision whether to acquire Acuant. Id. ¶ 30. GB Group ultimately decided to acquire Acuant to help “accelerate[] the rollout of GBG's identity and fraud solutions globally” and in North America in particular. Id. ¶ 31.

A few days after this announcement, Aristotle asked Acuant to certify that it had destroyed or returned Aristotle's confidential information and had not shared its confidential information with GB Group. Id. ¶ 32. Acuant did not do so. Id. On December 1, 2021, Aristotle again raised its confidentiality concerns with Acuant, reminded Acuant of its contractual confidentiality obligations, and asked Acuant to affirm that it had not shared Aristotle's confidential information with GB Group. Id. ¶ 33. Between December 1 and December 13, Aristotle, Acuant, and GB Group engaged in a series of phone and written conversations in which Aristotle repeatedly requested assurance that its information had remained confidential, but the conversations were not fruitful. Id. ¶¶ 34-40. During one such conversation, GB Group “nearly quoted from certain portions” of the Aristotle-Acuant reseller agreement. Id. ¶ 36.

On December 17, 2021, Aristotle sent a letter to Acuant terminating the contract and, per the termination provision, requesting that Acuant return or destroy Aristotle's confidential information and provide written confirmation. Id. ¶ 40. Acuant responded on December 21, 2021, requesting further discussions. Id. ¶ 41. Acuant continued to refuse to provide the requested written confirmations. Id. ¶¶ 42, 45-46.

On January 19, 2022, Acuant sent Aristotle XXXXX for the first time. Id. ¶ 43. The XXXXX to which Acuant XXXXX but it did not include all of the information required under paragraph 4 of the contract, XXXXX Id. After receiving the XXXXX Aristotle asked Acuant when it began XXXXX but Acuant did not provide further information. Id. Aristotle concluded that Acuant had XXXXX as required by paragraphs 2 and 4 of the contract. Id. Two days later, Aristotle informed Acuant that it XXXXX Id. ¶ 44. XXXXX Id.

On March 17, 2022, Aristotle brought this suit for misappropriation of trade secrets against Acuant and GB Group, breach of contract against Acuant, and interference with contractual relations against GB Group. Id. ¶¶ 53, 61, 69, 77. The defendants moved to dismiss under Rule 12(b)(2) of the Federal Rules of Civil Procedure for lack of personal jurisdiction and under Rule 12(b)(6) for failure to state a claim. Defs.' Mem. in Supp. of Mot. to Dismiss, Dkts. 20 (redacted version), 27 (sealed version).

II. LEGAL STANDARD

A. Rule 12(b)(2)

Under Rule 12(b)(2) of the Federal Rules of Civil Procedure, a party may move to dismiss an action when the court lacks personal jurisdiction. Fed.R.Civ.P. 12(b)(2). “On such a motion, the plaintiff bears the burden of ‘establishing a factual basis for the exercise of personal jurisdiction' over each defendant.” Triple Up Ltd. v. Youku Tudou Inc., 235 F.Supp.3d 15, 20 (D.D.C. 2017) (quoting Crane v. N.Y. Zoological Soc'y, 894 F.2d 454, 456 (D.C. Cir. 1990)). To meet this burden, a plaintiff cannot rely on conclusory allegations, Id., but rather must allege specific facts connecting the defendant with the forum, see Shibeshi v. United States, 932 F.Supp.2d 1, 2-3 (D.D.C. 2013) (citing Second Amendment Found. v. U.S. Conf. of Mayors, 274 F.3d 521, 524 (D.C. Cir. 2001)). When ruling on a 12(b)(2) motion, the court “may receive and weigh affidavits and any other relevant matter to assist it in determining the jurisdictional facts.” Triple Up Ltd., 235 F.Supp.3d at 20 (quotation marks omitted). “Ultimately, the Court must satisfy itself that it has jurisdiction to hear the suit.” Id. at 20-21 (quotation marks omitted).

B. Rule 12(b)(6)

Rule 12(b)(6) of the Federal Rules of Civil Procedure allows a defendant to move to dismiss the complaint for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). To survive a Rule 12(b)(6) motion, a complaint must contain factual matter sufficient to “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A facially plausible claim is one that “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). This standard does not amount to a specific probability requirement, but it does require “more than a sheer possibility that a defendant has acted unlawfully.” Id.; see also Twombly, 550 U.S. at 555 (“Factual allegations must be enough to raise a right to relief above the speculative level.”). A complaint need not contain “detailed factual allegations,” but alleging facts that are “merely consistent with a defendant's liability . . . stops short of the line between possibility and plausibility.” Iqbal, 556 U.S. at 678 (quotation marks omitted).

Well-pleaded factual allegations are “entitled to [an] assumption of truth,” Id. at 679, and the court construes the complaint “in favor of the plaintiff, who must be granted the benefit of all inferences that can be derived from the facts alleged,” Hettinga v. United States, 677 F.3d 471, 476 (D.C. Cir. 2012) (quotation marks omitted). The assumption of truth does not apply, however, to a “legal conclusion couched as a factual allegation.” Iqbal, 556 U.S. at 678 (quotation marks omitted). An “unadorned, the defendant-unlawfully-harmed-me accusation” is not credited; likewise, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. Ultimately, “[d]etermining whether a complaint states a plausible claim for relief [is] a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679.

III. ANALYSIS

A. Personal Jurisdiction

The Court “may exercise one of two types of personal jurisdiction: (1) ‘general or allpurpose jurisdiction' or (2) ‘specific or case-linked jurisdiction.'” Lewis v. Full Sail, LLC 266 F.Supp.3d 320, 323 (D.D.C. 2017) (quoting Goodyear Dunlop Tires...