BioPoint, Inc. v. Dickhaut

BIOPOINT, INC. v. ANDREW DICKHAUT and CATAPULT STAFFING, LLC d/b/a CATAPULT SOLUTIONS GROUP

Civil Action No. 20-10118-RGS

United States District Court, D. Massachusetts

September 22, 2021

MEMORANDUM AND ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT

RICHARD G. STEARNS, UNITED STATES DISTRICT JUDGE.

In the operative Second Amended Complaint (SAC), plaintiff BioPoint Inc., a life sciences consulting firm, alleges that defendant Andrew Dickhaut, a Managing Director for defendant and competitor Catapult Staffing, LLC d/b/a Catapult Solutions Group, exploited BioPoint's confidential information suborned from Leah Attis, a former Business Development Manager for BioPoint to whom Dickhaut is now married.^[1] Discovery having been completed, the parties cross-move for summary judgment.

BACKGROUND

BioPoint provides consultant placement services to companies in the life sciences industry. To place a consultant, BioPoint refers potential candidates for a client company's open positions. BioPoint earns a fee if a match is made and the candidate accepts an offer from the company. In May of 2015 BioPoint hired Attis as a Business Development Manager. Attis signed a Nonsolicition, Noncompetition and Confidentiality Agreement, committing, inter alia, not to use or share BioPoint's confidential information except in performing her job. During her employment with BioPoint, Attis was engaged to Dickhaut.

Catapult is a competitor of BioPoint providing similar placement services. In April of 2017, Catapult hired Dickhaut as the Managing Director of its Massachusetts office. In or around late 2017, Dickhaut begin soliciting clients for Catapult in the life sciences industry, a new area of business for Catapult. BioPoint alleges that Attis shared its confidential information -including the names of qualified candidates available positions, and business know-how, such as bill rates and contracts, with Dickhaut, causing BioPoint to lose a number of placement opportunities.

BioPoint terminated Attis on December 4, 2019, and filed this lawsuit on January 21, 2020. BioPoint asserts claims for misappropriation of trade secrets under state (Count I) and federal law (Count II), tortious interference with its relationships with prospective clients and consultants (Count III), and unfair and deceptive business practices (Count IV) in violation of Mass. Gen. Laws. Ch. 93A, 11. Defendants, in turn, by way of counterclaims, accuse BioPoint of tortiously interfering with its client relationship with Vedanta Biosciences, Inc. (Counterclaim Count III) and, reciprocally, for unfair and deceptive business practices (Counterclaim Count IV).^[2]

DISCUSSION

A movant is entitled to summary judgment upon a “show[ing] that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “A ‘genuine' issue is one that could be resolved in favor of either party, and a ‘material fact' is one that has the potential of affecting the outcome of the case.” Calero-Cerezo v. U.S. Dep't of Justice, 355 F.3d 6, 19 (1st Cir. 2004), citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-250 (1986).

BioPoint's Motion

Turning first to defendants' counterclaims: To make out a claim for intentional interference with contractual relations defendants must establish that “(1) [they] had a contract with a third party; (2) [BioPoint] knowingly induced the third party to break that contract; (3) [BioPoint] 's interference, in addition to being intentional, was improper in motive or means; and (4) [defendants] w[ere] harmed by [BioPoint]'s actions.” G.S. Enters., Inc. v Falmouth Marine, Inc., 410 Mass. 262, 272 (1991). In December of 2018, Catapult became the managed services provider (MSP) overseeing consultant placements for Vedanta. Vedanta terminated the agreement in April of 2020. Defendants identify the filing of this lawsuit, in January of 2020, as the catalyst causing Vedanta to rescind the MSP contract. In defendants' view, because BioPoint's Complaint repeatedly named Vedanta and called out its relationship with Catapult, Vedanta ended the successful working relationship to avoid entanglement in this litigation.

BioPoint asserts, and the court agrees, that defendants have failed to adduce competent evidence that would allow a factfinder to conclude that BioPoint induced Vedanta to terminate the contract with Catapult. Defendants offer no evidence that BioPoint ever informed or discussed the matter with Vedanta. At best there is a coincidence of timing between the initiation of this lawsuit and Vedanta's termination of the Catapult agreement, but that is insufficient to carry defendants' burden of proof. Defendants admit that one month prior to BioPoint's filing of the Complaint, Vedanta had reduced Dickhaut's hours by 50% because of an unrelated business slowdown, and that Vedanta had told them that it was terminating the MSP contract to move consultant hiring in-house.

Defendants see skullduggery in Vedanta's decision to reverse course and hire a different outside MSP some months later. Defendants, however, have no first- (or second-) hand knowledge of what motivated Vedanta's decision. See Fed.R.Evid. 602 (personal knowledge is a prerequisite for testimony). Absent any real evidence (defendants did not take discovery of Vedanta), defendants' surmise as to Vedanta's motivation in replacing them with another MSP is nothing but speculation and conjecture.^[3] Because defendants' unfair and deceptive business claim rests on the same foundation, it too will be dismissed.

Defendants' Motion

Defendants, for their part, argue that BioPoint (similarly) lacks evidence to support its claims. As to Counts I and II,

[t]o prevail on a claim of misappropriation of trade secrets, a plaintiff must show: 1) the information is a trade secret; 2) the plaintiff took reasonable steps to preserve the secrecy of the information; and 3) the defendant used improper means, in breach of a confidential relationship, to acquire and use the trade secret.

Incase Inc. v. Timex Corp., 488 F.3d 46, 52 (1st Cir. 2007); see also Viken Detection Corp. v. Videray Techs. Inc., 384 F.Supp.3d 168, 177 (D. Mass. 2019) (“The standard for misappropriation under [federal law] is substantially similar to that under Massachusetts law.”). Defendants contend that BioPoint's asserted “trade secrets” are matters in the public domain. Defendants note that BioPoint has no proprietary interest in the names of consultants or their resumes, that BioPoint does not require the consultants with whom it engages to keep such information confidential, and that, in any event, the information is readily available on public fora such as LinkedIn and Zoom Info (Internet sites on which consultants frequently advertise their qualifications). Likewise, the names of client companies do not belong to BioPoint, and BioPoint readily shares their identities with consultants and publishes them on public fora. Defendants also maintain that BioPoint cannot demonstrate that defendants ever made use of its information and, in fact, admitted as much while being deposed.

BioPoint, for its part, rejects defendants' pinched view of its confidential information, which it contends encompasses far more than publicly available names and resumes, and also includes dossiers memorializing direct communications with consultants and clients; internal notes and impressions; reference checks and contracts; and details regarding internal costs, recruiting strategies, and pricing. BioPoint also emphasizes that it takes multiple steps to protect this wider range of information, including the use of a password-protected database, Crelate, and other security measures on its computer systems; that it requires employees and consultants to execute confidentiality agreements; and that it maintains a system of remote surveillance to detect anomalous employee conduct.

The court agrees with BioPoint that, for purposes of summary judgment, it has established the existence of an actionable trade secret. “A trade secret may consist of any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it.” J. T. Healy &Son, Inc. v. James A. Murphy & Son, Inc., 357 Mass. 728, 736 (1970). Whether the asserted information constitutes a trade secret “depends on the conduct of the parties and the nature of the information.” Jet Spray Cooler, Inc. v. Crampton, 361 Mass. 835, 840 (1972). There are

six factors of relevant inquiry: (1) the extent to which the information is known outside of the business; (2) the extent to which it is known by employees and others involved in the business; (3) the extent of measures taken by the employer to guard the secrecy of the information; (4) the value of the information to the employer and to his competitors; (5) the amount of effort or money expended by the employer in developing the information; and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others.

Id.

BioPoint has presented documentary evidence^[4] that Attis shared with Dickhaut information, such as a draft supplier agreement including comments reflecting BioPoint's negotiation...