Clevinger v. Advocacy Holdings, Inc.

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CHAZZ CLEVINGER, Plaintiff, v. ADVOCACY HOLDINGS, INC., d/b/a OneClickPolitics, et al., Defendants.

ADVOCACY HOLDINGS, INC., d/b/a OneClickPolitics, Plaintiff, v. CHAZZ CLEVINGER, et al., Defendants.

No. 23-cv-1159 (JMC), 23-cv-1176 (JMC)

United States District Court, District of Columbia

July 10, 2024

MEMORANDUM OPINION

JIA M COBB, UNITED STATES DISTRICT JUDGE.

In late 2016, Chazz Clevinger began his employment with a political advocacy software company known as OneClickPolitics (OCP).^[1]By early 2023, the business relationship had soured, Clevinger resigned, and dueling lawsuits from each side followed. In total, the two complaints in the consolidated cases purport to assert thirty-eight separate counts of unlawful misconduct, including breach of contract malicious prosecution, trade secret misappropriation, wage theft, and assault. ECF 12; ECF 29.^[2] But, of course, with these dueling complaints came dueling motions to dismiss, in which each Party argues that the other side has failed to state even a single claim for which relief can be granted. ECF 26; ECF 63. Upon review of the motions, while the Court agrees that several of the more-than-three-dozen counts fall short of the standard necessary to survive dismissal under Federal Rule of Civil Procedure 12(b)(6), several others are plausibly alleged. As such, and for the reasons below, the Court PARTIALLY GRANTS and PARTIALLY DENIES both motions. Advocacy Holdings may proceed with its claims for breach of contract, breach of fiduciary duty, tortious interference with contract and prospective business advantage, trade secret misappropriation, Computer Fraud and Abuse Act violations of subsection (a)(5)(A), and Lanham Act violations. Clevinger may proceed with his claims for assault, fraudulent inducement/concealment and negligent misrepresentation, and unjust enrichment. All other claims in this consolidated action are DISMISSED.

I. BACKGROUND

Comparing the myriad assertions in each complaint, the Court observes the following areas of substantial agreement regarding the events giving rise to each lawsuit. Clevinger joined OCP as Vice President in November 2016, and was named Chief Executive Officer (CEO) after one year. ECF 12 ¶ 34; ECF 29 ¶¶ 35-36, 38. As CEO, Clevinger managed sales and marketing operations, which included recruiting, hiring, training, and general business development. ECF 12 ¶ 36; ECF 29 ¶ 39. In July 2020, Clevinger entered into a noncompete agreement with OCP with an effective date of July 1, 2020. ECF 12 ¶ 49; ECF 29 ¶¶ 86, 89. On February 1, 2023, Clevinger resigned from OCP without notice. ECF 12 ¶ 59; ECF 29 ¶¶ 221, 224.

Past these basic points of agreement, however, each countercomplaint tells a different story. The Court recounts the relevant aspects of these disparate narratives below.

A. Advocacy Holdings' Allegations

Advocacy Holdings, Inc., a Delaware corporation with its principal place of business in Illinois, doing business as OCP,^[3]is a digital advocacy provider that offers a subscription-based online platform designed to enhance customers' lobbying and campaigning efforts. ECF 12 ¶¶ 2, 7, 21. Its products and services include, for example, a proprietary advocacy software that facilitates outreach to legislators, advocate acquisition services to identify those who may support grassroots campaigns, and bill tracking services. Id. ¶¶ 22-23, 25, 28. Since 2013, OCP has used the trade name “OneClickPolitics” continuously in interstate commerce. Id. ¶ 19. In 2018, OCP applied to register its trade name with the U.S. Patent and Trademark Office, and in April 2020 the mark was registered for use in connection with the type of web-based, government-relations services OCP had provided for years. Id.; ECF 12-15. Since then, “OCP has served almost 500 customers[,] generating over $10 million in revenue.” ECF 12 ¶ 20.

When Clevinger came onboard in late 2016 and quickly ascended to CEO, he gained access to OCP's confidential information. This included marketing plans, customer information and contact lists, budgeting and financial information, and technical information as to both hardware and software research, development, and strategy. Id. ¶ 35. However, this access came with restrictions, and on July 15, 2020, Clevinger signed a “Non-Competition, Non-Solicitation and Non-Disclosure Agreement,” with an effective date of July 1, 2020. Id. ¶ 49; see generally ECF 12-1. The noncompete agreement prohibited him from using or disclosing OCP's confidential information (e.g., customer, vendor, and supplier information, marketing plans, technical information, etc.) for any purpose other than “for use by or on behalf of [OCP]” while employed and for five years thereafter. ECF 12 ¶¶ 50-52. It required him to return all of OCP's property and confidential information, including electronic data, upon termination of his employment. Id. ¶ 54. And it prohibited him from soliciting OCP customers, hiring OCP employees, and generally competing with OCP-anywhere in the United States-during employment and for a period of one year thereafter. Id. ¶¶ 55-57; ECF 12-1 at 1-3. In the event of litigation, the noncompete provided that any restrictive period would be tolled up to twelve months. ECF 12-1 at 3.

Clevinger played a central role in the business for years. As CEO, he regularly interacted with the sales team, the customer service operations team, and the technology team to manage operations across the business. Id. ¶¶ 36-38. He “also managed all aspects of OCP's Google Adwords lead generation activity including keywords, budgets, and bidding strategies.” Id. ¶ 36. When OCP started work on “a complete redesign of its platform” in early 2021, Clevinger “led the workstream” to ensure the new platform would “leap frog OCP's competitors.” Id. ¶¶ 40-44, 46. In order to preserve the competitive value of this project, OCP intended to maintain the secrecy of the platform redesign until it was released to the public. Id. ¶ 47. To that end, OCP required the software development firm it hired for the project to sign a technical services agreement with nondisclosure obligations. Id. ¶ 45. After an iterative process, Clevinger was the one to sign off on the redesign in May 2022, with development work anticipated for 2023. Id. ¶ 46. In short, Clevinger was heavily involved in OCP's day-to-day operations, knew who OCP's customers, vendors, and suppliers were and how to reach them, and had special access to a wide range of confidential information. Id. ¶ 48.

After more than six years with OCP, and with no notice, Clevinger resigned on February 1, 2023, taking some of OCP's data with him-and destroying other data-on the way out.

Without authorization to do so, he deleted the user accounts for five OCP employees, including himself, which included “years of OCP email, calendar, files, and contact data.” ECF 12 ¶¶ 63, 65-66. Prior to deleting his own account, he exported all the contacts associated with his OCP user and email account. Id. ¶ 64. When he returned his laptop that day, the laptop was inoperable and wiped of all information. Id. ¶ 67. OCP spent time and resources attempting to recover the deleted information and suffered losses in excess of $5,000. Id. ¶¶ 69, 268. According to Advocacy Holdings, however, this was only the tip of the iceberg of Clevinger's misconduct.

Following Clevinger's resignation, OCP discovered that Clevinger, while he was still acting as OCP CEO in 2021 and 2022, founded two competing political advocacy businesses under Delaware law: Superior Campaign Solutions, LLC (SCS) and CiviClick, Inc. Id. ¶¶ 3, 9-10, 7071, 95-98. Even before Clevinger resigned, Clevinger attempted to divert OCP customers to purchase similar services from SCS and CiviClick rather than OCP, see, e.g., id. ¶¶ 90-94, and did so with the help of OCP's former Director of Strategic Services, who CiviClick hired as Vice President of Client Services shortly after Clevinger resigned, id. ¶¶ 108-12. When engaging OCP's customers, Clevinger told them that “OCP was ceasing operations,” id. ¶¶ 197-98, that CiviClick was “the successor” to OCP or “the new product,” id. ¶¶ 203-04, and that Clevinger could “transfer accounts” from OCP to CiviClick, id. ¶ 118; ECF 12-7 at 1. Not all customers left OCP, see, e.g., ECF 12 ¶ 199, but others did. In some instances, customers chose to not renew their OCP subscriptions despite having done so in the past and despite indicating that they would “maintain [their] relationship with OCP,” see, e.g., id. ¶¶ 128-35, and at least one customer “terminat[ed] its relationship with OCP one year early” instead of paying for the second half of its two-year subscription, id. ¶¶ 150-55. At some point after CiviClick went live on March 1, 2023, a Google search for “one click politics” produced-as the top-line “sponsored” result-a link to “www.civiclick.com” with a hyperlink titled, “One Click Politics - CiviClick” Id. ¶¶ 103, 105. Additionally, CiviClick's website is “almost identical . . . to OCP's unreleased platform re-design” and includes “verbatim” language from OCP's unreleased platform. Id. ¶¶ 103-04.

B. Clevinger's Allegations

As a point of clarification on the who's who of this case Clevinger's complaint suggests that it is imprecise to equate “OCP” and “Advocacy Holdings” for all relevant time periods, mainly because Advocacy Holdings was not incorporated (and thus did not exist) until roughly 2020. See ECF 29 ¶¶ 30, 77, 82. A public records search for “Advocacy Holdings” on the State of Delaware official website confirms this. Cf. Entity Search, DELAWARE DEPARTMENT OF STATE: DIVISION OF CORPORATIONS, https://icis.corp.delaware.gov/Ecorp/EntitySearch/NameSearch.aspx (last visited July 3, 2024). Clevinger alleges that, prior to...