Corporate Synergies Grp., LLC v. Andrews

CORPORATE SYNERGIES GROUP, LLC, Plaintiff, v. GREGORY ANDREWS, SIMONE UR, GERARD DUFFY, BARBARA DIGGSand ALLIANT INSURANCE SERVICES, INC., Defendants.

Civil Action No. 18-13381

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

August 12, 2019

Not for Publication

OPINION & ORDER

This matter involves the alleged breach of non-solicitation and confidentiality agreements. Presently before the Court are the following two motions filed Defendants: (1) Defendants Gregory Andrews, Gerard Duffy and Barbara Diggs' motion to dismiss Counts One and Seven of Plaintiff's Amended Verified Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) (D.E. 56); and (2) Defendants Simone Ur and Alliant Insurance Services, Inc.'s ("Alliant") motion for judgment on the pleadings for Counts One and Seven of Plaintiff's Amended Verified Complaint (D.E. 59). Plaintiff filed a single brief opposing both motions (D.E. 73), to which Defendants filed two reply briefs (D.E. 74, 75).¹ For the reasons that follow, both of Defendants' motions are DENIED.

I. FACTUAL² AND PROCEDURAL BACKGROUND

Plaintiff Corporate Synergies Group, LLC ("CSG") and Defendant Alliant are direct competitors in the insurance brokerage services field. Am. Verified Compl. (the "AVC"), D.E. 19. Defendants Gregory Andrews, Simone Ur, Gerard Duffy, and Barbara Diggs (the "Individual Defendants") were CSG employees who worked closely together. Id. ¶¶ 25, 27, 29, 32. CSG required that each of the Individual Defendants sign a Non-Solicitation and Confidentiality Agreement (the "Agreement") that contained confidentiality requirements as well as post-employment non-solicitation, non-disclosure, and non-disparagement provisions. Id. ¶ 55. During the summer of 2018, the Individual Defendants all voluntarily resigned from CSG and began working for Alliant. Id. ¶¶ 104, 139, 147, 152.

On August 30, 2018, Plaintiff filed a Verified Complaint and requested a temporary restraining order, preliminary injunction, and expedited discovery. Plaintiff sought to prevent Defendants from soliciting CSG's current clients and disclosing confidential CSG information. D.E 1. Following oral argument on September 4, 2018, the Court granted Plaintiff's application for a temporary restraining order as to Defendant Andrews regarding the solicitation of CSG's current and former clients. Plaintiff's application for a temporary restraining order was otherwise denied. In addition, the Court partially granted Plaintiff's request for expedited discovery. D.E. 14.

On September 26, 2018, CSG filed the AVC and a motion for an expanded temporary restraining order as a result of new information it discovered after the September 4 hearing. D.E. 19, 20. The Court granted Plaintiff's request in part, and on October 3, 2018, preliminarily enjoined the Individual Defendants from violating the non-solicitation provision of the Agreements.³ D.E. 44. Shortly after, on October 24, 2018, Alliant and Ur filed answers to the AVC (D.E. 57, 58) along with their motion for judgment on the pleadings (D.E. 59); the remaining Defendants filed their motion to dismiss pursuant to Rule 12(b)(6) (D.E. 56).⁴

II. LEGAL STANDARDS

1. Motion to Dismiss Standard

Rule 12(b)(6) permits a court to dismiss a complaint that fails "to state a claim upon which relief can be granted[.]" For a complaint to survive dismissal under Rule 12(b)(6), it must contain sufficient factual matter to state a claim that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Further, a plaintiff must "allege sufficient facts to raise a reasonable expectation that discovery will uncover proof of her claims." Connelly v. Lane Const. Corp., 809 F.3d 780, 789 (3d Cir. 2016). In evaluating the sufficiency of a complaint, district courts must separate the factual and legal elements. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-211 (3d Cir. 2009). Restatements ofthe elements of a claim are legal conclusions, and therefore, are not entitled to a presumption of truth. Burtch v. Milberg Factors, Inc., 662 F.3d 212, 224 (3d Cir. 2011). The Court, however, "must accept all of the complaint's well-pleaded facts as true." Fowler, 578 F.3d at 210. Even if plausibly pled, however, a complaint will not withstand a motion to dismiss if the facts alleged do not state "a legally cognizable cause of action." Turner v. J.P. Morgan Chase & Co., No. 14-7148, 2015 WL 12826480, at *2 (D.N.J. Jan. 23, 2015).

2. Motion for Judgment on the Pleadings Standard

Rule 12(c) provides that "[a]fter the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings." Fed. R. Civ. P. 12(c). Pleadings are "closed" after the complaint and answer are filed. Horizon Healthcare Servs., Inc. v. Allied Nat'l Inc., No. 03-4098, 2007 WL 1101435, at *3 (D.N.J. Apr. 10, 2007). "Under Rule 12(c), judgment will not be granted unless the movant clearly establishes that no material issue of fact remains to be resolved and that he is entitled to judgment as a matter of law." Rosenau v. Unifund Corp., 539 F.3d 218, 221 (3d Cir. 2008) (quoting Jablonski v. Pan Am. World Airways, Inc., 863 F.2d 289, 290 (3d Cir. 1988)). A Rule 12(c) motion based on the defense that Plaintiff fails to state a claim is governed by the same standard that applies to a motion to dismiss under Rule 12(b)(6). Revell v. Port Auth. of N.Y. & N.J., 598 F.3d 128, 134 (3d Cir. 2010). Consequently, the Court will consider both motions together.

III. ANALYSIS

Defendants seek to dismiss (1) Count One - Plaintiff's claim for misappropriation of trade secrets under the federal Defend Trade Secrets Act of 2016 (the "DTSA")⁵; and (2) Count Two -Plaintiff's claim for misappropriation of trade secrets under the New Jersey Trade Secrets Act (the "NJTSA"). Both the DTSA and the NJTSA require a plaintiff "to demonstrate (1) the existence of a trade secret, defined broadly as information with independent economic value that the owner has taken reasonable measures to keep secret, and (2) misappropriation of that secret, defined as the knowing improper acquisition and use or disclosure of the secret."⁶ Par Pharm., Inc. v. QuVa Pharm, Inc., 764 F. App'x 273, 278 (3d Cir. 2019). Courts in this district "fold" the DTSA analysis into the NJTSA review. Scherer Design Grp., LLC v. Schwartz, No. 18-3540, 2018 WL 3613421, at *4 (D.N.J. July 16, 2018). Therefore, this Court will consider the claims together.

1. Applicability of the NJTSA

Defendants argue that the NJTSA claims should be dismissed because Plaintiff fails to allege that the Act applies to Defendants. Specifically, Defendants argue that the Individual Defendants worked for CSG in New York, went to work for Alliant in New York, and live in New York. 12(b)(6) Br. at 19-20. "In determining the choice of law for trade secret cases, the place of alleged misappropriation is controlling." Quintiles IMS Inc. v. Veeva Sys. Inc., No. 17-00177, 2017 WL 4842377, at *5 (D.N.J. Oct. 26, 2017). Although Defendants argue that the alleged wrongful conduct only occurred in New York, this is not apparent from the facts as alleged in theAVC. CSG pleads that its principal place of business in New Jersey (AVC ¶ 22); Ur lived in New Jersey (id. ¶ 28) and Alliant has offices in New Jersey (id. ¶ 33). As a result, based on the limited information available at this stage of the proceedings, the Court cannot conclude as a matter of law that the NJTSA does not apply. See Quintiles IMS Inc., 2017 WL 4842377, at *4 (refusing to dismiss claims based on choice-of-law argument because discovery was necessary to determine location of alleged wrongful conduct).⁷

The Court does not dismiss the NJTSA claims as to any Defendant on these grounds.

2. Trade Secrets

CSG identifies the trade secrets at issue as customer lists, an "opportunity list," and other proprietary business information. AVC ¶¶ 100, 126-33. Customer lists, pricing information, and marketing techniques constitute trade secrets under New Jersey law and the DTSA. IDT Corp. v. Unlimited Recharge, Inc., No. 11-4992, 2012 WL 4050298, at *6 (D.N.J. Sept. 13, 2012); Von Rohr Equip. Corp. v. Modern Fasteners Inc., No. 16-6675, 2017 WL 9690975, at *1 (D.N.J. May 18, 2017).

Defendants argue that Plaintiff's trade secrets claims fail because CSG does not identify the asserted trade secrets with enough specificity. See 12(b)(6) Br. at 14-15. The cases thatDefendant relies on in making this argument, however, are distinguishable. In Elsevier Inc. v. Doctor Evidence, LLC, No. 17-557906, 2018 WL 557906, at *5 (S.D.N.Y. Jan. 23, 2018), the court dismissed the trade secrets claim because the plaintiff only listed "nine extraordinarily general categories" to demonstrate the existence of trade secrets. Similarly, in Oakwood Laboratories, LLC v. Thanoo, No. 17-5090, 2017 WL 5762393, at *4 (D.N.J. Nov. 28, 2017), the court determined that the plaintiff failed to sufficiently plead that trade secrets existed because it "never identifie[d] or point[ed] to a specific action, process, or formula" that might be protectable. Here, Plaintiff sufficiently identifies the alleged trade secrets at issue. CSG specifically names and describes documents that Andrews accessed the day before he resigned from CSG (see AVC ¶ 100) and that Ur emailed to herself prior to her resignation (see id. ¶¶ 126-33).

Defendants also maintain that CSG has not taken appropriate steps to keep the information at issue secret. See 12(b)(6) Br. at 17. To constitute a protectable trade secret under the DTSA and the NJTSA, a plaintiff is required to take "reasonable measures to keep such information safe." 18 U.S.C. § 1839(3)(A); see also N.J.S.A. 56:15-2. CSG plausibly alleges that it took reasonable measures here. CSG...