Tower Commc'ns Expert, LLC v. TSC Constr., LLC

TOWER COMMUNICATIONS EXPERT, LLC, Plaintiff, v. TSC CONSTRUCTION, LLC et al., Defendants.

No. 18 C 2903

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

October 30, 2018

Chief Judge Rubén Castillo

MEMORANDUM OPINION AND ORDER

Tower Communications Expert, LLC ("Plaintiff") filed this action against TSC Construction, LLC ("TSC"), Gary Juknevicius ("Juknevicius"), Ruslan Tulegenov ("Tulegenov"), and Nurlan Kosmaiylov ("Kosmaiylov," collectively, the "Defendants"), alleging that they violated the federal Defend Trade Secrets Act ("DTSA"), 18 U.S.C. § 1836 et seq., the Illinois Trade Secrets Act ("ITSA"), 765 ILL. COMP. STAT. 1065/1 et seq., and that they committed several business torts under Illinois law. (R. 1, Compl. ¶¶ 35-77.) Juknevicius and Tulegenov filed a joint motion to dismiss Plaintiff's complaint pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6), and TSC filed a separate motion to dismiss pursuant to the same rules. (R. 16-1, Individual Defs.' Mot.; R. 19, TSC's Mot.) Both motions argue that Plaintiff fails to state a claim and that the Court lacks personal jurisdiction over Defendants. (R. 16-1, Individual Defs.' Mot. at 1-3; R. 19, TSC's Mot. at 1-3.) For the reasons stated below, both motions to dismiss are granted.

BACKGROUND

Plaintiff alleges that it is "a Nevada limited liability company" with its principal place of business in DuPage County, Illinois. (R. 1, Compl. ¶ 3.) Defendant TSC is alleged to be "a New York limited liability company" with its principal place of business in Johnson City, New York. (Id. ¶ 4.) Plaintiff alleges that TSC operates in the Chicago area through its agent, Antal Andrin ("Andrin"), and that TSC is registered to do business in Illinois. (Id.; R. 22, Greenan Decl. at 1.) TSC, however, has no offices or other facilities in Illinois. (R. 22, Greenan Decl. at 1.) As for the other Defendants, Plaintiff alleges that Juknevicius is a North Carolina resident, that Tulegenov is a Virginia resident, and that Kosmaiylov is a Texas resident. (R. 1, Compl. ¶¶ 5-7.)

Plaintiff and TSC are companies that compete for construction contracts to build and repair wireless communication infrastructure such as telecommunication towers. (Id. ¶¶ 1-2, 10.) In 2017, both companies were working on the same construction project in North and South Carolina, and during this project, TSC allegedly "poached [Plaintiff's] employees and subcontractors, encouraged them to obtain and disclose [Plaintiff's] confidential information and trade secrets, and encouraged them to solicit additional subcontractors and employees of [Plaintiff]." (Id. ¶ 2.)

Juknevicius and Tulegenov were Plaintiff's employees until April 8 and May 1, 2017, respectively. (Id. ¶ 25.) Juknevicius was later hired by TSC as a project manager to help TSC establish an office in North Carolina. (R. 16-2, Juknevicius Aff. at 2.) He started working for TSC on May 1, 2017. (Id.) Like Juknevicius, Tulegenov also allegedly began working for TSC shortly after his employment with Plaintiff ended. (R. 1, Compl. ¶ 6.)

Juknevicius' and Tulegenov's employment agreements with Plaintiff provided that they could not work for any company working on the same project as Plaintiff for a period of six months after their employment ended. (Id. ¶¶ 17-18; R. 1-2, Juknevicius Emp't Agreement at 2; R. 1-3, Tulegenov Emp't Agreement at 1.) The agreements also had a provision that prohibited them from soliciting Plaintiff's employees for a year after the end of their employment, and theyalso had confidentiality provisions that prevented Juknevicius and Tulegenov from disclosing Plaintiff's confidential information to a competitor without Plaintiff's authorization. (R. 1, Compl. ¶¶ 19-20; R. 1-2, Juknevicius Emp't Agreement at 2; R. 1-3, Tulegenov Emp't Agreement at 1-2.) In addition, both employment agreements provided that "[a]ll controversies or claims arising out of or relating to this agreement . . . shall be decided in . . . arbitration," which will "take place in DuPage County, [Illinois]" and that "[t]he Arbitration will be governed by the laws of the state of Illinois."¹ (R. 1-2, Juknevicius Emp't Agreement at 6; R. 1-3, Tulegenov Emp't Agreement at 4.)

Kosmaiylov was Plaintiff's subcontractor until May 5, 2017. (R. 1, Compl. ¶ 25.) Like Juknevicius' and Tulegenov's employment agreements, the subcontractor agreement with Kosmaiylov contained confidentiality, non-solicitation, and non-compete provisions. (Id. ¶ 23; R. 1-4, Subcontractor Agreement at 2-3.) The non-compete provision prohibited Kosmaiylov from working for any company involved with the same project as Plaintiff for a period of six months after the subcontractor agreement ended, and the non-solicitation provision prohibited him from recruiting Plaintiff's contractors and employees for a period of 18 months after the subcontractor agreement ended. (R. 1-4, Subcontractor Agreement at 3.) While they worked for Plaintiff, Kosmaiylov, Juknevicius, and Tulegenov were allegedly "privy to specialized, confidential information about [Plaintiff's] business; including information about [Plaintiff's customers[,] suppliers[,] [] staffing[,] and budgeting projects." (R. 1, Compl. ¶ 24.)

Plaintiff claims that Juknevicius, Tulegenov, and Kosmaiylov left Plaintiff to work for TSC within six months after they had stopped working for Plaintiff, began recruiting Plaintiff's employees to work for TSC, and shared Plaintiff's confidential information with TSC. (Id. ¶ 25.)Plaintiff asserts that Defendants carried out their efforts to "poach" Plaintiff's employees and obtain Plaintiff's confidential information through Andrin, who Plaintiff alleges was TSC's "agent." (Id. ¶¶ 15, 27-28.) As part of this effort, Juknevicius allegedly asked Andrin to send him Plaintiff's confidential files and recruited Plaintiff's employees to leave Plaintiff and join TSC. (Id. ¶¶ 27-30.)

TSC has not brought any lawsuit in Illinois, nor does it own any property or bank accounts in Illinois. (R. 22, Greenan Decl. at 1.) TSC does not regularly provide or distribute any goods or services in Illinois. (Id. at 2.) TSC's marketing does not target Illinois residents, and, during the time implicated by the complaint, TSC had no employee that was an Illinois resident. (Id.) During the same time period, TSC had worked on a total of 1,499 cellular towers, and nine of those towers were located in Illinois. (Id.) The last time TSC installed equipment on a cellular tower in Illinois was in July 2017. (Id.) During 2017, TSC's revenue from projects in Illinois comprised 0.8% of its national revenue. (Id.) The project in North and South Carolina that is the subject of the complaint is not related to any of TSC's projects in Illinois. (Id.) TSC's executive vice president states in a declaration that Andrin "is not and has never been employed in any capacity by TSC," and that Andrin "is not and has never been TSC's agent." (Id.) He further states that, to the best of his knowledge, Andrin was Plaintiff's employee at all times relevant to the allegations in the complaint. (Id.) Juknevicius has also submitted an affidavit attesting that Andrin is not and never has been TSC's employee or agent, and that Andrin is employed with Plaintiff in the position of "Safety Director." (R. 16-2, Juknevicius Aff. at 2.)

Juknevicius, Tulegenov, and Kosmaiylov did not work on any TSC project in Illinois. (R. 22, Greenan Decl. at 2.) Juknevicius has not lived in Illinois or owned real property in Illinois since March 2015, and he does not have any "offices, statutory agents, telephone listings,or mailing addresses" in Illinois. (R. 16-2, Juknevicius Aff. at 1.) Tulegenov has not lived in Illinois since February 2013 and owns no real property in Illinois. (R. 16-3, Tulegenov Aff. at 1.) Like Juknevicius, Tulegenov does not have any offices, "statutory agents," telephone listings, or mailing addresses in Illinois. (Id.) Neither Juknevicius nor Tulegenov have any bank accounts, "licenses[,] or other operations" in Illinois, and they have not "generate[d] any revenues from" Illinois. (R. 16-2, Juknevicius Aff. at 2; R. 16-3, Tulegenov Aff. at 1-2.) Juknevicius has not paid income tax in Illinois since 2015, and Tulegenov has never paid income tax in Illinois. (R. 16-2, Juknevicius Aff. at 2; R. 16-3, Tulegenov Aff. at 2.) A vice president of Plaintiff, however, has submitted a declaration stating that Andrin sent "files" to Juknevicius that were stored on a computer located in Illinois. (R. 27-1, Malkani Decl. at 1.)

PROCEDURAL HISTORY

On April 24, 2018, Plaintiff filed its complaint. (R. 1, Compl.) Plaintiff brings six counts; a count against Juknevicius, Tulegenov, and Kosmaiylov for breach of the non-compete, non-solicitation, and confidentiality provisions in their contracts with Plaintiff (Count I); a count against TSC for tortious interference with Plaintiff's contractual relationships (Count II); a count for "unlawful competition" against TSC (Count III); violation of the DTSA and ITSA against all Defendants (Counts IV and V); and a count for constructive fraud against all Defendants (Count VI). (Id. ¶¶ 35-77.) Plaintiff served Juknevicius with the complaint on April 30, 2018, and it left a copy of the complaint with a "co-resident" at Tulegenov's home on June 1, 2018. (R. 6, Reynolds Aff.; R. 13, Sircom Aff.) Plaintiff served the complaint on TSC's chief executive officer on April 27, 2018. (R. 5, Harrington Aff.) Plaintiff, however, has not filed with the Court any proof of service as to Kosmaiylov, and no attorney has appeared in this case on Kosmaiylov's behalf. Additionally, Juknevicius and Tulegenov represent that Plaintiff has yet toserve Kosmaiylov, and Plaintiff does not rebut this statement in its filings. (R. 16-4, Individual Defs.' Mem. at 1 n.1; R. 28, Resp. to Individual Defs.)

On July 2, 2018, Juknevicius and Tulegenov filed a joint motion to dismiss, and TSC filed a separate motion to dismiss on the same day. (...