Advanced Fluid Sys., Inc. v. Huber
| Decision Date | 18 June 2014 |
| Docket Number | Civil Action No. 1:13–CV–3087. |
| Citation | 28 F.Supp.3d 306 |
| Parties | ADVANCED FLUID SYSTEMS, INC., Plaintiff, v. Kevin HUBER, Insysma (Integrated Systems and Machinery, LLC), Livingston & Haven, LLC, Clifton B. Vann IV, and Thomas Aufiero, Defendants. |
| Court | U.S. District Court — Middle District of Pennsylvania |
David G. Concannon, Law Offices of David G. Concannon, Wayne, PA, Robert J. Larocca, Kohn Swift & Graf PC, Philadelphia, PA, for Plaintiff.
Andrew J. Kornblau, Philadelphia, PA, Chester R. Ostrowski, Seiger Gfeller Laurie LLP, New York, NY, Mark D. Shifton, Seiger Gfeller Laurie LLP, Princeton, NJ, Brian R. Tipton, Veronica P. Hallett, Florio Perrucci Steinhardt & Fader L.L.C., Phillipsburg, NJ, Joseph M. Donley, Thorp Reed & Armstrong, LLP, Philadelphia, PA, for Defendants.
Plaintiff Advanced Fluid Systems, Inc. (“AFS”) filed the above-captioned action seeking injunctive relief and compensatory and punitive damages based upon violations of the Lanham Act, 15 U.S.C. § 1051 et seq., the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, and the Pennsylvania Uniform Trade Secrets Act, 12 Pa. Cons.Stat. § 5301 et seq., along with various common law claims. Before the court are two motions filed by Livingston & Haven, LLC (“L & H”), Clifton B. Vann IV, and Thomas Aufiero, (Doc. 28), and Kevin Huber and Integrated Systems and Machinery, LLC (“INSYSMA”) (Doc. 33),1 seeking dismissal of AFS's amended complaint in its entirety. In a memorandum and order (Docs. 53–54) dated May 7, 2014, 2014 WL 1808652, the court rejected defendants' arguments related to subject-matter jurisdiction, personal jurisdiction, compulsory joinder, and transfer under 28 U.S.C. § 1404(a). This memorandum will assess the parties' arguments under Federal Rule of Civil Procedure 12(b)(6). For the reasons that follow, the court will grant in part and deny in part the motions.
Plaintiff AFS is a Pennsylvania corporation that designs, assembles, and installs hydraulic systems that use pressurized fluids to move heavy machinery for complex operations. (Doc. 65 ¶ 1). Relevant to the instant action, AFS created the Transporter/Erector/Launcher/Hydraulic System (“TELHS”) for the Mid–Atlantic Regional Spaceport (“MARS”) on Wallops Island, Virginia, pursuant to a contract with the Virginia Commercial Space Flight Authority (“VCSFA”) dated September 30, 2009. (Id. ) Under the TELHS contract, VCSFA hired AFS to “provide the complete specification, engineering drawings, analyses, testing requirements, operating descriptions, interfaces with other launch facility systems and all related engineering and professional design services to develop the final and complete design for the Antares' [sic] rocket['s] hydraulic motion control system.” (Id. ¶ 26).
Orbital is the developer of the Antares rocket and agreed to launch the rocket from the MARS facility upon construction of the facility and the purchase of certain hardware, including TELHS. (Id. ¶ 25). AFS successfully designed, assembled, and installed TELHS at the MARS facility, and the first test launch of the Antares rocket took place in February 2013. (Id. ¶¶ 29–31). In the process of completing the contract, AFS generated substantial internal documentation, including thousands of engineering drawings and diagrams and proprietary software code, which are kept in password-protected electronic files on AFS's server. (Id. ¶ 36). VCSFA acquired “legal ownership to all inventions or works” created under the contract, but AFS remained in physical possession and control of the trade secrets and continued to used them in a confidential manner to fulfill its obligations. (Id. ¶ 37). When necessary, AFS provided Orbital with certain confidential information to help integrate TELHS with the Antares rocket. (Id. )
During AFS's performance of the TELHS contract, defendant Kevin Huber served as AFS's main point of contact with Orbital. (Id. ¶ 44). From November 2006 until October 26, 2012, AFS employed Huber as a full-time salesman and engineer. (Id. ¶ 2). Defendant Thomas Aufiero, the head of AFS's sales force and a key member of AFS's management team, hired and supervised Huber until Aufiero resigned from AFS in January 2011. (Id. ¶¶ 40–41). Aufiero is now the hydraulic sales manager for defendant L & H, a North Carolina company that also designs, assembles, and installs hydraulic fluid systems and competes with AFS in the national market. (Id. ¶¶ 4, 6, 39). In his capacity as a salesman and engineer, Huber had access to AFS's confidential information, including complete sets of drawings, diagrams, and other documents generated in connection with numerous projects. (Id. ¶ 43).
Huber also had access to AFS's component and labor costs as well as AFS's quotes for all of its projects. (Id. ¶¶ 43, 58).
On October 9, 2012, Huber announced his resignation from AFS and officially left his position on October 26, 2012. (Id. ¶ 45). When AFS finally retrieved Huber's company-issued laptop computer and cell phone, AFS determined that Huber had attempted to erase all data from both devices. (Id. ¶¶ 45–46). Upon restoring the deleted information, AFS ostensibly discovered that Huber was working with the L & H defendants as early as January 2012 while he was a full-time AFS employee. (Id. ¶ 47).
AFS avers that defendants conspired to gain access to AFS's confidential information through Huber and to use that confidential information for the purpose of diverting business from AFS. (Id. ¶¶ 10, 40). According to AFS, Huber first accessed AFS's server and email system in November 2011 to send L & H photographs and videotapes of the Antares rocket test launches using TELHS. (Id. ¶ 66). In January 2012, L & H granted Huber access to L & H's private network through a Virtual Private Network (“VPN”) connection and password. (Id. ¶ 49). L & H also set up an email address for Huber in its internal email system. (Id. ¶ 51). On April 12, 2012, Huber organized a secret meeting at the MARS facility with L & H, including Clifton Vann, president of L & H, and Aufiero. (Id. ¶¶ 5, 52). According to several deleted emails, the purpose of the meeting was to discuss future upgrades to TELHS. (Id. ¶¶ 52–55). In its pleadings, AFS sets forth detailed allegations regarding actions taken by defendants in furtherance of the conspiracy.
AFS asserts that, beginning in September 2012, Huber accessed AFS's server and downloaded numerous files that did not correlate to any project on which he was working. (Id. ¶ 56). In October 2012, after he announced his resignation, Huber began saving significant amounts of confidential information to an external drive. (Id. ¶ 58). In particular, AFS discovered that Huber stored information about two of his past projects—the Passaic NJ Valley Sewer and New York Power projects—as well as a folder containing all pending AFS quotes. (Id. ¶¶ 58, 92–93). AFS alleges that Huber transmitted this confidential information to L & H. (Id. ¶¶ 56, 58).
On October 18, 2012, Huber formed a company called INSYSMA with offices in New York and Connecticut. (Id. ¶¶ 3, 57). AFS claims that Huber duplicated at least four AFS drawings of engineering plans and re-signed them for INSYSMA with his own initials. (Id. ¶ 64). The INSYSMA website displays a photograph of a successful launch of the Antares rocket using TELHS on September 18, 2013. (Id. ¶ 74). The website does not attribute TELHS to AFS. (Id. ) Rather, the website states that INSYSMA is currently working with Orbital in support of current and upcoming launches, thereby falsely implying to viewers that INSYSMA designed and installed TELHS. (Id. )
Lastly, AFS asserts that, in February or March 2012, L & H attempted to recruit AFS's top electrical engineers, Tom Reiker and Larry Quickel. (Id. ¶¶ 95–97). L & H called Reiker in York, Pennsylvania and offered him a position, which Reiker declined. (Id. ¶ 95). Huber also spoke in person with Quickel, AFS's chief electrical engineer, on multiple occasions to entice him to leave AFS and join L & H. (Id. ¶ 96). In April 2013, after the successful launch of the Antares rocket, Huber called Reiker again to “congratulate” him, (id. ¶ 97), but Huber also informed Reiker that AFS would not be receiving any more upgrade work on the Antares rocket. (Id. ) According to AFS, Reiker's congratulatory call was pretense to Huber's news of work stoppage, a transparent, second attempt to encourage Reiker to join L & H. (Id. )
In addition to stealing confidential information, AFS avers that the purpose of the alleged conspiracy was to divert AFS's business opportunities related to TELHS and other projects. (Id. ¶ 40). AFS details each of these attempts in its amended complaint.
AFS claims that, in September 2012, Huber submitted an unusually high bid on behalf of AFS for upgrades to TELHS's gripper arms. (Id. ¶ 60). According to AFS, Huber secretly and simultaneously submitted a substantially lower bid on behalf of L & H for the same project. (Id. ¶ 61). As a result, L & H and INSYSMA received Orbital's contract for the gripper arms upgrade. (Id. ¶ 67). When Orbital later decided to move forward with a $4 million upgrade to the entire TELHS system, (see id. ¶ 68), Huber sent Orbital an informal quote on behalf of L & H and INSYSMA, as agent of the S3 Group at L & H. (Id. ¶¶ 61–63, 69). AFS alleges that Jim Vaughn, president of AFS, repeatedly informed Orbital that AFS wanted to bid on all upgrades and all training and maintenance contracts. (Id. ¶ 71). Unsurprisingly, L & H and INSYSMA were awarded the contract for the complete TELHS upgrade. (Id. ¶ 71).
As part of the complete upgrade, Huber contacted Maritime Hydraulic, a cylinder manufacturer with whom AFS maintains a non-disclosure agreement. (Id. ¶ 65). Huber sought a quote on new cylinders. (Id. ¶ 72). Kim...
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Advanced Fluid Sys., Inc. v. Kevin Huber, Insysma (Integrated Sys. & Mach., LLC
...28 F.Supp.3d 306ADVANCED FLUID SYSTEMS, INC., Plaintiff,v.Kevin HUBER, Insysma (Integrated Systems and Machinery, LLC), Livingston & Haven, LLC, Clifton B. Vann IV, and Thomas Aufiero, Defendants.Civil Action No. 1:13–CV–3087.United States District Court, M.D. Pennsylvania.Signed June 18, M......