Am. Furukawa, Inc. v. Hossain, Case No. 14–cv–13633.

• Decision Date: 06 May 2015
• Docket Number: Case No. 14–cv–13633.
• Citation: 103 F.Supp.3d 864
• Parties: AMERICAN FURUKAWA, INC., Plaintiff, v. Isthihar HOSSAIN, Defendant.
• Court: U.S. District Court — Eastern District of Michigan

103 F.Supp.3d 864

AMERICAN FURUKAWA, INC., Plaintiff,

v.Isthihar HOSSAIN, Defendant.

Case No. 14–cv–13633.

United States District Court, E.D. Michigan, Southern Division.

Signed May 6, 2015.

Joseph J. Vogan, Varnum, Riddering, Grand Rapids, MI, Brett A. Rendeiro, Varnum, Riddering, Novi, MI, for Plaintiff.

Jason M. Shinn, Shinn Legal, PLC, Keego Harbor, MI, for Defendant.

Opinion and Order Denying Defendant's Motion for Partial Judgment on the Pleadings [30]

GERSHWIN A. DRAIN, District Judge.

I. Introduction

American Furukawa, Inc. (“Furukawa” or “Plaintiff”) commenced the instant action against its former employee, Isthihar Hossain (“Defendant”), on September 19, 2014. SeeDkt. No. 1. In the Complaint, Furukawa alleges that Hossain unlawfully accessed its computers to obtain confidential information in violation of the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030. Additionally, Furukawa brings claims under Michigan law for Fraud, Breach of Contract, Breach of Fiduciary Duty, Misappropriation of Trade Secrets, and Conversion. Id.

When it filed the Complaint, Furukawa simultaneously moved for a Temporary Restraining Order (“TRO”). SeeDkt. No. 4. On September 22, 2014, the Court entered a TRO enjoining Hossain from using Furukawa's information, and ordering Hossain to show cause why a preliminary injunction should not be issued; account for and return Furukawa's confidential information; and abide by a confidentiality agreement between the parties. SeeDkt. No. 7. The parties entered a Stipulated Order leaving the terms of the TRO in place, while setting forth an agreed protocol for examining the computers and email accounts at issue. SeeDkt. No. 18.

Presently before the Court is Defendant's Partial Motion for Judgment on the Pleadings Pursuant to Rule 12(c) of the Federal Rules of Civil Procedure. SeeDkt. No. 30. Furukawa filed a Response to Hossain's Motion, but Hossain failed to file a Reply in accordance with the Court's Local Rules. SeeE.D. Mich. L.R. 7.1(e)(1)(c). After reviewing the briefing, the Court concludes that oral argument will not aid in the resolution of this matter. Accordingly, the Court will resolve the Motion on the briefs as submitted. SeeE.D. Mich. L.R. 7.1(f)(2). For the reasons discussed herein, the Court will DENYHossain's Motion for Partial Judgment on the Pleadings Pursuant to Rule 12(c) of the Federal Rules of Civil Procedure[30].

II. Factual Background

American Furukawa, Inc. is a Delaware corporation and its principal place of business is located at 47677 Galleon Ct, Plymouth, Michigan. Furukawa is a supplier of advanced technology automotive, electronics and specialty products to several high technology industries. Isthihar Hossain accepted employment with Furukawa in September, 2011 as a Power Systems Electrical Engineer. Hossain reported to Furukawa's General Manager and Vice President.

When Hossain began his employment with Furukawa, Furukawa asserts that Hossain agreed to abide by Furukawa's Policies regarding “Supplier and Vendor Information,” “Conflicts of Interest,” “Confidentiality,” “Outside Employment,” “Company Property” and “Removable Media Use.” Furukawa also asserts that Hossain entered into an Invention Assignment & Secrecy Agreement (“Secrecy Agreement”) with Furukawa, which dictated that Hossain “will regard and preserve as confidential all trade secrets pertaining to the Company's business that have been or may be obtained by me by reason of my employment.” The Secrecy Agreement also dictated that Hossain would not “without prior authority from the Company to do so, use for my own benefit or purposes, nor disclose to others, either during my employment or thereafter” any trade secrets pertaining to Furukawa's business.

By 2014, Hossain had become a Production Manager and Senior Production Manager with access to Furukawa's trade secrets, know-how, intellectual property and other confidential information. On March 11, 2014, while he was still employed by Furukawa, Furukawa asserts that Hossain entered into an “Employment Agreement” (“Agreement”) with Huatong—a competitor and supplier to Furukawa. As part of Hossain's alleged Agreement with Huatong, Hossain was to serve as CEO of a new sales company, American Huatong. Also on March 11, Furukawa asserts that Hossain downloaded 910 Furukawa files to his external hard drive without his manager's permission.

On March 14, 2014, Furukawa states that Hossain called into Furukawa's offices and indicated he was sick. Yet, on March 17, 2014, Furukawa asserts that Hossain downloaded another 875 Furukawa files and also moved two-and-a-half years of email from Furukawa's exchange server to his external hard drive without his manager's permission. While files were allegedly being downloaded on March 17, 2014, Furukawa states that Hossain informed Furukawa he was unable to work due to a basketball injury. Notably, pursuant to his alleged Agreement with Huatong, Hossain was scheduled to begin his employment with Huatong on March 17, 2014.

As a result of his reported injury, Hossain was granted a leave of absence, commencing March 18, 2014. Critically, as a condition for granting the leave of absence, Furukawa asserts that it instructed Hossain that he could not do “any work” for Furukawa during his leave of absence. Despite the instructions to the contrary, Furukawa asserts that Hossain accessed information on his company laptop and copied Furukawa files from his company email to his personal “gmail” account during his leave of absence. Furukawa purportedly did not learn of Hossain's activities until the following chain of events raised suspicion.

On March 20, 2014, Huatong announced that it would no longer sell Electrical Submersible Pump (“ESP”) cables to the United States market through a partnership with Furukawa. Huatong also announced that it would no longer sell service drop cables to Kingwire, and photovoltaic (“PV”) cables to the United States market, through Furukawa.

On Thursday, April 24, 2014, Hossain sent an email to Furukawa's Manager of Human Resources stating that his doctor had cleared him to return to work. On April 25, 2014, Furukawa claims Hossain reported for work late and left early. On Monday, April 28, 2014, Hossain announced that he was resigning his employment, effective May 2, 2014. Furukawa accepted Hossain's resignation, effective April 29, 2014, and paid him through May 2, 2014.

Despite his alleged Agreement with Huatong, when he resigned his employment, Hossain allegedly indicated he did not “have another job lined up or anything,” but his “previous employer” had been contacting him, and he was “pretty sure” that he could get a job with them. Upon his departure from Furukawa, Hossain was asked to sign an “Employee Certification & Agreement on Termination,” certifying that he had returned all property belonging to the Company, had complied with the Secrecy Agreement and would continue to abide by that Agreement. Hossain allegedly refused to sign.

On or about May 12, 2014, Furukawa learned that Huatong had approached WTEC—one of Furukawa's customers—about buying cable from Huatong. On May 16, 2014, Furukawa received an email from WTEC regarding WTEC's “compound” requirements and “payment terms.” The email from WTEC was addressed to Hossain at his former Furukawa email address. On May 30, 2014, WTEC confirmed that Hossain was acting as Huatong's agent with respect to the sales negotiations between WTEC and Huatong. On June 5, 2014, Furukawa received another email from WTEC, addressed to Hossain's Furukawa email address purportedly asking Hossain to quote the price for “PV Wire 2kV AL S–8000” and “PV Wire 2kV CU.”

Furukawa sent a letter to Hossain on June 9, 2014, reminding him of his obligations under the Secrecy Agreement. In the letter, Furukawa demanded that Hossain immediately cease and desist from any further solicitation of cable business from WTEC or any other customer of Furukawa. Furukawa also sought assurances that Hossain would abide by his trade secret obligations, and would not use or disclose any trade secret information that he acquired during his employment with Furukawa. Hossain purportedly refused to comply with this request. Furukawa attempted to negotiate with Hossain to resolve the dispute. Throughout the negotiations, Hossain purportedly maintained that he had returned all property belonging to Furukawa and fully complied with the Secrecy Agreement. After looking into the actions of Hossain, Furukawa brought the instant action pursuant to the CFAA and Michigan law.

III. Discussion

A. Legal Standard

Federal courts review motions for judgment on the pleadings brought pursuant to Federal Rule of Civil Procedure 12(c)using the standards applicable to motions filed under Rule 12(b)(6). See Wee Care Child Ctr., Inc. v. Lumpkin,680 F.3d 841, 846 (6th Cir.2012). Though litigants employ these procedural mechanisms at different stages of the proceedings, the purpose of both motions is to test the legal sufficiency of a plaintiff's pleadings. Thus, as with Rule 12(b)(6)motions, a Rule 12(c)motion allows a court to make an assessment as to whether a plaintiff has stated a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6).

As articulated by the Supreme Court of the United States, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal,556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)(quoting Bell Atl. Corp. v. Twombly,550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). This facial plausibility standard requires claimants to put forth “enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of” the requisite elements of their claims. Twombly,550 U.S. at 557, 127 S.Ct. 1955. Even though a complaint need not contain “detailed” factual allegations, its “factual allegations must be enough to raise a right to relief above the...