Control Tech. & Sols. v. Omni Energy Partners, LLC
| Docket Number | 4:21-cv-686-MTS |
| Decision Date | 21 December 2021 |
| Parties | CONTROL TECHNOLOGY & SOLUTIONS, LLC, Plaintiff, v. OMNI ENERGY PARTNERS, LLC, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Missouri |
Before the Court is Defendants' Motion to Dismiss, Doc. [9] Plaintiff's Complaint, Doc. [3], pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons that follow, the Court denies Defendants' Motion.
Plaintiff Control Technology & Solutions, LLC's (“CTS” or “Plaintiff”) brings this action against Defendants Omni Energy Partners, LLC (“Omni”), Mark Graves, Scott Graves, [1] Jim Thurman, [2] Brandon Little, [3] and Ryan Moats[4] (collectively, “Defendants”) for several alleged wrongful acts including copying Plaintiff's confidential and proprietary materials and stealing Plaintiff's employees, clients, and business opportunities.
CTS is a company that provides energy efficient solutions and performance contracting, design-build, and system integration to help reduce energy and operational costs for its clients, that include school districts, local and federal government buildings, and healthcare providers. Doc. [3] ¶ 14. Plaintiff employed Defendant Mark Graves from November 2005 to December 16, 2020. During his time at CTS, Defendant Mark Graves served as CTS's primary sales representative and head of business development and had access to CTS's Trade Secrets.[5] Plaintiff alleges that on or about December 16, 2020, Defendant Mark Graves left CTS and formed Defendant Omni, a direct competitor of CTS.
Plaintiff alleges Defendant Mark Graves recruited his co-workers (the other individual Defendants) to join him in his new business endeavor; the individual Defendants left CTS to join Defendant Omni, and each had access to CTS's Trade Secrets and proprietary information. According to Plaintiff, while the individual Defendants were still employed by CTS, they prepared for Defendant Omni's business ventures while using CTS's resources and building proposals akin to Plaintiffs. Id. ¶ 37. Plaintiff alleges that Defendants attempted to solicit Plaintiff's clients and business opportunities while still working for Plaintiff. As an example, Plaintiff alleges that Defendant Mark Graves purposely bid on smaller projects-while working for CTS-with school districts in an attempt to work with the same districts on much larger projects at his new company. Id. ¶ 38. Currently, Plaintiff alleges, many of Defendants' clients and contractual relationships with the clients are the same as CTS's, such as these school districts. Id. ¶¶ 39-41, 45. Defendants also allegedly made several false statements and misrepresentations regarding the status of Plaintiff's business, employees, and abilities in order “to harm the business interests of [Plaintiff] and drive customers and clients to Defendants.” Id. ¶¶ 50-51, 61, 75, 90-91, 93-95. Plaintiff alleges Defendants exchanged emails with each other while still working at CTS outlining their plans to move business away from Plaintiff. Id. ¶ 110.
In carrying out Defendant Omni's business, the individual Defendants allegedly have used, and continue to use, CTS's Trade Secrets, proprietary materials, and materials that are also subject to copyright protection. Id. ¶¶ 43, 100, 110. Defendants allegedly submitted proposals to the school districts that contained CTS's “Trade Secrets, ” including content in the same layout and format, and used the same language as CTS uses in its own proposals. Id. ¶¶ 44, 47. According to the Complaint, Defendants' copying is so prevalent that in many instances Defendants failed to remove the documents' internal references to CTS. Id. ¶ 45. Plaintiff also alleges that Defendants misrepresented Plaintiff's work as their own work and “palm[ed] off” Plaintiff's “good name and accomplishments.” Id. ¶¶ 46, 50, 90-91, 116.
Based on Defendants alleged conduct, Plaintiff filed a nine-count Complaint asserting: (1) Trade Secret Misappropriation in Violation of the Missouri Uniform Trade Secret Act (Count I); (2) Missouri Common Law Unfair Competition, Mo. Rev. Stat. § 417.450 (Count II); (3) Unjust Enrichment (Count III); (4) Tortious Interference with Business Expectancy (Count V (sic)); (5) Breach of Duty of Loyalty (Count VI); (6) Injurious Falsehood (Count VII); (7) Common Law Copyright Infringement (Count VIII);[6] (8) Conspiracy (Count IX); and (9) Temporary Restraining Order and Preliminary and Permanent Injunction (Count X). Doc. [3]. In the instant Motion, Defendants seek to dismiss all counts, except injurious falsehood, [7] for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Doc. [9].
Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss a claim for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). To survive a Rule 12(b)(6) motion to dismiss, a complaint must contain sufficient factual matter to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). When analyzing the adequacy of a complaint, the Court must accept as true all of the complaint's factual allegations, viewed in the light most favorable to the plaintiff, and make all reasonable inferences in favor of the nonmoving party. Burton v. Richmond, 276 F.3d 973, 975 (8th Cir. 2002); see also BellAtl. Corp. v. Twombly, 550 U.S. 544, 556-56 (2007); Neitzke v. Williams, 490 U.S. 319, 32627 (1989); Martin v. Iowa, 752 F.3d 725, 727 (8th Cir. 2014). The Court “need not accept as true plaintiff's conclusory allegations or legal conclusions drawn from the facts.” Glick v. W. Power Sports, Inc., 944 F.3d 714, 717 (8th Cir. 2019). The Court does not decide whether the plaintiff will ultimately prevail, but rather whether the plaintiff is entitled to present evidence in support of the claim. See Twombly, 550 U.S. at 556. “Where the allegations show on the face of the complaint there is some insuperable bar to relief, dismissal under Rule 12(b)(6) is appropriate.” Benton v. Merrill Lynch & Co., 524 F.3d 866, 870 (8th Cir. 2008).
In support of their Motion, Defendants argue that (1) many of Plaintiff's claims are preempted by the Missouri Uniform Trade Secrets Act (“MUTSA”); (2) all of Plaintiff's claims are preempted by the Copyright Act; and (3) Plaintiff failed to sufficiently plead the elements for its claims of trade secret misappropriation (Count I) and tortious interference (Count V). For the reasons discussed below, Defendants' arguments are unavailing.
Defendants argue that the MUTSA preempts Plaintiff's state-law claims of unfair competition (Count II), unjust enrichment (Count III), tortious interference with a business expectancy (Count V), breach of duly of loyalty (Count VI), and conspiracy (Count IX).
The MUTSA “displace[s] conflicting tort, restitutionary, and other laws . . . providing civil remedies for misappropriation of a trade secret.” Mo. Rev. Stat. § 417.463.1. Federal courts in Missouri have interpreted this provision to preempt civil claims that are “derivative” of a claim of misappropriation of trade secrets. Bancorp Servs., L.L.C. v. Hartford Life Ins. Co., No. 4:00-cv-70-CEJ, 2002 WL 32727076, at *4 (E.D. Mo. Feb. 25, 2002). The MUTSA preempts commonlaw claims as derivative “if they are based on facts related to the misappropriation of trade secrets claim.” Pinebrook Holdings, LLC v. Narup, No. 4:19-cv-1562-RLW, 2020 WL 871578, at *8 (E.D. Mo. Feb. 21, 2020). “The crucial question is whether ‘the claims are no more than a restatement of the same operative facts' that formed the basis of the plaintiff's statutory claim for trade secret appropriation.” Secure Energy, Inc. v. Coal Synthetics, LLC, No. 4:08-cv-1719-JCH, 2010 WL 1691454, at *2 (E.D. Mo. Apr. 27, 2010) (internal citations omitted). In determining whether the MUTSA preempts a claim, courts must “look beyond the label of the claims to the facts being asserted in support of the claims.” Id. at *1 (internal quotations omitted).
The Court does not find that Plaintiff's state-law claims are “derivative” of a misappropriation of trade secrets claim because Plaintiff pleads “operative facts” that go beyond misappropriation. First Plaintiff's claim for a breach of duty of loyalty is also predicated on Defendants soliciting Plaintiff's clients to move to Defendant Omni while still employed by Plaintiff, as well as soliciting clients while working for Plaintiff to secure future work for Defendant Omni. Doc. [3] ¶¶ 37, 38, 82-83. Second, Plaintiff's conspiracy claim is also based on several unlawful acts, including Defendants allegedly exchanging emails with each other while still working at CTS outlining their plans to move business away from Plaintiff. Doc. [3] ¶ 110. Third, Plaintiff's tortious interference claim also alleges Defendants took credit for Plaintiff's accomplishments and made false statements regarding Plaintiff's business to prevent Plaintiff from entering into contractual relationships with clients. Doc. [3] ¶¶ 50-51, 75, 90-91, 93-95. Fourth, Plaintiff's unfair competition claim withstands preemption for those same reasons, including taking credit for Plaintiff's “accomplishments, ” work, and “name, ” and “passing it off” as Defendants' own. See Am. Equity Mortg., Inc. v. Vinson, 371 S.W.3d 62, 64 (Mo.Ct.App. 2012) (). Because all of Plaintiff's claims assert a broader claim against Defendant than improper copying of Plaintiff's confidential materials, the MUTSA does not preempt these claims....
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