Enviropak Corp. v. Zenfinity Capital, LLC

• Decision Date: 23 January 2015
• Docket Number: No. 4:14CV00754 ERW,4:14CV00754 ERW
• Court: U.S. District Court — Eastern District of Missouri
• Parties: ENVIROPAK CORPORATION, Plaintiff, v. ZENFINITY CAPITAL, LLC, et al., Defendants.

ENVIROPAK CORPORATION, Plaintiff, v. ZENFINITY CAPITAL, LLC, et al., Defendants.

No. 4:14CV00754 ERW

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION

January 23, 2015

MEMORANDUM AND ORDER

This matter comes before the Court on "Defendants Zenfinity Capital, LLC, Zenfinity Capital Group, LLC, Footprint, LLC and Jared Bearinger's Motion to Dismiss" [ECF No. 62].

I. BACKGROUND

This lawsuit arises out of negotiations between Defendant Zenfinity Capital, LLC ("Zenfinity"), and Plaintiff EnviroPAK Corporation, a manufacturer of protective molded pulp packaging. Plaintiff alleges it was contacted by Zenfinity, in May 2013, regarding a proposal to purchase Plaintiff. Plaintiff contends, to aid in the negotiation process, the parties entered into a "Mutual Confidentiality Agreement" ("Zenfinity Agreement"), which prohibited Zenfinity's disclosure and use of "Confidential Information," including customer information and proprietary information [See ECF No. 52-1 at ¶¶ 1-6]. The Zenfinity Agreement dictated neither party would interfere with the employment relationships of the other party's employees [See ECF No. 52-1 at ¶ 7]. Plaintiff states it rejected Zenfinity's ensuing purchase offer in July 2013.

In April 2014, Plaintiff initiated this lawsuit by filing its "Complaint" [ECF No. 1]. The Complaint asserted two breach of contract claims (Counts I and II), a claim for tortious interference with a business relationship (Count III), and a violation of the Missouri UniformTrade Secrets Act for misappropriation of trade secrets (Count IV). Specifically, Plaintiff alleged Zenfinity violated the Zenfinity Agreement by hiring Plaintiff's now former Vice President of Manufacturing, Rodney Heenan, who was previously bound by a "Confidentiality, Non-Disclosure, and Non-Compete Agreement" with Plaintiff. The Complaint also alleged Heenan has disclosed, and continues to disclose, confidential information to Zenfinity, including trade secrets and customer information.

In October, 2014, Plaintiff filed its "First Amended Complaint" [ECF No. 41] and "Second Amended Complaint" [ECF No. 52], which include additional claims and additional defendants. Specifically, Plaintiff now also brings claims against Zenfinity Capital Group, LLC ("Zenfinity Group"); Footprint, LLC ("Footprint"); Footprint MX S. De. R.L. de C.V. ("Footprint MX"); and Jared Bearinger (a/k/a Gene Bearinger). Count I of the Second Amended Complaint is a breach of contract claim against Zenfinity. Plaintiff alleges Zenfinity breached the terms of the Zenfinity Agreement by: (1) "soliciting for employment [Rodney] Heenan, [William] Noble, and Josh Heenan on behalf of Footprint and encouraging or causing [those individuals] to leave the employ or terminate their relationship with Plaintiff"; (2) "soliciting, through its agent Josh Heenan, various employees of Plaintiff on behalf of Footprint and encouraging, through its agent Josh Heenan, those employees to leave the employ or terminate their relationship with Plaintiff"; and (3) "using and disclosing Plaintiff's confidential information, including trade secrets and customer information, as defined in the Zenfinity Agreement, to other[s], including but not limited to Zenfinity Group, Footprint and Footprint MX, and otherwise failing to protect and safeguard the confidentiality of the Confidential Information" [ECF No. 52 at ¶¶ 86-88]. Count II alleges "tortious interference with business relationships and contracts" by all Defendants [ECF No. 52 at ¶¶ 92-102]. Specifically, Plaintiffclaims Defendants improperly interfered with various contracts and "business relationships" between Plaintiff and employees Rodney Heenan ("Heenan"), William Noble, and Josh Heenan. Count III is a separate allegation of "tortious interference with a contract" against Zenfinity Group, Footprint, Footprint MX, and Bearinger [ECF No. 52 at ¶¶ 103-09]. Specifically, Plaintiff claims these four Defendants played a role in Zenfinity's breach of the Zenfinity Agreement. Count IV alleges Zenfinity and Bearinger violated the Missouri Uniform Trade Secrets Act ("MUTSA") by disclosing trade secrets to Zenfinity Group, Footprint, and Footprint MX [ECF No. 52 at ¶¶ 110-19]. Count V alleges all Defendants engaged in "civil conspiracy to violate the Missouri Uniform Trade Secrets Act" [ECF No. 52 at ¶¶ 120-23]. Count VI alleges all Defendants engaged in "civil conspiracy to tort[i]ously interfere with contracts" [ECF No. 52 at ¶¶ 124-30]. Finally, Count VII alleges a violation of the Sherman Antitrust Act by all Defendants [ECF No. 52 at ¶¶ 131-37].

On November 6, 2014, Defendants Zenfinity, Zenfinity Group, Footprint, and Bearinger filed the pending Motion to Dismiss [ECF No. 62]. Specifically, these Defendants ask the Court to dismiss Counts II-VII of the Second Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted.

II. STANDARD

Under FRCP 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). The notice pleading standard of FRCP 8(a)(2) requires a plaintiff to give "a short and plain statement showing that the pleader is entitled to relief." To meet this standard and to survive a Rule 12(b)(6) 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 (2009) (internal quotations andcitation omitted). "A claim has facial plausibility 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. A court accepts "as true all of the factual allegations contained in the complaint," and affords the non-moving party "all reasonable inferences that can be drawn from those allegations" when considering a motion to dismiss. Jackson v. Nixon, 747 F.3d 537, 540-41 (8th Cir. 2014) (internal quotations and citation omitted). However, the Court is "not bound to accept as true a legal conclusion couched as a factual allegation." Carton v. Gen. Motor Acceptance Corp., 611 F.3d 451, 454 (8th Cir. 2010) (internal citation omitted). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678 (internal citation omitted). Additionally, "some factual allegations may be so indeterminate that they require further factual enhancement in order to state a claim." Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009).

A well-pleaded complaint may not be dismissed even if it appears proving the claim is unlikely and if the chance of recovery is remote. Bell Atlantic v. Twombly, 550 U.S. 544, 556 (2007). However, if a claim fails to allege one of the elements necessary to recovery on a legal theory, that claim must be dismissed for failure to state a claim upon which relief can be granted. Crest Constr. II, Inc. v. Doe, 660 F.3d 346, 355 (8th Cir. 2011). Bare assertions constituting merely conclusory allegations failing to establish elements necessary for recovery will not suffice. See id. ("Plaintiffs, relying on facts not in the complaint, make bare assertions that [defendants] were not just lenders, but owners that controlled the RICO enterprise . . . these assertions are more of the same conclusory allegation . . . "). Courts must assess the plausibility of a given claim with reference to the plaintiff's allegations as a whole, not in terms of the plausibility of each individual allegation. Zoltek Corp. v. Structural Polymer Grp., 592 F.3d893, 896 n.4 (8th Cir. 2010) (internal citation omitted). This inquiry is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679.

III. DISCUSSION

Zenfinity, Zenfinity Group, Footprint, and Bearinger (collectively, "Defendants") move to dismiss Counts II-VII of Plaintiff's Second Amended Complaint. Because many of Plaintiffs' allegations relate to trade secrets, and because Defendant argues for the preemption of certain claims related to trade secrets, the Court will first address Count IV (MUTSA violation) before going back to Count II and working through the remaining claims. For the reasons stated infra, the Court shall grant the Motion to Dismiss, in part.

A. Count IV (MUTSA)

In Count IV, Plaintiff alleges the misappropriation of its trade secrets by Heenan, Zenfinity, and Bearinger. Specifically, the Second Amended Complaint states, "Heenan misappropriated trade secrets acquired in the course of his employment with Plaintiff, by disclosing the trade secrets to Zenfinity, Zenfinity Group, Bearinger, Footprint, Footprint MX and others in order to usurp the business of Plaintiff" [ECF No. 52 at ¶ 115]. Similarly, Plaintiff alleges "Zenfinity and Bearinger misappropriated trade secrets acquired in the course of negotiations with Plaintiff and acquired through Heenan's misappropriation of the trade secrets by disclosing the trade secrets to Zenfinity Group, Footprint and Footprint MX in order to usurp the business of Plaintiff" [ECF No. 52 at ¶ 116]. However, the heading for Count IV clearly states Plaintiff is bringing MUTSA claims only against Zenfinity and Bearinger.

Defendants argue Plaintiff's MUTSA claim should be dismissed for failure to plead "the existence of its trade secrets with sufficient particularity" [ECF No. 67 at 10]. Defendants claiman adequate pleading of a MUTSA claim requires "more than 'broad and general allegations regarding misappropriation of trade secrets and confidential information'" [ECF No. 67 at 11 (citing Young Dental Manufacturing Co. v. Q3 Special Products, Inc., 891 F. Supp. 1345, 1349 (E.D. Mo. 1995)]. Stating Plaintiff has failed "to provide any descriptive information about the methods and processes it utilizes to produce its goods, or how...