Glynn v. Impact Sci.

• Decision Date: 25 August 2011
• Docket Number: Civil No. JFM–07–1660.
• Court: U.S. District Court — District of Maryland
• Parties: Dennis P. GLYNN, Plaintiff and Counter–Claim Defendant, v. IMPACT SCIENCE & TECHNOLOGY, INC., Defendant and Counter–Claimant, v. Saltwhistle Technology, LLC, Counter–Claim Defendant, and EDO Corp., Defendant.

807 F.Supp.2d 391

Dennis P. GLYNN, Plaintiff and Counter–Claim Defendant,

v.IMPACT SCIENCE & TECHNOLOGY, INC., Defendant and Counter–Claimant,

v.Saltwhistle Technology, LLC, Counter–Claim Defendant,andEDO Corp., Defendant.

Civil No. JFM–07–1660.

United States District Court, D. Maryland.

Aug. 25, 2011.

Roy Brent Fuller, Bacon Thornton and Palmer LLP, Greenbelt, MD, F. Douglas Hartnett, Elitok and Hartnett at Law LLC, Robert Scott Oswald, Adam Augustine Carter, Jason Mark Zuckerman, The Employment Law Group PC, Washington, DC, for Plaintiff and Counter–Claim Defendant.

Connie N. Bertram, Cooley Godward Kronish LLP, William M. Sullivan, Jr., Pillsbury Winthrop Shaw Pittman LLP, Alia Ornstein, Ryan R. Sparacino, Ryan S. Spiegel, Winston and Strawn LLP, Washington, DC, for Defendant and Counter–Claimant.

OPINION

J. FREDERICK MOTZ, District Judge.

Plaintiff Dennis Glynn ("Glynn") filed suit against Defendants, Impact Science & Technology, Inc. ("IST") and EDO Corporation ("EDO"),¹ on June 21, 2007, alleging, inter alia, retaliation in violation of the False Claims Act ("FCA"), post-termination FCA retaliation, declaratory judgment, and a Haddle claim under 42 U.S.C. § 1985(2).² In turn, IST filed counterclaims against Glynn and Saltwhistle Technology, LLC ("SWT")³ on April 11, 2008, which would eventually include breach of contract, misappropriation of trade secrets, breach of fiduciary duty, conversion, defamation, tortious interference, violation of New Hampshire's consumer protection statute, unjust enrichment, and civil conspiracy.

Now pending is Glynn and SWT's Motion for Summary Judgment requesting that this Court enter judgment that as a matter of law, Glynn engaged in protected activity and there is direct evidence of retaliation against Glynn by IST. In addition, Glynn and SWT move for summary judgment on IST's breach of the Employment Agreement (Count I), breach of the Asset Purchase Agreement ("APA") (Count II), misappropriation of trade secrets (Count III), breach of fiduciary duty (Count IV), conversion (Count V), tortious interference (Count VII), violation of New Hampshire's consumer protection statute (Count VIII), unjust enrichment (Count IX), and civil conspiracy (Count XI) counterclaims.⁴ Also pending is IST's Cross–Motion for Summary Judgment on Plaintiff's FCA retaliation (Count I), post-termination FCA retaliation (Count V), declaratory judgment (Count VI), and Haddle (Count VII) causes of action, as well as summary judgment on IST's breach of contract (Counts I and II) and tortious interference with advantageous relations (Count VII) counterclaims. A hearing on these motions was held on July 15, 2011.

For the following reasons, I deny Glynn's Motion for Summary Judgment as to the protected activity and retaliation claims, and I grant IST's Motion for Summary Judgment as to Glynn's FCA retaliation, post-termination FCA retaliation, declaratory judgment, and Haddle claims (Counts I, V, VI, and VII). I also grant summary judgment to IST on its counterclaim for breach of the Employment Agreement (Count I), and deny its Motion for Summary Judgment as to its counterclaims for breach of the APA and tortious interference (Counts II and VII). I grant summary judgment to Glynn on IST's counterclaims for breach of the APA, breach of fiduciary duty, conversion, tortious interference, unjust enrichment, and civil conspiracy (Counts II, IV, V, VII, IX, and XI), and deny Glynn's Motion for Summary Judgment as to IST's counterclaims for breach of the Employment Agreement, misappropriation of trade secrets, and violation of New Hampshire's consumer protection statute (Counts I, III, and VIII). The result of this decision is that solely IST's counterclaims for misappropriation of trade secrets, defamation,⁵ and violation of New Hampshire's consumer protection statute (Counts III, VI, and VIII) survive summary judgment and will proceed to trial.

I. Background

A.

Glynn began working for IST in February 2004 after IST acquired Dedicated Electronics, Inc. ("DEI"), a privately held company owned, in part, by Glynn. (Glynn Mot. Summ. J., Ex. 1 ¶¶ 17, 78.) Glynn worked as a Principal Engineer for IST, in the Information Warfare Group ("IW Group"), with the primary responsibility of designing various modules and components for IST's Mobile Multi–Band Jammer systems ("MMBJs"), which counter Improvised Explosive Devices ("IEDs") by interfering with signals sent to trigger the IEDs. (See id., Ex. 1 ¶¶ 17–19, 21.)

Each MMBJ system contains a component part known as a "module," which is designed to emit a radiofrequency that jams the receivers of nearby IEDs and prevents them from receiving signals that would cause them to detonate. As IST continued to tweak and develop its designs over the years, it regularly created updated versions of the modules used in its counter-IED ("C–IED") systems. For example, an earlier module, known as the MBTNS module, was used by IST until 2005. At that point, an updated module design, the DDS module, was introduced to replace the MBTNS module. (Id., Ex. 45, IST Dep. 181:9–183:1, Nov. 17, 2010.) Although the DDS module was thought to be superior to the MBTNS module in terms of performance, it encountered "producibility issues" and was replaced by the DRU module in 2007. (Id., Ex. 55, Murrin Dep. 154:7–155:20, Nov. 16, 2010.) The DRU module was used by IST "into the 2008 time frame and possibly beyond." (Id., Ex. 45, IST Dep. 183:14–15.)

Beginning in 2004, Glynn alleges that he became concerned with the C–IED technology IST was developing because Glynn believed the MMBJ devices would fail under extreme temperatures. (See id., Ex. 1 ¶¶ 22–23.) Glynn claims that he brought his concerns to the attention of his supervisors and IST management at various points throughout 2004, 2005, and 2006. (Id., Ex. 1 ¶ ¶ 23, 25, 31, 37–39.) On September 13, 2006, Glynn contacted the U.S. Attorney's office to raise his concerns. (Id., Ex. 1 ¶ 59.) Glynn also met with a government investigator from the Department of Defense ("DOD") (id., Ex. 1 ¶¶ 60–66), prompting DOD personnel to make an unannounced visit to IST to test IST's products in October 2006. (Id., Ex. 1 ¶ 68.)

On December 14, 2006, IST terminated Glynn's employment. (Fourth Am. Compl. ¶ 94.) The reasons for this termination are the subject of intense dispute: IST alleges Glynn engaged in "continued and escalating bad behavior," creating a "toxic" environment, "all while exhibiting pervasive negativity, disrespect, and insubordination at IST." (IST Mem. 1.) Glynn alleges he was terminated by IST in retaliation for his whistleblowing. (See Fourth Am. Compl. ¶¶ 5–6.)

B.

At the commencement of his employment at IST, Glynn entered into an Employment Agreement which, among other things, included noncompete, nonsolicitation, and nondisclosure provisions. (See IST's Rule 56 Statement of Facts at ¶ 36). The terms of these provisions expressly stated that they would remain in effect beyond the termination of Glynn's employment with IST.⁶ (IST Mot. Summ. J., Ex. 37, Employment Agreement §§ 6, 7.) On January 4, 2007, approximately three weeks after his termination, Glynn incorporated Saltwhistle Technology, LLC, his own company that, like IST, focused on designing C–IED devices for use by the United States government. (IST Mot. Summ. J., Ex. 9, Saltwhistle Technology Press Release.) Over the next two years, Glynn and SWT collaborated with Foster–Miller Inc. ("FMI") to secure two government contracts to supply C–IED devices to Naval Sea Systems Command ("NAVSEA"), a specific acquisition group within DOD. (IST Mot. Summ. J., Ex. 15, FMI Dep. 106:2–109:13, June 18, 2008.) Around the time that Glynn was setting up SWT, IST began attempts to recover copies of proprietary electronic files that had been retained by Glynn after his termination. Following a court-ordered computer forensics protocol, which involved a search of Glynn's computers, hard drives, and storage devices, IST eventually recovered numerous IST files with titles such as "IST—Transceivers," "IST—NOISE—SOURCE—MODULE," and "IST—MULTI–BAND—TUNABLE—NOISE—SOURCE." (IST Mot. Summ. J., Ex. 118, Fowler Decl. ¶ 53.) The protocol also turned up copies of DEI design schematics and a file entitled "dei library," which clearly dated back to Glynn's prior company, DEI, that was sold to IST in 2004.(Id. )

C.

On June 21, 2007, Glynn filed suit against IST alleging retaliation under the FCA and wrongful discharge. (See Compl. ¶¶ 79–97.) On April 11, 2008, IST filed counterclaims against Glynn and SWT. (ECF. No. 60.) IST's claims would eventually include breach of contract (Counts I and II), misappropriation of trade secrets (Count III), breach of fiduciary duty (Count IV), conversion (Count V), defamation (Count VI), tortious interference (Count VII), violation of New Hampshire's consumer protection statute (Count VIII), unjust enrichment (Count IX), and civil conspiracy (Count XI). (See IST Mot. Leave to File Second Am. Countercls. and Cross-cls., Ex. C, ECF No. 145.)

II. Standard of Review

Rule 56(a) of the Federal Rules of Civil Procedure provides that a "court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The Supreme Court has clarified that this does not mean that any factual dispute will defeat the motion. "By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (emphasis in original).

"A party opposing a properly supported motion for summary judgment ‘may not rest upon the mere allegations or denials of [his] pleadings,’ but rather must ‘set forth specific facts showing that there is a...