Meyer Grp., Ltd. v. Rayborn

• Decision Date: 28 September 2020
• Docket Number: Civil Action No. 19-1945 (ABJ)
• Parties: MEYER GROUP, LTD., Plaintiff, v. JAMES M. RAYBORN, et al., Defendants.
• Court: U.S. District Court — District of Columbia

MEYER GROUP, LTD., Plaintiff, v. JAMES M. RAYBORN, et al., Defendants.

Civil Action No. 19-1945 (ABJ)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

September 28, 2020

MEMORANDUM OPINION

PlaintiffThe Meyer Group, Ltd.("TMG") is a commercial real estate company providing brokerage and advisory services to tenants in the Washington, D.C. metropolitan area.Compl.[Dkt. # 1]¶ 7.DefendantJames M. Rayborn is a real estate salesperson and a former employee of TMG.Id.¶¶ 3, 8-9.During his employment with plaintiff, Rayborn was charged with maintaining existing client relationships and following leads for potential new clients.Aff. of James Rayborn, Ex.A to Def. James M. Rayborn's Mot. to Dismiss[Dkt. # 9-5]("Rayborn Aff.")¶¶ 17-19.In January of 2019, TMG terminated Rayborn's employment, and he later began working for Broad Street Realty, another real estate brokerage firm providing services in the District of Columbia area.Compl.¶¶ 10, 19-20.Plaintiff alleges that Rayborn misappropriated TMG's confidential client data, disclosed it to Broad Street Realty, and persuaded TMG's clients to terminate their contracts with TMG and move to Broad Street.Id.¶ 21.

On June 28, 2019, plaintiff filed a complaint against Rayborn and Broad Street Realty alleging violations of the federal Defend Trade Secrets Act, 18 U.S.C. § 1836, et seq., and the D.C. Uniform Trade Secrets Act, D.C. Code § 36-401. Compl.¶¶ 34-49.It also alleged that defendants tortiously interfered with TMG's contracts with its clients, and that Rayborn breached his employment agreement.Id.¶¶ 24-33.

On September 20, 2019, defendant Rayborn filed a motion to dismiss, or in the alternative, a motion for summary judgment.Def. Rayborn's Mot. to Dismiss or Alternatively Mot. for Summ. J.[Dkt. # 8]("Def.'s Mot."); Def. Rayborn's Errata Mem. in Supp. of Def.'s Mot. [Dkt. # 9-3]("Def.'s Mem.").He argued that the "confidential information" that was allegedly misappropriated from TMG is not a trade secret, and that the information was his property.Def.'s Mem.at 10-12.He also argued that plaintiff failed to state a claim for tortious interference or breach of contract.Id. at 12-20.Defendant Broad Street Realty later joined Rayborn's motion.Def. Broad Street Realty, LLC's Mot. to Dismiss[Dkt. # 11]("Broad St. Mot.").

For the following reasons, the Court will grant in part and deny in part defendants' motions.

BACKGROUND

Rayborn started working for The Meyer Group in 1994 as a real estate salesperson specializing in tenant representation.Compl.¶¶ 8, 11.According to the complaint, Rayborn ignored directives from the president of the company, William Meyer, and "engage[d] in disruptive behavior" during the course of his employment.Id.¶ 11.Rayborn also allegedly damaged the company's relationships with its clients by "harassing and ceaselessly calling and emailing" them.Id.In May of 2018, Rayborn was terminated for cause.Id.

Soon after he was terminated, Rayborn insisted that he be reinstated.Compl.¶ 12.Plaintiff agreed to bring him back under a different arrangement, and on May 29, 2018, TMG and Rayborn executed an Independent Contractor Agreement ("ICA").Id.Pursuant to the ICA, Rayborn would assist current TMG clients in locating premises and negotiating lease agreements, and he would assist TMG in acquiring new clients.Id.The agreement provided that Rayborn would be paid75% of any commissions paid to TMG, net of any other expenses.Id.The ICA also contained a confidentiality provision, in which Rayborn "recognized and acknowledged that TMG would be granting Rayborn access to confidential or proprietary information, including information concerning TMG's clients and prospective clients, the identity of clients and prospective customers, the identity of key purchasing personnel in the employ of customers and prospective clients, and client lists."Id.¶ 14.He agreed to not disclose this confidential information to others, to abstain from soliciting any client or potential client of TMG, and to return any confidential information in his possession to TMG prior to the termination of the contract.Id.¶ 15.The ICA also stated that either party could terminate the ICA at any time upon notice to the non-terminating party.Id.¶ 13.

Plaintiff alleges that by virtue of this arrangement, Rayborn had access to or created confidential client lists, which included information that was not publicly known.SeeCompl.¶ 16.Plaintiff alleges that the confidential data on each client included such information as "the date of lease expiration, notes on client preferences, and up-to-date contacts at each client company."Id.¶ 17.Some of the confidential information was stored on a Microsoft database and other information was recorded by Rayborn on a set of "TMG index cards."Id.

In January of 2019, plaintiff learned that Rayborn was corresponding with competing real estate firms, including Broad Street Realty about employment opportunities.Compl.¶ 19.Meyer asked Rayborn if he intended to continue working with TMG under the ICA, and Rayborn indicated that he intended to seek employment elsewhere.Id.On January 24, 2019, TMG notified Rayborn that the ICA was terminated.Id.At some point after the termination of the ICA, Rayborn joined Broad Street Realty as a Senior Vice President.Seeid.¶¶ 8, 20.

After Rayborn's departure, plaintiff learned that he had taken a number of the index cards that contained client information with him.Compl.¶ 21.Plaintiff alleges that Rayborn "disclosed and misappropriated TMG's Confidential Information by contacting and actively soliciting TMG's clients while working at Broad Street."Id.As a result, a number of TMG's "longtime" clients terminated their agreements and switched to Broad Street Realty.Id.¶ 21(a)-(g).For example, Barnes Vanze Architects, Inc. was TMG's client for over eight years, and on February 25, 2019, it notified TMG that it was terminating its exclusive agreement with TMG and would be working with Broad Street Realty instead.Id.¶ 21(b).Plaintiff alleges that Rayborn even set up meetings and calls with its clients to persuade them to move their business to Broad Street Realty while he was still working at TMG.Id.¶ 21(f)-(g).

On April 26, 2019, plaintiff sent Broad Street Realty a cease-and-desist letter demanding that it stop using TMG's confidential information.Compl.¶ 22.Broad Street refused to comply, and plaintiff alleges that Broad Street and Rayborn continue to utilize TMG's confidential information today.Id.¶¶ 22-23.

On June 28, 2019, plaintiff filed a complaint in this Court against Rayborn and Broad Street, alleging: (1) Rayborn breached the ICA by misappropriating and disclosing confidential information, Compl.¶¶ 24-27;(2) Rayborn and Broad Street tortiously interfered with the contracts between TMG and its clients by actively soliciting TMG's clients and encouraging them to terminate their contracts with TMG, id.¶¶ 28-33;(3) Rayborn and Broad Street violated the D.C. Uniform Trade Secrets Act, D.C. Code § 36-403, when they misappropriated TMG's confidential information, Compl. ¶¶ 34-40; and (4) Rayborn and Broad Street violated the Defend Trade Secrets Act, 18 U.S.C. § 1836, when they willfully acquired, misappropriated, and disclosed TMG's confidential information for their own economic benefit.Compl.¶¶ 41-49.Defendantshave moved to dismiss the complaint, or alternatively, for summary judgment.Def.'s Mem.; Broad St. Mot.

STANDARD OF REVIEW

"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 quotation marks omitted);accordBell Atl. Corp. v. Twombly, 550 U.S. 544, 570(2007).In Iqbal, the Supreme Court reiterated the two principles underlying its decision in Twombly: "First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions."556 U.S. at 678, citingTwomby, 550 U.S. at 555.And "[s]econd, only a complaint that states a plausible claim for relief survives a motion to dismiss."Id. at 679, citingTwombly, 550 U.S. at 556.

A claim is facially plausible when the pleaded factual content "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."Id. at 678."The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully."Id, quotingTwombly, 550 U.S. at 556.A pleading must offer more than "labels and conclusions" or a "formulaic recitation of the elements of a cause of action,"id., quotingTwombly, 550 U.S. at 555, and "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."Id.

When considering a motion to dismiss under Rule 12(b)(6), the Court is bound to construe a complaint liberally in the plaintiff's favor, and it should grant the plaintiff"the benefit of all inferences that can be derived from the facts alleged."Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276(D.C. Cir.1994), citingSchuler v. United States, 617 F.2d 605, 608(D.C. Cir.1979).Nevertheless, the Court need not accept inferences drawn by the plaintiff if those inferences areunsupported by facts alleged in the complaint, nor must the Court accept the plaintiff's legal conclusions.Seeid.;Browning v. Clinton, 292 F.3d 235, 242(D.C. Cir.2002).In ruling upon a motion to dismiss for failure to state a claim, the Court may ordinarily consider only "the facts alleged in the complaint, documents attached as exhibits or incorporated by reference in the complaint, and matters about which the Court may take judicial notice."Gustave-Schmidt v. Chao, 226 F. Supp. 2d 191, 196(D.D.C.2002)(citations omitted).

ANALYSIS

I.The...