Mintz v. Bartelstein

• Decision Date: 01 November 2012
• Docket Number: Case Nos. 2:12–cv–02554–SVW–SS, 2:12–cv–03055–SVW–SS.
• Citation: 906 F.Supp.2d 1017
• Parties: Aaron MINTZ v. MARK BARTELSTEIN AND ASSOCIATES INC. et al.
• Court: U.S. District Court — Central District of California

906 F.Supp.2d 1017

Aaron MINTZ

v.MARK BARTELSTEIN AND ASSOCIATES INC. et al.

Case Nos. 2:12–cv–02554–SVW–SS, 2:12–cv–03055–SVW–SS.

United States District Court,

C.D. California.

Nov. 1, 2012.

Anthony J. Oncidi, Robert H. Horn, Susan L. Gutierrez, Proskauer Rose LLP, Daniel Stephen Miller, Louis R. Miller, Miller Barondess, Los Angeles, CA, Christopher L. Williams, Proskauer Rose LLP, New Orleans, LA, for Aaron Mintz.

Adrian M. Pruetz, Paul Benedict Salvaty, Christopher Dacus, G. Jill Basinger, Lauren M. Gibbs, Glaser Weil Fink Jacobs Howard Avchen and Shapiro LLP, Los Angeles, CA, for Mark Bartelstein and Associates Inc.

STEPHEN V. WILSON, District Judge.

Proceedings: IN CHAMBERS ORDER re:

[48] MOTION for Summary Judgment as to All Counterclaims or, alternatively, MOTION for Partial Summary Judgment as to declaratory relief; violation of the Computer Fraud and Abuse Act; violation of the Electronic Communications and Privacy Act; violation of California Penal Code § 502; invasion of privacy; unfair business practices under state law; and all counterclaims filed by Plaintiff and Counterdefendants Creative Artists Agency LLC, Aaron L Mintz;

[56] MOTION for Partial Summary Judgment filed by Defendants and Counterclaimants Mark Bartelstein and Associates Inc.

I. INTRODUCTION

This case arises from the departure of a basketball sports agent from his old agency, Mark Bartelstein & Associates, Inc. d/b/a Priority Sports & Entertainment (“Priority Sports”), to join the Creative Arts Agency (“CAA”). On March 23, 2012, Plaintiff Aaron Mintz (“Plaintiff”) filed the instant action against his erstwhile employer, Priority Sports, seeking a declaration under the Declaratory Judgment Act, 28 U.S.C. § 2201, that two provisions of Plaintiff's employment contract with Priority Sports are unenforceable, namely a two-year non-compete clause and the requirement of fourteen days' written notice of termination. (Compl. I ¶¶ 15–16).

On April 6, 2012, Plaintiff filed a separate complaint against Priority Sports and its principal, Mark Bartelstein (collectively, “Defendants”), alleging that following Plaintiff's resignation, Defendants had engaged in a course of illegal retaliatory conduct, which included acquiring unauthorized access to Plaintiff's personal emails, obtaining confidential information about the terms of Plaintiff's employment with CAA, and disclosing this information to third parties. (Compl. II ¶ 1). Thus, the second complaint advances the following causes of action: (1) violation of the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030; (2) violation of the Electronic Communications and Privacy Act (“EPCA”), 18 U.S.C. §§ 2510 et seq.; (3) violation of the California Data Access and Fraud Act (“CDAFA”), Cal.Penal Code § 502; (4) defamation; (5) invasion of privacy; (6) interference with prospective economic relations; and (7) violation of the California Unfair Business Practices Act (“UCL”), Cal. Bus. & Prof.Code §§ 17200 et seq.¹

On April 17, 2012, Priority Sports counterclaimed alleging that before and after his resignation, Plaintiff conspired with CAA to misappropriate Priority Sports' confidential information, to convert Priority Sports' clientele to CAA, and to breach the terms of Plaintiff's employment contract with Priority Sports. (Counterclaim ¶¶ 3–4). Priority Sports accordingly asserts the following counterclaims: (1) breach of contract against Mintz; (2) breach of the covenant of good faith and fair dealing against Plaintiff; (3) breach of the duty of loyalty against Plaintiff; (4) misappropriation of trade secrets against Plaintiff and CAA (collectively, “Counterdefendants”); (5) intentional interference with contractual relations as to CAA; (6) intentional interference with present and prospective economic advantage and business relationships against Counterdefendants; (7) conversion against Plaintiff; (8) violation of California Penal Code § 502 against Plaintiff; (9) defamation against Plaintiff; (10) trade libel against Plaintiff; (11) conspiracy against Counterdefendants; and (12) violation of the UCL against Counterdefendants. (Dkt. 9).

On October 1, 2012, Plaintiff and CAA filed the instant Motion for Summary Judgment as to all Defendants' counterclaims, or in the alternative, Motion for Partial Summary Judgment on Plaintiff's claims with respect to the Declaratory Judgment Act, the CFAA, the ECPA, California Penal Code § 502, invasion of privacy, and unfair competition. (Dkt. 48).² Defendants simultaneously filed a Motion for Partial Summary Judgment as to their claims against Plaintiff for breach of contract and breach of the duty of loyalty. (Dkt. 56).

For the reasons below, Plaintiff's Motion for Summary Judgment on its own claims is GRANTED with respect to the claims for violation of California Penal Code § 502 and invasion of privacy, but DENIED with respect to the claim under the UCL. Further, the Court GRANTS summary judgment in favor of Defendants on Plaintiff's claims for declaratory relief, violation of the CFAA, and violation of the ECPA. Counterdefendants' Motion for Summary Judgment as to Defendants' counterclaims is GRANTED as to every claim. Accordingly, Defendants' Motion for Partial Summary Judgment is DENIED as moot.

II. FACTSA. Plaintiff's Employment Contract with Priority Sports

Priority Sports is a Chicago-based sports agency that represents professional athletes. Plaintiff worked in Priority Sports' Los Angeles office for eleven years, from September 25, 2001 until March 23, 2012. When he began working for Priority Sports, Plaintiff signed an employment contract. Pursuant to the employment agreement, Plaintiff agreed:

(1) To devote all working time, knowledge, skill, attention, and energy, using his best efforts, to the duties and responsibilities set forth herein;

(2) To serve and further the interest of the Company in every lawful way; and

(3) To follow the Company's policies and directives, and any modifications thereof.

(Compl. I, Ex. A ¶ II(A)). Plaintiff further agreed:

that during the Employee's employment with the Company the Employee will not, directly or indirectly, on behalf of himself or others either as an employee, consultant, owner, independent contractor or in any other capacity whatsoever:

1. Solicit Company Clients or business on behalf of a Company Competitor;

2. Recruit Company employees on behalf of a Company Competitor;

3. Perform or engage in activities or in the provision of services, in any capacity, on behalf of or for a Company Competitor;

... or

5. Disclose Confidential Business Information to anyone, including, without limitation, Company Competitors not affiliated with the Company, without the Company's prior written consent.

( Id. ¶ II(B)).

The employment contract also set forth specific terms concerning termination and its aftermath. Section IV(D) states that Plaintiff “may terminate his employment with the Company for any reason or no reason upon fourteen (14) days' written notice to the Company.” ( Id. ¶ IV(D)). Further, Section V(A) sets forth what is referred to by the parties as the non-compete provision:

For two (2) years following the termination of the Employee's employment, regardless of the reason therefore, the Employee agrees that the Employee will not, directly or indirectly, on behalf of himself or others either as an employee, consultant, owner, independent contractor or in any other capacity whatsoever:

1. Solicit Company Clients;

2. Recruit Company employees for or on behalf of Company Competitors:

3. Disclose Confidential Business Information to persons not affiliated with the Company, including, without limitation, Company Competitors, without the Company's prior written consent; or

4. Provide, or assist in providing, either directly or through a Company Competitor, services that are, or are similar to the services, provided by the Company to a Company Client.

( Id. ¶ V(A)). Finally, the employment contract provides that:

Upon and after the termination of Employee's employment, regardless of the reason therefor, the Employee shall not copy, duplicate, and/or remove documents containing Confidential Business Information from Company offices, and the Employee will promptly return to the Company any such documents the Employee possesses.

( Id. ¶ V(B)).

B. Plaintiff's Resignation from Priority Sports

In early March 2012, CAA offered Plaintiff a job. It is undisputed that on March 23, 2012, Plaintiff terminated his employment with Priority Sports without giving fourteen days' written notice. (Def. Response to Pl. Uncontroverted Facts (“DUF”) 6). That evening, Plaintiff spoke on the telephone with Bartelstein and informed him of his resignation. Bartelstein allegedly concluded the conversation by saying, “Wait until I tell the world about this. You made your bed, you better be ready to lie in it.” (Mintz Decl. ¶ 15).

C. Defendants' Alleged Retaliation Against Plaintiff

On March 25, 2012, Priority Sports' General Counsel, Rick Smith, instructed another employee, Bradley Ames, to access Plaintiff's personal email account (a.k.a. the “Gmail account”) without Plaintiff's permission. (DUF 7–10). Ames obtained a temporary password without Plaintiff's consent and accessed Plaintiff's Gmail account for at least twenty minutes. (DUF 11). It is undisputed that Ames viewed a copy of Plaintiff's employment agreement with CAA. (DUF 12). The next day, Plaintiff's colleague, Kevin Zuckerman, emailed Plaintiff the following message: “I'm in shock! Rumor on the street is that CAA is paying you less money over 4 years then [sic] you would have made here. I don't get it[.] You had a 50–year guaranteed deal here.” (DUF 15). Plaintiff contends that Defendants leaked his employment terms with CAA to a third party named Josh Ketroser. (DUF 16). Plaintiff further alleges that Bartelstein subsequently defamed him in front of various NBA team executives and players to persuade them not to follow Plaintiff to CAA. (Mot. at 6).

D. Plaintiff...