Nejla K. Lane & Lane Legal Servs., P.C. v. Le Brocq, 15 C 6177
| Decision Date | 28 March 2016 |
| Docket Number | No. 15 C 6177,15 C 6177 |
| Parties | NEJLA K. LANE and LANE LEGAL SERVICES, P.C., an Illinois Professional Corporation, Plaintiffs, v. STEPHEN KENJI LE BROCQ, Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
MEMORANDUM OPINION AND ORDER
This case stems from a failed business relationship between two attorneys. Nejla K. Lane ("Lane") and her law firm Lane Legal Services, P.C., ("LLS" or "the firm") (collectively "Plaintiffs") claim that when leaving his employment at LLS, Stephen Kenji Le Brocq ("Defendant") stole information off of the firm's computers in violation of the Stored Wire and Electronic Communications and Transactional Records Access Act ("SCA"), 18 U.S.C. § 2701 et seq., the Electronic Communications Privacy Act ("ECPA"), 18 U.S.C. § 2510 et seq., and the Computer Fraud and Abuse Act ("CFAA"), 18 U.S.C. § 1030 et seq. (R. 36, Am. Compl.) They also assert numerous state law claims, including breach of contract, fraud, and a violation of the Illinois Trade Secrets Act ("ITSA"), 765 ILL. COMP. STAT. 1065/1 et seq. (Id.) Defendant moves to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (R. 39, Def.'s Mot. to Dismiss.) For the reasons stated below, the motion is granted in part and denied in part.
Lane is an Illinois resident who is licensed to practice law in Illinois and Michigan. (R. 36, Am. Compl. ¶ 3.) She is also a licensed private detective who has been operating under the name Key Private Investigation Bureau, LLC, ("KPI") since 2012. (Id. ¶ 7.) LLS is an Illinois law firm incorporated by Lane in 2007 with its principal place of business in Chicago, Illinois. (Id. ¶¶ 4, 20.) The firm's practice areas include family law, immigration law, criminal law, and personal injury cases. (Id. ¶ 19.) Defendant is an attorney residing in Illinois who is licensed to practice in Illinois and Texas. (Id. ¶ 5.)
In May 2013, when Defendant was a 22-year-old law student, he began working as a "volunteer law clerk" at LLS while pursuing his law degree. (Id. ¶ 21.) Defendant was later offered an externship with the law firm Motherway & Napleton, LLP, and from August 2013 through December 2013, Defendant worked at both LLS and Motherway & Napleton. (Id. ¶¶ 22-23, 27.) Shortly after beginning with Motherway & Napleton, Defendant told Lane that he had received an offer of employment from the firm, with an annual salary of $180,000.00 and a signing bonus of $35,000.00. (Id. ¶ 24.) Lane later learned that this was untrue, but at the time she was concerned about losing Defendant as an employee, so she offered him a position with LLS. (Id. ¶¶ 24-25.)
On May 22, 2013, the two signed an agreement specifying the terms of Defendant's employment at LLS, including the scope of his duties and salary. (Id. ¶¶ 25-26; R. 36-1, Agreement.) Lane claims that she entered this agreement only because the parties orally agreed that Defendant would remain at LLS for at least five years after obtaining his Illinois law license. (R. 36, Am. Compl. ¶ 28.) Lane also provided Defendant with a business debit card in his own name, as well as a gym membership and other benefits. (Id. ¶ 28.) The debit card was intended to be used solely for business expenses. (Id. ¶ 31.)
In May 2014, Defendant became licensed to practice in Illinois and continued working as a staff attorney for LLS under the previously agreed-upon terms. (Id. ¶ 29.) Soon thereafter, Lane added Defendant as an authorized user on all of LLS's business accounts. (Id. ¶ 31.) In July 2014, Lane leased a larger office space so that Defendant could have his own private office. (Id. ¶ 32.) Lane and Defendant negotiated the lease for this office space together. (Id. ¶ 33.)
On September 29, 2014, Defendant drafted a supplement to the parties' employment agreement that added additional provisions about bonuses and holidays. (Id. ¶ 36; R. 36-1 Suppl. Agreement at 9.) Lane signed the supplemental agreement and specified that it was to be "effective on 1/1/2015." (R. 36, Am. Compl. ¶¶ 38-39.) Sometime prior to January 1, 2015, Lane reviewed the supplemental agreement and discovered certain "errors" within it. (Id. ¶ 39.) She drafted a new contract with certain changes to ensure consistency with LLS's past practices and fee-sharing agreements with outside counsel. (Id.) This second supplemental agreement was signed by the parties on February 18, 2015. (Id. ¶ 39; R. 36-1, Second Suppl. Agreement at 11.) Although Defendant was not yet a named partner of LLS, the agreement granted him certain benefits similar to those of a partner, including advances on top of his salary and a right to be consulted by Lane in decisions "that affect LLS overall." (R. 36, Am. Compl. ¶¶ 41-42.)
Around this same time, Lane "became weary of [Defendant's] constant complaints" about his high interest student loans, and advanced him $55,000 to help him reduce his loans. (Id. ¶¶ 45-46.) Lane claims that the parties understood that, because of this advance, "going forward, Lane would not pay [Defendant] a salary when LLS' payroll account was low on funds." (Id. ¶¶ 48-49.)
On April 14, 2015, Lane formed a limited partnership with Defendant under the name "Lane Le Brocq & Lange, LLP," with Lane as a managing partner and Defendant as a junior partner. (Id. ¶¶ 8, 51.) Lane claims that she did so only because Defendant promised her that he would stay with the firm through at least December 2019. (Id. ¶ 51.) On April 29, 2015, Defendant passed the Texas bar exam. (Id. ¶ 53.) On Saturday May 9, 2015, Defendant notified Plaintiffs by email that he was terminating his employment. (Id. ¶¶ 53-54.) Lane telephoned Defendant several times that day, but he did not answer any of her calls and instead responded via text message. (Id. ¶ 55.) Lane asked Defendant if they could meet in person to discuss his departure, but he refused. (Id.)
The following day Lane went to LLS's office and discovered that Defendant's desk was empty. (Id. ¶ 56.) The office computer and monitor that he had been using were allegedly missing, as was other LLS property. (Id.) Among other things, Defendant allegedly stole several books, a credit card payment processing device, and the office petty cash. (Id. ¶ 80.) Lane contacted Defendant and requested that he return the property he had removed; she also told him that she wanted to discuss "a proper exit method" from the firm. (Id. ¶ 57.) Defendant responded via text messages "demanding, among other things, a waiver for past advances and a release of all claims with regards to the newly entered five (5) year lease agreement and/or his liability under their mutual agreement." (Id.) On May 11, 2015, Lane Le Brocq & Lange, LLP, was dissolved. (Id. ¶¶ 9, 51.)
A subsequent investigation by Plaintiffs revealed that Defendant had been using his business debit card for personal expenses and that he had improperly withdrawn cash using this debit card. (Id. ¶¶ 60, 70, 72.) Plaintiffs also discovered that, sometime on or before January 13, 2014, Defendant had copied and stolen "vast stores of LLS's electronic data and trade secrets." (Id. ¶ 61.) Plaintiffs also learned that Defendant had been planning to leave LLS and start his own firm for quite some time before his departure. (Id. ¶¶ 63-64.) On September 28, 2014, just one day before Defendant and Lane had signed their second supplemental employment agreement, Defendant had incorporated his own law firm in Texas under the name "Le Brocq Law Group, P.C." (Id. ¶ 62; R. 36-1, Incorporation Documents at 13-14.) The following month, he had registered the domain name "lebrocqlawgroup.com." (R. 36, Am. Compl. ¶ 63.) After his departure, Defendant opened his own law office in Chicago under the name Le Brocq Law Group. (Id. ¶ 64.) Plaintiffs allege that Defendant never intended to remain with LLS for a five-year period as he had promised Lane, and that instead "[h]is sole agenda had been to start working at LLS in order to gain Lane's trust, exploit Lane's firm by stealing Plaintiffs' trade secrets, skills, clients and funds and then to secretly abandon his workplace." (Id. ¶ 65.)
Plaintiffs claim that when he left the firm Defendant stole an "enormous quantity of LLS's valuable electronic data, trade secrets, clients' list, and related properties that were compiled by Lane over a ten (10) year period." (Id. ¶ 64.) They claim that these electronic files were "the products of many years of . . . formulating strategies, skills, forms, clients list, and templates for vari[ous] areas of law." (Id. ¶ 98.) These files included:
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