TLS Mgmt. & Mktg. Servs. LLC v. Rodríguez-Toledo
| Decision Date | 29 March 2018 |
| Docket Number | Civil No. 15-2121 (BJM) |
| Parties | TLS MANAGEMENT AND MARKETING SERVICES LLC, Plaintiff, v. RICKY RODRÍGUEZ-TOLEDO, et al., Defendants. |
| Court | U.S. District Court — District of Puerto Rico |
TLS Management and Marketing Services LLC ("TLS") filed a complaint against, among others, Ricky Rodríguez-Toledo ("Rodríguez"), Lorraine Ramos ("Ramos"), Miguel Santo Domingo-Ortiz ("Santo Domingo"), ASG Accounting Solutions Group, Inc. ("ASG"), and Global Outsourcing Services LLC ("GOS"), alleging violations of Titles I and II of the Electronic Communications Privacy Act ("ECPA"); violations of the Puerto Rico Commercial and Industrial Trade Secret Protection Act, (the "Act), P.R. Laws Ann. tit. 10 §§ 4131-4141; breach of contract, in violation of Articles 1044, 1054, 1077 and 1206 of the Puerto Rico Civil Code, P.R. Laws Ann. tit. 31 §§ 2994, 3018, 3052, 3371; conversion, in violation of Article 1802 of the Puerto Rico Civil Code, P.R. Laws Ann. tit. 31, § 5141; and tortious interference with various contracts, in violation of Article 1802 of the Puerto Rico Civil Code. P.R. Laws Ann. tit. 31, § 5141. Docket No. 74. The claims arising under Title I of the Electronic Communications Privacy Act ("Wiretap Act") and the other state-law claims survived defendants' motion to dismiss. Docket No. 173. TLS moved for summary judgment on its claims against Rodriguez, Ramos, Santo Domingo, ASG, and GOS, Docket Nos. 297, 301, and Rodríguez, Ramos, ASG, and GOS (collectively "Defendants") opposed. Docket Nos. 308, 309.1 Defendants moved for summary judgment only on TLS's state law claims, Docket Nos. 299, 300, 354, 355, and TLS opposed. Docket Nos. 340, 341. Defendants also sought reconsideration of a previous order denying summary judgment of TLS's claims underthe Wiretap Act, Docket No. 339, and TLS opposed. Docket No. 347. The case is before me on consent of the parties. Docket No. 93.
For the reasons set forth below, the motions for summary judgment are GRANTED in part and DENIED in part. The motion for reconsideration is DENIED.
Summary judgment is appropriate when 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). A dispute is "genuine" only if it "is one that could be resolved in favor of either party." Calero-Cerezo v. U.S. Dep't of Justice, 355 F.3d 6, 19 (1st Cir. 2004). A fact is "material" only if it "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party has the initial burden of "informing the district court of the basis for its motion, and identifying those portions" of the record "which it believes demonstrate the absence" of a genuine dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once that bar is cleared, "the burden shifts to the summary judgment target to demonstrate that a trialworthy issue exists," Plumley v. S. Container, Inc., 303 F.3d 364, 368 (1st Cir. 2002), by "affirmatively point[ing] to specific facts" in the record revealing the presence of a meaningful dispute, McCarthy v. Nw. Airlines, Inc., 56 F.3d 313, 315 (1st Cir. 1995).
The court does not act as trier of fact when reviewing the parties' submissions and so cannot "superimpose [its] own ideas of probability and likelihood (no matter how reasonable those ideas may be) upon" conflicting evidence. Greenburg v. P.R. Mar. Shipping Auth., 835 F.2d 932, 936 (1st Cir. 1987). Rather, the court must "view the entire record in the light most hospitable to the party opposing summary judgment, indulging all reasonable inferences in that party's favor." Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st Cir. 1990). And the court may not grant summary judgment "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248.
As a threshold matter, TLS sought to exclude a number of Defendants' statements of uncontested fact because they were based on affidavits. TLS argued that Rodríguez's affidavit was impermissible evidence as it was conclusory and self-serving and argued that the affidavits of Bob Renguso, Brad Schumacher, and Jay Harris were inadmissible as hearsay. PRSUF ¶¶ 30, 172, 173. "Courts and parties have great flexibility with regard to evidence that may be used on a Rule 56 proceeding, and as Rule 56(c) makes clear, in deciding summary judgment motions courts may consider any material that would be admissible or usable at trial[.]" Asociacion De Periodistas De Puerto Rico v. Mueller, 680 F.3d 70, 78 (1st Cir. 2012). "A party's own affidavit, containing relevant information of which he has first-hand knowledge, may be self-serving, but it is nonetheless competent to support or defeat summary judgment." Cadle Co. v. Hayes, 116 F.3d 957, 961 (1st Cir. 1997). Furthermore, "at summary judgment a district court may consider hearsay evidence submitted in an inadmissible form, so long as the underlying evidence could be provided in an admissible form at trial, such as by live testimony." JL Beverage Co., LLC v. Jim Beam Brands Co., 828 F.3d 1098, 1110 (9th Cir. 2016). There is nothing to suggest that Rodríguez and the non-parties' testimony would not be admissible at trial, so there is no need to exclude Defendants' affidavits.
TLS is a Puerto Rico-based tax planning and consulting firm. PSUF ¶¶ 1-2. ASG is a boutique firm organized in 2007 by Rodríguez; it also performs tax planning and consulting amongother services. DSUF ¶ 12. Ramos, Rodríguez's wife, is an accountant and a subcontractor for ASG. PSUF ¶ 12; DSUF ¶ 16. ASG, through Rodríguez as its only principal, began to work as a Subcontractor for TLS in 2012. PSUF ¶¶ 4, 15; DSUF ¶ 13. At that time, ASG signed a Subcontractor Agreement (the "SCA") that included a confidentiality clause and a non-compete clause. PSUF ¶ 15. Rodríguez later became TLS's Managing Director until he resigned in January 2015. PSUF ¶¶ 4, 21. When Rodríguez began working for TLS as its Managing Director, Rodríguez signed a Confidentiality and Non-Disclosure Agreement (the "NDA") that included a confidentiality clause. PSUF ¶ 19.
Santo Domingo was a subcontractor for TLS; when he began with TLS, he signed a Confidentiality and Non-Disclosure Agreement that included a confidentiality clause. DSUF ¶¶ 25-26. At the end of 2013, Santo Domingo ceased working for TLS, and in 2014, Santo Domingo incorporated GOS. PSUF ¶ 28, DSUF ¶ 32. After Rodríguez resigned from TLS, he took over a 70% share of GOS. DSUF ¶ 40. By early 2017, Santo Domingo had left GOS, and Rodríguez was the sole owner. DSUF ¶ 41.
Before leaving TLS, Rodríguez copied all of the documents from his TLS Dropbox account to a flash drive. PSUF ¶ 74; DSUF ¶ 69. ASG also kept the files that it worked on for TLS. PSUF ¶¶ 76-77. DRSUF ¶¶ 76-77. ASG kept the documents as part of its document retention policy and because they "add[ed] value to its clients." PSUF ¶ 76; Docket No. 301-11 at 2.
In its business, TLS used loan programs and loan applications. PSUF ¶¶ 89, 91. It employed a U.S. Possession Strategy for which it used a buy-sell agreement. PSUF ¶¶ 79, 87. TLS also had an operating agreement in its possession. PSUF ¶ 94. GOS later used a loan program similar to TLS's loan program. DRSUF ¶ 90. Rodríguez modified one of TLS's loan applications for the loan program. DRSUF ¶ 91. ASG and GOS also used buy-sell agreements with their clients as using them is a "best practice" in the industry. PSUF ¶ 88; DRSUF ¶¶ 87-88. ASG used the operating agreement that TLS had for a third company. PSUF ¶ 93; DRSUF ¶ 93.
ASG, GOS, and Rodríguez had not worked on a U.S. Possession Strategy before Rodríguez worked at TLS. PSUF ¶ 78; DRSUF ¶ 78. While at TLS, Rodríguez worked on its U.S. Possession Strategy, recommending modifications to the program that TLS then implemented. PSUF ¶ 79; DRSUF ¶ 79. As an employee at TLS, Rodríguez would explain PSUF ¶ 81 (quoting Rodríguez's deposition)); DRSUF ¶ 81. After leaving TLS, Rodríguez stated that he and ASG used the U.S. Possession Strategy with clients. PSUF ¶ 84; DRSUF ¶ 84; Docket No. 301-1 at 100-01.
After leaving TLS, Rodríguez, ASG, and GOS worked with several of TLS's associates and clients. ASG worked with Brad Schumacher, Bob Renguso, and Jay Harris, all clients who had contractual relationships with TLS, as they sought to leave TLS. PSUF ¶¶ 135-138; DSUF ¶¶ 174-78. During the course of that working relationship, ASG discussed TLS's strategies and services with them. DSUF ¶ 177. Rodríguez, ASG, and GOS also interacted with TLS clients, Elgin Allen, Lawrence Friedman, Doug Clancy, and Ora Goldman, and TLS associates, Todd Mardis, Frank DeVincent, David Pulling, Cliff Morgan, Todd Thomae, Tim Kissling, and Walt Dallas. PSUF ¶¶ 143-75. While working with their clients, Rodríguez, ASG, and GOS discussed TLS methods, strategies, and practices although the source of the information discussed is contested. PSUF ¶¶ 98-142; DRSUF ¶¶ 98-142.
Defendants previously submitted a motion for summary judgment seeking to dismiss both of TLS's federal law claims. See Docket No. 188. I denied summary judgment on TLS's claim under the Wiretap Act. Defendants then sought reconsideration of that order based on four alleged errors by the court: 1. Refusing to consider Defendants' additional facts submitted in their sur-reply; 2. Allowing TLS to "modify its theories, but preclud[ing] Defendants from addressing them; 3. Adopting incorrect facts; and 4. Misinterpreting United States v. Szymuszkiewicz, 622 F.3d 701 (7th Cir. 2010). See Docket...
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