Vorhees v. Tolia

• Decision Date: 17 March 2020
• Docket Number: Case No. 3:16-cv-8208-BRM-LHG
• Citation: Vorhees v. Tolia, Case No. 3:16-cv-8208-BRM-LHG (D. N.J. Mar 17, 2020)
• Parties: LYNNANN VORHEES, Plaintiff, v. INDU TOLIA, et al., Defendants.
• Court: U.S. District Court — District of New Jersey

LYNNANN VORHEES, Plaintiff, v. INDU TOLIA, et al., Defendants.

Case No. 3:16-cv-8208-BRM-LHG

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

March 17, 2020

NOT FOR PUBLICATION

OPINION

MARTINOTTI, DISTRICT JUDGE

Before this Court is DefendantsIndu Tolia's ("Tolia") and Care LLC's (individually, "Care"; collectively with Tolia, "Defendants")Motion to Dismiss pro se Plaintiff Lynnann Vorhees's ("Vorhees") Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6)(ECF No. 43).Vorhees opposes the Motion.(ECF No. 44.)Vorhees also filed an Amended Response.¹(ECF No. 45.)Defendants did not file a Reply.Having reviewed the filings submitted in connection with the Motion and having declined to hold oral argument pursuant to Federal Rule of Civil Procedure 78(b), for the reasons stated below, Defendants' Motion to Dismiss is DENIED in part and GRANTED in part.

I.FACTUAL BACKGROUND AND PROCEDURAL HISTORY²

A.Factual Background

This matter arises from a dispute over the alleged misappropriation of trade secrets related to Plaintiff's business dealings with Tolia and co-DefendantAdam Newman, and with the corporate entities the parties created.(ECF No. 1 §§ I, II.)Though Vorhees filed an Amended Complaint, the differences from the original Complaint extend only to identifications of the parties, to be discussed below.Therefore, the Court refers to and adopts the complete recitation of the facts of this matter contained in this Court's Opinion of October 26, 2018.(ECF No. 54at 1-5.)

B.Procedural History

On November 3, 2016, Vorhees filed her Complaint, asserting ten claims: (1) against all Defendants for violations of the New Jersey Trade Secrets Act ("NJTSA"), N.J.S.A. 56:15-1, et seq. (Count One); (2) against Tolia and Newman for breach of contract (Count Two); (3) a claim against Tolia and Newman for fraud (Count Three); (4) a claim against all Defendants for breach of confidence (Count Four); (5) a claim against all Defendants for conversion (Count Five); a claim against all Defendants for trespass to chattels (Count Six); (7) against all Defendants for unlawful interference with prospective business advantage (Count Seven); (8) against all Defendants for unfair competition (Count Eight); (9) against all Defendants for breach of the implied covenant of good faith and fair dealing (Count Nine); and (10) against all Defendants for civil conspiracy (Count Ten).(ECF No. 1.)On February 6, 2017, Plaintiff filed a Request for Default againstNewman.(ECF No. 13.)The Clerk entered default as to Newman that same day for failure to plead or otherwise defend.(See2-6-2017 Docket Entry.)On August 4, 2017, Plaintiff filed a Motion for Entry of Default Judgment against Newman.(ECF No. 23.)On February 28, 2017, Tolia and Care moved to dismiss the claims against them, pursuant to Rule 12(b)(6).(ECF No. 14.)On March 2, 2017, Tolia and Care filed an Amended Motion to Dismiss pursuant to Rule 12(b)(6).(ECF No. 17.)This Court granted the Motion to Dismiss with prejudice in January 2018, holding that Vorhees's right to sue was barred by the Stock Surender Agreement executed by the parties, while an Employment Agreement required Vorhees to arbitrate all her claims.(ECF No. 24.)

Vorhees appealed that decision to the United States Court of Appeals for the Third Circuit in March 2018.(ECF No. 27.)The Third Circuit vacated that judgment, holding that the arbitration agreement in the Stock Surrender Agreement did not waive the parties right to all litigation, only to a jury trial, while the Employment Agreement's arbitration clause was not triggered by claims in the Complaint that were not related to Plaintiff's employment.(ECF No. 32at 4-5.)The Third Circuit further required this Court to consider on remand the issue of diversity jurisdiction, a claim it held was not sufficiently alleged in the Complaint.(Id. at 6.)

This Court reopened the matter on March 14, 2019, and ordered Vorhees to show cause by April 4, 2019 why this Court has subject-matter jurisdiction over the Complaint by filing a proposed Amended Complaint curing the jurisdictional allegations set forth in the Third Circuit's Opinion.(ECF No. 34.)Vorhees filed a Motion for the Recusal of this Court on March 22, 2019, alleging "prior judgments in this matter have been insufficient to allow due process of the law" as "evident by the Judgment of the Court of Appeals."(ECF No. 35.)On April 8, 2019, the Court denied Vorhees's Motion for Recusal, holding that "Generally, beliefs or opinions which merit recusal must involve an extrajudicial factor,"Selkridge v. United of Omaha Life Ins. Co., 360 F.3d155, 167(3d Cir.2004)(quotations omitted), while "judicial rulings alone almost never constitute a valid basis" for recusal, Liteky v. United States, 510 U.S. 540, 555(1994).The Court further held that, because Vorhees had not filed an Amended Complaint remedying the jurisdictional defects identified by the Third Circuit, the matter was dismissed without prejudice.(ECF No. 36.)Vorhees moved to reopen the case on April 26, 2019, a motion this Court granted on May 13, 2019.(ECF Nos. 37, 38.)Vorhees filed an Amended Complaint on May 24, 2019.(ECF No. 39.)Defendants filed this Motion to Dismiss the Amended Complaint on July 22, 2019.(ECF No. 43.)Vorhees filed opposition to the Motion on August 5, 2019, and an Amended Response on August 15, 2019.(ECF No. 44, 45.)Defendants did not file a Reply.

II.LEGAL STANDARDS

A.Rule 12(b)(6) Standard

In deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), a district court is "required to accept as true all factual allegations in the complaint and draw all inferences in the facts alleged in the light most favorable to the [plaintiff]."Phillips, 515 F.3d at 228."[A] complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations."Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555(2007)(citations omitted).However, the plaintiff's "obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action."Id.(citingPapasan v. Allain, 478 U.S. 265, 286(1986)).A court is "not bound to accept as true a legal conclusion couched as a factual allegation."Papasan, 478 U.S. at 286.Instead, assuming the factual allegations in the complaint are true, those "[f]actual allegations must be enough to raise a right to relief above the speculative level."Twombly, 550 U.S. at 555.

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim for relief that is plausible on its face.'"Ashcroft v. Iqbal, 556 U.S. 662, 678(2009)(citingTwombly, 550 U.S. at 570)."A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for misconduct alleged."Id.This "plausibility standard" requires that the complaint allege "more than a sheer possibility that a defendant has acted unlawfully," but it "is not akin to a 'probability requirement.'"Id.(quotingTwombly, 550 U.S. at 556)."Detailed factual allegations" are not required, but "more than an unadorned, the defendant-harmed-me accusation" must be pleaded; it must include "factual enhancements" and not just conclusory statements or a recitation of the elements of a cause of action.Id.(citingTwombly, 550 U.S. at 555, 557).

"Determining whether a complaint states a plausible claim for relief [is] . . . a context-specific task that requires the reviewing court to draw on its judicial experience and common sense."Iqbal, 556 U.S. at 679."[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not 'show[n]'—'that the pleader is entitled to relief.'"Id. at 679(quotingFed. R. Civ. P. 8(a)(2)).However, courts are "not compelled to accept 'unsupported conclusions and unwarranted inferences,'"Baraka v. McGreevey, 481 F.3d 187, 195(3d Cir.2007)(quotingSchuylkill Energy Res. Inc. v. Pa. Power & Light Co., 113 F.3d 405, 417(3d Cir.1997)), nor "a legal conclusion couched as a factual allegation."Papasan, 478 U.S. at 286.

While, as a general rule, the court may not consider anything beyond the four corners of the complaint on a motion to dismiss pursuant to Rule 12(b)(6), the Third Circuit has held that "a court may consider certain narrowly defined types of material without converting the motion to dismiss[to one for summary judgment pursuant to Rule 56]."In re Rockefeller Ctr. Props. Sec.Litig., 184 F.3d 280, 287(3d Cir.1999).Specifically, courts may consider any "'document integral to or explicitly relied upon in the complaint.'"Burlington Coat Factory, 114 F.3d at 1426(quotingShaw, 82 F.3d at 1220).

III.DECISION

As instructed by the Third Circuit, the Court's inquiry for this Motion to Dismiss begins with an inquiry into whether this Court has jurisdiction over the litigation.

In her original Complaint, Vorhees alleged, based on her "being informed and believe[ing]," that she"resides" in Pennsylvania and that Tolia and Newman reside in New Jersey.(Compl. (ECF No. 1) ¶¶ 5, 7-8.)Vorhees also alleged, again based on "being informed and believe[ing]," the entity defendants are organized in and have their principal place of business in New Jersey.(Id.¶ 6.)

The Third Circuit concluded Vorhees's invocation of this Court's diversity jurisdiction was insufficiently pleaded because she alleged only that she and defendants were residents of different states and not citizens of different states as required by § 1332, while she had not made any allegations about the membership or citizenship of the entity defendants.The Third Circuit said GBForefront, L.P. v. Forefront Management Group, LLC stood for the proposition that allegations of residence are...