Council on American-Islamic Relations Action Network, Inc. v. Gaubatz

• Court: District Court, District of Columbia
• Decided: June 24, 2011
• Docket: Civil Action No. 2009-2030
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

COUNCIL ON AMERICAN-ISLAMIC RELATIONS ACTION NETWORK, INC., et al.,

Plaintiffs, Civil Action No. 09-02030 (CKK) v.

PAUL DAVID GAUBATZ, et al.,

Defendants.

MEMORANDUM OPINION (June 24, 2011)

Plaintiffs Council on American-Islamic Relations Action Network, Inc. (“CAIR-AN”)

and CAIR-Foundation, Inc. (“CAIR-F”) bring this action against two sets of defendants: Paul

David Gaubatz and Chris Gaubatz (the “Gaubatz Defendants”); and the Center for Security

Policy, Inc. (“CSP”) and three of its employees, Christine Brim, Adam Savit, and Sarah Pavlis

(collectively with CSP, the “CSP Defendants”). Plaintiffs allege that Defendants conceived and

carried out a scheme to place Chris Gaubatz in an internship with CAIR-AN under an assumed

identity, which allowed him to remove and copy thousands of Plaintiffs’ internal documents and

to record private conversations involving Plaintiffs’ employees without consent or authorization.

Plaintiffs contend that Defendants thereafter publicly disclosed and published the contents of

those documents and recordings. In this action, Plaintiffs seek relief under Titles I and II of the

Electronic Communications Privacy Act of 1986 (the “ECPA”), 18 U.S.C. §§ 2510-2712, and the

common law of the District of Columbia.1

1 All the parties that have appeared in this action to date agree that District of Columbia law applies to Plaintiffs’ common law claims. There are three motions pending before the Court and addressed in this memorandum

opinion: the Gaubatz Defendants’ [34] Motion to Dismiss Under Rule 12(b)(6) of the Federal

Rules of Civil Procedure (“Motion to Dismiss”); Plaintiffs’ [43] Motion to Amend Complaint

(“First Motion to Amend”); and Plaintiffs’ [48] Motion for Leave to File Second Amended

Complaint (“Second Motion to Amend”). Upon consideration of the submissions by Plaintiffs

and the Gaubatz Defendants, the relevant authorities, and the record as a whole, the Court shall

grant in part and deny in part the Gaubatz Defendants’ Motion to Dismiss and grant Plaintiffs’

First Motion to Amend and Second Motion to Amend.

I. BACKGROUND

A. Factual Background

CAIR-AN is a self-described national Muslim advocacy group with a mission that

includes enhancing the understanding of Islam and promoting a positive image of Muslims in the

United States. Second Am. Compl. (“2d Am. Compl.”), ECF No. [48-4], ¶ 10.2 CAIR-F is an

organization supporting CAIR-AN and its mission. Id. ¶ 11. Both CAIR-AN and CAIR-F are

non-profit corporations incorporated in the District of Columbia. Id. ¶¶ 10-11. They share

physical office space in the District of Columbia that is generally closed to the public and

accessible to third parties only upon invitation. Id. ¶¶ 10-11, 27.

Chris Gaubatz is Paul David Gaubatz’s son. 2d Am. Compl. ¶¶ 12-13. CSP is a non-

profit corporation incorporated and located in the District of Columbia. Id. ¶ 14. Christine Brim,

2 This factual background is derived from the well-pleaded factual allegations in the Second Amended Complaint, which becomes the operative iteration of the Complaint by virtue of the Court’s decision today. See Erickson v. Pardus, 551 U.S. 89, 94 (2007) (“[W]hen ruling on a defendant’s motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint.”).

2 Adam Savit, and Sarah Pavlis are all employed by CSP. Id. ¶¶ 15-17.

Sometime prior to April 2008, Defendants conceived a plan to infiltrate Plaintiffs’ offices

with the aim of obtaining Plaintiffs’ internal documents and recording conversations involving

Plaintiffs’ employees. 2d Am. Compl. ¶ 19. According to their plan, Chris Gaubatz would

attempt to secure an internship with CAIR-AN under an assumed identity and deliver any

materials that he was able to obtain from Plaintiffs’ offices to Paul David Gaubatz and the CSP

Defendants for further dissemination. Id. In furtherance of this plan, the Gaubatz Defendants

entered into two written agreements with CSP to provide CSP with materials. Id. ¶ 35.

Consistent with the agreed-upon plan, Chris Gaubatz sought and obtained an internship

with the office for CAIR-AN Maryland/Virginia in April 2008. 2d Am. Compl. ¶ 20. However,

in June 2008, after it was announced that the office for CAIR-AN Maryland/Virginia would be

closing, Chris Gaubatz sought an internship at CAIR-AN’s headquarters in the District of

Columbia. Id. ¶¶ 10, 21.

Chris Gaubatz obtained his internship with CAIR-AN under false pretenses. During the

application process, he made false statements and omitted important facts about his background,

interests, and intentions. 2d Am. Compl. ¶¶ 22-23. Among other things, he used an assumed

name and represented that he was a student at a liberal arts college, that his father was in the

construction business, and that he was a practicing Muslim. Id. ¶ 22. When Chris Gaubatz made

these representations, he knew them to be false, and he made them in order to induce Plaintiffs to

repose trust and confidence in him so that he might obtain an internship with CAIR-AN. Id. ¶¶

23-25. He succeeded and was hired as an intern. Id. ¶ 29.

As a condition of and in consideration for his internship, Chris Gaubatz signed a

3 confidentiality and non-disclosure agreement (the “Confidentiality Agreement”). 2d Am. Compl.

¶¶ 29, 102. The other party to the agreement is identified as the “Council on American-Islamic

Relations.” Id. Ex. A (Confidentiality Agreement) at 1. The agreement provides:

Non-Disclosure of “Confidential Information”

I agree that I shall not at any time after the termination of my internship with CAIR, use for myself or others, or disclose or divulge to others . . . any trade secrets, confidential information, or any other proprietary data of CAIR in violation of this agreement . . . . The intern further agrees to take and protect the secrecy of, and to avoid disclosure or use of, the “Confidential Information” in order to prevent it from falling into public domain or into the possession of persons not bound to maintain the confidentiality of Confidential Information.

Id. Ex. A (Confidentiality Agreement) at 1-2. Paul David Gaubatz and the CSP Defendants were

aware of the Confidentiality Agreement because Chris Gaubatz told them that he had signed the

agreement. Id. ¶ 31.

Chris Gaubatz worked as an intern for CAIR-AN until August 2008, though he returned

to perform additional work over a weekend in September 2008. 2d Am. Compl. ¶ 32. During

the course of his internship, he sought to collect information about Plaintiffs and their employees

with the intention of publicly disclosing that information for profit and in order to cast Plaintiffs

in a negative light. Id. ¶ 36. To that end, he physically removed more than 12,000 of Plaintiffs’

internal documents without authorization and delivered those documents to Paul David Gaubatz.

Id. ¶¶ 37-38. Electronic documents, including e-mails and computer-generated spreadsheets,

were obtained by accessing Plaintiffs’ computers and computer systems with user-names and

passwords that were not assigned to him. Id. ¶¶ 40-41.

Chris Gaubatz also used a concealed electronic device to make audio and video

4 recordings of conversations involving Plaintiffs’ employees without authorization and consent.

2d Am. Compl. ¶ 42. He was able to compile over fifty computer discs containing recordings of

Plaintiffs’ employees. Id. ¶ 44. The Gaubatz Defendants delivered the recordings to CSP and

Christine Brim who, with the assistance of the other CSP Defendants, organized and edited the

recordings. Id. ¶¶ 45-46.

Defendants publicly disclosed the documents and recordings that they obtained from

Plaintiffs. The CSP Defendants provided a compilation of recordings to the third-party publisher

of WND Books and a website identified as WorldNet Daily, http://www.wnd.com (last visited

June 17, 2011). 2d Am. Compl. ¶ 47. Meanwhile, Paul David Gaubatz posted documents and

recordings on his blog, David Gaubatz, http://dgaubatz.blogspot.com (last visited June 17, 2011).

2d Am. Compl. ¶¶ 56-57. In addition, Paul David Gaubatz and a co-author wrote a book about

Chris Gaubatz’s internship with CAIR-AN. Id. ¶ 48; see also P. David Gaubatz & Paul Sperry,

Muslim Mafia: Inside the Secret World That’s Conspiring to Islamize America (1st ed., WND

Books 2009) (“Muslim Mafia”). In Muslim Mafia, the authors characterize Chris Gaubatz’s

internship as a “six-month counterintelligence operation,” admitting that Chris Gaubatz

“routinely load[ed] the trunk of his car with boxes of sensitive documents and deliver[ed] them

into the custody of investigative project leader P. David Gaubatz.” 2d Am. Compl. ¶ 50. The

book references and quotes from materials obtained from Plaintiffs’ offices, including internal

memoranda, minutes of board meetings, budget reports, real estate records, bank statements,

strategy papers, employee evaluations, and e-mails. Id. ¶ 51.

5 B. Procedural Background

The original Complaint was filed on October 29, 2009. See Compl., ECF No. [1]. The

Complaint was filed in the name of the “Council on American-Islamic Relations,” which for

reasons that will soon become clear the Court will refer to as CAIR-AN. See infra Part III.A.

The Complaint named as defendants the Gaubatz Defendants and ten John and Jane Does whose

identities were then unknown but who were alleged to have participated in and benefitted from

the activities alleged in the Complaint. 2d Am. Compl. ¶¶ 12-14. The original Complaint

asserted a single claim under Title II of the ECPA and common law claims for conversion,

breach of fiduciary duty, breach of contract, and trespass. Id. ¶¶ 49-77.

Contemporaneous with the filing of the Complaint, CAIR-AN moved for a temporary

restraining order and a preliminary injunction. See Mem. in Supp. of Pl.’s Mot. for a TRO &

Prelim. Inj., ECF No. [2-1]. On November 2, 2009, after repeated efforts to contact the Gaubatz

Defendants proved fruitless, the Court held an ex parte hearing to address CAIR-AN’s request

for a temporary restraining order. See Min. Entry (Nov. 2, 2009). On November 3, 2009, the

Court granted in part and denied in part CAIR-AN’s motion for a temporary restraining order,

temporarily prohibiting the Gaubatz Defendants from making certain uses of materials obtained

from Plaintiffs’ offices and requiring the return of such materials to CAIR-AN’s counsel. See

Council on American-Islamic Relations v. Gaubatz, 667 F. Supp. 2d 67 (D.D.C. 2009).

On November 19, 2009, CAIR-AN and the Gaubatz Defendants jointly moved for a

consent order granting CAIR-AN’s motion for a preliminary injunction. See Joint Mot. to Enter

Consent Order Granting Prelim. Inj., ECF No. [19]. That same day, the Court entered the

proposed consent order. See Consent Order Granting Prelim. Inj., ECF No. [22]. Pursuant to

6 that order, the Gaubatz Defendants are (a) enjoined from making any use, disclosure, or

publication of any document obtained from any office or facility of CAIR-AN, any recording of

meetings of or conversations involving CAIR-AN’s officials or employees, and any copies of

such documents or recordings, (b) required to remove from any website or blog under their

control any such documents or recordings, and (c) required to return any such documents or

recordings, including any copies, to CAIR-AN’s counsel. See id. ¶¶ 1-4. Subsequently, the

Court clarified that its order permits the Gaubatz Defendants’ counsel, but not the Gaubatz

Defendants themselves, to retain copies of the documents at issue for indexing purposes. See

Order (Dec. 10, 2009), ECF No. [30], at 2. Absent further action from the Court, the preliminary

injunction will remain in effect throughout this action. See Consent Order Granting Prelim. Inj.,

ECF No. [22], ¶ 5.

Following resolution of CAIR-AN’s motion for a preliminary injunction, the Court

granted CAIR-AN leave to depose CSP based on CAIR-AN’s representations that CSP was

believed to be in possession of materials obtained from Plaintiffs’ offices. See Order (Dec. 10,

2009), ECF No. [30], at 4. CAIR-AN subsequently deposed Christine Brim as CSP’s designated

agent under Rule 30(b)(6) of the Federal Rules of Civil Procedure. See Tr. of Dep. of Christine

Brim, ECF No. [48-3]. To date, no other discovery has been authorized by the Court.

On December 20, 2009, the Gaubatz Defendants filed their [34] Motion to Dismiss. On

March 1, 2010, after the Gaubatz Defendants’ Motion to Dismiss was fully briefed, Plaintiffs

filed their [43] First Motion to Amend. On April 12, 2011, after Plaintiffs’ First Motion to

Amend was fully briefed, Plaintiffs filed their [48] Second Motion to Amend. All three motions

were fully briefed as of May 23, 2011 and remain pending. Because the three motions raise a

7 number of overlapping issues, they are addressed together in this memorandum opinion. While

the Court’s decision is based on the record as a whole, its consideration of these three motions

has focused on the following documents, listed in chronological order of their filing:

• The Gaubatz Defendants’ Motion to Dismiss: Defs.’ Mem. in Supp of Mot. to Dismiss Under Federal Rule of Civil Procedure 12(b)(6) (“Defs.’ MTD Mem.”), ECF No. [34-1]; Pls.’ Resp. in Opp’n to Mot. to Dismiss (“Pls.’ MTD Opp’n”), ECF No. [37]; Defs.’ Reply Br. on Mot. to Dismiss (“Defs.’ MTD Reply.”), ECF No. [39].

• Plaintiffs’ First Motion to Amend: Pls.’ Mem. of P. & A. in Supp. of Pls.’ Mot. to Amend Compl. (“Pls.’ MTA1 Mem.”), ECF No. [43-1]; Defs.’ Opp’n to Mot. to File Am. Compl. (“Defs.’ MTA1 Opp’n”), ECF No. [44]; Pls.’ Reply Mem. in Supp. of Pls.’ Mot. to Amend Compl. (“Pls.’ MTA1 Reply”), ECF No. [45].

• Plaintiffs’ Second Motion to Amend: Pls.’ Mem. in Supp. of Mot. for Leave to File Second Am. Compl. (“Pls.’ MTA2 Mem.”), ECF No. [48-2]; Defs.’ Opp’n to Pls.’ Mot. to File a Second Am. Compl. (“Defs.’ MTA2 Opp’n”), ECF No. [62]; Pls.’ Reply to Opp’n to Mot. for Leave to File a Second Am. Compl., ECF No. [64].

Recently, this action has focused on proceedings concerning Paul David Gaubatz’s

compliance with the preliminary injunction ordered by this Court. For the time being, those

proceedings are being conducted under seal. See Sealed Order to Show Cause (Apr. 18, 2011),

ECF No. [49]; Sealed Order (Apr. 28, 2011), ECF No. [57]; Sealed Order (May 3, 2011), ECF

No. [59]; Sealed Order (June 2, 2011), ECF No. [68]. The proceedings remain ongoing.

II. LEGAL STANDARDS

Under the Federal Rules of Civil Procedure, a complaint must contain “a short and plain

statement of the claim showing that the pleader is entitled to relief,” Fed. R. Civ. P. (8)(a), “in

order to ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it

rests,’” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355

U.S. 41, 47 (1957)). Rule 12(b)(6) provides a vehicle for parties to challenge the sufficiency of a

complaint on the ground that it “fail[s] to state a claim upon which relief can be granted.” Fed.

8 R. Civ. P. 12(b)(6). When presented with a motion to dismiss for failure to state a claim, the

district court must accept as true the well-pleaded factual allegations contained in the complaint.

Atherton v. D.C. Office of Mayor, 567 F.3d 672, 681 (D.C. Cir. 2009), cert. denied, __ U.S. __,

130 S. Ct. 2064 (2010). Although “detailed factual allegations” are not necessary to withstand a

Rule 12(b)(6) motion to dismiss, to provide the “grounds” of “entitle[ment] to relief,” a plaintiff

must furnish “more than labels and conclusions” or “a formulaic recitation of the elements of a

cause of action.” Twombly, 550 U.S. at 555. “Nor does a complaint suffice if it tenders ‘naked

assertion[s]’ devoid of ‘further factual enhancement.’” Ashcroft v. Iqbal, __ U.S. __, 129 S. Ct.

1937, 1949 (2009) (quoting Twombly, 550 U.S. at 557). Rather, a complaint must contain

sufficient factual allegations that, if accepted as true, “state a claim to relief that is plausible on

its face.” Twombly, 550 U.S. at 570. “A claim has facial plausibility when the plaintiff pleads

factual content that allows the court to draw the reasonable inference that the defendant is liable

for the misconduct alleged.” Iqbal, 129 S. Ct. at 1949. The plaintiff must provide more than just

“a sheer possibility that a defendant has acted unlawfully.” Id. at 1950. When a complaint’s

well-pleaded facts do not enable a court, “draw[ing] on its judicial experience and common

sense,” “to infer more than the mere possibility of misconduct,” the complaint has not shown that

the pleader is entitled to relief. Id.

Under the Federal Rules of Civil Procedure, a party may amend its pleadings once as a

matter of course within a prescribed time period. See Fed. R. Civ. P. 15(a)(1). Where, as here, a

party seeks to amend its pleadings outside that time period, it may do so only with the opposing

party’s written consent or the district court’s leave. See Fed. R. Civ. P. 15(a)(2). The decision

whether to grant leave to amend a complaint is entrusted to the sound discretion of the district

9 court, but leave “should be freely given unless there is a good reason, such as futility, to the

contrary.” Willoughby v. Potomac Elec. Power Co., 100 F.3d 999, 1003 (D.C. Cir. 1996), cert.

denied, 520 U.S. 1197 (1997). As the Supreme Court has observed:

If the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits. In the absence of any apparent or declared reason—such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.—the leave sought should, as the rules require, be “freely given.”

Foman v. Davis, 371 U.S. 178, 182 (1962). “[A] district court has discretion to deny a motion to

amend on grounds of futility where the proposed pleading would not survive a motion to

dismiss.” Nat’l Wrestling Coaches Ass’n v. Dep’t of Educ., 366 F.3d 930, 945 (D.C. Cir. 2004),

cert. denied, 545 U.S. 1104 (2005). Review for futility is practically “identical to review of a

Rule 12(b)(6) dismissal based on the allegations in the amended complaint.” In re Interbank

Funding Corp. Secs. Litig., 629 F.3d 213, 215-16 (D.C. Cir. 2010) (quotation marks omitted).

Because leave to amend should be liberally granted, the party opposing amendment bears the

burden of coming forward with a colorable basis for denying leave to amend. Abdullah v.

Washington, 530 F. Supp. 2d 112, 115 (D.D.C. 2008).

III. DISCUSSION

A. Plaintiffs’ First Motion to Amend

Plaintiffs’ First Motion to Amend is limited in scope. Plaintiffs request leave to amend

the Complaint to (a) clarify that references to the “Council on American-Islamic Relations” in the

Complaint are to CAIR-AN, (b) add CAIR-F as a second plaintiff, (c) include a claim for unjust

10 enrichment, and (d) introduce a handful of supplemental factual allegations in support of claims

already asserted. See Comparison of Compl. and Proposed First Am. Compl., ECF No. [50].

Because leave to amend is to be “freely given,” and because the grounds stated for the Gaubatz

Defendants’ opposition are insufficient to warrant denying the relief sought, the Court shall grant

Plaintiffs’ First Motion to Amend.

1. Scope

Because granting leave to amend is especially favored where the proposed changes do not

radically reshape the action, see Smith v. Cafe Asia, 598 F. Supp. 2d 45, 58 (D.D.C. 2009), the

Court will begin by addressing each of the four proposed changes and how they relate to this

case. As shown below, the scope of Plaintiffs’ First Motion to Amend is limited.

First, Plaintiffs propose to make a technical correction to clarify that references to the

“Council on American-Islamic Relations” in the caption and body of the original Complaint are

intended to refer to CAIR-AN, or the Council on American-Islamic Relations Action Network,

Inc. Despite the seemingly trivial nature of the proposed change, the Gaubatz Defendants spill a

fair amount of ink arguing against it. See Defs.’ MTD Mem. at 2-5, 25-26; Defs.’ MTA1 Opp’n

at 12-15. Their argument is difficult to follow, mostly because it seems to shift from one

moment to the next, but its basic structure is this: (i) this action was brought in the name of the

“Council on American-Islamic Relations”; (ii) the “Council on American-Islamic Relations”

does not exist; (iii) something that does not exist cannot be a “real party in interest”; (iv)

therefore, this action is not brought in the name of the real party in interest.

The argument is a strange one because the Gaubatz Defendants concede that the “Council

on American-Islamic Relations” changed its name to CAIR-AN in June 2007 and they introduce

11 documentary evidence showing as much. See Defs.’ MTD Mem. at 2; Decl. of Daniel Horowitz,

ECF No. [34-2], Ex. 7 (Articles of Amendment) & Ex. 8 (Certificate of Amendment). Entirely

consistent with this showing, Plaintiffs maintain that the references to the “Council on American-

Islamic Relations” in the original Complaint were the product of a simple mistake. See Pls.’

MTA1 Mem. at 3-4; Pls.’ MTA1 Reply at 6-7. They submit a sworn declaration by their counsel,

who explains that at the time the original Complaint was prepared, counsel was “unaware that the

organization had changed its formal legal name to ‘Council on American-Islamic Relations

Action Network, Inc.’ in 2007.” Decl. of Tillman Finley, ECF No. [45-1], ¶¶ 2-4. The Court

accepts that “[t]his mistake was made unknowingly and unintentionally and was not intended to

confuse or mislead Defendants, the Court, or anyone else.” Id. ¶ 6. Given this state of affairs,

the Court sees no good reason to deny Plaintiffs leave to clarify that references to the “Council on

American-Islamic Relations” are intended to be references to CAIR-AN.3

3 While the parties disagree as to the appropriate procedural lens for approaching the issue, their disagreement is of no moment. Consistent with their view that the proposed amendment would effect nothing more than a technical correction to the Complaint, Plaintiffs claim that they need only comply with Rule 15. See Fed. R. Civ. P. 15(a). The Gaubatz Defendants construe the proposed amendment as akin to substituting in the real party in interest and therefore argue that Plaintiffs must meet the requirements of Rule 17. See Fed. R. Civ. P. 17(a). Yet another alternative may be Rule 21, which authorizes a district court to add or drop a party on motion or on its own. See Fed. R. Civ. P. 21. While the Court agrees with Plaintiffs that Rule 15 is the closest fit, granting Plaintiffs leave would be appropriate under all three Rules. See Willoughby, 100 F.3d at 1003 (“[L]eave to amend [under Rule 15] should be freely given unless there is a good reason . . . to the contrary.”); Lans v. Gateway 2000, Inc., 84 F. Supp. 2d 112, 120 (D.D.C. 1999) (“[I]t is appropriate to liberally grant leave to substitute a real party in interest when there has been an honest mistake in choosing the nominal plaintiff.”), aff’d, 252 F.3d 1320 (Fed. Cir. 2001); Wiggins v. District Cablevision, Inc., 853 F. Supp. 484, 499 n.29 (D.D.C. 1994) (“[I]t is well established that after a responsive pleading has been served, the standards for adding parties are the same whether the motion is made under Rule 15 or Rule 21.”) (quotation marks omitted).

12 Second, Plaintiffs seek leave to add CAIR-F as a second plaintiff. Rule 21 allows a

district court to add a party “at any time” and “on just terms.” Fed. R. Civ. P. 21. Rule 20, in

turn, defines the contours of permissive joinder, providing that parties may be joined as plaintiffs

when (i) their claims “aris[e] out of the same transaction, occurrence, or series of transactions or

occurrences” and (ii) “any question of law or fact common to all plaintiffs will arise in the

action.” Fed. R. Civ. P. 20. When asked to decide whether permissive joinder is appropriate, the

district court should be guided by the underlying aims of joinder, which include promoting

judicial economy, expediting the resolution of disputes, and eliminating unnecessary litigation.

Swan v. Ray, 293 F.3d 1252, 1253 (11th Cir. 2002). Because the general preference is “toward

entertaining the broadest possible scope of action [that is] consistent with fairness to the parties,”

United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 724 (1966), the joinder of plaintiffs is

ordinarily allowed at the election of the plaintiffs so long as both prongs of the test under Rule 20

are met, Acevedo v. Allsup’s Convenience Stores, Inc., 600 F.3d 516, 521 (5th Cir. 2010).

Attempts to join a party who satisfies the test for permissive joinder should generally not be

denied in the absence of undue prejudice, expense, or delay. Chavez v. Illinois State Police, 251

F.3d 612, 632 (7th Cir. 2001).

Applying these principles to this case is an easy matter. CAIR-AN and CAIR-F share

physical office space in the District of Columbia, and it is at those offices that the events

underlying this action were alleged to have transpired. See 2d Am. Compl. ¶¶ 10-11. Although

Chris Gaubatz’s internship is alleged to have formally been with CAIR-AN, both CAIR-AN and

CAIR-F claim an interest in the documents and materials allegedly taken from their shared office

space and employees of both organizations are alleged to have been the subjects of surreptitious

13 recordings made by Chris Gaubatz. See id. ¶¶ 29, 38, 40, 42. Unsurprisingly, CAIR-AN and

CAIR-F intend to pursue virtually identical legal claims in connection with these alleged events.

See id. ¶¶ 69-131. Without a doubt, their claims arise out of the same series of transactions or

occurrences and, as evidenced by the pages that follow, common questions of law and fact will

arise in this action.

Third, Plaintiffs seek to add a claim for unjust enrichment based on the same set of facts

underlying their other claims. The Gaubatz Defendants do not specifically respond to this aspect

of Plaintiffs’ First Motion to Amend. While they do offer a broader argument that granting leave

to amend would be futile because the First Amendment bars Plaintiffs’ claims or protects their

conduct, see Defs.’ MTA1 Opp’n at 2-8, an argument which presumably encompasses Plaintiffs’

unjust enrichment claim, the Court rejects that argument. See infra Part III.C.1. Meanwhile,

because Plaintiffs’ unjust enrichment claim does “no more than state an alternative theory of

recovery,” Foman, 371 U.S. at 182, granting leave to amend to add this claim is appropriate.

Fourth, Plaintiffs seek to add a handful of allegations to the Complaint that are designed

to flesh out the factual basis for the claims they have already asserted. For the most part, these

facts pertain to the nature of the documents and materials at issue in this action, the non-public

nature of Plaintiffs’ offices, the basis for Chris Gaubatz’s alleged fiduciary duties, and the

injuries allegedly flowing from the Gaubatz Defendants’ conduct. See Comparison of Compl.

and Proposed First Am. Compl., ECF No. [50]. Responding to these proposed changes, the

Gaubatz Defendants claim that “the new complaint is the old complaint” and suffers from the

same defects as the original Complaint. See Defs.’ MTA1 Opp’n at 2-8. Consistent with this

view, the Gaubatz Defendants have taken the position that their legal arguments apply equally to

14 the original Complaint and the proposed First Amended Complaint. See id.; Joint Status Report,

ECF No. [52], at 9. While the Court is inclined to agree that the addition of these factual

allegations is not likely to change the outcome of the legal issues presented, this certainly does

not provide a basis for denying leave to amend. Plaintiffs’ factual allegations merely fine-tune

the basis for the relief Plaintiffs seek in this action. Factual allegations of this kind, which clarify

but do not reshape the action, are rarely a bad thing.

2. Futility

The crux of the Gaubatz Defendants’ opposition to Plaintiffs’ First Motion to Amend is

the contention that the proposed amendments fail to improve upon the original Complaint. See

Defs.’ MTA1 Opp’n at 2. Arguing that “the new complaint is the old complaint,” the Gaubatz

Defendants rehash and incorporate the arguments raised in their Motion to Dismiss. See id. at 2-

8. The implication is that granting leave to amend would be futile (though the Gaubatz

Defendants never actually use that word outside of stating the standard of review). The argument

divides into three sub-parts.

First, the Gaubatz Defendants argue that leave to amend should be denied because the

First Amendment either protects their conduct or precludes Plaintiffs from securing any relief.

See Defs.’ MTA1 Opp’n at 2-8, 10-12. The Court addresses this argument below in resolving the

Gaubatz Defendants’ Motion to Dismiss, in which the argument was first raised. See infra Part

III.C.1. For present purposes, suffice it to say that the Court rejects the argument, and as a result

it cannot constitute grounds for denying Plaintiffs leave to amend.

Second, the Gaubatz Defendants argue that leave to amend should be denied because this

action became moot when the materials at issue were returned to Plaintiffs following the entry of

15 the Court’s preliminary injunction order. See Defs.’ MTA1 Opp’n at 8-9. This argument rests on

a number of faulty premises. Most importantly, the argument presupposes that this Court would

separately conclude both that Plaintiffs have failed to state a claim for relief under the ECPA and

that their common law claims are all barred by the First Amendment. Because the Court reaches

the contrary conclusion on both accounts, see infra Parts III.B.2, III.C.1, and III.C.2, the Gaubatz

Defendants’ mootness argument is misplaced. As the succeeding pages make clear, there

remains a live case or controversy for this Court to decide.

Third, the Gaubatz Defendants argue that granting Plaintiffs leave to clarify that CAIR-

AN is the entity referenced in the original Complaint “may affect diversity.” Defs.’ MTA1 Opp’n

at 12. This argument similarly presupposes that the Court would conclude that Plaintiffs have

failed to state a claim for relief under the ECPA, which serves as the basis for the Court’s federal

question jurisdiction, and that Plaintiffs would be unable to invoke the Court’s diversity

jurisdiction because there is an absence of complete diversity between the parties. However, the

Court concludes that Plaintiffs’ ECPA claims survive the Gaubatz Defendants’ Motion to

Dismiss. See infra Parts III.B.2 and III.C.2. As a result, this Court has original jurisdiction over

Plaintiffs’ claims under the ECPA and supplemental jurisdiction over Plaintiffs’ claims under

District of Columbia law because they form part of the same case and controversy. See 28

U.S.C. §§ 1331, 1367. Because this Court’s jurisdiction does not rest on the diversity of

citizenship between the parties, the Gaubatz Defendants’ argument is reduced to a non sequitor.

3. Undue Prejudice or Bad Faith

Leave to amend may be denied for a good reason, such as undue prejudice or bad faith.

See Willoughby, 100 F.3d at 1003. The Court can glean two basic claims of prejudice or bad

16 faith from the Gaubatz Defendants’ disjointed opposition.

First, the Gaubatz Defendants point to the length of this litigation as a basis for denying

Plaintiffs leave to amend. Plaintiffs filed their First Motion to Amend on March 10, 2010, at

which point this action had been pending for a shade over four months. True, the Gaubatz

Defendants’ Motion to Dismiss had been fully briefed when Plaintiffs’ First Motion to Amend

was filed, but the Court had yet to issue a final ruling on that motion and discovery pertaining to

the merits had not begun. In fact, because this action has been delayed by several proceedings

collateral to the merits, discovery is still yet to begin in earnest. Under these circumstances,

Plaintiffs sought leave to amend in a sufficiently timely manner.

More to the point, the length of a litigation cannot on its own justify denying leave to

amend; any delay must be accompanied by a showing of bad faith or prejudice. See Caribbean

Broad. Sys., Ltd. v. Cable & Wireless P.L.C., 148 F.3d 1080, 1084 (D.C. Cir. 1998). While the

Gaubatz Defendants paint Plaintiffs’ First Motion to Amend as a “dilatory tactic” and complain

that responding will require them to expend additional “time and expense,” Defs.’ MTA1 Opp’n

at 1-2, these contentions are either entirely conclusory or relate to the ordinary costs and

inconveniences incidental to defending against any lawsuit. They fall short of the “good reason”

required to deny leave to amend. Willoughby, 100 F.3d at 1003.

Second, the Gaubatz Defendants contend that the mere pendency of this action will have

a “chilling effect” on the exercise of their First Amendment rights. See Defs.’ MTA1 Opp’n at

11-12. The argument, which the Gaubatz Defendants support only with citations to the most

basic principles of First Amendment jurisprudence, again assumes that the First Amendment

either protects their conduct or precludes Plaintiffs from securing any relief in this action. As set

17 forth elsewhere, the Court finds this assumption to be misplaced. See infra Part III.C.1. Viewed

from a slightly different perspective, the alleged “prejudice” that the Gaubatz Defendants identify

has nothing to do with the effect of any proposed amendment, but is attributable to the action

itself. The argument begs the question at the heart of this litigation—namely, whether Plaintiffs

can prevail on the merits of their claims—and that question cannot be answered at this stage of

the proceedings. Because the Court concludes that the Gaubatz Defendants’ Motion to Dismiss

must be denied in large part, see infra Part III.C, the parties will need to conduct discovery, and

this action will remain pending, regardless of whether Plaintiffs’ First Motion to Amend is

granted.

The limited scope of Plaintiffs’ First Motion to Amend supports the conclusion that

granting Plaintiffs leave to amend will not cause the Gaubatz Defendants any undue prejudice.

Plaintiffs’ proposed changes for the most part effect technical corrections and fine-tune the legal

and factual basis for the relief they seek in this action. If anything, these amendments should

benefit the Gaubatz Defendants by providing them with greater notice of what Plaintiffs’ claims

are and the grounds upon which they rest.

The only meaningful expansion of this action that would flow from granting Plaintiffs’

First Motion to Amend pertains to CAIR-F, but the Gaubatz Defendants offer no good reason for

denying CAIR-F leave to join this action. Their opposition is silent on the matter, either

conflating CAIR-AN and CAIR-F or mentioning CAIR-F only in passing in the context of their

misplaced argument that there is an absence of complete diversity between the parties. See

Defs.’ MTA1 Opp’n at 4-8, 12-14. But allowing CAIR-F to participate in this action in lieu of

requiring it to bring a separate action will benefit the Gaubatz Defendants by minimizing the

18 possibility of inconsistent decisions and sparing them the vexation and expense of redundant

litigation.

In the end, the Gaubatz Defendants have failed to point to any undue prejudice that would

result from granting Plaintiffs leave to amend. Indeed, their claims of prejudice ring particularly

hollow given that they argue that “the new complaint is the old complaint” and maintain that the

legal arguments raised in their Motion to Dismiss apply equally to the First Amended Complaint.

See Defs.’ MTA1 Opp’n at 2-8; Joint Status Report, ECF No. [52], at 9. In other words, the

Gaubatz Defendants concede that Plaintiffs’ proposed amendments do not catch them by surprise

or radically reshape this action, let alone deprive them of an opportunity to mount a fair defense.

See City of Moundridge v. Exxon Mobil Corp., 250 F.R.D. 1, 6 (D.D.C. 2008) (“Undue prejudice

is not mere harm to the non-movant but a denial of the opportunity to present facts or evidence

which would have been offered had the amendment been timely.”) (quotation marks and

notations omitted). More broadly, the Gaubatz Defendants have failed to discharge their burden

of coming forward with a colorable basis for denying leave to amend. See Abdullah, 530 F.

Supp. 2d at 115. Therefore, the Court will grant Plaintiffs’ First Motion to Amend.

B. Plaintiffs’ Second Motion to Amend

In their Second Motion to Amend, Plaintiffs request leave to amend the Complaint to (a)

add the CSP Defendants as defendants, (b) add a claim under Title I of the ECPA and its

counterpart under District of Columbia law, and (c) add a claim for tortious interference with

contract. See Comparison of Compl. and Proposed Second Am. Compl., ECF No. [51]. Because

leave to amend is to be “freely given,” and because the grounds stated for the Gaubatz

Defendants’ opposition are insufficient to warrant denying the relief sought, the Court shall grant

19 Plaintiffs’ Second Motion to Amend.

The Court begins by addressing the three proposed changes and how they relate to this

case. The bottom line is that, while Plaintiffs’ Second Motion to Amend is more expansive than

their First Motion to Amend, the proposed changes still would not radically reshape this action.

First, Plaintiffs propose to add the CSP Defendants as defendants in this action. The

original Complaint named as defendants ten John and Jane Does whose identities were then

unknown but who were alleged to have participated in and benefitted from the Gaubatz

Defendants’ alleged misconduct. See Compl. ¶¶ 12-14. Following resolution of CAIR-AN’s

motion for a preliminary injunction, the Court granted CAIR-AN leave to depose CSP based on

CAIR-AN’s representation that CSP was believed to be in possession of materials obtained from

Plaintiffs’ offices, and therefore might be one of the defendants whose identities were unknown.

See Order (Dec. 10, 2009), ECF No. [30], at 4. On July 12, 2010, CAIR-AN deposed Christine

Brim as CSP’s designated agent under Rule 30(b)(6) of the Federal Rules of Civil Procedure.

See Tr. of Dep. of Christine Brim, ECF No. [48-3]. Based in part on CSP’s testimony during that

deposition, Plaintiffs now seek to add the CSP Defendants as defendants in this action. See Pl.’s

MTA2 Mem. at 2.4

Rule 21 allows a district court to add a party “at any time” and “on just terms.” Fed. R.

Civ. P. 21. Rule 20, in turn, defines the contours of permissive joinder, providing that parties

may be joined as defendants in a single action if (i) “any right to relief is asserted against them

4 Because the document is not paginated, the Court will refer to the page numbers generated by the Court’s CM/ECF System.

20 jointly, severally, or in the alternative with respect to or arising out of the same transaction,

occurrence, or series of transactions or occurrences” and (ii) “any question of law or fact

common to all defendants will arise in the action.” Fed. R. Civ. P. 20(a)(2). In this case, the

CSP Defendants are alleged to be participants in the same scheme to infiltrate Plaintiffs’ offices

with the aim of obtaining Plaintiffs’ internal documents and recording conversations involving

Plaintiffs’ employees and, like the Gaubatz Defendants, the CSP Defendants are alleged to have

publicly disclosed and published materials obtained from Plaintiffs’ offices. See 2d Am. Compl.

¶¶ 2-5, 47. Moreover, Plaintiffs intend to assert the same set of legal claims against both sets of

defendants. See id. ¶¶ 69-131. In sum, Plaintiffs claim that the CSP Defendants are liable on

essentially the same legal theories and the same set of facts. As a result, granting Plaintiffs leave

to name the CSP Defendants as defendants in this action will promote judicial economy, expedite

the resolution of Plaintiffs’ claims, and eliminate unnecessary litigation. In short, it aligns with

the general preference “toward entertaining the broadest possible scope of action [that is]

consistent with fairness to the parties.” United Mine Workers of Am., 383 U.S. at 724.

Second, Plaintiffs propose to add a claim under Title I of the ECPA, commonly referred

to as to the Wiretap Act, 18 U.S.C. §§ 2510-2522, and its counterpart under District of Columbia

law, D.C. Code §§ 23-541-23-556. The claim is based on allegations that Chris Gaubatz, with

the assistance of Paul David Gaubatz and the CSP Defendants, used a concealed electronic

device to make unauthorized recordings of conversations involving Plaintiffs’ employees and

that Defendants later used and disclosed the contents of those conversations. See 2d Am. Compl.

¶¶ 70-78. These same factual allegations were raised in the original Complaint, but Plaintiffs at

that time only asserted common law claims in connection with those allegations. See Compl. ¶¶

21 3, 32. In other words, Plaintiffs now seek leave to “state an alternative theory of recovery.”

Foman, 371 U.S. at 182. Under these circumstances, granting leave to amend is appropriate.

Third, Plaintiffs propose to add a common law claim for tortious interference with

contract.5 The claim is based on allegations that Paul David Gaubatz and the CSP Defendants

interfered with Plaintiffs’ contractual relationship with Chris Gaubatz by inducing and assisting

Chris Gaubatz in breaching the Confidentiality Agreement by physically removing materials

from Plaintiffs’ offices and making surreptitious recordings of Plaintiffs’ employees. See 2d Am.

Compl. ¶¶ 111-116. In other words, the claim is based on essentially the same nucleus of facts

supporting Plaintiffs’ other claims. While adding the claim to this action will likely require the

parties to conduct discovery as to Paul David Gaubatz and the CSP Defendants’ awareness of

Chris Gaubatz’s alleged contractual relationship with Plaintiffs, that is a minor matter. The

addition of the claim to this case will not radically expand the scope of the litigation. Under

these circumstances, granting leave to amend is appropriate.

The Gaubatz Defendants’ opposition to Plaintiffs’ Second Motion to Amend is brief,

consisting of less than two pages. Once again, the crux of their opposition is that the proposed

amendments fail to improve upon the original Complaint, arguing that the “[t]he law is as clear

now as it was . . . when [their] motion to dismiss was filed.” See Defs.’ MTA2 Opp’n at 2. The

Court addresses the Gaubatz Defendants’ Motion to Dismiss below. See infra Part III.C. For

present purposes, suffice it to say that the Court will deny the Gaubatz Defendants’ Motion to

Dismiss in almost its entirety. The only component of the Motion to Dismiss that will be granted

5 Neither party addresses this claim in briefing Plaintiffs’ Second Motion to Amend.

22 has no bearing upon the proposed changes relevant to Plaintiffs’ Second Motion to Amend. As a

result, the Gaubatz Defendants’ arguments for dismissal do not constitute grounds for denying

Plaintiffs leave to amend.

The Gaubatz Defendants also suggest that Plaintiffs’ proposed claim under Title I of the

ECPA, commonly referred to as to the Wiretap Act, 18 U.S.C. §§ 2510-2522, and its counterpart

under District of Columbia law, D.C. Code §§ 23-541-23-556, would not survive a motion to

dismiss. See Defs.’ MTA2 Opp’n at 2. Among other things, these statutes make it a criminal

offense for any person to intentionally (a) intercept or attempt to intercept wire, oral, or electronic

communications or (b) procure any other person to intercept or attempt to intercept wire, oral, or

electronic communications. See 18 U.S.C. § 2511(1); D.C. Code § 23-542(a). Both statutes

create a private right of action for any person whose communications have been unlawfully

intercepted, used, or disclosed. See 18 U.S.C. § 2520; D.C. Code § 23-554. In this case,

Plaintiffs claim that Defendants violated the Wiretap Act and its District of Columbia analog

when Chris Gaubatz, with the assistance of Paul David Gaubatz and the CSP Defendants, used a

concealed electronic device to make unauthorized recordings of conversations involving

Plaintiffs’ employees and when Defendants later used and disclosed the contents of those

conversations. See 2d Am. Compl. ¶¶ 70-78

The Gaubatz Defendants argue, in a single sentence without citation to any legal

authority, that this claim would not survive a motion to dismiss because the ECPA6 “applies only

6 The Gaubatz Defendants do not even mention the District of Columbia’s analog to the Wiretap Act in their opposition. While the Wiretap Act and its counterpart under District of Columbia law have been described as “virtually identical,” Napper v. United States, __ A.3d __, 2011 WL 2226858, at *6 (D.C. June 9, 2011), there are textual differences between the two. While those differences may or may not turn out to be important in this case, they are not

23 to servers and not to computers at an end user’s location.” Defs.’ MTA2 Opp’n at 2. In making

this argument, the Gaubatz Defendants clearly confuse Plaintiffs’ claim under the Wiretap Act

(Count One of the Second Amended Complaint) with Plaintiffs’ claim under the Stored

Communications Act (the “SCA”), 18 U.S.C. §§ 2701-2712 (Count Two of the Second Amended

Complaint). Both statutes fall under the umbrella of the ECPA (the Wiretap Act is Title I of the

ECPA and the SCA is Title II), but they are not concerned with the same conduct. Stated briefly,

the Wiretap Act is concerned with the contemporaneous interception of communications and the

SCA is concerned with the unauthorized accessing of stored communications. See 18 U.S.C. §§

2511, 2701. Consistent with this distinction, Plaintiffs’ Wiretap Act claim turns on the allegation

that Chris Gaubatz unlawfully recorded live conversations, while Plaintiffs’ SCA claim turns on

the allegation that Chris Gaubatz unlawfully obtained documents from Plaintiffs’ computer

systems. See 2d Am. Compl. ¶¶ 70-85. The Gaubatz Defendants’ argument that the ECPA

“applies only to servers,” Defs.’ MTA2 Opp’n at 2, may have some relevance to Plaintiffs’ SCA

claim, see infra Part III.C.2, but it has no bearing on the viability of Plaintiffs’ Wiretap Act

claim. Therefore, the Gaubatz Defendants have failed to show that amendment would be futile.

The Gaubatz Defendants have also failed to show that Plaintiffs’ Second Motion to

Amend is made in bad faith or that granting leave to amend would cause them any undue

prejudice. The Gaubatz Defendants’ cursory opposition does not use the word “prejudice,” but it

includes this paragraph:

Leave to amend should be denied. The new complaint’s statutory

material to this motion.

24 cause of action and the new insufficient legal theory could have been filed nearly two years ago as part of the original complaint. The third-party deposition was taken many months ago.

Defs.’ MTA2 Opp’n at 2. To the extent the Gaubatz Defendants intend to suggest that the timing

of Plaintiffs’ Second Motion to Amend alone justifies denying leave to amend, they are mistaken.

Delay alone cannot serve as grounds for denying leave to amend; any delay must be accompanied

by a showing of bad faith or prejudice. See Caribbean Broad. Sys., Ltd., 148 F.3d at 1084. Here,

the Gaubatz Defendants have failed to allege, let alone establish, any bad faith or prejudice.

In any event, while Plaintiffs could have acted sooner, Plaintiffs moved to amend in a

sufficiently prompt manner. Plaintiffs filed their Second Motion to Amend on April 12, 2011, at

which point the Court had yet to issue a final ruling on the Gaubatz Defendants’ Motion to

Dismiss and discovery pertaining to the merits of this action had not begun. To date, merits-

based discovery still has not begun.

In the end, the Gaubatz Defendants have failed to discharge their burden of coming

forward with a colorable basis for denying leave to amend. See Abdullah, 530 F. Supp. 2d at

115. For the reasons set forth above, the Court concludes that granting leave to amend is

appropriate in this case. However, in order to facilitate the prompt resolution of this litigation,

the Court shall require Plaintiffs to effect service of the Summons and the Second Amended

Complaint upon the CSP Defendants, and to file proof of service with the Court, on or before

July 25, 2011. See Fed. R. Civ. P. 21 (providing that a district court may impose “just terms” on

the addition of any party). If Plaintiffs fail to effect service of process by the designated date, the

Court will dismiss this action without prejudice against the CSP Defendants. No extensions will

be granted absent compelling circumstances.

25 C. The Gaubatz Defendants’ Motion to Dismiss

The Gaubatz Defendants’ Motion to Dismiss predates Plaintiffs’ requests for leave to

amend the Complaint. Nonetheless, the Gaubatz Defendants have consistently maintained that

their legal arguments apply with equal force to Plaintiffs’ Second Amended Complaint. See

Defs.’ MTA2 Opp’n at 2; Joint Status Report, ECF No. [52], at 9. In fact, when the Gaubatz

Defendants were directed to show cause why their Motion to Dismiss should not be denied

without prejudice with leave to re-file after tailoring their arguments to speak to the allegations

and claims raised in Plaintiffs’ amended pleadings, the Gaubatz Defendants elected to rest on

their arguments as previously articulated. See Min. Order (Apr. 13, 2011); Joint Status Report,

ECF No. [52], at 9. Therefore, in addressing the Gaubatz Defendants’ arguments for dismissal,

the Court will reference the allegations and claims in the Second Amended Complaint which, by

virtue of the Court’s decision above, is now the operative version of the Complaint. For the

reasons set forth below, the Court will grant in part and deny in part the Gaubatz Defendants’

Motion to Dismiss.

1. The Gaubatz Defendants’ First Amendment Defense

The First Amendment embodies our national commitment to the free exchange of ideas,

but its protections are not boundless. Ashcroft v. Am. Civil Liberties Union, 535 U.S. 564, 573

(2002). The heart of the Gaubatz Defendants’ defense to this action is their contention that the

First Amendment either protects their conduct or bars Plaintiffs from obtaining any relief. See

Defs.’ MTD Mem. at 11-17; Defs.’ MTD Reply at 1-5; Defs.’ MTA1 Opp’n at 2-8; Defs.’ MTA2

Opp’n at 2-3. It is not always easy to reconcile the freedoms afforded by the First Amendment

with the protections afforded to individuals by various statutes and the common law, but this

26 much is clear: the protections afforded by the First Amendment, far reaching as they may be, do

not place the unlawful acquisition of information beyond the reach of judicial review. Because

that is precisely what is at issue in this action, the First Amendment does not require dismissal of

Plaintiffs’ claims against the Gaubatz Defendants at this time.

The Gaubatz Defendants rely on the principle that if a publisher lawfully obtains truthful

information about a matter of public significance, then the government may not punish the

publication of that information in the absence of a governmental interest of the highest order.7

Smith v. Daily Mail Publ’g, 443 U.S. 97, 103 (1979). That principle is both well-established and

uncontroversial. However, it only applies where the publisher has “lawfully acquired” the

information. Cohen v. Cowles Media Co., 501 U.S. 663, 669 (1991). In this case, Plaintiffs

allege that the Gaubatz Defendants acquired the materials at issue in violation of Chris Gaubatz’s

contractual, fiduciary, and other legal obligations to Plaintiffs. In fact, crediting the factual

allegations in the Second Amended Complaint, the Gaubatz Defendants’ conduct was potentially

criminal.8 See supra Part III.B.2; infra Part III.C.2. If Plaintiffs’ allegations are to believed (and

7 For purposes of this motion, Plaintiffs do not dispute that the Gaubatz Defendants are within the class of publishers entitled to invoke this principle or that their speech touched upon a matter of public significance. The Court therefore has no occasion to address either issue. 8 Because the Gaubatz Defendants’ conduct was potentially criminal, there is no need to define the precise contours of the concept of “unlawful acquisition” at this time, though several courts have intimated that conduct considerably short of a criminal offense will suffice. See, e.g., Cohen, 501 U.S. at 671; Boehner v. McDermott, 484 F.3d 573, 579 (D.C. Cir.) (en banc), cert. denied, 552 U.S. 1072 (2007); Veilleux v. Nat’l Broad. Co., 206 F.3d 92, 127-28 (1st Cir. 2000); Food Lion, Inc. v. Capital Cities/ABC, Inc., 194 F.3d 505, 521-24 (4th Cir. 1999); Spear Pharm., Inc. v. William Blair & Co., LLC, 610 F. Supp. 2d 278, 288 (D. Del. 2009). Similarly, because Plaintiffs allege that both of the Gaubatz Defendants were actively involved in unlawfully acquiring Plaintiffs’ materials, the Court need not address where the line should be drawn between unlawful acquisition and the passive acceptance of stolen materials. See Peavy v. WFAA-TV, Inc., 221 F.3d 158, 193 (5th Cir. 2000), cert. denied, 532 U.S. 1051 (2001).

27 at this stage they must be), the Gaubatz Defendants did not gather information from Plaintiffs’

offices lawfully.

It is for this reason that the Gaubatz Defendants’ reliance upon the Supreme Court’s

decision in Bartnicki v. Vopper, 532 U.S. 514 (2001), is misplaced. That case involved the

“novel and narrow” question of what degree of protection the First Amendment provides to

speech that discloses the contents of an illegally intercepted communication where the defendants

“played no part in the illegal interception” and their “access to the information . . . was obtained

lawfully.” Id. at 518, 525. Answering that narrow question, the Bartnicki Court merely held that

“a stranger’s illegal conduct” does not preclude a First Amendment defense. Id. at 535. The

Court assumed, without deciding, that the government’s interest in protecting private

communications would justify prohibiting the interceptor’s own use of those communications,

noting that “[t]he normal method of deterring unlawful conduct is to impose an appropriate

punishment on the person who engages in it.” Id. at 529. Bartnicki only preserves a First

Amendment defense for the “law-abiding possessor of information” and “does not apply to

punishing parties for obtaining the relevant information unlawfully.” Id. at 529, 532 n.19.

Because Plaintiffs’ allegations take the Gaubatz Defendants outside the category of the “law-

abiding possessor of information,” Bartnicki is no shield.

However, that is not to say that the First Amendment is irrelevant to this case. It may, for

example, turn out that Plaintiffs will be unable to establish that some or all of the defendants in

this action participated in the unlawful acquisition of information. But there is another First

Amendment doctrine more relevant to the present motion—namely, the principle that the special

protections that the First Amendment affords defendants charged with defamation may also

28 extend to other kinds of legal claims where the plaintiff seeks damages for reputational or

emotional harm allegedly flowing from the publication of protected speech. See Snyder v.

Phelps, __ U.S. __, 131 S. Ct. 1207, 1215 (2011); Barr v. Clinton, 370 F.3d 1196, 1203 (D.C.

Cir. 2004). In those situations, regardless of how a claim is labeled, a plaintiff will often be

required to satisfy the more onerous showing required to recover what are referred to loosely as

“publication damages.” See Hustler Magazine v. Falwell, 485 U.S. 46, 56 (1988). Otherwise,

plaintiffs would be free to recast claims for defamation in another form and thereby “chok[e] off

the ‘breathing space’ necessary to safeguard ‘the freedoms protected by the First Amendment.’”

Barr, 370 F.3d at 1203 (quoting Hustler, 485 U.S. at 56).

In their Motion to Dismiss, the Gaubatz Defendants argue that Plaintiffs are attempting to

make an “impermissible end run” around the First Amendment by asserting what are effectively

defamation claims seeking publication damages in the guise of various statutory and common

law claims. But in response, Plaintiffs have expressly disclaimed damages for reputational or

emotional harm, see Pls.’ MTD Opp’n at 8, and the Court will hold them to that representation.

While that should be the end of the matter, the Gaubatz Defendants nevertheless complain that

Plaintiffs “plead[] damages in a vague and conclusory manner,” faulting Plaintiffs for failing to

come forward with specific factual allegations showing that they suffered damages that are not

for reputational or emotional harm. See Defs.’ MTD Reply at 1. However, Plaintiffs are not

required to plead with particularity damages that would typically be expected to flow from their

claims. See Fed. R. Civ. P. 8(a)(3), 9(g); Browning v. Clinton, 292 F.3d 235, 245 (D.C. Cir.

2002). Following discovery, Plaintiffs ultimately may or may not be able to prove that they

suffered damages that are not for reputational or emotional harm, such as actual pecuniary

29 damages. See Snyder v. Phelps, 580 F.3d 206, 218 n.11 (3d Cir. 2009) (noting that the First

Amendment “is inapplicable . . . when the plaintiff seeks damages for actual pecuniary loss, as

opposed to injury to reputation or state of mind.”), aff’d, __ U.S. __, 131 S. Ct. 1207 (2011). But

at this early stage, “the character of [Plaintiffs’] damage is not definite,” making dismissal on

First Amendment grounds inappropriate. Steele v. Isikoff, 130 F. Supp. 2d 23, 29 (D.D.C. 2000).

For the foregoing reasons, the Court will deny the Gaubatz Defendants’ Motion to

Dismiss insofar as it seeks dismissal of Plaintiffs’ claims based upon the protections afforded by

the First Amendment.

2. Plaintiffs’ Stored Communications Act Claim (Count Two of the Second Amended Complaint)

Congress enacted Title II of the ECPA, or the SCA, 18 U.S.C. §§ 2701-2712, with the

aim of addressing what it perceived as the “growing problem” of unauthorized persons

deliberately gaining access to wire or electronic communications not intended to be available to

the public. S. Rep. No. 99-541, at 35 (1986), reprinted in 1986 U.S.C.C.A.N. 3555, 3589. To

that end, Congress criminalized the act of obtaining wire or electronic communications by

accessing without authorization a facility through which an electronic communication service is

provided. Section 2701(a) of Title 18 of the United States Code provides:

[W]hoever—

(1) intentionally accesses without authorization a facility through which an electronic communication service is provided; or

(2) intentionally exceeds an authorization to access that facility;

and thereby obtains, alters, or prevents authorized access to a wire or electronic communication while it is in electronic storage in such system shall be punished as provided in subsection (b) of this section.

30 18 U.S.C. § 2701(a). By its terms, criminal liability under Section 2701(a) arises where a person

(i) “intentionally accesses” (ii) “a facility through which an electronic communication service is

provided” (iii) “without authorization” or by “exeed[ing] an authorization” given and (iv) thereby

“obtains . . . a wire or electronic communication” (v) while that wire or electronic

communication is in “electronic storage.” Id. Congress created a private cause of action for “any

. . . person aggrieved” by an intentional violation of Section 2701(a). Id. § 2707(a).

Plaintiffs claim that Defendants violated Section 2701(a) when Chris Gaubatz9 obtained

e-mails, computer-generated spreadsheets, and other electronic documents electronically stored

on their computers and computer servers, networks, and systems with user-names and passwords

that were not assigned to him. See 2d Am. Compl. ¶¶ 3, 37, 40-41, 60, 62, 80-85. The Gaubatz

Defendants’ arguments as to why this claim should be dismissed are disjointed and poorly

articulated. What is clear is that, at least for purposes of this motion, the Gaubatz Defendants do

not contest that Chris Gaubatz intentionally accessed Plaintiffs’ computers, that he did so without

proper authorization, that he thereby succeeded in obtaining access to electronic

communications, and that Plaintiffs would have standing to sue as aggrieved persons. The

Gaubatz Defendants instead limit their motion to four arguments. First, they argue that Section

2701(a) does not apply because Chris Gaubatz did not access “a facility through which an

electronic communication service is provided.” Second, they argue that Section 2701(a) does not

apply because the documents at issue were not in “electronic storage” at the time that they were

9 Of the various defendants, only Chris Gaubatz is alleged to have directly accessed Plaintiffs’ computer systems; Paul David Gaubatz and the CSP Defendants are sued under a theory that they conspired with or aided and abetted Chris Gaubatz in committing these acts. See 2d Am. Compl. ¶¶ 82-83. Neither Plaintiffs nor the Gaubatz Defendants have addressed whether such a theory of liability is available under the SCA.

31 obtained. Third, they argue that Section 2701(a) does not apply because the documents at issue

were not “in transit” at the time that they were obtained. Finally, they argue that the application

of Section 2701(a) to the facts of this case would render the statute constitutionally infirm.

While the Gaubatz Defendants’ arguments may or may not bear fruit upon further development

of the factual record, they do not warrant dismissal at this early stage. The Court addresses each

argument in turn.

i. “A Facility Through Which an Electronic Communication Service is Provided”

For liability to arise under Section 2701(a), a defendant must access “a facility through

which an electronic communication service is provided.” 18 U.S.C. § 2701(a). Citing to this

language, the Gaubatz Defendants contend that the SCA “applies to transfer facilities that

forward data to an end user,” such as “large servers tied to [internet service providers] or other

data carriers,” and does not extend its protections to “home or office computers.” Defs.’ MTD

Mem. at 23. In short, the Gaubatz Defendants argue that the SCA does not apply here because

Plaintiffs’ offices and office computers “are not a communications facility.” Id. While the

argument is not entirely without merit, it ultimately must fail because it rests upon a

misapprehension as to the relevant inquiry and the factual allegations relied upon by Plaintiffs in

support of their claim.

Given the complexity of the SCA, the slippage in the Gaubatz Defendants’ formulation of

the relevant inquiry is problematic. So at the outset, it is important to define that inquiry. Under

Section 2701(a), the question is not whether CAIR’s offices are a communications facility, but

whether Chris Gaubatz accessed a “facility through which an electronic communication service is

provided.” 18 U.S.C. § 2701(a). The reach of this language turns on the construction of two

32 terms—“facility” and “electronic communication service.”

Congress defined only the second of these terms. An “electronic communication service”

is “any service which provides to users thereof the ability to send or receive wire or electronic

communications.” 18 U.S.C. §§ 2510(15), 2711(1). Examples include telephone companies and

e-mail service providers, see S. Rep. No. 99-541, at 14 (1986), reprinted in 1986 U.S.C.C.A.N.

3555, 3568; H. Rep. No. 99-647, at 37 (1986), but the term is not so narrowly confined. The

language chosen by Congress captures any service that stands as a “conduit” for the transmission

of wire or electronic communications from one user to another. Quon v. Arch Wireless

Operating Co., Inc., 529 F.3d 892, 902 (9th Cir. 2008), cert. denied in relevant part, __ U.S. __,

130 S. Ct. 1011 (2009). To the extent the Gaubatz Defendants intend to suggest that liability

may arise under Section 2701(a) only where the electronic communication service is provided by

a third-party, such as a commercial internet service provider, they are mistaken. Congress

drafted Section 2701(a) broadly, and “providing an electronic communication service to the

public” is not part of the statutory inquiry. Devine v. Kapasi, 729 F. Supp. 2d 1024, 1027 (N.D.

Ill. 2010) (emphasis omitted). Consistent with this reading, several courts have concluded that

an employer may provide an “electronic communication service” to its own employees. See, e.g.,

Shefts v. Petrakis, 758 F. Supp. 2d 620, 635 (C.D. Ill. 2010); Bloomington-Normal Seating Co.,

Inc. v. Albritton, 2009 WL 1329123, at *4 (C.D. Ill. May 13, 2009); Ideal Aerosmith, Inc. v.

Acutronic USA, Inc., 2007 WL 4394447, at *6 (E.D. Pa. Dec. 13, 2007); Bohach v. City of Reno,

932 F. Supp. 1232, 1236 (D. Nev. 1996).

Meanwhile, the term “facility” is not expressly defined in the SCA, but the legislative

history and the term’s usage elsewhere reveals that Congress intended the term to include the

33 physical equipment used to facilitate electronic communications. The legislative history

indicates that Congress understood that an “electronic communication service” could be provided

through the same facilities that are used for an “electronic communication system,” see S. Rep.

No. 99-541, at 14 (1986), reprinted in 1986 U.S.C.C.A.N. 3555, 3568, which is defined as “any

wire, radio, electromagnetic, photooptical or photoelectronic facilities for the transmission of

wire or electronic communications, and any computer facilities or related electronic equipment

for the electronic storage of such communications,” 18 U.S.C. § 2510(14). This reading also

flows from the common definition of the term “facility” as “the physical means or equipment

required for doing something.” Oxford English Dictionary Online,

http://www.oed.com/viewdictionaryentry/Entry/67465 (last visited June 20, 2011). In this

context, the “something” that a facility must do is to serve as the physical means or equipment

“through which an electronic communication service is provided.” 18 U.S.C. § 2701(a).

While that much is clear, the interaction between the terms “facility” and “electronic

communication service” will not always present an easy question. When the definitions of each

term are incorporated into the operative statutory language, Section 2701(a) requires a defendant

to access the physical means or equipment “through which” a “service which provides to users

thereof the ability to send or receive wire or electronic communications” is “provided.” 18

U.S.C. §§ 2701(a), 2510(15), 2711(1). This formulation is admittedly a little unwieldy. What

does it mean in the real world? On the one hand, the statute clearly is triggered when a defendant

directly or indirectly accesses the physical server-side computer dedicated to running an e-mail

client by, for instance, downloading e-mails from the server. On the other hand, the statute

clearly is not triggered when a defendant merely accesses a physical client-side computer and

34 limits his access to documents stored on the computer’s local hard drive or other physical media.

See United States v. Steiger, 318 F.3d 1039, 1049 (11th Cir. 2003) (concluding that Section

2701(a) does not apply to the act of hacking into a personal computer to download information

stored on the hard drive), cert. denied, 538 U.S. 1051 (2003).

Mapping the world between these two poles may prove difficult, but the Court need not

undertake that endeavor in this case (or at least at this early stage) because the Gaubatz

Defendants are operating under the erroneous assumption that Plaintiffs’ SCA claim is confined

to the allegation that Chris Gaubatz accessed Plaintiffs’ office computers and limited his access

to documents stored on the computers’ local hard drives. See Defs.’ MTD Mem. at 23-25; Defs.’

MTD Reply at 19-25. Quite the contrary, Plaintiffs repeatedly allege that Chris Gaubatz accessed

their “computer servers, networks, or systems” (which the Court will simply refer to collectively

as “computer servers”).10 2d Am. Compl. ¶¶ 3, 40, 80-81. Plaintiffs contend that they use these

computer servers to provide an “electronic communication service” to their employees. See Pls.’

MTD Opp’n at 21-22. While the Gaubatz Defendants are correct that liability under Section

2701(a) would not arise if any unauthorized activity was limited to Plaintiffs’ office computers,

liability may arise if discovery reveals that Chris Gaubatz accessed Plaintiffs’ computer servers

and that those servers were the physical means “through which” a “service which provides to

users thereof the ability to send or receive wire or electronic communications” was “provided.”

10 Strictly speaking, Plaintiffs allege that Chris Gaubatz accessed their “computers or computer servers, networks or systems.” 2d Am. Compl. ¶¶ 3, 40, 80-81 (emphasis added). The term “computer” is expansive. It could encompass a server hosting an electronic communication service, but it could also refer to a purely local office computer, one without any network access whatsoever. Because its usage in the Second Amended Complaint is open to interpretation, the Court will avoid the term here.

35 28 U.S.C. §§ 2701(a), 2510(15), 2711(1).

The Gaubatz Defendants’ argument may or may not turn out to have merit upon further

development of the factual record. Resolving that issue will require the parties to conduct

discovery as to which of Plaintiffs’ systems, if any, were accessed by Chris Gaubatz and whether

those systems were used to provide an electronic communication service. At this time and at this

stage of the proceedings, it is simply “premature and speculative” to interrogate further into the

nature of Plaintiffs’ systems. Becker v. Toca, 2008 WL 4443050, at *4 (E.D. La. Sept. 26, 2008).

Where, as here, a plaintiff alleges that it provides an electronic communication service through

its own systems and that the defendant intentionally and without authorization obtained stored

communications by accessing those systems, the plaintiff states a claim under Section 2701(a).

Expert Janitorial, LLC v. Williams, 2010 WL 908740, at *5 (E.D. Tenn. Mar. 12, 2010).

Before proceeding to the Gaubatz Defendants’ second argument, the Court pauses to note

that there is a red herring to be avoided in this case. True, Chris Gaubatz is alleged to have

accessed Plaintiffs’ local office computers, but that is largely beside the point (at least with

respect to Plaintiffs’ SCA claim). The point is that he is alleged to have used those local office

computers to access Plaintiffs’ computer servers and it is those servers that must be shown to

have provided an electronic communication service to Plaintiffs’ employees. Section 2701(a) is

agnostic on the question of how a defendant goes about “access[ing] . . . a facility through which

an electronic communication service is provided.” 18 U.S.C. § 2701(a). The result would be the

same regardless of whether Chris Gaubatz accessed Plaintiffs’ computer servers by sitting down

at one of Plaintiffs’ local office computers, by hacking in remotely through a personal computer

at home, or by somehow plugging in directly to the server itself.

36 ii. “Electronic Storage”

Section 2701(a) requires that an electronic communication be in “electronic storage” at

the time that it is improperly obtained. 18 U.S.C. § 2701(a). The term “electronic storage” is

elsewhere defined to include:

• “[A]ny temporary, intermediate storage of a wire or electronic communication incidental to the electronic transmission thereof”; and

• “[A]ny storage of [a wire or electronic] communication by an electronic communication service for purposes of backup protection of such communication.”

18 U.S.C. §§ 2510(17), 2711(1). Courts have struggled to define the reach of this language.

Generally speaking, the controversy centers on a recurring fact pattern—namely, when the

intended recipient of an electronic communication has downloaded the communication from the

computer server hosting the electronic communication service. See generally James G. Carr &

Patricia L. Bellia, The Law of Electronic Surveillance § 8:35 (West 2011 ed.). The majority of

courts that have addressed the issue have determined that “prior access is irrelevant to whether

the messages at issue were in electronic storage,” concluding that electronic communications that

are stored on a server hosting an electronic communication service after they have been delivered

to an end-user remain in “electronic storage” provided they are retained for purposes of backup

protection. Theofel v. Farey-Jones, 359 F.3d 1066, 1077 (9th Cir.), cert. denied, 543 U.S. 813

(2004); see also Pure Power Boot Camp v. Warrior Fitness Boot Camp, 587 F. Supp. 2d 548,

555 (S.D.N.Y. 2008).

The Gaubatz Defendants argue that the electronic documents at issue in this case were not

in “electronic storage” because they were stored on the hard drives of Plaintiffs’ local office

computers at the time they were obtained. See Defs.’ MTD Mem. at 23-24. The argument rests,

37 in part, on a correct statement of the law. It is entirely non-controversial that “e-mail messages

downloaded and stored on, and subsequently accessed solely from, a user’s personal computer

do[] not fall within the SCA’s definition of electronic storage.” Thompson v. Ross, 2010 WL

3896533, at *5 (W.D. Pa. Sept. 30, 2010); accord Bailey v. Bailey, 2008 WL 324156, at *6 (E.D.

Mich. Feb. 6, 2008). This is because (assuming the computer is not used to provide an electronic

communication service) such communications are neither stored on a temporary basis “incident

to [their] electronic transmission” nor stored “by an electronic communication service for

purposes of backup protection of such communication.” 18 U.S.C. §§ 2510(17), 2711(1).

Nonetheless, the Gaubatz Defendants’ argument goes nowhere because it once again

turns upon a misapprehension as to the factual allegations relied upon by Plaintiffs in support of

their SCA claim. Plaintiffs have never limited themselves to alleging that Chris Gaubatz directly

accessed electronic documents stored exclusively on the hard drives and other physical media of

their local office computers. Rather, Plaintiffs allege that Chris Gaubatz improperly obtained

access to electronic communications while they were in electronic storage in the computer

servers used by Plaintiffs to provide an electronic communication service to their employees. 2d

Am. Compl. ¶¶ 80-81; see also Pls.’ MTD Mem. at 21-22. If those allegations are proven true,

liability may arise under Section 2701(a).

Once again, the Gaubatz Defendants’ argument may or may not turn out to have merit

upon further development of the factual record. But resolving that issue will require the parties

to conduct discovery as to which documents, if any, were accessed by Chris Gaubatz and how

those documents were stored and for what purposes. At this early stage, Plaintiffs have put

forward sufficient factual allegations to state a plausible claim for relief. See In re Intuit Privacy

38 Litig., 138 F. Supp. 2d 1272, 1277 (C.D. Cal. 2001) (concluding that allegations that the

defendant accessed data placed in electronic storage in plaintiffs’ computers satisfied the liberal

pleading requirements of Fed. R. Civ. P. 8(a)(2)).

iii. “In Transit”

The Gaubatz Defendants also argue that Section 2701(a) does not apply in this case

because the documents at issue were not “in transit” at the time they were accessed. See Defs.’

MTD Mem. at 24. However, the “in transit” requirement pertains only to claims arising under

Title I of the ECPA, commonly referred to as to the Wiretap Act, 18 U.S.C. §§ 2510-2522, which

addresses the improper “interception” of wire, oral, and electronic communications. The SCA,

meanwhile, is concerned with stored communications, and a plaintiff invoking its protections

need not establish that the documents accessed were “in transit” at the time they were accessed.

iv. The Gaubatz Defendants’ Constitutional Arguments

The Gaubatz Defendants contend that the SCA would be constitutionally infirm if applied

to this case. See Defs.’ MTD Reply at 19-21. Specifically, they argue that applying Section

2701(a) here would extend the statute to situations beyond the power of Congress to regulate

under its Commerce Clause power and would render the statute unconstitutionally vague. See id.

For several reasons, these arguments do not warrant dismissal of Plaintiffs’ SCA claim at this

time. First, the Gaubatz Defendants raised these arguments for the first time in reply, depriving

Plaintiffs of an opportunity to render a meaningful response. See Baloch v. Norton, 517 F. Supp.

2d 345, 348 (D.D.C. 2007) (“If the movant raises arguments for the first time in his reply to the

non-movant’s opposition, the court [may] either ignore those arguments . . . or provide the non-

movant an opportunity to respond.”), aff’d, 550 F.3d 1191 (D.C. Cir. 2008). While the Gaubatz

39 Defendants purport to frame their constitutional arguments as a response to Plaintiffs’

“interpretation” of the statute, the interpretation referred to is the same one attributed to Plaintiffs

by the Gaubatz Defendants in their opening memorandum, meaning that there was no reason why

the Gaubatz Defendants could not have raised the argument at the outset. Second, even if the

Court were to consider the Gaubatz Defendants’ constitutional arguments, they turn upon a

misapprehension as to the factual allegations relied upon by Plaintiffs in support of their SCA

claim. In particular, the Gaubatz Defendants erroneously assume that Plaintiffs seek to hold

Defendants liable on the allegation that Chris Gaubatz accessed documents stored exclusively on

the hard drives and local media of Plaintiffs’ local office computers. Third, and most

importantly, resolving the Gaubatz Defendants’ constitutional arguments at this early stage

would be premature. The doctrine of constitutional avoidance counsels that federal courts should

refrain from deciding abstract and hypothetical constitutional questions and formulating rules of

constitutional law without reference to the particular facts to which they are to be applied.

Clinton v. Jones, 520 U.S. 681, 690 n.11 (1997). Before the Court can opine on the merits of the

Gaubatz Defendants’ constitutional arguments, the parties must conduct discovery as to what

documents, if any, may have been accessed by Chris Gaubatz and how those documents were

stored by Plaintiffs at the time they were obtained, on what systems, and for what purposes. If,

for instance, it turns out that Chris Gaubatz did not access a communication “transmitted in

whole or in part by a . . . system that affects interstate or foreign commerce,” 18 U.S.C. §§

2510(12), 2711(1), the Gaubatz Defendants’ constitutional arguments may have some merit. But

at this stage of the proceedings, it is too early to say.

For the reasons set forth above, the Court shall deny the Gaubatz Defendants’ Motion to

40 Dismiss insofar as it seeks dismissal of Plaintiffs’ SCA claim.

3. Plaintiffs’ Conversion Claim (Count Three in the Second Amended Complaint

Under District of Columbia law, conversion is defined as the (i) “unlawful exercise” (ii)

“of ownership, dominion or control” (iii) “over the personal property of another” (iv) “in denial

or repudiation” of that person’s rights. Shea v. Fridley, 123 A.2d 358, 361 (D.C. 1956). In this

case, Plaintiffs claim that Defendants unlawfully converted (a) physical documents and (b)

electronic documents, including e-mails and computer-generated spreadsheets. See 2d Am.

Compl. ¶¶ 38, 40-41, 87. In their Motion to Dismiss, the Gaubatz Defendants contend that

Plaintiffs have failed to state a plausible claim of conversion as to both categories of documents.

See Defs.’ MTD Mem. at 17-18, 20.

i. Physical Documents

The Gaubatz Defendants first argue that Plaintiffs’ conversion claim must fail insofar as

it seeks recovery for the Defendants’ alleged taking of physical documents because all the

documents were slated to be shredded. See Defs.’ MTD Mem. at 17-18; Defs.’ MTD Reply at 8-

9. From this factual premise, the Gaubatz Defendants argue that Plaintiffs have failed to allege

that Defendants deprived them of a cognizable property right. See Defs.’ MTD Mem at 17-18;

Defs.’ MTD Reply at 8-9.

The Court cannot accept the factual premise to the argument. Plaintiffs have alleged that

Chris Gaubatz removed thousands of documents from Plaintiffs’ offices. See 2d Am. Compl. ¶¶

3, 38. Plaintiffs do not allege that any of these documents were slated to be shredded. Without

converting the Gaubatz Defendants’ Motion to Dismiss to a motion for summary judgment, the

scope of the Court’s review is limited to the allegations in the pleadings. See Fed. R. Civ. P.

41 12(d). Because the proffered argument requires the premature consideration of materials outside

the pleadings, it fails at the outset.

However, even accepting the factual premise, the argument rests on a misapprehension as

to the scope of an owner’s property rights under District of Columbia law. One of the many

sticks in the owner’s bundle of property rights is the right to destroy the property, Almeida v.

Holder, 588 F.3d 778, 788 (2d Cir. 2009), and Plaintiffs’ allegations that Defendants physically

removed thousands of Plaintiffs’ documents are sufficient to state a claim that Defendants

deprived Plaintiffs of their “right of destruction,” for lack of a better description. This right

assumes a heightened importance where, as here, the property in question is alleged to include

confidential, proprietary, and privileged materials. See 2d Am. Compl. ¶¶ 5, 51-52, 89. In this

case, even assuming that some sub-set of the thousands of documents allegedly removed from

Plaintiffs’ offices were slated to be shredded, Plaintiffs would not necessarily be precluded from

recovering for conversion as to those documents. Therefore, the Court shall deny the Gaubatz

Defendants’ Motion to Dismiss insofar as it seeks dismissal of Plaintiffs’ claim that Defendants

converted Plaintiffs’ physical documents.

ii. Electronic Documents

The Gaubatz Defendants next argue that Plaintiffs’ conversion claim must fail insofar as

it pertains to the “copying of digital files” because the mere copying of electronic data does not

constitute conversion. See Defs.’ MTD Mem. at 20. So far as the Court can tell, the argument

divides into two sub-parts. First, the Gaubatz Defendants argue that electronic data does not

qualify as the sort of “personal property” protected by the tort of conversion. See id. Second, the

Gaubatz Defendants argue that Plaintiffs’ factual allegations do not indicate that Defendants

42 exercised “ownership, dominion, or control” over Plaintiffs’ electronic data. See id.

Whether the District of Columbia courts would accept the first argument is not clear.

While other courts have concluded that the law of conversion in other jurisdictions may protect

electronic data or information, see, e.g., Kremen v. Cohen, 337 F.3d 1024, 1034 (9th Cir. 2003)

(applying California law); Thyroff v. Nationwide Mut. Ins. Co., 8 N.Y.3d 283, 292 (N.Y. 2007)

(applying New York law), it remains an open question whether District of Columbia law would

protect intangible property of this kind, see Kaempe v. Myers, 367 F.3d 958, 963 (D.C. Cir 2004)

(observing that the District of Columbia courts have provided limited guidance on the protections

to be afforded to intangible property); Equity Grp., Ltd. v. PaineWebber Inc., 48 F.3d 1285, 1286

(D.C. Cir. 1995) (per curiam) (same). Meanwhile, Maryland, to which the District of Columbia

courts often look for guidance in the absence of other precedent, see Athridge v. Aetna Cas. &

Sur. Co., 351 F.3d 1166, 1171 (D.C. Cir. 2003), does not extend the tort of conversion to cover

intangible property rights beyond those that “are merged or incorporated into a transferable

document,” Allied Inv. Corp. v. Jasen, 731 A.2d 957, 965 (Md. 1999). Plaintiffs’ conversion

claim would be on shaky ground (to the extent it relates to electronic data) if the District of

Columbia courts were to adopt a similar approach.

But the Court need not decide this question because Plaintiffs have otherwise failed to

state a plausible claim for the conversion of electronic data. To recover for conversion under

District of Columbia law, the plaintiff must show that the defendant exercised “ownership,

dominion or control” over the plaintiff’s property. Shea, 123 A.2d at 361. This requires the

defendant to do something that “seriously interferes” with the plaintiff’s right to control the

property in question. Blanken v. Harris, Upham & Co., Inc., 359 A.2d 281, 283 (D.C. 1976).

43 While there may be other avenues for redress when the interference is less serious, suing for

conversion is not among them. Pearson v. Dodd, 410 F.2d 701, 707 (D.C. Cir.), cert. denied,

395 U.S. 947 (1969).

In this case, Plaintiffs’ Second Amended Complaint is devoid of factual allegations

indicating that Defendants exercised the requisite ownership, dominion, or control over

Plaintiffs’ electronic data. Whereas Plaintiffs allege that their physical files were removed from

their offices, there is no comparable, non-conclusory allegation pertaining to Plaintiffs’ electronic

data.11 At best, Plaintiffs have alleged that Defendants accessed and copied electronic data

(technically, Plaintiffs imply that Defendants copied electronic data, but the implication is clear

enough). See 2d Am. Compl. ¶¶ 40-41. However, a plaintiff fails to state a claim for conversion

where the defendant is only alleged to have made copies of documents while the plaintiff retains

the originals because the mere copying of documents does not seriously interfere with the

plaintiff’s right of control. See Furash & Co., Inc. v. McClave, 130 F. Supp. 2d 48, 58 (D.D.C.

2001) (citing Pearson, 410 F.2d at 706); accord FMC Corp. v. Capital Cities/ABC, Inc., 915

F.2d 300, 303-04 (7th Cir. 1990) (applying California law); Internet Archive v. Shell, 505 F.

Supp. 2d 755, 763 (D. Colo. 2007) (applying Colorado law). The exercise of ownership,

dominion, or control is an essential element of a claim for conversion under District of Columbia

law, and because the Second Amended Complaint is devoid of any allegation that Defendants

deleted, corrupted, or otherwise interfered with Plaintiffs’ control over their electronic data,

Plaintiffs have failed to state a claim that is plausible on its face. Therefore, the Court shall grant

11 Plaintiffs’ allegation that Defendants “exercise[d] . . . ownership, dominion, or control over [their] property,” 2d Am. Compl. ¶ 88, is the sort of “formulaic recitation” of an element of a cause of action that should be disregarded on a motion to dismiss, Twombly, 550 U.S. at 555.

44 the Gaubatz Defendants’ Motion to Dismiss insofar as it seeks dismissal of Plaintiffs’ claim that

Defendants converted Plaintiffs’ electronic data.

4. Plaintiffs’ Breach of Fiduciary Duty Claim (Count Four of the Second Amended Complaint)

Under District of Columbia law, a plaintiff asserting a claim for breach of fiduciary duty

must allege that (i) the defendant had a fiduciary duty to the plaintiff, (ii) the defendant breached

that duty, and (iii) the breach was the proximate cause of an injury. See Paul v. Judicial Watch,

Inc., 543 F. Supp. 2d 1, 5 (D.D.C. 2008). In their Motion to Dismiss, the Gaubatz Defendants

focus on the first of these elements, arguing that Plaintiffs have failed to come forward with

factual allegations that would suggest that there existed a fiduciary relationship between Chris

Gaubatz and Plaintiffs. See Defs.’ MTD Mem. at 21-22; Defs.’ MTD Reply Mem. at 12-13. The

Gaubatz Defendants contend that there was no contractual relationship between the parties and

that “[i]t is not enough to say that Chris Gaubatz was an intern.” Defs.’ MTD Mem. at 22.

However, even assuming that no contractual relationship existed between Chris Gaubatz and

Plaintiffs, but see infra Part III.C.5, Plaintiffs have come forward with sufficient factual

allegations to survive a motion to dismiss.

Significantly, the District of Columbia courts have deliberately left the definition of a

“fiduciary relationship” open-ended, allowing the concept to fit a wide array of factual

circumstances. High v. McLean Fin. Corp., 659 F. Supp. 1561, 1568 (D.D.C. 1987); see also

United Feature Syndicate, Inc. v. Miller Features Syndicate, Inc., 216 F. Supp. 2d 198, 218

(S.D.N.Y. 2002) (“[T]he exact limits of what constitutes a fiduciary relationship are impossible

of statement.”) (quotation marks omitted). Deciding whether a fiduciary relationship exists in a

particular case requires “a searching inquiry into the nature of the relationship, the promises

45 made, the type of services or advice given and the legitimate expectations of the parties.”

Firestone v. Firestone, 76 F.3d 1205, 1211 (D.C. Cir. 1996) (quotation marks omitted). Because

the inquiry is fact-intensive, it is often inappropriate to decide whether a fiduciary relationship

existed even in the context of a motion for summary judgment. Id. Consistent with this

observation, courts have observed that a claim for breach of fiduciary duty is generally not

amenable to dismissal for failure to state a claim when the claimed ground for dismissal is the

absence of a fiduciary relationship. See Abercrombie v. Andrew College, 438 F. Supp. 2d 243,

274 (S.D.N.Y. 2006); Thompson, Cobb, Bazilio & Assocs., P.C. v. Grant Thornton LLP, 2002

WL 458997, at *6 (D.D.C. Mar. 25, 2002).

To the extent the Gaubatz Defendants intend to suggest that a fiduciary relationship can

never exist between an intern and the entity engaging the intern, the aforementioned authorities

foreclose such an expansive argument. Meanwhile, Plaintiffs allege that Chris Gaubatz secured

his internship only by making a number of affirmatively false statements and omitting material

information about his background, interests, and intentions with the specific intention of

inducing Plaintiffs to repose a measure of trust and confidence in him, and that as a result of the

trust and confidence reposed in him, Chris Gaubatz was afforded access to confidential,

proprietary, and privileged materials as well as non-public areas of Plaintiffs’ offices. See 2d

Am. Compl. ¶¶ 2, 19-20, 22-23, 25-26, 33, 93. These allegations imply a relationship akin to one

between employer and employee, which under some circumstances may suffice to support a

claim for breach of fiduciary duty under District of Columbia law. See Cahn v. Antioch Univ.,

482 A.2d 120, 131-32 (D.C. 1984). In any event, they suffice to suggest that the relationship

between Chris Gaubatz and Plaintiffs extended beyond the normal bounds of a contractual

46 relationship to form a special relationship founded upon trust and confidence. See Paul, 543 F.

Supp. 2d at 6. Whether Plaintiffs will be able to show that the relationship was grounded in a

higher level of trust than is normally present between those involved in arm’s-length business

transactions is a question that must be answered after discovery. Plaintiffs have stated a

plausible claim for breach of fiduciary duty. Therefore, the Court shall deny the Gaubatz

Defendants’ Motion to Dismiss insofar as it seeks dismissal of Plaintiffs’ claim for breach of

fiduciary duty.

5. Plaintiffs’ Claim for Breach of Contract (Count Five of the Second Amended Complaint)

To state a claim for breach of contract under District of Columbia law, a plaintiff must

allege (i) a valid contract between the parties, (ii) an obligation or duty arising out of the contract,

(iii) a breach of that duty, and (iv) damages caused by that breach. Tsintolas Realty Co. v.

Mendez, 984 A.2d 181, 187 (D.C. 2009). In this case, Plaintiffs allege that Chris Gaubatz

breached the Confidentiality Agreement entered into between him and CAIR-AN and that the

other Defendants induced, aided and abetted, or conspired with Chris Gaubatz to breach the

agreement. See 2d Am. Compl. ¶¶ 100-110. In their Motion to Dismiss, the Gaubatz Defendants

argue that Plaintiffs have failed to state a valid claim for breach of contract for three reasons.

First, the Gaubatz Defendants argue that Plaintiffs have failed to show that there were two

parties to the agreement. The argument is this: (i) the supposed contract identifies the “Council

on American Islamic Relations” as the relevant counter-party; (ii) the “Council on American

Islamic Relations” does not exist; (iii) therefore, there were not two parties to the contract. See

Defs.’ MTD Mem. at 21. There are several problems with this argument. Not least among them

is that the second prong of the argument requires consideration of materials outside the pleadings

47 and the scope of the Court’s review at this time is limited to the allegations in the pleadings. See

Fed. R. Civ. P. 12(d). At this time, all that really matters is that Plaintiffs have specifically

alleged that CAIR-AN was a party to the Confidentiality Agreement. See 2d Am. Compl. ¶ 101.

That claim is entirely plausible given that Chris Gaubatz’s internship is alleged to have been with

CAIR-AN.

True, the agreement that is attached to and incorporated into the Second Amended

Complaint identifies the relevant counter-party as the “Council on American-Islamic Relations”

and not CAIR-AN, or the Council on American-Islamic Relations Action Network, Inc. See id.

Ex. A (Confidentiality Agreement) at 1. Assuming without deciding that the reference is

ambiguous, Plaintiffs are nonetheless entitled to conduct discovery before being asked to prove

the existence of an enforceable agreement between Chris Gaubatz and CAIR-AN. Depending on

what evidence Plaintiffs are able to marshal, the Gaubatz Defendants’ argument may or may not

win out in a motion for summary judgment. See Novecon Ltd. v. Bulgarian-American Enter.

Fund, 190 F.3d 556, 564 (D.C. Cir. 1999) (“The party asserting the existence of an enforceable

contract bears the burden of proof on the issue of contract formation.”), cert. denied, 529 U.S.

1037 (2000). For now, it suffices to say that the question is one of intent, and it is a question that

is not amenable to resolution at this stage of the proceedings.

Second, the Gaubatz Defendants argue that Plaintiffs have failed to plead that the contract

was supported by adequate consideration. See Defs.’ MTD Mem. at 21. They contend that

“[p]roviding the job itself can’t be the consideration because the pleading alleges that defendant

worked for CAIR for months before signing the document and past conduct cannot be

consideration for a later contract.” Id. Plaintiffs do not allege that Chris Gaubatz was working

48 for CAIR-AN for months before he signed the Confidentiality Agreement; they allege that he

entered into the agreement in June 2008, the same month he is alleged to have secured his

internship with CAIR-AN. See 2d Am. Compl. ¶¶ 21, 101. Even if this were not the case, the

District of Columbia adheres to the majority position that continued employment may serve as

consideration for a new agreement if the employment is at-will. See Kauffman v. Int’l Bhd. of

Teamsters, 950 A.2d 44, 48 (D.C. 2008). Because there is no indication that Chris Gaubatz’s

relationship with CAIR-AN was anything other than at-will and terminable at the election of

either party, the Gaubatz Defendants’ argument must fail.

Third, the Gaubatz Defendants argue that, even if the parties entered into a valid

agreement, Plaintiffs have failed to point to any contractual obligation that was breached by Chris

Gaubatz’s alleged misconduct. See Defs.’ MTD Reply at 11-12. However, because this

argument was raised for the first time in reply, depriving Plaintiffs of an opportunity to render a

meaningful response, the Court declines to consider it on the merits. See Baloch, 517 F. Supp.

2d at 348. But even if the Court were inclined to reach the merits, the argument would fail. The

Gaubatz Defendants argue that “[if] a contract were formed, CAIR has not stated its contents”

and “has not pointed to a single provision of any contract, oral or written, that was breached.”

Defs.’ MTD Reply at 11. This is just wrong. Not only have Plaintiffs attached the form of the

alleged written agreement to their pleadings, but they have specifically identified which

provisions of the Confidentiality Agreement Chris Gaubatz allegedly breached. See 2d Am.

Compl. ¶ 103 & Ex. A (Confidentiality Agreement).

Nonetheless, couched within this argument is the suggestion, never fully articulated, that

the Confidentiality Agreement does not cover the materials alleged to be taken:

49 [The Confidentiality Agreement] appears to be a barely modified confidentiality agreement for a software company. The classes of information covered by the agreement are information that relates to legal research, Products software source code, object code, services, development, processes, purchasing, accounting, flow charts, marketing, merchandising, and/or any customer information, other valuable business information or business practices.

Defs.’ MTD Reply at 11. The Gaubatz Defendants are referring here to the agreement’s

definition of “confidential information”:

“Confidential Information” shall be deemed to mean any information, including, but not limited to: presentation and training manuals, and that which relates to legal research, products software source code, object code, services, development, processes, purchasing, accounting, flow charts, marketing, merchandising, and/or any customer information, other valuable business information or business of CAIR which is disclosed by CAIR or on its behalf, before or after the date hereof to the intern, either directly or indirectly, in writing or by visual inspection.

2d Am. Compl. Ex. A (Confidentiality Agreement) at 1. Admittedly, the term is not defined with

model clarity. Most notably, despite the intervention of a colon and a non-exhaustive list of the

types of information covered, it appears that the parties may have intended the last few clauses to

modify “any information,” meaning that the agreement would cover not “any information”

whatsoever but rather “any information . . . which is disclosed by CAIR or on its behalf . . . to the

intern.” But the Court need not address that precise question now. It merely flags it as a

question that may require the parties’ attention in discovery. For now, it is sufficient to note that

the definition expressly includes “information that relates to legal research” and “valuable

business information,” and Plaintiffs have alleged that the materials taken by Chris Gaubatz

included privileged communications and documents containing Plaintiffs’ proprietary

information. See 2d Am. Compl. ¶¶ 5, 52, 65. Those allegations are sufficient to state a

50 plausible claim that Chris Gaubatz breached the Confidentiality Agreement.

For the foregoing reasons, the Court shall deny the Gaubatz Defendants’ Motion to

Dismiss insofar as it seeks dismissal of Plaintiffs’ breach of contract claim.

6. Plaintiffs’ Trespass Claim (Count Seven in the Second Amended Complaint

Under District of Columbia law, a trespass is (i) an unauthorized entry (ii) onto the

plaintiff’s property (iii) that interferes with the plaintiff’s possessory interest. Sarete, Inc. v. 1344

U. Street Ltd. P’ship, 871 A.2d 480, 490 (D.C. 2005). In this case, Plaintiffs’ trespass claim

divides into two branches. First, Plaintiffs claim that Chris Gaubatz committed a trespass merely

by entering their offices because he “only gained access to the property . . . through the use of

pretense, subterfuge, misrepresentation, and/or concealment.” 2d Am. Compl. ¶ 120. Second,

Plaintiffs claim that Chris Gaubatz committed a trespass by exceeding the consent he obtained

from Plaintiffs by “stealing documents, accessing restricted areas and networks, and recording

without permission conversations in Plaintiffs’ offices.” Id. The Gaubatz Defendants present

three reasons why they believe this claim should be dismissed.

First, the Gaubatz Defendants argue that Plaintiffs have failed to plead that “the premises

were private and not open to the public.” Defs.’ MTD Mem. at 22. Even assuming that a

plaintiff must plead that the property at issue was not open to the public in order to state a claim

for trespass (something this Court doubts), Plaintiffs do allege that their offices “are not generally

open to the public and may be accessed by third parties only upon invitation or authorization”

and that “[t]he public is not permitted access to the areas of the offices . . . where documents are

stored or maintained or where [Plaintiffs’] computers and computer servers, networks, and

systems are stored and maintained.” 2d Am. compl. ¶¶ 27-28. Given these express allegations,

51 the Gaubatz Defendants’ first argument is without merit.

Second, the Gaubatz Defendants argue that Plaintiffs’ trespass claim must fail because

they have not alleged damages. See Defs.’ MTD Mem. at 22. However, provided the damages

are of the kind that would typically be expected to flow from a trespass, Plaintiffs are not

required to plead their damages with particularity. See Fed. R. Civ. P. 8(a)(3), 9(g); see also

Pearson, 410 F.2d at 707 (“The measure of damages in trespass is . . . the actual diminution of []

value caused by the [defendant’s] interference.”). Regardless, District of Columbia law allows a

plaintiff to recover nominal damages for trespass. Decker v. Dreisen-Freedman, Inc., 144 A.2d

108, 110 (D.C. 1958). Therefore, even assuming for the sake of argument that Plaintiffs could

not recover actual damages, that still would not be fatal to their claim.

Third, the Gaubatz Defendants argue that Plaintiffs’ trespass claim must fail because

Chris Gaubatz was authorized to enter Plaintiffs’ offices. See Defs.’ MTD Reply at 7-8. While

this argument was first raised in reply, the Court will address it because Plaintiffs arguably

opened the door in their opposition. See Pls.’ MTD Opp’n at 19. However, the argument is

unavailing. As an initial matter, it has no bearing on the second branch of Plaintiffs’ trespass

claim—namely, the contention that Chris Gaubatz exceeded the consent that he obtained from

Plaintiffs by doing things like accessing restricted areas and networks. As a general matter, “[a]

condition or restricted consent to enter land creates a privilege to do so only in so far as the

condition or restriction is complied with.” Restatement (Second) of Torts § 168 (1965).

Therefore, “on-site employees may exceed the scope of their invitation to access, and so not be

‘rightfully’ on, the employer’s property . . . at a place or time forbidden by their employer.” ITT

Indus., Inc. v. Nat’l Labor Relations Bd., 413 F.3d 64, 72 n.2 (D.C. Cir 2005).

52 As to the first branch of Plaintiffs’ trespass claim—that is, the contention that Chris

Gaubatz committed a trespass merely by entering Plaintiffs’ offices because he obtained

Plaintiffs’ consent through subterfuge and fraud—the Gaubatz Defendants’ consent argument is

premature. Consent “given upon fraudulent misrepresentations” will not always defeat a claim

for trespass. Dine v. Western Exterminating Co., 1988 WL 25511, at *9 (D.D.C. Mar. 9, 1988).

Consent may be ineffective if “induced . . . by a substantial mistake concerning the nature of the

invasion of [the owner’s] interests or the extent of the harm to be expected from it and the

mistake is known to the other or is induced by the other’s misrepresentation.” Restatement

(Second) of Torts §§ 173, 892B(2) (1965); see also Desnick v. Am. Broad. Cos., Inc., 44 F.3d

1345, 1352 (7th Cir. 1995) (noting that it is no defense to trespass where “a competitor gain[s]

entry to a business firm’s premises posing as a customer but in fact hoping to steal the firm’s

trade secrets.”). Because this is precisely what Plaintiffs have alleged occurred here, whether the

Gaubatz Defendants’ argument will win out is a question that must await discovery.

For the foregoing reasons, the Court will deny the Gaubatz Defendants’ motion to dismiss

insofar as it seeks dismissal of Plaintiffs’ trespass claim. In summary, the Court will grant the

motion insofar as it seeks dismissal of Plaintiffs’ claim that Defendants converted Plaintiffs’

electronic data and will deny the motion in all other respects. The Gaubatz Defendants will be

required to serve and file their Answer to the Second Amended Complaint on or before July 8,

2011.

53 IV. CONCLUSION

For the reasons set forth above, the Court shall grant Plaintiffs’ [43] First Motion to

Amend and their [48] Second Motion to Amend, on the condition that Plaintiffs serve the

Summons and the Second Amended Complaint upon each of the CSP Defendants on or before

July 25, 2011. The CSP Defendants will then have twenty-one days from the date of service to

serve and file a responsive pleading. See Fed. R. Civ. P. 12(a)(1)(A)(i). In addition, the Court

shall grant in part and deny in part the Gaubatz Defendants’ [34] Motion to Dismiss.

Specifically, the Court will grant the motion insofar as it seeks dismissal of Plaintiffs’ claim that

Defendants converted Plaintiffs’ electronic data and will deny the motion in all other respects.

The Gaubatz Defendants will be required to serve and file their Answer to the Second Amended

Complaint on or before July 8, 2011. Finally, the Court will hold an Initial Scheduling

Conference on August 17, 2011, at 9:00 a.m., in Courtroom 28A before Judge Colleen Kollar-

Kotelly. An appropriate order accompanies this memorandum opinion.

Date: June 24, 2011

/s/ COLLEEN KOLLAR-KOTELLY United States District Judge