Cultural Experiences Abroad, LLC v. Colon

CourtDistrict Court, D. Delaware
DecidedFebruary 8, 2024
Docket1:23-cv-00564
StatusUnknown

This text of Cultural Experiences Abroad, LLC v. Colon (Cultural Experiences Abroad, LLC v. Colon) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cultural Experiences Abroad, LLC v. Colon, (D. Del. 2024).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE CULTURAL EXPERIENCES ABROAD, ) LLC, ) ) Plaintiff, ) ) Vv. ) Civil Action No. 23-564-GB W-SRF ) CATHERINE COLON, JOHN ) CHRISTIAN, GERARD CHRISTIAN, and ) GRAHAM WILKINSON, ) ) Defendants. ) REPORT AND RECOMMENDATION Presently before the court in this civil action for misappropriation of trade secrets under the federal Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § 1832, and related causes of action, are the following motions: (1) the motion to dismiss the first amended complaint (“FAC”) for lack of personal jurisdiction and failure to state a claim under Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6), respectively, filed by defendants Catherine Colon (“Colon”), John Christian (“J. Christian”), Gerard Christian (“G. Christian”), and Graham Wilkinson (“Wilkinson;” collectively, “Defendants”) (D.L. 37);! (2) the motion to compel compliance with the court’s July 18, 2023 Status Quo Order, filed by plaintiff Cultural Experiences Abroad, LLC (“Plaintiff”) (D.1. 40); (3) Plaintiff's motion for leave to file a surreply in connection with Defendants’ motion to dismiss the FAC (D.I. 50);3 and (4) Plaintiff’s motion for leave to file a second amended complaint (“SAC”) (D.I. 51).* For the following reasons, I recommend that the

! The briefing on the motion to dismiss is found at D.I. 38, D.I. 39, and D.L. 42. 2 The briefing on the motion to compel compliance is found at D.I. 41, D.. 44, and D.L. 48. 3 The briefing on the motion for leave to file a surreply is found at D.I. 50, D.I. 53, and D.I. 56. * The briefing on the motion to amend is found at D.I. 51, D.I. 54, and D.I. 55.

court GRANT the relief requested in Defendants’ motion to dismiss and DISMISS this action without prejudice under the doctrine of forum non conveniens in accordance with the terms of the parties’ forum selection clause. I further recommend that the court DENY as moot Plaintiff's motion to compel compliance, Plaintiff's motion for leave to file a surreply, and Plaintiffs motion for leave to file a SAC. 1. BACKGROUND This case arises out of an Equity Purchase Agreement (the “Equity Agreement”) executed by the parties on April 27, 2021. (D.L. 6 at 931) Under the terms of the Equity Agreement, Plaintiff, a business providing study abroad and foreign internship educational opportunities for university students, agreed to acquire 100% of the assets and ownership interests of CAPA International Education Limited Partnership and CAPA Holdings LLC (together, “CAPA”) from Defendants.’ (/d. at □□□ 22, 31) In return, Defendants received cash at closing, a seller note, and the potential for an earn-out to be paid in cash if a certain revenue threshold was achieved in 2022. id.) Specifically, the earn-out provision stated that Defendants would receive more than $4.5 million as an earn-out payment if CAPA’s revenue reached $19,555,000 in 2022. (/d. at ] 35) Defendants would receive no earn-out payment if the target revenue amount was not achieved. (/d. at J 36) The earn-out calculation statement dated March 15, 2023 confirmed that CAPA’s 2022 revenue fell short of the target revenue amount, totaling $18,159,246.34. (D.L. 6 at 67, 69) Defendants subsequently asked to review the documents supporting the earn-out calculation statement. Plaintiff attempted to collect those documents over the course of the next month, but

> Defendants Catherine Colon, John Christian, Gerard Christian, and Graham Wilkinson owned 100% of CAPA prior to the execution of the Equity Agreement. (D.I. 6 at J 34)

its collection efforts were repeatedly delayed. (/d. at {] 70-80) During that time, Defendants independently obtained and shared various revenue-related documents from CEA employees in an effort to confirm Plaintiffs revenue calculation. (/d. at JJ 94-123) When Plaintiff later discovered that Defendants had obtained information from Plaintiffs systems, Plaintiff stopped preparing the supporting information for the earn-out calculation statement and instead sent letters demanding that Defendants return all stolen information by April 25, 2023. (Ud. at {{ 74- 85) Plaintiff brought this suit on May 23, 2023 and filed the FAC two days later, alleging causes of action for misappropriation of trade secrets under the federal DTSA (Count I) and Delaware Uniform Trade Secrets Act (““DUTSA”), 6 Del. C. § 2001 (Count II), based on Defendants’ collection and use of Plaintiff’s confidential trade secret information. (D.I. 6 at ff 129-64) The FAC also asserts a cause of action for violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 (Count III), and state law causes of action for conspiracy (Counts IV-V]), tortious interference with contractual relations (Counts VII-VIII), breach of fiduciary duty (Counts [X-X]), breach of contract (Count XTI-XV), and conversion (Count XVI). (/d. at ff 165-274) Plaintiff moved for a temporary restraining order on May 25, 2023, the same day the FAC was filed. (D.I. 7) The court resolved the motion by entering a Status Quo Order on July 18, 2023, which required Defendants to provide certain disclosures by specific deadlines. (D.I. 36) Defendants moved to dismiss the FAC three days later, on July 21, 2023. (D.I.37) Abouta month after the motion to dismiss was fully briefed, Plaintiff moved for leave to file the proposed SAC. (D.I.51) The proposed SAC withdraws Count X of the FAC and adds five causes of action against Defendants for breaches of the implied covenant of good faith and fair

dealing as it pertains to the Equity Agreement, Defendants’ respective employment and consulting agreements, and the Fourth Amended and Restated Limited Liability Company Agreement among Plaintiff and the Members (the “CEA LLC Agreement”). (D.I. 51-2 at 233-62) The proposed SAC also adds jurisdictional allegations relating to two complaints filed in the Delaware Court of Chancery. On May 24, 2023, G. Christian filed a complaint on behalf of himself and the other Defendants for alleged breaches of the Equity Agreement (the “Earn Out Action”). (D.I. 51-2 at ¢31) On August 10, 2023, Colon and J. Christian filed a complaint in the Court of Chancery for alleged breaches of certain contracts and employment agreements, and to seek payment of attorneys’ fees and expenses (the “Advancement Action”). (/d. at 932) In addition, the proposed amended pleading generally alleges that Colon and J. Christian have conducted business in Delaware by supporting study abroad programs at the University of Delaware. (/d. at § 33) Also pending are Plaintiff's motion to compel compliance with the Status Quo Order and Plaintiff's motion for leave to file a surreply brief in opposition to Defendants’ motion to dismiss. (D.I. 40; D.I. 50) All pending motions, which were referred to the undersigned judicial officer on October 4, 2023, are now fully briefed and ripe for resolution. (D.I. 52) II. LEGAL STANDARD Under Rule 12(b)(2) of the Federal Rules of Civil Procedure, the court may dismiss a suit for lack of jurisdiction over a person. “[T]he plaintiff bears the burden of establishing personal jurisdiction by a preponderance of the evidence” when a defendant challenges the court’s exercise of personal jurisdiction. Turner v. Prince George’s Cty. Pub. Schs., 694 F. App’x 64, 66 (3d Cir. 2017). At the pleading stage, without an evidentiary hearing on the motion to

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Bluebook (online)
Cultural Experiences Abroad, LLC v. Colon, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cultural-experiences-abroad-llc-v-colon-ded-2024.