His Co. v. Stover

202 F. Supp. 3d 685, 2016 WL 4376611, 2016 U.S. Dist. LEXIS 109576
CourtDistrict Court, S.D. Texas
DecidedAugust 15, 2016
DocketCIVIL ACTION NO. 4:15-CV-00842
StatusPublished
Cited by3 cases

This text of 202 F. Supp. 3d 685 (His Co. v. Stover) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
His Co. v. Stover, 202 F. Supp. 3d 685, 2016 WL 4376611, 2016 U.S. Dist. LEXIS 109576 (S.D. Tex. 2016).

Opinion

OPINION & ORDER

MELINDA HARMON, UNITED STATES DISTRICT JUDGE

Pending in the above-referenced cause is Defendant’s Motion to Dismiss Plaintiffs Complaint. (Doc. 7.) Having reviewed the motion, Plaintiffs Response in Opposition (Doc. 11), and the relevant law, the Court is of the opinion that Defendant’s motion should be DENIED.

I. Background

The dispute in this case arises from allegations that a former employee used misappropriated trade secrets to compete with his former employer in violation of an express confidentiality agreement.

Plaintiff His Company, Inc. (“Hiseo”) offers a variety of goods and services to its [689]*689customers, including a component part for the manufacture of body armor known as “spall cover” or “spall material.” (Doc. 1 at ¶ 13-14.) This fabric-like ballistic material is the subject of a patent to which Hisco owns the rights. (Id. at ¶ 16) In addition to this patent, Hisco “has developed numerous trade secrets and other confidential information relating to its ballistic materials business.... including], but not limited to, information such as formulas, patterns, compilations, programs, devices, methods, techniques, processes, financial data, actual and potential customer data, and actual and potential supplier data, relating to its spall material, systems and methods for making that material, and customers that purchase or may purchase that material.” (Id. at ¶ 17.) In an attempt to protect these trade secrets, Hisco has “policies that provide for disciplinary action and/or termination of employment in the event of certain behavior by an employee, such as the unauthorized disclosure of trade secrets.” (Id. at ¶ 19.) The company also has a “Confidentiality, Cooperation, & Release Agreement” that employees must sign. (Id. at ¶ 20; Doc. 1-1 at 2.)

Defendant Robert Scott Stover (“Sto-ver”) worked for Hisco for twenty-six years in a variety of positions. (Id. at ¶ 22.) During that time he allegedly gained knowledge of a number of Hisco’s trade secrets and confidential information. (Id. at ¶ 24.) In September 2014, Stover left His-co. (Id. at ¶ 22.) Sometime around November, Stover then founded a company with two other individuals and began selling spall material in direct competition with Hisco. (Id. at ¶¶ 28, 40.) In December, the parties executed Hisco’s standard Confidentiality, Cooperation, •& Release Agreement wherein Stover agreed “to continue to refrain from divulging, disclosing, or sharing to any other person or entity any of Hisco’s confidential information....” in exchange for a lump-sum payment of $16,699. (Id. at ¶¶26, 40; Doc. 1-1 at 2-3.) When Hisco later discovered that Stover was not in compliance with the Agreement, it initiated this suit for breach of contract (Count I), misappropriation of trade secrets (Count II), and fraudulent inducement (Count III). (Doc. 1 at ¶¶ 42-61.) Stover responded with the instant Motion to Dismiss (Doc. 7), which is now ripe for adjudication.

II. Legal Standard

A. Federal Rule of Civil Procedure 12(b)6

Motions to dismiss for failure to state a claim, are appropriate when a defendant attacks the complaint because it fails to state a legally cognizable claim. Fed. R. Civ. P. 12(b)(6). Under the Federal Rules, a pleading must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). This requirement exists 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, 560 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)) (internal quotation marks omitted). Although Rule 8’s pleading standard “does not require ‘detailed factual allegations,’ it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955).

. “To survive a motion to dismiss [for failure to state a claim], a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Id. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). “A claim has facial plausibility when a court can draw the reasonable inference that the defendant is liable for the misconduct alleged based on the [690]*690factual content pled.” Id. at 678, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). In determining plausibility, courts first disregard “formulaic recitation[s] of the elements” of the legal claim as conclusory. Id. at 678, 129 S.Ct. 1937. The court then assumes the truth of all factual allegations and determines whether those factual allegations allege a plausible claim. See id. “Determining whether a complaint states a plausible claim for relief will.. .be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679, 129 S.Ct. 1937 (citation omitted).

“[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not show[n]’—‘that the pleader is entitled to relief.’ ” Id. (quoting Fed. R. Civ. P. 8(a)(2)). If the facts fail to “nudge[ ] the[ ] claims across the line from conceivable to plausible, [then] the[] complaint must be dismissed.” Twombly, 550 U.S. at 570, 127 S.Ct. 1955. On a Rule 12(b)(6) review, “the court may consider documents attached to or incorporated in the complaint and matters of which judicial notice may be taken.” United States ex rel. Willard v. Humana Health Plan of Tex. Inc., 336 F.3d 375, 379 (5th Cir.2003) (citing Lovelace v. Software Spectrum Inc., 78 F.3d 1015, 1017-18 (5th Cir.1996)).

B. Federal Rule of Civil Procedure 9(b)

When a complaint alleges claims sounding in fraud, Rule 9(b) requires that plaintiffs plead the underlying factual circumstances with particularity. Fed. R. Civ. P. 9(b). Accordingly, “with respect to fraud and fraudulent inducement claims, at a minimum, Fed. R. Civ. P. 9(b) requires that the plaintiff ‘state with particularity the circumstances constituting the fraud.’ ” Shandong Yinguang Chem. Indus. Joint Stock Co. v. Potter,

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Bluebook (online)
202 F. Supp. 3d 685, 2016 WL 4376611, 2016 U.S. Dist. LEXIS 109576, Counsel Stack Legal Research, https://law.counselstack.com/opinion/his-co-v-stover-txsd-2016.