Micronics Filtration Holdings, Inc., v. Timothy Miller, Peter Kristo, and Pure Filtration, LLC

2018 DNH 198
CourtDistrict Court, D. New Hampshire
DecidedOctober 4, 2018
Docket18-cv-303-JL
StatusPublished

This text of 2018 DNH 198 (Micronics Filtration Holdings, Inc., v. Timothy Miller, Peter Kristo, and Pure Filtration, LLC) is published on Counsel Stack Legal Research, covering District Court, D. New Hampshire primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Micronics Filtration Holdings, Inc., v. Timothy Miller, Peter Kristo, and Pure Filtration, LLC, 2018 DNH 198 (D.N.H. 2018).

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF NEW HAMPSHIRE

Micronics Filtration Holdings, Inc.,

v. Civil No. 18-cv-303-JL Opinion No. 2018 DNH 198 Timothy Miller, Peter Kristo, and Pure Filtration, LLC

MEMORANDUM ORDER

This trade-secrets case involves the adequacy of factual

allegations in a complaint, as well as preemption under the New

Hampshire Uniform Trade Secrets Act (“NHUTSA”) and the

heightened pleading requirements of Rule 9(b). Plaintiff

Micronics Filtration Holdings, Inc. brought this suit against

two former Micronics sales executives, Tim Miller and Peter

Kristo, and the competing business they have formed, Pure

Filtration, LLC. Micronics alleges that the defendants have

misappropriated its trade secrets and confidential information,

disparaged Micronics to third parties, and violated other

contractual obligations. Micronics’ amended complaint brings a

federal claim under the Defend Trade Secrets Act (“DTSA”), a

claim under the NHUTSA, and several other state law claims.

This court has subject-matter jurisdiction over this action

under 28 U.S.C. § 1331 (federal question) in light of the

plaintiff’s DTSA claim, and over plaintiffs’ state-law claims under § 1367 (supplemental jurisdiction). Defendants have moved

to dismiss all claims. After oral argument, the court grants

this motion in part and denies it in part. Specifically, the

court denies defendants’ motion with respect to Micronics’ trade

secret claims under the DTSA and the NHUTSA and its claims for

breach of contractual confidentiality agreements against Miller

and Kristo. But claims for intentional interference with

contractual relations and violation of the New Hampshire

Consumer Protection Act (“NHCPA”) are dismissed because of a

combination of NHUTSA preemption and failure to meet the

heightened pleading requirements of Rule 9(b) for claims

sounding in fraud. And claims for defamation and breach of

employee non-solicitation provisions are also dismissed because

the allegations in the amended complaint are insufficient to

state these claims.

Applicable legal standard

“A pleading that states a claim for relief must contain,”

among other things, “a short and plain statement of the claim

showing that the pleader is entitled to relief.” Fed. R. Civ.

P. 8(a)(2). To satisfy this requirement, a plaintiff must

include “factual content that allows the court to draw the

reasonable inference that the defendant is liable for the

misconduct alleged.” Martinez v. Petrenko, 792 F.3d 173, 179

2 (1st Cir. 2015) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009)). In other words, the complaint must “contain sufficient

factual matter, accepted as true, to state a claim to relief

that is plausible on its face.” SEC v. Tambone, 597 F.3d 436,

442 (1st Cir. 2010) (quoting Iqbal, 556 U.S. at 678).

At the Rule 12(b)(6) stage, the court must “take the

complaint’s well-pleaded facts as true,” and “draw all

reasonable inferences in the plaintiffs’ favor.” Barchock v.

CVS Health Corp., 886 F.3d 43, 48 (1st Cir. 2018). But “[w]ell-

pleaded facts must be ‘non-conclusory’ and ‘non-speculative.’”

Id. “If the factual allegations in the complaint are too

meager, vague, or conclusory to remove the possibility of relief

from the realm of mere conjecture, the complaint is open to

dismissal.” Id. (quoting Iqbal, 556 U.S. at 678).

Documents outside of the pleadings are generally not

considered in ruling on a motion to dismiss. Flores v. OneWest

Bank, F.S.B., 886 F.3d 160, 167 (1st Cir. 2018). The court may,

however, consider documents attached to or explicitly

incorporated in the complaint, and “narrow exceptions [exist]

for documents the authenticity of which are not disputed by the

parties; for official public records; for documents central to

plaintiffs’ claim; or for documents sufficiently referred to in

3 the complaint.” Id. (quoting Watterson v. Page, 987 F.2d 1, 3

(1st Cir. 1993)).1

Analysis

A. Trade secret claims

Micronics brings both federal and state claims for trade

secret misappropriation under the DTSA and the NHUTSA. The

parties agree that the requirements to state a claim under the

DTSA and the NHUTSA are not meaningfully different for this case

and have argued the claims together.2 For the reasons set forth

on the record at the hearing, Micronics has stated claims under

1 In briefing and at the hearing, Micronics sought to rely on facts alleged in attachments to its motion for a preliminary injunction, which it filed prior to amending its complaint. But it has not shown why these documents fit within any of the exceptions to the usual rule. Micronics had every opportunity to amend its complaint to incorporate these allegations. Indeed, Micronics represented to the court that it would be further amending the complaint after withdrawing its preliminary injunction motion, but it chose not to. The attachments to the preliminary injunction motion will thus not be considered on this motion to dismiss the amended complaint. 2 The definitions of misappropriation in the DTSA and the NHUTSA differ only in form. 18 U.S.C. § 1839; N.H. Rev. Stat. Ann. § 350-B:1. The definitions of trade secret differ slightly, but have very similar requirements. Id.; cf. H.R. Rep. No. 114-529, at 5, 13 (2016) (DTSA’s definition of misappropriation modeled on Uniform Trade Secrets Act and DTSA intended to “bring the Federal definition of a trade secret in conformity with the definition used in the” Uniform Trade Secrets Act).

4 both statutes and the motion to dismiss is denied as to these

counts.3

B. State-law claims

Micronics also brings several state-law claims under the

following theories: (1) intentional interference with existing

contractual relations; (2) violation of the NHCPA; (3)

confidentiality-related breach of contract; (4) employee-

solicitation-related breach of contract; and (5) defamation.

The defendants move to dismiss these claims for failure to state

a claim. As discussed below, Micronics has pleaded factual

allegations such that it states a claim for confidentiality-

related breach of contract, but not for intentional interference

with contractual relations, violation of the NHCPA, employee-

solicitation-related breach of contract, or defamation.

1. Intentional interference with existing contractual relations

Under New Hampshire law:

To establish liability for intentional interference with contractual relations, a plaintiff must show: (1) the plaintiff had an economic relationship with a third party; (2) the defendant knew of this relationship; (3) the defendant intentionally and improperly interfered with this relationship; and (4) the plaintiff was damaged by such interference.

3 See Am. Compl. (doc. no. 16) ¶¶ 8-15, 45-53.

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2018 DNH 198, Counsel Stack Legal Research, https://law.counselstack.com/opinion/micronics-filtration-holdings-inc-v-timothy-miller-peter-kristo-and-nhd-2018.