Seneca Companies v. Becker

134 F. Supp. 3d 1148, 2015 U.S. Dist. LEXIS 135305, 2015 WL 5783809
CourtDistrict Court, S.D. Iowa
DecidedSeptember 17, 2015
DocketNo. 4:15-cv-00035-JEG
StatusPublished
Cited by2 cases

This text of 134 F. Supp. 3d 1148 (Seneca Companies v. Becker) is published on Counsel Stack Legal Research, covering District Court, S.D. Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Seneca Companies v. Becker, 134 F. Supp. 3d 1148, 2015 U.S. Dist. LEXIS 135305, 2015 WL 5783809 (S.D. Iowa 2015).

Opinion

ORDER

JAMES E. GRITZNER, Senior Judge,

UNITED STATES DISTRICT COURT

This matter is before the Court on Motion by Defendant Midway Industrial Supply, Inc., (Midway) to dismiss the Amended Complaint by Plaintiff Seneca Companies, Inc., (Seneca) pursuant to Federal Rule of Civil Procedure 12(b)(6), or in the alternative, to transfer venue to the U.S. District Court for the District of Minnesota. Seneca resists Midway’s Motion. The parties have not requested a hearing, and the Court finds a hearing is unnecessary. The Motion is fully submitted and ready for consideration.

I. FACTUAL AND PROCEDURAL BACKGROUND

Courts consider motions to dismiss “accepting the allegations contained in the complaint as true and drawing all reasonable inferences in favor of the nonmoving party.” Cockram v. Genesco, Inc., 680 F.3d 1046, 1056 (8th Cir.2012) (citation omitted).

Seneca is an Iowa corporation headquartered in Iowa that distributes and installs industrial paint finishing systems. Midway is one of Seneca’s competitors. Defendant John Becker (Becker) is a resident of Minnesota and former sales representative for Seneca. Becker worked for Seneca from 2000 until his voluntary resignation on January 23, 2015, effective that day. While Seneca’s employee, Becker had access to Seneca’s confidential and proprietary business information. Seneca alleges that prior to his resignation, Becker forwarded a number of Seneca’s customer emails and backorder lists to Becker’s personal email account and downloaded Seneca’s customer database, all without Seneca’s permission. In January 2015, Becker forwarded to a Midway sales manager confidential Seneca information, which included quotes, estimates, and billing documents. Seneca further alleges that on January 25, 2015, after resigning, Becker attached a storage device to his Seneca-provided laptop and without authorization gained access to Seneca’s files, including vendor files, a complete 2014 and 2015 quote history, and customer purchase history. On January 26, 2015, Becker began working for Midway, where he is still employed. Seneca alleges that because Becker and Midway acquired Seneca’s business information with[1151]*1151out its consent, both Becker and Midway have an unfair business advantage and are in a position to solicit business away from Seneca.

Seneca filed a Complaint against Becker in this Court on February 2, 2014, alleging violations of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 (CFAA), misappropriation of trade secrets, and breach of the duties of loyalty and good faith, and requesting compensatory damages, punitive damages, and injunctive relief. On May 12, 2015, Seneca filed an Amended Complaint adding Midway as a Defendant on the claim alleging misappropriation of trade secrets against Midway.

Midway filed this motion to dismiss for failure to state a claim and alternative motion to transfer venue, arguing that Seneca has not stated an actionable claim for misappropriation of trade secrets under Iowa law, Seneca’s claim against Midway is made in bad faith, Midway is entitled to attorneys’ fees for Seneca’s bad-faith claim, and this matter should be transferred to the District of Minnesota. Seneca resists.

II. DISCUSSION

A. Jurisdiction

Seneca is an Iowa corporation with its principal place of business in Polk County, Iowa. Becker is a resident of Farmington, Minnesota. Midway is a Wisconsin corporation with its principal place of business in Minneapolis, Minnesota. This Court has original jurisdiction over Seneca’s CFAA claim against Becker pursuant to 28 U.S.C. § 1331 and has supplemental jurisdiction over Seneca’s remaining state law claims against Becker and Midway pursuant to 28 U.S.C. § 1367.

B. Procedural Posture

In the filed memoranda supporting and opposing the instant motion to dismiss, both parties have presented the Court with matters outside the pleadings. On a motion to dismiss pursuant to Rule 12(b)(6), a court cannot generally consider matters outside of the pleadings unless the court converts the motion into a motion for summary judgment pursuant to Rule 56. Fed.R.Civ.P. 12(d). However, on Rule 12(b)(6) motions, “courts are not strictly limited to the four corners of complaints.” Dittmer Props., L.P. v. F.D.I.C., 708 F.3d 1011, 1021 (8th Cir.2013). As the Eighth Circuit has noted,

[w]hile courts primarily consider the allegations in the complaint in determining whether to grant a Rule 12(b)(6) motion, courts additionally consider matters incorporated by reference or integral to the claim, items subject to judicial notice, matters of public record, orders, items appearing in the record of the case, and exhibits attached to the complaint whose authenticity is unquestioned; without converting the motion into one for summary judgment.

Id. at 1021 (quoting Miller v. Redwood Toxicology Lab., Inc., 688 F.3d 928, 931 n. 3 (8th Cir.2012) (internal quotation marks and citation omitted)). Here, the authenticity of documents outside the complaint (for example, Becker’s email to Midway’s .sales manager and attachments) is not questioned. The Court declines to consider matters outside of the pleadings that are not embraced necessarily by the complaint and therefore does not convert the present motion to dismiss into a motion for summary judgment. Skyberg v. United Food and Commercial Workers Int’l Union, 5 F.3d 297, 302 n. 2 (8th Cir.1993) (noting that a motion to dismiss is not automatically converted into a motion for summary judgment “where the district court’s order makes clear that the judge ruled only on the motion to dismiss”) (citing E.E.O.C. v. Reno, 758 F.2d 581, 583 n. 6 (11th Cir.1985)).

[1152]*1152C. Rule 12(b)(6) Motion

1. Standard for the Motion to Dismiss

Federal Rule of Civil Procedure 8(a)(2) requires a complaint to contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” “In ruling on a motion to dismiss ... courts ‘must take all of the factual allegations in the complaint as true,’ but ‘are not bound to accept as true a legal conclusion couched as a factual allegation.’ ” Wood v. Moss, — U.S. -, 134 S.Ct. 2056, 2065 n. 5, 188 L.Ed.2d 1039 (2014) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)).

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Cite This Page — Counsel Stack

Bluebook (online)
134 F. Supp. 3d 1148, 2015 U.S. Dist. LEXIS 135305, 2015 WL 5783809, Counsel Stack Legal Research, https://law.counselstack.com/opinion/seneca-companies-v-becker-iasd-2015.