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Nephron Pharmaceuticals Corp. v. Hulsey

United States District Court, M.D. Florida, Orlando Division

August 19, 2019

NEPHRON PHARMACEUTICALS CORPORATION, NEPHRON S.C., INC. and NEPHRON STERILE COMPOUNDING CENTER LLC, Plaintiffs,
v.
JENNIFER SHELLY HULSEY, U.S. COMPOUNDING INC. and ADAMIS PHARMACEUTICALS CORPORATION, Defendants.

          ORDER

          GREGORY A. PRESNELL UNITED STATES DISTRICT JUDGE

         This Matter comes before the Court on the Defendants' Motions to Dismiss (Docs. 75 and 76) and the Plaintiffs'[1] Responses (Docs. 77 and 78).

         I. Background

         Hulsey is a former employee of the Plaintiffs. As their employee, Hulsey had access to confidential trade secret information, and she was required to execute an Employee Confidentiality and Non-Disclosure Agreement, which she signed on June 17, 2015. Third Amend. Compl. ¶ 26-28. Hulsey resigned on August 24, 2018, after giving two weeks' notice. Id. ¶ 37. Hulsey then went to work for U.S. Compounding, Inc. (“USCI”), [2] a direct Nephron competitor. Id. ¶ 41. Upon learning that Hulsey had emailed a Nephron customer following her resignation, Nephron began an investigation into Hulsey's pre-resignation conduct. Among other things, Nephron alleges that Hulsey misappropriated Nephron's trade secrets based on its findings from that investigation. The Third Amended Complaint alleges violation of the Federal Defend Trade Secrets Act against all Defendants (Count I); Breach of Contract against Hulsey (Count II); violation of the Florida Uniform Trade Secrets Act against all Defendants (Count III); breach of the duty of loyalty against Hulsey (Count IV); aiding and abetting a breach of the duty of loyalty against Adamis and U.S. Compounding (“USCI”) (Count V); tortious interference with business relationships against all Defendants (Count VI); intentional interference with advantageous relationships against USCI and Adamis (Count VII); and civil conspiracy against all Defendants (Count VIII). USCI and Adamis move to dismiss Counts V, VI, and VIII. Hulsey moves to dismiss Counts IV, VI, and VIII.[3]

         II. Legal Standards

         A. Motion to Dismiss

         In ruling on a motion to dismiss, the Court must view the complaint in the light most favorable to the Plaintiff, see, e.g., Jackson v. Okaloosa County, Fla., 21 F.3d 1531, 1534 (11th Cir. 1994), and must limit its consideration to the pleadings and any exhibits attached thereto. See Fed. R. Civ. P. 10(c); see also GSW, Inc. v. Long County, Ga., 999 F.2d 1508, 1510 (11th Cir. 1993). The Court will liberally construe the complaint's allegations in the Plaintiff's favor. See Jenkins v. McKeithen, 395 U.S. 411, 421 (1969). However, “conclusory allegations, unwarranted factual deductions or legal conclusions masquerading as facts will not prevent dismissal.” Davila v. Delta Air Lines, Inc., 326 F.3d 1183, 1185 (11th Cir. 2003).

         In reviewing a complaint on a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), “courts must be mindful that the Federal Rules require only that the complaint contain ‘a short and plain statement of the claim showing that the pleader is entitled to relief.'” U.S. v. Baxter Intern., Inc., 345 F.3d 866, 880 (11th Cir. 2003) (citing Fed.R.Civ.P. 8(a)). This is a liberal pleading requirement, one that does not require a plaintiff to plead with particularity every element of a cause of action. Roe v. Aware Woman Ctr. for Choice, Inc., 253 F.3d 678, 683 (11th Cir. 2001). However, a plaintiff's obligation to provide the grounds for his or her entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 554-555 (2007). The complaint's factual allegations “must be enough to raise a right to relief above the speculative level, ” id. at 555, and cross “the line from conceivable to plausible.” Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009).

         B. Florida Uniform Trade Secrets Act

         To state a claim under FUTSA, the plaintiff must allege that: (1) it possessed secret information and took reasonable steps to protect its secrecy; and (2) the secret information was misappropriated, either by one who knew or had reason to know that the secret was improperly obtained or by one who used improper means to obtain it. See, e.g., Levenger Co. v. Feldman, 516 F.Supp.2d 1272, 1287 (S.D. Fla. 2007); Del Monte Fresh Produce Co. v. Dole Food Co., 136 F.Supp.2d 1271, 1291 (S.D. Fla. 2001); see also Fla. Stat. § 688.002 (defining “misappropriation” to include “Disclosure or use of a trade secret ... without express or implied consent by a person who ... knew or had reason to know that her or his knowledge of the trade secret was ... derived from or through a person who had utilized improper means to acquire it.”). Misappropriation under FUTSA can also be shown by alleging “[d]isclosure or use of trade secret of another without express or implied consent by a person who . . . [a]t the time of disclosure or use, knew or had reason to know that her or his knowledge of the trade secret was . . . [d]erived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use.” Fla. Stat. § 688.002(2)(b)(2)(c).

         FUTSA preempts “conflicting tort, restitutory, and other law[s] of this state providing civil remedies for misappropriation of a trade secret.” Fla. Stat. § 688.008(1). Common law claims based on a theory of misappropriation of trade secrets are preempted by FUTSA unless the allegations are separate and have material distinctions. ThinkLite LLC v. TLG Sols., LLC, No. 16-civ-24417, 2017 WL 5972888, at *4 (S.D. Fla. Jan. 31, 2017). If the trade secret misappropriation alone comprises the underlying wrong, the action is preempted. Allegiance Healthcare Corp. v. Coleman, 232 F.Supp.2d 1329, 1336 (S.D. Fla. 2002).

         III. Analysis

         A. Count IV and Count V: Breach of the Duty of Loyalty and Aiding and Abetting a Breach of the Duty of Loyalty

         Count IV alleges breach of the duty of loyalty against Hulsey. “The elements of a breach of fiduciary duty claim are: (1) the existence of a fiduciary duty; (2) the breach of that duty; and (3) damage proximately caused by that breach.” Border Collie Rescue, Inc. v. Ryan, 418 F.Supp.2d 1330, 1342 (M.D. Fla. 2006). Additionally, an employee “may not engage in disloyal acts in anticipation of his future competition.” Bank of Am., N.A. v. Crawford, No. 2:12-civ-691-FTM-99, 2013 WL 593743, at *3 (M.D. Fla. Feb. 15, 2013) (internal quotations omitted). Most of the allegations in Count IV are plagued by the same insufficiency found in the Second Amended Complaint. The only new allegations that could amount to a breach of the duty of loyalty are the claims that Hulsey attempted to poach Nephron employees and customers. However, there is not an adequate claim of damages for either allegation; there is no indication that any Nephron employees or customers actually left as a result of Hulsey's poaching ...


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