Motion to Dismiss Claims for Misappropriation of Trade Secrets and Tortious Interference under Florida law. Tampa, Florida. Hillsborough County Circuit Court - Complex Business Litigation Division.
Pollard PLLC
P. 954-332-2380
It’s Not Easy Being Green: Ethical Pitfalls for Bankruptcy Novices
Motion to Dismiss - Trade Secrets & Tortious Interference Claims
1. IN THE CIRCUIT COURT OF THE THIRTEENTH JUDICIAL CIRCUIT
IN AND FOR HILLSBOROUGH COUNTY, FLORIDA
CIVIL DIVISION
WEINTRAUB INSPECTIONS & Case No: 19-CA-010555
FORENSIC, INC., Division L
Plaintiff,
v.
ROBERT CLOUSE; LEOLA
CONSTRUCTION, L.L.C.; and AQUILA
INSPECTION SERVICES, LLC,
Defendants.
__________________________/
DEFENDANT AQUILA INSPECTION SERVICES, LLC’S
PARTIAL MOTION TO DISMISS
Defendant Aquila Inspection Services, LLC, through undersigned counsel and pursuant to
Florida Rule of Civil Procedure 1.140, hereby moves to dismiss Count I (Misappropriation of
Trade Secrets—Permanent Injunction), Count II (Misappropriation of Trade Secrets—Damages),
Count IV (Tortious Interference with the Agreement and Restrictive Covenants), and Count V
(Tortious Interference with Plaintiff’s Advantageous Business Relationships) of Plaintiff
Weintraub Inspections & Forensic, Inc.’s Verified Complaint for Injunctive Relief and Damages
(“Complaint”) as to Aquila and in support states:1
1
Plaintiff Weintraub Inspections & Forensic, Inc., is “Plaintiff” or “WIFI.” Defendant Aquila
Inspection Services, LLC is “Aquila.” Defendant Leola Construction, L.L.C. is “Leola.”
Defendant Robert Clouse is “Clouse.”
Filing # 98921084 E-Filed 11/14/2019 11:45:24 PM
2. 2
Introduction
This suit is not about protecting Plaintiff’s alleged trade secrets or any legitimate business
interest. Plaintiff is suing Aquila to stop its competition in the building inspection industry. But
Florida’s trade secret statute is not a vehicle to suppress fair competition.2
The same can be said
of common law claims for tortious interference, which are intended to curb illegal conduct, not
inhibit the free flow of the market through fair competition.
In this case, Plaintiff ran into this Court claiming that Defendants presented an existential
threat to its business. Thirty days after filing its Complaint, asking that this matter be treated an
“Emergency,” and moving for a highly invasive forensic inspection, Plaintiff has failed to offer
anything but the most rote of allegations regarding the existence and misappropriation of its
alleged trade secrets.
The Complaint similarly does not identify any employees or customers with whom Aquila
has allegedly tortiously interfered. The fundamentally deficient pleading fails to put Aquila on
notice as to what it has actually been sued for. Counts I, II, IV, and V of the Complaint against
Aquila must be dismissed.
I. Background
WIFI and Aquila compete in the building inspection business. Aquila employs two former
WIFI employees, neither of whom signed restrictive covenants or confidentiality agreements while
with WIFI. Clouse worked for WIFI for approximately two years before he left to join Leola, a
construction business. Clouse has never and is never alleged to have worked for Aquila. Despite
these undisputed facts, WIFI brought this suit against Aquila along with Clouse and Leola.
2
The Florida Uniform Trade Secret Act, Fla. Stat. §§ 688.001-009, is referred to as “FUTSA.”
3. 3
II. Memorandum of Law
The relevant allegations related to Aquila and Counts I, II, IV, and V of the Complaint are
so vague and conclusory that Aquila has not been given fair notice as to the nature of these claims.
Counts IV and V are otherwise barred by law due to FUTSA preemption. Under the applicable
pleading standard, these counts must be dismissed as to Aquila.
A. Standard.
“Whether a complaint is sufficient to state a cause of action is an issue of law.” W.R.
Townsend Contracting, Inc. v. Jensen Civil Construction, Inc., 728 So. 2d 297, 300 (Fla. 4th DCA
1999). “To state a cause of action, a complaint must allege sufficient ultimate facts to show that
the pleader is entitled to relief.” Id. (quotations omitted); Fla. R. Civ. P. 1. 110(b) (requiring “a
short and plain statement of the ultimate facts showing that the pleader is entitled to relief”). While
“courts must liberally construe, and accept as true, factual allegations in a complaint and
reasonably deductible inferences there from,” they “need not accept … conclusory allegations,
unwarranted deductions, or mere legal conclusions made by a party.” Id. (citation omitted). Thus,
the question is whether, assuming the well-pleaded factual allegations in the Complaint are true,
Plaintiff would be entitled to the relief requested.
B. Plaintiff Failed to State Claims for Misappropriation of Trade Secrets as to
Defendant Aquila (Counts I and II).
Plaintiff split its claims against Aquila for misappropriation of trade secrets into two
claims: one for injunctive relief, the other for damages. Each fails for the same reasons.
i. Plaintiff Failed to Adequately Describe its Alleged Trade Secrets.
To state a claim for misappropriation of a trade secrets under Florida law, Plaintiff must
show: (1) that it possesses secret information and took reasonable s to protect its secrecy and (2)
4. 4
that its secret was misappropriated. Del Monte Fresh Product Co. v. Dole Food Co., Inc., 148
F.Supp.2d 1322, 1291 (S.D. Fla. 2001).
It is axiomatic that the claimant in a trade secret case must identify the trade secret involved
with reasonable particularity. See Revello Med. Mgmt., Inc. v. Med-Data Infotech USA, Inc., 50
So. 3d 678, 679 (Fla. 2d DCA 2010) (citing Del Monte Fresh Produce Co., 148 F.Supp.2d at 1325;
see also Treco Int’l S.A. v. Kromka, 706 F.Supp. 2d 1283, 1386 (S.D. Fla. 2010) (“A plaintiff has
the burden to describe the alleged trade secret with reasonable particularity.”); see also Border
Collie Rescue, Inc. v. Ryan, 418 F.Supp. 2d 1330, 1338-39 (M.D. Fla. 2006) (awarding judgment
for defendants where plaintiffs provided only “conclusory allegations” to support its trade secret
claims that amounted to nothing more than “rank speculation.”); Portionpac Chem. Corp. v.
Sanitech Sys., Inc., 217 F.Supp. 2d 1238, 1252-53 (M.D. Fla. 2002) (granting judgment on
misappropriation claim where claimant did not identify trade secrets with specificity).3
a. Plaintiff Seeks Relief Under FUTSA for Alleged Misappropriation of
Non-Trade Secrets.
As a threshold matter, Plaintiff’s improper attempts to expand the scope of FUTSA
protections must be addressed. FUTSA is intended to remedy the misappropriation of bona fide
trade secrets, not to act as a catch-all for all information a party believes is “confidential.” See,
e.g., Norton v. Am. LED Tech., Inc., 245 So.3d 968, 969 (Fla. 1st
DCA 2018) (“[F]UTSA may not
be used as a vehicle to restrict competition.”) (citing Hatfield v. AutoNation, Inc., 939 So. 2d 155,
157 (Fla. 4th
DCA 2006) (clarifying that the statute is not a general business tort, but concerned
3
Although a number of the cases here cited are federal courts interpreting FUTSA, the underlying
requisites for a trade secret—chiefly an adequate description of the at-issue trade secrets—applies
regardless of jurisdiction.
5. 5
solely with misappropriation of trade secrets); Thomas v. Alloy Fasteners, Inc., 664 So.2d 59, 60–
61 (Fla. 5th
DCA 1995) (holding that FUTSA cannot be used to restrict competition).
Here, Plaintiff seeks to recover under FUTSA for information that it does not adequately
allege are trade secrets. Specifically, Plaintiff’s trade secret claims purport to seek injunctive relief
and damages for alleged misappropriation of its “trade secrets and other Proprietary Information.”
See Complaint at ¶¶ 67-69, 72-74. 81-86. Plaintiff fails to explain the distinction between “trade
secrets” and “other Proprietary Information”, and instead offers only the conclusory statement that
its “trade secrets and other Proprietary Information. . . constitute ‘trade secrets’ within the meaning
of Fla. Stat. § 688.002.” Complaint at ¶ 71. This is not enough. Plaintiff’s blatant attempt to sweep
non-trade secret information into its claim further indicates that these claims are not brought to
remedy trade secret misappropriation, but to hinder Aquila’s competition.4
b. Plaintiff’s Boilerplate Descriptions of “Trade Secrets” are
Insufficient.
Even assuming that Plaintiff’s terms “trade secrets and other Proprietary Information”
collectively refers to information that constitutes trade secrets under Chapter 688, Plaintiff’s claims
fail. Plaintiff recites only a generic list of its alleged trade secrets: “business plans, employees,
customers lists and agreements, pricing and financial information concerning, proprietary software
and digital technology and “other confidential information relating to Plaintiff’s business.”
4
Florida courts do not tolerate baseless misappropriation of trade secrets suits like Plaintiff’s. See
Nardone v. Hofmann, 2014 WL 5430137, at *1 (Fla. 18th Jud. Cir. Ct. Sep. 17, 2014) (finding
misappropriation of trade secrets claim was brought in bad faith and awarding attorneys’ fees
under Fla. Stat. § 688.005 where trade secrets were neither unique, independently valuable by
virtue of their secrecy, unascertainable by proper means, nor the subject of reasonable efforts to
maintain their secrecy); Delfasco LLC v. Powell, 2018 WL 4301708, at *1 (Fla. 13th Jud. Cir. Ct.
Jun. 22, 2018) (“[T]he underlying motive behind the case was suppression of competition, not the
effort to enforce protectible legal rights. Accordingly, the motion for attorneys' fees [under Florida
Statute section 688.005] is GRANTED[.]”).
6. 6
Complaint, ¶67. Plaintiff made no effort to describe those alleged trade secrets with particularity
or to provide any detail regarding the nature of or reasons why they should be considered as such.
The problem is that none of these terms shed any light on what specific trade secrets are at issue.
This is simply not enough to adequately allege the existence of trade secrets. See Am. Registry,
LLC v. Hanaw, 2013 WL 6332971, at *4 (M.D. Fla. Dec. 5, 2013) (indicating “financial data” is
a “broad and generic” category of information and provides “insufficient notice as to the actual
trade secrets misappropriated).
First, Plaintiff fails to articulate what it means by “business plans.” By failing to do so, as
with other items on its list, Plaintiff has failed to plausibly allege that what it claims are trade
secrets (a) are not generally known or (b) derive economic value from same. Similarly, “trade
secrets concerning employees” could mean anything. The existence of trade secrets related to this
category is belied by Plaintiff’s admittance that certain employees—namely, those that now work
for Aquila—were not subject to any confidentiality agreements. See Complaint at ¶ 33.
Next, Plaintiff listed “customer lists and agreements.” Meanwhile it has done nothing to
indicate why potential or actual customers or the related agreements are confidential in a business
that it readily admits is predicated on proposals for each job. Plaintiff has thus not made a plausible
showing that its customer list is not “compiled from information that is readily ascertainable to the
public” and the “product of any great expense or effort.” See Sethscot Collection, Inc. v. Drbul,
669 So. 2d 1076, 1078 (Fla. 3d DCA 1996) (citing Templeton v. Creative Loafing Tampa, Inc., 552
So. 2d 288, 289 (Fla. 2d DCA 1989)); see also Mittenzwei v. Industrial Waste Serv., Inc., 618 So.
2d 328 (Fla. 3d DCA 1993).
The same is true of “pricing and financial information.” To be clear: Aquila is not
suggesting that pricing and financials can never constitute trade secretes—clearly, they can. But
7. 7
Plaintiff has not even attempted to explain (a) what this information is (e.g., price offerings, costs,
information it has learned is offered by other competitors, etc.). Plaintiff does not explain how or
why this information is secret in the first place or valuable by virtue of this alleged secrecy.
Plaintiff also, as with all categories on this list, fails to explain the measures taken to maintain the
secrecy of this information beyond the most conclusory of allegations.
Similarly, Plaintiff failed to explain what “proprietary software/digital technology” it
claims is a trade secret. Plaintiff does not explain specific measures taken to maintain this materials
secrecy as a group, let alone any subsets of information or data, if that is in fact what is being
referred to. Further, there is no allegation that Aquila utilizes technology similar to Plaintiff, let
alone a version of the same software (just as there is no allegation indicating that Clouse took such
information, let alone that Aquila or its agents have come to be in possession of it). But even if
there was, Plaintiff does not explain how this information is valuable by virtue of its secrecy or
how Aquila could use it to gain an unfair advantage.
The final catch all “other confidential information” is patently over broad. By including
this caveat, Plaintiff has rendered the rest of the list inconsequential as Plaintiff could be
considering any of its business material confidential.
As detailed above, Plaintiff has failed to satisfy its pleading burdens. Despite its list of
generic informational categories, Plaintiff did not adequately plead the existence of a single trade
secret. In short, it has not provided the requisite detail for establishing that any of its generic
categories are actually trade secret information. Nor has it shown that any of them are subject to
reasonable efforts to maintain secrecy, are valuable by virtue of their secrecy, or are unobtainable
through proper means. Consequently, Plaintiff has failed to plead the existence any trade secrets
8. 8
and, in turn, failed to state a plausible claim for misappropriation of trade secrets under Florida
Statute § 688.002. Counts I and II must be dismissed.
ii. Plaintiff Failed to Articulate how Aquila Misappropriated any of its Alleged
Trade Secrets.
Just as it failed to plead the existence of any trade secrets, Plaintiff wholly failed to
demonstrate that Aquila engaged in any misappropriation. Plaintiff did not adequately allege that
Aquila acquired or disclosed, through improper means, any of the nebulous material that Plaintiff
points to as “trade secrets.” Aside from the recitation of the term ‘misappropriation’, there simply
is not anything in the Compliant to suggest that misappropriation occurred. As such, Plaintiff failed
to carry its burden related to alleged misappropriation. See Thomas v. Alloy Fasteners, Inc., 664
So.2d 59, 60 (Fla. 5th DCA 1995) (“Litigants alleging violations of specific trade secrets must be
held to their burden to plead and prove the ‘use’ of ‘specific trade secrets’”) (quoting Lovell Farms,
Inc. v. Levy, 641 So. 2d 103 (Fla. 3d DCA 1994)) (internal quotation marks omitted); Lovell
Farms, Inc. v. Levy, 641 So. 2d 103, 105 (Fla. 3d DCA 1994) (holding that injunction based “upon
mere allegation of the employee’s ‘use’ of ‘specific trade secrets[]” was improper); see also Zupnik
v. All Fla. Paper, Inc., 997 So. 2d 1234, 1238–39 (Fla. 3d DCA 2008) (requiring a showing of
misappropriation in order to prevail on trade secret claim).
C. Plaintiff Failed to State Claims for Tortious Interference (Count IV and V) as to
Defendant Aquila.
i. Plaintiff’s FUTSA Claims Preempt its Tortious Interference Claims as to
Aquila.
As a preliminary matter, Plaintiff’s claims for tortious interference with Clouse’s
“agreement and restrictive covenants” (Count IV) and “advantageous business relationships”
(Count V) are preempted by FUTSA and must be dismissed. FUTSA displaces other tort and
statutory claims to the extent those claims are based on misappropriation of trade secrets. See Fla.
9. 9
Stat. § 688.008 (“[FUTSA] displace[s] displace conflicting tort, restitutory, and other law of this
state providing civil remedies for misappropriation of a trade secret.”); see also New Lenox Indus.,
Inc. v. Fenton, 510 F.Supp. 2d 893, 908 (M.D. Fla. 2007) (“In order to pursue claims for additional
tort causes of action where there are claims for misappropriation of a trade secret, there must be
material distinctions between the allegations comprising the additional torts and the allegations
supporting the FUTSA claim.”); Am. Honda Moto Co. v. Motorcycle Info. Network, Inc., 390
F.Supp. 2d 1170, 1181 (M.D. Fla. 2005); Allegiance Healthcare Corp. v. Coleman, 232 F.Supp.
2d 1329, 1336 (S.D. Fla. 2002); Mortgage Now, Inc. v. Stone, 2009 WL 426877, *6 (M.D. Fla.
Nov. 24, 2009).
Plaintiff’s tortious interference claims are duplicative of its misappropriation claims.
Aquila is alleged to have tortiously interfered with Plaintiff and Clouse’s contract to
misappropriate Plaintiff’s trade secrets, and then used those trade secrets to tortiously interfere
with Plaintiff’s advantageous business relationships. Specifically, Count V of the Complaint
alleges:
112. Defendants, jointly and severally, intentionally, tortiously, and unjustifiably
interfered in the proper performance and enforcement of the Agreement and
Restrictive Covenants therein by hiring and/or otherwise affiliating with Mr.
Clouse to wrongfully acquire and use Plaintiff’s trade secrets . . . in direct
violation of the Restrictive Covenants.
And Count VI of the Complaint alleges:
125. Defendants’ tortious misappropriation of Plaintiff’s confidential trade
secrets and other Proprietary Information has given them an unfair competitive
advantage.
These claims are thus predicated on the existence and misappropriation of Plaintiff’s
alleged trade secrets. As a result, the claims are preempted by FUTSA and must be dismissed. See
Coleman, 232 F.Supp. 2d at 1336 (“Plaintiff has not identified any material distinction between
10. 10
the wrongdoing alleged in the trade secret claim and that alleged in the unfair competition claim.
Accordingly, the unfair competition claim must be dismissed.”); Hanaw, 2013 WL 6632971 at *4
(dismissing tortious interference with business relationships claim because “the underlying
misconduct is the use or misappropriation of plaintiff’s trade secrets[.]”).
ii. Plaintiff Failed to Identify any Employees or Customers with Whom Aquila
Tortiously Interfered.
With regard to the claim that Aquila tortiously interfered with Clouse’s restrictive
covenants, Plaintiff merely provides the conclusory allegation that Aquila did so by “otherwise
affiliating” with Clouse to “wrongfully acquire and use Plaintiff’s trade secrets and Proprietary
Information. . . as well as to wrongfully solicit and recruit Plaintiff’s employees and customers.”
Complaint at ¶ 112. No other allegations described the supposedly tortious conduct by Aquila.
There are several reasons for that. First, Aquila does not employ Clouse, nor is it alleged to.
Second, as discussed supra, to the extent that this claim seeks redress for trade secret
misappropriation, such claims are preempted by FUTSA. See II.C.i. Third, Aquila is not alleged
to have interfered with any specific employees of Plaintiff. To the contrary, the Complaint only
alleges that Leola, an entity distinct from Aquila, approached one of its employees about a job
opportunity. See Complaint ¶53 and Exhibit I to the Complaint.5
Plaintiff’s efforts to rope Aquila
into this lawsuit are insufficient. For the reasons detailed above, Count IV must be dismissed.
Plaintiff’s claim for tortious interference with “advantageous business relationships”
against Aquila also fails. See Count V. For such a claim, Florida law requires: (1) the existence of
a business relationship[;] (2) knowledge of the relationship on the part of the defendant; (3) an
intentional and unjustified interference with the relationship by the defendant; and (4) damage to
5
Aquila does not at this stage weigh whether the statements contained in Exhibit I are accurate,
merely that they do not implicate Aquila in any way.
11. 11
the plaintiff as a result of the breach of the relationship.” Gossard v. Adia Servs., Inc., 723 So. 2d
182, 184 (Fla. 1998). Thus, to state a claim for tortious interference, Plaintiff was required to
identity whom Aquila tortiously interfered with. See Ethan Allen, Inc. v. Georgetown Manor, Inc.,
647 So. 2d 812, 815 (Fla. 1994) (holding that claimant may allege “tortious interference with
present or prospective customers but no cause of action exists for tortious interference with a
business's relationship to the community at large.”) (citation omitted); see also Cornell Pump Co.,
2018 WL 3827249, at *9 (dismissing tortious interference claim that failed to identify at-issue
agreements, understandings, or existing or prospective customers with which defendant allegedly
interfered and holding: “As a general rule, an action for tortious interference with business
relationship requires a business relationship evidenced by an actual and identifiable understanding
or agreement which in all probability would have been completed if the defendant had not
interfered.”) (quoting id.). The Florida Supreme Court has further stated that “in order to establish
the tort of tortious interference with a business relationship, the plaintiff must prove a business
relationship with identifiable customers.” Ferguson Transp., Inc. v. N. Am. Van Lines, Inc., 687
So. 2d 821 (Fla. 1996).
At best, Plaintiff alleges that one of its former customers, Mattamy Homes, now uses
Aquila’s services. Id. at ¶57. What is missing is an allegation that Aquila did anything tortious in
its acquisition of Mattamy Homes as a customer. Id. Instead, there is only Plaintiff’s allegation
that the market is “highly competitive[]”. Id. at ¶ 12. Plaintiff’s failure to plead with specificity
the identity of entities or individuals with whom Aquila is accused of tortiously interfering, let
alone how Aquila supposedly interfered, dooms its claim as presently constructed.
12. 12
Conclusion
Plaintiff has failed to apprise Aquila of (a) what its alleged trade secrets are, (b) how Aquila
allegedly misappropriated its supposed trade secrets, (c) any employees with whom Aquila has
tortiously interfered or how such alleged interference occurred, and (d) the identities of Plaintiff’s
customers with whom Aquila has allegedly interfered. To the extent that its tortious interference
claims are predicated on the misappropriation of trade secrets, such claims are preempted and must
be dismissed.
WHEREFORE, Defendant Aquila Inspection Services, LLC respectfully requests that
this Court dismiss Count I (Misappropriation of Trade Secrets—Permanent Injunction), Count II
(Misappropriation of Trade Secrets—Damages), Count IV (Tortious Interference with the
Agreement and Restrictive Covenants), and Count V (Tortious Interference with Plaintiff’s
Advantageous Business Relationships) as pleaded against Defendant Aquila Inspection Services,
LLC, in Plaintiff Weintraub Inspections & Forensic, Inc.’s Verified Complaint for Injunctive
Relief and Damages, and grant any other relief the Court deems appropriate.
CERTIFICATE OF CONFERRAL
Pursuant to Local Rule 3.7 (Business Court Procedure), counsel for Defendant Aquila
conferred in writing regarding this motion. At the time of this filing, Plaintiff had not agreed to
amend its Complaint or to the relief sought herein.
Dated: November 14, 2019 Respectfully submitted,
By: /s/ Christopher S. Prater
Jonathan E. Pollard
Florida Bar No.: 83613
jpollard@pollardllc.com
Christopher S. Prater
Florida Bar No.: 105488
cprater@pollardllc.com
13. 13
Pollard PLLC
100 SE 3rd Ave., Ste. 601
Fort Lauderdale, FL 33394
Telephone: 954-332-2380
Facsimile: 866-594-5731
CERTIFICATE OF SERVICE
I hereby certify that the foregoing document was served on all counsel of record through
the Court’s electronic filing system on November 12, 2019.
By: /s/ Christopher S. Prater
Christopher S. Prater