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Total Safety U.S., Inc. v. Code Red Safety & Rental, LLC

United States District Court, E.D. Louisiana

November 13, 2019

TOTAL SAFETY U.S., INC., et al.
v.
CODE RED SAFETY & RENTAL, LLC, et al.

         SECTION “F”

          ORDER AND REASONS

          MARTIN L. C. FELDMAN UNITED STATES DISTRICT JUDGE.

         Before the Court is the defendants' Rule 12(b)(6) motion to dismiss the plaintiffs' complaint. For the reasons that follow, the motion is GRANTED IN PART and DENIED IN PART.

         Background

         This litigation arises from trade secrets Todd Meyer allegedly stole from his former employer, Total Safety, after he abruptly resigned and joined a competitor. Total Safety sued Meyer and the competitor -- a company called Code Red -- for misappropriation of trade secrets. Code Red seeks an on-the-pleadings dismissal; its Rule 12(b)(6) motion presents one principal question: Has Total Safety plausibly alleged that Code Red misappropriated its trade secrets? It has.

         Total Safety U.S. provides integrated industrial safety services to the petrochemical industry. It acquired another national safety service provider, Airgas On-Site Safety Services, in summer 2019. The company then changed its name to Total Safety On-Site Safety Services. The parties call this company “Total Safety, ” and the Court does the same.

         Less than one month after the acquisition, several of the company's senior employees left to join a competitor -- Code Red.[1]Total Safety says these employees “secretly prepared” to join Code Red by “arming themselves” with Total Safety's trade secrets before leaving the company. Todd Meyer was allegedly one such employee.

         Total Safety hired Meyer as a safety sales specialist in May 2014. During his employment, Meyer had access to Total Safety's trade secrets and confidential information, including: (1) Total Safety's products, services, finances, marketing plans, suppliers, and price quotes; (2) the context of Total Safety's contracts with customers; (3) quotes to customers; (4) details about customer needs; and (5) the names of trusted vendors.

         Meyer left Total Safety in June 2019. One month before leaving, he emailed a competitor (not Code Red) to “explore employment opportunities.” In the message, Meyer expressed his intent to bring his “book of business” to the competitor. Around the same time, he plugged an external storage device into his work computer and accessed folders containing Total Safety's trade secrets. He did not return the device when he left Total Safety.

         Meyer allegedly copied, disclosed, and used Total Safety's trade secrets with Code Red's “approval.” After leaving Total Safety, he continued misappropriating trade secrets “in coordination with” Code Red. Code Red, too, “misappropriated” and “used” Total Safety's trade secrets. Code Red did so, Total Safety says, even though Code Red knew or had reason to know that the trade secrets “derived from Meyer[, ] who used improper means to acquire” them. Meyer and Code Red have allegedly used Total Safety's trade secrets to “solicit and induce” customers to transfer their business to Code Red, causing Total Safety “irreparable harm, injuries, and damages.” Total Safety sued Code Red for misappropriating its trade secrets, invoking assorted provisions of federal and Louisiana law. Total Safety alleges claims for (1) violations of the Defend Trade Secrets Act, 18 U.S.C. § 1836(b)(1); (2) violations of the Louisiana Uniform Trade Secrets Act, La. Rev. Stat. §§ 51:1431 - 51:1439; (3) violations of the Louisiana Unfair Trade Practices Act, La. Rev. Stat. §§ 51:1401 - 51:1430; (4) conversion; (5) unjust enrichment; and (6) civil conspiracy.

         Now, Code Red moves to dismiss under Rule 12(b)(6). It reasons as follows: all of Total Safety's claims against it hinge on its alleged misappropriation of trade secrets; Total Safety has not adequately alleged that it misappropriated any trade secrets; so, Total Safety has not alleged any plausible claims against it. Total Safety disagrees. It rejoins that it has stated plausible claims and casts Code Red's motion as a challenge to the merits of its claims, not the sufficiency of its allegations.

         I.

         A complaint 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). A party may move for dismissal of a complaint that fails this requirement. See Fed.R.Civ.P. 12(b)(6). Such motions are rarely granted because they are viewed with disfavor. Leal v. McHugh, 731 F.3d 405, 410 (5th Cir. 2013) (quoting Turner v. Pleasant, 663 F.3d 770, 775 (5th Cir. 2011)).

         In considering a Rule 12(b)(6) motion, the Court “accept[s] all well-pleaded facts as true and view[s] all facts in the light most favorable to the plaintiff.” Thompson v. City of Waco, Tex., 764 F.3d 500, 502 (5th Cir. 2014) (citing Doe ex rel. Magee v. Covington Cty. Sch. Dist. ex rel. Keys, 675 F.3d 849, 854 (5th Cir. 2012) (en banc)). Conclusory allegations are not well pleaded and, consequently, are not accepted as true. See Thompson, 764 F.3d at 502-03 (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

         To overcome a Rule 12(b)(6) motion, “‘a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'” Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir. 2009) (quoting Iqbal, 556 U.S. at 678). A claim is facially plausible if it contains “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.

         “A complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations[.]” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). But it must contain “more than labels and conclusions, and a formulaic recitation of a cause of action's elements will not do.” Id. at 555. Ultimately, the Court's task is “to determine whether the plaintiff stated a legally cognizable claim that is plausible, not to evaluate the plaintiff's likelihood of success.” Thompson, 764 F.3d at 503 (citation omitted).

         II.

         Code Red first contends that Total Safety's claims are deficiently pleaded because Total Safety has not alleged that it “misappropriated” any trade secrets. The Court disagrees.

         A.

         The Defend Trade Secrets Act grants the “owner of a trade secret that is misappropriated” the right to bring a civil action “if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.” 18 U.S.C. § 1836(b)(1). The Louisiana Uniform Trade Secrets Act, similarly, creates a claim for “damages for the actual loss caused by misappropriation” of a trade secret. La. Rev. Stat. § 51:1433.

         To plead a plausible claim under the Defend Trade Secrets Act, Total Safety must allege that: (1) it owns a trade secret; (2) the trade secret was misappropriated by Code Red; and (3) the trade secret is related to a product or service used or intended for use in interstate or foreign commerce. See 18 U.S.C. ยง 1836(b)(1). Stating a Louisiana Uniform Trade Secrets Act ...


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