ACCLAIM SYSTEMS, INC. v. INFOSYS, LTD.
2:13-cv-07336
E.D. Pa.Jul 14, 2015Background
- Acclaim provides technical analysts to clients (e.g., Time Warner Cable) and had non-compete agreements with vendors (Global, Sysintelli) and an employee (Blackwell) who worked on a "salesforce.com" team at Time Warner.
- Infosys hired Blackwell (August 2013) and later had Global and Sysintelli analysts (Jasthi, Nellutla, Mendonca) perform the same work at Time Warner through Infosys (October 2013), allegedly breaching Acclaim's non-competes.
- Vedainfo is alleged to have acted as a "protective screen"/empaneled vendor for Infosys: contracting directly with the analysts despite knowledge of their non-competes and receiving only a small margin.
- Acclaim asserts tortious interference with contracts, civil conspiracy, and an "aiding/abetting/inducing contractual breaches" claim against Vedainfo (and Infosys); Vedainfo moved to dismiss for failure to state a claim and for untimely service under Rule 4(m).
- Court found Acclaim plausibly alleged Vedainfo knowingly induced breaches of non-competes and interference with Acclaim's contract with Time Warner, but dismissed the aiding/abetting breach-of-contract claim as not recognized under Pennsylvania law and duplicative.
- Although Acclaim failed to show "good cause" for late service, the court exercised discretion to extend the service deadline to the date Vedainfo was actually served, keeping Vedainfo in the case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Acclaim stated a tortious interference claim based on induced breaches of employee non-competes | Vedainfo knowingly hired analysts subject to non-competes and induced breaches, causing lost revenue | Acclaim's allegations are conclusory; competitor privilege or lack of independently actionable wrong defeats the claim | Claim survives: allegations sufficiently plead improper interference with non-competes (no competition privilege here) |
| Whether Acclaim stated tortious interference with its contract with Time Warner | Vedainfo's conduct caused Time Warner to cease/shift business to Infosys, harming Acclaim | Vedainfo argues insufficiency if contract was prospective/terminable at will and no independent wrong | Claim survives: independent wrong (inducing breaches) supports interference with Time Warner contract under either §768 or NC law |
| Whether Acclaim stated a civil conspiracy claim | Acclaim alleges agreement between Vedainfo and Infosys to induce breaches and harm Acclaim | Vedainfo contends no underlying tort = no conspiracy | Claim survives: underlying tortious interference adequately pled to support conspiracy claim |
| Whether "aiding and abetting" a breach of contract is a cognizable tort in Pennsylvania | Plaintiff pleads aiding/abetting/inducing contractual breaches | Vedainfo says Pennsylvania does not recognize aiding/abetting for mere breach of contract; claim duplicative of interference | Claim dismissed with prejudice: aiding/abetting breach-of-contract not a recognized tort absent underlying tort and is duplicative |
| Whether service on Vedainfo was untimely under Rule 4(m) and requires dismissal | Acclaim blames lack of address disclosure by Infosys and difficulties locating Vedainfo | Vedainfo asserts service untimely and no good cause for delay | No good cause shown, but court in its discretion extended service time to actual service date (case not dismissed) |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard: plausibility required)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (antitrust pleading and plausibility framework)
- Acumed LLC v. Advanced Surgical Servs., Inc., 561 F.3d 199 (Third Circuit on interference with prospective contracts and need for independently actionable wrong)
- Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (federal courts apply forum state choice-of-law rules)
- Petrucelli v. Bohringer & Ratzinger, 46 F.3d 1298 (good-cause standard under Rule 4(m))
- MCI Telecomm. Corp. v. Teleconcepts, Inc., 71 F.3d 1086 (factors for good-cause analysis under Rule 4(m))
- Windsor Sec., Inc. v. Hartford Life Ins. Co., 986 F.2d 655 ("breach of contract, without more, is not a tort")