300 F. Supp. 3d 718
D. Maryland2018Background
- Adobe (Inc. and Adobe Federal) sues former employee John Gardiner and entities Open Market Energy (OME), Plurality Energy (Plurality), and VAR Solutions for a scheme in which Gardiner allegedly funneled confidential Adobe Connect sales opportunities to Plurality and other resellers and received payments through OME/VAR. Adobe seeks damages under multiple theories including breach of fiduciary duties, breach of contract, fraud, aiding and abetting, and civil conspiracy.
- Gardiner was a Public Sector sales rep responsible for Adobe Connect opportunities; Plurality was approved as an Adobe Connect reseller in 2012 after meetings Gardiner organized. Adobe alleges Gardiner did not disclose his roles/interests in Plurality/OME/VAR and answered conflicts questionnaires in the negative.
- Adobe Connect resellers may register deals in a Salesforce database to receive up to 20% deal registration commissions; Adobe alleges Gardiner shared confidential internal bid information with Plurality so it could register deals it did not earn, resulting in over $5 million paid to Plurality.
- Adobe alleges kickbacks were funneled back to Gardiner via VAR Solutions invoices and transfers to OME or investments; Plurality allegedly received loans from OME before reseller approval and received later transfers to compensate Gardiner.
- Defendants moved to dismiss under Fed. R. Civ. P. 12(b)(6) and Rule 9(b). The court evaluated (1) whether Maryland recognizes an independent tort for breach of fiduciary duty and (2) the sufficiency/particularity of fraud, aiding-and-abetting, conspiracy, and contract-based claims, including choice-of-law for implied covenant claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Adobe may plead an independent tort claim for breach of fiduciary duty (Count I) | Kann permits fiduciary-duty-based causes of action when a specific fiduciary relationship and specific breaches are alleged | Maryland does not recognize a standalone omnibus tort for breach of fiduciary duty | Dismissed Count I as an omnibus fiduciary claim; but specific fiduciary-duty claims (loyalty, confidentiality) may proceed |
| Breach of duty of loyalty and confidentiality / Aiding & abetting (Counts II–IV) | Gardiner owed and breached duties by concealing conflicts and sharing confidential deal information; Plurality and VAR aided and abetted by receiving and returning proceeds | Defendants argue Maryland limits independent fiduciary torts and lack of sufficient allegations tying third parties to breaches | Court allowed claims for breach of loyalty/confidentiality against Gardiner; aiding-and-abetting plausible as to Plurality and VAR but not as to OME |
| Breach of implied covenant of good faith and fair dealing (Count VII) | Adobe asserts implied-covenant breaches in Gardiner's employment agreement and Plurality's reseller agreement | Defendants say Maryland doesn’t recognize this as independent; choice-of-law disputes over governing law | Claim dismissed as to Gardiner (no showing California law governs his Employment Agreement); claim survives as to Plurality because the Reseller Agreement contains a California choice-of-law clause |
| Fraud and civil conspiracy (Counts VIII & IX) | Adobe pleads Gardiner and Plurality knowingly made false representations (fraudulent deal registrations) and conspired with others to defraud Adobe; alleges emails, dates, and specific interactions | Defendants move under Rule 9(b) for failure to plead fraud with particularity; OME says no facts show it made misrepresentations or that Gardiner acted for OME | Fraud and conspiracy claims survive as to Gardiner and Plurality (particularized allegations, e.g., emails and dates). Claims against VAR and OME dismissed for lack of specific factual allegations linking them to fraudulent acts or agency participation |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (standards for plausibility on a motion to dismiss)
- Bell Atlantic v. Twombly, 550 U.S. 544 (plausibility pleading standard)
- Kann v. Kann, 344 Md. 689 (Maryland: no omnibus tort for breach of fiduciary duty; specificity required)
- Alleco, Inc. v. Harry & Jeanette Weinberg Foundation, Inc., 340 Md. 176 (aiding-and-abetting requires underlying tort; conspiracy requires underlying fraud)
- Windesheim v. Larocca, 443 Md. 312 (civil conspiracy may be proved circumstantially)
- United States ex rel. Wilson v. Kellogg Brown & Root, Inc., 525 F.3d 370 (Rule 9(b) ‘who, what, when, where, and how’ of fraud pleading)