American Center for Excellence in Surgical Assisting Inc. v. Community College District 502
190 F. Supp. 3d 812
N.D. Ill.2016Background
- ACE, an ABSA-accredited surgical assistant program operator, alleges College of DuPage (COD) and District 502 solicited ACE’s curriculum, proprietary Self-Study Report, and other materials while negotiating a joint program partnership beginning Nov. 2013.
- COD officials (Cameron, Solt, Cabai) exchanged proposals, attended ACE’s Skill-Lab, requested ACE materials and assistance (including Blackboard integration and budget justification) and received ACE’s Consortium Proposal and a signed (by ACE) Consortium Agreement dated May 5, 2014.
- COD informed ACE on Sept. 8, 2014 that it would not partner with ACE; COD later (April 2015) launched a surgical assistant program whose course numbers and content duplicated ACE’s materials.
- ACE sued (diversity) alleging breach of contract (Count I), unjust enrichment (Count II), fraud (Count III), ITSA misappropriation (Count IV), conversion (Count V), and promissory estoppel (Count VI).
- Defendants moved to dismiss under Rule 12(b)(6). The court denied dismissal of the breach of contract and ITSA misappropriation and fraud claims, but granted dismissal (without prejudice) of unjust enrichment, conversion, and promissory estoppel as preempted by the Illinois Trade Secrets Act (ITSA).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of an enforceable contract (Count I) | ACE alleges offer, acceptance (email communications and Cabai’s "ready to move forward"), consideration, and a Consortium Agreement that memorialized terms. | No signed bilateral contract by COD; attached Consortium Agreement signed only by ACE and thus not accepted/operative. | Court: Allegations plausibly plead a contract (acceptance may be in Dec. 2013 email or April 23 email); breach claim survives. |
| Trade-secret misappropriation under ITSA (Count IV) | ACE alleges specific proprietary materials (catalog, curriculum, Self-Study Report, Skill-Lab info) and reasonable secrecy measures (requests for NDA, limited disclosures, Consortium Agreement confidentiality clause). | COD argues ACE took insufficient measures (no signed NDA attached) so information lacks reasonable secrecy. | Court: At pleading stage, reasonable efforts plausibly alleged; ITSA claim survives. |
| Whether ITSA preempts common-law claims (Counts II, V, VI) | ACE says common-law claims are available and not necessarily displaced; urges not to follow Spitz/Pope reasoning. | Defendants: ITSA displaces claims that are essentially trade-secret misappropriation; unjust enrichment, conversion, promissory estoppel rely solely on alleged trade-secret theft. | Court: Follows Seventh Circuit (Spitz, Hecny) — unjust enrichment, conversion, and promissory estoppel are preempted because they rest on the same trade-secret allegations; dismissed without prejudice. |
| Fraud claim (Count III) — preemption question | ACE alleges defendants knowingly misrepresented intent to partner, inducing ACE to provide not only proprietary documents but also labor, expertise, and expenses (e.g., Blackboard integration). | Defendants: Fraud is merely repackaged trade-secret claim and therefore preempted. | Court: Fraud survives because allegations encompass inducement to provide broader knowledge, labor, and expenditures beyond mere trade-secret disclosure. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading plausibility standard foundational)
- Spitz v. Proven Winners N. Am., LLC, 759 F.3d 724 (7th Cir. 2014) (ITSA preemption of common-law claims that are essentially trade-secret misappropriation)
- Hecny Transp., Inc. v. Chu, 430 F.3d 402 (7th Cir. 2005) (ITSA preempts claims that rest on misappropriation; claims survive if independent of trade-secret misappropriation)
- Learning Curve Toys, Inc. v. PlayWood Toys, Inc., 342 F.3d 714 (7th Cir. 2003) (reasonable secrecy measures for trade-secret protection typically a jury question)
- Clarendon Nat’l Ins. Co. v. Medina, 645 F.3d 928 (7th Cir. 2011) (contract formation requires offer, acceptance, consideration)