Executive Security Management Inc. v. Dahl
2011 U.S. Dist. LEXIS 132538
C.D. Cal.2011Background
- Plaintiffs Apex and CSC filed suit in 2008 alleging Dahl and Johnson, former Apex/CSC employees, engaged in acts to help Populous compete.
- Dahl (Apex officer) and Johnson (CSC director) resigned in Feb 2008 and joined Populous, taking confidential materials with them.
- Plaintiffs allege misrepresentations to NFL and PGA, plus unauthorized data access, data erasure, and misappropriation of funds to lure employees.
- Populous is a competitor providing event management and credentialing services; DJ Johnson and Dahl allegedly acted to benefit Populous.
- In 2011, the parties stipulated to dismiss some claims; the SAC remained with ten claims, later narrowed by motions for summary judgment.
- The court evaluated Johnson’s and Populous’s summary judgment motions on the remaining claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of fiduciary duty by Dahl/Johnson | Dahl breached duties by self-dealing and misusing Apex funds. | No breach; business judgment rule insulates decisions. | Triable issue as to breach; denial of Johnson’s SJ as to claim 1. |
| Conversion of Apex property | Overpayments and data/prop erty misappropriation by Dahl/Johnson convert Apex assets. | Insufficient specificity and causation for conversion against each defendant. | Triable issue as to Dahl; Populous entitled to SJ on its conversion claim. |
| Intentional interference with contract (Dahl/Johnson) | Dahl/Johnson interfered with Yucaipa contracts by misrepresentations. | Burkle/ Renzi decision to terminate contract independent of alleged acts; no causal link. | Johnson SJ granted as to third claim. |
| Intentional interference with prospective economic advantage (Dahl/Johnson) | Dahl/Johnson’s acts disrupted NFL, PGA, NCAA relationships and economic expectancies. | Actions not independently wrongful or not proven to disrupt relationships. | Partial denial; some claims survive as to NFL/PGA, others dismissed. |
| Agency/ratification of Populous liability for Dahl/Johnson's pre-resignation acts | Agency or ratification imputed Dahl/Johnson’s pre-resignation acts to Populous. | No agency or ratification proven; Populous not liable for pre-resignation acts. | Populous not liable; claims limited to Dahl/Johnson; agency theory rejected. |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment burden shifting; movant must show absence of genuine dispute)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (genuine issue of material fact necessary for trial)
- PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP, 150 Cal.App.4th 384 (Cal.Ct.App.2007) (conversion elements; required causal connection to damages)
- Kirwan v. Public Utility Comm’n, 39 Cal.3d 111 (Cal. 1985) (elements of interference with prospective economic advantage; actual disruption required)
- Zenith Radio Corp. v. Bear *Stearns & Co., 475 U.S. 574 (1986) (inference from underlying facts view favorable to nonmovant; summary judgment standard)
- Bunnell v. Mot. Picture Ass’n of Am., 567 F. Supp. 2d 1148 (C.D. Cal. 2007) (Wiretap Act forwardings not actionable as interception under statute)
- Theofel v. Farey-Jones, 359 F.3d 1066 (9th Cir. 2004) (authorization to access vs. access to unauthorized information; ECPA)
- Stefanchik v. FTC, 559 F.3d 924 (9th Cir. 2009) (non-movant must show more than bald assertions)
- Creative Computing v. GetLoaded.com LLC, 386 F.3d 930 (9th Cir. 2004) (economic damages in CFAA context include lost business/goodwill)