Joshua David Mellberg LLC v. Will
4:14-cv-02025
| D. Ariz. | Jan 22, 2016Background
- JDM (Joshua David Mellberg, LLC) alleges former employees misappropriated proprietary marketing, advertising, call-center, and training materials developed over years and used them to launch competing services (Annuity Angel / Cashflow College).
- Individual defendants (former JDM employees) are alleged to have accessed, downloaded, transferred, or deleted JDM materials before or after leaving, and to have used identical/adapted PowerPoint slides, AdWords buys, scripts, call-center metrics, and client/agent lists.
- Impact Partnership (Georgia LLC) is accused of partnering with those ex-employees, hosting events at its office, using the misappropriated materials in its call center and through a related entity JFI/Annuity Angel, and receiving a cease-and-desist over client-list use.
- JDM asserted claims against Impact for: misappropriation of trade secrets (Arizona Uniform Trade Secrets Act), unfair competition, civil conspiracy, and aiding & abetting.
- Impact moved to dismiss under Rule 12(b)(6), arguing (1) JDM failed to plead particularized trade secrets or that Impact knew the materials were wrongfully acquired, and (2) JDM pleaded only collective/conclusory allegations and relied improperly on JFI (a separate entity).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether JDM sufficiently identified trade secrets | JDM alleges specific categories (AdWords/keyword strategies, email copy/timing, landing‑page components, call‑center metrics, advisor training/processes) and facts showing economic value and secrecy efforts | Impact says allegations are conclusory, describe only individual defendants/JFI conduct, and do not particularize trade secrets against Impact | Court: trade‑secret categories pleaded with sufficient particularity (court previously found training/materials adequate); decline to dismiss on identification ground |
| Whether JDM pleaded that Impact knew or should have known materials were improperly acquired | JDM points to timeline (contacts before/after departures), data transfers/forensic wipes, identical AdWords purchases, events at Impact’s office, use of identical slides, cease‑and‑desist letter, and that employees signed confidentiality agreements | Impact contends JDM shows only that ex‑employees/JFI acted improperly, not that Impact had actual or constructive knowledge; JFI is separate | Court: circumstantial “web” of allegations plausibly shows Impact knew or had reason to know and that it used misappropriated secrets; claim survives pleading stage |
| Whether JFI’s separate corporate form defeats liability for Impact | JDM: Impact used JFI as an instrumentality, directly participated in conspiracy and use of the materials; not relying solely on vicarious liability | Impact: JFI is a separate entity and JDM points to JFI conduct, not Impact’s direct acts | Court: plausibly alleged that Impact directly participated and used the materials (events at its address, call‑center activity); corporate separation does not mandate dismissal at this stage |
| Adequacy of claims for unfair competition, conspiracy, and aiding & abetting | JDM incorporates prior factual allegations and pleads these claims in the alternative; alleges Impact aided, conspired, and substantially assisted wrongful use | Impact argues these counts are conclusory and fail to attribute specific wrongful acts to Impact beyond collective allegations | Court: because misappropriation claim plausibly pleaded and factual allegations tie Impact to the scheme, the ancillary claims likewise survive dismissal |
Key Cases Cited
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (pleading must be plausible)
- Ashcroft v. Iqbal, 556 U.S. 662 (legal conclusions not entitled to assumption of truth)
- Telesaurus VPC, LLC v. Power, 623 F.3d 998 (plausibility standard discussion)
- MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511 (plaintiff must identify trade secrets)
- Imax Corp. v. Cinema Technologies, Inc., 152 F.3d 1161 (describe trade secret with sufficient particularity)
- Jack Russell Terrier Network v. American Kennel Club, 407 F.3d 1027 (court cannot assume facts not alleged)
- Wells Fargo Bank v. Arizona Laborers, Teamsters and Cement Masons, 38 P.3d 12 (elements for aiding and abetting / civil conspiracy)
- Phoenix Children’s Hospital, Inc. v. Grant, 265 P.3d 417 (employee knowledge imputed to employer in some contexts)
- Amedisys Holding, LLC v. Interim Healthcare of Atlanta, Inc., 793 F. Supp. 2d 1302 (employee use of stolen trade secrets can be imputed where used in scope of employment)
Decision: Magistrate Judge recommends DENYING Impact Partnership’s motion to dismiss the Second Amended Complaint; the trade‑secret and related claims were plausibly pleaded and should proceed to discovery.