Recoop LLC v. Outliers Inc. d/b/a Thesis Nootropics Inc.
1:24-cv-01810
S.D.N.Y.Apr 14, 2025Background
- Recoop LLC, an e-commerce company selling vitamin supplements, accused Outliers Inc. d/b/a Thesis Nootropics Inc. (Thesis) and its CEO Daniel Freed of unlawfully accessing and using Recoop’s trade secrets and customer data using website tracking pixels.
- Daniel Freed was a co-founder and officer of both companies during overlapping periods with the full knowledge and supervision of Recoop’s CEO, Anastasia Alt.
- The alleged improper access centered on setting up and using Google Tag Manager, Google Analytics, and Meta Pixels on Recoop’s website, allegedly without authorization, to benefit Thesis’s marketing strategy.
- A forensic examination by third-party expert Stroz Friedberg found no evidence that customer data or sensitive proprietary information was accessed, exported, or used by Thesis or Freed, and that Freed’s website work at Recoop was known and directed by Alt.
- Recoop brought claims for trade secret misappropriation under the Defend Trade Secrets Act (DTSA), violations of the Wiretap Act and California Invasion of Privacy Act (CIPA), and common law claims for unfair competition and unjust enrichment.
- The court granted summary judgment for Thesis, finding Recoop presented no evidence of unauthorized use, improper access, or misappropriation, and retained jurisdiction over potential sanctions and attorney's fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Misappropriation of trade secrets (DTSA) | Thesis improperly accessed and used Recoop’s proprietary data | No improper acquisition, use, or disclosure; actions authorized | No evidence of misappropriation |
| Wiretap Act / CIPA violations | Thesis intercepted customer communications via unauthorized pixels | No interception or contemporaneous acquisition; tracking tools harmless | No evidence of interception |
| Unfair competition | Thesis diverted Recoop’s business through misappropriation | No use or export of Recoop’s property or data | No wrongful diversion or use |
| Unjust enrichment | Thesis was enriched via improper use of Recoop’s information | No retention of property or enrichment at Recoop’s expense | No enrichment or unconscionability |
Key Cases Cited
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (clarifies standard for summary judgment—material facts and genuine disputes)
- Universal Instruments Corp. v. Micro Sys. Eng'g, Inc., 924 F.3d 32 (defines two elements of trade secret misappropriation)
- ITC Ltd. v. Punchgini, Inc., 880 N.E.2d 852 (New York unfair competition defined as wrongful use of plaintiff’s property)
- Mandarin Trading Ltd. v. Wildenstein, 944 N.E.2d 1104 (elements of unjust enrichment in New York law)
- Columbia Mem’l Hosp. v. Hinds, 192 N.E.3d 1128 (reiterates unjust enrichment standard in equity and good conscience)