MEMORANDUM AND ORDER
Alliantgroup, L.P., a Texas limited partnership, sued its former employee, Jeffrey Feingold, a Massachusetts citizen, in Texas state court. Feingold removed to this court on the basis of diversity jurisdiction. (Docket Entry No. 1). Alliantgroup asserted causes of action for breach of contract, breach of fiduciary duty, conversion, tortious interference, civil conspiracy, misappropriation of trade secrets, and violations of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030. (Docket Entry No. 46).
Feingold’s Employment Contract with Alliantgroup contained noncompetition, nonsolicitation, and nondisclosure provisions. Alliantgroup alleged that Feingold violated these contract provisions when he left Alliantgroup and went to work for a competitor, Kahn, Litwin, Renza
&
Co. (“KLR”), which is based in Rhode Island. Alliantgroup also alleged that Feingold took customer lists and confidential or proprietary information and disclosed that information to KLR. On May 11, 2009,
Feingold has moved for summary judgment on Alliantgroup’s claims. (Docket Entry No. 80). Alliantgroup responded and requested a continuance to take Feingold’s deposition. (Docket Entry No. 83, 85). Feingold opposed the request for continuance. (Docket Entry No. 86). This court granted the continuance and ordered Feingold to determine whether he had any customer lists from Alliantgroup. (Docket Entry No. 87). Feingold responded that he had no customer lists from Alliantgroup. (Docket Entry No. 88). Alliantgroup supplemented its response, (Docket Entry No. 89), and Feingold replied, (Docket Entry No. 90).
Based on the record; the motion, the response, the supplemental response, and the reply; and the relevant law, this court grants Feingold’s motion for summary judgment in part and denies it in part. A status conference is set for April 8, 2011 at
The reasons for these rulings are explained below.
I. Background 1
Alliantgroup is a national tax consulting firm based in Houston, Texas. Feingold was employed by Alliantgroup as a salesman working primarily in Massachusetts, Rhode Island, and New York from 2006 to January 2009. Feingold signed an Employment Agreement containing a covenant not to compete, a nondisclosure provision, and an agreement to return his $25,000 retention bonus if he voluntarily resigned from Alliantgroup. The noncompete provides:
(a) Covenant to Not Solicit: During the Employment Term and until the date twelve months following the date FEINGOLD ceases to be employed by ALLIANTGROUP for any reason (the “Restricted Period”), FEINGOLD shall not in Massachusetts, whether on FEINGOLD’S own behalf or on behalf of or in conjunction with any person, firm, partnership, joint venture, assoeiation, corporation or other business organization, entity or enterprise whatsoever (“Person”), directly or indirectly solicit or assist in soliciting in competition with ALLIANTGROUP’s business any service which ALLIANT GROUP provides its actual Clients or prospective Clients at the time of termination.
(b) Covenant to Not Compete: During the Restricted Period, FEINGOLD shall not directly or indirectly:
(i) engage in any business that competes with the Business (or any businesses that ALLIANTGROUP or its affiliates conduct or have taken significant steps toward conducting at the time of FEINGOLD’S termination of employment) within the State of Massachusetts (a “Competitive Business”);
(ii) enter the employ of, or render any services to, or enter into any contractual agreement or relationship with any Person (or any division or controlled or controlling affiliate of any Person) that engages in a Competitive Business within the State of Massachusetts;
(in) acquire a financial interest in, or otherwise become actively involved with,any Competitive Business, directly or indirectly, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant or transfer any business to, or in any other way facilitate any other Person’s ability to engage in a Competitive Business within the State of Massachusetts; or
(iv) interfere with, or attempt to interfere with, business relationships (whether formed before, on or after the date of this Agreement) between ALLIANTGROUP or any of its affiliates and customers, Clients, referring CPAs, suppliers, partners, members, investors, vendors or payors of ALLIANTGROUP....
(e) Non-Solicitation of Contractors: During the Restricted Period, FEINGOLD will not, directly or indirectly, solicit or encourage any consultant then under contract with ALLIANTGROUP or its affiliates or any referring CPAs to cease working with or referring business to ALLIANTGROUP or its affiliates.
(Docket Entry No. 81, Ex. A-l at 7-8).
While at Alliantgroup, Feingold marketed Research and Development Tax Credit Studies. Under § 41 of the Internal Revenue Code, taxpayers are entitled to tax credits for expenses related to research and development. 26 U.S.C. § 41; 26 C.F.R. § 1.41-4;
Trinity Indus., Inc. v. United States,
On January 6, 2009, Feingold traveled to New York to “pitch” Alliantgroup’s R & D Tax Credit services to Mini-Circuits. Feingold reported back to Alliantgroup. “First Margolin Winer client mtg today ... They will sign [the engagement letter] next couple days (want kickoff call Tuesday) ... $200K-$700K credit. (Docket Entry No. 85, Ex. A3 (ellipses in original)). The record does not show, however, that this business was certain. “I was a salesman,” Feingold testified at the preliminary injunction hearing on April 28, 2009. (Docket Entry No. 56 at 26). “I always thought something was going to close the next day.... I met the client once for an hour, there was a potential opportunity there, I got very excited about it. It was — the assessment that it was going to close sooner rather than later or — or definitely going to close versus not close at all was nothing more than that — that salesman’s enthusiasm.” (Id.).
On January 9, 2009, a few days after his meeting with Mini-Circuits, Feingold announced his resignation to Alliantgroup, effective January 16. (Docket Entry No. 85, Ex. A-5). Feingold committed to help in the transition of his work to others at the firm. Feingold wrote:
I have a number of outstanding proposals, as well as a few upcoming meetings, and I’ll be happy to work with you ... to help transition these. Also, I’ll be happy to make some time, if needed, even after my exit date, to help ease the transition. I think we cah make this a fairly seamless transition, though, and I’ll be happy to help make that work to the best of my ability. I trust that you both know, from our time working together, that you can expect me to manage this change in a friendly and professional way.
(Id.).
Feingold accepted a position at KLR, which also did tax consulting work. KLR and Alliantgroup had worked together on
The next day, Saturday, January 10, Feingold wrote in an e-mail to two other Alliantgroup employees, Sonny Grover and Dhaval Jadav, that he expected the Mini-Circuits deal to “close Monday/Tuesday this week.” (Docket Entry No. 85, Ex. A-6). Feingold started working for KLR on January 19. On February 8, Feingold spoke to Terry Strassberg at the Margolin CPA Firm. Feingold e-mailed Bob D’Andrea and Paul Oliviera, coworkers at KLR, about his conversation:
I just got a call from Terry Strassberg, a Partner at [Margolin] in NY. I’d done an R & D CPA for Terry’s firm recently. I also reviewed tax returns, identified perhaps a half dozen (give or take) R & D credit opportunities, and met with one of them, Mini-Circuits. Probably a big credit. Terry reported that he met with David Mayer, my alliant counterpart in NY, but the firm wasn’t impressed. He’d like to consider partnering with KLR for Margolin’s R & D work.
Although my non-compete is specifically for MA, we have to consider any potential risk from ‘interference’ with alliantgroup relationships in other states. That said, Margolin clearly isn’t going to work with Alliant going forward, regardless of potential involvement of KLR or not.
Terry would like to have a conference call with us ASAP — he’s going to make a recommendation to his client, Mini-Circuits asap....
Please see attached list of clients under consideration for R & D at Margolin — 4 strong candidates, about a half dozen more possible.
(Id., Ex. A-7). The e-mail was produced in this litigation without an attachment. Feingold testified that his references to reviewing tax returns, identifying R & D credit opportunities, and meeting with Mini-Circuits were to activities undertaken while he was an Alliantgroup employee. Feingold testified that he could not recall whether he had created a list of Margolin clients. Had he created such a list, he asserts that it would have been generated from his conversation with his contact at Margolin, after he left Alliantgroup. (Docket Entry No. 56 at 79).
The same day, February 3, 2009, Feingold received an e-mail from Alliantgroup’s general counsel stating that Feingold was in breach of his agreement. On February 4, 2009, Alliantgroup sued Feingold in Texas state court, seeking a temporary restraining order and expedited discovery. A hearing was scheduled for February 5, 2009. Shortly before the hearing, Feingold retained a Houston attorney for the limited purpose of representing him at the hearing. Coe appeared at the hearing on Feingold’s behalf and opposed Alliantgroup’s requests for a temporary restraining order and expedited discovery. The state court judge denied Alliantgroup’s request for a temporary restraining order but granted expedited discovery. The court ordered Feingold to appear in Houston for his deposition on or before February 11, 2009 and scheduled a temporary injunction hearing for February 20, 2009.
On February 6, Alliantgroup noticed Feingold’s deposition for February 11 in
Feingold then retained a Massachusetts lawyer, Christopher Bell, to represent him in the Texas litigation. On February 10, Bell wrote Alliantgroup and expressed his surprise that it had not agreed to the requested deposition changes “as a matter of professional courtesy.” (Docket Entry No. 10, Ex. D). Bell told Alliantgroup that Feingold intended to file a “complaint with the Massachusetts Attorney Generals Office regarding Alliantgroup’s violations of Massachusetts law.... Alliantgroup could be subject to criminal and civil forfeitures ----” (Id.). Bell stated that although he could not prevent Feingold from filing this complaint, he believed Feingold “would be willing to delay filing it in an attempt to settle this case amicably” and that “[a]t a minimum, it would behoove all parties to delay the deposition.” (Id.).
On February 10, 2009, the Houston attorney moved to withdraw as counsel for Feingold. The state court judge took the motion under advisement.
Feingold did not appear in Houston for his February 11 deposition. His Houston lawyer informed Alliantgroup that Feingold’s position was that he “did not understand that he had to appear in person for his deposition.” (Docket Entry No. 10, Ex. E). Alliantgroup noticed the deposition again, for February 13. (Docket Entry No. 33, Ex. C). On February 12, 2009, Feingold moved to quash because he had “family, medical, and professional obligations that ma[de] it impossible for him to attend his deposition in Houston, Texas.” (Id.). Feingold did not appear for the deposition noticed for February 13 in Houston. On February 16, 2009, Alliantgroup moved to compel Feingold’s deposition and for sanctions, including contempt. The state court scheduled a show-cause hearing for February 20, 2009. On February 16, 2009, Feingold moved to continue the February 20, 2009 hearing. (Docket Entry No. 33, Ex. D). On February 18, 2009, Feingold removed to federal court. (Docket Entry No. 1). Two days later, he filed a motion for extension of time to file an answer because he was retaining new counsel. (Docket Entry No. 8). Alliantgroup moved to remand, (Docket Entry No. 10), and Feingold responded, (Docket Entry No. 15). At a hearing held on February 27, 2009, this court allowed Bell to substitute in as counsel for Feingold. (Docket Entry No. 16). This court granted Feingold’s motion for extension of time to answer.
This court denied Alliantgroup’s motion to remand. Alliantgroup moved to expedite discovery. (Docket Entry No. 20). Feingold responded, (Docket Entry No. 25), and filed an answer to the complaint and a counterclaim, (Docket Entry No. 27). On March 23, 2009, this court held a hearing on Alliantgroup’s motion to expedite discovery. (Docket Entry No. 28). Feingold appeared via telephone and opposed the motion. (Id.). This court granted Alliantgroup’s motion to expedite discovery, ordered Feingold to appear for his deposition in Houston, Texas on April 25 or 26, 2009, and scheduled a temporary injunction hearing for April 28, 2009. (Id.).
On April 28, 2009, at the hearing on Alliantgroup’s application for an injunction against Feingold’s working for KLR, this court ruled that the covenant not to com
On January 11, 2010, Alliantgroup moved to have Feingold held in contempt for violating the preliminary injunction. (Docket Entry No. 70). Alliantgroup alleged that Feingold violated the injunction by directly soliciting Garlock Printing and Converting Corporation, a company he had solicited R & D Tax Credit business from while at Alliantgroup. Alliantgroup supplemented its motion for contempt to add an allegation that Feingold had violated the injunction by founding a company to provide R & D Tax Credit studies and by marketing his R & D Tax Credit services to a CPA firm located in Massachusetts. (Docket Entry No. 71).
Feingold filed an opposition to the motion for contempt, (Docket Entry No. 73). Feingold denied that he had solicited an Alliantgroup client on January 6. He admitted that he contacted the Massachusetts CPA firm on January 11, but claimed he mistakenly believed that the injunction on client solicitation expired on January 11, not January 13, 2010. This court denied the motion for contempt. (Docket Entry No. 87).
Feingold then moved for summary judgment on Alliantgroup’s claims. (Docket Entry No. 80). Alliantgroup responded and requested a continuance to take Feingold’s deposition. (Docket Entry No. 83, 85). Feingold opposed the request for continuance. (Docket Entry No. 86). This court granted the continuance and ordered Feingold to determine whether he had any customer lists from Alliantgroup. (Docket Entry No. 87). Feingold responded that he had no customer lists from Alliantgroup. (Docket Entry No. 88). Alliantgroup supplemented its response, (Docket Entry No. 89), and Feingold- replied, (Docket Entry No. 90).
II. The Summary Judgment Standard
Summary judgment is appropriate if no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed. R. Crv. P. 56(a). “The movant bears the burden of identifying those portions of the record it believes demonstrate the absence of a genuine issue of material fact.”
Triple Tee Golf, Inc. v. Nike, Inc.,
If the burden of proof at trial lies with the nonmoving party, the movant may satisfy its initial burden by “ ‘showing’ — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party’s case.” See
Celotex,
When the moving party has met its Rule 56(a) burden, the nonmoving party cannot survive a summary judgment motion by resting on the mere allegations of its pleadings. The nonmovant must identify specific evidence in the record and articulate how that evidence supports that party’s claim.
Baranowski v. Hart,
III. Analysis
A. Breach of Contract
1. The Enforceability of the Employment Agreement
Feingold first argues that the Employment Agreement he signed at Alliantgroup is unenforceable under the statute of frauds because the parties did not extend it in writing. Feingold signed the Employment Agreement on September 9, 2007. The Employment Agreement states:
The term of this agreement shall be effective from August 6, 2007 to August 6, 2008, unless otherwise terminated in accordance with the terms of this Agreement. At the end of this term, should the parties mutually consent to continue the employment relationship, then this Agreement (including all terms and conditions found herein) shall continue indefinitely until this Agreement is terminated by one or the parties by providing fourteen (14) days written notice. Mutual consent of the parties shall be inferred if the employment relationship continues past August 6, 2008, without either party providing notice of termination.
(Docket Entry No. 81, Ex. A-l at 1).
Feingold relies on
Farone v. Bag’n Baggage, Ltd.,
2. Breach of the Covenant Not to Compete
Feingold contends that Alliantgroup cannot obtain damages for breach of the noncompetition clause because this court reformed it in entering the injunction. Under Texas law, “the procedures and remedies in an action to enforce a covenant not to compete provided by Sec
Alliantgroup may seek damages only under section 15.51(c). That section precludes damages for violation of a clause that had to be reformed to -be enforceable. This limit applies to damages for breaches that occurred before or after reformation.
See Butler v. Arrow Mirror & Glass, Inc.,
At the April 28, 2009 temporary injunction hearing, this court ruled that the covenant not to compete was over-broad. (Docket No. 56 at 173-75). The court then reformed the covenant not to compete in accordance with Texas law. Under section 15.51(c), the cases interpreting it, and the evidence in this record, Alliantgroup is not entitled to damages for Feingold’s alleged breach of the noncom-petition covenants in his Employment Agreement. Feingold’s motion for summary judgment on Alliantgroup’s claim for damages for breach of contract is granted. 2
Alliantgroup also claims that Feingold breached the Employment Agreement by disclosing Alliantgroup’s confidential information and client data. “[A] non-disclosure agreement may be enforceable even if a covenant not to compete is not.”
Tom James of Dallas, Inc. v. Cobb,
The nondisclosure provision forbids disclosure of:
any non-public proprietary or confidential information — including without limitation trade secrets, know-how, research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals — concerning the past, current or future business, activities and operations of ALLIANTGROUP, its subsidiaries or affiliates and/or any third party that has disclosed or provided any of same to ALLIANTGROUP on a confidential basis (“Confidential Information”) without the prior written authorization of the senior management of ALLIANTGROUP.
(Docket Entry No. 85, Ex. A-8 at 9). Under the Employment Agreement,
“Confidential Information” shall not include any information that is (a) generally known to the industry or the public other than as a result of FEINGOLD’s breach of this covenant; (b) made legitimately available to FEINGOLD without confidentiality restriction by a third party without breach of any confidentiality obligation of that third party; or (c) required by law to be disclosed; provided that Feingold shall give prompt written notice to ALLIANTGROUP of such requirement, disclose no more information than is so required, and cooperate with any attempts by ALLIANTGROUP to obtain a protective order or similar treatment.
(Id.).
Alliantgroup asserts that Feingold has breached his contract by disclosing (1) Alliantgroup’s current and prospective client lists and contact information; (2) Alliantgroup’s pricing information; (3) contact information for Alliantgroup’s current and prospective CPA alliances; (4) information regarding the Mini-Circuits account; (5) information regarding Alliantgroup’s current and prospective CPA alliances; (6) information regarding the Mini-Circuits account; (7) information regarding the Seaman Paper Company of Massachusetts, Inc., account; (8) information regarding Alliantgroup’s marketing sales and business activities; and (9) information regarding the six to ten clients and/or prospective clients mentioned but not identified by
The essential elements of a breach of contract claim in Texas are: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach.
Aguiar v. Segal,
Alliantgroup’s claim must be dismissed because it has not raised a fact issue as to whether any breach of the nondisclosure agreement resulted in damages. Alliantgroup contends that it sustained damages because Mini-Circuits never signed an agreement with Alliantgroup after Feingold left. But Alliantgroup has neither identified nor submitted evidence that shows that any breach of the nondisclosure agreement caused Mini-Circuits not to contract with Alliantgroup. Feingold has submitted evidence that Mini-Circuits never became a KLR customer. His e-mail to his colleagues states that Margolin had already decided not to use Alliantgroup. Alliantgroup has provided no evidence to the contrary. Feingold is entitled to summary judgment on Alliantgroup’s claim for breach of the nondisclosure provision.
4. The Breach of Retention Bonus Provision
Alliantgroup also claims that Feingold breached the Employment Agreement by failing to repay the $25,000 retention bonus. Article VIII of his Employment Agreement states:
A. Bonus: ALLIANTGROUP will pay FEINGOLD the gross amount of [redacted] as a retention bonus within thirty (30) days after the Effective Date.
B. Refund: In the event that FEINGOLD voluntarily resigns his employment with ALLIANTGROUP for any reason or is terminated for cause as defined in Article VI of this Agreement, then FEINGOLD must repay ALLI-ANTGROUP the entire gross amount of the Retention Bonus provided in Article VIII, Paragraph A. FEINGOLD authorizes ALLIANTGROUP to withhold this amount from any monies due FEINGOLD at termination. Any amount not satisfied by this withholding must be paid by FEINGOLD within thirty (30) days of his termination.
(Docket Entry No. 85, Ex. A-8). The Employment Agreement required Feingold to forfeit his retention bonus if he “voluntarily resigns ... or is terminated for cause.”
Although Feingold moved for summary judgment on “all Mounts,” (Docket Entry No. 80 at 1), his motion does not address the retention bonus. Feingold characterized his departure as a “resignation” in his motion for summary judgment. (Id. at 5 (“Mr. Feingold resigned his position with the Plaintiff on January 13, 2009.”)). Feingold is not entitled to summary judgment on the retention-bonus claim.
B. The Trade Secret Misappropriation Claim
Feingold argues that the record does not raise a fact issue as to Alliantgroup’s misappropriation claim. According to Feingold, the names and contact information of Alliantgroup’s clients and pricing structure are not confidential, proprietary, or trade secret information because they are readily ascertainable or otherwise unprotected.
Texas law defines a “trade secret” as a “formula, pattern, device or compilation of information used in a business, which gives the owner an opportunity to obtain an advantage over his competitors who do not know or use it.”
Triple Tee Golf, Inc.,
To determine whether information is a trade secret protected from disclosure or use, a court must examine six “relevant but nonexclusive” criteria: “(1) the extent to which the information is known outside the business; (2) the extent to which it is known by employees and others involved in the business; (3) the extent of measures taken to safeguard the secrecy of the information; (4) the value of the information to him and to his competitors; (5) the amount of effort or money expended in developing the information; and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others.”
Gen. Universal Sys., Inc. v. Lee,
Courts in Texas identify trade secrets, proprietary information, and confidential information separately but provide them similar protection if the requirements — including that of secrecy — are met.
3
“Use” of a trade secret refers to
Under Texas law, customer lists may be protected as trade secrets.
See Sharma v. Vinmar Int’l, Ltd,
Alliantgroup argues that the list of Margolin clients is a trade secret. It is disputed whether Feingold had a list of Margolin clients after leaving Alliantgroup and, if he did, whether he created it while he was at Alliantgroup. In any event, it is undisputed that the Margolin client-list was very short, under 15 names, and that the information was limited, and that the names were “readily ascertainable” from Margolin. The record is insufficient to show that this list is confidential or proprietary.
Alliantgroup has a stronger argument that its pricing information is confidential or proprietary. But the record shows no basis to infer that Feingold disclosed that information to KLR or that KLR used that information to Alliantgroup’s disadvantage.
Alliantgroup has not raised a fact issue that it was damaged by Feingold’s disclosure of confidential or proprietary information. Such a showing is necessary for its misappropriation claim.
Speedemissions, Inc. v. Capital C Enters., Ltd.,
No. 01-07-00400-CV,
C. Conversion
Under Texas law, conversion is the wrongful exercise of dominion and control over another’s property, in a manner that denies or conflicts with the true owner’s rights.
Bandy v. First State Bank,
Although Texas courts have recognized claims for conversion “where the underlying intangible right has been merged into a document” such as a cus
D. Breach of Fiduciary Duty
Alliantgroup alleges that Feingold breached his fiduciary duty as an employee of Alliantgroup by failing to finalize an agreement with a potential client before he left the firm. Under Texas law, the elements of a breach of fiduciary duty claim are: (1) the plaintiff and defendant had a fiduciary relationship; (2) the defendant breached its fiduciary duty to the plaintiffs; and (3) the defendant’s breach resulted in injury to the plaintiff or benefit to the defendant.
Navigant Consulting, Inc. v. Wilkinson,
An agency relationship such as employer-employee imposes certain fiduciary duties on the parties.
Id.
Courts take all aspects of the relationship into consideration when determining the nature of the fiduciary duties between the parties.
Id.
In
Johnson v. Brewer & Pritchard, P.C.,
the Texas Supreme Court considered whether an associate lawyer at a law firm breached a fiduciary duty to his firm by referring a matter to another firm without obtaining a referral fee for his own employer.
An employee may prepare to go into competition with his employer before •resigning without breaching fiduciary duties owed to that employer.
Navigant,
Alliantgroup contends that Feingold breached his fiduciary duty by delaying the Mini-Circuits deal so that he could obtain that business for KLR. The record demonstrates that Feingold met with Mini-Circuits on January 6, 2008. He told his colleagues at Alliantgroup about the pending Mini-Circuits deal immediately after his January 6 meeting. Feingold stated in a January 10 email that he believed the Mini-Circuits deal would close within a few days. There is no evidence, and Alliantgroup does not contend, that Feingold disparaged the firm to Mini-Circuits or anyone else while he worked for Alliantgroup. Feingold began working at KLR nine days later, on January 19. There is no evidence that he spoke to anyone at Mini-Circuits or the Margolin CPA firm until February 3. And there is no evidence that Feingold disparaged Alliantgroup in his conversation with Strassberg, the Margolin partner, in his February 3 conversation. No evidence supports an inference that Mini-Circuits became a KLR customer or that Alliantgroup pursued the Mini-Circuits business after Feingold left the firm. Alliantgroup has not presented evidence that its employees attempted to close the Mini-Circuits deal and were rebuffed because of Feingold’s alleged delay. On this record, there is no basis for an inference that Feingold delayed closing a contract between Alliantgroup and Mini-Circuits so that he could obtain the business for KLR. The record does not present a genuine issue material to determining whether any action by Feingold caused Alliantgroup to lose business from Mini-Circuits or any other entity.
Feingold is entitled to summary judgment on this claim.
E. Tortious Interference with Prospective Economic Relations
To establish a claim for tortious interference with prospective business relations, a plaintiff must prove that: (1) there was a reasonable probability that the parties would have entered into a contractual relationship; (2) the defendant committed an “independently tortious or unlawful act” that prevented the relationship from occurring; (3) the defendant committed the act with a conscious desire to prevent the relationship from occurring or knew that the interference was certain or substantially certain to occur as a result of his conduct; and (4) the plaintiff suffered actual harm or damage as a result of the defendant’s interference — that is, that the defendant’s actions prevented the relationship from occurring.
Faucette v. Chantos,
A plaintiff seeking to recover for tortious interference with prospective business relationships must establish proximate causation and damages with evidence rising above mere suspicion or speculation.
See B. Cantrell Oil Co. v. Hino Gas Sales, Inc.,
F. Computer Fraud and Abuse Act
Alliantgroup brings a claim under 18 U.S.C. § 1030(g) of the Federal Computer Fraud and Abuse Act. The CFAA prohibits unauthorized access to a “protected computer” for purposes of obtaining information, causing damage, or perpetrating fraud.
Quantlab Techs. Ltd. (BVI) v. Godlevsky,
Alliantgroup alleges that a violation of the CFAA occurred when Feingold knowingly accessed at least one of Alliantgroup’s computers without authorization or exceeded his authorized access to obtain information about current and prospective clients, billing, relationships with CPA firms, or marketing materials. Alliantgroup cites access to a computer printout of Margolin, Winer & Evans client opportunities. Feingold moves for summary judgment on the CFAA claim because Alliantgroup has offered no evidence to support its allegations.
To state a civil claim under the CFAA, Alliantgroup must allege “loss to 1 or more persons during any 1-year period ... aggregating at least $5,000 in value.” See 18 U.S.C. § 1030(c)(4)(A)(l), (g). The CFAA defines loss as:
any reasonable cost to any victim, including the cost of responding to an offense, conducting a damage assessment, and restoring the data, program, system or information to its condition prior to the offense, and any revenue lost, cost incurred, or consequential damages incurred because of interruption of service.
Id.
§ 1030(e)(ll). The term “loss” encompasses only two types of harm: costs to investigate and respond to an offense, and costs incurred because of a service interruption.
Quantlab,
Alliantgroup does not allege or present evidence of any cognizable losses. It does not allege an interruption of services as a result of Feingold’s actions, or any costs incurred to investigate and respond to an interruptions or any service interruption. Feingold’s motion for summary judgment on Alliantgroup’s CFAA claim is granted.
G. Civil Conspiracy
The elements of civil conspiracy include (1) two or more persons; (2) an object to be accomplished; (3) a meeting of the minds on the object or course of action; (4) one or more unlawful, overt acts; and (5) damages as a proximate result.
Tri v. J.T.T.,
Civil conspiracy is a derivative tort.
See Meadows v. Hartford Life Ins. Co.,
IV. Conclusion
Feingold’s motion for summary judgment is granted except as to the claim that he failed to return a bonus. All claims except the breach of contract claim based on Feingold’s failure to repay the bonus are dismissed, with prejudice. A status conference is set for April 8, 2011, at 8:15 a.m. to address the only remaining claim. Counsel may participate by telephone.
Notes
. The summary judgment record includes: Feingold’s Employment Agreement with Alliantgroup, (Docket Entry No. 81, Ex. A-l; Docket Entry No. 85, Ex. A — 8); Feingold’s February 3, 2009 e-mail to Robert D'Andrea and Paul Oliveira, (Docket Entry No. 81, Ex. A-2; Docket Entry No. 88, Ex. F); this court’s memorandum and opinion reforming Feingold’s covenant not to compete, (Docket Entry No. 81, Ex. B); the transcript from the April 28, 2009 temporary injunction hearing before this court, (id., Ex. C; Docket Entry No. 85, Exs. B, F (excerpts); Docket Entry No. 88, Ex. E (excerpts); Docket Entry No. 89, Ex. B (excerpts)); the affidavit of Wes Bangerter, Managing Director of Finance and Administration for Alliantgroup, (Docket Entry No. 85, Ex. A); Feingold’s December 9, 2008 e-mail to Dhaval Jadav and Steve Ragow, (id., Ex. A-l); Feingold's December 3, 2008 e-mail to Rachael Boaz, (id., Ex. A-2); Feingold's January 6, 2009 e-mail to Steve Ragow and Joel Schwartz, (id., Ex. A-3); Alliantgroup 's proposed agreement with Mini-Circuits, (id., Ex. A — 4); Feingold's January 9, 2009 e-mail to Dhaval Jadav and Steve Ragow announcing his resignation, (id., Ex. A-5); Feingold’s January 10, 2009 e-mail to Sonny Grover and Dhaval Jadav, (id., Ex. A-6); and e-mail chain ending with Feingold’s January 10, 2009 e-mail to Sonny Grover and Dhaval Jadav, (id., Ex. A-6); Feingold’s February 3, 2009 e-mail to Robert D’Andrea and Paul Oliveira, (id., Ex. A-7); a second affidavit of Wes Bangerter, (id., Ex. C); Ronald Masiello’s January 7, 2010 e-mail to Steffanie Gunn, (id., Att. A-l); Alliantgroup's proposed agreement with Garlock Printing and Converting Corp., (id.); Feingold’s Linkedln profile, (id., Ex. D); Feingold's January 11, 2010 email to Laura DePalma, (id., Ex. E); Feingold’s affidavit, (Docket Entry No. 88, Ex. A); excerpts from Feingold’s deposition, (Docket Entry No. 89, Ex. A).
. Alliantgroup may, seek damages for contempt for violation of the injunction. See, e.g., Piggly Wiggly Clarksville, Inc. v. Mrs. Baird's Bakeries, 177 F.3d 380, 383 (5th Cir.1999). This court denied Alliantgroup’s previous motion for contempt. There is no motion for contempt before this court.
.
See, e.g., Gallagher Healthcare Ins. Servs. v. Vogelsang,
.
Gen. Universal Sys., Inc. v. HAL, Inc.,
.
See ADCO Indus. v. Metro Label Corp.,
No. 05-99-01128-CV,
.See also Crouch v. Swing Machinery Co.,
.
See also Jeter v. Associated Rack Corp.,
.
Ameristar Jet Charter, Inc. v. Cobbs,
.
See also Slaughter-Cooper v. Kelsey Seybold Med. Group P.A.,