PONY COMPUTER, INC., Appellant, v. EQUUS COMPUTER SYSTEMS OF MISSOURI, INC.; Equus Computer Systems, Inc.; Xiao Mei Zhou; Adam Jones; Benjamin Liu; Andy Juang; Der-Hisiang Hsueh; John Doe, Appellees.
No. 98-1108.
United States Court of Appeals, Eighth Circuit.
Dec. 11, 1998.
162 F.3d 991
Submitted June 12, 1998.
Nelson also challenges the district court‘s conclusion that Hudek is immune from suit on the state law battery charge. To qualify for official immunity under Minnesota law, the public official must be “charged by law with duties which call for the exercise of his judgment or discretion” and not be “guilty of a willful or malicious wrong.” Elwood v. County of Rice, 423 N.W.2d 671, 677 (Minn.1988) (citations and internal punctuation omitted). Police officers are generally classified as discretionary officers who may be entitled to official immunity. Johnson v. Morris, 453 N.W.2d 31, 42 (Minn.1990). The key issue here is whether, viewing the facts in the light most favorable to Nelson, Hudek committed a willful or malicious wrong.
The Minnesota Supreme Court has indicated that willful and malicious are synonymous in the official immunity context and mean “nothing more than the intentional doing of a wrongful act without legal justification or excuse, or, otherwise stated, the willful violation of a known right.” Rico v. State, 472 N.W.2d 100, 107 (Minn.1991) (citations and footnote omitted). This is a subjective standard, in contrast to the objective qualified immunity standard. See Elwood, 423 N.W.2d at 676-79 (declining to follow federal precedent which eliminated the subjective good faith component for immunity). Nelson has not produced any evidence to suggest that Hudek did not believe that his personal safety was in jeopardy or that he intended to violate Nelson‘s rights. On the basis of this record, Hudek is entitled to official immunity under state law and the county is relieved of any potential vicarious liability. See, e.g., Kari v. City of Maplewood, 582 N.W.2d 921 (Minn.1998).
For these reasons, the judgment is affirmed.
Charles L. Joley, Bellville, IL, argued, for Appellee.
Before HANSEN and MORRIS SHEPPARD ARNOLD, Circuit Judges, and PANNER,1 District Judge.
HANSEN, Circuit Judge.
Pony Computer, Inc. (Pony) appeals the transfer of this diversity case from the United States District Court for the Northern District of Ohio2 to the United States District Court for the Eastern District of Missouri. Pony also appeals the district court‘s3 dismissal of three of its claims for failure to state a claim upon which relief could be granted, see
I.
Pony is an Ohio corporation, maintaining its computer system and data in Solon, Ohio, with a branch operation in St. Louis, Missouri. Defendant Equus Computer Systems of Missouri, Inc. (Equus of Missouri) is a Minnesota corporation with its principal place of business in St. Louis, Missouri. Defendant Equus Computer Systems, Inc. (Equus) is also a Minnesota corporation with its principal place of business in St. Paul, Minnesota.
Andy Juang, a Minnesota resident, started Equus in 1992 when he bought out Pony‘s St. Paul branch. Equus opened an office in St. Louis in December 1995. Juang hired Xiao Mei Zhou, a Missouri resident, in October 1995 to work in the St. Louis branch, beginning formal employment December 1, 1995. At the time, Zhou was employed in Pony‘s Return Merchandise Authorization (RMA) department as a data entry clerk. Zhou performed some initial tasks to open Equus of Missouri‘s St. Louis branch during the end of November 1995, including: advertising for employees in the St. Louis Post-Dispatch; using her home address and phone number to purchase and receive computer equipment; and contacting former Pony employees about potential employment with Equus. Some of this work was performed while Zhou was on the job at Pony, including a one-time use of Pony‘s fax machine and the furnishing of her work phone number to the Post-Dispatch as a contact number. In conjunction with Zhou‘s clerical responsibilities at Pony, she had limited access to Pony‘s computer files, which she accessed with a password, including customer invoices, shipping records, receiving records, credit records, and on-site warranty records. Adam Jones, a resident of Missouri, is also a former Pony employee in its shipping and warehouse department who left to work for Equus of Missouri. He likewise had limited access to Pony‘s computer files, via a password, including shipping records and customer payment records in the warehousing department.
Pony originally filed this diversity case in federal court in Ohio against Equus, Equus of Missouri, Zhou, Jones, Juang and two
II.
A. Transfer and Choice of Law Rules
Initially, Pony appeals the transfer by the United States District Court for the Northern District of Ohio to the United States District Court for the Eastern District of Missouri. We lack jurisdiction to review this transfer because it was made by a district court outside the Eighth Circuit.
Pony argues that the law of Ohio should govern this case. We disagree. The United States District Court for the Northern District of Ohio transferred the case for improper venue pursuant to
The Supreme Court of Missouri adopted the principal contacts rule of section 145 of the Restatement (Second) of Conflict of Laws (1971) for choice of law problems in tort actions. See Kennedy v. Dixon, 439 S.W.2d 173, 184 (Mo.1969) (en banc); D.L.C. v. Walsh, 908 S.W.2d 791, 794 (Mo.Ct.App.1995). In conflicts cases, the forum state will apply its own procedural rules but must apply substantive law based on its conflicts of law doctrine. D.L.C., 908 S.W.2d at 794.
Section 145 of the Restatement (Second) provides:
(1) The rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties under the principles stated in § 6.
(2) Contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include:
(a) the place where the injury occurred,
(b) the place where the conduct causing the injury occurred,
(c) the domicil, residence, nationality, place of incorporation and place of business of the parties, and
(d) the place where the relationship, if any, between the parties is centered.
These contacts are to be evaluated according to their relative importance with respect to the particular issue.
Section 145 provides direction in the application of the general principles found in section 6, which are the heart of the choice of law considerations. D.L.C., 908 S.W.2d at 795; Greco v. Anderson, 615 S.W.2d 429, 432 (Mo.Ct.App.1980). Section 6 sets forth the general principles as follows:
(1) A court, subject to constitutional restrictions, will follow a statutory directive of its own state choice of law.
(2) When there is no such directive, the factors relevant to the choice of the applicable rule of law include
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the relevant interests of those states in the determination of the particular issue,
(d) the protection of justified expectations,
(e) the basic policies underlying the particular field of law,
(f) certainty, predictability and uniformity of result, and
(g) ease in the determination and application of the law to be applied.
The defendants’ actions of which Pony complains—including accessing and taking computer information, providing confidential information to Equus and Equus of Missouri, contacting former Pony employees, and working for Equus of Missouri while still employed by Pony—all occurred in Missouri. Pony was allegedly injured by the disruption of its St. Louis branch during the height of its busy season and its loss of St. Louis market share. Equus of Missouri is located in Missouri. Defendants Zhou, Jones, and Hsueh are Missouri residents. The only tie to Ohio is the password-accessible computer information which is maintained in Pony‘s headquarters and the indirect injury to Pony headquarters through the alleged unfair competition between Equus of Missouri and Pony‘s St. Louis branch. Two Pony employees were contacted in Ohio but meetings between them and Equus of Missouri representatives occurred in Missouri. Regardless of whether these Ohio contacts would subject the defendants to personal jurisdiction in Ohio, the application of the choice of law principles of section 6(2) clearly reveals that Missouri has the greater interest in these parties and occurrences. Thus, the district court correctly applied Missouri law.
B. Adequacy of Discovery
Pony contends that the district court erred in granting summary judgment prior to the completion of discovery. “A trial court‘s determination that a claim is ripe for summary judgment is reviewed for abuse of discretion.” In re Temporomandibular Joint (TMJ) Implants Prod. Liab. Litig., 113 F.3d 1484, 1489 (8th Cir.1997); see also Humphreys v. Roche Biomed. Lab., Inc., 990 F.2d 1078, 1081 (8th Cir.1993). Discovery does not need to be complete before a case is dismissed on summary judgment. TMJ, 113 F.3d at 1489. However, summary judgment is only proper if the nonmovant has had adequate time for discovery. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); TMJ, 113 F.3d at 1490. The nonmovant must make some showing that discovery has been inadequate. Absent such a showing, summary judgment is appropriate despite incomplete discovery. See Dulany v. Carnahan, 132 F.3d 1234, 1238-39 (8th Cir.1997) (affirming summary judgment where nonmovant had not filed a
The case management order allowed for nearly one year of discovery. Though Pony claimed its discovery was inhibited by the defendants’ objections to some of its interrogatories, Pony failed to conduct further discovery upon receiving answers to the interrogatories one month prior to the discovery deadline. The additional discovery sought pertains to the defendants’ communications providers and phone numbers in order to ascertain the number and timing of communications among the defendants and between the defendants and Pony‘s prior employees. However, Pony fails to explain how this additional discovery will provide support for any of its claims other than to state that it found out about Zhou‘s dealings with Equus of Missouri representatives through an examination of telephone records. Inadequate discovery cannot be a shield against summary judgment without a showing of a meritorious opposition. Light, 766 F.2d at 397. The district court found that Pony‘s request for an extension of the discovery deadline was a request for an unbounded
C. Summary Judgment
Pony contends that genuine issues of material fact preclude the entry of summary judgment and that the defendants are not entitled to judgment as a matter of law. We review the district court‘s grant of summary judgment de novo, viewing the record in a light most favorable to the nonmoving party. We will affirm only if there are no genuine issues of material fact in the record and the movant is entitled to judgment as a matter of law.
Count II of Pony‘s first amended complaint alleges defendants Zhou and Jones violated
A person commits the crime of tampering with computer data if he knowingly and without authorization or without reasonable grounds to believe that he has such authorization:
...
(3) Discloses or takes data, programs, or supporting documentation, residing or existing internal or external to a computer, computer system, or computer network; or
(4) Discloses or takes a password, identifying code, personal identification number, or other confidential information about a computer system or network that is intended to or does control access to the computer system or network;
(5) Accesses a computer, a computer system, or a computer network, and intentionally examines information about another person;
(6) Receives, retains, uses, or discloses any data he knows or believes was obtained in violation of this subsection.
Pony claims that Zhou and Jones disclosed confidential information learned while accessing the Pony computer network in the course of their employment with Pony. The affidavits of Joseph Chou, Pony‘s president, and Yunchi Chen, Pony‘s St. Louis branch manager, are the only evidence of any disclosure. However, these affidavits are merely conclusory, failing to enumerate specific evidence of any disclosure. Summary judgment is appropriate where there is no independent evidence, other than the petitioner‘s unsubstantiated allegations. Davenport v. Riverview Gardens Sch. Dist., 30 F.3d 940, 945 (8th Cir.1994). Thus, summary judgment was appropriate as to Count II.
Count III alleges breach of fiduciary duty. A confidential relationship between employer and employee giving rise to fiduciary duties exists if (1) there is an express understanding that the employee is receiving confidential information, or (2) the employee acquired the information in such a way that he must have known of its confidential nature. National Rejectors, Inc. v. Trieman, 409 S.W.2d 1, 35-36 (Mo.1966) (en banc). Pony claims that because Zhou and Jones could only access the Pony computer with a password and because they had limited access to only the information they needed for their job, each must have known of the confidential nature of the information. Pony paints too broad a picture of a confidential relationship. Zhou‘s duties were primarily clerical. She accessed the computer files to enter defective parts to be returned to the supplier. Jones’ access to computer information was similar, involving warehousing duties. To base fiduciary responsibilities on passwords and limited file access would make nearly any employee with any controlled computer access a confidant. Pony has failed to enumerate facts to support a finding
Count V alleges unfair competition, which requires a showing of: (1) the existence of a trade secret, (2) communication of the trade secret to another, (3) while that party was in a position of trust and confidence, and (4) the use of the trade secret to injure the plaintiff. Reddi-Wip, Inc. v. Lemay Valve Co., 354 S.W.2d 913, 917 (Mo.Ct.App.1962). Even if the existence of a trade secret is conceded, Pony still failed to show proof in the record that either Zhou or Jones was in a position of confidence, that either of them communicated any information to the other defendants, or that any of the defendants used the alleged trade secrets to injure Pony. Thus, Count V fails for the reasons that Counts II and III fail.
Count VII alleges fraud against Zhou and Jones for concealing their alleged disloyal and anticompetitive acts while employed by Pony. Fraud requires a showing of: (1) a representation, (2) that is false, (3) and material, (4) of which the speaker knows to be false or is ignorant of its truth, (5) made with the intent that the representation be relied upon, (6) to a hearer who is ignorant of the falsity of the representation, (7) who in fact relies on the representation, (8) who has a right to rely on it, and (9) who suffers proximate and subsequent damages. Missouri ex rel. PaineWebber, Inc. v. Voorhees, 891 S.W.2d 126, 128 (Mo.1995) (en banc). Silence can be considered a misrepresentation if the one making the misrepresentation has a duty to speak, which duty arises from a confidential relationship. See id. at 129. The misrepresentation which Pony asserts resulted in fraud was Zhou‘s and Jones’ silence regarding their future employment with Equus of Missouri. However, we have already concluded that neither of these defendants was in a position of confidence. Furthermore, employees can agree to compete against their employer in the future and may even plan and prepare for it while still employed. Metal Lubricants Co. v. Engineered Lubricants Co., 411 F.2d 426, 429 (8th Cir.1969) (citing National Rejectors, Inc. v. Trieman, 409 S.W.2d 1 (Mo.1966) (en banc)). Neither Zhou nor Jones had an obligation to disclose their future employment with Equus to Pony since neither was in a confidential relationship with Pony. Thus, Pony has failed to present facts in the record to support its fraud claim.
Counts VIII and X allege tortious interference with Pony‘s customers and employees. Tortious interference requires: (1) a contract or valid business expectancy, (2) known by the defendant, (3) a breach induced by the defendant‘s intentional interference, (4) without justification, and (5) damages. Rice v. Hodapp, 919 S.W.2d 240, 245 (Mo.1996) (en banc). Pony claims that the defendants raided it of its employees, contacting employees that had noncompete agreements with Pony. Of the employees that actually left to work for Equus, Pony has not produced, nor alleged, a noncompete agreement. There is nothing wrong with offering employment to an at-will employee to compete with his current employer, where the employee is not subject to a covenant not to compete or a confidential relationship. Metal Lubricants, 411 F.2d at 429-30. Though the defendants allegedly approached two employees with non-compete agreements, neither accepted employment with Equus. Thus, there was no breach of contract. Pony fails to allege, or provide evidence of, facts regarding business expectancies with its clients. Counts VIII and X were properly dismissed.
Count IX alleges that the defendants conspired to convert Pony‘s trade secrets. To establish a conspiracy under Missouri law, a claimant must show that: “(1) two or more persons, (2) with an unlawful objective; (3) after a meeting of the minds; (4) committed at least one act in furtherance of the conspiracy; and (5) the plaintiff was thereby damaged.” Rice, 919 S.W.2d at 245. Pony has failed to provide evidence of an unlawful act, namely that Zhou and Jones provided trade secret information to Equus who then used it to harm Pony. Reading the evidence in the light most favorable to Pony, Pony has failed to set forth proof of a conspiracy.
Pony appeals the dismissal of two of the three claims dismissed under Rule 12(b)(6).4 Pony asserts that Count IV, alleging breach of a duty of loyalty, was improperly dismissed for failure to state a claim under
Count VI alleges a faithless employee cause of action. Pony asserts Missouri courts have recognized such an action by citing to two cases which use the term “faithless employee.” See American Sash & Door Co. v. Commerce Trust Co., 332 Mo. 98, 56 S.W.2d 1034, 1037 (Mo.1932) (en banc); National Rejectors, 409 S.W.2d at 43. However, neither case involves nor creates an action based on being a faithless employee and neither requires the forfeiture of wages as the appropriate sanction, as Pony seeks in its complaint. Thus, this count was properly dismissed under
III.
Accordingly, for the reasons stated above, we affirm the district court‘s judgment.