United States District Court, D. New Jersey
E. THOMPSON, U.S.D.J.
matter comes before the Court on an amended motion to dismiss
by Plaintiff Scherer Design Group, LLC ("Plaintiff'
or "SDG"). (ECF No. 23.) Defendants Chad Schwartz,
Ahead Engineering LLC, Far Field Telecom LLC, Kyle McGinley,
Daniel Hernandez, and Ryan Waldron (collectively,
"Defendants") oppose. (ECF No. 43.) The Court has
decided this Motion based on the written submissions and
without oral argument pursuant to Local Civil Rule 78.1(b).
For the reasons stated herein, Plaintiffs Motion is granted.
is a consulting engineering firm in the telecommunications
industry, founded by Colleen Connelly and Glenn Scherer.
(Compl.¶¶ 11-12, ECF No. 1.) Plaintiff alleges that
four of its former employees, Defendants Chad Schwartz,
Daniel Hernandez, Kyle McGinley, and Ryan Waldron,
coordinated the appropriation of SDG trade secrets prior to
their mass resignation. (See, e.g., Id. ¶ 65.)
Defendant Schwartz, a senior engineer and Director of
Engineering at SDG who worked with SDG's predecessor
since 2000, resigned on November 22, 2017, effective December
8, 2017. (Id. ¶¶ 48, 55; Am. Countercl.
¶ 3, ECF No. 28.) Defendant Schwartz continued to work
with Plaintiff as a paid consultant to assist with projects
on which he was designated as the Professional Engineer.
(Compl. ¶ 62.) Defendant Schwartz then set-up two of his
own engineering firms, Defendants Ahead Engineering LLC and
Far Field Telecom LLC. (Id. ¶ 56.) Defendant
Ahead Engineering is a self-described "full-service
telecom engineering firm," and Defendant Far Field is a
company that offers "innovative cost-effective solutions
of oDAS and small cell site concealment." (Id.
¶¶ 57, 59 (quoting each company's Linkedln
profile).) "On January 16, 2018, [Defendants] Hernandez,
McGinley and Waldron resigned from their positions at SDG and
officially became, respectively, Principal of [Defendant Far
Field, Director of Engineering for [D]efendant Ahead
Engineering, and Director of Business Processes for
[Defendant Far Field." (Id. ¶ 98.)
claims that Defendants Hernandez, McGinley, and Waldron took
files and information from Plaintiffs self-described
"proprietary relational database." (See, e.g.,
Id. ¶ 13.) While in Plaintiffs employ,
Defendant Hernandez downloaded Facebook Messenger on his SDG
company computer, which Plaintiff claims he failed to log out
of upon his resignation. (Id. ¶¶ 71, 73.)
Defendants assert that Defendant Hernandez logged out and
cleared all browsing history from his SDG devices prior to
his resignation on January 17, 2018. (Am. Countercl.
¶¶ 11, 13-14, 16.) After Defendant Hernandez's
resignation, Plaintiff accessed Facebook messages and
conversations from Defendant Hernandez's account (Compl.
¶ 74), which Defendants allege to have been done
improperly and without permission (Am. Countercl.
¶¶ 19- 21). In particular, there was a Facebook
messenger conversation, created December 20, 2017, with
Defendants Schwartz, McGinley, Waldron, and Hernandez, as
well as Preeyapon Chawpetdee, Taqi Khawaja, Robert
Petriocola, and Craig Andrews. (Id. ¶¶
6-7.) The conversation discusses the download of files from
Plaintiffs database while Defendants were still employed by
Plaintiff, (see Compl. ¶¶ 77-84 (exhibits of
conversations between Defendants and others)), which
Plaintiff asserts is corroborated by the removal and use of
USB drives on SDG computers (id. ¶ 75). "On
February 21, 2018, counsel for SDG corresponded with each of
the defendants and demanded that they cease their unlawful
conduct, return all materials and proprietary information to
SDG, preserve all relevant documentation and confirm their
compliance with those demands within three days of that
date." (Compl. ¶ 99.)
March 12, 2018, Plaintiff filed this lawsuit against the four
past employees and two new engineering firms, pleading seven
Counts: (I) Misappropriation of Trade Secrets, N.J.S.A.
56:15-1, et seq.; (II) Violations of the Federal Defend Trade
Secrets Act, 18 U.S.C. § 1839, et seq.; (III) Breach of
Duty of Loyalty; (IV) Tortious Interference with Prospective
Business Relationships; (V) Conversion; and (VI) Conspiracy.
(See generally Compl.) With its Complaint, Plaintiff filed an
Order to Show Cause for a temporary restraining order
("TRO") and preliminary injunction. Defendants
removed to this Court. (ECF No. 1.) The Court issued a TRO on
April 4, 2018 (ECF No. 14), and the preliminary injunction
motion is currently pending.
April 19, 2018, Defendants answered Plaintiffs Complaint and
counterclaimed (ECF No. 21), and on May 21, 2018, filed an
Amended Answer and Counterclaim, pleading: (I) Invasion of
Privacy by Intrusion Upon Seclusion, (II) Invasion of Privacy
by Public Disclosure of Private Facts, (III) False Light
Invasion of Privacy, and (IV) Tortious Interference with
Contractual and Business Relations. (See generally
id.) On April 25, 2018, Plaintiff filed the instant
Motion to Dismiss (ECF No. 23), and Defendants sought an
extension to oppose (ECF No. 26). Defendants then filed an
Amended Answer on May 21, 2018 pleading the same four Counts
(ECF No. 28), in response to which Plaintiff submitted a
"Reply Brief to Opposition Motion" (ECF No. 30),
although no opposition had yet been filed. Pursuant to
Defendants' requests, the Court set this Motion on an
amended briefing schedule, and indicated it would consider
Plaintiffs two briefs, in conjunction, in support of its
Motion, and that Defendant should oppose by June 28, 2018.
(ECF Nos. 34, 36.) Defendants opposed timely, and Plaintiff
replied. (ECF Nos. 43, 44.) This Motion is presently before
motion under Federal Rule of Civil Procedure 12(b)(6) tests
the sufficiency of a complaint. Kost v. Kozakiewicz,
1 F.3d 176, 183 (3dCir. 1993). The defendant bears the burden
of showing that no claim has been presented. Hedges v.
United States, 404 F.3d 744, 750 (3d Cir. 2005). When
considering a Rule 12(b)(6) motion, a district court should
conduct a three-part analysis. See Malleus v.
George, 641 F.3d 560, 563 (3d Cir. 2011). "First,
the court must 'take note of the elements a plaintiff
must plead to state a claim.'" Id. (quoting
Ashcroft v. Iqbal, 556 U.S. 662, 675 (2009)).
Second, the court must accept as true all of a plaintiffs
well-pleaded factual allegations and construe the complaint
in the light most favorable to the plaintiff. Fowler v.
UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009);
see also Connelly v. Lane Constr. Corp., 809 F.3d
780, 786-87 (3d Cir. 2016). The court, however, may disregard
any conclusory legal allegations. Fowler, 578 F.3d
the court must determine whether the "facts are
sufficient to show that plaintiff has a 'plausible claim
for relief" Id. at 211 (quoting Iqbal,
556 U.S. at 679). If the complaint does not demonstrate more
than a "mere possibility of misconduct," it must be
dismissed. See Gelman v. State Farm Mut. Auto.
Ins. Co., 583 F.3d 187, 190 (3d Cir. 2009) (quoting
Iqbal, 556 U.S. at 679).
moves to dismiss Counts II (Invasion of Privacy by Public
Disclosure of Private Facts) and III (False Light Invasion of
Privacy) of Defendants' Counterclaim, arguing that these
counterclaims are barred by the New Jersey litigation
privilege. (See generally PL's Br., ECF No.
23-1.) In response to Defendants' Amended Counterclaim
which included the additional fact that Plaintiff allegedly
shared information and communications with one of its clients
(compare Countercl. ¶¶ 38-52,
with Am. Countercl. ¶¶ 38-54 (adding that
Plaintiff shared information with Tilson official)),
Plaintiff further argues that communication to one person
does not qualify as publicity to adequately state a claim for
either Count. (See generally PL's Reply, ECF No.
30.) In opposition, Defendants argue that the litigation
privilege does not apply because Plaintiff shared
Defendants' private Facebook communications with a third
party outside of the scope of litigation, and because the
counterclaim alleges that the statements were publicly
disclosed both in the complaint and to a third party such
that the claims are legally sufficient. (See
generally Defs.' Opp'n, ECF No. 43.) Plaintiff
argues that the instant Motion should be granted with
prejudice because Defendants amended with this new allegation
following Plaintiffs initial motion to dismiss. (PL's
Reply Mem. to Opp'n at 1-2, ECF No. 44.)
New Jersey law, a claim for invasion of privacy by public
disclosure of private facts occurs where: "One  gives
publicity to a matter concerning the private life of
another... if that matter publicized is of a kind that (a)
would be highly offensive to a reasonable person, and (b) is
not of legitimate concern to the public." Catsro v.
NYT Television,895 A.2d 1173, 1178 (
N.J.Super.Ct.App.Div. 2006) (quoting Restatement (Second) of
Torts § 652D (Am. Law Inst. 1977)). False light invasion
of privacy occurs where a party "gives publicity to a
matter concerning [another party] in a manner that places the
[other] before the public in a false light," such that
"(a) the false light in which the [other] was placed
would be highly offensive to a reasonable person, and (b) the
actor had knowledge of or acted with reckless disregard as to
the falsity of the publicized matter and the false light in
which the [other] would be placed.'" Ingris v.