Spiniello Companies v. Priscilla Moynier et al
Filing
31
OPINION. Signed by Judge Kevin McNulty on 12/17/14. (DD, ) [Transferred from New Jersey on 12/19/2014.]
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
SPINIELLO COMPANIES,
Civ. No. 2:13-5145
(KM)(SCM)
Plaintiff,
V.
OPINION
MOYNIER et al.,
Defendants.
KEVIN MCNULTY, U.S.D.J.:
This matter comes before the court on the motion (ECF No. 10) of
Defendant Priscilla Moynier (“Moynier”) to dismiss the Complaint (ECF
No. 1) of Plaintiff Spiniello Companies (“Spiniello”). Spiniello filed this
Complaint alleging that Moynier deleted data from her work laptop prior
to her resignation for her own gain and for the benefit of currently
unknown individuals and entities, with whom she conspired. Spiniello
alleges (1) violation of the Computer Fraud and Abuse Act (“CFAA”), 18
U.S.C.
§ 1030; (2) violation of the New Jersey Computer-Related Offenses
Act, N.J.S.A. § 2A:38A-3; (3) breach of contract; (4) breach of implied
covenant of good faith and fair dealing; (5) breach of duty of loyalty; and
(6) trespass to chattels.
Defendant Moynier moves (1) to dismiss the Complaint for lack of
subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1); (2) to dismiss
the Complaint for lack of personal jurisdiction under Fed. R. Civ. P.
12(b)(2); and (3) to dismiss the Complaint for improper venue under Fed.
-RGiv-P-111---or jjj
§ 1404(a).
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flO T T 0
For the reasons set forth below, the motion to dismiss is denied as
moot and the motion to transfer venue to the Central District of
California is granted.
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BACKGROUND
I.
Spiniello brings this action against Moynier, fictitious individuals
John Does (1—10), and fictitious entities ABC Corps. (1—10). Spiniello is a
California corporation with headquarters and a principal place of
business in New Jersey. (Compl. ¶4). Moynier is a California resident and
was the Office Manager at Spiniello’s California office from February
2011 to July 2013. (Compi. ¶1, 5; Moynier Deci. ¶2, ECF No. 10-2).
“John Does (1—10) and ABC Corps. (1—10) are fictitious names for
individuals and entities” who allegedly “conspired with, orchestrated,
facilitated, or otherwise benefited from the conduct being alleged against
[Moynier], but whose names or involvement are not known to Spiniello at
this time.” (Compl. ¶6).
Spiniello issued Moynier a laptop and mobile device. (Id. ¶12).
Moynier’s duties included “reviewing and modifying bid documents,
ensuring bid compliance with certain regulatory guidelines, estimating
the appropriate amount to bid for certain projects, and managing
accounts payable for successful bids.” (Id.
¶ 13).
Spiniello gave Moynier
access to confidential and proprietary Spiniello information, and Moynier
entered into a Confidentiality Agreement (“Agreement”) with Spiniello on
February 22, 2011. (Id. ¶j14—15). The relevant provisions of the
Agreement are as follows:
[Section 3.4.4] In exchange for being given the Company’s
Trade Secrets and Confidential Information, and in
connection with the consideration of his employment with
the Company, Employee agrees that such Trade Secrets and
The factsaretakeirprhnarilyfi uui the €omp1aintE-CF--No--I)---Theparties also rely in part on limited jurisdictional discovery ordered by then
Magistrate Judge Madeline Cox Arleo on November 26, 2013. (ECF No. 17).
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Confidential Information are to be used by him solely and
exclusively for the purpose of conducting business on behalf
of the Company or its affiliated companies. Employee agrees
to keep such Trade Secrets and Confidential Information
confidential and not to divulge or disclose this information
except for the purpose of conducting business on behalf of
Employer or its affiliated companies. If Employee resigns or
is terminated from his employment for any reason, he agrees
to immediately return all Confidential Information, including
Confidential Information maintained by him in his office,
personal electronic devices, and/or at home, and to continue
to maintain the confidentiality of all Trade Secrets and
Confidential Information, whether or not in written form.
[Section 3.4.6] All memoranda, notes, lists, records, property
and any other tangible product and documents (and all
copies thereof), whether visually perceptible, machinereadable or otherwise, made, produced or compiled by the
Employee or made available to the Employee concerning the
business of the Company or its affiliates, (i) shall at all times
be the property of the Company (and, as applicable, any
affiliates) and shall be delivered to the Company at any time
upon its request, and (ii) upon the Employee’s termination of
employment, shall be immediately returned to the Company.
(Id.
¶J 16—17). The Agreement is to be interpreted under New Jersey law.
(Id. ¶18). Spiniello also gave Moynier a handbook (the “Handbook”),
which provided that “E-mail messages (sent and received) using
Company communications equipment are the property of the Company,
including emails sent on personal email providers including gmail,
yahoo, aol, and hotmail.” (Id. ¶20).
On July 19, 2013, Moynier resigned from Spiniello. (Id. ¶2 1).
Before resigning, Moynier allegedly deleted 11.9 GB of data from her
Spiniello laptop, including over 100 files in a “BID STUFF” folder, which
contained materials relating to several projects on which Spiniello was
actively bidding. (Id. ¶j22—24). The deleted data included over 11 GB of
emails, “which represented substantially all of the emails that Moynier
—
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—---ha4sen-and-eeeved-usig-Spiello-email-acMiesa-diring the over
two years she was employed by Spiniello.” (Id. ¶25). Although Spiniello
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has used “extensive forensic resources” to recover some of the data,
portions of the data that had been overwritten may be unrecoverable. (Id.
¶27).
Spiniello alleges that Moynier deleted this data “in order to prevent
Spiniello from discovering that she had engaged in illegal activities in
order to personally enrich herself, John Does (1—10), and/or ABC Corp.
(1—10),” and “to prevent Spiniello from discovering that she had violated
the terms of her Confidentiality Agreement.” (Id. ¶J28—29). Before
deleting this data, Moynier allegedly connected a USB Memory Stick to
her laptop and downloaded a copy of the deleted information “for her own
personal use, and/or for the benefit of John Does (1—10) and/or ABC
Corps (1—10).” (Id. ¶30).
Spiniello alleges (1) violation of the Computer Fraud and Abuse Act
§ 1030; (2) violation of New Jersey Computer-Related
Offenses Act, N.J.S.A. § 2A:38A-3; (3) breach of contract; (4) breach of
(“CFAA”), 18 U.S.C.
implied covenant of good faith and fair dealing; (5) breach of duty of
loyalty; and (6) trespass to chattels. (Id. ¶J32—72).
Spiniello asserts that this Court has original jurisdiction over the
§ 1331 and supplemental
jurisdiction over the state law claims under 28 U.S.C. § 1367. (Id. ¶7—8).
Spiniello claims venue is proper under 28 U.S.C. § 139 1(b)(2) “because ‘a
alleged CFAA violations under 28 U.S.C.
substantial part of the events or omissions giving rise to the claim
occurred’ in New Jersey.” (Id. ¶9).
Defendant Moynier now moves to dismiss the Complaint (1) for
lack of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1); (2) for
lack of personal jurisdiction under Fed. R. Civ. P. 12(b)(2); and (3) for
improper venue under Fed. R. Civ. P. 12(b)(3), or moves in the alternative
to transfer venue under 28 U.S.C. 14jBecause Moynier’s first
argument is directed to the merits, and to the face of Count One, it is
4
more properly considered pursuant to Fed. R. Civ. P. 12(b)(6), rather
than Fed. R. Civ. P. 12(b)(1). (P1. Br. 1; Def. Br. 1 n.1 (noting thenMagistrate Judge Arleo’s ruling that Moynier’s motion to dismiss for lack
of subject matter jurisdiction is more appropriately considered as one for
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failure to state a claim)).
II.
DISCUSSION
This Court will not reach Moynier’s motions to dismiss for failure
to state a claim or for lack of personal jurisdiction. Because venue is
improper in the District of New Jersey, this case will be transferred to the
Central District of California.
a. Improper Venue
28 U.S.C.
§ 139 1(b) instructs that a civil action may be brought in:
(1) a judicial district in which any defendant
resides, if all defendants are residents of the
State in which the district is located; (2) a
judicial district in which a substantial part of
the events or omissions giving rise to the claim
occurred, or a substantial part of property that
is the subject of the action is situated; or (3) if
there is no district in which any action may
otherwise be brought as provided in this section,
any judicial district in which any defendant is
subject to the court’s personal jurisdiction with
respect to such action.
The parties appear to agree that alternatives (1) and (3) have no
application here. Spiniello asserts that venue is appropriate because New
Jersey is “(2) a judicial district in which a substantial part of the events
or omissions giving rise to the claim occurred.” Id.
Moynier’s motion states that “Count I should be dismissed for failure to
state a claim, and, as a result, the entire Complaint should be dismissed for
lack of subject matter jurisdiction.”_I take her to be saying that, once the federal
ith7thëtate law àuses
law cause of action is dismissed for failure to
of action should be dismissed under the supplemental jurisdiction statute, 28
U.S.C. § 1367.
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The Third Circuit has repeatedly held that “in determining whether
a substantial part of the events or omissions giving rise to a cause of
action occurred in a specific jurisdiction, ‘[t]he test
.
.
.
is not the
defendant’s contacts’ with a particular district, but rather the location of
those events or omissions giving rise to the claim.” Bockman v. First Am.
Mktg. Corp., 459 F. App’x 157, 161 (3d Cir. 2012) (not precedential;
quoting Cottman Transmission Systems, Inc. v. Martino, 36 F.3d 291, 294
(3d Cir. 1994)). “[I]n assessing whether events or omissions giving rise to
the [plaintiffs] claims are substantial, it is necessary to look at the
nature of the dispute.” IcL (quoting Cottman, 36 F.3d at 295). The Third
Circuit has “observed that the venue provision ‘favors the defendant in a
venue dispute by requiring that the events or omissions supporting a
claim be substantial,’ and that ‘[s]ubstantiality is intended to preserve
the element of fairness so that a defendant is not haled into a remote
district having no real relationship to the dispute.” Id. (quoting Cottman,
36 F.3d at 294 and citing Leroy v. Great W. United Corp., 443 U.S. 173,
183—84 (1979)).
In Bockman, the Third Circuit found that “defendants satisfied
their burden of showing improper venue by offering evidence that the
wrongful acts alleged in the Complaint did not occur in” the district court
in which the action was brought. Id. The plaintiffs’ recital of the
defendants’ “general contacts” with the forum did “not alone suffice for
the analysis of venue.” Id. Such “contact” information “fails to show the
jurisdiction where the acts or omissions giving rise to the Complaint
occurred.” Id.
Both parties cite to Judge Cecchi’s September 30, 2014 opinion in
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Spinello Companies v. Silva, No. CIV.A. 13-5 146, 2014 WL 4896530
(D.N.J. Sept. 30, 2014) for subject matter jurisdiction arguments. (See
Spiniello’s name has been misspelled as “Spinello” in this and other
cases involving the company in this district.
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Letters, ECF Nos. 27, 28, 29).
In Silva, Spiniello sued another out-of-state employee, alleging that
he had improperly used his high-level position in the company to divert
business to his own benefit. Judge Cecchi found that venue was proper
for four reasons:
Defendant Silva (1) was a high-ranking employee who often
worked from the New Jersey office; (2) reported directly to
the New Jersey office for approval of contracts and bids; (3)
regularly traveled to Plaintiffs New Jersey headquarters on
behalf of Plaintiff; and (4) [Silva and his own business, to
which he allegedly diverted Spiniello customers] accepted a
loan from Plaintiff in New Jersey.
Silva, 2014 WL 4896530, at *2 (internal citations omitted). Based on
these factors, Judge Cecchi concluded that “Plaintiffs have shown that
substantial events or omissions underlying the dispute occurred in New
Jersey, and venue is proper here.” Id. (citing 28 U.S.C. § 139 1(b)(2)).
Because Judge cecchi found that venue was proper, it is
instructive to compare that case to this one. In Silva, Spiniello alleged
that the defendant
(1) awarded subcontracts to [his own business] without
disclosing his financial interest in the company; (2) diverted
[Spiniello’s] confidential bid opportunities to [his own
company]; and (3) diverted [Spiniello’sJ confidential
information to [his own company] by forwarding the
confidential information from his work email address to his
personal email address, and by improperly modifying files on
[Spiniello’s] servers.
Id. (internal citations omitted). Silva, a high-level employee, had travelled
to New Jersey often, worked from Spiniello’s New Jersey office often, and
accepted a loan from Spiniello in New Jersey for the very company to
which he was accused of diverting business
--
Theaiegations-iri--this-ease -are quitedifferent---Here -Moynier is
accused of deleting data from her work laptop. That act was performed in
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California, by a resident of California, who worked in a California office.
Thus, “the location of [thel events
.
.
.
giving rise to the claim” is
California. I3ockman, 459 F. App’x at 161; Cottman, 36 F.3d at 294. True,
Moynier communicated with Spiniello’s New Jersey office regarding bids
via telephone and email, and she has physically been to the New Jersey
office three times in connection with her employment: for her interview
with Spiniello, for a yearly meeting, and for training. (Def. Br. 27 (citing
Moynier Dep. Tr. 23: 12—27:24, ECF No. 2 1—1)); (Moynier Dec. ¶3). But
none of these visits are associated with the events that give rise to
Spiniello ‘s claim against Moynier.
Spiniello cites a case from this district, Calkins v. Dollarland, Inc.,
for the proposition that “[t]he venue statute requires only that a
‘substantial part’ of the underlying activities occur in the forum state,
and it is of no moment that ‘the activities in [another state] were more
substantial, or even the most substantial.” (Def. Br. 26 (citing Calkins v.
Dollarland, Inc., 117 F. Supp. 2d 421, 426 (D.N.J. 2000))). And of course
I have no quarrel with the notion that a district may have venue “where
an illegal action was repeated in more than one state and venue was laid
in a state that accounted for only a small number of those actions.” Id.
Here, however, none of the actionable conduct occurred in New Jersey.
Spiniello also cites Omega Fin. Serus., Inc. v. Innovia Estates &
Mortgage Corp., No. CIV.A. 07-1470 (JAG), 2007 WL 4322794 (D.N.J.
Dec. 6, 2007). In that case, a New Jersey mortgage lender sued a
California defendant based on fraudulent representations in a mortgage
loan application. Id. at * 1. There, however, the out-of-state defendant
had submitted the false application to the New Jersey lender, and that
submission was the very essence of the tort. The acts giving rise to
Spiniello’s claims, however, did not involve doing anything in, or sending
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anythgtoNewJersey.
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In short, this is not a case of actionable conduct that occurred
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wholly or partly in the forum state of New Jersey. Moynier allegedly
communicated with the New Jersey office, and visited New Jersey three
times on Spiniello business. (Moynier Dec. ¶3). Those New Jersey-related
acts, however, did not relate to the alleged wrongdoing: the alleged
misuse of her company laptop computer. In that connection, it is
important to keep in mind the distinction between New Jersey contacts
(which may give rise to personal jurisdiction) and New Jersey “events or
omissions giving rise to the claim” (which may support venue). See
Bockman, 459 F. App’x at 161.
Spiniello further argues that it felt “the impact” of Moynier’s acts in
New Jersey (P1. Br. 27) Nevertheless, the acts themselves occurred in
California. If “feeling the impact” were enough, then venue would almost
always be appropriate in the plaintiff’s home state.
Moynier has satisfied her burden of showing that venue is not
proper in the District of New Jersey, because none of the “events or
§
omissions giving rise to the claim” occurred here. 28 U.S.C.
139 1(b).
b. Transfer
If a court determines that venue has been improperly laid within
its district, 28 U.S.C.
§
1406(a) confers discretion to transfer the case or
dismiss it. “Dismissal is considered to be a harsh remedy
.
.
.
and
transfer of venue to another district court in which the action could
originally have been brought, is the preferred remedy.” NCR Credit Corp.
v. Ye Seekers Horizon, Inc., 17 F. Supp. 2d 317, 319 (D.N.J. 1998); see
also Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466—67 (1962). Thus, if the
court finds that the interests of justice would be served, it may transfer
the case to a proper venue. See NCP Credit Corp, 17 F. Supp. 2d at 319.
(“By allowing for transfer in lieu of dismissal,
[
1406(a)] was designed to
prevent any injustice from occurring and save time and resources,
should a plaintiff erroneously choose the wrong forum in which to bring
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an action.”).
To effectuate a
§ 1406(a) transfer to a proper venue, a court must
possess subject matter jurisdiction over the case. See C. Wright, A.
Miller, et al., 14D Fed. Prac. & Proc.: Juris.
§ 3827 (4th ed.) (“A district
judge may not order transfer under Section 1406(a) unless the court has
jurisdiction of the subject matter of the action
.. . .“) .‘
This court does
have federal-question subject matter jurisdiction. See 28 U.S.C.
§ 1331.
Count One of the complaint, on its face, states a claim of violation of the
Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C.
§ 1030. Moynier’s
argument that the court lacks “jurisdiction” is really more akin to a Rule
12(b)(6) motion to dismiss. See n.2, supra.
Personal jurisdiction over the defendant, unlike subject matter
jurisdiction, is not a prerequisite to a transfer of venue. See Goldlawr
369 U.S. at 466 (holding that Section 1406(a) “is amply broad enough to
authorize the transfer of [a case]
. . .
whether the court in which it was
filed had personal jurisdiction over the defendants or not.”). And that
issue will likely be wholly mooted by a transfer to the Central District of
California, where defendant is located.
This action could originally have been brought in the Central
District of California, pursuant to 28 U.S.C.
§ 139 1(b)(2). Venue would
have been, and is, proper there because a substantial part of the alleged
computer access abuse giving rise to Spiniello’s claims occurred there. I
will therefore order that this case be transferred to the Central District of
California.
Wright & Miller go on to note that, where the defect in subject matter
jurisdiction could be cured by transfer to the proper court, there is some
authority that 28 U.S.C. § 1631 would permit such a transfer. Id. § 3827,
3842. This is not alleged to be such a case.
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III.
CONCLUSION
For the foregoing reasons, the motion to dismiss the Complaint is
denied as moot and the motion to transfer venue to the Central District
of California is granted.
Dated: December 17, 2014
Kevin McNulty
United States District Judge
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