Primo Broodstock, Inc. v. American Mariculture, Inc. et al
Filing
135
OPINION AND ORDER granting in part and denying in part defendants' 120 Motion for Partial Summary Judgment. Signed by Judge John E. Steele on 12/4/2018. (CMG)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
PB LEGACY,
Corporation
USA, LLC,
INC, a
and TB
Texas
FOODS
Plaintiffs,
v.
Case No:
2:17-cv-9-FtM-29CM
AMERICAN MARICULTURE, INC.,
a
Florida
corporation,
AMERICAN PENAEID, INC., a
Florida
corporation,
and
ROBIN PEARL,
Defendants.
OPINION AND ORDER
This matter comes before the Court on the defendants’ Motion
for Partial Summary Judgment (Doc. #120) filed on September 17,
2018.
Plaintiffs filed a Response in Opposition (Doc. #126) on
October 1, 2018.
For the reasons set forth below, the motion is
granted in part and denied in part.
I.
Summary
judgment
is
appropriate
only
when
the
Court
is
satisfied that “there is no genuine issue as to any material fact
and that the moving party is entitled to judgment as a matter of
law.”
Fed. R. Civ. P. 56(a).
“An issue of fact is ‘genuine’ if
the record taken as a whole could lead a rational trier of fact to
find for the nonmoving party.”
Baby Buddies, Inc. v. Toys “R” Us,
Inc., 611 F.3d 1308, 1314 (11th Cir. 2010) (quotation and citation
omitted).
A fact is “material” if it may affect the outcome of
the suit under governing law.
477 U.S. 242, 248 (1986).
Anderson v. Liberty Lobby, Inc.,
“A court must decide ‘whether the
evidence presents a sufficient disagreement to require submission
to a jury or whether it is so one-sided that one party must prevail
as a matter of law.’”
Hickson Corp. v. N. Crossarm Co., Inc., 357
F.3d 1256, 1260 (11th Cir. 2004)(quoting Anderson, 477 U.S. at
251).
In ruling on a motion for summary judgment, the Court views
all evidence and draws all reasonable inferences in favor of the
non-moving party.
Scott v. Harris, 550 U.S. 372, 380 (2007); Tana
v. Dantanna’s, 611 F.3d 767, 772 (11th Cir. 2010).
However, “‘if
reasonable minds might differ on the inferences arising from
undisputed facts, then the court should deny summary judgment.’”
St. Charles Foods, Inc. v. America’s Favorite Chicken Co., 198
F.3d 815, 819 (11th Cir. 1999)(quoting Warrior Tombigbee Transp.
Co.
v.
M/V
Nan
Fung,
695
F.2d
1294,
1296-97
(11th
Cir.
1983)(finding summary judgment “may be inappropriate even where
the parties agree on the basic facts, but disagree about the
factual inferences that should be drawn from these facts”)).
“If
a reasonable fact finder evaluating the evidence could draw more
than one inference from the facts, and if that inference introduces
a genuine issue of material fact, then the court should not grant
2
summary judgment.”
Allen v. Bd. of Pub. Educ., 495 F.3d 1306,
1315 (11th Cir. 2007).
II.
The
undisputed
material
facts
are
as
follows:
Primo
Broodstock, Inc. (Primo) operated a commercial shrimp breeding
business.1
(Doc. #120, ¶ 2; Doc. #120-1, ¶ 5.)
On January 1,
2015, Primo entered into a shrimp farming agreement (the Grow-Out
Agreement) with American Mariculture, Inc. (AMI), the operator of
a shrimp farming facility in St. James City, Florida.
2; Doc. #120, ¶ 7; Doc. #120-1, ¶ 7.)
(Doc. #20-
Pursuant to the Grow-Out
Agreement, AMI agreed to grow post-larva “Primo shrimp” for Primo,
which Primo would then sell to third parties.
Doc. #120, ¶ 8.)
(Doc. #20-2, p. 2;
The Grow-Out Agreement also provided that, if
Primo was unable to sell any of the shrimp grown by AMI, such
shrimp would “be killed and sold as dead fresh or frozen shrimp
product into the market” by AMI.
(Doc. #20-2, p. 2; Doc. #120, ¶
8.)
Primo Broodstock, Inc. was the original plaintiff in this case.
However, on February 17, 2017, TB Foods, USA, LLC acquired an
ownership stake in Primo Broodstock, Inc. and changed its name to
PB Legacy, Inc. (Doc. #86, ¶¶ 4-5.) As part of that acquisition,
TB Foods, USA, LLC also acquired Primo Broodstock, Inc.’s rights
in the instant litigation, and TB Foods, USA, LLC has therefore
been added as a plaintiff in this case. (Id., ¶ 7; Doc. #87.)
Accordingly, although the current litigation centers in large part
on Primo Broodstock, Inc., the plaintiffs in this case are PB
Legacy, Inc. and TB Foods, USA, LLC (collectively, Plaintiffs).
1
3
In January of 2016, Primo and AMI became involved in a dispute
regarding payments Primo owed to AMI under the Grow-Out Agreement.
(Doc. #120, ¶ 9; Doc. #120-1, ¶ 8.)
On January 5, 2016, Robin
Pearl (Pearl), the Chief Executive Officer and registered agent of
AMI, sent Primo an email demanding the overdue payments.
#120, ¶ 10; Doc. #120-1, ¶ 9.)
(Doc.
In that email, Pearl stated that
if AMI did not receive payment from Primo within ten days, AMI
would begin harvesting the Primo shrimp in its possession weighing
more than thirty grams.
(Doc. #120, ¶ 10; Doc. #120-1, ¶ 9.)
On
January 21, 2016, Primo filed a lawsuit against AMI in the Circuit
Court of the Twentieth Judicial Circuit in and for Lee County,
Florida to enjoin AMI from harvesting Primo’s shrimp.
(Doc. #120,
¶ 11; Doc. #120-1, ¶ 10.)
On January 28, 2016, Pearl and Randall Aungst (Aungst),
Primo’s
Sheet.”
Vice
President,
signed
(Doc. #20-3, p. 2.)
a
one-page
handwritten
“Term
In relevant part, the Term Sheet
states that Primo had until April 30, 2016 to remove all of its
shrimp from the AMI Facility.
(Id.)
Primo did not remove all of
its shrimp from AMI’s facility by April 30, 2016, and AMI retained
the remaining shrimp.
(Doc. #120, ¶¶ 15-16; Doc. #120-1, ¶¶ 14-
15.)
Defendants
(collectively,
Pearl,
AMI,
Defendants)
and
contend
American
that
when
Penaeid,
Primo
Inc.
failed
to
remove its shrimp from AMI’s facility, AMI retained ownership over
4
the remaining shrimp and could sell the broodstock on the open
market.
(Doc. #120, ¶ 17; Doc. #120-1, ¶ 16.)
Plaintiffs argue
that when Primo failed to remove its shrimp from AMI’s facility,
AMI was not entitled to maintain ownership over the broodstock,
but was rather only entitled to kill the remaining shrimp and sell
them as dead fresh or frozen shrimp pursuant to the Grow-Out
Agreement.
(Doc. #20, ¶¶ 53-54.)
III.
Plaintiffs assert claims against Defendants for breach of
contract (Count I), conversion (Count II), defamation (Count III),
trade secret misappropriation under the Defend Trade Secrets Act,
18 U.S.C. § 1836 (Count IV), trade secret misappropriation under
the Florida Uniform Trade Secrets Act, Fla. Stat. § 688.001 et
seq. (Count V), unfair competition under Section 43(a) of the
Lanham Act, 15 U.S.C. § 1125(a) (Count VI), unfair competition
under Florida common law (Count VII), violation of the Florida
Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201 et
seq. (Count VIII), and unjust enrichment (Count IX).
Defendants
now move for summary judgment as to Counts II, VII, VIII, and IX.
Defendants argue they are entitled to summary judgment because
those Counts are preempted by Plaintiffs’ claim under the Florida
Uniform Trade Secrets Act in Count V.
The
Florida
Uniform
Trade
Secrets
Act
(the
FUTSA)
“displace[s] conflicting tort, restitutory, and other law[s] of
5
[the
state
of
Florida]
providing
misappropriation of a trade secret.”
civil
remedies
for
Fla. Stat. § 688.008(1).
It
does not, however, affect “[o]ther civil remedies that are not
based upon misappropriation of a trade secret.”
688.008(2)(b).
Fla. Stat. §
While there is no Florida case law examining the
scope of the FUTSA preemption provision, other federal district
courts, with which this Court agrees, have found that “to pursue
claims for additional tort causes of action where there are claims
for misappropriation of a trade secret, there must be material
distinctions between the allegations comprising the additional
torts and the allegations supporting the FUTSA claim.”
New Lenox
Indus., Inc. v. Fenton, 510 F. Supp. 2d 893, 908 (M.D. Fla. 2007)
(citation omitted).
Thus, “the issue becomes whether allegations
of trade secret misappropriation alone comprise the underlying
wrong; if so, the cause of action is” preempted by the FUTSA.
Allegiance Healthcare Corp. v. Coleman, 232 F. Supp. 2d 1329, 1335–
36 (S.D. Fla. 2002) (quotation and citation omitted).
The central issue before the Court, therefore, is whether
Defendants’ alleged misappropriation of Primo’s trade secrets
“alone comprise[s] the underlying wrong” in Counts II, VII, VIII,
and IX.
A.
Id.
The Court will address each Count in turn below.
The Conversion Claim (Count II)
Defendants argue that Count II is preempted by the FUTSA claim
in Count V because there is no material distinction between Counts
6
II and V as both Counts “seek redress for the same wrongdoing . .
. .”
(Doc. #120, p. 8.)
The Court agrees.
In both Counts II and V, Plaintiffs assert that Defendants
converted Primo’s breeder shrimp and subsequently aggressively
bred those shrimp and brought them “to market . . . in China and
other East Asian countries . . . .”
(Doc. #20, ¶¶ 104, 147.)
Because both Counts II and V are solely based upon Defendants’
alleged misappropriation of Primo’s trade secrets, the Court finds
there is no material distinction between the two Counts.2
The
Court therefore finds that Count II is preempted by the FUTSA claim
in Count V. Accordingly, Defendants’ motion is granted as to Count
II.
B.
The Unfair Competition under Florida Common Law Claim (Count
VII)
Defendants argue that Count VII is preempted by the FUTSA
claim in Count V because Count VII “relies upon and incorporates
by reference the same allegations that are used to support” Count
V.
(Doc. #120, p. 10.)
The Court disagrees.
2
In their Response in Opposition, Plaintiffs assert that Count II
is materially distinct from Count V because Count II seeks recovery
for Defendants’ alleged conversion of Primo’s “tangible property,”
whereas
Count
V
seeks
recovery
for
Defendants’
alleged
misappropriation of Primo’s “intangible” trade secrets.
(Doc.
#126, p. 6.) The Court finds Plaintiffs’ argument unpersuasive,
however, because the tangible property that Plaintiffs assert
Defendants converted (the breeder shrimp) is the same intangible
trade secret(s) Plaintiffs allege that Defendants misappropriated.
7
While both Counts V and VII are comprised of, and incorporate
by reference, the same general factual allegations in the Amended
Complaint, the Court finds that Count VII is nonetheless materially
distinct from Count V. Specifically, unlike in Count V, Plaintiffs
allege in Count VII that Defendants engaged in unfair competition
by making “false and misleading statements” which have caused
“confusion regarding the affiliation, connection, or association
of Defendants to [] Primo’s proprietary shrimp broodstock, Primo’s
tradename, and associated intellectual property rights and trade
secrets of Primo.”
Defendants
(Doc. #20, ¶ 162.)
contend
that
this
assertion
in
Count
VII
is
insufficient to constitute a material distinction from Count V
because it merely alleges “conclusory allegations of harm” and not
facts “that are separate and distinguishable from the alleged
misappropriation and misuse of [Primo’s] trade secrets.”
#120, p. 10.)
(Doc.
The Court disagrees, however, because Count VII is
not solely based upon Defendants’ alleged misappropriation of
Primo’s
trade
Defendants
secrets.
engaged
in
Rather,
unfair
Count
VII’s
competition
is
assertion
that
predicated
upon
Defendants’ alleged marketing practices: that Defendants allegedly
made
“false[]
claim[s]
that
‘Primo
abandoned
over
650,000
[broodshrimp] and all its genetic material’” and made “false[]
representations that Primo ‘moved all of their genetic base to
[AMI’s Premises] in Florida,’ while retaining nothing in reserve
8
at its Texas facility.”
further
based
Defendants
upon
made
(Doc. #20, ¶¶ 66, 73.)
the
these
Amended
false
Complaint’s
representations
Count VII is
assertion
“for
that
purposes
of
promoting ‘Primo’ shrimp products” to shrimp farmers in China.
(Id., ¶ 64.)
Because Count VII alleges that Defendants engaged in unfair
competition
by
making
false
representations
about
Primo’s
ownership over the Primo shrimp broodstock to market Primo shrimp
products in China – and does not merely allege that Defendants
misappropriated Primo’s trade secrets - the Court finds that Count
VII is materially distinct from Count V.
Defendants’ motion is
therefore denied as to Count VII.
C.
The Florida Deceptive and Unfair Trade Practices Act Claim
(Count VIII)
Defendants argue that Count VIII is preempted by the FUTSA
claim
in
Count
V
because
Count
VIII
alleges
no
facts
that
“differentiate it from a claim for misappropriation of trade
secrets” under the FUTSA.
(Doc. #120, p. 9.) The Court disagrees.
Count VIII asserts that Defendants’ “false and misleading
statements have caused, and will continue to cause, confusion
regarding
the
Defendants
to
affiliation,
Primo’s
connection,
proprietary
shrimp
or
association
broodstock,
of
Primo’s
tradename, and associated intellectual property rights and trade
secrets of Primo.”
(Doc. #20, ¶ 168.)
9
Like the unfair competition
claim in Count VII, Count VIII relies upon, and incorporates by
reference, the Amended Complaint’s allegations that Defendants
made false representations about Primo’s business activities “for
purposes of promoting ‘Primo’ shrimp products” to shrimp farmers
in China.
(Id.,
¶
64.)
Because
Count VIII is based upon
Defendants’ alleged marketing practices – and is not solely based
upon Defendants’ alleged misappropriation of Primo’s trade secrets
- the Court finds Count VIII is materially distinct from Count V.3
Accordingly, the Court finds Count VIII is not preempted by the
FUTSA claim in Count V. Defendants’ motion is therefore denied as
to Count VIII.
D.
The Unjust Enrichment Claim (Count IX)
Defendants argue Count IX is preempted by Count V because
both Counts seek redress for Defendants’ alleged misappropriation
of Primo’s trade secrets.
The Court agrees.
Citing to Developmental Techs., LLC v. Valmont Indus., Inc., No.
8:14-CV-2796-MSS-JSS, 2016 WL 7320908, at *3 (M.D. Fla. July 18,
2016), Defendants argue there can be no material distinction
between Counts V and VIII because both Counts rely on the same
operative
facts.
The
Court
finds
Developmental
Techs.
unpersuasive.
There, the court found no material distinction
between the plaintiff’s FUTSA and Florida Deceptive and Unfair
Trade Practices Act claims because both claims were solely based
upon the defendants’ alleged “failure to maintain the secrecy of
[] information disclosed to them” pursuant to a non-disclosure
agreement.” Id. at *6. In this case, however, Count VIII – unlike
Count V – is based upon Defendants’ alleged marketing practices
and
is
not
solely
predicated
upon
Defendants’
alleged
misappropriation of Primo’s trade secrets.
3
10
In relevant part, Count IX asserts that “Defendants have
benefited from the misappropriation of trade secrets, proprietary,
and confidential information belonging to Primo.”
173.)
the
(Doc. #20, ¶
As Plaintiffs concede (Doc. #126, p. 9), the FUTSA provides
exclusive
remedy
misappropriation”
of
for
trade
the
“unjust
secrets.
enrichment
Fla.
Stat.
caused
§
by
688.004.
Nonetheless, Plaintiffs assert that Count IX is not entirely
preempted by Count V because Count IX also seeks recovery for
Defendants’
alleged
“misappropriation
of
proprietary
and
confidential information, which may not rise to the level of a
trade secret . . . .”
(Doc. #126, pp. 9-10.)
As this Court has
previously found, however, “the FUTSA preempts all non-contract
claims
based
on
the
misappropriation
of
confidential
and/or
commercially valuable information even if the information does not
constitute a trade secret under the FUTSA.”
Am. Registry, LLC v.
Hanaw, No. 2:13-CV-352-FTM-29CM, 2014 WL 12606501, at *6 (M.D.
Fla. July 16, 2014).
Accordingly, the Court finds that Count IX
is preempted by the FUTSA claim in Count V.
Defendants’ motion is
therefore granted as to Count IX.
Accordingly, it is now
ORDERED:
1.
Defendants’ Motion for Partial Summary Judgment (Doc.
#120) is GRANTED IN PART AND DENIED IN PART.
2.
The motion is GRANTED as to Counts II and IX.
11
3.
The motion is DENIED as to Counts VII and VIII.
4.
The Clerk shall withhold the entry of judgment until the
conclusion of the case.
DONE AND ORDERED at Fort Myers, Florida, this ___4th___ day
of December, 2018.
Copies: Counsel of record
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