Primo Broodstock, Inc. v. American Mariculture, Inc. et al

Filing 378

ORDER denying Defendants American Mariculture, Inc., American Penaeid, Inc., and Robin Pearl's 345 Motion to Dismiss Count IV of the Amended Complaint for Lack of Subject Matter Jurisdiction. Signed by Judge John E. Steele on 10/7/2021. (TLP)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
TB FOOD USA, LLC, a
Delaware Limited Liability
Company,
Plaintiff,
v.

CASE NO. 2:17-cv-9-FtM-29NPM

AMERICAN MARICULTURE, INC.,
a Florida Corporation,
AMERICAN PENAEID, INC., a
Florida Corporation, and
ROBIN PEARL,
Defendants.
AMERICAN MARICULTURE, INC.,
a Florida Corporation,
Counter-Plaintiff,
v.
PB LEGACY, INC., a Texas
Corporation, KENNETH GERVAIS,
and RANDALL AUNGST,
Counter/Third-Party
Defendants.
OPINION AND ORDER
This matter comes before the Court on Defendants American
Mariculture, Inc., American Penaeid, Inc. and Robin Pearl’s Motion
to Dismiss Count IV of the Amended Complaint for Lack of Subject
Matter

Jurisdiction

(Doc.

#345)

filed

on

January

4,

2021.

Plaintiff TB Food USA, LLC and Counter/Third-Party Defendant PB

Legacy, Inc. filed a Response in Opposition (Doc. #346) on January
18, 2021. For the reasons set forth below, the motion is denied.
I.
This matter concerns ongoing disputes between Plaintiff TB
Food, USA, LLC (Plaintiff or TB Food), Counter and Third-Party
Defendant PB Legacy, Inc. (PB Legacy), and Defendants American
Mariculture, Inc. (AMI), American Penaeid, Inc. (API), and Robin
Pearl (collectively, the Defendants) that arose out of a business
relationship between Primo Broodstock, Inc. (now known as PB
Legacy,

Inc.)

and

AMI.1

relationship

involved

facility

Florida

in

(Doc.

AMI
for

#1,

The

business

large

indoor

grow-out

commercial

shrimp

breeding

providing
Primo’s

¶¶
a

20-22.)

business. (Id.)
An Amended Complaint filed on January 26, 2017, included a
claim that AMI engaged in trade secret misappropriation under the
Defend Trade Secrets Act (DTSA), 18 U.S.C. § 1836 (Count IV). (Doc.
#20, ¶¶ 127-145.) Defendants assert that this court lacks subject
matter

jurisdiction

over

Count

IV

because

the

alleged

misappropriations occurred prior to the May 11, 2016 effective
date of the DTSA. Plaintiff and PB Legacy respond that the Amended
Complaint, pleadings, and the evidentiary record before the Court

On February 17, 2017, TB Food purchased substantially all of
Primo Broodstock, Inc.’s assets, and after the sale, Primo caused
its name to be changed to PB Legacy, Inc. (Doc. #86, ¶¶ 4-5.)
1

2

show that unlawful disclosure and use of Plaintiff’s trade secrets
(broodstock shrimp) occurred after May 11, 2016 and continue to
this day. (Doc. #346, pp. 2-4.)

Additionally, Plaintiff argues

that even if a trade secret was acquired or developed prior to May
11, 2106, Plaintiff may recover under the DTSA where use or
disclosure of a trade secret occurred after DTSA’s effective date.
(Id., pp. 7-8.)
II.
"Federal courts exercise limited subject matter jurisdiction,
empowered to hear only those cases within the judicial power of
the United States as defined by Article III of the Constitution or
otherwise authorized by Congress."

Taylor v. Appleton, 30 F.3d

1365, 1367 (11th Cir. 1994). “When a plaintiff files suit in
federal court, [he or] she must allege facts that, if true, show
federal

subject

matter

jurisdiction

over

her

case

exists."

Travaglio v. Am. Exp. Co., 735 F.3d 1266, 1268 (11th Cir. 2013)
(citing Taylor, 30 F.3d at 1367). A “nonfrivolous allegation of
jurisdiction generally suffices to establish jurisdiction upon
initiation of a case.”

Perry v. Merit Systems Protection Bd., 137

S.Ct. 1975, 1984 (2017).

Jurisdiction “is not defeated . . . by

the possibility that the averments might fail to state a cause of
action on which [a plaintiff] could actually prevail.”

Bell v.

Hood, 327 U.S. 678, 682 (1946). Jurisdiction may be defeated,
however, where the alleged claim clearly appears to be “immaterial,
3

[or] made solely for the purpose of obtaining jurisdiction, or
where the claim is wholly insubstantial and frivolous.”

Id. at

682-83. “A litigant generally may raise a court's lack of subjectmatter jurisdiction at any time in the same civil action, . . ..”
Kontrick v. Ryan, 540 U.S. 443, 455 (2004). Defendants make a
facial challenge to Count IV, asserting Plaintiff’s DTSA claim
alleges the trade secret misappropriation occurred in April 2016,
prior to the DTSA’s effective date, and therefore cannot state a
cause of action.
III.
“To state a claim under the DTSA, . . . a plaintiff must
allege facts showing (1) that the plaintiff possessed a ‘trade
secret,’ (2) that the plaintiff "took reasonable measures" to
protect the trade secret, and (3) that the defendant used or
disclosed the trade secret despite a duty to maintain secrecy.”
Prov Int'l, Inc. v. Rubens Dalle Lucca, No. 8:19-cv-978-T-23AAS,
2019 U.S. Dist. LEXIS 187060, at *6 (M.D. Fla. Oct. 29, 2019).
Section 1839(3) broadly defines a "trade secret" as "all forms and
types of financial, business, scientific, technical, economic, or
engineering information . . . " that (1) the owner "has taken
reasonable

measures

to

keep"

secret

and

(2)

that

derives

"independent economic value . . . from not being generally known
to, and not being readily ascertainable through proper means by
another person who can obtain economic value from the disclosure
4

or use of the information."2 18 U.S.C. § 1839(3)(A), (B); see Fla.
Beauty Flora Inc. v. Pro Intermodal L.L.C., No. 20-20966-CIVALTONAGA/Goodman, 2021 U.S. Dist. LEXIS 92178, at *11 (S.D. Fla.
May 14, 2021). A misappropriation occurs when: "(1) a person
acquires the trade secret while knowing or having reason to know
that he or she is doing so by improper means; (2) a person who has
acquired or derived knowledge of the trade secret discloses it
without the owner's consent; or (3) when a person who has acquired
or derived knowledge of the trade secret uses it without the
owner's consent."

Fla. Beauty Flora Inc., 2021 U.S. Dist. LEXIS

92178, at *11-12. In other words, "[t]he DTSA contemplates three
theories of liability: (1) acquisition, (2) disclosure, or (3)
use." Id. The DTSA applies to "any misappropriation of a trade
secret ... for which any act occurs on or after the date of the
enactment of [the] Act." Fin. Info. Techs., Inc. v. iControl Sys.,
United States, LLC, No. 8:17-cv-190-T-23MAP, 2018 U.S. Dist. LEXIS
118315, at *10 (M.D. Fla. June 12, 2018) (quoting Pub. L. No. 114153, § 2(e), 18 U.S.C. § 1836).

In a previous motion for summary judgment, Defendants challenged
whether Primo’s shrimp broodstock fell under the DTSA’s statutory
definitions of “trade secret.” (Doc. #306, pp. 35-36.) This Court
denied Defendants’ motion as to Count IV, along with Counts V
through VIII. (Id., pp. 36-39.)
2

5

IV.
Here, the Amended Complaint alleges that:
138. All of Primo’s trade secrets have
independent economic value, are confidential,
are not publicly known or available, and are
proprietary to Primo.
139. Primo provided its trade secrets to AMI
and Pearl pursuant to the NDA and Grow-Out
Agreement solely for the limited purposes
contemplated by those agreements.
140. AMI and Pearl knew they were subject to
a duty to maintain the secrecy of and limit
the use of Primo’s trade secrets.
141. Primo has enacted a number of measures to
guard its proprietary methods and to guard
against theft.
142. Defendants have misappropriated Primo’s
trade secrets following the termination of the
Grow-Out Agreement on April 30, 2016 by acting
in concert to effectuate a scheme involving
(i) the continuing conversion of all live
Primo breeder shrimp in their possession,
which are exclusive intellectual property of
Primo, (ii) the aggressive breeding of
hundreds of thousands of Primo’s breeder
shrimp from the initial genetic strains
received by AMI under the Grow-Out Agreement,
(iii) the bringing of the Primo breeder shrimp
to market as quickly possible, particularly in
China and other East Asian countries, and (iv)
the enlisting of some of the largest shrimp
breeders and distributors in China and the Far
East to swiftly implement this scheme.
143. Defendants’ acts of misappropriation have
been taken with knowledge that Primo’s trade
secrets are proprietary to it and that they
were disclosed to and shared with AMI and
Pearl pursuant to the NDA and Grow-Out
Agreement, which established AMI’s and Pearl’s
duty to maintain the secrecy of Primo’s trade
6

secrets and limit their use only to actions in
furtherance of their commercial relationship
with Primo.
(Doc. #20, ¶¶ 138-43)(emphasis added).
Contrary to Defendants argument, the Court does not find that
paragraph 142 implies that all misappropriation occurred on April
30, 2016, or prior to May 11, 2016. Rather, it only states that
misappropriation
termination

of

occurred
the

following

Grow-Out

April

Agreement.

30,

Indeed,

2016,
the

the

Amended

Complaint provides numerous instances of misappropriation, all of
which occurred after May 11, 2016.

(See Doc. #346, p. 4.)

For

example, on May 25, 2016, defendant Robin Pearl, President of API,
posted a message on Yahoo! stating that (1) API terminated its
relationship with Primo;3 (2) that the Primo shrimp are now owned
by API and have been renamed “API High Vigor Animals”; (3) API has
about 50,000 fully mature breeders in the 30 to 45 gram range
available for immediate shipment; and (4) that API’s genetic
program is already hard at work selecting future generations and
will be able to supply next generation animals starting in 2
months, and for many years thereafter. (Doc. #20, ¶¶ 59-61; Doc.
#20-4, pp. 2-4; Doc. #346, p. 4.) Likewise, the Amended Complaint
asserts that misappropriation occurred in September 2016, after
Primo sent AMI and Mr. Pearl a cease and desist letter on August

Plaintiff maintains that API never had a relationship with Primo.
(Doc. #20, ¶ 60.)
3

7

30, 2016.

AMI’s attorney responded on September 16, 2016, denying

that Primo had any rights in the animals left behind with AMI by
stating that “[s]ince . . . [Primo] made no effort to take delivery
of any of the animals in my client’s stock tanks . . . by April
30, 2016, those animal[s] became my client’s to sell.” (Doc. #20,
¶¶ 62-63; Doc. #20-6, pp. 2-3; Doc. #346, p. 4.) Finally, the
Amended Complaint alleges that in October 2016, Defendants and
their agents in China solicited attendance by shrimp farmers and
made a presentation, informing attendees that after April 30, 2016,
AMI had acquired and now owned any of Primo’s animals left on AMI
premises and that AMI “would be able to do whatever we wanted to
do with them.” (Doc. #20, ¶¶ 64-66; Doc. #346, p. 4.) This
misappropriation is alleged to have continued on January 10, 2017,
when API shipped 1,940 Primo shrimp from its Florida facility to
a China-based company named “Primo (China) Broodstock Co., Ltd.”
(Doc. #20, ¶¶ 74-75; Doc. #346, p. 4.)

Taking these allegations

in the Amended Complaint as true, Plaintiff has provided sufficient
factual allegations to plausibly demonstrate misappropriation of
trade secrets on and after May 11, 2016.

See Fla. Beauty Flora

Inc., 2021 U.S. Dist. LEXIS 92178, at *11-12.
Any alleged misappropriation occurring between the April 30,
2016 termination of the Grow-Out Agreement and prior to the DTSA’s
enactment on May 11, 2016, cannot be the basis for liability under
the DTSA since the statute does not apply retroactively. See Fin.
8

Info. Techs., Inc., 2018 U.S. Dist. LEXIS 118315, at *10; see also
Landgraf v. USI Film Prods., 511 U.S. 244, 280 (1994) (holding
that "absent clear congressional intent," courts must presume that
statutes do not operate retroactively). Viable claims may exist,
however,

for

Defendants’

disclosure

acquired before May 11, 2016.

or

use

of

trade

secrets

See, e.g., Agilysys, Inc. v. Hall,

258 F. Supp. 3d 1331, 1348-49 (N.D. Ga. 2017)(finding that where
alleged misappropriation occurred prior to May 11, 2016, the
plaintiff’s

DTSA

claims

were

not

barred

since

the

defendant

continued to used, possess and disclose plaintiff’s proprietary
information); Brand Energy & Infrastructure Servs. v. Irex Contr.
Grp., No. CV 16-2499, 2017 U.S. Dist. LEXIS 43497, 2017 WL 1105648,
at *4 (E.D. Pa. Mar. 24, 2017) (finding that the plaintiff could
pursue

its

DTSA

claim

because

the

amended

complaint

alleged

multiple uses of the trade secrets that continued to occur after
the DTSA’s effective date); Adams Arms, LLC v. Unified Weapon Sys.,
No. 8:16-cv-1503-T-33AEP, 2016 U.S. Dist. LEXIS 132201, at *17-19
(M.D. Fla. Sep. 27, 2016) (recognizing that under the DTSA, a party
may have a viable claim even where the misappropriation occurs
both before and after DTSA’s effective date).
The Amended Complaint, as well as the record, does not
establish that Count IV is immaterial, or made solely to obtain
federal jurisdiction, or is wholly insubstantial or frivolous. See

9

Bell, 327 U.S. at 682-83. Therefore, the Court has jurisdiction
over Count IV, and the Court denies the motion to dismiss.
Accordingly, it is hereby
ORDERED:
Defendants’

Motion

to

Dismiss

Count

IV

of

the

Amended

Complaint for Lack of Subject Matter Jurisdiction (Doc. #345) is
DENIED.
DONE AND ORDERED at Fort Myers, Florida, this
October, 2021.

Copies: Counsel of record

10

7th

day of