Stove Builder International, Inc. v. GHP Group, Inc.

Filing 32

MEMORANDUM Opinion and Order Signed by the Honorable Milton I. Shadur on 6/3/2011:Mailed notice(srn, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
STOVE BUILDER INTERNATIONAL,
INC.,
Plaintiff,
v.
GHP GROUP, INC.,
Defendant.

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No.

11 C 1098

MEMORANDUM OPINION AND ORDER
During the course of yesterday morning’s continued hearing
on the pending motion of GHP Group, Inc. (“GHP”) to dismiss the
First Amended Complaint (“FAC”) filed against it by Stove Builder
International, Inc. (“Stove Builder”), this Court ruled instead
on the viability of Stove Builder’s Second Amended Complaint
(“SAC”), which had just been filed on May 31, 2011.1

In part the

oral arguments then exchanged by the parties’ counsel led this
Court to defer ruling on SAC Count IV--a count captioned
“Tortious Interference with Prospective Economic Advantage--so
that this Court could review the caselaw cited by each side.

It

has now done so, and this memorandum opinion and order addresses
that count.
It is undisputed that the fate of Count IV is controlled by
the preemption provision of the Illinois Trade Secrets Act
(“Act”), 765 ILCS 1065/8, which reads in relevant part:

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When the SAC supplanted the FAC, GHP’s motion to dismiss
the latter was of course rendered moot.

(a) Except as provided in subsection (b), this Act
is intended to displace conflicting tort,
restitutionary, unfair competition, and other laws of
this State providing civil remedies for
misappropriation of a trade secret.
(b)

This Act does not affect:
(1) contractual remedies, whether or
not based upon misappropriation of a trade
secret, provided however, that a contractual
or other duty to maintain secrecy or limit
use of a trade secret shall not be deemed to
be void or unenforceable solely for lack of
durational or geographical limitation on the
duty;
(2) other civil remedies that are not
based upon misappropriation of a trade
secret.

And as the caption of Count IV connotes, the claim advanced there
comes under the rubric of “other civil remedies,” so that the
determination of its preemption vel non depends on whether the
count is or is not “based upon misappropriation of a trade
secret.”
On that score GHP’s counsel has sought to rely on the late
Judge James Moran’s opinion in Automed Tech., Inc. v. Eller, 160
F.Supp.2d 915, 921-22 (N.D. Ill. 2001), while Stove Builder’s
counsel has pointed to Judge Elaine Bucklo’s opinion in Abanco
Int’l, Inc. v. Guestlogix, Inc., 486 F.Supp.2d 779, 781-82 (N.D.
Ill. 2007).

Ironically those opinions really do not differ in

their reading and application of the Act’s preemption
provision--but even more ironically, analysis discloses that this
Court need not explore any arguable differences between the views
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of its former colleague and those of its present colleague.
By way of explanation, SAC ¶34 defines “SBI2 Trade Secret
Information,” while SAC ¶69 charges GHP with having “wrongfully
used and misappropriated SBI’s Trade Secret Information” and SAC
¶71 charges that by such misappropriation and misuse “GHP has
wrongfully and by improper means interfered with SBI’s valid
contractual and business relationships and prospective economic
advantages.”

If that were all, then, GHP would have the better

of the argument on preemption.
But neither side’s counsel has given heed to the provision
of Fed. R. Civ. P. (“Rule”) 8(d)(3) that gives every pleader free
rein in advancing “as many separate claims or defenses as it has,
regardless of consistency.”3

It must be remembered that part of

GHP’s proposed legal arsenal (advanced unsuccessfully to this
point as a pleading matter, but preserved of course as a matter

2

“SBI” is the acronym adopted by Stove Builder’s counsel
in drafting the SAC.
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That omission on counsel’s part is somewhat amusing,
because each of them has exercised that prerogative in this case:
1. Stove Builder’s counsel has charged GHP with a
violation of the Act in SAC Count I, while at the same time
urging that Trade Secret Information (the gravamen of its
Count I claim) is not really “trade secret information” so
as to run afoul of Act preemption for Count IV purposes.
2. For their part, GHP’s counsel have argued that no
trade secrets are involved, thus calling for the dismissal
of SAC Count I, while at the same time they urge that trade
secrets are involved, requiring the dismissal of Count IV.
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of proof) is that Stove Builder does not have protectible trade
secrets.

If GHP is right on that score, Count IV is not

preempted by the Act because “Trade Secret Information” would be
an inaccurate characterization of the property interests it seeks
to preserve.

Conversely, if the label “Trade Secret Information”

is an apt description, Count IV would become subject to dismissal
at that point.
For the present, then, GHP’s motion to dismiss SAC Count IV
is denied, and GHP’s answer to the SAC (as ordered by this Court
yesterday) must respond to that count as well.

As is often the

case with inconsistent pleadings, the ultimate fate of Count IV
will be a function of how the case evolves.

________________________________________
Milton I. Shadur
Senior United States District Judge
Date:

June 3, 2011

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