DuoDesk, LLC v. Gee Hoo Industrial Corporation

Filing 151

ORDER denying 119 Motion for Partial Summary Judgment. Signed by Judge Jay C. Zainey. (jrc)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
DUODESK, L.L.C.

CIVIL ACTION

VERSUS

NO: 14-1363

GEE HOO INDUSTRIAL
CORPORATION

SECTION: “A” (3)

ORDER
Before the Court is a Motion for Partial Summary Judgment (Rec. Doc. 119) filed by
Defendant Gee Hoo Industrial Corporation (“Gee Hoo”). Plaintiff DuoDesk, L.L.C. (“DuoDesk”)
opposes the motion. The motion, set for submission on February 10, 2016, is before the Court on the
briefs without oral argument. Trial is set to begin in this matter on May 10, 2016. For the following
reasons, IT IS ORDERED that the motion is DENIED.
I.

Background
Plaintiff DuoDesk filed suit in this Court on June 11, 2014, alleging breach of contract. (Rec.

Doc. 1). Mr. Christoph Leonhard, the president of DuoDesk, a Louisiana L.L.C., had designed an
exercise machine called the “activeLife Trainer.” He contracted with Gee Hoo, a Taiwanese
manufacturing company, to manufacture the trainers. Plaintiff’s original complaint alleges that
Defendant breached its contract by failing to manufacture the trainers in accordance with certain
specifications.
On July 23, 2015, DuoDesk amended its complaint to allege that, after the filing of the
complaint, Gee Hoo breached the parties’ non-disclosure and confidentiality agreement (“NDA”).
(Rec. Doc. 28). The NDA applied to the products that Gee Hoo agreed to develop for DuoDesk.
DuoDesk alleges that in February of 2015, Gee Hoo attempted to sell DuoDesk’s machines at an
international exhibition.

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II.

Analysis
Summary judgment is appropriate only if “the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any,” when viewed in the light
most favorable to the non-movant, “show that there is no genuine issue as to any material fact.” TIG
Ins. Co. v. Sedgwick James, 276 F.3d 754, 759 (5th Cir. 2002) (citing Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 249–50 (1986)). A dispute about a material fact is “genuine” if the evidence is such that
a reasonable jury could return a verdict for the non-moving party. Id. (citing Anderson, 477 U.S. at
248). The court must draw all justifiable inferences in favor of the non-moving party. Id. (citing
Anderson, 477 U.S. at 255). Once the moving party has initially shown “that there is an absence of
evidence to support the non-moving party’s cause,” Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986),
the non-movant must come forward with “specific facts” showing a genuine factual issue for trial. Id.
(citing Fed.R.Civ.P. 56(e); Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986)).
Conclusional allegations and denials, speculation, improbable inferences, unsubstantiated assertions,
and legalistic argumentation do not adequately substitute for specific facts showing a genuine issue for
trial. Id. (citing SEC v. Recile, 10 F.3d 1093, 1097 (5th Cir.1993)).
In the instant motion, Gee Hoo argues that the NDA is unenforceable because it does not
contain a time limitation; it does not contain a geographic limitation; and it does not sufficiently define
the information it seeks to protect. The parties agree that Illinois law applies to the interpretation of the
NDA, and Gee Hoo has pointed to a number of Illinois cases in its argument.
The Court agrees with DuoDesk that the cases relied upon by Gee Hoo in support of its motion
do not provide the relevant legal standard for the matter at issue. Gee Hoo’s cases involve employeremployee relationships and the enforceability of non-compete agreements and restrictive covenants.
As DuoDesk notes, restrictions on time, geography, and scope are imposed in these agreements due to
the policy consideration that such agreements conflict with a person’s “fundamental right to pursue

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that vocation in which he is most proficient.” Disher v. Fulgoni, 124 Ill. App. 3d 257, 262 (Ill. App.
Ct. 1st Dist. 1984). This policy consideration does not apply in a case like the instant one.
Gee Hoo does cite one unpublished opinion that held that there is no reason to treat
employment-related confidentiality agreements differently from confidentiality agreements between
sophisticated parties. Sencon Sys., Inc. v. W.R. Bonsal Co., 1988 WL 33842, at *4 (N.D. Ill. 1988).
This district court faced an agreement much like the one in the instant case. See id. The court wrote
that the plaintiff had provided no reason to treat the two types of contracts differently. Id. The court
found that the policy of “protect[ing] the flow of information necessary for competition among
businesses” applied equally to employment-related agreements and the agreement at issue. Id.
As DuoDesk notes, in the nearly thirty years since the Sencon court issued its opinion, no other
court has relied on Sencon for the proposition argued by Gee Hoo. In light of this and because the
Court is not persuaded by the reasoning of Sencon, the Court denies Gee Hoo’s motion. The Court is
not persuaded that the NDA should be deemed unenforceable on the grounds urged by Gee Hoo.
Accordingly and for the foregoing reasons, IT IS ORDERED that the Motion for Partial
Summary Judgment (Rec. Doc. 119) filed by Defendant Gee Hoo is DENIED.
March 16, 2016

___________________________________
JUDGE JAY C. ZAINEY
UNITED STATES DISTRICT JUDGE

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