Camsoft Data Systems, Inc. v. Southern Electronics Supply, Inc. et al

Filing 313

RULING denying in part 281 Motion for Oral Argument ; granting in part and denying in part 233 Motion to Dismiss ; granting in part and denying in part 234 Motion to Dismiss ; granting in part and denying in part 238 Motion to Dismiss ; grant ing in part and denying in part 239 Motion to Dismiss ; granting 240 Motion to Dismiss ; granting 241 Motion to Dismiss ; granting 242 Motion to Dismiss ; granting in part and and pltf's claims against these defendants for fraud, LUTPA, and unjust enrichment are DISMISSED 243 Motion to Dismiss ; granting in part and pltf's claims against these dft's for fraud, LUTPA, and unjust enrichment are DISMISSED in part 244 Motion to Dismiss; granting in part and and pltf's claims against these dft's for fraud, LUTPA, and unjust enrichment are DISMISSED 245 Motion to Dismiss ; granting in part and denying in part 246 Motion to Dismiss.. Signed by Judge James J. Brady on 7/26/2011. (CMM)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
CAMSOFT DATA SYSTEMS, INC.
CIVIL ACTION
VERSUS
NO. 09-1047-JJB
SOUTHERN ELECTRONICS SUPPLY,
INC., ET AL.
RULING
This matter is before the Court on numerous motions to dismiss filed by
various defendants in this matter. Defendants Active Solutions, LLC, Brian
Fitzpatrick, Henry J. Burkhardt, Ignace A. Perrin III, and Southerns Electronics
Supply, Inc. (“Southern”) (collectively, the “Active-Southern Defendants”) have
filed a motion to dismiss (doc. 233), which plaintiff CamSoft Data Systems, Inc.
(“CamSoft”) has opposed (doc. 249). CIBER, Inc. (“CIBER”) (doc. 234) and Mark
Kurt (doc. 238) have also filed motions to dismiss, which plaintiff has opposed
(doc. 251). Defendants Dell Inc. and Dell Marketing, L.P. (“Dell”) have filed a
motion to dismiss (doc. 239), which plaintiff has opposed (doc. 250). Defendants
Steve Reneker (doc. 240), Billy Ridge (doc. 241), and Heather Smith (doc. 242)
have each filed motions to dismiss, which plaintiff has opposed (doc. 250).
Defendant EarthLink, Inc. (“EarthLink”) has filed a motion to dismiss (doc. 243),
which plaintiff has opposed (doc. 253). Defendants Donald Berryman and Bill
Tolpegin (“EarthLink Employee Defendants”) have filed a motion to dismiss (doc.
245), which plaintiff has opposed (doc. 253). Defendant Motorola Solutions, Inc.
1

(“Motorola”) has filed a motion to dismiss (doc. 244), which plaintiff has opposed
(doc. 253). Defendant MMR Constructors, Inc. (“MMR”) has also filed a motion to
dismiss (doc. 246), which plaintiff has opposed (doc. 251).
Plaintiff has requested oral argument (doc. 281). The Active-Southern
Defendants (doc. 282) and CIBER (doc. 283) have opposed plaintiff’s request for
oral argument. After the filing of the aforementioned motions, the court granted
CamSoft’s request to file another amended complaint. The amendment was
limited to CamSoft’s claims under Sherman Act, Robinson-Patman, RICO, and
state antitrust law. This ruling, therefore, does not address the merits of
defendants’ arguments regarding dismissal of plaintiff’s Sherman Act, RobinsonPatman, RICO, or state antitrust law claims.
Rule 12(b)(6) provides for dismissal for failure to state a claim upon which
relief can be granted. Fed. R. Civ. P. 12(b)(6). In reviewing the complaint, courts
accept all well-pleaded facts in the complaint as true. C.C. Port, Ltd. v. DavisPenn Mortg. Co., 61 F.3d 288, 289 (5th Cir. 1995). Courts do not, however,
accept as true all legal conclusions. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949
(2009). Instead, “the complaint must contain sufficient factual matter, accepted
as true, to state a claim to relief that is plausible on its face.” Id. (quoting Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). That is, a plaintiff must
provide sufficient factual content for the court to reasonably infer that the plaintiff

2

is entitled to relief based upon the context of the case and the court’s “judicial
experience and common sense.” Id. at 1949-50.
Courts, therefore, must first identify the conclusory allegations, which do
not receive a presumption of truth, and then determine whether the remaining
factual allegations plausibly give rise to an entitlement of relief. Id. at 1950.
Active-Southern Defendants
The Active-Southern Defendants have moved to dismiss CamSoft’s
Second Supplemental and Amended Complaint (doc. 205) (hereinafter
“Complaint”1). First, the Active-Southern Defendants contend that “all delictual
actions2 have prescribed,” citing the one year liberative prescriptive period
applicable under Louisiana law. These defendants contend that CamSoft knew of
its state law tort causes of action by January 10, 2006 and thus these claims
have prescribed. However, the portions of the complaint cited by the ActiveSouthern Defendants do not support this argument and are mischaracterized by
the defendants. Paragraphs 173, 184, and 191 show that CamSoft likely knew it
had been excluded or “pushed aside” by the City of New Orleans and possibly
others, but not necessarily the Active-Southern Defendants.

1

Although plaintiff has filed a subsequent amended complaint (doc. 308), the amendment is limited to its
Sherman, Robinson-Patman, RICO and state antitrust claims. As such, the third amended complaint (doc. 308)
does not affect the outcome of this ruling.
2
Referring to CamSoft’s claims for fraud, tortious interference with business relations, breach of duty of
confidential business relations, promissory estoppel, and violations of state antitrust laws.

3

In opposition, CamSoft asserts that its state law delictual causes of action
did not accrue until September of 2009 when CamSoft asserts that it first learned
of the Active-Southern Defendant’s participation in the July 8, 2004 meeting and
subsequent agreements with Dell and city employees. (Complaint, ¶ 86). See
Jordan v. Emp. Transfer Corp., 509 So.2d 420 (La. 1987); Griffin v. Kinberger,
507 So.2d 821 (La. 1987). Accepting as true the factual allegations of the
Complaint, the court presently declines to find that these delictual causes of
action have prescribed.
Next, the Active-Southern Defendants seek dismissal of plaintiff’s claim
under the Louisiana Unfair Trade Practices Act (LUTPA), La. R.S. 51:1409,
based on peremption. In opposition, CamSoft contends that its LUTPA claims
involve the continuing violation doctrine and are limited in damages to one year
before filing suit and thereafter. In support, CamSoft cites Tubos de Acero de
Mexico, S.A. v. Am. Int’l Inv. Corp., 292 F.3d 471, 481-82 (5th Cir. 2002), for the
proposition that Louisiana’s one year peremptive period for unfair trade practices
is subject to the continuing violation doctrine. However, this Court is also aware
of Glod v. Baker, 899 So.2d 642, 647 (La. App. 3d Cir. 2005), which
distinguishes Tubos and notes that a “strong line of Louisiana jurisprudence”
holds that the continuing tort doctrine does not apply to suspend a peremptive
period, including the peremptive period applicable in Louisiana unfair trade
practices claims. See Canal Marine Supply, Inc. v. Outboard Marine Corp., 522
4

So.2d 1201 (La. App. 4th Cir. 1988). This court is persuaded by the reasoning
and authorities cited in Glod. As such, we hold that CamSoft’s LUTPA claims
against the Active-Southern defendants are prescribed and should therefore be
dismissed.
The Active-Southern Defendants also seek dismissal of plaintiff’s claims
for misappropriation of trade secrets. Louisiana Revised Statute § 51:1436
provides, “[a]n action for misappropriation must be brought within three years
after the misappropriation is discovered or by the exercise of reasonable
diligence should have been discovered.” CamSoft alleges that Active-Southern
Defendants misappropriated plaintiff’s trade secrets by disclosing them to city
employees and Dell at a meeting on July 8, 2004. However, CamSoft alleges that
it was not aware of this action until September 2009 (Complaint, ¶ 86). Whether
or not the Active-Southern Defendants can eventually produce evidence
regarding when plaintiff actually knew or should have known of the
misappropriation of trade secrets is not presently before the court. Accepting as
true the factual allegations in the Complaint, compared with the language of §
51:1436, the court declines to hold that plaintiff’s misappropriation of trade
secrets claim against the Active-Southern Defendants has prescribed.
Defendants also assert that plaintiff has disclosed its trade secrets to third
parties with no obligation to maintain the confidentiality of the information.
However, the court finds that plaintiff has alleged sufficient factual allegations to
5

assert that it reasonably attempted to prevent disclosure of its trade secrets. As
such, the court will not presently grant dismissal on this basis.
Defendants next contend that all claims asserted against them are timebarred under La. R.S. § 12:1502, which is entitled “Actions against persons who
control business organizations.” CamSoft alleges that CamSoft, Active, and
Southern were involved in a joint venture. Louisiana Revised Statute §
12:1502(B) notes that the statute specifically applies to partnerships, and as
defendants correctly assert, joint ventures are governed by Louisiana partnership
law. Broadmoor, L.L.C. v. Ernest N. Morial New Orleans Exhibition Hall Auth.,
867 So.2d 651, 663 (La. 2004). As such, the time periods of §1502 are
applicable to certain specified claims by CamSoft against the Active-Southern
Defendants.
Subsection (C) of §1502 establishes a one year prescriptive period for
claims including breach of fiduciary duty and gross negligence. Subsection (D)
provides a two year prescriptive period for claims of intentional tortious
misconduct, intentional breach of duty of loyalty, intentional unlawful distribution,
and acts or omissions in bad faith or involving fraud or a knowing and intentional
violation of law. Subsections (C) and (D) also establish a three year peremptive
period that runs from the date of the alleged act or omission. La. R.S. §12:1502
(“but in no event shall an action covered by the provisions of this Subsection be
brought more than three years from the date of the alleged act or omission”).
6

Because the three year peremptive period runs from the date of the alleged act
or omission, the Active-Southern Defendants assert that the acts or omissions
alleged against the Active-Southern Defendants largely occurred in 2004 and
2005 and, according to the Complaint, no later than January 2006. CamSoft did
not file suit until September 2009.
In opposition, CamSoft attempts to invoke the continuing tort theory,
asserting that Active-Southern Defendants believed they were still participating in
the complained of conspiracy in February of 2007. CamSoft asserts that the
prescriptive periods should run from either February 5, 2007 (the date of
involuntary termination of the alleged conspiracy) or April 13, 2009 (“the
timeframe after the Active-Defendants last direct, concerted and fraudulent
concealment of facts tending to cover up their involvement in the conspiracy”).
However, the court is persuaded by a recent Louisiana appellate court decision,
which addressed this matter.
We agree . . . as to the hybrid prescriptive and peremptive
nature of La. R.S. 12:1502. This statute is a prescriptive statute
that is subject to time limitations that have peremptive
attributes. Nevertheless, the time limitations contained within
this statute do not allow for plaintiffs . . . to levy claims under
the continuous tort doctrine.
Albeit that the statute at issue is not a strictly peremptive
statute, the peremptive elements of the subject liberative
prescription statute still do not permit the application of a
continuing tort theory. . . . The application of [the continuing tort]
doctrine stands in direct opposition, however, to the specific
wording of this statute, which provides in La. R.S. 12:1502(E)
7

that actions brought under La. R.S. 12:1502 are not subject to
suspension or interruption, unless a suit is timely filed. The
continuing tort doctrine is a suspension principle based on
contra non valentem.
Suhren v. Gibert, 55 So.3d 941, 947 (La. App. 4th Cir. 2011).
The plain language of §1502(E) makes clear that the three year limitation
period in §1502 “shall not be subject to suspension on any grounds or
interruption except by timely suit.” This court adopts the reasoning set forth in
Suhren, 55 So.3d at 945-47. Accordingly, the court finds that the three year
period has expired and any state law claims asserted by CamSoft against the
Active-Southern Defendants based on breach of fiduciary duty, applicable gross
negligence, intentional tortious misconduct, intentional breach of duty of loyalty,
intentional unlawful distribution, and acts or omissions in bad faith or involving
fraud or a knowing and intentional violation of law should be dismissed.
(Hereinafter, these claims are collectively referred to as “business torts based on
joint venture.”) The court does not find that §1502 applies to bar any federal law
claims nor state law claims other than those specified.
The Active-Southern Defendants also assert that plaintiff’s claims should
be dismissed pursuant to the Noerr-Pennington doctrine. However, the court
presently defers ruling on the merits of the Noerr-Pennington assertions because
we find that this matter turns on factual issues inappropriate for a 12(b)(6)
motion.

8

Defendants also contend that plaintiff has not alleged an actionable
conspiracy under Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). The
basis for defendants’ argument is that plaintiff’s characterization of the purported
conspiracy is “nonsensical,” noting that Twombly “requires a complaint with
enough factual information (taken as true) to suggest that an agreement was
made.” 550 U.S. at 556. According to defendants, “[w]here Camsoft further
alleges that the other participants in the July 8, 2004 meeting were actively
conspiring against the Active-Southern Defendants,” the claim for conspiracy
must fail as a matter of law because “the Active-Southern Defendants could not
be both perpetrators and victims of the same conspiracy.” The court disagrees
with defendants and finds that plaintiff has alleged sufficient facts to suggest that
an agreement was made involving these defendants. That some purported coconspirators are later alleged to have turned on the Active-Southern Defendants
does not warrant dismissal of plaintiff’s Complaint.
Finally, defendants contend, and CamSoft agrees, that plaintiff’s unjust
enrichment claim fails as a matter of law. As such, plaintiff’s unjust enrichment
claim against the Active-Southern Defendants should be dismissed.
CIBER
CIBER seeks dismissal of the allegations against it pursuant to Rules
12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. CIBER contends,
and CamSoft does not dispute, that plaintiff’s claim arising under Louisiana’s
9

Unfair Trade Practices Act (LUTPA) is perempted. Therefore, the LUPTA claim
against CIBER should be dismissed.3
CIBER also seeks dismissal of plaintiff’s claim under Louisiana Uniform
Trade Secrets Act (LUTSA). On this matter, the court agrees with CIBER that
plaintiff has not alleged sufficient facts indicating that CIBER engaged in any
activity to misappropriate4 CamSoft’s trade secrets, nor that CIBER was involved
in a conspiracy to misappropriate CamSoft’s trade secrets. In other words,
CamSoft has not adequately alleged that CIBER either acquired its trade secret
with knowledge it was acquired through improper means, or disclosed or used
CamSoft’s trade secret without express or implied consent. The closest the
Complaint comes to making such an allegation is in paragraph 346, however this
paragraph only alleges that CIBER knew or should have known of what other
actors were doing, combined with the conclusory allegation that CIBER is
“imported with the MOT Employees’ knowledge . . . given their employment as
subcontractors to Ciber.” Mere knowledge does not constitute an agreement, and
CIBER’s actions in furtherance of a conspiracy to violate other laws does not
mean that CIBER agreed to misappropriate plaintiff’s trade secrets. The court is
not persuaded by plaintiff’s attempt to use vicarious liability to establish CIBER’s
liability under LUTSA. Though plaintiff has made one non-factual, conclusory
3

Plaintiff requests that the dismissal be without prejudice in the event discovery produces additional relevant
facts. However, plaintiff has already been given the opportunity to amend its Complaint in light of discovery. As
such, the dismissal of the LUTPA claims—along with the other claims dismissed in this ruling—is with prejudice.
4
See La. R.S. 51:1431(2) for the definition of misappropriation under LUTSA.

10

allegation that MOT Employees “were working within the course and scope of
their employment with Ciber,”5 plaintiff’s own Complaint generally characterizes
the MOT Employees and their privately held companies as independent
subcontractors of CIBER. See Complaint, ¶¶ 299, 300, 306. Moreover, plaintiff
has pointed to no factual allegations in the Complaint that would justify the
conclusion that the MOT Employees and/or their privately held companies were
controlled by or employed by CIBER, nor that they were anything other than
independent subcontractors. As such, plaintiff’s LUTSA claim against CIBER
should be dismissed.
CIBER also seeks dismissal of CamSoft’s fraud claim against it. CIBER
correctly points to the statement in the Complaint where CamSoft “admits that no
direct Ciber employee made any affirmative material misrepresentations to either
MacDonald or CamSoft.” (Complaint, ¶355). However, CamSoft asserts (in
conclusory language) that CIBER “is vicariously liable for the MOT Employees’
fraudulent misrepresentations,” and that CIBER “either knew or should have
known of CamSoft, and accordingly conspired with the MOT Employees, Active
Solutions and Southern Electronics, who did in fact make delictual and fraudulent
misrepresentations.” Id. Given the court’s previous determination regarding
CIBER’s purported vicarious liability for MOT Employees, and considering the

5

Complaint, ¶ 355. While plaintiff’s Complaint does allege that Kurt eventually came to be employed by CIBER, this
employment did not begin, according to the Complaint, until May 2007.

11

law cited by CIBER,6 the court finds these allegations insufficient. Regarding
CIBER, CamSoft has not adequately alleged misrepresentation of a material fact,
nor has it adequately alleged fraudulent intent. As such, plaintiff’s claim against
CIBER for fraud should be dismissed.
CIBER seeks dismissal of plaintiff’s claim for unjust enrichment. Plaintiff
does not dispute dismissal of its unjust enrichment claim against CIBER. As
such, the unjust enrichment claim against CIBER should be dismissed.
Finally, CIBER seeks dismissal of CamSoft’s conspiracy claim against it.
While CIBER is correct that conspiracy is not an independent tort under
Louisiana law, Louisiana law does impose liability for conspiracy to commit an
underlying tort. Aranyosi v. Delchamps, Inc., 739 So.2d 911, 917 (La. App. 1st
Cir. 1999). As correctly noted by CIBER, it is the underlying tort that constitutes
the actionable element of the claim. Id. Plaintiff has alleged sufficient factual
allegations to constitute a conspiracy involving CIBER. While the court will not
recognize an independent tort of conspiracy under Louisiana law, insofar as
plaintiff has other remaining causes of actions related to the purported
conspiracy, its conspiracy allegations are not dismissed.
Mark Kurt
First, Kurt seeks dismissal of plaintiff’s Complaint for violations of Rule 8.
Kurt contends that the Complaint is “overly verbose and confusing” (doc. 238-1,

6

See Opposition, doc. 234-5, page 38.

12

p. 5). While Kurt cites examples where courts have chosen to dismiss complaints
under Rule 8, the cases also indicate that a district court is vested with much
discretion in the matter. This court finds that plaintiff’s Complaint should not be
dismissed under Rule 8.
Kurt also seeks dismissal of the claims against him pursuant to qualified
immunity based on his role as Chief Technology Officer of the MOT for the City
of New Orleans. Kurt cites La. R.S. 9:2798.1(B), which states: “Liability shall not
be imposed on public entities or their officers or employees based upon the
exercise or performance or the failure to exercise or perform their policymaking
or discretionary acts when such acts are within the course and scope of their
lawful powers and duties.” CamSoft cites also to subsection C of the same
statute, which provides, in part, that subsection B immunity does not apply to
“acts or omissions which constitute criminal, fraudulent, malicious, intentional,
willful, outrageous, reckless, or flagrant misconduct.” The court presently
declines to reach the merits of Kurt’s immunity argument because resolution
would require factual determinations more appropriate for summary judgment or
trial.
Kurt also seeks dismissal of plaintiff’s claims against him pursuant to Rule
12(b)(6). According to Kurt’s motion, Kurt is “improperly lumped in” with his
alleged co-conspirators and the Complaint does not detail the role Kurt played in
plaintiff’s causes of action. However, a review of plaintiff’s Complaint reveals
13

otherwise. Paragraphs 218, 222, 231, 235, 280, and 300, among others, detail
the role specifically played by Kurt in the overall conspiracy and causes of action
(doc. 205). These allegations are in addition to other allegations throughout the
Complaint in which plaintiff discusses actions by groups of defendants
collectively.
Kurt also seeks dismissal of plaintiff’s claim under LUTPA. The court
agrees with Kurt that CamSoft’s claims has prescribed under the one year time
period of La. R.S. 51:1409(E). As such, CamSoft’s state law claim against Kurt
for unfair trade practices under LUTPA should be dismissed.
Kurt seeks dismissal of plaintiff’s claim under LUTSA as well. However,
Kurt’s primary arguments in this regard are more appropriate for summary
judgment or trial than the present motion. Kurt claims plaintiff’s purported trade
secret was revealed in the public record and thus cannot support a LUTSA claim.
However, for purposes of the present motion, the court assumes the factual
allegations of the Complaint are true and finds that plaintiff has properly asserted
a claim under LUTSA. Plaintiff has alleged facts to indicate that Kurt was
involved in the conspiracy to misappropriate plaintiff’s wireless network designs.
Whether plaintiff can eventually prevail on the merits of its LUTSA claim is not
presently before the court.
Kurt seeks dismissal of plaintiff’s claims against Kurt for declaration of
ownership interest under Louisiana law, breach of fiduciary duty, breach of
14

confidential relations, promissory estoppel, breach of contract, and unjust
enrichment. Plaintiff concedes that it has no claim against Kurt for these causes
of action. With the exception of the unjust enrichment claim, plaintiff correctly
asserts that its Complaint does not attempt to state causes of action for the
aforementioned claims against Kurt. The court agrees with both plaintiff and
defendant that CamSoft’s claim against Kurt for unjust enrichment should be
dismissed.
Kurt seeks dismissal of plaintiff’s fraud claim against him. CamSoft’s
opposition in no way responds to Kurt’s assertion that the Complaint fails to
comply with Rule 9(b)’s heightened pleading requirements for fraud. As such, the
court finds that CamSoft’s state law fraud claim against Kurt should be
dismissed.
Kurt also seeks dismissal of plaintiff’s claim for tortious interference with
business relations. Kurt claims that the allegations against Kurt do not constitute
a cognizable claim for tortious interference with business relations. In its
opposition, CamSoft focuses on the roles played by other actors. However,
CamSoft does not sufficiently address why its allegations are sufficient to state a
cognizable claim for relief against Kurt for tortious interference with business
relations. As such, the court finds this claim against Kurt should be dismissed.
Kurt contends that CamSoft has failed to state a claim for conspiracy under
Louisiana law. The court has already addressed that conspiracy is not an
15

independent tort under Louisiana law and that the actionable element in a
conspiracy claim is not the conspiracy itself but the underlying tort. In this case,
as we have cited to numerous allegations in the Complaint related to Kurt and his
involvement in a conspiracy to engage in purported violations of law, the court
finds that plaintiff has adequately alleged Kurt was involved in a civil conspiracy
under Louisiana law. Plaintiff cannot recover for an independent state law tort
based solely on this conspiracy, but as plaintiff has other causes of action
remaining which serve as an underlying tort, the conspiracy claim should not
presently be dismissed.
Finally, Kurt contends that CamSoft fails to state a claim for fraudulent
concealment. However, plaintiff’s Complaint does not attempt to state a cause of
action for fraudulent concealment, but only seeks to raise the issue of fraudulent
concealment as a defense against prescription. The court thus finds it
unnecessary at present to address Kurt’s arguments in this regard.
Dell, Steve Reneker, Billy Ridge and Heather Smith
Dell seeks dismissal of all claims against it and its named employees.
Reneker, Ridge, and Smith (“Dell employees”) each contend that the state law
claims for LUTPA violations, fraud, unjust enrichment, and conspiracy should be
dismissed because the allegations are based on actions committed within the
scope of their employment with Dell. These defendants correctly assert that
under Louisiana law, an employee will not be held personally liable for the
16

delictual or contractual obligations of his or her employer unless the employee
acts outside the scope of his employment. See Korson v. Independence Mall I,
Ltd., 595 So.2d 1174, 1177-78 (La. App. 5th Cir. 1992). Accepting as true the
factual allegations of the Complaint, CamSoft has failed to state a claim against
the Dell employees on these causes of action. As such, the LUTPA, fraud, unjust
enrichment, and conspiracy claims against the Dell employees should be
dismissed.
Dell contends that plaintiff’s LUTPA claim should be dismissed because
the claim is perempted. This ruling has already addressed the peremptive nature
of the one year LUTPA period. Dell also argues that CamSoft’s LUTPA claim
against Dell is perempted even if the continuing violation doctrine applies
because, based on the factual allegations of the Complaint, Dell’s “continual
unlawful acts” stopped in January 2007. The court is persuaded by Dell’s
analysis in this regard and finds that CamSoft’s claim against Dell for violations of
LUTPA should be dismissed.
Dell also seeks dismissal of CamSoft’s LUTSA claim. To establish a claim
under LUTSA, CamSoft must allege: (1) the existence of a trade secret; (2) a
misappropriation of the trade secret, and (3) actual loss caused by the
misappropriation. Some of Dell’s LUTSA arguments—such as whether plaintiff
destroyed its trade secret by voluntarily disclosing it to third parties—are more
appropriate for a later motion for summary judgment or a trial on the merits. For
17

purposes of this motion, the court assumes the factual allegations of the
Complaint are true. The court finds that the Complaint adequately states a claim
for relief under LUTSA; plaintiff has alleged the existence of its purported trade
secret and has alleged misappropriation of the trade secret as well as actual
loss. Specifically, regarding Dell’s arguments related to misappropriation, the
court finds that paragraph 345 of the Complaint, combined with the other factual
allegations, alleges sufficient facts to state a claim for misappropriation of trade
secrets. This ruling has already addressed why plaintiff’s LUTSA claim has not
necessarily prescribed. As such, CamSoft’s LUTSA claim against Dell should not
be dismissed.
Dell also seeks dismissal of CamSoft’s state law fraud claim. To state a
claim for fraud, CamSoft must allege that Dell made a misrepresentation of
material fact to CamSoft with the intent to deceive and that CamSoft justifiably
relied on the misrepresentation and suffered injury as a result. Newport Ltd. v.
Sears, Roebuck & Co., 6 F.3d 1058, 1068 (5th Cir. 1993). CamSoft concedes
that it has “alleged no facts suggesting that any representative of Dell made any
false statements to CamSoft” (doc. 250, p. 49). Instead, CamSoft relies on the
effects of conspiracy law to hold Dell liable for the fraudulent conduct of other
defendants.
Separating the factual allegations, which are entitled to a presumption of
truth, from the legal conclusions which are not entitled to such a presumption,
18

reveals that plaintiff has not properly alleged that Dell engaged in a conspiracy to
defraud CamSoft. Paragraph 354 of the Complaint provides one illustration of the
conclusory nature of CamSoft’s allegations regarding Dell’s involvement with the
purported conspiracy to defraud (“CamSoft alleges that Dell either knew or
should have known of CamSoft, and accordingly conspired with the MOT
Employees, Active Solutions and Southern Electronics, who did in fact make
delictual and fraudulent misrepresentations, for the purpose of benefitting all Dell
Alliance Members”). In short, the factual allegations related to Dell’s involvement
in the conspiracy to defraud do not state claim to relief that is plausible on its
face. For instance, plaintiff appears to propose that the agreement forming the
basis of the conspiracy was entered into at the July 8, 2004 meeting. However,
the factual allegations later in the Complaint directly contradict that Dell reached
such an agreement in 2004 or at all. See, e.g., Complaint, ¶¶ 129, 138, 210. As
such, the court finds that plaintiff’s fraud claim against Dell should be dismissed.
Dell also seeks dismissal of plaintiff’s claim for unjust enrichment. CamSoft
does not oppose Dell’s request in this regard. Accordingly, plaintiff’s unjust
enrichment claim against Dell should be dismissed. Finally, Dell seeks dismissal
of CamSoft’s conspiracy claim. However, CamSoft readily admits that it does not
seek to allege an independent cause of action for conspiracy. As such, there is
no need to dismiss the conspiracy “claim” because it does not represent a
separate cause of action.
19

EarthLink and EarthLink Employee Defendants
EarthLink and the EarthLink Employee defendants (collectively, “EarthLink
defendants”) seek dismissal of plaintiff’s claims for LUTPA, unjust enrichment,
and conspiracy. Plaintiff concedes in its opposition that the court should dismiss
the LUTPA, fraud, and unjust enrichment claims against these defendants.
Accordingly, the court finds that these claims against the EarthLink defendants
should be dismissed. CamSoft asserts that it has not stated a separate cause of
action for conspiracy. As such, there is no need to dismiss plaintiff’s conspiracy
“claim” against these defendants as there is no independent cause of action to
dismiss. Insofar as plaintiff’s conspiracy allegations relate to its antitrust claims,
we have already stated that this ruling does not address the parties’ arguments
regarding plaintiff’s antitrust claims.
Motorola
Motorola has also filed a motion to dismiss. Plaintiff concedes that its
fraud, LUTPA, and unjust enrichment claims against Motorola should be
dismissed. As such, the court finds that these claims against Motorola should be
dismissed.
MMR
MMR also seeks dismissal of plaintiff’s claims against it. CamSoft
concedes in its opposition that its claims against MMR are “solely” based on “the
legal theory of successor liability” (doc. 251, p. 47). Plaintiff also makes clear that
20

it “does not allege that MMR Constructors or its employees played any
independent role in the alleged activities” described in the Complaint (id., pp. 4748). MMR correctly points out, though, that CamSoft has failed to allege facts
sufficient to establish successor liability of MMR. In its opposition, CamSoft cites
to no specific allegations in the Complaint; plaintiff simply asserts that it has
established successor liability based on the fraud or continuation exceptions to
the general rule of non-liability.7 However, plaintiff has not alleged sufficient facts
in its Complaint to indicate MMR was formed to defraud creditors of NetMethods.
Plaintiff’s only option, then, is to have alleged facts sufficient to establish that
MMR was a continuation of NetMethods. CamSoft’s allegations fall short in this
regard as well. Plaintiff has not alleged that MMR purchased all the assets of
NetMethods,8 nor that the owners of the selling company had a substantial or
almost identical interest in the purchasing corporation.9 The closest the
Complaint comes to making such allegations is its assertion that MMR
“acquired”10 NetMethods; however, the Complaint also alleges that St. Pierre, the
former owner of NetMethods, was merely a “contractor”11 of MMR.
7

8 GLENN MORRIS & WENDELL HOLMES, LA CIVIL LAW TREATISE § 37.02 (2010). Plaintiff has also not alleged facts sufficient
to invoke either of the other noted exceptions—based on assumption of liabilities or “de facto”
merger/consolidation.
8
See Pichon v. Asbestos Defendants, 52 So.3d 240, 244 (La. App. 4th Cir. 2010), citing Golden State Bottling Co. v.
N.L.R.B., 414 U.S. 168 (1973). See also, LeBlanc v. Adams, 510 So.2d 678, 682 (La. App. 4th Cir. 1987) (continuing
business operations of company does not constitute an acquiring of assets and liabilities).
9
See Nat’l Sur. Corp. v. Pope Park, Inc., 121 So.2d 240, 243 (La. 1960).
10
See, e.g., Complaint, ¶¶ 257, 326, 356. See also, Complaint, ¶ 259, which alleges that MMR merely assumed a
“part of NetMethods business.”
11
Complaint, ¶¶ 254, 356.

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Based solely on the factual allegations contained in the Complaint,
CamSoft has failed to state a claim against MMR for violation of LUTPA, violation
of LUTSA, fraud, conspiracy, or unjust enrichment, as CamSoft has failed to
allege facts sufficient to establish successor liability. As such, these claims
against MMR should be dismissed.
Accordingly, the Active-Southern Defendants’ motion (doc. 233) is
GRANTED INSOFAR as it seeks dismissal of plaintiff’s claims against the ActiveSouthern Defendants for violation of LUTPA, state law business torts based on
joint venture,12 and unjust enrichment, and is DENIED in all other respects,
except that the court makes no determination on the merits of the parties’
arguments regarding RICO and antitrust claims. CIBER’s motion (doc. 234) is
GRANTED INSOFAR as it seeks dismissal of plaintiff’s claims against CIBER for
violation of LUTPA, violation of LUTSA, fraud, and unjust enrichment, and is
DENIED in all other respects, except that the court makes no determination on
the merits of the parties’ arguments regarding RICO and antitrust claims. Mark
Kurt’s motion (doc. 238) is GRANTED INSOFAR as it seeks dismissal of
plaintiff’s claims against Kurt for violation of LUTPA, state law fraud, tortious
interference with business relations, and unjust enrichment, and is DENIED in all
other respects, except that the court makes no determination on the merits of the
12

As noted earlier in our ruling, the phrase “business torts based on joint venture” refers specifically to state law
claims asserted by CamSoft against the Active-Southern Defendants based on breach of fiduciary duty, applicable
gross negligence, intentional tortious misconduct, intentional breach of duty of loyalty, intentional unlawful
distribution, and acts or omissions in bad faith or involving fraud or a knowing and intentional violation of law.

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parties’ arguments regarding RICO and antitrust claims. The Dell employees’
motions (docs. 240, 241, 242) are GRANTED INSOFAR as they seek dismissal
of plaintiff’s claims for LUTPA violations, fraud, unjust enrichment, and
conspiracy; however the court makes no determination regarding the merits of
the parties’ arguments regarding antitrust and RICO claims.
Dell’s motion (doc. 239) is GRANTED INSOFAR as it seeks dismissal of
plaintiff’s LUTPA, fraud, and unjust enrichment claims, and DENIED in all other
respects, except that the court makes no determination on the merits of the
parties’ arguments regarding RICO and antitrust claims. The EarthLink
defendants’ motions (docs. 243, 245) are GRANTED IN PART, and plaintiff’s
claims against these defendants for fraud, LUTPA, and unjust enrichment are
DISMISSED; however, the court makes no determination on the merits of the
parties’ arguments regarding RICO and antitrust claims. Motorola’s motion (doc.
244) is GRANTED IN PART, and plaintiff’s claims against Motorola for fraud,
LUTPA, and unjust enrichment are DISMISSED; however, the court makes no
determination on the merits of the parties’ arguments regarding RICO and
antitrust claims. MMR’s motion (doc. 246) is GRANTED INSOFAR as it seeks
dismissal of plaintiff’s claims against MMR for violation of LUTPA, violation of
LUTSA, fraud, conspiracy, and unjust enrichment; however, the court makes no
determination on the merits of the parties’ arguments regarding RICO and

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antitrust claims. Plaintiff’s request for oral argument (doc. 281) is HEREBY
DENIED.
Signed in Baton Rouge, Louisiana, on July 26, 2011.





JUDGE JAMES J. BRADY
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

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