Structural Preservation Systems, LLC v. Andrews et al
MEMORANDUM AND ORDER denying 52 Motion of Sean Turner and Benjamin Bill to Dismiss for Failure to State a Claim; denying 57 Motion of James Andrews to Dismiss for Failure to State a Claim and/or, Alternatively, to Transfer Under Forum Non Conveniens. Signed by Judge Marvin J. Garbis on 7/22/13. (jnls, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
SYSTEMS, LLC, et al.
JAMES L. ANDREWS, et al.
CIVIL ACTION NO. MJG-12-1850
MEMORANDUM AND ORDER RE: MOTIONS TO DISMISS AMENDED COMPLAINT
The Court has before it Defendants Sean Turner's and
Benjamin Ball's Motion to Dismiss Amended Complaint for Failure
to State a Claim [Document 52], Defendant James Andrews' Motion
to Dismiss for Failure to State a Claim and/or, Alternatively,
to Transfer Under Forum Non Conveniens [Document 57], and the
materials submitted related thereto.
The Court has had a
hearing and had the benefit of the arguments of counsel.
Plaintiff Structural Preservation Systems, LLC ("SPS"),
based in Hanover, Maryland, is a specialty contractor that
provides construction and engineering services in the
commercial, government, industrial, energy, and transportation
Specifically, SPS performs floor tipping restoration
The "facts" are stated herein as alleged by Plaintiffs and
not agreed upon in various respects by Defendants.
and vault work.
Plaintiff Structural Group, Inc. ("SGI"), based
in Baltimore, Maryland, is the general manager of SPS.
Defendants Sean Turner ("Turner"), Benjamin Ball ("Ball"), and
James Andrews ("Andrews") (collectively, the "Defendants") are
former employees of SPS.
In 2006 and 2007, SPS entered into employment agreements
with the Defendants that contain forum-selection clauses,
confidentiality provisions, and, for Andrews only, a nondisparagement provision.
Following the conclusion of the
Defendants' employment with SPS in 2010 and 2011, the Defendants
started a new business venture in California, Turner & Sons,
that competes with SPS for floor tipping restoration and vault
Plaintiffs allege that the Defendants have
misappropriated SPS's valuable and confidential proprietary
business information and/or trade secrets in connection with
Turner & Sons, which enabled Turner & Sons to undercut SPS's
bids on two construction projects.
In addition, Plaintiffs claim that after the conclusion of
his employment with SPS, Andrews told persons - including
current employees of SPS - that SPS is engaged in a bid-rigging
scheme, raided other corporate entities, and engaged in racism
and discrimination against employees.
On June 22, 2012, Plaintiffs filed the Complaint [Document
In the Memorandum and Order Re: Motions to Dismiss
[Document 43] the Court held that it could exercise personal
jurisdiction over the Defendants and that venue in the District
of Maryland is proper and dismissed, without prejudice to the
filing of an Amended Complaint, all claims against Andrews.
On April 1, 2013, SPS and SGI (collectively "Plaintiffs")
filed the Amended Complaint [Document 49] presenting claims in
Breach of Contract (All Defendants),
Violation of Maryland Uniform Trade
Secrets Act (All Defendants),
Breach of Contract (Defendant Andrews),
Declaratory Judgment (Defendant
By the instant motions, each Defendant seeks dismissal of
all claims in the Amended Complaint against him pursuant to Rule
In addition, Andrews sought alternatively to transfer
this case under forum non conveniens to the Central District of
All Rule references herein are to the Federal Rules of
Civil Procedures unless otherwise indicated.
Defendants Turner and Ball, who filed a dismissal motion
III. DISMISSAL STANDARD
A motion to dismiss filed pursuant to Rule 12(b)(6) tests
the legal sufficiency of a complaint.
A complaint need only
contain "a short and plain statement of the claim showing that
the pleader is entitled to relief, in order to give the
defendant fair notice of what the . . . claim is and the grounds
upon which it rests."
Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007) (citations omitted).
When evaluating a 12(b)(6)
motion to dismiss, a plaintiff's well-pleaded allegations are
accepted as true and the complaint is viewed in the light most
favorable to the plaintiff.
However, conclusory statements or a
"formulaic recitation of the elements of a cause of action" will
A complaint must allege sufficient facts to
"cross 'the line between possibility and plausibility of
entitlement to relief.'"
Francis v. Giacomelli, 588 F.3d 186,
193 (4th Cir. 2009) (quoting Twombly, 550 U.S. at 557).
Inquiry into whether a complaint states a plausible claim
is "a context-specific task that requires the reviewing court to
draw on its judicial experience and common sense."
if the well-pleaded facts contained within a complaint "do not
jointly, also requested transfer of this case to the Central
District of California on the grounds that the forum-selection
clause in Turner's employment agreement was the product of
overreaching. After Turner and Ball filed their dismissal
motion, the Court found the forum-selection clause in Turner's
employment agreement to be enforceable [Document 65].
permit the court to infer more than the mere possibility of
misconduct, the complaint has alleged – but it has not shown –
that the pleader is entitled to relief."
Id. (quoting Ashcroft
v. Iqbal, 556 U.S. 662, 679 (2009)) (internal quotation marks
Misappropriation Claims (Counts I and II)
Plaintiffs allege that, as part of their employment with
SPS, the Defendants were given access to valuable and
confidential proprietary information related to SPS's client
lists, client preferences, pricing models, estimating and markup strategies, and customized tools to price jobs and create
Am. Compl. [Document 49] ¶¶ 34, 36.
information (collectively referred to as "the Proprietary
Information contained in the Customer
Relationship Management Program ("CRM") – a
password protected program purchased by SPS that
maintains a customer relationship database
including information on current clients,
potential clients, client needs, and work
performed for clients;4
Pricing Tools – computerized program that houses
customized tools developed by SPS to price jobs,
create estimates and mark-ups, and formulate bids
for clients and potential clients. Each screen
Only Turner and Andrews are alleged to have had access to
the CRM while employed with SPS. Am. Compl. ¶ 38.
of the Pricing Tools program is marked
The Template – an "estimating template" developed
by and unique to SPS that is used to create bids
for projects, provides SPS with an "economic
advantage over competitors in the marketplace",
and contains bid calculation methods particular
to SPS. The Template is standardized based on
the type of project (i.e., floor-tipping or vault
Project Tools – customized tools for forecasting
jobs, production, check lists, safety, etc.,
which are accessible only on SPS's intranet; and
Procedural Guides – step-by-step procedural
guides unique to SPS, such as an 18-step
Procedural Guide for floor tipping projects.
Each page of the Procedural Guides is marked
Id. ¶¶ 37-53.
Plaintiffs allege that SPS maintained procedures to protect
the Proprietary Information from disclosure to competitors,
including employee acknowledgements when entering SPS's intranet
that all information contained on that network is confidential,
confidentiality provisions in employment agreements,
confidentiality provisions in all bids, and limiting access to
certain of the Proprietary Information by job description.
Plaintiffs allege that the Proprietary Information are
protected as confidential information under the Defendants'
employment agreements and constitute trade secrets under the
Contract Rights Enforceability
The Defendants contend that Count I is subject to dismissal
because the Confidentiality Provisions in their respective
employment agreements are unenforceable under California or
Maryland law as de facto non-compete clauses or unreasonable
restraints on trade.
Thus, they contend, Plaintiffs can protect
any Proprietary Information that constitutes a statutory trade
secret only by their MUTSA claim (Count II) and cannot, by
asserting contract rights, protect any Proprietary Information
that is not a statutory trade secret.
The Confidentiality Provisions
Turner and Ball signed identical employment agreements with
maintaining the confidentiality and value of
its trade secrets.
The phrase "trade
secrets" means any company confidential or
proprietary information of or relating to
[SPS], or the business prospects or affairs
of [SPS], including but not limited to,
Turner's employment agreement is with "Structural
Preservation Systems, LLC, and all of its subsidiaries and
affiliates" and Ball's employment agreement is with "Structural
Group, Inc. and all of its subsidiaries and affiliates."
information, customer lists and information,
products, processes and procedures, designs,
and training programs within the company
knowledge management system. . . .
Am. Compl. Ex. 2, 3 [Documents 49-3, 49-4] ¶ 2.
Ball's employment agreements provide that they agree "not to use
(other than for the exclusive benefit of [SPS]) or disclose to
any person, firm, or corporation . . . the trade secrets or
other information of or pertaining to [SPS].
disclosure agreement does not apply to information of [SPS]
which is generally available to the public through no actions of
Id. ¶ 3(a).
Andrews signed an employment agreement with SPS that
contained a confidentiality provision stating that Andrews
. . . [K]eep confidential and will not
disclose to anyone . . . or publish, utter,
exploit or make use of (or aid others in
publishing, uttering, exploiting or using),
or otherwise Misappropriate . . . any Trade
obligations hereunder shall continue both
during and after the Term hereof for so long
as such Trade Secrets or Confidential or
Proprietary Information remain Trade Secrets
or Confidential or Proprietary Information
of the Company.
Turner's and Ball's employment agreements do not contain
Am. Compl. Ex. 1 [Document 49-2] ¶ 7(a)(1).
"Trade Secrets or
Confidential or Proprietary Information" is defined as
information that would be considered a "trade secret" under the
MUTSA7 and information that is "unique to [SPS] which has a
significant business purpose and is not known or generally
available from sources outside [SPS] or typical of industry
practice" or "the disclosure of which would have a material
adverse effect on the business of [SPS]."
Id. ¶ 7(c)(4)(i) &
Defendants contend that the Confidentiality Provisions are
unenforceable as de facto non-compete clauses or unreasonable
restraints on trade to the extent such provisions are broader
than the MUTSA or any other applicable trade secrets law.
Defendants also maintain that despite the principles of lex loci
contractus (under which Turner and Ball admit Maryland law most
likely controls)8 and the Maryland choice-of-law provision in
The Andrews' agreement provides that "all Trade Secrets or
Confidential or Proprietary Information shall be 'Trade Secrets'
(as defined under the [MUTSA], which definition is set forth in
Section 7(c)(4)(i) hereof)." Am. Compl. Ex. 1 [Document 49-2]
Turner and Ball assert that Maryland recognizes a "public
policy" exception to lex loci contractus that would permit the
Court to apply California law over Maryland law. The Maryland
Court of Appeals has recognized that it will not apply the lex
loci principles in a contract action to the extent those
Andrews' employment agreement, California law should control the
enforceability of the Confidentiality Provisions because
California has a strong public policy against restrictive
The Proprietary Information that Plaintiffs seek to protect
appears, at least potentially, to include information that would
not constitute a MUTSA trade secret.
Whether applying Maryland
or California law, questions arise as to the enforceability of
the Confidentiality Provisions by virtue of their having wider
breadth than the MUTSA.
See generally Metro Traffic Control,
Inc. v. Shadow Traffic Network, 27 Cal.Rptr.2d 573, 577 (App.
Ct. 1994) (affirming denial of preliminary injunction and
explaining California law permits restraints in employment
agreements that are "necessary to protect the employer's trade
secrets"); Allied N. Am. Ins. Brokerage Corp. of Cal. v.
Woodruff–Sawyer, 2005 WL 6583937, at *8 (N.D. Cal. Feb.22, 2005)
(noting, in context of preliminary injunction motion, that postemployment non-solicitation agreements protecting a former
employer's "confidential, proprietary, and/or trade secret"
principles require the enforcement of another state's law and
there is a "strong public policy" against enforcement of that
law in Maryland. See Lab. Corp. of Am. v. Hood, 911 A.2d 841,
848 (2006) (citing Bethlehem Steel Corp. v. G.C. Zarnas & Co.,
Inc., 498 A.2d 605, 608 (Md. 1985)). The Court does not now
reach the issue but observes that the rationale of the Hood and
Bethlehem Steel decisions may not be applicable to the instant
information do not run afoul of Section 166009); Fowler v.
Printers II, Inc., 598 A.2d 794, 799 (Md. Ct. Spec. App. 1991)
(explaining that an employer can enforce restrictive covenants
to prevent the misuse of trade secrets, routes, or lists of
clients or solicitation of customers).
Moreover, there may be
issues presented regarding whether, as to the Proprietary
Information that is a MUTSA trade secret, a contract claim is
duplicative or preempted.
The issues surrounding the applicability of California law
on public policy grounds and the enforceability of the
Confidentiality Provisions, which are heavily intertwined,
present substantial factual questions.
See Ruhl v. F.A.
Bartlett Tree Expert Co., 225 A.2d 288, 291 (Md. 1967)
(explaining that when determining whether a restrictive covenant
in an employment contract is enforceable, courts assess "whether
the particular restraint is reasonable on the specific facts");
Ecology Servs., Inc. v. Clym Envtl. Servs., LLC, 952 A.2d 999,
1007 (Md. Ct. Spec. App. 2008).
Accordingly, the Amended Complaint is not subject to
dismissal on enforceability grounds.
California Business and Professions Code § 16600 provides
that "every contract by which anyone is restrained from engaging
in a lawful profession, trade, or business of any kind is to
that extent void."
Defendants Turner and Ball contend that Count I is subject
to dismissal as preempted by the MUTSA
Subject to certain exceptions, the MUTSA provides the
exclusive civil remedy for the misappropriation of a trade
See Md. Code Ann., Com. Law § 11-1207; Bond v.
PolyCycle, Inc., 732 A.2d 970, 976 n.2 (Md. Ct. Spec. App.
However, as discussed above, Count I includes claims
based on Proprietary Information that is not a MUTSA trade
Hence, there are at least some claims in Count I that
are not preempted by the MUTSA.
See Swedish Civil Aviation
Admin. v. Project Mgmt. Enters., Inc., 190 F. Supp. 2d 785, 802
(D. Md. 2002) (concluding breach of confidential relation claim
not subject to dismissal as preempted by MUTSA where a plaintiff
may plead in the alternative that if misappropriated information
was not trade secret, the defendant breached the duty of
Accordingly, Count I is not subject to dismissal on
Adequacy of the Factual Allegations
The Defendants assert that the factual allegations in the
Amended Complaint fail to provide enough detail to support a
plausible claim that the Proprietary Information are trade
secrets or that the Defendants misappropriated such information
in violation of the Confidentiality Provisions and/or the MUTSA.
The MUTSA defines a trade secret as:
[I]nformation, including a formula, pattern,
technique, or process, that:
(1) Derives independent economic value,
generally known to, and not being readily
ascertainable by proper means by, other
persons who can obtain economic value from
its disclosure or use; and
(2) Is the subject of
maintain its secrecy.
Md. Code Ann., Com. Law § 11-1201(e).
"The existence of a trade secret is a conclusion of law
based upon the applicable facts."
Trandes Corp. v. Guy F.
Atkinson Co., 996 F.2d 655, 661 (4th Cir. 1993).
Restatement of Torts sets forth six factors relevant to
determining whether given information constitutes a trade
(1) the extent to which the information is
known outside of his business; (2) the
extent to which it is known by employees and
others involved in his business; (3) the
extent of measures taken by him to guard the
secrecy of the information; (4) the value of
competitors; (5) the amount of effort or
money expended by him in developing the
information; (6) the ease or difficulty with
which the information could be properly
acquired or duplicated by others.
Id. (quoting Restatement (First) of Torts § 757 cmt. b.).
Maryland courts consider the Restatement factors to provide
"helpful guidance to determine whether the information in a
given case constitutes 'trade secrets' within the definition of
Optic Graphics, Inc. v. Agee, 591 A.2d 578, 585 (Md.
Ct. Spec. App. 1991).
The Defendants argue that the Amended Complaint is
deficient because it does not allege that the Proprietary
Information is "not generally known" in the flooring and
vaulting fields or "not readily ascertainable by proper means."
Defendants are correct that the Amended Complaint does not use
that conclusory phraseology, simply reciting the statutory
However, the Amended Complaint contains allegations
that, inter alia, the information in the CRM includes password
protected confidential client lists that are valuable to SPS;
the Pricing Tools are confidential and valuable to SPS, the
Templates (developed by and unique to SPS) are confidential and
give SPS economic advantage over competitors in the marketplace;
the Project Tools are customized by SPS, confidential, and
valuable to SPS; and the Procedural Guides contain valuable and
confidential information that gives SPS a competitive advantage
in the marketplace.
Am. Compl. ¶ 34-52.
A client list is
capable of constituting a trade secret where the list is
protected from public disclosure and the list is competitively
See NaturaLawn of Am., Inc. v. W. Grp., LLC, 484 F.
Supp. 2d 392, 399 (D. Md. 2007).
Drawing all reasonable inferences in favor of Plaintiffs,
the Court concludes that the Amended Complaint contains factual
detail sufficient to support a plausible claim that the
Proprietary Information are "trade secrets" within the meaning
of the MUTSA.
Defendants assert that the Plaintiffs' claims of
misappropriation are too speculative because the Plaintiffs
failed to allege which Defendants misappropriated or used which
trade secret and/or how the Defendants misappropriated
information allegedly stored on SPS's intranet post-employment.
Under the MUTSA, "misappropriation" means the "[d]isclosure
or use of a trade secret of another without express or implied
consent" by a person who "used improper means to acquire
knowledge of the trade secret" or at the time of disclosure or
use, "knew or had reason to know that the person's knowledge of
the trade secret was":
(1) Derived from or through a person who had
utilized improper means to acquire it;
(2) Acquired under circumstances giving rise
to a duty to maintain its secrecy or limit
its use; or
(3) Derived from or through a person who
owed a duty to the person seeking relief to
maintain its secrecy or limit its use.
Md. Code Ann., Com. Law § 11-1201(c).
Confidentiality Provisions prohibit the Defendants from using or
disclosing information protected thereby.
The Amended Complaint contains allegations that all of the
Defendants are part of a business venture called "Turner & Sons"
or "American Restore" that "directly competes with [SPS] in . .
. tipping floor work and vault work."
Am. Compl. ¶ 65 & n.1.
Plaintiffs allege that as part of that business venture, the
Defendants have used or disclosed the Proprietary Information
gained from their employment with SPS to usurp SPS's business
Specifically, Plaintiffs and the Defendants –
though Turner & Sons – submitted bids for two tipping floor
Plaintiffs aver that the Defendants
used or disclosed the Proprietary Information to determine the
margin needed to slightly undercut SPS and win the bids and, but
for the Defendants' misappropriation, SPS would have won both of
Id. ¶ 70-74.
Assuming the veracity of the these allegations and drawing
all reasonable inferences in favor of Plaintiffs, the Amended
Complaint presents a plausible claim that the Defendants used or
disclosed the Proprietary Information in connection with Turner
& Sons, a business all of the Defendants are involved in and
that competes with SPS, by utilizing that Information to predict
how SPS would formulate its bid and then undercut it.
the Amended Complaint is not deficient because it fails to
elucidate which Defendant used or disclosed which trade secret.
Nor are the claims of misappropriation illogical because the
Plaintiffs do not explicitly aver the means by which the
Defendants acquired the Proprietary Information – most of which
is stored on SPS's intranet – post employment.
It would be
reasonable to draw the inference from the Amended Complaint that
the Defendants had knowledge of the Proprietary Information from
using it during their employment and/or fixated it onto a
transferable medium prior to the conclusion of their employment
Accordingly, the Amended Complaint is not subject to
dismissal for failure to allege a plausible claim that the
Defendants misappropriated the Proprietary Information.
Andrews appears to take the position that Count II is
subject to dismissal because the California Uniform Trade
Secrets Act is controlling and California rejects the inevitable
The Maryland Court of Appeals has expressed
concern about the doctrine of inevitable disclosure and does not
appear to have ever applied or adopted it.
See LeJeune v. Coin
Acceptors, Inc., 849 A.2d 451, 470-71 (Md. 2004).
As summarized by the Maryland Court of Appeals, the "theory
of 'inevitable disclosure' has been applied . . . to enjoin a
departing employee from working for a competitor when the court
is persuaded that it is inevitable that the departed employee
will use or disclose trade secrets in his or her work for the
(finding California case law persuasive in
denying injunctive relief on the basis of
disclosure" theory and noting "Maryland has a policy in favor of
employee mobility similar to that of California").
In the briefing on the instant motions, Plaintiffs have
made clear that they do not seek recovery on a theory of
inevitable disclosure or a threat to misappropriate trade
Rather, Plaintiffs seek relief under the MUTSA for the
Defendants' actual misuse of the Propriety Information.
The Court will not now decide whether California or
Maryland law controls Plaintiffs' trade secrets' claim as it
appears to make no meaningful difference at this juncture.
Accordingly, the inevitable disclosure contention is not a
basis for dismissal.
The Non-Disparagement Claim (Count III)
In the Memorandum and Order Re: Motions to Dismiss
[Document 43], the Court dismissed the Non-Disparagement Claim
against Andrews because SPS did "not allege the particular
nature of the remarks or to whom or when such remarks were
In the Amended Complaint the Plaintiffs seek to rely
upon two instances of alleged disparaging remarks made by
A letter sent by Andrews to Plaintiffs'
President Peter Emmons (the "Andrews
Letter")11 in which Andrews, as an
apparent proposal to engage in
settlement negotiations, suggests a
confidentiality agreement including
information related to, inter alia,
SPS's "racism & discrimination issues"
and "bid-rigging" and
A May 2012 phone conversation between
Andrews and Bill Blennerhassett
("Blennerhassett"), a SPS employee
during which Andrews said someone from
SPS forged his signature as part of a
bid-rigging scheme and has and/or will
go to the FBI with such information.
The Andrews Letter is attached to the Amended Complaint.
The Amended Complaint contains allegations that Emmons received
the letter on or about June 7, 2012.
Andrews asserts that the claimed disparaging remarks are
not actionable because they were made to SPS employees and/or
are legally protected.
The "Non-Disparagement Provision" in Andrews' employment
agreement provides that, for two years following the date
Andrews ceases to be an employee of SPS, Andrews:
. . . [W]ill not, directly or indirectly .
. . make any disparaging remarks about the
business, services, products, stockholders,
officers, directors or other personnel of
[SPS] or any of its Affiliates, or interfere
in any way with the Company's business.
Am. Compl. Ex. 1 [Document 49] ¶ 7(b)(5) (emphasis added).
Recipients of Remarks
The Non-Disparagement Provision does not state whether
actionable remarks include only those made to persons who are
not associated with SPS.
Plaintiffs contend that disparaging
remarks made to their employees by former employees are just as
damaging as disparaging remarks made to third parties because
such statements can lower employee morale, foster unrest amongst
current employees, etc.
The Non-Disparagement Provision is ambiguous as to its
recipient coverage and requires contract interpretation.
Plaintiffs' reading of the Provision is at least plausible.
Thus, the issue cannot be resolved for Defendants in the instant
See generally Martin Marietta Corp. v. Int'l
Telecomms. Satellite Org., 991 F.2d 94, 97 (4th Cir. 1992).
Privileged Settlement Communication
Andrews contends that the Andrews Letter is a settlement
communication and is therefore protected by the litigation
privilege against suit.
The Andrews Letter is marked
"confidential and privileged", appears to be composed on
Andrews' letterhead and signed by Andrews, makes reference to
meeting with Emmons "to further attempt to work out our issues
and a fair and reasonable settlement package for myself", and
explains that Andrews has "met with several law firms."
The Federal Rules of Evidence restrict the admissibility of
statements "made during compromise negotiations about [a]
Fed. R. Evid. 408.
From the face of the Amended
Complaint and the Andrews Letter, it is unclear what "issues"
Andrews sought to workout with Emmons and/or whether Andrews
wrote the letter with or without the assistance of counsel.12
Maryland recognizes a litigation privilege for defamatory
statements published by an attorney prior to the "institution of
a judicial proceeding which is contemplated in good faith" as
well as communications in the institution, of, or during the
course and as a part of a judicial proceeding. See Arundel
Corp. v. Green, 540 A.2d 815, 818-19 (Md. Ct. Spec. App. 1988).
The Court does not reach the question whether this privilege
would be at all applicable to the Andrews Letter.
With reference to the Amended Complaint and the Andrews
Letter attached thereto, the Court cannot conclude that
Plaintiffs have no plausible position to refute Andrews'
The Blennerhassett Call
Andrews maintains that any attempt to enforce the NonDisparagement Provision in regard to this telephone call is
against public policy because it would "prevent Andrews from
voluntarily approaching a government or law enforcement agency
or to petition a Court to report a violation of law."
Mot.[Document 57] at 16.
Under Maryland law, "'parties are free to contract as they
wish. A contractual provision that violates public policy is
invalid, but only to the extent of the conflict between the
stated public policy and the contractual provision.'"
Nationwide Mut. Ins. Co., 910 A.2d 1122, 1131 (Md. 2006)
(quoting State Farm Mut. Auto. Ins. Co. v. Nationwide Mut. Ins.
Co., 516 A.2d 586, 592 (Md. 1986)).
The allegations in the Amended Complaint do not establish
the public policy defense presented by Andrews.
Amend Compl. ¶
The "actionable" telephone call alleged was to a SPS
employee and not a government agent.
Moreover, the call
included more disparagement than reference to Andrews' calls to
the FBI, i.e., reference to an alleged forgery.
Accordingly, the Non-Disparagement Claim shall not be
Claims Against Andrews by SPI
SGI is not a party to Andrews' employment agreement.
Therefore, any contract claims against Andrews made by SGI shall
Andrews' Transfer Request
In the pending motion, Andrews sought to transfer this case
to the Central District of California.
On May 14, 2013, Andrews v. SPS, MJG-13-1419, was
transferred to this Court from the Central District of
California, by the agreement of Andrews and SPS [Document 16].
In MJG-13-1419, Andrews asserts several employment-related
claims against SPS, including retaliation in violation of the
Fair Employment and Housing Act and public policy, wrongful
termination, breach of contract, failure to pay wages, violation
of the Business & Professions Code, etc.
After the hearing on
the instant matter, the Court issued a Scheduling Order
[Document 67] coordinating discovery in MJG-13-1419 and the
In light of Andrews' agreement to the transfer of Andrews
v. SPS, MJG-13-1419 to this Court, Andrews is no longer pursuing
his transfer request.
Declaratory Judgment (Count IV)
In Andrews' employment agreement, he agreed that SPS would
have a right to set off against any payments due to him under
the employment agreement, any damages sustained by virtue of a
violation of the Non-Disparagement Provision.
The declaratory judgment may, as a practical matter, be
mooted by virtue of the pendency in this Court of the related
case, Andrews v. SPS, MJG-13-1419.
The Court will not now
dismiss Count IV but shall, after consultation with counsel,
take such action as may be appropriate to simplify the
proceedings in both cases.
For the foregoing reasons:
1. Defendants Sean Turner's and Benjamin Ball's.
Motion to Dismiss Amended Complaint for Failure
to State a Claim [Document 52] is DENIED.
2. Defendant James Andrews' Motion to Dismiss for
Failure to State a Claim and/or, Alternatively,
to Transfer Under Forum Non Conveniens [Document
57] is DENIED.
3. This case shall proceed with discovery pursuant
to existing Scheduling.
SO ORDERED, this Monday, July 22, 2013.
Marvin J. Garbis
United States District Judge
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