Teras et al v. Wilde et al

Filing 14

MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 2/26/2015. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
CHRISTOPHER A. TERAS, et al.
:
v.

:

Civil Action No. DKC 14-0244

:
JINHEE KIM WILDE, et al.
:
MEMORANDUM OPINION
Presently pending and ready for resolution in this breach
of contract action are a motion to dismiss (ECF No. 6) and
motion to seal (ECF No. 8), filed by Defendants Jinhee Wilde
(“Wilde”) and Wilde & Associates, LLC (“W&A”).

The issues have

been fully briefed, and the court now rules, no hearing being
deemed necessary.

Local Rule 105.6.

For the following reasons,

Defendants’ motion to dismiss and motion to seal will be denied.
I.

Background
A.

Factual Background

Plaintiff

Worldwide

Personnel,

Inc.

(“Worldwide”)

is

a

corporation organized under the laws of the District of Columbia
and wholly owned by Plaintiff Christopher A. Teras (“Teras”).
(ECF No. 1 ¶¶ 3, 10).

Worldwide is a specialized personnel

staffing company that works with foreign recruiters, primarily
in Asia, to recruit foreign workers to be placed with employers
located in the United States in jobs for which there is an

insufficient supply of American workers.
Teras

commenced
X,1

Company

a

a

foreign

worker

multi-state

food

(Id. ¶ 10).

recruitment

processing

In 1989,

program

with

company.

Since

Worldwide was incorporated in 1995, Company X’s foreign worker
recruitment program has been serviced through Worldwide.

(Id.).

Worldwide provides various services to Company X and the foreign
recruiters
providers

and
on

engages

the

various

recruiters’

United

and

States-based

recruits’

behalf

serviceincluding

attorneys, interpreters, and resettlement coordinators.
17).

(Id. ¶

In addition, Worldwide coordinates the preparation and

filing

of

the

foreign

workers’

immigration-related forms.

visa

applications

(Id. ¶ 21).

and

Worldwide sometimes

engages lawyers to perform this work, and other times the work
is

performed

by

non-lawyers.

(Id.).

When

such

work

is

performed by service-providers selected by Worldwide, Worldwide
compensates
receives

such

from

recruiters

and

the

service-providers
foreign

recruits

service-providers,

but

out

recruiters.

are

also

independent

1

free

of

the

(Id.).
to

fixed-fee
The

engage

service-providers

it

foreign

their
must

own
be

The parties both refer to the food processing company
throughout their briefs as Company X to maintain the company’s
anonymity.
The parties acknowledge that Company X is the
recruit employer referenced in the Settlement Agreement.
As
discussed below, it is not apparent why this company’s name must
remain confidential.
2

engaged at the foreign recruiter’s or recruit’s own expense.
(Id.).
On October 1, 2004, Plaintiff Teras and Defendant Jinhee
Kim Wilde (“Wilde”) formed an immigration law practice named
Teras & Wilde, PLLC (“T&W”).

(Id. ¶ 11).

At the time of T&W’s

formation, Wilde had virtually no immigration clients and did
not know or have any relationship with the foreign recruiters
who worked with Worldwide or Company X.

(Id. ¶ 12).

After T&W

was formed, Worldwide engaged T&W to perform services, including
preparation and filing of the foreign workers’ visa applications
and immigration-related forms that were necessary for foreign
workers to obtain their immigration visas and to be permitted to
immigrate to the United States and work for companies such as
Company X.

(Id. ¶ 11).

Prior to Worldwide engaging T&W’s

services, Worldwide had engaged Plaintiff Christopher A. Teras,
P.C.

(“CATPC”),

a

professional

corporation

wholly

owned

by

Teras, to perform the services that were later performed by T&W.
(Id. ¶ 13).
In
CATPC,

2009,
and

disputes

T&W,

which

arose
led

among

to

Teras,

litigation

being

Superior Court of the District of Columbia.
involved

the

dissolution

claims against Wilde.

of

T&W

and

(Id. ¶¶ 9, 14).

Wilde,

Worldwide,

filed

in

the

The litigation

professional

malpractice

On July 20, 2010, Teras,

Wilde, Worldwide, CATPC, and T&W entered a Settlement Agreement
3

(the “Agreement” or “Settlement Agreement”) to settle all issues
and claims among the parties.

(Id. ¶ 15).

The Settlement

Agreement was intended to address all issues in the litigation
and govern the parties’ past and future relationships.
9).
that

(Id. ¶

The Agreement governs the handling and division of payments
were

due

to

Worldwide

for

foreign

workers

that

were

recruited by Worldwide and had immigrant cases filed in 2007 and
2008.

(Id. ¶ 22).

The Settlement Agreement requires that all

payments that were due to Worldwide for these specific recruits
must

be

paid

predetermined

directly
and

agreed

Wilde.

(Id. ¶¶ 23-25).

send

letter

a

to

signed

Worldwide,

amounts

among

and

then

disbursed

Worldwide,

Teras,

in
and

The Agreement called for Worldwide to
by

Teras

and

Wilde

to

the

relevant

recruiters, informing them that all payments should be directed
to Worldwide.

(Id. ¶ 26).

The parties also agreed that if

further legal work was necessary for any of the recruits covered
by the Agreement, Worldwide would use specific procedures to
engage independent “Selected Counsel” to perform such work, and
that neither Teras or Wilde could perform the work.
32).

(Id. ¶¶ 31-

Worldwide agreed to negotiate and pay a reasonable fee to

Selected

Counsel,

and

in

consideration

for

Worldwide’s

commitment to pay such fees, the parties allocated $1,000 per
recruit to Worldwide to offset such an expense.

4

(Id. ¶ 31).

According

to

Plaintiffs,

since

the

inception

of

the

Settlement Agreement, Wilde has committed numerous breaches of
the Agreement, including: secretly diverting payments that were
due to Worldwide under the Settlement Agreement to herself or
W&A and concealing these payments from Worldwide (Id. ¶ 27);
inducing the recruiters and recruits to ignore the letter sent
by Worldwide and send their fees directly to Defendants (Id. ¶
30); failing to cooperate with Worldwide to appoint Selected
Counsel

and

instead

secrecy

(Id.

¶¶

correspondence

undertaking

32-33);

that

Selected

failing

Wilde

to

received

Counsel’s

disclose

from

the

to

work

in

Worldwide

United

States

Department of State and other government agencies and instead
secretly

taking

action

in

these

matters

(Id.

¶¶

35-36);

disclosing the terms of the Settlement Agreement to Company X
and foreign recruiters (Id. ¶¶ 37-38); and inducing the foreign
recruiters

not

to

honor

their

fixed-fee

agreements

with

Worldwide and instead work directly with Wilde (Id. ¶¶ 39-40).
B.

Procedural Background

On

January

27,

2014,

Teras,

CATPC,

and

Worldwide

(collectively “Plaintiffs”) filed a four count complaint against
Wilde

and

Plaintiffs

W&A
allege

(collectively
that

since

“Defendants”
the

Defendants have failed to comply with it.

or

“Wilde”).

Agreement’s

inception

Plaintiffs have filed

several claims which spring from Defendants’ alleged violation
5

of

the

parties’

Settlement

Agreement,

including:

breach

of

contract (count II); interference with contractual relationships
(count III); and interference with economic relationships (count
IV).

Plaintiffs also request a declaratory judgment (count I),

and various forms of relief flowing from their other claims,
including:

damages; an accounting; attorneys’ fees; costs; and

an injunction against Wilde preventing her from continuing to
breach the Settlement Agreement.

On March 5, 2014, Defendants

filed a motion to dismiss (ECF No. 6), and a motion to seal (ECF
No. 8).

The motion to dismiss is fully briefed.

(ECF Nos. 11

and 12).
II.

Motion to Dismiss
A.

Standard of Review

The purpose of a motion to dismiss under Rule 12(b)(6) is
to test the sufficiency of the complaint.

Presley v. City of

Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006).

A complaint

need only satisfy the standard of Rule 8(a), which requires a
“short and plain statement of the claim showing that the pleader
is entitled to relief.”

Fed.R.Civ.P. 8(a)(2).

“Rule 8(a)(2)

still requires a ‘showing,’ rather than a blanket assertion, of
entitlement to relief.”
544, 555 n.3 (2007).

Bell Atl. Corp. v. Twombly, 550 U.S.

That showing must consist of more than “a

formulaic recitation of the elements of a cause of action” or
“naked

assertion[s]

devoid

of

further
6

factual

enhancement.”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations
omitted).
At this stage, all well-pleaded allegations in a complaint
must be considered as true, Albright v. Oliver, 510 U.S. 266,
268 (1994), and all factual allegations must be construed in the
light

most

favorable

to

the

plaintiff.

See

Harrison

v.

Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir.
1999) (citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134
(4th Cir. 1993)).

In evaluating the complaint, unsupported legal

allegations

not

need

be

accepted.

Revene

Comm’rs, 882 F.2d 870, 873 (4th Cir. 1989).

v.

Charles

Cnty.

Legal conclusions

couched as factual allegations are insufficient, Iqbal, 556 U.S.
at 678, as are conclusory factual allegations devoid of any
reference to actual events.

United Black Firefighters v. Hirst,

604 F.2d 844, 847 (4th Cir. 1979).
B.

Affirmative Defense

Defendants first argue that Plaintiffs’ claims are barred
because they violate several ethical rules.

Defendants argue

that Plaintiffs have not stated a claim for breach of contract
based on their failure to deliver fees to Worldwide because the
legal

fees

performed,

received
and

it

by

would

Wilde

were

violate

for

Rule

legal

5.4

of

services
the

Rules

she
of

Professional Conduct to split these fees with Worldwide, a nonlawyer.

Defendants

also

contend
7

that

Plaintiffs’

claims

infringe on the recruiters’ and recruits’ rights to choose Wilde
as their counsel and Wilde’s right to perform work for these
clients
assert

and

receive

that

the

compensation

Maryland

and

for

that

District

work.

of

Defendants

Columbia

Rule

of

Professional Conduct 5.6 prohibits such agreements that restrict
attorneys’

rights

to

practice

law.

Defendants

contend

that

under “the ethical rules and the parties’ agreement, Wilde is
free to compete for the business of the recruits, recruiters,
and employer[,]” and accordingly, Plaintiffs’ claims should be
dismissed

because

they

Professional Conduct.
Plaintiffs
Settlement

are

barred

by

the

Attorney

Rules

of

(ECF No. 6-1, at 5-6).

respond

Agreement

that

neither

violate

any

their

ethical

claims
rules.

nor

the

First,

Plaintiffs contend that Wilde is not necessarily forbidden by
Rule 5.4 from sharing the fees she received from the recruiters
or recruits because the nature of the monies paid to Wilde is
uncertain at this stage in the proceedings and the fees were not
necessarily paid for legal services considering that Worldwide’s
agreements with recruiters covered a range of services, many of
which

were

Plaintiffs

non-legal.
note

specifically

recognizes

their choice:
retain

an

that

(ECF
§

No.

4(c)

of

recruits’

11-1,
the

right

at

15).

Second,

Settlement

Agreement

to

retain

counsel

of

“each [recruit] shall have the unimpeded right to

independent

attorney
8

of

his/her

choosing

and

at

his/her

own

cost.”

(ECF

No.

11-1,

at

7).

According

to

Plaintiffs, the Agreement merely requires that the recruit pay
for an independent attorney’s services if the recruit chooses
not to use the Selected Counsel retained by Worldwide; it does
not ban the recruit from using independent counsel.

Third,

Plaintiffs argue that Wilde does not have an unfettered right to
represent any client that comes to her seeking advice.

In fact,

Plaintiffs assert that Rules of Professional Conduct 1.6, 1.8,
and

1.9

may

disqualify

Wilde

from

representing

the

foreign

recruits and recruiters due to her duty of confidentiality and
to

avoid

conflicts

of

interests

with

her

former

client,

Worldwide.
At the motion to dismiss stage, it is not appropriate to
consider Defendants’ affirmative defense based on the Attorney
Rules of Professional Conduct.

An affirmative defense is not

ordinarily considered on a motion to dismiss because a plaintiff
is not required to negate it in the complaint.

The purpose of a

motion to dismiss under Fed.R.Civ.P. 12(b)(6) is to “test the
legal adequacy of the complaint, and not to address the merits
of

any

affirmative

defenses.”

Richmond,

Fredericksburg

Potomac R.R. Co. v. Forst, 4 F.3d. 244, 250 (4th Cir. 1993).

&
“A

court may consider defenses on a 12(b)(6) motion only ‘when the
face

of

the

complaint

clearly

meritorious affirmative defense.’”
9

reveals

the

existence

of

a

E. Shore Markets, Inc. v.

J.D. Assoc. Ltd. P’ship, 213 F.3d 175, 185 (4th Cir. 2000); see
also 5A Charles Alan Wright & Arthur R. Miller, Federal Practice
& Procedure § 1357, at 348 (2d ed. 1990).
“clear”

from

the

face

of

the

complaint

It certainly is not
that

the

Settlement

Agreement or Plaintiffs’ requested relief under the Settlement
Agreement

would

violate

Rule

5.4

by

requiring

Defendants

to

share legal fees with non-lawyers, nor that it would violate
Rule 5.6 by improperly restricting Wilde’s right to practice
law.2

Moreover, Defendants’ arguments regarding fee sharing

rely on facts — that the legal fees Wilde received were for bona
fide legal services — contrary to those asserted by Plaintiffs.
Plaintiffs’

summation

of

Defendants’

defense

is

entirely

on

point:
Defendants appear to be contending that any
monies
they
have
received
are
not
Worldwide’s
fixed
fees,
but
bona
fide
payments
for
legal
services
Defendants
rendered to the recruits.
That defense []
runs counter to the Complaint’s allegations
that Wilde has diverted the fixed fees due
and owing to Worldwide [under the Settlement
Agreement].
Thus, there is a dispute about
how much money Defendants have received and
what it was in payment for.

2

As noted by Plaintiffs, Wilde does not have an unfettered
right to practice law, as the Rules of Professional Conduct
provide limitations on representing clients with interests
adverse to former clients.
Moreover, Defendants have not
challenged the enforceability of the Settlement Agreement
itself, which provides some limits on how Selected Counsel will
be chosen when legal service needs arise for the recruits
covered by the Settlement Agreement.
10

(ECF No. 11-1, at 13-14).

At the motion to dismiss stage,

Plaintiffs’ allegations must be taken as true, and therefore,
Defendants’ argument that Plaintiffs’ claims are barred by the
Rules of Professional Conduct will be rejected.
C.

Breach of Contract (Count II)

Defendants

contend

that

despite

Plaintiffs’

allegations

that Defendants violated several provisions of the Settlement
Agreement, none of these violations states a plausible claim for
breach of contract because Plaintiffs fail to allege that they
were harmed by these breaches.

Defendants point specifically to

several of their alleged breaches — failure to cooperate in
selecting and engaging Selected Counsel; failure to cooperate
with Worldwide in processing recruits’ visa applications; and
disclosure of terms of the Settlement Agreement — arguing that
Plaintiffs have not alleged that these violations damaged them.
In response, Plaintiffs point to various allegations in the
complaint
various

to

clarify

breaches.

how

First,

they

were

Plaintiffs

damaged

by

allege

Defendants’

that

they

were

damaged by Wilde’s failure to deliver revenues that were due and
owing to Worldwide.
argue

they

were

(ECF No. 11-1, at 15).

damaged

by

Defendants’

Plaintiffs also

alleged

failure

to

cooperate with Worldwide in processing foreign recruits’ visa
applications.
from

foreign

They assert that Worldwide only receives payments
recruiters

when

certain
11

steps

in

the

recruits’

immigration processes are completed and Defendants’ failure to
pass along communications from the State Department prevented
the recruits from receiving their visas, which in turn prevented
Worldwide from receiving payments.

Plaintiffs also contend that

Defendants’ disclosure of the terms of the Settlement Agreement,
which violated the Agreement’s confidentiality provision, caused
multiple foreign recruiters to repudiate their agreements with
Worldwide, again damaging Worldwide.
As recently noted by Judge Quarles in Arashteh v. Mount
Vernon Fire Ins. Co., No. WDQ-13-2833, 2014 WL 3974172, at *4
(D.Md. Aug. 12, 2014), “[t]o survive a motion to dismiss, a
complaint for breach of contract must allege facts showing a
contractual obligation owed by the defendant to the plaintiff
and a breach of the obligation.”
quotation marks omitted).
stage,

the

support

[p]laintiffs

for

[their]

Id. (internal citation and

Moreover, “[a]t the motion to dismiss
do

not

have

allegations.”

to
Id.

forecast
(third

evidentiary

alteration

in

original) (internal citation and quotation marks omitted).
Plaintiffs’ allegations state a plausible claim for breach
of the Settlement Agreement.

Plaintiffs have alleged that the

Settlement Agreement created a number of obligations for Wilde,
and that Wilde breached several of these obligations, including:
“retaining funds payable to Worldwide, failing to cooperate in
selecting

and

engaging

Selected
12

Counsel

to

handle

relevant

recruit

legal

work,

failing

to

cooperate

with

Worldwide

in

processing recruit immigrant visa applications, and disclosing
the terms of the Settlement Agreement to other persons without
Plaintiffs’ consent.”

(ECF No. 1 ¶ 51).

Defendants’ argument

that Plaintiffs have failed sufficiently to allege that they
were damaged by these breaches will be rejected.
Defendants’

assertion,

Plaintiffs’

complaint

Contrary to
specifically

alleges that Defendants’ breaches caused them damages — “in the
form of lost revenues from, inter alia, fees paid by prospective
immigrant workers.”

(ECF No. 1 ¶ 53).

Moreover, “Maryland law

is clear that a breach of contract, in the absence of actual
damages,
Yacoubou

will
v.

entitle

Wells

Fargo

the

plaintiff

Bank,

N.A.,

to
901

nominal
F.Supp.2d

damages.”
623,

638

(D.Md. 2012) (citing Taylor v. NationsBank, N.A., 365 Md. 166,
175

(2001)),

aff’d

sub

nom.

Adams

F.App’x 177 (4th Cir. 2013).

v.

Wells

Fargo

Bank,

521

Accordingly, even if Plaintiffs

failed to allege damages, they would still state a claim for
breach
nominal

of

contract

damages

because

based

on

the

court

Plaintiffs’

could

infer

allegations

at
that

least
the

Settlement Agreement was breached.
D.

Tortious Interference (Counts II and III)

Plaintiffs

assert

that

Defendants

have

tortiously

interfered with their contractual relationships with the foreign

13

recruiters as well as with their business relationships with
numerous foreign recruiters and Company X.
Defendants
Maryland

move

has

interference

to

“refused
with

dismiss
to

contract

these

adopt
or

claims

any

with

asserting

theory

economic

of

that

tortious

relations

converts a breach of contract into an intentional tort.”

that
(ECF

No. 6-1, at 11) (quoting Alexander & Alexander, Inc. v. Dixon
Evander & Associates, Inc., 336 Md. 635 (1994)).
contend

that

because

Plaintiffs

have

not

Defendants

alleged

that

Wilde

performed any wrongful acts aside from breaching the Settlement
Agreement,

they

have

failed

to

state

a

claim

for

tortious

interference with either contractual or economic relations.
According

to

Plaintiffs,

Defendants’

wrongful

acts

were

that “Wilde directly induced the foreign recruiters to terminate
their agreements with Worldwide and work with her directly and
caused Company X to contact the foreign recruiters and ignore
the mode of payment set forth in the Agreement.”
at 21).

(ECF No. 11-1,

Plaintiffs also contend that Defendants’ interference

with Worldwide’s contractual relationships with the recruiters
and recruits, and economic relations with Company X was wrongful
because it “constituted a breach of a separate and independent
contract” — the Settlement Agreement, and her conduct breached
her “ethical and common law fiduciary obligations” to her former

14

client,

Worldwide.

(ECF

No.

11-1,

at

22)

of

Appeals

(emphasis

in

original).
As
Circuit

the

United

recently

States

recognized

Court
in

Painter’s

Mill

for

the

Grill,

Brown, 716 F.3d 342, 353-54 (4th Cir. 2013):
“Maryland recognizes the tort action for
wrongful interference with contractual or
business relationships in two general forms:
inducing the breach of an existing contract
and, more broadly, maliciously or wrongfully
interfering with economic relationships.”
Alexander & Alexander Inc. v. B. Dixon
Evander & Assocs., Inc., 336 Md. 635, 650
A.2d 260, 268 (1994) (internal quotation
marks omitted).
To establish a claim for
wrongful interference with a contract, a
plaintiff
must
demonstrate
“(1)
[t]he
existence of a contract or a legally
protected interest between the plaintiff and
a third party; (2) the defendant’s knowledge
of
the
contract;
(3)
the
defendant’s
intentional inducement of the third party to
breach or otherwise render impossible the
performance of the contract; (4) without
justification on the part of the defendant;
(5) the subsequent breach by the third
party; and (6) damages to the plaintiff
resulting
therefrom.”
Blondell
v.
Littlepage, 185 Md.App. 123, 968 A.2d 678,
696
(2009)
(internal
quotation
marks
omitted), aff’d, 413 Md. 96, 991 A.2d 80
(2010).
And to establish a claim for
intentional
interference
with
economic
relationships, a plaintiff must demonstrate
“(1) intentional and willful acts; (2)
calculated to cause damage to the plaintiffs
in their lawful business; (3) done with the
unlawful purpose to cause such damage and
loss, without right or justifiable cause on
the
part
of
the
defendants
(which
constitutes malice); and (4) actual damage
and loss resulting.” Alexander & Alexander,
15

Fourth
LLC

v.

650 A.2d at 269 (internal quotation marks
omitted).
1.

Tortious Interference with Contract

Plaintiffs’ allegations that Wilde has contacted foreign
recruiters and induced them to terminate their agreements with
Worldwide and work directly with her, state a plausible claim
for

tortious

interference

with

an

existing

contract.

The

Complaint alleges that “Worldwide had contractual relationships
with

the

foreign

recruiters

who

located

potential

immigrant

workers for whom Worldwide arranged immigrant visa sponsorship
and

oversaw

process[.]”

the

overall

immigration

(ECF No. 1 ¶ 55).

and

re-settlement

As part of the agreements:

the
foreign
recruiters
have
agreed
in
advance to pay Worldwide a fixed-fee with
respect to each foreign worker for whom
Worldwide obtained a commitment from a
United States-based employer.
The [fixedfee] that the foreign recruiters have agreed
to pay to Worldwide usually is paid in three
or four stages upon the completion of
various steps in each foreign worker’s
immigration visa application process.
(ECF No. 1 ¶ 17).
relevant

times

Plaintiffs also allege that “Wilde at all

had

knowledge

of

Worldwide’s

contractual

relationships with the recruiters” (ECF No. 1 ¶ 56); “Wilde
intentionally
recruiters

[]

relationships
recruiters,

and

without

to
with

including

justification

terminate

those

Worldwide”
but

not

(Id.
limited

16

induced

numerous

parties’

contractual

¶

57);

“[n]umerous

Edith

Lai,

to,

David

Change,

and

Greg

Evans,

did

in

fact

terminate

contractual

relationships with Worldwide” (Id. ¶ 59); and “Worldwide has
sustained

damages

as

a

result

of

Wilde’s

Worldwide’s contractual relationships”

interference

(Id. ¶ 60).

with

Plaintiffs

plausibly allege that Wilde intentionally induced the foreign
recruiters to breach their agreements with Worldwide, causing
Worldwide

damages

in

the

form

of

lost

revenue

from

the

contingent fixed-fee payments Worldwide was supposed to receive
upon completion of various stages in the recruits’ immigrant
visa processes.
2.

Tortious Interference with an Economic Relationship

Defendants
concerning

challenge

Wilde’s

conduct

whether

Plaintiffs’

plausibly

constitute

allegations
malice

or

a

wrongful act in order to satisfy the third element of tortious
interference with economic relations.

Defendants cite Alexander

& Alexander, 336 Md. 635 (1994), arguing that Wilde’s breach of
the

Settlement

Agreement

alone

is

insufficient

to

allege

wrongful conduct, and that her interference must be wrongful,
independent of any contract.

In Alexander & Alexander, 336 Md.

635 (1994), the Court of Appeals of Maryland clarified what
conduct may constitute wrongful or malicious conduct:
[W]e have made clear in our cases that
acting
to
pursue
one’s
own
business
interests at the expense of others is not,
in itself, tortious.

17

Moreover, this Court has refused to adopt
any theory of tortious interference with
contract or with economic relations that
converts a breach of contract into an
intentional tort.
. . . .
[T]ortious intent alone, defined as an
intent to harm the plaintiff or to benefit
the
defendant
at
the
expense
of
the
plaintiff, [is] not sufficient to turn
deliberate interference into a tort, [] the
defendant must interfere through improper or
wrongful means.
Therefore,
wrongful
or
malicious
interference with economic relations is
interference
by
conduct
that
is
independently wrongful or unlawful, quite
apart from its effect on the plaintiff’s
business
relationships.
Wrongful
or
unlawful acts include common law torts and
violence
or
intimidation,
defamation,
injurious
falsehood
or
other
fraud,
violation
of
criminal
law,
and
the
institution or threat of groundless civil
suits or criminal prosecutions in bad faith.
In addition, “actual malice,” in the sense
of ill will, hatred or spite, may be
sufficient to make an act of interference
wrongful where the defendant’s malice is the
primary
factor
that
motivates
the
interference.
Alexander

&

Alexander,

336

Md.

at

653-57

(emphases

added)

(internal citations and quotation marks omitted).
Plaintiffs

not

only

allege

that

Wilde’s

conduct

was

wrongful because it breached the Settlement Agreement, but also
that

Wilde’s

acts

were

wrongful

because

they

constituted

a

breach of Wilde’s ethical and fiduciary duties to her former
18

client, Worldwide.

In addition, Plaintiffs allege that Wilde

failed

information

to

disclose

she

received

from

the

State

Department, and “actively concealed” actions she took in such
matters and payments she received therefrom, rather than sending
the fees to Worldwide as required by the Settlement Agreement.
(ECF No. 1 ¶¶ 33, 35-36).

Plaintiffs sufficiently allege that

Wilde acted wrongfully, by actively concealing information and
funds from Plaintiffs and potentially breaching her fiduciary
duties to Worldwide.
E.

Declaratory Judgment (Count I)

Plaintiffs seek a declaratory judgment from the court that:
[T]he Settlement Agreement requires Wilde to
immediately
deliver,
or
cause
to
be
delivered immediately, to Worldwide all
recruit fee payments; [and] . . . Wilde’s
failure
to
deliver,
or
cause
to
be
delivered, to Worldwide all recruit fee
payments is a breach of the Settlement
Agreement; [and] . . . Wilde must issue a
corrective instruction to the recruiters
instructing them to deliver all fees for
recruits covered by the Settlement Agreement
directly to Worldwide[.]
(ECF No. 1, at 13).
The Declaratory Judgment Act provides that “[i]n a case of
actual controversy within its jurisdiction . . . any court of
the

United

relations

States
of

any

.

.

.

may

interested

declare

party

seeking

whether or not further relief is sought.”

19

the

rights
such

and

other

declaration,

28 U.S.C. § 2201(a).

(emphasis added).

The Fourth Circuit has further explained that

a federal court may properly exercise jurisdiction in such cases
where three criteria are met:

“(1) the complaint alleges an

actual controversy between the parties of sufficient immediacy
and reality to warrant issuance of a declaratory judgment; (2)
the court possesses an independent basis for the jurisdiction
over

the

parties

(e.g.,

federal

question

or

diversity

jurisdiction); and (3) the court does not abuse its discretion
in its exercise of jurisdiction.”

Volvo Constr. Equip. N. Am.,

Inc. v. CLM Equip. Co., Inc., 386 F.3d 581, 592 (4th Cir. 2004)
(citing 28 U.S.C. § 2201; Cont’l Cas. Co. v. Fuscardo, 35 F.3d
963, 965 (4th Cir. 1994)).
Defendants do not challenge the second and third criteria;
rather, they argue that Plaintiffs’ allegations do not support a
present

controversy

that

warrants

a

declaratory

judgment.

Defendants assert that Plaintiffs’ alleged controversy is based
on two allegations:
her;

and

recruiters.

(2)

(1) Wilde improperly retaining fees paid to

Wilde

communicating

Defendants

argue

with

that

Company

there

X

is

and

no

the

actual

controversy because Wilde’s actions in retaining fees did not
violate the Settlement Agreement because the fees were intended
for Wilde rather than Worldwide.
that

they

cannot

be

required

Additionally, Defendants argue
to

share

fees

with

Worldwide

because it would violate the ethical rule of sharing fees with a
20

non-lawyer.

Defendants

also

contend

that

Plaintiffs’

allegations regarding Wilde’s allegedly improper communications
with

Company

X

and

the

recruiters

do

not

involve

a

present

controversy because these claims were settled and released as
part of the Settlement Agreement.
In response, Plaintiffs contend that there is a present
controversy regarding whether Defendants’ conduct violated and
continues to violate the Settlement Agreement, a controversy of
sufficient

immediacy

to

warrant

a

declaratory

judgment.

Plaintiffs point out again that Defendants’ arguments are based
on a factual assertion — that the only funds that Wilde has
received are bona fide legal fees — that is directly contrary to
the

Complaint’s

controlling

allegations,

that

Wilde

retained

fees that were part of the fixed-fee due and owing to Worldwide
for

a

wide-range

of

services

provided

to

the

recruits.

Plaintiffs also dispute Wilde’s assertions that she is “entitled
to represent the foreign workers and recruiters,” arguing that
her ethical obligations to her former client, Worldwide, make
such a representation improper.
Plaintiffs
Defendants

have

regarding

alleged
whether

a
the

concrete
fees

controversy

that

were

paid

with
to

Defendants properly belonged to Defendants or belonged, in part
or full, to Plaintiffs based on the terms of the Settlement
Agreement.

The parties also dispute whether, based on the terms
21

of

the

Settlement

Agreement,

Wilde

is

permitted

to

continue

representing recruits that she formerly represented on behalf of
Worldwide.

This controversy also appears to be of a sufficient

immediacy to warrant a declaratory judgment.

If Plaintiffs’

allegations are true, they have been damaged and will continue
to

be

damaged

by

Defendants

properly due to Plaintiffs.

retaining

payments

which

are

Moreover, contrary to Defendants’

assertions, Plaintiffs claims relating to Defendants’ allegedly
improper communications with the recruiters and Company X could
not have been settled and released as part of the Settlement
Agreement,

because

Plaintiffs’

allegations

relate

to

conduct

occurring after the Settlement Agreement was executed.
F.

Dismissal of CATPC

Defendants
Plaintiff

argue

because

the

that

CATPC

complaint

support a claim by CATPC.

should

be

dismissed

contains

no

allegations

(ECF No. 6-1, at 5).

as

a

that

Defendants

assert that the only allegations pertaining to CATPC are that
“it performed legal work for recruits before [T&W] did [], and
that

it

is

a

party

to

the

Settlement

Agreement[.]”

(Id.).

Plaintiffs do not respond to these arguments.
Because

all

of

Plaintiffs’

claims

are

rooted

in

the

Settlement Agreement and none will be dismissed, it is premature
at this juncture to dismiss Plaintiff CATPC, who is also a party
to the Settlement Agreement.

CATPC’s rights and obligations
22

under the Settlement Agreement do not appear to differ from
those

of

Worldwide

and

Teras,

such

that

CATPC’s

allegations

would fail to state a plausible claim against Defendants while
the other Plaintiffs’ allegations remain plausible.3
III. Motion to Seal
Along with their motion to dismiss, Defendants also filed
an unopposed motion to seal exhibit 2 of their motion to dismiss
(ECF No. 8).
Agreement

Defendants seek to seal the parties’ Settlement

(ECF

No.

7),

arguing

that

it

contains

a

confidentiality provision and includes:
information
that
is
personal
and
confidential to the parties regarding the
former business affairs of the parties.
It
also
contains
sensitive
commercial
information about how the parties conduct
their law practices, including among other
things,
pricing
information
and
client
lists. Disclosure of this information could
work a competitive disadvantage to all the
parties in their business.
(ECF No. 8, at 1).

3

Defendants have also moved to dismiss Plaintiffs’ request
for attorney fees, arguing that Plaintiffs have not alleged a
sufficient basis for an award.
(ECF No. 6-1, at 11).
Plaintiffs argue that they are due attorneys’ fees based on an
indemnification provision in the Settlement Agreement which
requires Wilde to hold Plaintiffs harmless against certain of
Wilde’s breaches of representations and warranties in the
Agreement. (ECF No. 11-1, at 24). Plaintiffs argue that Wilde
breached her representation and warranty that she would not
enter any arrangement that would reduce Worldwide’s payments or
cause payments owed to Worldwide to be made to her. Plaintiffs
have stated a plausible basis for an award of attorneys’ fees.
23

“The right of public access to documents or materials filed
in a district court derives from two independent sources: the
common law and the First Amendment.”

Va. Dep’t of State Police

v. Wash. Post, 386 F.3d 567, 575 (4th Cir. 2004).

“The common

law presumes a right of the public to inspect and copy ‘all
judicial records and documents,’” id. at 575 (quoting Stone v.
Univ. of Md. Med. Sys. Corp., 855 F.2d 178, 180 (4th Cir. 1988)),
although this presumption “‘can be rebutted if countervailing
interests

heavily

outweigh

the

public

interests

in

access.’”

Id. (quoting Rushford v. New Yorker Magazine, Inc., 846 F.2d
249, 253 (4th Cir. 1988)); see also Nixon v. Warner Commc’ns,
Inc.,

435

U.S.

balancing

589,

analysis,

presumption

bears

597–99
“[t]he

the

(1978).
party

burden

of

Under

to

showing

common

law

overcome

seeking

the

some

interest that outweighs the presumption.”
253.

this

significant

Rushford, 846 F.2d at

“Ultimately, under the common law[,] the decision whether

to grant or restrict access to judicial records or documents is
a matter of a district court’s ‘supervisory power,’ and it is
one

‘best

court.’”

left

to

the

sound

discretion

of

the

[district]

Va. Dep’t of State Police, 386 F.3d at 575 (quoting

Nixon, 435 U.S. at 598–99) (second alteration in original).
In addition to the public’s common law right of access, the
First Amendment provides a “more rigorous” right of access for
certain “judicial records and documents.”
24

Va. Dep’t of State

Police, 386 F.3d at 575-76; see also In re Application of the
United

States

2703(D),

707

“significant”

for
F.3d

an

Order

283,

distinction

290

Pursuant
(4th

between

Cir.
the

to

18

2013)
two

U.S.C.

Section

(explaining

rights

of

the

access).

Where the First Amendment does apply, access may be denied “only
on the basis of a compelling governmental interest, and only if
the denial is narrowly tailored to serve that interest.”

Stone,

855 F.2d at 180.
“For a right of access to a document to exist under either
the First Amendment or the common law, the document must be a
‘judicial record’” in the first instance.
707

F.3d

at

290.

The

Fourth

Circuit

In re Application,
recently

held

that

judicially authored or created documents are “judicial records,”
as are documents filed with the court that “play a role in the
adjudicative process, or adjudicate substantive rights.”

Id.

(citing Rushford, 846 F.2d at 252; In re Policy Mgt. Sys. Corp.,
67 F.3d 296 (4th Cir. 1995) (unpublished table decision)).
Thus, as a substantive matter, when a district court is
presented with a request to seal certain documents, it must
determine two things:

(1) whether the documents in question are

judicial records to which the common law presumption of access
applies; and (2) whether the documents are also protected by the
more

rigorous

First

Amendment

25

right

of

access.

In

re

Application,

707

F.3d

at

290;

see

also

Va.

Dep't

of

State

Police, 386 F.3d at 576.
The sealing of any judicial record must also comport with
certain procedural requirements.

First, the non-moving party

must be provided with notice of the request to seal and an
opportunity to object.
235 (4th Cir. 1984).

In re Knight Publ’g Co., 743 F.2d 231,

This requirement may be satisfied by either

notifying the persons present in the courtroom or by docketing
the motion “reasonably in advance of deciding the issue.”
at 234.

Id.

In addition, “less drastic alternatives to sealing”

must be considered.

Va. Dep’t of State Police, 386 F.3d at 576;

see also Local Rule 105.11 (requiring any motion to seal to
include

both

“proposed

reasons

supported

by

specific

factual

representations to justify the sealing” and “an explanation why
alternatives
protection”).

to

sealing

would

not

provide

sufficient

Finally, if sealing is ordered, such an order

must “state the reasons (and specific supporting findings)” for
sealing and must explain why sealing is preferable over its
alternatives.

Va. Dep’t of State Police, 386 F.3d at 576.

The Settlement Agreement Defendants seek to seal forms the
basis for the various counts alleged in this action and thus
necessarily

plays

an

important

role

in

adjudicating

substantive rights of the parties to this dispute.

the

Accordingly,

it is a judicial record to which the common law right of public
26

access attaches.

To justify sealing, Defendants must establish

that a significant countervailing interest exists that outweighs
the public’s interest in accessing this document.
Defendants first argue that the document should be sealed
because it contains a confidentiality provision.

It appears,

however, that this action may fall within an exception to the
confidentiality

provision

which

provides

that

“any

Party

may

disclose the terms of this Agreement pursuant to . . . court
process[.]”

(ECF No. 7, at 13).

Even if this exception does

not apply, the confidentiality provision would not overcome the
common law presumption of public access.

Furthermore, the fact

that

that

the

Agreement

parties

previously

should

remain

stipulated

confidential

does

the
not

adequate justification for sealing the document.

Settlement
provide

an

See Visual

Mining, Inc. v. Ziegler, No PWG 12–3227, 2014 WL 690905, at *5
(D.Md. Feb. 21, 2014) (denying a motion to seal when the only
justification was that the documents were “confidential” under a
court-approved Protective Order); Butler v. DirectSAT USA, LLC,
876 F.Supp.2d 560, 576 n.18 (D.Md. 2012) (“In their motion to
seal, Plaintiffs state only that they seek to seal the exhibits
pursuant

to

the

confidentiality

order,

an

explanation

insufficient to satisfy the ‘specific factual representations’
that Local Rule 105.11 requires.”); Roberts v. Office of Sheriff
for

Charles

Cnty.,

No.

DKC

10-3359,
27

2014

WL

3778594,

at

*1

(D.Md. July 29, 2014) (denying motion to seal exhibits in their
entirety

when

the

only

reasons

provided

for

sealing

the

documents were that they had been designated “confidential” by
the

parties

and

boilerplate

arguments

devoid

of

factual

support).
Defendants
should

be

also

sealed

information,

contend

because

including

that

it

pricing

the

contains

Settlement
sensitive

information

and

Agreement
commercial

client

lists.

These allegations are similar to those made by the defendants in
Sky Angel U.S., LLC v. Discovery Commc’ns, LLC, No. DKC 13-0031,
2013 WL 3465352, at *9-11 (D.Md. July 9, 2013).
the

undersigned

found

that

the

defendants’

In Sky Angel,
allegations,

regarding the confidential commercial nature of the information
in the parties’ agreement, were inadequate to justify sealing
the document:
[T]hese conclusory assertions do not satisfy
Defendants’
burden
of
establishing
a
significant
countervailing
interest
that
outweighs the public right of access to the
Agreement — the contract that is at the
heart of this lawsuit. [] Defendants’ brief
[] [does not] provide specific factual
details regarding the purported competitive
disadvantage that Defendants would face upon
unsealing the Agreement, nor is it clear how
the contract’s terms — with the exception of
the pricing information . . . are truly
“confidential” or “sensitive.”
Similar to the defendants in Sky Angel, here Defendants have
provided only superficial allegations that the information in
28

the Settlement Agreement is sensitive commercial information.
Aside from the pricing information contained in the Settlement
Agreement,

it

is

confidentiality
prospects.
specific
apparent,

unclear

in

For

instance,

factual
why

order

the

what

information

requires

protect

Defendants’

business

to

other

Defendants

representations,
client

list

have

nor

should

is

not

provided

it

remain

any

immediately
under

seal.

Moreover, there are multiple provisions of Settlement Agreement
that are at issue in the present dispute and Defendants have not
provided

any

justification

remain under seal.

for

why

these

provisions

should

Defendants also fail adequately to explain

why the confidential information in Settlement Agreement cannot
simply be redacted as an alternative to sealing the document in
its entirety.
IV.

Conclusion
For the foregoing reasons, Defendants’ motion to dismiss

based on failure to state a claim will be denied.

The motion to

seal will also be denied, but Defendants have fourteen days to
cure the deficiencies.

A separate order will follow.

/s/
DEBORAH K. CHASANOW
United States District Judge

29