AirFacts, Inc. v. Amezaga
Filing
78
MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 8/21/2017. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
AIRFACTS, INC.
:
v.
:
Civil Action No. DKC 15-1489
:
DIEGO DE AMEZAGA
:
MEMORANDUM OPINION
After Defendant Diego de Amezaga (“Defendant”) resigned his
employment
with
Plaintiff
AirFacts,
Inc.
(“Plaintiff”
or
“AirFacts”), Plaintiff commenced this action alleging breach of
contract, misappropriation of trade secrets, and conversion.
A
five-day bench trial was held between January 25 and February 3,
2017.
The following findings of fact and conclusions of law are
issued pursuant to Fed.R.Civ.P. 52(a).1
1
Rule 52(a) provides, in relevant part, that “[i]n an
action tried on the facts without a jury . . . , the court must
find the facts specially and state its conclusions of law
separately. The findings and conclusions . . . may appear in an
opinion or a memorandum of decision filed by the court.”
To
comply with this rule, the court “‘need only make brief,
definite, pertinent findings and conclusions upon the contested
matters,’ as there is no need for ‘over-elaboration of detail or
particularization of facts.’”
Wooten v. Lightburn, 579
F.Supp.2d 769, 772 (W.D.Va. 2008) (quoting Fed.R.Civ.P. 52(a)
advisory committee’s note to 1946 amendment). Rule 52(a) “does
not require the court to make findings on all facts presented or
to make detailed evidentiary findings; if the findings are
sufficient to support the ultimate conclusion of the court they
are sufficient.”
Darter v. Greenville Cmty. Hotel Corp., 301
F.2d 70, 75 (4th Cir. 1962) (quoting Carr v. Yokohama Specie
Bank, Ltd., 200 F.2d 251, 255 (9th Cir. 1952)).
I.
Factual Background
Plaintiff
licenses
is
a
revenue
Delaware
corporation
accounting
software
that
for
develops
airlines.
headquarters are located in Bethesda, Maryland.
and
Its
April Pearson
has been CEO since May 2001, and from the start of her tenure as
CEO, auditing has been the company’s exclusive focus.
61,
at
28:8-11,
29:17-23).
Plaintiff’s
primary
(ECF No.
product
TicketGuard, an airfare auditing software product.2
is
TicketGuard
is used by airlines, including one department within American
Airlines, to audit ticket sales by comparing tickets issued to
an airline’s fares, taking into account commissions, taxes, and
industry rules for sales.
both
an
automated
Plaintiff’s auditing process involves
ticket
review
and
a
manual
review.
TicketGuard can also be used to audit refunds issued through a
process
that
identified
for
is
partially
a
ticket,
automated.
TicketGuard
When
violations
invoices
the
are
automated
pricing systems or travel agents which priced the tickets in
error on behalf of the airlines.
Plaintiff
has
also
attempted
to
develop
a
proration
software product to assist airlines in receiving revenue that
accurately
reflects
industry
standards
and
negotiated
rates,
which are recorded in special prorate agreements (“SPAs”), when
2
TicketGuard
Internet webpage.
customers
access
2
the
product
through
an
two
or
more
transaction.
airlines
share
ticket
revenues
in
a
single
Plaintiff first began working “intermittently” and
“sporadically” on a proration product in 2012 (ECF No. 61, at
70:25-71:9, 71:18-23), and entered into a contract with Alaska
Airlines to develop a proration product on June 1, 2015 (PTX
172).3
Although Ms. Pearson testified that Plaintiff had “a
complete and finished product” that Plaintiff’s airline client
was evaluating at the time of the January 2017 trial, Plaintiff
did not yet have a proration product in use.
(See ECF No. 66,
at 128:5-15).
Defendant was employed by Plaintiff from June 2008 until
February 2015.
He was hired as a product development analyst
before being promoted to manager of product development and then
director of product development.
His primary responsibilities
included working with programmers and coders to develop products
and managing client relationships.
the
development
and
proration product.
sales
pitches
In addition, he worked on
for
Plaintiff’s
proposed
At the start of Defendant’s employment with
Plaintiff, the parties executed an “Employment Agreement.”
3
(PTX
“PTX” refers to exhibits offered by Plaintiff at trial,
and “DTX” refers to exhibits offered by Defendant.
References
to trial testimony are designated by the ECF docket entry of the
official transcript and page number where available.
Official
transcripts were not prepared for the fourth or fifth days of
the bench trial.
3
35).
The
Employment
Agreement
restricted
Defendant’s
post-
employment opportunities for a twelve-month period.
Defendant first tendered his resignation to Plaintiff on
October 10, 2014, but was convinced to continue his employment.
In
December,
Defendant
unsuccessfully
applied
for
a
position
with Kayak, a metasearch engine that displays airline fares and
is not Plaintiff’s competitor or customer.
screenshots
of
TicketGuard
to
Kayak
in
He emailed static
connection
with
his
On February 6, 2015, Defendant resigned a second time.
He
application.
did not have a job offer at that time and gave four weeks’
notice,
but
at
Ms.
February 13, 2015.
Pearson’s
direction,
his
last
day
was
Both Ms. Pearson and Randy Laser, who had
recently been hired as Plaintiff’s Vice President of Airline
Strategy, told Defendant they would contact him after he left if
they had questions about his work.
In his last week of work,
Defendant printed documents on which he had been working, and on
his last day, he emailed a spreadsheet related to proration on
which he had been working to his personal email account.
On
March 11, Defendant applied for a position with Fareportal, a
travel agency.
customer
of
(PTX 8).
Plaintiff’s,
tickets sold by Fareportal.
Fareportal is not a competitor or
but
TicketGuard
is
used
(ECF No. 72, at 18:2-9).
to
audit
Defendant
emailed two flowcharts which he had created for Plaintiff to
4
Fareportal in connection with his application.
(PTX 6-7).
He
accessed the flowcharts by logging in to an AirFacts’ LucidChart
account
February
on
March
13
11.
until
May
Defendant
11,
2015,
remained
when
he
unemployed
began
from
working
at
American Airlines as a senior manager in the Refunds department.
American Airlines is Plaintiff’s largest customer.
U.S.
Airways had begun using TicketGuard in 2006, and after U.S.
Airways merged with American Airlines, American Airlines began
using TicketGuard in its Travel Agency Audit department to audit
domestic travel agency ticket sales in 2014.4
Prior to the
airline merger, Plaintiff had discussed the development of a
proration product for U.S. Airways in 2013, but the project did
not come to fruition.
American Airlines has a contract with
Accelya Kale for proration work, and Plaintiff has never pitched
a proration product to American Airlines.
When
American
Defendant
Airlines
began
assured
working
for
Plaintiff
American
that
Defendant
Airlines,
was
not
performing services that were in competition with, or similar
to,
services
that
were
provided
by
Plaintiff.
Defendant
maintains that his work at American Airlines did not involve
performing any services that were restricted by the Employment
4
The airline merger officially took place in December 2013,
but Plaintiff and American Airlines entered into a service
provider agreement in September 2014.
(PTX 171; see also ECF
No. 66, at 145:3-22).
5
Agreement.
Plaintiff alleges that Defendant’s work for American
Airlines constitutes a breach of the Employment Agreement, and
further alleges that Defendant misappropriated trade secrets.
Further facts will be discussed as relevant to the various legal
issues.
II.
Procedural Background
The
breach
three-count
of
complaint,
May
misappropriation
contract;
filed
of
22,
2015,
trade
alleges
secrets
in
violation of the Maryland Uniform Trade Secrets Act (“MUTSA”),
Md.Code Ann., Com. Law I § 11–1201, et seq.; and conversion, and
seeks money damages as well as injunctive relief.
(ECF No. 1).
Plaintiff filed a motion for a temporary restraining order and
preliminary injunctive relief with the complaint.
(ECF No. 2).
Following a hearing, the court granted the temporary restraining
order,
temporarily
destroying,
restraining
erasing,
and
enjoining
mutilating,
Defendant
concealing,
from
altering,
transferring, or otherwise disposing of, in any manner, directly
or indirectly, any document that related to his employment with
Plaintiff or any document or electronically stored information
belonging
to
or
Defendant
filed
received
an
from
answer
Plaintiff.
(ECF
No.
9),
(ECF
and
Nos.
2;
responded
6).
in
opposition to the motion for a preliminary injunction (ECF No.
14).
Upon the consent of the parties, the court granted a
preliminary
injunction
ordering
6
Defendant
to
return
and
not
retain
originals
confidential
23).
or
copies
any
property,
obtained
information,
of
from
including
Plaintiff.
(ECF
No.
The order also required Defendant to provide Plaintiff
access
to
all
electronic
devices
for
forensic
evaluation.
Discovery closed on September 30, 2016 (ECF No. 43), and the
case proceeded to a bench trial.
Although
Plaintiff’s
breach
of
contract
claim
alleges
violations of several provisions of the Employment Agreement,
Plaintiff
paragraph
narrowed
8,
the
its
claim
during
non-solicitation
trial
of
to
a
clients
breach
of
provision.
Plaintiff also acknowledged at trial that it had recovered or
deleted
all
AirFacts
documents
within
Defendant’s
custody,
possession, or control through forensic measures, and that it
had not proven its conversion claim.
under
advisement
after
the
trial
The court took the matter
concluded
and
reviewed
pleadings, trial transcripts, and admitted exhibits.
the
For the
reasons set forth below, the court concludes that Plaintiff has
not met its burden to prove by a preponderance of the evidence
that Defendant breached the Employment Agreement or committed a
violation of the MUTSA.
III. Findings of Fact and Conclusions of Law
A.
Count I, Breach of Contract Claim
A federal court sitting in diversity must apply the law of
the state in which the court is located, including the forum
7
state’s choice of law rules.
See Klaxon Co. v. Stentor Elec.
Mfg. Co., 313 U.S. 487, 496 (1941); Colgan Air, Inc. v. Raytheon
Aircraft
Co.,
507
F.3d
270,
275
(4th
Cir.
2007).
Maryland
follows the rule of lex loci contractus for contract claims,
applying the substantive law of the state where the contract was
formed
in
the
contract.
absence
of
a
choice-of-law
provision
in
the
Am. Motorists Ins. Co. v. ARTRA Group, Inc., 338 Md.
560, 573 (1995); Kronovet v. Lipchin, 288 Md. 30 (1980).
Employment
Agreement
includes
a
choice
of
law
The
provision
submitting to “the internal laws of the State of Maryland.”
(PTX
35
¶
10.1).
Accordingly,
Maryland
law
governs
the
Plaintiff’s breach of contract claim.
The relevant paragraph of the Employment Agreement states:
8.
NON-SOLICITATION OF CLIENTS
8.1 During employee’s employment and for a
period of 12 months thereafter or from the
date of entry by a court of competent
jurisdiction of a final judgment enforcing
this covenant (whichever is later), employee
will not, without the prior written consent
of
the
employer,
either
directly
or
indirectly, for the benefit of anyone other
than the employer:
. . . .
(d) Perform services for, own, work for,
consult,
be
employed
by,
or
become
financially interested in any [of] the
employer’s customers (as defined below)
unless the services being performed [are]
not in competition with, or similar to,
either (i) the services or products provided
8
by the employer during the term of the
employee’s employment or (ii) anticipated
services or products of the employer of
which the employee has material knowledge.
8.2 Customers . . . shall include any
customer who within the twelve months prior
to the date of employee’s termination has
been a customer of the employer; or to whom
the employee has directly or indirectly made
or had knowledge of, within the twelve
months prior to the date of employee’s
termination, a proposal for becoming a
customer of the employer.
(PTX 35 ¶ 8).
Plaintiff
contends
that
Defendant
violated
the
non-
solicitation provision of the Employment Agreement in working
for American Airlines.
American Airlines became a TicketGuard
client in October 2014, and accordingly, was a “customer” as
defined
in
employment
paragraph
at
American
8.2.
Defendant
Airlines
disputes
violated
the
that
terms
of
his
the
Employment Agreement.
Paragraph 8.1(d) prohibited Defendant from competing with
Plaintiff by providing services to a customer that were “in
competition with, or similar to . . . the services or products
provided
by
employment”
employer[.]”
the
or
employer
to
during
“anticipated
the
term
services
or
of
the
employee’s
products
(PTX 35 PPP 8.1(d) (emphasis added)).
of
the
Plaintiff
has argued that this provision also prohibited Defendant from
providing services to a customer that were similar to those he
9
had provided to Plaintiff during his employment.
It introduced
evidence purporting to show that Defendant is “doing similar
work
and
applying
similar
techniques
that
he
learned
at
AirFacts” in his work for American Airlines, such as managing
projects
and
directing
coders,
using
industry
and
technical
knowledge he gained through his employment with AirFacts.
Under
the plain language of the contract, the Employment Agreement
prohibited Defendant only from providing services to a customer
that
were
in
competition
with
those
services
provided
by
Plaintiff, not services that were similar to the work he had
performed for Plaintiff during his employment.5
irrelevant
to
Plaintiff’s
claim
for
breach
It is therefore
of
the
non-
solicitation provision whether Defendant, for example, managed
other employees or served as a project manager, while working
for both Plaintiff and American Airlines.
5
The Employment Agreement does contain a separate twelvemonth restriction prohibiting Defendant from “engag[ing] in
activities or contribut[ing] skills and knowledge substantially
related to duties performed at AirFacts to any business or
entity in competition with AirFacts’ business” (PTX 35 ¶ 7.2),
which was cited in the complaint (ECF No. 1 ¶¶ 27, 40).
As
noted above, Plaintiff narrowed its claim during trial to
paragraph 8.1(d).
Plaintiff has not introduced any evidence
that American Airlines was a “business or entity in competition
with AirFacts’ business,” and therefore cannot prove that
Defendant breached this provision by working for American
Airlines.
10
1.
Refunds
At American Airlines, Defendant works as the senior manager
of
the
Refunds
department.
Revenue
department
within
the
Revenue
Accounting
He reports to Brenda Fullmer, a director in the
Accounting
department
who
oversees
five
departments,
including the Refunds department and the Proration department.
Ms. Fullmer does not oversee the Travel Agency Audit department,
which is the American Airlines department that uses TicketGuard.
The Travel Agency Audit department is also within the Revenue
Accounting
managed
Ann
is
overseen
process
Refunds
Monick
and
It
automated
The
Beth
responsible for processing passenger ticket refund requests.
proprietary
Michulsky.
by
is
a
Mary
but
department
uses
by
department,
for
passenger
refunds,
which was first used by America West Airlines, then by U.S.
Airways after it merged with American West, and is now used by
American Airlines following the U.S. Airways-American merger.
Defendant
oversees
the
approximately 100 employees.
Refunds
department,
managing
(PTX 90).
TicketGuard provides auditing services.
While TicketGuard
may be used to audit refunds, it does not process refunds.6
6
Ms.
Again, while Defendant’s work for Plaintiff involved
automating processes relating to the auditing of refunds and
understanding the ATPCO categories for refunds, the employment
restriction concerns only those services or products provided by
Plaintiff.
Plaintiff does not provide services or products
relating to the processing of refunds.
It was suggested at
11
Pearson
testified
that
“you
cannot
process
a
refund
without
auditing the original ticket,” meaning that, in order to process
a refund, an airline would first “have to go through the same
process that you do when you’re auditing.
sure that the ticket was refundable.
are any penalties.
the
refund
So you need to make
You need to know if there
If it is refundable, you need to calculate
amount.”
(ECF
No.
71,
at
59:9-19).
Plaintiff
contends that processing a refund of a direct sale ticket for a
customer, so that the fare can be refunded to the passenger, is
“the same process” as auditing an agency sale ticket for the
airline, so that the airline may bill the travel agency if the
agency issued the fare in error.
(Id. at 60:4-23).
Plaintiff
concedes that these processes are done for different business
purposes,
but
argues
that
Defendant
should
not
be
permitted
under the agreement to perform this similar process.
Defendant did not develop the refund processing system at
American
Airlines,
employment,
involve
himself.
for
and
managing
which
his
was
in
use
responsibilities
employees,
not
before
at
directly
he
began
his
American
Airlines
processing
refunds
Even assuming that the services Defendant performed
American
Airlines
in
managing
the
Refunds
department
trial by Plaintiff’s counsel that Plaintiff had unsuccessfully
pitched an internal refund processing product to U.S. Airways in
2010, but Plaintiff has not proven that it provided refund
processing products or services or that such products or
services were anticipated.
12
included
automating
refund
processing
or
manually
processing
refunds, Plaintiff has not proven that those services were in
competition with or similar to its services.
sales
or
refunds
and
processing
refunds
Auditing ticket
may
involve
the
application of some of the same industry or airline rules, but
they are separate and distinct processes performed for different
purposes.
Plaintiff provides refund auditing services, but it
does not provide refund processing products or services, and
Defendant’s work for American Airlines clearly did not involve
performing services in competition with Plaintiff.
above,
these
functions
are
the
responsibilities
As noted
of
separate
departments led by different managers and directors at American
Airlines.
Moreover, Plaintiff has not shown that Defendant or
American Airlines actually processes refunds in a way that is at
all similar to the TicketGuard process for auditing refunds.
Ms. Pearson testified that she would process a refund in the
same way that she would audit a refund or ticket sale, but she
cannot attest to American Airline’s refund process.
Ms. Fullmer
testified that she considers “auditing a ticket and calculating
just
the
different
refund
based
processes.”
on
resulting
(ECF
No.
66,
values
at
.
.
.
completely
79:10-15).
explained:
One is you are trying to determine whether a
ticket was sold properly and if they met all
of the rules of the ticket in order to
13
As
she
purchase the price that they got for the
ticket. The other process is, we have sold
a ticket, the customer has the ticket, has
decided not to use the full or partial part
of the ticket, and we are just calculating
whatever value was remaining and giving them
their money back.
(Id. at 79:16-22; see also id. at 81:8-82:7 (“[R]efunds isn’t
looking to see whether someone who processed it sold it properly
or
refunded
it
properly. . . . We
are
looking
to . . . calculate[] the value and refund[] the value back to
the
customer.”)).
Plaintiff
has
not
shown
that
American
Airline’s preexisting proprietary system processes refunds using
the
same
or
similar
processes
as
TicketGuard
uses
to
audit
ticket sales and refunds.
Plaintiff has also argued that Defendant’s work on refunds
breached
the
agreement
because
he
interacted
with
American
Airlines employees in or formerly in the Travel Agency Audit
department.
The
Refunds
department
at
American
Airlines
primarily processes refunds of company sales, but Defendant did
work with the Travel Agency Audit department on a backlog of
international agency ticket refunds, which it was responsible
for processing.
(See PTX 197).
Those refunds would not have
been audited by TicketGuard under American Airline’s contract
with Plaintiff, but Plaintiff contends that such refunds could
14
have been audited by TicketGuard.7
This is immaterial.
Even
showing Defendant processed refunds for tickets that had been or
were later audited by TicketGuard would only further demonstrate
that
Defendant
provided
services
to
American
that
were
dissimilar to and not in competition with those provided by
Plaintiff.
Plaintiff
has
also
emphasized
that
Defendant
is
now
reporting to Ms. Fullmer at American Airlines, who had, prior to
September
2012,
managed
U.S.
Airways’
travel
agency
audit
department, and therefore had interacted with Defendant during
that time as a TicketGuard customer.
plainly
does
industry
not
contact
prohibit
he
made
Defendant
during
his
The Employment Agreement
from
working
employment.
for
any
If
this
connection has any probative value, the fact that Ms. Fullmer
had not managed the department which used TicketGuard for years
before hiring Defendant underscores that he was not providing
services to American Airlines similar to or in competition with
those
provided
by
Plaintiff.
Similarly,
the
Employment
Agreement plainly did not restrict Defendant from occasionally
working with American Airlines employees in the Travel Agency
7
While TicketGuard can be used to audit both direct airline
ticket sales and travel agency sales, American Airlines does not
use TicketGuard to audit its own sales. (ECF No. 66, at 146:716).
TicketGuard is also used by other AirFacts customers to
audit international agency sales, but American Airlines uses it
only to audit domestic agency sales. (See ECF No. 71, at 66:1967:24).
15
Audit
department
on
non-auditing
matters
simply
because
they
used TicketGuard.8
Plaintiff
has
not
proven
that
Defendant
breached
the
Employment Agreement through his work in the Refunds department
or in connection with refunds for American Airlines.
2.
Proration
Plaintiff contends that Defendant also breached paragraph
8.1(d) by performing services for American Airlines that were
similar
to
or
in
competition
with
its
anticipated
proration
product, of which Defendant had material knowledge.
a.
Plaintiff Had an Anticipated Proration Service or
Product of which Defendant Had Material Knowledge
The
proration
product
is
under
development
for
Alaska
Airlines pursuant to a contract Plaintiff entered into on June
1, 2015.
(PTX 172).
Alaska Airlines first approached Plaintiff
about developing a proration product in 2012, and Plaintiff had
worked
on
it
“sporadically”
and
“intermittently”
time.
(ECF No. 61, at 71:1-5, 20-23).
since
that
Ms. Pearson testified
that Plaintiff’s proration product development “really started
in earnest in 2014,” and that Defendant spent approximately half
of his time working on the product between October 2014 and his
8
Moreover, while some of the contact between Defendant and
the Travel Agency Audit department occurred in January 2016 (see
PTX 197), the Employment Agreement did not bar Defendant from
performing any services for American Airlines after February 13,
2016.
16
resignation in February 2015.
(Id. at 71:20-72:11).
Defendant
testified that, at the time of his resignation, Plaintiff was in
the midst of working out a contract with Alaska Airlines for a
proration
product,
and
that
he
alone
had
material pieces of the potential product.
did
not
enter
into
a
contract
for
been
working
on
Although Plaintiff
the
development
of
the
proration product until after Defendant’s resignation, the court
concludes that the proration product was anticipated at that
time,
and
that
Defendant
had
material
knowledge
of
the
anticipated product.
The proration product was an anticipated product for Alaska
Airlines, but not for American Airlines.
American Airlines was
a customer only of the TicketGuard auditing product.9
Plaintiff
argues that the Employment Agreement prohibits Defendant from
providing to any AirFacts customer services in competition with
or similar to anticipated services or products for any other
AirFacts customer, not just those services Plaintiff performed
for that customer.
At the time the parties entered into this
agreement in 2008, this would have been a distinction without a
difference.
Plaintiff had one core product, TicketGuard, which
9
Plaintiff and U.S. Airways did discuss the development of
a proration product in 2013, and Ms. Pearson testified that
Plaintiff “knew that [American Airlines] had been interested in
our proration product.” (ECF No. 61, at 113:8-14). Ms. Fullmer
testified that American Airlines was not considering and had not
considered changing proration products since 2013. (ECF No. 66,
at 65:17-67:3).
17
provided
auditing
services.
Assuming
arguendo
that
the
provision should be read as Plaintiff contends, Plaintiff has
not
proven
that
Defendant
performed
services
for
American
Airlines that were similar to or in competition with Plaintiff’s
anticipated proration product for Alaska Airlines.
b.
Defendant Did Not Perform Proration Services for
American Airlines
Defendant
does
not
work
in
the
Proration
department
at
American Airlines and has not been involved in the development
or use of a proration engine similar to that under development
by
Plaintiff.
American
Airlines
has
an
in-house
proration
system that has been in use since it was America West Airlines,
which is used to prorate “a very small number of transactions.”
(ECF No. 66, at 66:23-67:3).
The majority of its proration
transactions are outsourced to Accelya Kale, a proration vendor.
(Id.).
There
is
no
evidence
that
Defendant
has
provided
proration services to American Airlines.
What
Plaintiff
has
shown
at
trial
is
that
Defendant
attended weekly staff meetings which were also attended by the
senior
manager
of
the
Proration
department;
that
he
was
occasionally copied on emails that were relevant to both the
Refunds
and
Proration
departments;
and
that,
as
the
Revenue
Accounting point of contact on a project, he served as a conduit
for
information
relating
to
the
18
project
between
departments
outside Revenue Accounting and those inside Revenue Accounting,
including
Proration.
Plaintiff
argues
that
any
mention
of
“auditing,” “proration,” or “SPAs,” either directly to Defendant
or
to
other
employees
at
a
meeting
or
on
an
email
where
Defendant was in attendance or included for unrelated reasons,
was a violation of the provision.10
Such an interpretation goes
far beyond the plain language of the Employment Agreement, and
would amount to a restriction on working in the airline industry
at
all.
proration
Defendant
services
was
to
arguably
American
prohibited
Airlines
from
similar
providing
to
or
in
competition with those that Plaintiff anticipated providing to
Alaska Airlines, and Plaintiff has not proven that he did so.
10
Plaintiff emphasized at trial an email Ms. Fullmer sent
to her team, which was prepared by American Airlines’ in-house
counsel, instructing them to avoid discussing these topics with
Defendant in light of his Employment Agreement with Plaintiff.
(PTX 38). It is far from clear that the email was intended as
an opinion on the extent or reach of the non-solicitation
clause, but even if it were plainly meant to be an
interpretation of the agreement, the interpretation of a
contract by counsel for a third-party years after the contract
was entered into by the parties would be entitled to no
evidentiary weight in interpreting the contract.
Any legal
advice given to Defendant’s new employer on how best to avoid a
violation or the appearance of a violation of the Employment
Agreement was not binding, and any business determination by
that employer not to follow the advice could not constitute
evidence of a breach by Defendant of his employment contract
with Plaintiff.
Even if the advice to American Airlines’
employees to avoid discussing proration software or SPAs with
Defendant was reasonable, it would not make it a reasonable
interpretation of paragraph 8.1(d) of the Employment Agreement.
19
Plaintiff
has
not
proven
that
Defendant
breached
the
Employment Agreement, and accordingly, judgment will be entered
in favor of Defendant on Plaintiff’s breach of contract claim.
B.
Count II, Maryland Uniform Trade Secrets Act Claim
Plaintiff
alleges
that
Defendant
violated
the
MUTSA
by
misappropriating trade secret information contained in several
documents and files.
materials
at
misappropriated.
It is Plaintiff’s burden to prove that the
issue
were
Under
the
both
trade
MUTSA,
the
secrets
and
definition
of
were
“Trade
secret” is:
[I]nformation, including a formula, pattern,
compilation,
program,
device,
method,
technique, or process, that:
(1) Derives
independent
economic
value,
actual
or
potential,
from
not
being
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
reasonable
under
the
maintain its secrecy.
efforts that
circumstances
are
to
Md.Code Ann., Com. Law I § 11–1201(e).
The Restatement (First) of Torts sets forth six factors for
courts
to
consider
in
determining
whether
given
information
constitutes a trade secret:
(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
20
extent of measures taken by him to guard the
secrecy of the information; (4) the value of
the
information
to
him
and
to
his
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.
Restatement (First) of Torts § 757 cmt. b.
“Although all of the
Restatement’s factors no longer are required to find a trade
secret,
those
factors
still
provide
helpful
guidance
to
determine whether the information in a given case constitutes
‘trade secrets’ within the definition of the statute.”
Optic
Graphics, Inc. v. Agee, 87 Md.App. 770, 784 (1991); see also
Trandes Corp. v. Guy F. Atkinson Co., 996 F.2d 655, 661 (4th Cir.
1993).
“Misappropriation” can be either the acquisition of a
trade secret of another by improper means, defined as “theft,
bribery, misrepresentation, breach or inducement of a breach of
a duty to maintain secrecy, or espionage through electronic or
other means,” or the disclosure or use of a trade secret of
another.
Id. § 11-1201(b)-(c).
Plaintiff’s claim consists of four separate alleged trade
secret violations: (1) screenshots of the TicketGuard library
and upload user interface, sent by email from Defendant to Kayak
on December 24, 2014, in connection with a job application (PTX
17); (2) “pseudocode” relating to Fare By Rule processing, which
Defendant
printed
during
his
last
21
week
of
employment,
as
captured by Spector 360 software (PTX 14-16); (3) flowcharts
relating to the Fare By Rule, which Defendant downloaded from
LucidChart and sent by email to Fareportal on March 11, 2015, in
connection
with
a
job
application
(PTX
6-7);
and
(4)
a
spreadsheet relating to the Alaska Airlines proration product,
which
Defendant
emailed
from
his
work
email
account
to
his
personal email account on his final day of employment (PTX 2123).11
Forensic
evidence
showed
that
Defendant
used
these
documents as described, and he does not dispute that he acquired
or used these materials.
The questions before the court are
whether these materials were protected trade secrets and whether
Defendant’s acquisition or use was in violation of the MUTSA.
The materials must be considered individually.
11
Evidence
was
also
introduced
regarding
documents
Defendant sent to his personal email account or stored in an
AirFacts Dropbox account in 2009, 2011, and 2013.
(PTX 1-4).
Plaintiff’s counsel stated in closing argument that Plaintiff
considered these documents to be relevant to Defendant’s
credibility, but that it did not advance claims for their
misappropriation. The purported cost of the misappropriation of
these documents was included in Plaintiff’s expert’s damages
calculations, however.
As these documents were used by
Defendant during his employment long before his resignation and
not accessed or used after his employment ended, the court
agrees that Plaintiff has not proven they were acquired by
improper means. The court finds Defendant’s testimony, that he
simply did not recall that these documents were still in his
personal email account or stored in a company Dropbox account,
to be credible.
22
1.
TicketGuard Screenshots
Defendant emailed two static screenshots of the TicketGuard
user interface to Kayak in connection with a job application on
December
24,
“library”
2014.
page
(PTX
and
the
17).
The
screenshots
upload
user
interface
TicketGuard client’s webpage interface.
showed
page
the
of
a
Defendant created the
screenshots while logged in to his own TicketGuard account, and
concedes that he did not receive authorization from Plaintiff to
create
or
use
application.
the
screenshots
in
connection
with
his
job
Plaintiff contends that the screenshots are trade
secrets because they reveal the type of interface TicketGuard
provides to its customers, a feature that sets Plaintiff apart
from its competitors.
For
the
screenshots
to
be
protected
under
the
MUTSA,
Plaintiff must prove that the static display of the TicketGuard
user interface was the subject of reasonable efforts to maintain
its
secrecy.
Plaintiff
made
some
efforts
that
would
have
contributed to keeping the TicketGuard interface secret, such as
including
confidentiality
provisions
in
its
employment
agreements with employees (see PTX 35 ¶ 2), using a system of
passwords to prevent unauthorized access (ECF No. 72, at 57:2058:2),
and
information,
including
a
defined
to
provision
include
relating
AirFacts’
to
confidential
“user
interface
designs,” in its service provider agreements with its clients
23
(see, e.g., PTX 172 ¶ 8).
See Trandes Corp., at 664.
However,
in light of the other evidence presented, these steps fail to
show
that
reasonable
interface’s secrecy.
passwords
to
its
efforts
were
taken
to
maintain
the
It is not clear that Plaintiff provides
customers
to
maintain
the
secrecy
of
its
interface, rather than to maintain the secrecy of its customer’s
information and to limit access to the number of users for which
the
customer
provision
of
paid
the
a
licensing
service
fee.
provider
The
confidentiality
agreements
also
limits
disclosure only outside the airline, rather than, for example,
to
any
non-authorized
user.
(PTX
172
¶ 8).
A
customer’s
contractors or service providers may access the software on its
behalf
with
unreasonably
written
permission
withheld.”
(Id.
from
¶
Plaintiff,
5(a)).
Most
“not
to
be
significantly,
TicketGuard is regularly demonstrated to prospective clients and
at its booths at industry trade shows.12
These demonstrations
would reveal not only the interface pages sent by Defendant, but
12
Plaintiff argued that it is significant that Defendant
sent screenshots from live client accounts rather than from a
“test” account that could be used when demonstrating the
product.
It did not prove that a “test” account was used for
demonstrations, however, or that there would have been any
difference in the information shown in the screenshots.
The
screenshots were static, and did not reveal client information
or enable the recipient to “click through” the links shown.
Moreover, even if client information had been disclosed through
Defendant’s use of the client pages rather than the test pages,
Plaintiff’ clients’ data would not be Plaintiff’s own trade
secret.
24
all the TicketGuard screens and its functionality.
There is no
evidence that Plaintiff required prospective customers to sign
non-disclosure
agreements
before
viewing
the
user
interface.
Plaintiff has not proven that the front-end appearance of its
interface was the subject of reasonable efforts to maintain its
secrecy, and accordingly, it is not trade secret information.
2.
In
Printed “Pseudocode”
October
2014,
Ms.
Pearson
assigned
two
development
projects to Defendant, one relating to the Fare By Rule display
and the other to the SPA proration framework.
at 41:16-18).
(See ECF No. 71,
During the final week of his employment with
Plaintiff, Defendant cut and pasted “pseudocode” relating to the
Fare By Rule display into a notepad document, then printed the
documents.
360
(PTX 14-16).
monitoring
software
These actions were captured by Spector
installed
on
Plaintiff’s
employees’
computers.
Plaintiff has not proven that this information was trade
secret information.
Defendant testified that he had been asked
to translate ATPCO code into text, which he would do by copying
column names from an ATPCO database and the text display for
that information from ATPCO’s Fare Manager tool into a single
document.13
Plaintiff’s programmers would then be able to use
13
“ATPCO” is the Airline Tariff Publishing Company, an
organization that collects and distributes fare information or
25
this translation document for coding.
information
because
information
that
ATPCO.
it
was
was
being
He copied and pasted the
faster
copied
than
and
retyping,
pasted
all
and
the
came
from
The documents contained information from ATPCO that was
generally known to subscribed users of ATPCO, and to the extent
that
the
document
Defendant
created
by
combining
information
from two ATPCO sources had economic value, the information was
readily ascertainable by proper means by persons who subscribed
to ATPCO.
In
addition,
Plaintiff
has
misappropriated this material.
not
proven
that
Defendant
Although Ms. Pearson testified
that it was unusual to print such a document (see ECF No. 72, at
22:1-10, 24:1-8), Defendant testified that Plaintiff’s employees
would regularly print their work and it was a matter of personal
preference.
Defendant
was
authorized
to
be
working
on
the
document when he printed it, and Plaintiff has not proven that
Defendant retained the printed copy of this material.
Plaintiff’s
counsel
suggested
in
his
closing
argument
While
that
Defendant had deleted this material before leaving AirFacts and
not left it for Plaintiff’s use, this contention is unsupported
by the evidence.
Defendant testified that he would normally
the airline and travel industry.
AirFacts pays a monthly
subscription to ATPCO to access its data and data application,
which “describe[s] how to use ATPCO data.”
(ECF No. 71, at
26:5-21).
26
have saved the material in JIRA, an issued tracking system used
by
Plaintiff’s
employees
to
communicate
internally,
and
Ms.
Pearson testified that Defendant “put it electronically in the
JIRA that he was assigned . . . so the programmer could look at
it.”
(ECF
No.
72,
at
23:18-23;
see
also
id.
at
22:3-7).
Plaintiff has not proven that Defendant misappropriated trade
secret information by printing these materials.
3.
Fare By Rule Flowcharts
On March 11, 2015, Defendant retrieved two flowcharts that
were
part
of
the
same
Fare
By
Rule
display
project
“pseudocode” and sent them to a prospective employer.
as
the
(PTX 6-7)
He retrieved them from a LucidChart online data modeling service
account he had created while working for AirFacts.
testified
that
they
“describe[e]
the
decisions
Ms. Pearson
and
the
data
tables and the ATPCO fares database,” and “took a lot of time”
for Defendant to develop.
(ECF No. 71, at 38:12-17).
Ms.
Pearson testified that they contain “processing logic,” that is
“entirely proprietary and sensitive to our process.”
71, at 47:9-13).
(ECF No.
Defendant testified, however, that the charts
show how ATPCO displays Fare By Rule text in Fare Manager, and
that they contained standard ATPCO processing information, and
Cindy Regan, Plaintiff’s director of client accounts, testified
that the charts were “an overview . . . of what Fare By Rule
is,” and that competitors did not have the information in “this
27
form” (ECF No. 72, at 54:4-55:14).
Although Defendant may have
created a visual display of ATPCO data that was unique, the
underlying
ATPCO
information
industry.
These
flowcharts
was
did
widely
not
known
contain
within
information
the
or
processes unique to Plaintiff; rather, they provided an overview
of APTCO’s processes for Plaintiff’s employees’ use.
both
the
information
themselves
appear
to
in
the
have
flowcharts
been
widely
employees, as was their intended purpose.
has
not
proven
that
this
information
and
known
the
to
Moreover,
flowcharts
Plaintiff’s
Ultimately, Plaintiff
derives
independent
economic value from not being generally known and not being
readily ascertainable to others who can obtain economic value
from their disclosure or use, nor has Plaintiff shown that it
took reasonable efforts to maintain their secrecy.
Although
Defendant was not authorized to acquire or use the LucidChart
flowcharts
as
he
did,
Plaintiff
has
not
proven
that
the
flowcharts were trade secrets.
4.
SPA Proration Framework and Database Model
On February 13, 2015, his last day at AirFacts, Defendant
emailed the SPA proration framework and a database model on
which he had been working since October 2014 to his personal
email account from his AirFacts email account.
(PTX 21-23).
As
shown by Plaintiff’s Spector 360 monitoring software, he then
deleted the copy of this email saved in his work email “sent”
28
folder.
(PTX 15C; ECF No. 64, at 63:20-64:17).
were
incomplete,
but
had
The documents
Defendant
emailed
taken
months
to
develop.
They represent the database tables that would be used
to store SPA contract information in the proration engine under
development.
Plaintiff
has
shown
that
this
framework
and
database model derive potential independent economic value from
not being generally known.14
Plaintiff
did
not
necessarily
take
measures to protect these documents.
example,
that
the
documents
were
specific
security
It has not shown, for
designated
internally
as
confidential, that they were password protected, or that access
to
these
documents
was
limited
within
employees who reasonably needed access.
AirFacts
to
those
See PADCO Advisors,
Inc. v. Omdahl, 179 F.Supp.2d 600, 604, 610 (D.Md. 2002) (noting
that, where databased alleged to be a trade secret was protected
by “firewalls” and passwords, “[t]he strongest support for [the]
argument that it has been kept secret is that only about 23
employees out of 160 have access to this database and everyone
who is granted access is required to sign the [confidentiality
agreement]”).
team
were
Ms. Pearson testified that “all members of the
working
on”
the
proration
14
product
development,
This value, however, lies only in the process or method
represented by the framework.
The fact that the framework
contained some actual pricing data from Plaintiff’s customer’s
expired, anticipated, or active SPAs is not relevant to this
claim, as such information is not Plaintiff’s trade secret.
29
however.
used
(ECF No. 61, at 72:24-73:3).
individual
passwords
to
access
Plaintiff’s employees
their
work
computers
generally, and Spector 360 monitoring software was installed on
those computers to track employees’ usage.
(See ECF No. 72, at
100:18-21).
that,
Ms.
Pearson
also
testified
in
order
to
protect Plaintiff’s confidential information generally, “all of
our
employees
sign
confidentiality
clauses
as
part
of
their
employment agreement.”
(ECF No. 71, at 10:6-13; see PTX 35 ¶ 2.
But
at
see
ECF
No.
64,
136:7-137:12,
155:2-18
(Plaintiff’s
director of technical development, Li Ying, testified that all
employees were asked to sign a confidentiality statement after
Defendant’s
Source
resignation)).
Consulting
Group
Chief
James
Technology
Mlodgenski,
Officer
who
worked
of
on
Open
the
database diagram (PTX 22) with Defendant, testified that the
diagram
was
confidential
and
that
AirFacts
and
Open
Consulting Group had a non-disclosure agreement in place.
No.
64,
at
120:7-16).
The
court
concludes
that
Source
(ECF
reasonable
efforts were made to maintain the secrecy of these documents,
and accordingly, Plaintiff has proven that they contained trade
secrets.
A current employee authorized to access trade secrets may
acquire those trade secrets by improper means.
In LeJeune v.
Coin Acceptors, Inc., 381 Md. 288 (2004), for example, the Court
of Appeals of Maryland held that an outgoing employee acquired
30
trade secrets by improper means when he burned digital copies of
documents from his company laptop to a compact disc on three
occasions, created a second copy of the disc, and retained hard
copies of documents.
The court noted that the employee had
erased information from his company laptop, “suggest[ing] that
[the employee] was attempting to hide his conduct and was aware
that transferring the files was improper,” and that he “again
demonstrated an intent to hide his possession of trade secrets
when he told his supervisor that ‘everything’ had been returned,
although
numerous
possession.”
hard-copy
Id. at 314-15.
trade
secrets
remained
in
[his]
The trial court had not found the
employee’s justifications for his actions to be credible, and
the Court of Appeals found this evidence sufficient to support
the finding that the employee had acquired trade secrets by
improper means.
It relied on Bond v. PolyCycle, 127 Md.App. 365
(1999), where:
the former engineer of a plastic recycling
company, on the evening prior to resigning,
“took all of the work product that he had
done in the preceding two years on improving
[the company’s technology], placed it on a
floppy disc, [and] then erased it from the
company computers.” Because this technology
was a trade secret belonging to the company,
Bond did not have authority to take it.
Id. at 313 (alterations in original) (quoting Bond, 127 Md.App.
at 377).
But see Diamond v. T. Rowe Price Assocs., Inc., 852
F.Supp. 372, 409-12 (D.Md. 1994) (holding that former employee
31
who retained company documents at her home after the termination
of her employment did not acquire them by improper means because
they were within the scope of her legitimate business duties and
she was allowed to have such documents at her home while she was
an employee).
Upon
consideration
concludes
that
of
Plaintiff
the
has
evidence
not
presented,
proven
misappropriated the documents under the MUTSA.
that
the
court
Defendant
As the creator
or co-creator of the documents, Defendant was clearly authorized
to access them.
The evidence proves that he was instructed to
and did continue to work on this project through February 13,
his last day.
Defendant emailed the documents to himself at his
personal email address as he had previously done in order to
work remotely.
This may not have been an explicitly authorized
practice, but other employees also used personal email accounts
for AirFacts business or worked on home computers.15
Defendant testified that he sent these documents to his
personal email account because had been asked to be available to
answer questions after he left and he wanted to be able to
answer
any
questions
that
arose.
Defendant
believed
that
Plaintiff was close to signing a contract with Alaska Airlines,
15
When Mr. Laser contacted Defendant at his personal email
address to ask him work-related questions following Defendant’s
departure, for example, he did so using his own personal email
account. (See DTX 3; ECF No. 72, at 87:10-12).
32
and
testified
Although
Ms.
Defendant
that
he
Pearson
to
take
felt
a
responsibility
testified
copies
that
of
the
she
had
documents,
to
the
not
client.
instructed
she
had
told
Defendant that she and other employees would contact him if they
had questions about his work.
noted,
this
project
had
(ECF No. 71, at 24:19-25:3).
made
up
approximately
As
half
of
Defendant’s workload in the four months before his resignation.
(ECF No. 61, at 71:24-72:11).
Mr. Laser also asked Defendant if
he would be available to answer questions after having left
AirFacts
because,
based
on
his
industry
experience,
“when
somebody leaves . . . there is a grace period of being able to
ask
questions
once
they
leave
if
there
is
anything
outstanding or products that are incomplete[.]”
85:12-20).
that
is
(ECF No. 72, at
Mr. Laser did contact Defendant with questions after
his departure (id. at 85:21-24), as did Ms. Ying (ECF No. 64, at
137:13-21).
The court finds Defendant’s testimony to be credible.
forensic
analysis
of
Defendant’s
personal
email
account
The
and
computer show that he did not access the documents after the end
of his employment.
secret
is
not
(See DTX 7).
required
to
prove
Use or disclosure of a trade
misappropriation,
but
this
evidence lends credibility to Defendant’s testimony that he took
copies of the documents only in case he needed them to answer
questions from Plaintiff’s employees, which he ultimately did
33
not.
It is unclear why Defendant deleted the sent copy of his
email, but he also used his work computer and email account to
send
the
documents
and
testified
that
he
was
aware
of
the
monitoring software on his computer.
Accordingly, this is not
convincing
knew
evidence
that
Defendant
his
improper and intended to hide those actions.
actions
were
A breach of a duty
to maintain secrecy can constitute improper means, and Defendant
continued to be bound by the confidentiality provision of his
Employment Agreement after his resignation.
proven
that
he
maintaining
the
breached
that
documents
duty
in
his
to
Plaintiff has not
maintain
personal
secrecy
email
by
account,
however, particularly given that Plaintiff’s employees consulted
Defendant
through
his
personal
email
on
substantive
internal
issues following his resignation.
Defendant was authorized to
access
so,
the
documents
when
he
did
and
Plaintiff
has
not
proven that he acquired them by improper means.
Accordingly, although the court finds that the documents
Defendant emailed to himself on his last day of employment were
entitled to trade secret protection, Plaintiff has not proven
that Defendant misappropriated the documents.
IV.
Preliminary Injunction
In his closing argument, Defendant’s counsel argued that
the preliminary injunction should be terminated.
consented
to
the
entry
of
the
34
preliminary
The parties
injunction,
which
provided
allow
that
Defendant
Plaintiff
to
have
would
return
access
to
accounts for a forensic evaluation.
AirFacts’
his
property
electronic
(ECF No. 23).
media
and
and
Defendant
was also ordered not to disclose proprietary, confidential, or
trade secret materials.
The order was not broader than the
confidentiality provision of the Employment Agreement, and that
provision, unlike the non-solicitation and conflicts of interest
provisions, does not expire after twelve months.
(PTX 35 ¶ 2).
Nevertheless, the purpose of a preliminary injunction is “to
preserve the relative positions of the parties until a trial on
the merits can be held.”
University of Texas v. Camenisch, 451
U.S.
A
390,
395
(1981).
preliminary
injunction
expires upon entry of a final judgment.
necessarily
There is no basis on
which to grant permanent injunctive relief.
V.
Defendant’s Motion in Limine
Shortly before trial, Defendant filed a motion in limine to
exclude
evidence
regarding
TicketGuard
documents
and
damages
based upon an unjust enrichment theory (ECF No. 48), which was
discussed at a pretrial conference held on December 13, 2017
(ECF No. 47).
To the extent any objections were not resolved or
waived during trial and remain, they will be denied as moot.
VI.
Plaintiff’s Motion to Seal and Motion for Redaction
Plaintiff moved for a protective order sealing the trial
transcripts and exhibits shortly before trial, requesting that
35
the court temporarily seal the trial transcripts and exhibits
and permit Plaintiff 60 days to review and selectively redact
confidential and proprietary information.
(ECF No. 59).
The
court did not grant the motion prior to trial (see ECF No. 61,
at 4:20-5:6), and Plaintiff moved for redactions of the trial
transcripts after the trial ended (ECF No. 76).
Accordingly,
Plaintiff’s motion for a protective order will be denied as
moot,
and
the
court
will
consider
Plaintiff’s
motion
for
redactions.
Plaintiff
describes
in
requests
detail
limited
features
redactions
of
of
AirFacts’
testimony
that
confidential
and
proprietary software that AirFacts contends differentiates the
software from its competitors.
pricing
information
AirFacts
It also requests that specific
received
from
its
customers
and
agreed to hold in confidence be redacted from the transcripts.
(ECF No. 76, at 2-3).
A.
At
Defendant does not object to this motion.
Standard of Review
issue
in
principles
of
Amendment
analysis
any
request
common-law
access
that
to
redact
and
the
applies
to
or
more
seal
are
rigorous
judicial
the
First
records.
“[D]ocuments filed with the court are ‘judicial records’ if they
play
a
role
in
substantive rights.”
the
adjudicative
process,
or
adjudicate
In re United States for an Order Pursuant
to 18 U.S.C. Section 2703[(D)], 707 F.3d 283, 290 (4th
36
Cir.
2013).
The
United
States
Court
of
Appeals
for
the
Circuit recently reminded us that:
It is well settled that the public and
press have a qualified right of access to
judicial documents and records filed in
civil
and
criminal
proceedings.
See
Richmond Newspapers, Inc. v. Virginia, 448
U.S. 555, 580 n.17 (1980); Nixon v. Warner
Communications, Inc., 435 U.S. 589, 597
(1978); Media Gen. Operations, Inc. v.
Buchanan, 417 F.3d 424, 428 (4th Cir. 2005).
The right of public access springs from the
First Amendment and the common-law tradition
that court proceedings are presumptively
open to public scrutiny. Va. Dep’t of State
Police v. Wash. Post, 386 F.3d 567, 575 (4th
Cir. 2004).
“The distinction between the
rights of access afforded by the common law
and the First Amendment is significant,
because the common law does not afford as
much substantive protection to the interests
of the press and the public as does the
First Amendment.”
[In re United States for
an Order, 707 F.3d at 290] (quoting Va.
Dep’t of State Police, 386 F.3d at 575)
(internal quotation marks omitted).
The
common-law
presumptive
right
of
access
extends
to
all
judicial
documents
and
records, and the presumption can be rebutted
only
by
showing
that
“countervailing
interests
heavily
outweigh
the
public
interests in access.”
Rushford v. New
Yorker Magazine, Inc., 846 F.2d 249, 253 (4th
Cir.
1988).
By
contrast,
the
First
Amendment secures a right of access “only to
particular judicial records and documents,”
Stone v. Univ. of Md. Med. Sys. Corp., 855
F.2d 178, 180 (4th Cir. 1988), and, when it
applies, access may be restricted only if
closure is “necessitated by a compelling
government interest” and the denial of
access is “narrowly tailored to serve that
interest.”
In re Wash. Post Co., 807 F.2d
383, 390 (4th Cir. 1986) (quoting Press–
Enter. Co. v. Superior Court, 464 U.S. 501,
37
Fourth
510
(1984)
omitted)).
(internal
quotation
marks
Doe v. Pub. Citizen, 749 F.3d 246, 265-66 (4th Cir. 2014).
The
First Amendment right of access applies to judicial records made
part of a dispositive motion or entered into evidence at trial.
See Minter v. Wells Fargo Bank, N.A., 258 F.R.D. 118, 121 (D.Md.
2009)
(citing
Va.
Dep’t
of
State
Police,
386
F.3d
at
576;
Rushford, 846 F.2d at 253); Level 3 Commc’ns, LLC v. Limelight
Networks,
Inc.,
611
F.Supp.2d
572,
576,
589
(E.D.Va.
2009).
Furthermore, “[t]he burden to overcome a First Amendment right
of access rests on the party seeking to restrict access, and
that
party
position.”
must
present
specific
reasons
in
support
of
its
Va. Dep’t of State Police, 386 F.3d at 575 (citing
Press–Enterprise Co. v. Superior Court, 478 U.S. 1, 15 (1986)).
B.
Analysis
The court did not rely on Plaintiff’s customer’s specific
pricing
three
information,
lines
of
and
testimony
Plaintiff’s
from
the
motion
January
to
25,
redact
2017
these
morning
session transcripts will be granted.
The court did rely on testimony describing the proprietary
features
of
Plaintiff’s
decisional process.
civil
trial,
these
software
and
SPA
framework
in
the
Considered during the adjudication of a
portions
of
the
transcripts
constitute
a
judicial record subject to the First Amendment right of access.
38
See In re U.S. for an Order, 707 F.3d at 290; Level 3 Commc’ns,
611 F.Supp.2d at 590.
Consequently, the court must weigh the
appropriate
interests
competing
to
determine
whether
the
redactions are “justified by ‘an overriding interest based on
findings that closure is essential to preserve higher values.’”
Level 3 Commc’ns, 611 F.Supp.2d at 590 (quoting Press-Enter. Co.
v. Superior Court of California, Riverside Cty., 464 U.S. 501,
510 (1984)).
preserving
“A corporation may possess a strong interest in
the
confidentiality
of
its
proprietary
and
trade-
secret information, which in turn may justify partial sealing of
court records.”
Pub. Citizen, 749 F.3d at 269; see also Level 3
Commc’ns, 611 F.Supp.2d at 591.
Plaintiff claims these features are proprietary and trade
secret
information,
and
the
court
has
found
that
framework is entitled to trade secret protection.
the
SPA
Accordingly,
the court determines that the limited redactions requested are
justified
by
Plaintiff’s
confidentiality
of
these
interest
materials.
in
preserving
Plaintiff’s
motion
the
for
redactions will be granted.
VII. Conclusion
For
the
foregoing
reasons,
judgment
will
be
favor of Defendant on all counts in the complaint.
entered
in
Defendant’s
motion in limine and Plaintiff’s motion to seal will be denied
39
as moot.
Plaintiff’s motion for redactions will be granted.
separate order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
40
A
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