DatabaseUSA.com, LLC v. Van Gilder et al

Filing 51

ORDER that Plaintiff's Motion to Amend Complaint 41 is granted in part. Plaintiff shall file its amended pleading (in accordance with the stated limits) by September 4, 2018. Defendant's Motion to Strike 44 is denied as moot. Defendant's Motion to Strike Brief 48 is denied. Ordered by Magistrate Judge Susan M. Bazis. (MBM)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
DATABASEUSA.COM, LLC,
Plaintiff,

8:17CV386

vs.
ORDER
BLAKE VAN GILDER,
Defendant.
This matter is before the Court on Plaintiff’s Motion to Amend Complaint (Filing No. 41),
Defendant’s Motion to Strike (Filing No. 44), and Defendant’s Motion to Strike Brief (Filing No.
48). For the reasons set forth below, Plaintiff’s Motion to Amend will be granted, in part.
Defendant’s Motion to Strike and Motion to Strike Brief will be denied.

DISCUSSION

1.

Motion to Amend Complaint

Under Federal Rule of Civil Procedure 15, the Court should “freely give leave” to amend
a pleading “when justice so requires.” Fed. R. Civ. P. 15. Nevertheless, a party does not have an
absolute right to amend and “denial of leave to amend may be justified by undue delay, bad faith
on the part of the moving party, futility of the amendment or unfair prejudice to the opposing
party.” Amrine v. Brooks, 522 F.3d 823, 833 (8th Cir. 2008) (quotation and citation omitted).
Whether to grant a motion for leave to amend is within the sound discretion of the district court.
Popoalii v. Corr. Med. Servs., 512 F.3d 488, 497 (8th Cir. 2008).
Plaintiff’s Complaint originally asserted claims for conversion and misappropriation
against Defendants Infogroup, Inc. (“Infogroup”), Koley Jessen P.C., LLO (“Koley Jessen”), and
Blake Van Gilder (“Van Gilder”) (collectively, “Defendants”). The Complaint also asserted a
conspiracy claim against Infogroup and Koley Jessen, as well as a computer fraud claim against
Van Gilder. (Filing No. 1.) By Memorandum and Order dated March 27, 2018, the Court

dismissed all claims against Infogroup and Koley Jessen. The Court also dismissed the conversion
claim against Van Gilder.1 (Filing No. 40.)
With respect to the conversion claim, the Court found that Plaintiff’s allegations that Van
Gilder converted Plaintiff’s proprietary information by copying it to a flash drive and sharing it
with Koley Jessen and Infogroup were insufficient to state a claim. The Court explained that the
“essence of conversion is the wrongful deprivation of property from the rightful owner” and that
there was no indication that Defendants deprived Plaintiff of its proprietary information. (Id.) As
to the misappropriation claim against Infogroup and Koley Jessen, the Court found that the
Complaint contained “no factual allegations from which the Court [could] reasonably infer that
either Infogroup or Koley Jessen knew—or had reason to know—that the alleged trade secrets
were acquired improperly.” (Id.)

Plaintiff requests that it be allowed to amend the Complaint to cure deficiencies identified
in the March 27, 2018 Memorandum and Order.2 Specifically, Plaintiff wants to clarify its
conversion claim to assert that “a conversion occurred because Defendants acted together to take
an electronic copy of confidential information owned by Plaintiff, and that a conversion occurred
even though [P]laintiff retained the original electronic data.” (Filing No. 42.) Plaintiff’s briefing
on the motion states that Plaintiff “considered the legal authorities cited by the Court, and the
Court’s ruling,” but “seeks a change in the law of Nebraska.” (Filing No. 42.)
Plaintiff’s request to amend the Complaint to replead its conversion claim will be denied.
Nebraska law is clear that Plaintiff’s proposed allegations that a conversion occurred even though
Plaintiff retained the original electronic data do not state a claim. See Zimmerman v. FirsTier
Bank, N.A., 255 Neb. 410, 418, 585 N.W.2d 445, 452 (1998) (“[T]he essence of conversion is not
acquisition by the wrongdoer, but the act of depriving the owner wrongfully of the property”)

1

The only remaining claims in this action are the misappropriation and computer fraud
claims against Van Gilder.
2

In its March 27, 2018 order, the Court stated it would not grant Plaintiff leave to amend
at that time because Plaintiff had not filed a formal motion to amend or submitted a proposed
amended pleading as required by this Court’s local rules of practice. See NECivR 15.1(a).
2

(quotation omitted). Plaintiff’s proposed amended complaint does not allege that Plaintiff was
deprived of access to its property. Thus, allowing Plaintiff to amend the Complaint to reassert the
conversion claim would be futile.

Plaintiff also requests that it be permitted to amend the Complaint to clarify its
misappropriation claim. Plaintiff’s proposed amended complaint provides more detail regarding
the purported misappropriation, and it is not readily apparent that amendment would be futile or
that the amendment asserts clearly frivolous claims. See Becker v. Univ. of Neb., 191 F.3d 904,
908 (8th Cir. 1999) (“Likelihood of success on the new claim or defenses is not a consideration for
denying leave to amend unless the claim is clearly frivolous”); Gamma-10 Plastics, Inc. v. Am.
President Lines, 32 F.3d 1244, 1255 (8th Cir. 1994) (stating that a motion to amend should only be
dismissed on the merits if it asserts clearly frivolous claims or defenses). Thus, the Court will
permit Plaintiff to file an amended pleading which reasserts this claim, as well as the civil
conspiracy claim to the extent it relates to the alleged misappropriation.

2.

Motion to Strike

Defendant requests that the Court strike Paragraphs 23 and 24 of the Complaint pursuant
to Federal Rule of Civil Procedure 12(f). Rule 12(f) provides a mechanism for the Court to “strike
from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous
matter.” Fed. R. Civ. P. 12(f).

Paragraphs 23 and 24 of the Complaint allege that Van Gilder had work performance issues
and delineate examples of those performance problems. Defendants argue that the paragraphs
should be stricken because the reasons for Van Gilder’s termination have no bearing on this case
and that Plaintiff is not allowed to submit character evidence to prove its claims.
It appears that Plaintiff’s proposed amended complaint removes these allegations. Because
Plaintiff will be permitted to file an amended pleading, Defendant’s request that the Court strike
Paragraphs 23 and 24 of the Complaint will be denied as moot.

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3.

Motion to Strike Brief

Defendant seeks to strike Paragraphs 2-5 and 9 of Plaintiff’s Brief in Opposition to
Defendant’s Motion to Strike (Filing No. 47). These paragraphs essentially summarize the
allegations contained in Paragraphs 23 and 24 of the Complaint. In light of the Court’s ruling on
Defendant’s Motion to Strike Paragraphs 23 and 24 of the Complaint, Defendant’s Motion to
Strike Brief will likewise be denied.

IT IS ORDERED:

1.

Plaintiff’s Motion to Amend Complaint (Filing No. 41) is granted, in part, as set

forth above. Plaintiff shall file its amended pleading (in accordance with the limits set out above)
by September 4, 2018.

2.

Defendant’s Motion to Strike (Filing No. 44) is denied as moot.

3.

Defendant’s Motion to Strike Brief (Filing No. 48) is denied.

Dated this 28th day of August, 2018.
BY THE COURT:

s/ Susan M. Bazis
United States Magistrate Judge

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