US TECH SOLUTIONS, INC. et al v. eTEAM, INC. et al

Filing 39

OPINION. Signed by Judge Susan D. Wigenton on 8/16/2017. (ld, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

CHAMBERS OF
SUSAN D. WIGENTON
UNITED STATES DISTRICT
JUDGE

August 16, 2017

MARTIN LUTHER KING
COURTHOUSE
50 WALNUT ST.
NEWARK, NJ 07101
973-645-5903

Laura Descioli Link
Robert T. Egan
Patrick Papalia
Archer & Greiner, PC
One Centennial Square
Haddonfield, NJ 08033
Attorneys for Plaintiffs US Tech
Solutions, Inc., and Workspend, Inc.
Robert James Basil
The Basil Law Group, P.C.
1270 Broadway, Suite 305
New York, NY 10001
Attorney for Defendants eTeam, Inc.,
James Lucier, and Jennifer Hewitt

LETTER OPINION FILED WITH THE CLERK OF THE COURT DENYING
DEFENDANTS’ MOTION TO DISMISS
Re:

US Tech Solutions, Inc., et al. v. eTeam, Inc., et al., Civil Action No. 17-1107SDW-LDW

Litigants:
Before this Court is Defendants eTEAM, Inc. (“eTeam”), James Lucier (“Defendant
Lucier”), and Jennifer Hewitt’s (“Defendant Hewitt”), (collectively, “Defendants”), Motion to
Dismiss the Amended Complaint of Plaintiffs US Tech Solutions, Inc. (“US Tech”), and
Workspend, Inc. (“Workspend”), (collectively, “Plaintiffs”), pursuant to Federal Rule of Civil
Procedure 12(b)(7).
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Jurisdiction is proper pursuant to 28 U.S.C. § 1331 and § 1367(a). Venue is proper pursuant
to 28 U.S.C. § 1391. This Letter Opinion is issued without oral argument pursuant to Federal Rule
of Civil Procedure 78.
For the reasons stated herein, the Motion to Dismiss is DENIED.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs US Tech and Workspend are corporations in the business of temporary staffing
and technology consulting. (Am. Compl. ¶¶ 18, 30.) Defendant Lucier served as US Tech’s Senior
Business Development Executive / Account Manager from January 2009 until 2012, when he was
assigned to serve as the Executive Vice President of Workspend, a separate entity formed in 2012
to “provide comprehensive consulting and managerial services . . . .” (Id. ¶¶ 20-21, 28, 30-31.)
Defendant Lucier was Workspend’s Executive Vice President until he resigned on October 12,
2016. (Id. ¶ 31.) Defendant Hewitt was US Tech’s Regional Vice President for the Raleigh, North
Carolina area from November 2014 until she resigned in November 2015. (Id. ¶¶ 36, 58.) As part
of their employment with Plaintiffs, Defendants Lucier and Hewitt were heavily involved in
Plaintiffs’ marketing and sales efforts. (Id. ¶¶ 28, 37, 48.) In addition, Defendants Lucier and
Hewitt were subject to employment agreements which restricted the use and disclosure of
Plaintiffs’ confidential business information. (Id. ¶¶ 21-27, 38-39.)
Of particular importance to this matter are Plaintiffs’ efforts to reach an agreement with
non-party BMC to provide BMC with temporary placement services. Defendant Hewitt initially
identified BMC as a potential client and began “an effort to get the company to retain the services
of USTECH . . . .” in approximately February of 2015. (Am. Compl. ¶ 51.) After Defendant
Hewitt resigned in November of 2015, Defendant Lucier “took over as the lead sales employee on
the BMC deal.” (Id. ¶¶ 58-59.) However, Defendant Lucier eventually “began to[, allegedly,]

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collaborate with [Defendants] eTeam, EWSI, Hewitt, Thakur and John and Jane Does 1-10 to
misappropriate Plaintiffs’ trade secrets and confidential information and to misappropriate
Workspend’s business and prospective business, including its pending agreement with BMC . . . .”
(Id. ¶ 67.) According to Plaintiffs, after Defendants Hewitt and Lucier resigned, they began new
positions for Defendant eTeam. (Id. ¶¶ 81, 87.) In addition, Defendant eTeam entered the business
of providing temporary staffing services and secured a contract with BMC “pursuant to which
eTeam and EWSI are providing the same exact type of services to BMC that Workspend would
have provided to BMC . . . .” (Id. ¶¶ 82, 84.) Moreover, Defendant eTeam also assigned
Defendants Hewitt and Lucier to the BMC account. (Id. ¶ 87.) In addition to these allegations,
Plaintiffs contend that Defendant Lucier stole and deleted Workspend’s information from a
company laptop. (Id. ¶¶ 68-78.)
The Amended Complaint contains ten claims, including breach of the duty of loyalty,
breach of contract, and violation of the Defend Trade Secrets Act under 18 U.S.C. § 1836. (Am.
Compl. ¶¶ 103-91.) Furthermore, Plaintiffs seek a permanent injunction which:
Enjoins Defendants from soliciting, or attempting to solicit or influence, or
initiating any contact with, directly or indirectly, any of Plaintiffs’ current or
prospective customers with whom Lucier had contact or communications or
acquired information about while employed by Plaintiffs . . . .
(Id. at 40.)
In response to this request for injunctive relief, on March 15, 2017, Defendants filed a
Motion to Dismiss, pursuant to Federal Rule of Civil Procedure 12(b)(7), for failure to join a party
under Federal Rule of Civil Procedure 19. (Dkt. No. 30.)1 Plaintiffs filed a brief in opposition on
April 3, 2017, and Defendants filed a brief in reply on April 6, 2017.

This Court considers this Motion together with Defendants’ subsequent Motion to Dismiss filed on April
17, 2017. (Dkt. No. 35.)
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LEGAL STANDARD
Motion to Dismiss- Federal Rule of Civil Procedure 12(b)(7)
Under Federal Rule of Civil Procedure (“Rule”) 12(b)(7), a court may dismiss a complaint
for failure to join a party pursuant to Rule 19. In turn, Rule 19 sets out the circumstances under
which it is necessary to join an absent party and, if joinder of that party is not feasible, the factors
for determining whether the absent party is indispensable to the action.
In considering a motion under Rule 12(b)(7), the court must accept the factual allegations
in the complaint as true and view those allegations in the light most favorable to the non-moving
party. See Tullett Prebon, PLC v. BGC Partners, Inc., No. CIV.A.09-5365 (SRC), 2010 WL
2545178, at *6 (D.N.J. June 18, 2010), aff'd, 427 F. App’x 236 (3d Cir. 2011); Cummings v.
Allstate Ins. Co., No. CIV.A. 11-02691, 2011 WL 6779321, at *3 (E.D. Pa. Dec. 27, 2011).
Moreover, in pursuing a Rule 12(b)(7) motion to dismiss, the moving party bears the burden of
showing that the absent party is both necessary and indispensable under Rule 19. Disabled in
Action v. Se. Pa. Transp. Auth., 635 F.3d 87, 97 (3d Cir. 2011).
Determining whether an absent party is indispensable is a two-step process. “A court ‘first
must determine whether the absent [parties] should be joined as ‘necessary’ parties under Rule
19(a). If they should be joined, but their joinder is not feasible inasmuch as it would defeat
diversity of citizenship . . . , [a court] next must determine whether the absent parties are
‘indispensable’ under Rule 19(b).’” Downs v. Andrews, 639 F. App’x 816, 822 (3d Cir. 2016)
(quoting Gen. Refractories Co. v. First State Ins. Co., 500 F.3d 306, 312 (3d Cir. 2007)).
DISCUSSION
As discussed above, Plaintiffs seek to enjoin Defendants from:

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soliciting, or attempting to solicit or influence, or initiating any contact with,
directly or indirectly , any of Plaintiffs’ current or prospective customers with
whom Lucier had contact or communications or acquired information about while
employed by Plaintiffs . . . .
(Am. Compl. at 40.) In filing their Motion pursuant to Rule 12(b)(7), Defendants contend that
these current or prospective customers (the “Absent Parties”) are necessary and indispensable to
this matter under Rule 19. (See generally Defs.’ Br. Supp.) Accordingly, Defendants ask that this
Court enter an Order (1) staying this matter, (2) directing Plaintiffs to identify the Absent Parties,
(3) directing Plaintiffs to seek joinder of the Absent Parties, and (4) permitting Defendants to file
a subsequent motion pursuant to Rule 12(b)(7). (See Defs.’ Br. Supp. at 7; Dkt. No. 30-2 at 1-2.)
Defendants also request that Plaintiffs’ Amended Complaint be dismissed should Plaintiffs fail to
seek joinder of the Absent Parties within a reasonable time. (See Defs.’ Br. Supp. at 7.) For the
reasons that follow, Defendants’ Motion will be denied.
The first step in determining whether an absent party must be joined to an action under
Rule 19 is to determine whether that absent party is a required party under Rule 19(a)(1). Rule
19(a)(1) provides:
(a) Persons Required to Be Joined if Feasible.
(1) Required Party. A person who is subject to service of process and whose joinder
will not deprive the court of subject-matter jurisdiction must be joined as a party if:
(A) in that person's absence, the court cannot accord complete relief among
existing parties; or
(B) that person claims an interest relating to the subject of the action and is
so situated that disposing of the action in the person's absence may:
(i) as a practical matter impair or impede the person's ability to
protect the interest; or
(ii) leave an existing party subject to a substantial risk of incurring
double, multiple, or otherwise inconsistent obligations because of
the interest.
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In this instance, Defendants contend only that the Absent Parties are required parties under
Rule 19(a)(1)(B)(i).2 See (Defs.’ Br. Reply. at 6 (“Defendants have sought relief only under
Rule19(a)(1)(B).) Specifically, Defendants assert that should Plaintiffs’ request for injunctive
relief be granted, the Absent Parties “will be barred from continuing to do business with
Defendants, or from receiving solicitations from and doing business with them . . . .” (Defs.’ Br.
Supp. at 5-6.) Accordingly, Defendants submit that disposing of this action without joining the
Absent Parties will, “impair or impede [the Absent Parties’] ability to exercise their right to do
business with Defendants if they so choose.” (Id.) Nonetheless, Defendants fail to satisfy their
burden under Rule 12(b)(7) on a number of bases.
First, with the exception of BMC, Defendants have not sufficiently identified the Absent
Parties. Instead, Defendants seek an order directing Plaintiffs to identify the Absent Parties. (See
Dkt. No. 30-2.) However, this request improperly shifts the burden of proof to Plaintiffs from
Defendants who, as the moving parties, must show that the Absent Parties are necessary and
indispensable to this action. See Indian Harbor Ins. Co. v. KB Lone Star, Inc., No. H-11-CV-1846,
2012 WL 1038658, at *5 (S.D. Tex. Mar. 27, 2012) (holding that a movant” fail[ed] to meet its
burden of proof because it fail[ed] even to identify or name the purported indispensable parties, no
less present any evidence in support of its motion.”); In re Stat-Tech Sec. Litig., 905 F. Supp. 1416,
1421 (D. Colo. 1995).
Second, as outlined above, Rule 19(a)(1)(B) provides that, if feasible, an absent party must
be joined to an action when “that person claims an interest relating to the subject of the action and
is so situated that disposing of the action in the person’s absence may . . . as a practical matter

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Although Defendants explicitly limit their argument to Rule 19(a)(1)(B), they do not raise an argument
under Rule 19(a)(1)(B)(ii).
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impair or impede the person’s ability to protect the interest . . . .” (emphasis added). Although
Defendants do argue that disposing of this matter without the Absent Parties will impair or impede
an interest of the Absent Parties, Defendants ignore the “claimed interest” clause of Rule 19. See
Ward v. Apple Inc., 791 F.3d 1041, 1048 (9th Cir. 2015) (“According to Rule 19's text, two
conditions must be satisfied for a party to qualify as a ‘required party’ under Rule 19(a)(1)(B).
First, the party must ‘claim[ ] an interest relating to the subject of the action.’ Second, the party
must be ‘so situated that disposing of the action in the person's absence’ may have one of the two
consequences enumerated in Rule 19(a)(1)(B)(i) and (a)(1)(B)(ii).” (citations omitted)).

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addition to failing to adequately identify the Absent Parties, Defendants do not contend that the
Absent Parties claim and interest in this litigation, just that they have an interest. (See Defs.’ Br.
Supp. at 5 (“Each of the [Absent Parties] has a substantial interest relating to the subject of this
action . . . .”); see also U.S. for Use & Ben. of Special-Lite, Inc. v. Republic W. Sur. Co., No. CIV.
A. 97-7400, 1998 WL 299674, at *3 (E.D. Pa. May 20, 1998) (“Defendant, who has the burden of
showing that Town Supply is a necessary party, does not contend that Town Supply claims an
interest in this litigation, merely that it has an interest.”); Incubadora Mexicana, SA de CV v.
Zoetis, Inc., 310 F.R.D. 166, 171–72 (E.D. Pa. 2015) (“With respect to subsection (a)(1)(B)(i),
[movants] have failed to show that the absent . . . entities in fact ‘claim an interest’ in the subject
of this litigation such that their interests need protecting.”). Moreover, with regard to BMC – the
only Absent Party Defendants actually name in their Motion – it is on notice of this action but is
not currently seeking to intervene and has not otherwise claimed any interest in the subject matter
of this litigation. (See Dkt. No. 25.)
Third, Plaintiffs contend that disposing of this action without joining the Absent Parties
will not, as a practical matter, impair or impede the Absent Parties’ ability to protect their interests

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because Defendants will adequately represent those interests. (Pls.’ Br. Opp. at 13.); see also
Owens-Illinois, Inc. v. LakeShore Land Co., Inc., 610 F.2d 1185, 1191 (3d Cir. 1979) (“The fact
that the absent person may be affected by the judgment does not of itself require his joinder if his
interests are fully represented by parties present.”). Defendants neither respond to this argument
nor offer any reason to believe that their interests are not in alignment with those of the Absent
Parties. Moreover, Defendants and the Absent Parties would presumably, under Defendants’
framing of the issues, oppose any injunctive relief that would interfere with their current or future
business interaction. Accordingly, Defendants have failed to satisfy their burden to establish that
disposing of this matter without the Absent Parties would impede or impair the Absent Parties’
interests as a practical matter.3
Finally, it bears noting that even had Defendants established that the Absent Parties are
required parties under Rule 19(a), Defendants make only a conclusory argument regarding the
Rule 19(b) requirements. (Defs.’ Br. Supp. at 6-7.) Defendants do not argue that joinder would
not be feasible and, in fact, concede that joining the Absent Parties “will not affect the subject
matter jurisdiction of this Court . . . .” (Id. at 6.) Accordingly, even if this Court found that the

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As Defendants have not established that the Absent Parties are necessary under Rule 19(a), this Court
need not address whether the Absent Parties are indispensable. See In-Tech Mktg. Inc. v. Hasbro, Inc., 685
F. Supp. 436, 438 (D.N.J. 1988) (“Only if a person is deemed ‘necessary’ under Rule 19(a), must the court
undertake the second step of the analysis.”)

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Absent Parties were required parties under Rule 19(a), dismissal of Plaintiffs’ Amended Complaint
would be inappropriate.
CONCLUSION
For the reasons set forth above, Defendants’ Motion to Dismiss is DENIED. An
appropriate Order follows.
s/ Susan D. Wigenton
SUSAN D. WIGENTON
UNITED STATES DISTRICT JUDGE

Orig:
cc:

Clerk
Leda D. Wettre, U.S.M.J.
Parties

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