Aggreko, LLC v. Barreto et al

Filing 33

ORDER by Chief Judge Daniel L. Hovland denying as moot 13 Motion to Dismiss; denying as moot 17 Motion to Dismiss; denying 23 Motion to Dismiss (MM)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NORTH DAKOTA
Aggreko, LLC,,

)
)
Plaintiff,
)
ORDER DENYING DEFENDANT’S
)
MOTION TO DISMISS
vs.
)
)
Guillermo Barreto and
)
Elite Power, LLC,
)
)
Case No. 1:16-cv-353
Defendants.
)
______________________________________________________________________________
Before the Court is Defendant Guillermo Barreto’s Rule 12(b)(6) “Motion to Dismiss”
filed on December 21, 2016. See Docket No. 23. The Plaintiff filed a response in opposition to
the motion on January 18, 2017. See Docket No. 27. For the reasons set forth below, the motion
is denied.

I.

BACKGROUND
The factual background, which the Court must accept as true for purposes of this motion,

is taken from the complaint. See Docket No. 20.
The Plaintiff, Aggreko, LLC, is a limited liability company, organized under the laws of
the State of Delaware, with its principal place of business in New Iberia, Louisiana. None of
Aggreko’s members are citizens of North Dakota.

Aggreko is in the business of renting

generators to customers in North Dakota. Defendant Elite Power is a limited liability company,
organized under the laws of the State of North Dakota, with its principal place of business in
Dickinson, North Dakota. Elite Power’s members are citizens of North Dakota. Elite Power is
in the business of renting generators to customers in North Dakota. Elite Power is a direct
competitor of Aggreko in North Dakota. Defendant Guillermo Barreto is the former Business
Development Manager for Agrekko who now works as a Sales Manager for Elite Power.

Aggreko hired Barreto on December 1, 2014, as Aggreko’s Business Development
Manager for North Dakota. As Aggreko’s Business Development Manager, Barreto had access
to a substantial amount of confidential and proprietary information and trade secrets belonging to
Aggreko relating to Aggreko’s operations, customers, business proposals, pricing strategy, client
preferences and history, and proprietary pricing models known only within Aggreko, among
other sensitive information that Aggreko uses to compete in the marketplace.
As part of his employment with Aggreko, Barreto entered into a Confidentiality
Agreement, an Employment Agreement, and an acknowledgment of Aggreko’s Information
Technology End User Policy (“Agreements”).

The Agreements were intended to protect

Aggreko’s confidential information and ensure this information was not removed from the
workplace or used by former employees and Aggreko’s competitors.
On June 16, 2016, Guillermo Barreto gave Aggreko notice of his resignation effective
June 28, 2016. Barreto notified Aggreko that he was leaving Aggreko’s employment in order to
develop software he had been working on in connection with a company that is not a competitor
of Aggreko. In actuality, Barreto was leaving Aggreko to work for Elite Power. Barreto’s
Employment Agreement required that he give prior written notice to Aggreko if he were to
obtain employment with one of Aggreko’s competitors.
After giving Aggreko his notice of resignation and remaining in Aggreko’s employ to
transition out of the business, Barreto began downloading Aggreko’s information from
Aggreko’s internal computer network systems, onto an Aggreko-owned laptop computer, for use
in his position with Elite Power. On June 25, 2016, while still employed by Aggreko, Barreto
downloaded Aggreko’s trade secrets and confidential information, including selected emails, and
other proprietary and confidential information and/or trade secrets belonging to Aggreko onto

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his personal external hard drive. This information related to Aggreko’s operations, customers,
business proposals, pricing strategy, client preference and history, and proprietary pricing
models known only within Aggreko, among other sensitive information that Aggreko uses to
compete in the marketplace.
Barreto immediately went to work for Elite Power after leaving Aggreko. Both during
and after his employment with Aggreko, Barreto used Aggreko’s confidential and proprietary
information and trade secrets to solicit Aggreko’s clients on behalf of Elite Power. Barreto has
been using Aggreko’s confidential and proprietary information and trade secrets to win business
away from Aggreko for the benefit of Elite Power.

Barreto violated the Agreements by

downloading Aggreko’s confidential, proprietary and trade secret information and using it to win
business for Elite Power.

Barreto has also used and/or disclosed Aggreko information in

connection with his job duties with Elite Power. Elite Power has been the beneficiary of
Barreto’s actions.

These actions have caused irreparable harm and monetary damages to

Aggreko in terms of lost business and lost future business.
Agrekko filed this action in federal court on September 30, 2016. See Docket No. 1.
Barreto filed a Rule 12(b)(6) motion to dismiss on October 27, 2016. See Docket Nos. 13 and
17. In lieu of a response, Aggreko filed an amended complaint on November 11, 2016. See
Docket No. 20. Barreto filed a Rule 12(b)(6) motion to dismiss as to the amended complaint on
December 21, 2016. See Docket No. 23. Aggreko filed a response in opposition to the motion
on January 18, 2017. See Docket No. 27. The matter is now ripe for consideration.

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II.

STANDARD OF REVIEW
Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a pleading to contain a

“short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R.
Civ. P. 8 (a)(2). Rule 12(b)(6) of the Federal Rules of Civil Procedure mandates the dismissal of
a claim if there has been a failure to state a claim upon which relief can be granted. In order to
survive a motion to dismiss under Rule 12(b)(6), “a complaint must contain sufficient factual
matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009). A plaintiff must show that success on the merits is more than a “sheer
possibility.” Id. A complaint is sufficient if its “factual content . . . allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Id. The court must
accept all factual allegations as true, except for legal conclusions or “formulaic recitation of the
elements of a cause of action.” Id. at 681. Detailed factual allegations are not necessary under
the Rule 8 pleading standard, rather a plaintiff must set forth grounds of its entitlement to relief
which “requires more than labels and conclusions, and a formulaic recitation of the elements of a
cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A
complaint does not “suffice if it tenders a naked assertion devoid of further factual
enhancement.” Ashcroft, 556 U.S. at 678 (2009). The determination of whether a complaint
states a claim upon which relief can be granted is “a context-specific task that requires the
reviewing court to draw on its judicial experience and common sense.” Id. at 679. Dismissal
will not be granted unless it appears beyond doubt the plaintiff can prove no set of facts entitling
the plaintiff to relief. Ulrich v. Pope Cnty, 715 F.3d 1054, 1058 (8th Cir. 2013).

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III.

LEGAL DISCUSSION
Barreto contends the amended complaint fails to state a claim upon which relief can be

granted. The amended complaint contains seven counts, four of which (counts I, IV, V, and VII)
pertain to Barreto. Count I alleges misappropriation of trade secrets in violation of the Defend
Trade Secrets Act of 2016, 18 U.S.C. § 1836 et seq. and North Dakota’s Uniform Trade Secrets
Act, N.D.C.C. § 47-25.1-01 et seq. Count IV alleges breach of the duty of loyalty. Count V
alleges breach of contract. Count VII alleges conversion.
Barreto contends Aggreko has not pled its misappropriation claims with sufficient
particularity. The Court disagrees. All that is required at this stage of the proceedings is an
allegation that Barreto misappropriated Aggreko’s trade secrets sufficient to put the defense on
notice as to the nature of the claim. Aggreko has alleged Barreto wrongfully acquired its trade
secrets and provided them to Elite Power. Aggreko describes its trade secrets as including
customer lists and information regarding Aggreko’s operations, customers, business proposals,
pricing strategy, client preference and history, and proprietary pricing models known only to
Aggreko; a description which the Court finds is clearly adequate under Rule 8. The discovery
process will provide the parties with the details relevant to the claims, most of which are known
to Barreto. It is undisputed that Barreto downloaded information from Aggreko’s computer
system onto his own personal computer.

Given this undisputed allegation, Aggreko’s

misappropriation of trade secret claims are certainly plausible and not subject to dismissal under
Rule 12(b)(6).
Aggreko’s other claims are also more than sufficient to survive a Rule 12(b)(6) motion to
dismiss. The breach of loyalty claim is supported by the allegation that Barreto, while still
employed with Aggreko, contacted and solicited Aggreko customers to move their business to

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his future employer, Elite Power, and by North Dakota law which considers employee loyalty to
be in the public interest and prohibits employees from soliciting their employer’s customers
while still working for that employer. See N.D.C.C. § 34-02-14; see also Biever, Drees &
Nordell v. Coutts, 305 N.W.2d 33, 36 (N.D. 1981) (holding that an accounting firm had a right to
expect an employee would not solicit clients of the firm for himself while he was employed by
the firm); Warner and Co. v. Solberg, 634 N.W.2d 65, 72 (N.D. 2001) (discussing an employee’s
duty of loyalty).
The breach of contract claim is supported by the allegation that Barreto breached the
Agreements he signed by failing to provide notice to Aggreko that he was going to work for
Elite Power, downloading, using and disclosing Aggreko’s information, and soliciting Aggreko’s
customers. Insofar as the breach of loyalty and breach of contract claims overlap, parties are
allowed to proceed on overlapping or inconsistent legal theories even if based on the same fact
allegations. See McColl Farms, LLC v. Pflaum, 837 N.W.2d 359, 367 (N.D. 2013).
As for the conversion claim, Barreto candidly admits that “by backing up information
from his laptop, Barreto merely made a copy of the information; he did not remove the
information from Plaintiff’s ownership or control.” See Docket No. 23, p. 17. This admission
alone is sufficient for Aggreko’s conversion claim to survive a Rule 12(b)(6) motion as a
conversion claim does not require proof that the property in question was removed from the
owner’s possession. See Ritter, Laber & Assocs., Inc. v. Koch Oil, Inc., 680 N.W.2d 634, 638
(N.D. 2004) (describing conversion as the “tortious detention or destruction of personal property,
or a wrongful exercise of dominion or control over the property inconsistent with or in defiance
of the rights of the owner”).

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IV.

CONCLUSION
The Court has carefully reviewed the amended complaint.

Viewing the amended

complaint in a light most favorable to the Plaintiff and drawing all reasonable inferences
therefrom, the Court finds the amended complaint to be more than adequate under Rule 8. The
amended complaint contains a detailed factual statement which supports the claims and which
the Court finds is sufficient to put Barreto on notice as to Aggreko’s allegations. Accordingly,
Barreto’s motion to dismiss (Docket No. 23) is DENIED. The motions to dismiss filed in
relation to the original complaint (Docket Nos. 13 and 17) are DENIED as moot.
IT IS SO ORDERED.
Dated this 13th day of March, 2017.
/s/ Daniel L. Hovland
Daniel L. Hovland, Chief Judge
United States District Court

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