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Search Partners, Inc. v. MyAlerts, Inc.

United States District Court, D. Minnesota

June 30, 2017

Search Partners, Inc., Plaintiffs,
v.
MyAlerts, Inc., f/k/a Track IF, Defendants.

          L. Kathleen Harrell-Latham, Esq. and Loop Legal PLLC, counsel for plaintiffs.

          Thomas J. Conley, Esq. and Law Office of Thomas J. Conley, counsel for defendants.

          ORDER

          DAVID S. DOTY, JUDGE.

         This matter is before the court upon the motion to dismiss by defendant MyAlerts, Inc. (formerly known as TrackIF). Based on a review of the file, record, and proceedings herein, and for the following reasons, the motion is granted and the case is dismissed with leave to file in state court.

         BACKGROUND

         This trade secret and contract dispute arises from the parties' executive recruiting agreement. In approximately September 2015, defendant and plaintiff Search Partners Inc. (SPI) executed an agreement whereby SPI agreed to recruit and provide names of prospective employees to MyAlerts in exchange for a fee. Compl. ¶¶ 15-18; Conley Aff. Ex. 1.

         On October 13, 2015, after detailed negotiations, one of the candidates SPI referred to MyAlerts, Mr. Babcock, declined MyAlerts' offer of employment. Compl. ¶¶ 21, 25-28. SPI alleges that at some point later, however, MyAlerts contacted Babcock to again discuss the position. Id. ¶ 29. In approximately March 2016, MyAlerts formally offered Babcock the job and he accepted. Id. ¶¶ 30-31. When SPI later learned that Babcock worked for MyAlerts, it demanded payment from MyAlerts under the contract. MyAlerts refused to pay SPI. Id. ¶ 33.

         On April 3, 2017, plaintiff commenced this suit raising several claims against defendant. Count I alleges a violation of the Defend Trade Secrets Act (DTSA), 18 U.S.C. § 1832; Count II alleges a violation of the Deceptive Trade Practices Act (DTPA), Minn. Stat. § 325D.43; Count III alleges breach of contract; Count IV alleges unjust enrichment; and Count V alleges conversion. Defendant now moves to dismiss.

         DISCUSSION

         I. Standard of Review

         To survive a motion to dismiss for failure to state a claim, “‘a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'” Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “A claim has facial plausibility when the plaintiff [has pleaded] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). Although a complaint need not contain detailed factual allegations, it must raise a right to relief above the speculative level. Twombly, 550 U.S. at 555. “[L]abels and conclusions or a formulaic recitation of the elements of a cause of action” are not sufficient to state a claim. Iqbal, 556 U.S. at 678 (citation and internal quotation marks omitted).

         The court does not consider matters outside the pleadings under Rule 12(b)(6). Fed.R.Civ.P. 12(d). The court may, however, consider matters of public record and materials that are “necessarily embraced by the pleadings.” Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999) (citation and internal quotation marks omitted). Here, the court considers the parties' contract.

         II. Defense of Trade Secrets Act

         SPI alleges that MyAlerts violated the DTSA by using SPI's proprietary candidate information for its economic benefit. Compl. ¶¶ 39-40. The DTSA creates a private cause of action in favor of the “owner of a trade secret that is misappropriated ... if the trade secret is related to a product or service used in, or intended for use in, ...


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