United States District Court, D. Minnesota
McDaniel for Plaintiffs.
Olawsky for Defendant MultiPacking Solutions, Inc.
Richard Voelbel for Defendant John Dwyer.
FRANKLIN L. NOEL UNITED STATES MAGISTRATE JUDGE.
MATTER came before the undersigned United States
Magistrate Judge on March 12, 2018, on Defendants Multi
Packaging Solutions, Inc. (“MPS”), Ken Glinert,
John Searfoss (collectively the “MPS
Defendants”), and John Dwyer's motions to amend
their answers to add an affirmative defense (ECF Nos. 246 and
252), and Plaintiffs CPI Card Group, Inc. and CPI Card
Group-Minnesota's (collectively “CPI”) motion
for leave to file a second amended complaint (ECF No. 258).
For the reasons set forth below, Defendants' motions to
amend (ECF Nos. 246 and 252) are GRANTED.
CPI's motion for leave to file a second amended complaint
(ECF No. 258) is GRANTED in part, and
DENIED in part.
SUMMARY OF FACTS
September 8, 2017, CPI filed an Amended Complaint alleging,
amongst others, one count of misappropriation of trade
secrets in violation of the Defend Trade Secrets Act (Count
I), one count of fraudulent inducement of the amendment
(Count III), one count of unfair competition (Count IX), and
one count of civil conspiracy (Count X). See
generally, ECF No. 11. On September 21, 2017, MPS and
Searfoss moved to dismiss counts III and IX of the Amended
Complaint. ECF No. 48. On November 7, 2017, CPI moved for a
preliminary injunction against the MPS Defendants and Dwyer.
ECF No. 143. The parties conducted limited expedited
discovery in connection with CPI's motion for a
preliminary injunction. On December 29, 2017, the Court
granted CPI's motion for a preliminary injunction, and
granted in part and denied in part the Defendants' motion
for partial dismissal. See ECF No. 213. In its
Order, the Court dismissed without prejudice Count III of the
Amended Complaint, but denied the motion to dismiss with
regard to Count IX. Id. at 55. The Court found that
Count III did not contain any factual assertions that
supported a claim of fraudulent inducement against MPS and
Searfoss, and that CPI's allegations of a civil
conspiracy did not save its fraud claim under Federal Rule of
Civil Procedure Rule 9(b). Id. at 49. Specifically,
the Court found that, with regard to count III, the Amended
Complaint was devoid of any ‘who, what, where, when,
and how' of MPS and Searfoss' alleged fraudulent
inducement. Id. The Court noted, however, that CPI
was allowed to amend the Amended Complaint to add sufficient
facts to support its claim under Count III, and add Defendant
Ken Glinert. Id. at 50 n.16, and 55.
CONCLUSION OF LAW
The MPS Defendants and John Dwyer's Motion to Amend their
Defendants and John Dwyer ask the Court for leave to amend
their first amended answers to add an affirmative defense.
See ECF Nos. 246 and 252. Specifically, they seek to
add the following paragraph to their Answers:
Plaintiffs are barred from recovering exemplary damages or
attorneys' fees under the Defend Trade Secrets Act
because of their failure to comply with the mandatory notice
requirements under the Act.
See ECF No. 266 at 1. The Defendants argue that this
amendment would clarify their position that CPI is precluded
from seeking exemplary damages and attorneys' fees under
the Defend Trade Secrets Act. See Id. at 4; ECF No.
254. CPI takes the position that all amendments should be
permitted at this stage, and does not oppose this request.
See ECF No. 270. However, if the Court does not
uniformly grant the parties' motions to amend, CPI argues
that the Defendants' motion to amend should be denied
because the amendment is futile. Id.
the parties, for the most part, are in agreement that the
Defendants' motions to amend should be granted, this
Court grants the MPS Defendants and John Dwyer's motion
to amend their answers to add an affirmative.
CPI's Motion to File a ...