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Stratasys, Inc. v. Krampitz

United States District Court, D. Minnesota

May 16, 2018

Stratasys, Inc. Plaintiff,
v.
Christopher W. Krampitz, individually, and Nova Machina LLC, Defendants.

          Gregory L. Peters, Esq. and Seaton, Peters & Revnew, PA, counsel for plaintiff.

          Zane A. Umsted, Esq., J. Ashwin Madia, Esq. and Madia Law LLC, counsel for defendants.

          ORDER

          DAVID S. DOTY, JUDGE

         This matter is before the court upon the motion to dismiss by defendants Christopher Krampitz and Nova Machina LLC. Based on a review of the file, record, and proceedings herein, and for the following reasons, the motion is granted in part.

         BACKGROUND

         This trade secret and contract dispute arises from the parties' employment relationship. Plaintiff Stratasys, Inc. provides consulting services relating to 3D printing. Am. Compl. ¶ 2. On July 26, 2016, after weeks of discussions between the parties, Krampitz applied for the principal consultant position with Stratasys. Id. ¶¶ 15-17. Stratasys immediately offered Krampitz the position, but Krampitz declined. Id. ¶¶ 19, 21. After additional discussions, Stratasys again offered Krampitz the position, and he accepted.[1] Id. ¶¶ 24-25, 27. Krampitz agreed to a Restrictive Employment Agreement (Agreement), among other agreements. Id. ¶ 27. In relevant part, the Agreement identifies Stratasys's confidential information and prohibits Krampitz from communicating, divulging, or disclosing that information to any person or organization absent authorization from Stratasys. Id. ¶¶ 30-31. He is also prohibited from using the information except as permitted by Stratasys. Id. ¶ 31. The Agreement requires Krampitz to return all confidential information to Stratasys on his termination. Id. The Agreement further prohibits Krampitz from competing with Stratasys during his employment and for one year following his termination. Id. ¶ 33. Stratasys's employee handbook also addresses its “[c]onfidential, trade secret, or proprietary information” and prohibits employees from disclosing that information to third parties without the company's consent. Id. ¶ 35.

         Stratasys alleges that during the parties' negotiations, Stratasys formed a competing business, Nova Machina, and that while employed with Stratasys, he used the company's confidential information and resources for the benefit of Nova Machina. Id. ¶¶ 20, 22, 43-44.[2] Krampitz resigned from Stratasys on October 23, 2017, effective November 3. Id. ¶ 137. Stratasys alleges that he continued to use and disclose its confidential information and trade secrets for Nova Machina's benefit during that period. Id. ¶¶ 138-47. He sent confidential information to his Nova Machina email account and downloaded files to a portable USB, and continued to do so after he left Stratasys. Id. ¶¶ 150, 153, 154, 161-63, 165, 172-73. Stratasys thereafter suspended Krampitz's access to its electronic files and information. Id. ¶ 174. Stratasys then became aware of Krampitz's questionable activities and his connection to Nova Machina, and discovered that Nova Machina was closely modeled after Stratasys. Id. ¶¶ 175-76. In other words, Krampitz used Stratasys's confidential information and trade secrets to build his own competing business.

         On November 10, 2017, Stratasys sent a cease and desist letter to Krampitz detailing his misappropriation of its confidential information and demanding that he return all such information, refrain from using the information and contacting its customers, and cease violating the non-compete agreement. Id. ¶¶ 179-80. Krampitz refused to do so, and this suit followed.

         On February 19, 2018, Stratasys filed a voluminous amended complaint raising the following nine claims against Krampitz and Nova Machina: (1) breach of contract; (2) unjust enrichment; (3) breach of duty of loyalty; (4) violation of the Minnesota Uniform Trade Secrets Act (MUTSA); (5) conversion; (6) violation of the Defend Trade Secrets Act (DTSA); (7) unfair competition; (8) deceptive trade practices; and (9) account stated. Krampitz and Nova Machina now move to dismiss the MUTSA, DTSA, unfair competition, and account stated claims.

         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 ...


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