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Integrated Process Solutions, Inc. v. Lanix LLC

United States District Court, D. Minnesota

March 18, 2019

INTEGRATED PROCESS SOLUTIONS, INC., Plaintiff,
v.
LANIX LLC, KEVIN LANDSVERK, and DYLAN DYKE, Defendants.

          ORDER ON PLAINTIFFS MOTION FOR PRELIMINARY INJUNCTION

          NANCY E. BRASEL, UNITED STATES DISTRICT JUDGE.

         Integrated Process Solutions, Inc. (“IPS”) has sued Lanix, LLC (“Lanix”), its owner-Kevin Landsverk-and Dylan Dyke for breaches of fiduciary duties and the duty of loyalty as well as violations of the Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § 1836(b)(1), Minnesota Uniform Trade Secrets Act (“MUTSA”), Minn. Stat. §§ 325.01-.08, and Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030. The claims revolve around Landsverk's departure from his employment at IPS and his alleged conspiracy with Dyke, who is an employee for a customer, to draw business away from IPS. IPS seeks to enjoin the Defendants from using or disclosing its trade secrets and confidential information allegedly taken by Landsverk before he left IPS's employ. Additionally, IPS requests that the Court issue an order setting an expedited discovery schedule and requiring the Defendants to preserve all evidence related to the case.

         BACKGROUND

         IPS designs, builds, implements, and integrates electrical systems in Minnesota, Wisconsin, and other parts of the Midwest. [ECF No. 8 ¶ 1.] It manufactures and sells specialized goods including “custom solenoid, remote terminal, or programmable controller panels; protective relaying cabinets; Distribution Control system control rooms; and photovoltaic systems.” (Id.) IPS describes itself as “a leader in the implementation of municipal and industrial controls and instrumentation systems.” (Id.) Its goods and services are often used by industrial or municipal operators of water and waterway systems. (Id.at ¶ 4.) It provides a variety of services to those customers, including planning, requirements, design and submittal, implementation, testing, startup, commissioning, and product service and support. (Id. at ¶ 10.)

         IPS hired Landsverk on June 17, 2013 as a Control Systems Engineer and the person responsible for IPS's Information Technology (“IT”) systems. (Id. at ¶ 11). Landsverk's duties at IPS included:

. As IPS representative, coordinate projects for the management and design of control system projects for water/wastewater treatment facilities
. UL panel shop supervisor
. Implement supervisory control and data acquisition (SCADA) systems for a variety of process control systems
. System database development; HMI and operator interface design and programming, PLC programming, HMI/OIT programming, network design and implementation
. Customer acceptance testing installation, on-site training, system start-up, and support
. AutoCAD design and drafting . Submittal and O&M documentation
. Interface with customer/consultant as the face of IPS in order to keep project on track from design stage through startup and test until final completion/acceptance
. Serve as the face of IPS to provide onsite, online, and telephone service for existing customers
. IT support, software administrator, and software license manager for IPS including pfSense Firewall, network hardware, exchange server, KVM server, Owncloud server and workstations

(Id. at ¶ 12). IPS contends that Landsverk's duties expanded over time and he became a “de facto IT specialist, salesperson, and project manager in addition to his original duties as a field engineer.” (Id.) And, according to IPS, Landsverk was privy to a great deal of sensitive and confidential information. (Id. at ¶ 13.) He even had computer server at his home to backup IPS's electronically stored files. (Id. at ¶ 14.) IPS contends that Landsverk “developed special relationships with IPS's customers” and that he “was the face of IPS with certain customers.” (Id. at ¶ 9.)

         During his time at IPS, Landsverk frequently communicated with his friend Dylan Dyke, a systems engineer at one of IPS's customers, Corval Group, Inc. After Landsverk left IPS, IPS recovered text messages between Dyke and Landsverk in which the two expressed frustrations about their jobs, believing they were under-compensated. [ECF No. 9 at 11.] Landsverk sent various messages to Dyke discussing his plan to start his own company. (Id. at 6-11.) The two planned to direct Corval business to Lanix instead of IPS. (Id. at 6-8.) In these conversations, Landsverk expressed an intent to take IPS information to start his company. (Id.) The two also discussed Landsverk giving Dyke a cut of his profits. (Id. at 8, 10.) Landsverk was concerned about the possibility of getting sued by IPS (Id. at 9) and told Dyke he wiped all his company devices. (ECF No. 22 at 4.)

         Before leaving IPS, Landsverk created his company, Lanix LLC. [ECF No. 8 ¶ 23.] Then, on February 8, 2019 Landsverk gave his two weeks' notice to IPS. (Id. at ¶ 16). Landsverk stated it was a “gut wrenching decision” and that he was leaving all his tools, laptop, and iPad on his desk. (Id. at 16-17.) After Landsverk resigned, IPS recovered copies of text messages between Landsverk and Dyke. (ECF No. 9 ¶ 4.) IPS also recovered Landsverk's desktop computer, laptop, and iPad. [ECF No. 10 ¶ 2.] A forensic service was able to recover 327 emails from Landsverk's email account, but only seven of the recovered emails predated January 24, 2019. (Id. at ¶ 5.) The service also determined that the desktop and laptop computers had been recently wiped and had little content on them (Id. at ¶ 7-8.)

         IPS's founder, Peter Nelson, confronted Landsverk about the text messages and accused him of stealing company information. (ECF No. 8 ¶ 30). Nelson contends that Landsverk “apologized for his actions, said he knew what he had done, and said, ‘I'm a dumbass.'” (Id.) Nelson claims Landsverk also admitted to sending Dyke IPS's confidential financial information. (Id.)

         On February 27, 2019, IPS sent Landsverk a cease and desist letter with a variety of demands, including that he immediately cease wrongfully competing against IPS. [ECF No. 7 at 13-24.] Landsverk responded on March 6, 2019. (Id. at 26-28). Landsverk agreed to (1) “deliver the hard drives used for the backup server to whomever IPS directs him to deliver them to, ”[1] (2) provide counsel with “the ...


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