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Flowshare, LLC v. TNS, US, LLC

United States District Court, E.D. Missouri, Eastern Division

July 26, 2017

FLOWSHARE, LLC, Plaintiff,
v.
TNS, US, LLC, Defendant.

          MEMORANDUM AND ORDER

          JOHN A. ROSS UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on Defendant TNS, US, LLC's (“TNS”) Motion to Dismiss (Doc. 20). The motion is fully briefed and ready for disposition. For the reasons set forth below, TNS's motion will be granted in part and denied in part.

         I. Background

         Plaintiff Flowshare, LLC, doing business as ShareTracker (“ShareTracker”), brought the instant action for claims arising out of its business relationship with TNS. In its Amended Complaint, ShareTracker alleges that it is the largest United States research company dedicated to telecom market share and flowshare measurement products, analystics, and solutions for the communications industry. (Amended Complaint (“Compl.”), Doc. 16, ¶ 7). Specifically, ShareTracker creates database products and solutions, which consist of numerous data fields, to its customers in the telecommunications industry that, among other things, allow the customers to determine telecom market share, link cell phone users to their providers, identify telecom competitors for those users, and track customer movement between telecom competitors (“ShareTracker products”). (Id. at ¶ 8). ShareTracker claims that ShareTracker Products and the underlying intellectual property they embody constitute “Confidential Information.” (Id. at ¶ 8). Generally, ShareTracker's business model involves providing fee-based, limited, non-exclusive licenses to its database products, directly or indirectly through authorized independent distributors, and charging a fee for those licenses. (Id. at ¶ 9). If ShareTracker grants a license to its database products directly, the license is non-transferable. (Id.). If ShareTracker grants a license to its database products indirectly through an authorized distributor, that distributor can grant non-transferable sublicenses authorized by ShareTracker. (Id.).

         One of ShareTracker's distributors is TNS. (Id. at ¶ 10). ShareTracker alleges it entered into an oral license agreement with TNS that allowed TNS to sell or grant limited, non-exclusive, non-transferable sublicenses for a fee to use the ShareTracker Products to three authorized customers or sublicensees. (Id.). In exchange, ShareTracker provided updated or refreshed databases and data fields to TNS to support the licensed ShareTracker Products. ShareTracker claims that the pricing or fee structure ShareTracker charged to TNS for ShareTracker Products was unique and individually negotiated based on the needs of each of the authorized customers. (Id.).

         ShareTracker alleges that in November 2015, it acquired the assets of GeoResults, Inc. (“GeoResults”), a telecom marketing database company engaged in a similar business as ShareTracker. (Id. at ¶¶ 11-12). ShareTracker claims one of the principal drivers behind the acquisition was GeoResults' proprietary information, as well as its long-standing customer (“Customer”) relationship with one of the largest telecom operating companies in the United States Market. (Id. at ¶ 20).

         Shortly after ShareTracker acquired GeoResults, the Customer ended its decade-long business relationship with GeoResults. (Id. at ¶ 25). ShareTracker alleges TNS encouraged the Customer to end its relationship with GeoResults and to deal directly or indirectly with TNS. (Id. at ¶ 27). ShareTracker claims that TNS then, acting in concert with others, misappropriated and converted some or all of ShareTracker's Confidential Information without ShareTracker's authorization to do so. (Id. at ¶ 29). In short, ShareTracker claims TNS improperly used its license to ShareTracker's Database Products by distributing, directly or indirectly, those products to the Customer without ShareTracker's authorization and obtaining payment directly from the Customer.

         In the instant action, ShareTracker asserts six counts against TNS: (1) breach of oral contract under Missouri law; (2) misappropriation of trade secrets under the Missouri Uniform Trade Secrets Act, Mo. Rev. Stat. §§ 417.450, et seq. (“MUTSA”); (3) misappropriation of trade secrets under the federal Defend Trade Secrets Act of 2016, 18 U.S.C. 1836, et. seq. (“DTSA”); (4) tortious interference with a business expectancy or relationship; (5) unjust enrichment; and (6) declaratory judgment. TNS now moves to dismiss all six counts.

         II. Legal Standard

         The purpose of a motion to dismiss under Rule 12(b)(6) is to test the legal sufficiency of the complaint. Fed.R.Civ.P. 12(b)(6). A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). “[P]leadings under the Federal Rules of Civil Procedure are designed to give the opposing party fair notice of the claim asserted.” Shelter Mut. Ins. Co. v. Pub. Water Supply Dist. No. 7 of Jefferson Cnty., Mo., 747 F.2d 1195, 1197 (8th Cir. 1984). “To survive a motion to dismiss, 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) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

         III. Discussion

         a. Breach of Contract

         TNS argues that Count I should be dismissed because, as pled, the alleged oral contract between ShareTracker and TNS is barred by the statute of frauds. (Doc. 21 at 4). Specifically, TNS argues that ShareTracker's breach of contract claim falls within the statute of frauds because it is not clear from the face of the Complaint that the contract could have been performed within one year. (Id. at 4-5). It further argues that ShareTracker's Complaint fails to sufficiently plead the existence of any writings that would remove the oral contract from the reach of the statute of frauds. (Id. at 6). In response, ShareTracker argues that the statute of frauds is not triggered by the mere failure to plead that the contract could not be performed within one year. (Doc. 30 at 6-7). ShareTracker further argues that in the event the statute of frauds is triggered, ShareTracker pled the existence of writings that memorialize the agreement and supply the essential terms. (Id. at 7-8). Finally, ShareTracker argues that the performance exception to the statute of frauds applies because it fully performed its obligation under the contract. (Id. at 8-9).

         The statute of frauds may properly be raised in a motion to dismiss for failure to state a claim if it appears the contract in question is unwritten and the plaintiff fails to plead facts which would take the contract out of the operation of the statute. Satterfield v. Missouri Dental Ass'n, 642 S.W.2d 110, 112 (Mo.Ct.App. 1982). The statute of frauds requires certain contracts to be in writing, including any agreement that is not to be performed within one year of its making. Mo. Rev. Stat. § 432.010. To be enforceable, contracts that fall within the statute of frauds must contain the essential terms of the contract, including the identity of the parties, the subject matter, the price, and consideration. See Bayless Bldg. Materials Co. v. Peerless Land Co., 509 S.W.2d 206, 210 (Mo.Ct.App. 1974). Several documents in combination may supply the essential terms of the contract, “as long as one document refers to the other, or their contents clearly show they are ...


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