United States District Court, W.D. Missouri, Western Division
FARM JOURNAL, INC. d/b/a FARM JOURNAL MEDIA Plaintiff,
GREGORY JOHNSON and BLUE BOOK SERVICES, INC. d/b/a PRODUCE BLUE BOOK, Defendants.
STEPHEN R. BOUGH UNITED STATES DISTRICT JUDGE.
the Court is Defendant Gregory Johnson's Motion to
Dismiss (Doc. #26) and Defendant Blue Book Services, Inc.
d/b/a Produce Blue Book's Motion to Dismiss (Doc. #27).
For reasons discussed below the motions are denied.
Gregory Johnson (“Johnson”) and Blue Book
Services, Inc. d/b/a Produce Blue Book (“Blue
Book”) filed the present motions to dismiss Plaintiff
Farm Journal, Inc. d/b/a Farm Journal Media's
(“Plaintiff”) Complaint under Federal Rule of
Civil Procedure 12(b)(6), which allows courts to dismiss a
claim for “failure to state a claim upon which relief
can be granted.” To survive this kind of motion,
“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) (internal citations and quotation marks
omitted) (quoting Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 570 (2007)); Zink v. Lombardi, 783
F.3d 1089, 1098 (8th Cir. 2015). “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.”
Ash v. Anderson Merchs., LLC, 799 F.3d 957, 960 (8th
Cir. 2015) (internal citation quotation marks omitted)
(quoting Iqbal, 556 U.S. at 678).
Court must accept all facts alleged in the complaint as true
when deciding a motion to dismiss. See Data Mfg., Inc. v.
United Parcel Serv., Inc., 557 F.3d 849, 851 (8th Cir.
2009) (noting “[t]he factual allegations of a complaint
are assumed true and construed in favor of the plaintiff,
even if it strikes a savvy judge that actual proof of those
facts is improbable”). However, allegations that are
“legal conclusions or formulaic recitation of the
elements of a cause of action . . . may properly be set
aside.” Braden v. Wal-Mart Stores, Inc., 588
F.3d 585, 594 (8th Cir. 2009) (internal quotation marks
omitted) (quoting Iqbal, 556 U.S. at 677).
Complaint alleges the following facts, which the Court
accepts as true for purposes of Defendant Johnson's and
Blue Book's motions to dismiss. See Data Mfg.,
Inc., 557 F.3d at 851. Plaintiff is an
“agricultural media company” that produces
“a variety of respected publications” and is
“a trusted source for agricultural information and
news.” (Doc. #1, ¶¶ 11- 12). Defendant
Johnson is a former employee of Plaintiff who served as
editorial director for two of Plaintiff's publications:
The Packer and Produce Retailer. (Doc. #1,
¶¶ 14-15). Defendant Johnson is a current employee
of Defendant Blue Book, “another agricultural media
company and [Plaintiff's] direct competitor.” (Doc.
#1, ¶¶ 2, 31). This lawsuit is about Defendant
Johnson's alleged conduct during his employment
transition from Plaintiff to Defendant Blue Book.
working for Plaintiff, Defendant Johnson's employment
responsibilities included handling Plaintiff's
confidential information. To adequately perform his job,
Defendant Johnson had “access to a substantial volume
of [Plaintiff's] confidential, proprietary, and/or trade
secret documents, files and information stored on its
internal computer network, ” which “included, but
was not limited to, market and industry research data,
customer lists and information, pricing and financial
information, information regarding advertisers, marketing
strategies, competitive analysis, and information regarding
new products and services under development.” (Doc. #1,
¶ 17). When Defendant Johnson accepted Plaintiff's
employment offer on December 2, 2015, he “agreed in the
offer letter he signed” (“offer letter”)
not to disclose or use Plaintiff's confidential
information “except in furtherance of”
Plaintiff's business. (Doc. #1, ¶ 27). Plaintiff
requires all new employees to sign such an agreement. (Doc.
#1, ¶ 21). Another “integral part” of
Defendant Johnson's work responsibilities was to
“routinely update The Packer's Twitter
account with posts and links to [Plaintiff's] content as
part of the company's overall marketing strategy to build
its profile and the visibility of its publications.”
(Doc. #1, ¶ 30).
early as March of 2018, [Defendant] Johnson entered into
discussions with” Defendant Blue Book's President
and CEO “about the potential for [Defendant] Johnson to
leave his job at [Plaintiff] and join [Defendant] Blue
Book.” (Doc. #1, ¶ 32). On July 7, 2018, Defendant
Blue Book “formally offered to [Defendant] Johnson a
position as its new Director of Media Development, ”
which Defendant Johnson soon accepted. (Doc. #1, ¶ 37).
On July 16, 2018, Defendant Johnson gave Plaintiff his
resignation letter and two-weeks' notice. (Doc. #1,
¶ 38). While Plaintiff paid Defendant Johnson his salary
through the end of July 2018, Plaintiff relieved Defendant
Johnson of his work responsibilities on July 17, 2018. (Doc.
#1, ¶ 41). The next day, Defendant Johnson and his wife
returned to Plaintiff's office one last time “to
collect some personal items and return his company cell
phone.” (Doc. #1, ¶ 44).
after July 19, 2018, Plaintiff “discovered that
[Defendant] Johnson deliberately changed the
‘handle' of The Packer's Twitter
account from ‘"gregofthepacker' to
‘"gregofthebluebook'” and thereby
“redirect[ed]” Plaintiff's “followers
to Blue Book content.” (Doc. #1, ¶¶ 47, 115).
Plaintiff also “obtained a forensic image of the hard
drive of [Defendant Johnson's] company laptop
computer.” (Doc. #1, ¶ 51). The forensic image
revealed that on June 11, 2018, -after Defendant Johnson had
begun employment discussions with Defendant Blue Book but
before he stopped working for Plaintiff-Defendant Johnson
“surreptitiously copied more than 11, 000 files from
[Plaintiff's] internal computer network to a personal
‘Dropbox' account” without Plaintiff's
knowledge or permission. (Doc. #1, ¶ 52) (emphasis
omitted). The forensic image also showed that Defendant
Johnson “attached a USB storage device to his [company]
laptop, ” though Plaintiff “cannot determine what
additional information [Defendant] Johnson may have copied to
this USB storage device because [Plaintiff] does not have the
USB storage device despite repeated requests for the
same.” (Doc. #1, ¶ 53).
November and December 2018, Plaintiff sent letters to
Defendants Johnson and Blue Book informing them of what
Plaintiff had learned since Defendant Johnson's departure
and demanding their cooperation in returning Plaintiff's
property. (Doc. #1, ¶¶ 57, 59). Defendant Johnson
“never substantively responded to any of
[Plaintiff's] letters, ” and Defendant Blue Book
“largely declined to meet any of [Plaintiff's]
demands.” (Doc. #1, ¶¶ 72, 75-76). Plaintiff
then filed this lawsuit. (Doc. #1, ¶ 76). Plaintiff
brings Counts I-V against Defendant Johnson only. Plaintiff
brings Counts VI-IX against Defendants Johnson and Blue Book.
Count I: Violation of DTSA
Count I, Plaintiff alleges Defendant Johnson
“misappropriated [Plaintiff's] trade secrets by
intentionally and willfully copying, without
[Plaintiff's] authorization, more than 11, 000
files” to his personal DropBox account in violation of
the Defend Trade Secrets Act (“DTSA”), 18 U.S.C.
§ 1836, et seq. (Doc. #1, ¶¶ 78, 82).
“The DTSA creates a private right of action for an
owner of a trade secret when that secret has been
misappropriated, if the secret relates to a product used in
interstate commerce.” CMI Roadbuilding, Inc. v.
Iowa Parts, Inc., No. 18-1075, 2019 WL 1474022, at *2
(8th Cir. Apr. 4, 2019) (citing 18 U.S.C. § 1836). The
DTSA defines “trade secret” as “all forms
and types of financial, business, scientific, technical,
economic, or engineering information” as long as 1)
“the owner thereof has taken reasonable measures to
keep such information secret” and 2) “the
information derives independent economic value . . . from not
being generally known to, and not being readily ascertainable
through proper means by, another person who can obtain
economic value from the disclosure or use of the
information.” § 1839(3)(A)-(B).
“Misappropriation” under the DTSA means, among
other things, “disclosure or use of a trade secret of
another without express or implied consent by a person who .
. . used improper means to acquire knowledge of the trade
secret.” § 1839(5)(B). “[I]mproper
means” for DTSA purposes “includes theft,
bribery, misrepresentation, breach or inducement of a breach
of a duty to maintain secrecy, or espionage through
electronic or other means” but “does not include
reverse engineering, independent derivation, or any other
lawful means of acquisition.” § 1839(6)(A).
Johnson argues that Plaintiff makes only conclusory
allegations that the uploaded files contained trade secrets
and that, because the offer letter's confidentiality
provision did not include a survival clause, the offer letter
“expressly permitted” him to cease maintaining
the confidentiality of Plaintiff's information once his
employment ended. (Doc. #28, pp. 13-15). Defendant Johnson
further argues that because he owed Plaintiff no
confidentiality obligation at the moment his employment with
Plaintiff ended, Plaintiff's information lost its trade
secret status and Plaintiff's DTSA claim fails as a
matter of law. (Doc. #28, pp. 12-13) (citing Ruckelshaus
v. Monsanto Co., 467 U.S. 986, 1006-1007) (1984)).
Plaintiff argues that “[t]here is nothing in the
confidentiality provision suggesting it terminates with
[Defendant] Johnson's employment, ” that Defendant
Johnson “stole [Plaintiff's] confidential
information while he was still employed, ” and
that it “specifically pled that the files Johnson stole
included trade secrets.” (Doc. #17, pp. 14-17)
(emphasis in original).
Plaintiff states a DTSA claim. Plaintiff's Complaint
contains many allegations that the 11, 000 uploaded files
contained trade secrets. Plaintiff alleges that it has taken
reasonable measures to maintain the secrecy of this
information, (Doc. #1, ⁋⁋ 17-29, 80), which
derives independent economic value from not being generally
known to Plaintiff's competitors. (Doc. #1,
⁋⁋ 17-18, 80, 79, 89). Defendant Johnson's
conduct, as alleged by Plaintiff, shows the use of improper
means-either theft or a breach of a duty to maintain
secrecy-to misappropriate those files by using them or
disclosing them. (Doc. #1, ⁋⁋ 82-84). Defendant
Johnson's motion to dismiss Count I is denied.
Count II: Violation of KUTSA
Count II, Plaintiff alleges that this same conduct by
Defendant Johnson also violates the Kansas Uniform Trade
Secrets Act (“KUTSA”), Kan. Stat. Ann. §
60-3320, et seq., because Defendant Johnson “stole the
trade secrets while working for [Plaintiff] in its Lenexa,
Kansas[, ] office and he uploaded them from [Plaintiff's]
computer server that is located in that office.” (Doc.
#1, ¶ 88). To prevail on a claim under the KUTSA, a
plaintiff must show 1) “that the defendants employed
theft or breached a duty to maintain secrecy in order to
acquire trade secrets that had an independent economic value,
” 2) that “these secrets were not readily
ascertainable by proper means by the defendants, ” and
3) “that [the plaintiff] made reasonable efforts under
the circumstances to maintain the secrecy of the trade
secrets.” Progressive Prod.,Inc. v.
Swartz, 258 P.3d 969, 976 (Kan. 2011) (“[T]he act
tells us that it seeks uniformity with other jurisdictions
that have adopted the Uniform Trade Secrets Act.”). The
KUTSA's definitions of “trade secret, ”
“misappropriation, ” and “improper
means” are ...