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Summer Infant, Inc. v. Bramson

United States District Court, D. Rhode Island

February 10, 2016

SUMMER INFANT, INC., Plaintiff,
v.
CAROL E. BRAMSON, et al., Defendants.

MEMORANDUM AND ORDER

WILLIAM E. SMITH CHIEF JUDGE.

Before the Court are Defendant Kenneth Price’s Motion to Dismiss (“Price’s Motion”) (ECF No. 41) and Plaintiff’s Motion to Dismiss Carol E. Bramson and Annamaria Dooley’s Counterclaims (“Summer’s Motion”) (ECF No. 64). After careful consideration, Price’s Motion is DENIED, and Summer’s Motion is GRANTED IN PART and DENIED IN PART, for the reasons that follow.

I. Background

Plaintiff, Summer Infant, Inc. (“Summer”), a company that designs and sells baby products, is suing several of its former employees for a number of violations, including breach of contract, misappropriation of trade secrets, tortious interference with business relations, computer theft, and civil conspiracy. In short, Summer alleges that the defendants - Kenneth Price (former President of Global Sales and Marketing), Carol Bramson (former President and CEO), and Annamaria Dooley (former Senior Vice President of Product Development) - colluded to steal Summer’s trade secrets and leave Summer to form a competing start-up.

The alleged conspiracy started after Summer entered into a Consulting Agreement with Rest Devices, Inc. (“Rest”) in February 2015. Under the Consulting Agreement, Rest agreed to assist Summer in developing a new product. After making a confidential presentation on Rest’s work to Summer’s Board of Directors, Bramson, along with Dooley and Price, resigned. Around the same time, Rest informed Summer that it would not consent to an additional term of their Consulting Agreement.

Shortly after their resignations, Bramson and Dooley created a slide deck containing information related to the new product (the “Startup Deck”). Summer alleges that the Startup Deck is an investors’ pitch for a new, competing venture, and that it is comprised almost exclusively of confidential and proprietary information belonging to Summer that was wrongfully taken without Summer’s knowledge or permission. Among the slides in the Startup Deck is one that lists employees of the alleged new company, including biographies that can be tied to Bramson, Dooley, and Price. Dooley emailed the Startup Deck to Bramson, stating, among other things, “[i]n my head I hear [Rest employee] Dulcie [Madden]’s voice - ‘there’s a crapton of information’”; and “I spoke with Ken [Price] at length and am excited about the possibilities.” (Compl. ¶ 95, ECF No. 1.)

Bramson and Dooley tell a starkly different tale in their counterclaims. According to them, Summer - having failed to put into place a non-compete agreement when they resigned - resorted to a frivolous lawsuit to ruin their reputations and prevent them from lawfully working with other companies, including Rest.

II. Price’s Motion

At this stage, the Court must “accept the well-pleaded facts as true” and “view[] factual allegations in the light most favorable to the plaintiff.” Rederford v. U.S. Airways, Inc., 589 F.3d 30, 35 (1st Cir. 2009). “To adequately plead civil conspiracy, a plaintiff must allege that ‘(1) there was an agreement between two or more parties and (2) the purpose of the agreement was to accomplish an unlawful objective or to accomplish a lawful objective by unlawful means.’” W. Reserve Life Assur. Co. of Ohio v. Caramadre, 847 F.Supp.2d 329, 347 (D.R.I. 2012), aff’d sub nom. W. Reserve Life Assur. Co. of Ohio v. ADM Assocs., LLC, 793 F.3d 168 (1st Cir. 2015) (quoting Smith v. O’Connell, 997 F.Supp. 226, 241 (D.R.I. 1998)).

Price’s argument concerning all the counts asserted against him is largely the same: Summer has not alleged sufficient facts to show his involvement in Dooley and Bramson’s purported scheme. Price argues:

The bare facts that Dooley authored an email to Bramson attaching the Startup Deck, referenced “Ken” in such email, and that the creator of the Startup Deck apparently included Price on a roster of prospective “team” members does not provide a legal basis for liability of Price for misappropriating any information of Summer. Nothing in Summer’s comprehensive factual recitation surrounding the various presentations and product development efforts undergone in connection with the subject new product offering demonstrates or even suggests that Price had any involvement in that process.

(Price’s Mot. 7, ECF No. 41-1.) With respect to Counts XI-XIII (Computer Theft; Computer Trespass; Access to Computer for Fraudulent Purpose; and Intentional Access, Alteration, Damage or Destruction) (collectively, the “computer theft counts”), Price asserts that these claims are particularly tenuous, as they “represent nothing more than a conclusory leap that because Price had access to Summer information, and Summer has advanced a theory that he acted in concert with the other Defendants, he must have abused that access and engaged in illegal conduct through Summer’s computers.” (Id. at 18.)

Summer responds that it has alleged a conspiracy and “[a]t this pleading stage, those allegations ‘go into enough detail about the alleged conspiracy’ to state claims against Price.” (Summer’s Opp’n to Price’s Mot. 3, ECF No. 59-1 (quoting W. Reserve Life Assur. Co. of Ohio v. Conreal LLC (“Conreal”), 715 F.Supp.2d 270, 282-83 (D.R.I. 2010)).) Summer further argues that “this is precisely the type of case where additional information concerning the nature and extent of the conspiracy, and the facts concerning the conspirators’ specific roles and actions, are in the possession of the Defendants.” (Id.) Finally, Summer requests that, should the Court find the Complaint deficient, it be granted leave to amend, citing new information tying Price to the conspiracy that it has uncovered since the filing of the Complaint. (Id. at 49-50.)

The Court agrees with Summer that it has alleged sufficient facts against Price to satisfy the pleading standard. Taking the facts alleged in the Complaint as true and in the light most favorable to Summer - including the email allegedly referencing Price and the inclusion of his biography as the head of “Sales Leadership” in the Startup Deck - the claim that Price formed an agreement with Bramson and Dooley to use Summer’s trade-secret information to form their own competing business is “plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Accordingly, the Court finds that Summer states a claim for misappropriation of trade secrets, misappropriation of confidential information (unfair competition), [1] breach of fiduciary duty, conversion, breach of contract, tortious interference with contracts, tortious interference with prospective business relations, and unjust enrichment. Regarding the computer theft counts, the Court agrees with Price that there are no facts in the current Complaint that show he was personally involved in compiling information from the computers. However, based on the civil conspiracy theory, it is nonetheless plausible that he agreed to Bramson and Dooley’s plan to create the Startup Deck; thus, Summer ...


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