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Professional Investigating and Consulting Agency, Inc. v. SOS Security, LLC

United States District Court, S.D. Ohio, Eastern Division

January 14, 2020

PROFESSIONAL INVESTIGATING AND CONSULTING AGENCY, INC., Plaintiff,
v.
SOS SECURITY, LLC, et al., Defendants.

          Jolson Magistrate Judge

          OPINION & ORDER

          ALGENON L. MARBLEY CHIEF UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         This matter is before the Court on two Motions: (1) Defendants SOS Security, LLC and Edward B. Silverman's Motion to Dismiss [#7]; and (2) Defendant Rodolfo G. Diaz's Motion to Dismiss [#8]. The Court will resolve both Motions without oral argument. For the reasons set forth below, the Court GRANTS IN PART and DENIES IN PART Defendants SOS and Silverman's Motion [#7] and GRANTS Defendant Diaz's Motion [#8].

         II. BACKGROUND

         Plaintiff Professional Investigating and Consulting Agency, Inc. (“PICA”) is an Ohio corporation that provides security investigation, consulting, executive protection, and secure transport services. (Doc. 2.) Defendant SOS Security, LLC (“SOS Security”) is a foreign limited liability company that also provides security related services. (Id.). At one time, however, SOS Security lacked the full capabilities that PICA offered. (Id.)

         To account for these deficiencies, Defendant Edward B. Silverman, SOS Security's CEO, approached Defendant Rodolfo G. Diaz, PICA's Chief Operating Officer, around October 2014 to discuss a potential business relationship between the two companies with the goal of SOS purchasing PICA. (Id.) Diaz persuaded PICA's shareholders that it was in the company's best interest to explore this venture. (Id.) Thus, as part of the acquisition process, PICA disclosed certain confidential information and trade secrets to SOS Security. (Id.) Prior to that, however, the two sides entered into a Confidentiality and Non-Disclosure Agreement (hereinafter, “NDA”) which, among other things, prohibited SOS Security from soliciting or accepting work from clients that PICA would later disclose. (Id.)

         Unbeknownst to PICA, the company alleges that Diaz and Silverman had concocted a scheme to steal PICA's customers and trade secrets. (Id.) This belief stems from the fact that on May 1, 2015, after SOS Security had obtained PICA's confidential information and trade secrets, Diaz abruptly resigned from PICA. (Id.) And, following this, Silverman informed PICA that SOS Security was putting the acquisition process on hold until the end of the year. (Id.)

         Notwithstanding the above, SOS Security continued to work with PICA on various projects throughout Mexico, Colombia, Venezuela, and Brazil, which gave SOS direct access to PICA's customers. (Id.) Silverman had encouraged PICA to continue working with SOS Security based on the joint understanding that the acquisition process was merely postponed. (Id.) Consequently, SOS Security continued to benefit from PICA's services, such as PICA drafting and organizing business models to serve SOS's clients, PICA providing SOS with VIP treatment at the Latin America Regional Council Meeting in Bogota, and PICA performing work for a client -- Microsoft -- that both companies shared. (Id.). PICA asserts that it received no compensation in return for these services. (Id.)

         On June 1, 2017, the date on which Diaz's covenant not to compete with or solicit PICA's employees or associates expired, SOS Security hired Diaz as its VP of Southeast Operations in Latin America. (Id.) Two weeks after that, SOS Security announced that it was acquiring AS Solutions, a former partner of PICA, and a firm specializing in executive protection and secure transport services. (Id.) SOS Security never completed its acquisition of PICA.

         PICA now files suit against SOS Security, Edward Silverman, and Rodolfo Diaz raising ten causes of action: Count One -- Breach of Contract (against SOS Security); Count Two --Fraud in the Inducement (against SOS Security and Edward Silverman); Count Three --Conspiracy to Commit Fraud (against SOS Security, Edward Silverman, and Rodolfo Diaz); Count Four -- Breach of Fiduciary Duty/Violation of O.R.C. § 1701.641 (against Rodolfo Diaz); Count Five -- Aiding and Abetting Breach of Fiduciary Duty (against SOS Security and Edward Silverman); Count Six -- Misappropriation of Trade Secrets/Violation of O.R.C. § 1333.61, et seq. (against SOS Security); Count Seven -- Tortious Interference with Business Relationships (against SOS Security); Count Eight -- Conspiracy to Tortiously Interfere with Business Relationships (against SOS Security, Edward Silverman, and Rodolfo Diaz); Count Nine -- Unfair Competition (against SOS Security); and Count Ten -- Quantum Meruit (against SOS Security). Ultimately, PICA maintains that Defendants utilized its trade secrets and confidential information to gain an unfair advantage and to solicit its customers.

         III. STANDARD OF REVIEW

         Federal Rule of Civil Procedure 12(b) provides for the dismissal of a complaint for, among other things, lack of personal jurisdiction and failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(2) and (6).

         When evaluating a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for a failure to state a claim upon which relief can be granted, “[a]ll factual allegations in the complaint must be presumed true, and reasonable inferences must be made in favor of the non-moving party.” Mitchell v. BMI Fed. Credit Union, 374 F.Supp.3d 664 (S.D. Ohio 2019) (quoting Total Benefits Planning Agency, Inc. v. Anthem Blue Cross and Blue Shield, 552 F.3d 430, 434 (6th Cir. 2008)). The Court, however, does not have to “accept unwarranted factual inferences.” Id. (quoting Total Benefits, 552 F.3d at 434). A complaint “must state more than a bare assertion of legal conclusions to survive a motion to dismiss.” Id. (internal quotations and citations omitted). Stated differently, “[a] plaintiff's [f]actual allegations must be enough to raise a right to relief above the speculative level.” Id. (internal quotations and citations omitted).

         IV. ANALYSIS

         A. Defendants SOS Security and Edward Silverman's Motion to Dismiss [#7]

         Defendants SOS Security and Edward Silverman move for the dismissal of Plaintiff's Complaint on six grounds. The Court will address each of these arguments, in turn, below.

         1. Whether Ohio's Uniform Trade Secrets Act Preempts Plaintiff's Tort-Related Claims

         First, Defendants argue that all of Plaintiff's claims, other than its breach-of-contract claim (Count One) and misappropriation of trade secrets claim (Count Six) are preempted by Ohio's Uniform Trade Secrets Act (“OUTSA”), O.R.C. § 1333.61, et seq. Plaintiff concedes that the OUTSA preempts Counts Two, Five, and Nine.[1] Plaintiff, however, ...


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