United States District Court, D. Colorado
RECOMMENDATION OF UNITED STATES MAGISTRATE
KRISTEN L. MIX MAGISTRATE JUDGE
matter is before the Court on Defendant's Motion
to Dismiss [#21] (the
“Motion”). Plaintiff filed a Response [#25] in
opposition to the Motion, and Defendant filed a Reply [#40].
The Motion has been referred to the undersigned for a
recommendation regarding disposition pursuant to 28 U.S.C.
§ 636(b)(1)(A) and D.C.COLO.LCivR 72.1(c)(3).
See [#37]. The Court has reviewed the Motion,
Response, Reply, the entire case file, and the applicable
law, and is sufficiently advised in the premises. For the
reasons set forth below, the Court respectfully
RECOMMENDS that the Motion [#21] be
GRANTED in part and DENIED in
well-pled facts of the Complaint [#1] are construed in a
light most favorable to Plaintiff. Barnes v. Harris,
783 F.3d 1185, 1191-92 (10th Cir. 2015). Plaintiff is a
Delaware limited liability company with its principal place
of business in Colorado. Compl. [#1] ¶ 4.
Plaintiff is a live-music and entertainment company that
organizes high-end music and adult cultural festivals in
California with plans to expand geographically. Id.
¶ 12. Defendant served as Plaintiff's Senior Vice
President of Business Development from October 1, 2015, until
October 10, 2017. Id. ¶ 2. During his
employment, Defendant lived and worked primarily from his
home in Florida while traveling often to Colorado and
maintaining constant communication with the Colorado office.
Id. ¶ ¶ 6, 17.
“fiercely protects” proprietary information about
its business and operating system to protect its competitive
advantage. Id. ¶ 13. Information including the
identities of partners for upcoming events, prospective
partners and their primary contacts, pricing information,
attendee information, and financial information is protected
by several procedures. Id. These procedures include
notifying each employee in his offer letter that he will be
required to sign a confidentiality agreement, providing only
restricted access to proprietary information, outlining the
company's confidentiality requirements and the importance
of confidentiality to Plaintiff's business model in the
Employee Handbook, withdrawing access to restricted
information upon termination of any employee's
employment, and requiring each employee to certify that he
has returned all confidential information on his departure
from the company. Id. ¶ 15.
Senior Vice President of Business Development, Defendant had
and allegedly retains access to nearly all proprietary
information listed above. Id. ¶ ¶ 16, 25.
Specifically, Plaintiff maintains that Defendant has access
“(1) the entire attendee list for the [Del Mar,
California] festival, including their contact information,
preferences, and demographic information; (2) the festival
budget information; (3) the names of prospective partners;
(3) information about the pricing and other deal terms
offered to the existing corporate partners; (4) analyses of
the festival results; (5) prospective locations and plans for
expansion of the KAABOO brand; (6) hospitality pricing
information; (7) contract templates for hospitality,
culinary, and corporate partnerships; (8) sales team reports;
(9) strategies for identifying corporate partners; (9)
payment and financial information related to corporate
partners; (10) information related to specific needs and
preferences of the corporate partners; and (11) sponsorship
pricing, sales data and sales strategy.”
Id. ¶ 16. Plaintiff further contends that
Defendant has certain confidentiality obligations with
KAABOO, namely that Defendant was aware of what information
was considered confidential and that he may not use or
disclose that information. Id. ¶ 19. According
to Plaintiff, Defendant also knew that on termination of his
employment he would be required to return any confidential
company information. Id. ¶ 20.
October 2017, Plaintiff terminated Defendant's employment
and requested that he sign a certification acknowledging that
he had returned all company “property in his
possession, including confidential, proprietary, and trade
secrets information, in any form (electronic and hard copy)
and that he did not keep copies of such information.”
Id. ¶ 24. Defendant did not sign the
certification and informed the CEO of KAABOO that he planned
to restart his prior business named Sprocket, which would be
a potential competitor with KAABOO. Id. Plaintiff
maintains that Defendant has not returned KAABOO's
property and that he remains in possession of trade secrets
and confidential information. Id. ¶ 25.
has asserted three claims against Defendant. First, Plaintiff
asserts a claim for violation of the Colorado Trade Secrets
Act. Id. ¶ ¶ 26-35. Second, Plaintiff
asserts a claim for violation of the Defend Trade Secrets
Act. Id. ¶ ¶ 36-45. Finally, Plaintiff
asserts that Defendant converted its property. Id.
¶ 46-49. Plaintiff seeks an Order requiring Defendant to
deliver Plaintiff's confidential information and trade
secrets; entering preliminary and permanent injunctions that
enjoin Defendant from using, disclosing, or misappropriating
Plaintiff's trade secrets and confidential information;
entering judgment in favor of Plaintiff and against
Defendant; awarding Plaintiff compensatory damages; awarding
Plaintiff the value of unjust enrichment to Defendant;
awarding Plaintiff punitive and exemplary damages for the
intentional harm inflicted on Plaintiff by Defendant;
awarding Plaintiff its reasonable attorneys' fees and
costs; and awarding Plaintiff all such further and other
relief that is just and adequate. Id. at 14.
Standard of Review
Court analyzes an argument that the Court lacks personal
jurisdiction under Fed.R.Civ.P. 12(b)(2). A plaintiff bears
the burden of establishing personal jurisdiction over a
defendant. Behagen v. Amateur Basketball Ass'n of the
United States, 744 F.2d 731, 733 (10th Cir. 1984).
Before trial, a plaintiff need only make a prima facie
showing of jurisdiction. Id. The Court accepts the
well-pled allegations (namely the plausible, nonconclusory,
and nonspeculative facts) of the operative pleading as true
to determine whether the plaintiff has made a prima facie
showing that the defendant is subject to the Court's
personal jurisdiction. Dudnikov v. Chalk & Vermillion
Fine Arts, Inc., 514 F.3d 1063, 1070 (10th Cir. 2008).
The Court “may also consider affidavits and other
written materials submitted by the parties.” Impact
Prods., Inc. v. Impact Prods., LLC, 341 F.Supp.2d 1186,
1189 (D. Colo. 2004). However, any factual disputes are
resolved in the plaintiff's favor. Benton v. Cameco
Corp., 375 F.3d 1070, 1074-75 (10th Cir. 2004).
of personal jurisdiction over a nonresident defendant must
satisfy the requirements of the forum state's long-arm
statute as well as constitutional due process requirements.
Doe v. Nat'l Med. Servs., 974 F.2d 143, 145
(10th Cir. 1992). Colorado's long-arm statute “is
to be interpreted as extending jurisdiction of our state
courts to the fullest extent permitted by the due process
clause of the United States Constitution.” Mr.
Steak, Inc. v. Dist. Court In & For Second Judicial
Dist., 194 Colo. 519, 521 (1978). Therefore, if
jurisdiction is consistent with the due process clause,
Colorado's long-arm statute authorizes jurisdiction over
a nonresident defendant. See Id. Under the due
process clause of the Fourteenth Amendment, personal
jurisdiction may not be asserted over a party unless that
party has sufficient “minimum contacts” with the
state, so that the imposition of jurisdiction would not
violate “traditional notions of fair play and
substantial justice.” Helicopteros Nacionales De
Columbia, S.A. v. Hall, 466 U.S. 408, 414 (1984)
(quoting Int'l Shoe Co. v. Washington, 326 U.S.
310, 316 (1945)).