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Global Imaging Acquisitions Group LLC v. Amerisound Medical

United States District Court, D. Colorado

March 15, 2019

GLOBAL IMAGING ACQUISITIONS GROUP LLC, Plaintiff,
v.
AMERISOUND MEDICAL, and KEVIN EVEN, Defendants.

          ORDER REJECTING THE DECEMBER 20, 2018 RECOMMENDATION BY UNITED STATES MAGISTRATE JUDGE AND DENYING DEFENDANTS' MOTION TO DISMISS

          CHRISTINE M. ARGUELLO UNITED STATES DISTRICT JUDGE.

         This matter is before the Court upon the December 20, 2018 Recommendation by United States Magistrate Judge Kristen Mix, in which she recommends that this Court grant Defendants Amerisound Medical and Kevin Even's (collectively, “Defendants”) Motion to Dismiss (Doc. # 20) pursuant to Rule 12(b)(1). (Doc. # 38.) Plaintiff Global Imaging Acquisitions Group objects to Magistrate Judge Mix's Recommendation for two reasons, see (Doc. # 39), neither of which is relevant to the Recommendation itself. Nonetheless, for the reasons described herein, the Court rejects the Recommendation and denies Defendants' Motion to Dismiss.

         I. BACKGROUND

         The Magistrate Judge's Recommendation (Doc. # 38) provides a recitation of the factual and procedural background of this dispute and is incorporated herein by reference. See 28 U.S.C. § 636(b)(1)(B); Fed.R.Civ.P. 72(b). Accordingly, this Order will reiterate only what is necessary to address Defendants' Motion to Dismiss.

         Plaintiff is a privately-held Wisconsin limited liability company in the business of repairing, refurbishing, and selling used medical imaging equipment. (Doc. # 1 at 1.) On or about April 21, 2014, Plaintiff purchased certain assets of Med Pro Imaging Probe Labs, LLC and Med Pro Imaging, Inc. (collectively, “Med Pro”), including Med Pro's computer databases, files, customer lists, and non-compete agreements. (Id.) Plaintiff negotiated an Asset Purchase Agreement with Med Pro's Wisconsin-based receiver (“the Receiver”), who had been appointed by a court because Med Pro had fallen behind in bank loan payments. (Doc. # 20 at 2.) The Asset Purchase Agreement detailed which assets were included in the deal and which were excluded. (Id.); see (Doc. # 20-2.) Relevant here, the Asset Purchase Agreement, Schedule 1, included as “assets to be purchased” “[a]ll intellectual property, technical know-how, systems, processes, software, computer programs, trademarks, trade names, patent rights, copyrights and other similar intangible assets.” (Doc. # 20-2 at 7.) However, Schedule 2 of the Asset Purchase Agreement excluded from the sale “[a]ll causes of action in favor of [Med Pro]” and “[a]ll rights the Receivers or the Company may have against third parties with respect to the Excluded Assets.” (Id. at 8.)

         Plaintiff relies on a Filemaker Pro software program and database (“Filemaker”), which it purchased from Med Pro pursuant to the Asset Purchase Agreement, to track customer orders, inventory, the services performed for customers, the status of services, and the charges for the services provided. (Doc. # 1 at 3-4.) The database includes over 15, 000 entries of pricing, order, and customer data from Med Pro. (Id. at 4.) Plaintiff also uses Filemaker to store and manage its trade secrets, which include confidential, custom, and detailed procedures and processes (e.g., written repair manuals) that Med Pro had created and developed. (Id. at 3-4.)

         Defendant Amerisound Medical is a Colorado limited liability company also engaged in the business of repairing, refurbishing, and selling used medical imaging equipment. (Id. at 2.) Defendant Kevin Even is allegedly an owner, principle, or partner of Defendant Amerisound. (Id.) According to the Complaint, Defendant Even was previously employed by Med Pro in Colorado between 2011 and July 2013. (Id. at 5.)

         Plaintiff alleges that, prior to Defendant Even's termination from Med Pro in July 2013, Defendant Even tampered with Med Pro's computer system and software and illegally downloaded Med Pro's Filemaker data. (Id. at 5-6.) It asserts that Defendants conspired to steal Med Pro's trade secrets and to sabotage the business's ability to conduct its operations “for the benefit of [a] new competing company, ” Defendant Amerisound. (Id. at 6-7.) Plaintiff also alleges that “continuing after [its] purchase of [Med Pro's] assets in or about April 2014, ” Defendants have “tampered with” Plaintiff's own “IT systems” and have “download[ed], cop[ied], and/or remov[ed] from [Plaintiff's] system [Plaintiff's] extensive Filemaker database.” (Id. at 6, 12.)

         Plaintiff initiated this action on March 20, 2018, and asserts six claims for relief against Defendants: (1) misappropriation of trade secrets under the Colorado Uniform Trade Secrets Act, Colo. Rev. Stat. §§ 7-74-101, et seq.; (2) misappropriation of trade secrets under 18 U.S.C § 1836(B); (3) misappropriation of trade secrets under the Wisconsin Trade Secrets Act, Wis.Stat. § 134.90; (4) violation of the Computer Fraud and Abuse Act, 18 U.S.C § 1030; (5) conversion and theft pursuant to Colorado and Wisconsin law; and (6) conspiracy to cause injury to business pursuant to Wisconsin law. (Id. at 8-12.)

         Defendants jointly filed the Motion to Dismiss on May 4, 2018, and requests relief pursuant to Federal Rule of Civil Procedure 12(b)(1). (Doc. # 20.) Defendants assert that Plaintiff lacks standing for two reasons. (Id.) First, Plaintiff has not asserted claims based on its own legal rights and interests and cannot not satisfy the requirements of the prudential standing doctrine. (Id. at 8-9.) Second, Plaintiff has not asserted an injury in fact and therefore fails to satisfy the constitutional test for standing. (Id. at 9- 10.)

         Plaintiff responded to Defendant's Motion to Dismiss on June 8, 2018. (Doc. # 30.) It cites law regarding the legal standard for dismissal pursuant to Rule 12(b)(6). (Id. at 2-4.) Plaintiff then asserts that Defendants' Motion to Dismiss is improper because Plaintiff's claims had not accrued at the time of Defendant Even's departure from Med Pro. (Id. at 4-10.)

         Defendants replied in support of their Motion to Dismiss on June 29, 2018. (Doc. # 37.) Defendants state that Plaintiff is attempting to assert a third party's legal rights and interests-that is, Med Pro's legal rights and interests-and that Plaintiff is not the party that suffered the alleged injuries. (Id. at 4-7.) Defendants also argue that the date Plaintiff discovered the claims does not implicate standing. (Id. at 7-8.) Finally, Defendants contend that Plaintiff's “as is” purchase of Med Pro's intellectual property, coupled with the Asset Purchase Agreement's express language, did not confer any standing. (Id. at 8-9); see (Doc. # 20-3.)

         Magistrate Judge Mix issued her Report and Recommendation on December 20, 2018, recommending that this Court grant Defendants' Motion to Dismiss. (Doc. # 38.) She concluded that Plaintiff lacks prudential standing because it has not asserted claims based on its own legal rights and interests. (Id. at 13.) Out of an abundance of caution, Magistrate Judge Mix also considered constitutional standing and determined that Plaintiff has failed to demonstrate an injury in fact sufficient to establish constitutional standing. (Id. at 16.)

         Plaintiff filed its Objection to the Recommendation on December 20, 2018. (Doc. # 39.) Defendants responded to the ...


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