United States District Court, D. Colorado
RECOMMENDATION OF UNITED STATES MAGISTRATE
Kristen L. Mix, United States Magistrate Judge.
matter is before the Court on Plaintiff's Motion
to Strike, or in the Alternative Dismiss,
Counter-Complaint [#110] (the “Motion”).
Defendant filed a Response [#112] in opposition to the Motion
[#110], and Plaintiff filed a Reply [#117]. The Motion has
been referred to the undersigned for recommendation pursuant
to 28 U.S.C. § 636(b) and D.C.COLO.LCivR 72.1(c).
See [#111]. 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, to the extent Plaintiff seeks
dismissal of Defendant's counterclaims, the Court
RECOMMENDS that the Motion [#110] be
DENIED in part and GRANTED in part. The
Court is concurrently issuing a separate Order regarding the
portion of the Motion [#110] seeking to strike the
counterclaims pursuant to Fed.R.Civ.P. 12(f), 15(a), and
is a Delaware limited liability company with its principal
place of business in Colorado. See [#109] ¶ 3.
Plaintiff is a live-music and entertainment company that
organizes high-end music and adult cultural festivals in
California with plans to expand geographically. Am.
Compl. [#88] ¶ 15. Defendant served as
Plaintiff's Senior Vice President of Business Development
from October 1, 2015, until October 10, 2017. Id.
¶ 2. Plaintiff has asserted three claims against
Defendant. Id. ¶¶ 37-65. First, Plaintiff
asserts a claim for violation of the Colorado Trade Secrets
Act. Id. ¶¶ 37-51. Second, Plaintiff
asserts a claim for violation of the Defend Trade Secrets
Act. Id. ¶¶ 52-61. Finally, Plaintiff
asserts that Defendant converted its property. Id.
¶¶ 62-65. On January 8, 2019, Defendant filed an
Answer, Counterclaim[s], and Demand for Jury on
Counterclaim[s] [#109] asserting four counterclaims: (1)
breach of contract, (2) quantum meruit, (3) fraud in the
inducement, and (4) bad faith pursuant to Colo. Rev. Stat.
§ 7-74-105. See [#109] at 13-18, ¶¶
9-43. The precise allegations underlying the claims are
generally immaterial to resolution of the present Motion
[#110], which, in relevant part, seeks dismissal of all
counterclaims on the basis of subject matter jurisdiction and
of the bad faith counterclaim for failure to state a claim.
Standards of Review
Federal Rule of Civil Procedure 12(b)(1)
purpose of a motion to dismiss pursuant to Rule 12(b)(1) is
to test whether the Court has jurisdiction to properly hear
the case before it. Because “federal courts are courts
of limited jurisdiction, ” the Court must have a
statutory basis to exercise its jurisdiction. Montoya v.
Chao, 296 F.3d 952, 955 (10th Cir. 2002); Fed.R.Civ.P.
12(b)(1). Statutes conferring subject-matter jurisdiction on
federal courts are to be strictly construed. F & S
Const. Co. v. Jensen, 337 F.2d 160, 161 (10th Cir.
1964). “The burden of establishing subject-matter
jurisdiction is on the party asserting jurisdiction.”
Id. (citing Kokkonen v. Guardian Life Ins. Co.
of Am., 511 U.S. 375, 377 (1994)).
motion to dismiss pursuant to Rule 12(b)(1) may take two
forms: facial attack or factual attack. Holt v. United
States, 46 F.3d 1000, 1002 (10th Cir. 1995). When
reviewing a facial attack on a complaint, the Court accepts
the allegations of the complaint as true. Id. By
contrast, when reviewing a factual attack on a complaint, the
Court “may not presume the truthfulness of the
complaint's factual allegations.” Id. at
1003. With a factual attack, the moving party challenges the
facts upon which subject-matter jurisdiction depends.
Id. The Court therefore must make its own findings
of fact. Id. In order to make its findings regarding
disputed jurisdictional facts, the Court “has wide
ranging discretion to allow affidavits, other documents, and
a limited evidentiary hearing.” Id. (citing
Ohio Nat'l Life Ins. Co. v. United States, 922
F.2d 320, 325 (6th Cir. 1990); Wheeler v. Hurdman,
825 F.2d 257, 259 n.5 (10th Cir. 1987)). The Court's
reliance on “evidence outside the pleadings” to
make findings concerning purely jurisdictional facts does not
convert a motion to dismiss pursuant to Rule 12(b)(1) into a
motion for summary judgment pursuant to Rule 56. Id.
Federal Rule of Civil Procedure 12(b)(6)
purpose of a motion to dismiss pursuant to Rule 12(b)(6) is
to test “the sufficiency of the allegations within the
four corners of the complaint after taking those allegations
as true.” Mobley v. McCormick, 40 F.3d 337,
340 (10th Cir. 1994); Fed.R.Civ.P. 12(b)(6) (stating that a
complaint may be dismissed for “failure to state a
claim upon which relief can be granted”). “The
court's function on a Rule 12(b)(6) motion is not to
weigh potential evidence that the parties might present at
trial, but to assess whether the plaintiff's complaint
alone is legally sufficient to state a claim for which relief
may be granted.” Sutton v. Utah State Sch. for the
Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir. 1999)
(citation omitted). To withstand a motion to dismiss pursuant
to Rule 12(b)(6), “a complaint must contain enough
allegations of fact ‘to state a claim to relief that is
plausible on its face.'” Robbins v.
Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) (quoting
Bell Atlantic Co. v. Twombly, 550 U.S. 544, 570
(2007)); see also Shero v. City of Grove, Okla., 510
F.3d 1196, 1200 (10th Cir. 2007) (“The complaint must
plead sufficient facts, taken as true, to provide
‘plausible grounds' that discovery will reveal
evidence to support the plaintiff's allegations.”
(quoting Twombly, 550 U.S. at 570)). “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). “A pleading that offers labels and conclusions
or a formulaic recitation of the elements of a cause of
action will not do. Nor does a complaint suffice if it
tenders naked assertion[s] devoid of further factual
enhancement.” Id. (brackets in original;
internal quotation marks omitted).
survive a motion to dismiss pursuant to Rule 12(b)(6), the
factual allegations in the complaint “must be enough to
raise a right to relief above the speculative level.”
Christy Sports, LLC v. Deer Valley Resort Co., 555
F.3d 1188, 1191 (10th Cir. 2009). “[W]here the
well-pleaded facts do not permit the court to infer more than
the mere possibility of misconduct, ” a factual
allegation has been stated, “but it has not show[n][
]that the pleader is entitled to relief, ” as required
by Fed.R.Civ.P. 8(a). Iqbal, 552 U.S. at 679 (second
brackets added; citation and internal quotation marks
briefly raises the issue of jurisdiction, albeit with minimal
analysis and no legal citation, which the Court construes
pursuant to Fed.R.Civ.P. ...