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M.M.A. Design LLC v. Capella Space Corp.

United States District Court, D. Colorado

August 21, 2019

M.M.A. DESIGN, LLC, Plaintiff,
v.
CAPELLA SPACE CORPORATION, and THOMAS J. HARVEY, Defendants.

          OPINION AND ORDER DENYING MOTION TO DISMISS

          Marcia S. Krieger Senior United States District Judge.

         THIS MATTER comes before the Court pursuant to Defendant Capella Space Corporation's (“Capella”) Motion to Dismiss (# 32), Plaintiff M.M.A. Design, LLC's (“MMA”) response (# 38), and Capella's reply (# 41).

         FACTS

         The Complaint (# 2) in this matter is lengthy and rife with unnecessary detail, but the basic contours of MMA's claims are straightforward. MMA is a business involved in the design and manufacture of solar arrays and antennas used on satellites. MMA was owned by Defendant Thomas J. Harvey and two other individuals.

         In early 2016, Capella, a company engaged in the manufacture, launch, and operation of satellites, contacted MMA about designing and building satellites that Capella would deploy. As discussions progressed, and the entities shared more detailed information, they entered into a Confidentiality Agreement. Under this Agreement, Capella promised that it would only use MMA's proprietary information and trade secrets for the purpose of “evaluating the feasibility of a business relationship with MMA and performing its obligations and exercising its rights under any such business relationship that is agreed to between the parties.”

         In the summer of 2016, MMA developed specifications for a satellite antenna to meet Capella's needs. ¶ 82.[1] MMA alleges that the specifications constitute proprietary information belonging to MMA. ¶ 83. MMA also alleges that Capella sent MMA's specifications to MMA's competitors, and invited them to submit bids to produce and supply an antenna with such specifications. ¶ 85. MMA also alleges that it provided a proposal to Capella for an antenna, again disclosing substantial amounts of MMA's proprietary and trade secret information. ¶ 92.

         During these negotiations, Mr. Harvey's relationship with MMA became strained for various reasons. MMA alleges that one reason was that Mr. Harvey formed a separate consulting business that competed directly with MMA. Mr. Harvey resigned from MMA's employment in August 2016, but he retained partial ownership in the company. Ultimately, litigation ensued between Mr. Harvey and MMA's other owners over whether Mr. Harvey breached fiduciary duties to MMA. In September 2016, Capella requested MMA to produce the antenna it had proposed at a dramatically lower price than Capella had committed to pay. MMA contends that Capella did so with the intention of sabotaging any business relationship with MMA. ¶ 117. Sometime thereafter, Capella and Mr. Harvey agreed that Mr. Harvey would consult directly with Capella to design and deploy the antenna. ¶ 123. Mr. Harvey explained to Capella that he would “need to recreate the IP that I did at MMA” and would attempt to “find a way around the MMA patent” that covered the technology in question. ¶ 132, 134. MMA contends that Mr. Harvey appropriated proprietary testing protocols that belonged to MMA and used them with Capella, and that the antenna that Mr. Harvey designed for Capella incorporated a variety of MMA's trade secrets and proprietary information. ¶ 138-146.

         Based on these facts, MMA asserts the following claims against Capella: (i) breach of contract, in that Capella breached the terms of the Confidentiality Agreement by disclosing MMA's proprietary and trade secret information to others and by using that information for the purpose of designing its own antenna to the exclusion of MMA; (ii) misappropriation of trade secrets in violation of the Federal Defend Trade Secrets Act (“FDTSA”), 18 U.S.C. § 1836; (iii) misappropriation of trade secrets in violation of the Colorado Uniform Trade Secrets Act (“CUTSA”), C.R.S. § 7-74-101 et seq.; (iv) common law unfair competition, apparently under Colorado law, in that Capella (in concert with Mr. Harvey) misappropriated MMA's proprietary information for its own benefit; and (v) common law unjust enrichment, apparently under Colorado law, based on the same facts.

         Capella moves (# 32) to dismiss MMA's claims, arguing: (i) as to the contract claim, that the Complaint fails to allege facts sufficient to demonstrate Capella's breach of the Confidentiality Agreement or injuries sustained by MMA because of any breach; (ii) as to the federal and state trade secret claims, the Complaint fails to allege facts showing Capella's misappropriation of any trade secrets; and (iii) as to the common law claims, such claims are preempted by CUTSA and Colorado's Economic Loss Rule.

         ANALYSIS

         A. Standard of review

         In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept all well-pleaded allegations in the Amended Complaint as true and view those allegations in the light most favorable to the nonmoving party. Stidham v. Peace Officer Standards & Training, 265 F.3d 1144, 1149 (10th Cir. 2001) (quoting Sutton v. Utah State Sch. for the Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir. 1999)). The Court must limit its consideration to the four corners of the Amended Complaint, any documents attached thereto, and any external documents that are referenced in the Amended Complaint and whose accuracy is not in dispute. Oxendine v. Kaplan, 241 F.3d 1272, 1275 (10th Cir. 2001); Jacobsen v. Deseret Book Co., 287 F.3d 936, 941 (10th Cir. 2002); Dean Witter Reynolds, Inc. v. Howsam, 261 F.3d 956, 961 (10th Cir. 2001).

         A claim is subject to dismissal if it fails to state a claim for relief that is “plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). To make such an assessment, the Court first discards those averments in the Complaint that are merely legal conclusions or “threadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Id. at 678-79. The Court takes the remaining, well-pleaded factual contentions, treats them as true, and ascertains whether those facts (coupled, of course, with the law establishing the requisite elements of the claim) support a claim that is “plausible” or whether the claim being asserted is merely “conceivable” or “possible” under the facts alleged. Id. What is required to reach the level of “plausibility” varies from context to context, but generally, allegations that are “so general that they encompass a wide swath of conduct, much of it innocent, ” will not be sufficient. Khalik v. United Air Lines, 671 F.3d 1188, 1191 (10th Cir. 2012).

         B. Breach of ...


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