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Genis v. Campbell

Superior Court of Massachusetts, Suffolk, Business Litigation Session

February 22, 2019

Alfred R. GENIS
v.
Martin CAMPBELL et al.

          File Date: February 26, 2019

          MEMORANDUM AND ORDER ON PLAINTIFF’S MOTION TO FOR LEAVE TO AMEND COMPLAINT

          Kenneth W. Salinger, Justice of the Superior Court

          Alfred Genis filed suit in June 2017 claiming that Martin Campbell, David Campbell, their company Pure Crystal, LLC, and up to ten unidentified "John Doe" plaintiffs had allegedly misappropriated trade secrets. By statute, an unknown defendant may be sued in a civil action "by a fictitious name"; doing so "shall not be grounds for dismissal" so long as the actual defendant is identified in an amended complaint and served with process in a timely manner. See G.L.c. 223, § 19.

          Genis now seeks leave to amend his complaint to substitute Campbell Technological Resources, Inc. ("CTR"), Fraunhofer USA, Inc., Fraunhofer-Gesellschaft, and Thomas Schuelke for the prior fictitious defendants.

          Fraunhofer USA and Schuelke oppose the motion to amend. Neither CTR, nor the existing Defendants, nor Fraunhofer Gesellschaft (which is not represented by the same counsel as Fraunhofer USA and Schuelke) has opposed the motion.

          The Court concludes that it would be futile to amend the complaint to assert claims against Fraunhofer USA and Schuelke because those claims could not survive a motion to dismiss. The Court will therefore deny the motion to amend in part to the extent that Genis seeks to assert claims against Fraunhofer USA and Schuelke, but will allow the motion in part to the extent it seeks to assert claims against CTR and Fraunhofer-Gesellschaft.

          1. Legal Standards

         "Courts are not required to grant motions to amend prior complaints where ‘the proposed amendment ... is futile.’" Johnston v. Box, 453 Mass. 569, 583 (2009), quoting All Seasons Servs., Inc. v. Commissioner of Health & Hosps. of Boston, 416 Mass. 269, 272 (1993); accord Thermo Electron Corp. v. Waste Mgmt. Holdings, Inc., 63 Mass.App.Ct. 194, 203 (2005) (affirming denial of motion for leave to assert counterclaim that would have been futile).

         A proposed amendment that would add new claims to a complaint is futile if the new claims could not survive a motion to dismiss. Mancuso v. Kinchla, 60 Mass.App.Ct. 558, 572 (2004) (affirming denial of motion to amend).

         To survive a motion to dismiss under Rule 12(b)(6), and thus to avoid being futile under Rule 15, a complaint must allege facts that, if true, would "plausibly suggest[ ] ... an entitlement to relief." Lopez v. Commonwealth, 463 Mass. 696, 701 (2012), quoting Iannacchino v. Ford Motor Co., 451 Mass. 623, 636 (2008), and Bell A. Corp. v. Twombly, 550 U.S. 544, 557 (2007). For the purpose of deciding whether the proposed claims against Fraunhofer USA and Schuelke could survive a motion to dismiss, the Court must assume that the factual allegations in the proposed amended complaint and any reasonable inferences that may be drawn in Genis’s favor from those allegations are true. See Golchin v. Liberty Mut. Ins. Co., 460 Mass. 222, 223 (2011). In so doing, however, it must "look beyond the conclusory allegations in the complaint and focus on whether the factual allegations plausibly suggest an entitlement to relief." Maling v. Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, 473 Mass. 336, 339 (2015), quoting Curtis v. Herb Chambers I- 95, Inc., 458 Mass. 674, 676 (2011).

          2. Futility of Proposed New Claims Against Fraunhofer USA and Schuelke

          2.1. Trade Secret Claim

          Count I of the proposed amended complaint would assert a claim for misappropriation of trade secrets against Fraunhofer USA and Schuelke. "The essence of an action for the wrongful use of trade secrets is the breach of the duty not to disclose or to use without permission confidential information acquired from another." Jet Spray Cooler, Inc. v. Crampton, 377 Mass. 159, 165 (1979).

         In the typical case (as with the claims against the Campbells and Pure Crystal), to state a claim for misappropriation of trade secrets a plaintiff must allege facts plausibly suggesting that: "1) the information is a trade secret; 2) the plaintiff took reasonable steps to preserve the secrecy of the information; and 3) the defendant used improper means, in breach of a confidential relationship, to acquire and use the trade secret." See Protege Software Servs., Inc. v. Colameta, Middlesex civ. action 09-03168, 30 Mass.L.Rptr. 127, 2012 WL 3030268, at *11 (Mass.Super. July 16, 2012) (Kirpalani, J.), quoting Incase, Inc. v. Timex Corp.,488 F.3d 46, 52 (1st Cir. 2007) (applying Massachusetts ...


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