United States District Court, E.D. Kentucky, Northern Division, Covington
CHARLESTON LABORATORIES, INC. PLAINTIFF
SIDIS CORPORATION, et al., DEFENDANTS
MEMORANDUM OPINION AND ORDER
L. Bunning, United States District Judge.
matter is before the Court upon Defendants' Motion to
Dismiss Counts 7, 8, and 9 of Plaintiff Charleston
Laboratories, Inc.'s Complaint pursuant to Federal Rule
of Civil Procedure 12(b)(6). This Court has jurisdiction over
this action pursuant to 29 U.S.C. § 1132.
Factual and Procedural Background
case involves a large number of actors and defendants, all
interconnected in various ways. Accordingly, the Court will
begin by identifying the parties named in the Complaint.
Charleston Laboratories, Inc. (“Charleston”) is
an emerging pharmaceutical company. (Doc. # 1 at ¶ 18).
Paul Bosse is the president, chief executive officer, and
founder of Charleston. Id. at ¶ 19. Charleston
has developed a drug, “CL- 108", that is
undergoing U.S. Food and Drug Administration review for
approval to sell. Id. at ¶¶ 20-21.
SIDIS Corporation (“SIDIS”) is a holding company
of “portfolio companies, ” that compete with
Charleston in the pharmaceutical and biotechnology industries
for investors, partners, affiliations, and strategic
collaborations. Id. at ¶ 51. Nigel M. Ferrey is
the founder, President, and CEO of SIDIS. Id. at
¶ 9. Ferrey and Defendant Ray Takigiku are the sole
members and founders of Defendant bioLOGIC Corporation LLC
(“bioLOGIC”). Id. at ¶ 3. Takigiku
is also a board member of SIDIS, and is the registered agent
of Bexion Pharmaceuticals, LLC (“Bexion”).
Id. at ¶ 7.
Charles D. LeCroix is a board member of SIDIS, and
“claims to have ‘run' bioLOGIC for some
period of time.” Id. at ¶ 6.
Margaret Van Gilse is an officer or director of
“various entity-defendants” named in the
Complaint. Id. at ¶ 8.
DP LLC (“Prime”) is a limited liability company
whose only identified member is Defendant LeCroix.
Id. at ¶ 10. Defendant Van Gilse is Prime's
last-known registered agent. Id. When Prime ceased
doing business in Kentucky, its assets were acquired by or
distributed to SIDIS or other SIDIS-related entities.
Charles R. Scheper is the settlor of the Defendant Charles R.
Scheper Irrevocable Family Trust (the “Scheper
Trust”). Id. at ¶ 5. The Scheper Trust is
a stockholder of SIDIS. Id.
the Complaint, Plaintiff refers to SIDIS and bioLOGIC
collectively as “SIDIS-Related Entities” and to
Ferrey, Takigiku, LeCroix, Van Gilse and Scheper as
“SIDIS-Related Individuals.” Id. at
2007, a third party introduced John Ameling, a Charleston
consultant, to Defendant Takigiku. Id. at
¶¶ 26-27. In 2008, Ameling and Bosse,
Charleston's CEO, traveled to Cincinnati to meet with
Takigiku, and discuss Takigiku's potential employment
with Charleston. Id. at ¶ 29. According to
Charleston, a number of SIDIS-related individuals also
attended the meeting and attempted to create a relationship
between Charleston and one or more SIDIS-related entities.
Id. at ¶ 30. Charleston expressed that it was
not interested in forming any affiliation with SIDIS.
Id. at ¶ 31.
subsequently hired Takigiku, and issued Charleston stock to
him personally. Id. at ¶ 32. After issuing that
stock, Charleston learned that Prime DP, a SIDIS-related
entity, or some other SIDIS-related entity, had deposited
funds into Takigiku's personal account or reimbursed
Takigiku for his capital contribution to Charleston.
Id. at ¶ 40. In 2009, Takigiku represented to
Charleston that Scheper was a relative of his who was
interested in becoming a stockholder of Charleston, and in
2010, Scheper caused the Scheper Trust to become a
stockholder of Charleston. Id. at ¶¶
of his employment with Charleston, Takiguku executed a
Confidential Information and Invention Assignment Agreement
(“CIIAA Agreement”). Id. at ¶ 93.
Pursuant to that agreement, Takigiku agreed that during the
term of his employment and thereafter, he would not disclose
any of Charleston's confidential information.
Id. at ¶ 94. Charleston now alleges that
Takigiku violated the CIIAA agreement, and disclosed
Charleston's proprietary, confidential information to the
other Defendants. Id. at ¶ 96.
Charleston alleges that Takigiku reported to SIDIS, bioLOGIC,
Ferrey, and LeCroix confidential information relating to
Charleston's efforts to raise money, and its research and
development of certain products, including CL-108.
Id. at ¶ 53. According to Charleston, SIDIS,
bioLOGIC, Ferrey, Takiguku, LeCroix, and Van Gilse falsely
represented to Charleston investors and potential investors
that Charleston is affiliated with SIDIS. Id. at
¶ 54. Charleston claims that the SIDIS-related entities
and individuals used Charleston's name, as well as the
advancement and success of Charleston's product, CL-108,
to lure potential investors away from Charleston to SIDIS, by
representing that an investment in SIDIS would include an
interest in Charleston. Id. at ¶ 55. Allegedly,
in 2015, bioLOGIC and Van Gilse falsely represented to
investors that Charleston was a client of bioLOGIC.
Id. at ¶ 57.
November 2, 2016, Charleston filed the instant Complaint
seeking monetary damages and temporary and permanent
injunctive relief, alleging tortious interference with
contractual relationships, tortious interference with
prospective contractual relationships, defamation, unfair
competition, breach of confidentiality agreements, violations
of Kentucky's Trade Secrets Act, civil conspiracy, and
false designations of origin under the Lanham Act.
Id. at 14. The Defendants collectively moved to
dismiss Charleston's civil-conspiracy and
false-designation-of-origin claims, as well as
Charleston's claim under the Kentucky Trade Secrets
(Doc. # 22). The Motion to Dismiss is now fully briefed
(Docs. # 29 and 33) and ripe for the Court's review.
Standard of Review
survive a Rule 12(b)(6) motion to dismiss, “a complaint
must contain sufficient factual matter, accepted as true, to
state a claim to relief that is plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The
plausibility standard is met when the facts in the complaint
allow “the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Id. The complaint need not contain “detailed
factual allegations, ” but must contain more than mere
“labels and conclusions” or “a formulaic
recitation of the elements of a cause of action.”
Id. Put another way, the “[f]actual
allegations must be enough to raise a right to relief above
the speculative level.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007).