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Ebonite International Inc. v. Hickland

United States District Court, W.D. Kentucky

May 7, 2018




         Memorandum Opinion & Order This matter comes before the Court upon two Motions. The first has been made by Defendant Creating The Difference, LLC, and it seeks partial dismissal under Federal Rule of Civil Procedure 12(b)(6). [DN 52.] The second Motion has been made by Defendant Ronald Hickland under Federal Rule of Civil Procedure 12(c). [DN 57.] These matters are ripe for adjudication and their merits are discussed below.

         I. Background

         Ebonite International, Inc., (“Ebonite”), is a corporation “that provides bowling-related products and services to customers throughout the United States.” [DN 47, at 1.] The company “designs, manufactures, and markets…bowling products and licenses its name in connection with such products, including bowling balls, bags, accessories, and equipment.” [Id.] Defendant Ronald Hickland, (“Hickland”), was previously employed by Ebonite, where he held the position of technology and design engineer. [Id.] He left the company in February 2015 and subsequently started a new limited liability company called Creating The Difference, LLC, (“CTD”). [Id. at 3.] Hickland and his wife are the two members of CTD, which “manufactures and sells bowling-related products” such as “bowling ball cleaner and various other bowling accessories.” [Id.]

         According to Ebonite's Amended Complaint, in the course of his employment with Ebonite, “Hickland obtained confidential and proprietary business information from Ebonite including but not limited to information concerning Ebonite's products, customers, business strategies, finances, methodologies, processes, operations, and pricing.” [Id. at 4.] Because of Hickland's knowledge of the inner workings of Ebonite, the company had Hickland sign an employment agreement, “whereby he agreed, inter alia, that he would not misappropriate Ebonite's confidential information or compete directly with Ebonite following the cessation of his employment.” [Id. at 9.] As part of this agreement, Hickland acknowledged that “he would not enter into Direct Competition with [Ebonite] within the United States” for three years following the termination of his employment with the company. [Id. at 10.]

         Ebonite alleges that, upon leaving the company in February 2015, Hickland started CTD in violation of his employment agreement. [Id. at 10.] Specifically, Ebonite alleges that “Hickland has violated, threatened to violate, and/or inevitably will violate various of his restrictive covenant obligations. Such conduct in violation of the covenants includes but is not limited to” the following: “(a) solicitation of Ebonite's customers; (b) use and disclosure of Ebonite's Confidential Information including, inter alia, information relating to Ebonite's products and services and research projects; and (c) competing directly with Ebonite by manufacturing, marketing, and selling products that compete with Ebonite's products.” [Id. at 11.]

         On April 20, 2017, Ebonite filed this lawsuit, and on August 31, 2017, it filed an Amended Complaint, wherein it alleges the following claims: (1) copyright infringement against Hickland and CDT; (2) breach of contract against Hickland; (3) tortious interference with contract against CTD; and (4) civil conspiracy against Hickland and CDT. [Id. at 12-17.]

         II. CTD's Motion for Partial Dismissal

         The first Motion at issue is CTD's motion for partial dismissal under Rule 12(b)(6). CDT argues that Ebonite has failed to state a claim upon which relief can be granted with respect to its claims of (1) tortious interference and (2) civil conspiracy. The merits of this Motion are discussed below.

         A. Legal Standard

         Pursuant to Federal Rule of Civil Procedure 8(a)(2), a plaintiff's complaint is required to include “a short and plain statement of the claim showing that the pleader is entitled to relief.” “Rule 12(b)(6) provides that a complaint may be dismissed for failure to state a claim upon which relief can be granted.” Bloch v. Ribar, 156 F.3d 673, 677 (6th Cir. 1998). Importantly, “[w]hen considering a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, the district court must accept all of the allegations in the complaint as true, and construe the complaint liberally in favor of the plaintiff.” Lawrence v. Chancery Court of Tennessee, 188 F.3d 687, 691 (6th Cir. 1999). This means that, “unless it can be established beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief, ” the motion should be denied. Achterhof v. Selvaggio, 886 F.2d 826, 831 (6th Cir. 1989). “However, the Court need not accept as true legal conclusions or unwarranted factual inferences.” Blakely v. United States, 276 F.3d 853, 863 (6th Cir. 2002). A “complaint must contain either direct or inferential allegations respecting all the material elements to sustain a recovery under some viable legal theory.” Andrews v. Ohio, 104 F.3d 803, 806 (6th Cir. 1997).

         Although a “complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, the plaintiff's “[f]actual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. The concept of “plausibility” indicates that a complaint should contain sufficient facts “to state a claim to relief that is plausible on its face.” Id. at 570. The element of plausibility is satisfied “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). However, where the court cannot “infer more than the mere possibility of misconduct, the complaint has alleged-but has not show[n]-that the pleader is entitled to relief.” Id. at 679 (internal quotation marks omitted).

         B. Discussion

         In the instant Motion, CTD has moved for a partial dismissal under Rule 12(b)(6). [DN 52.] Specifically, CTD argues that Ebonite has failed to state a claim upon which relief can be granted with respect to claims three and four of its Amended Complaint. [See DN 47.] These claims allege (1) civil conspiracy against Hickland and CTD, and (2) tortious interference with a contract against CTD. [See Id. at 16-17.] The Court will analyze each of the claims separately.

         1. Civil Conspiracy Claim

         The first claim CTD seeks to have dismissed under Rule 12(b)(6) is Ebonite's civil conspiracy claim against it and Hickland. “In order to prevail on a claim of civil conspiracy, the proponent must show an unlawful/corrupt combination or agreement between the alleged conspirators to do by some concerted action an unlawful act.” Peoples Bank of N. Kentucky, Inc. v. Crowe Chizek and Co. LLC,277 S.W.3d 255, 261 (Ky. Ct. App. 2008) (citing Montgomery v. Milam,910 S.W.2d 237, 239 (Ky. 1995)); see also Wallace v. Midwest Fin. & Mortg. Servs., Inc., 714 F.3d 414, 422-23 (6th Cir. 2013). As the Sixth Circuit Court of Appeals has explained, “[t]he ‘gist of the civil action for conspiracy is the act or acts committed in pursuance of the conspiracy, not the actual conspiracy'-meaning a plaintiff must also prove that the act or acts caused her injuries.” Id. at 423 (quoting James v. Wilson, 95 S.W.3d 875, 897 (Ky. Ct. ...

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