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Simpler Consulting, Inc. v. Wall

April 7, 2008

SIMPLER CONSULTING, INC., PLAINTIFF,
v.
THOMAS MICHAEL WALL, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Judge Nora Barry Fischer

MEMORANDUM OPINION

I. Introduction and Procedural Background

The plaintiff in this case is Simpler Consulting, Inc. ("Simpler"), a Pennsylvania corporation that provides consulting services in the field of "lean" based business conversions. (Docket No. 21, First Amended Complaint, (the "Complaint")). "Lean" is a process management philosophy derived from the Toyota Production System that is focused on continuous improvement and waste elimination.*fn1

The Defendants in this case are Thomas Michael Wall ("Wall"), a former employee of Simpler (Complaint at ¶ 11), and Better Enterprise Solutions Corp. d/b/a BESCORP. ("BESCorp") (collectively "Defendants"), a Kansas corporation of which Wall is the president and founder. (Docket No. 21 ¶ 3; Docket No. 50 at ¶ 5). BESCorp also provides consulting services in the field of lean based business conversions.*fn2

On February 24, 2006, Simpler filed this action against Defendants alleging copyright infringement (Count I), breach of contract (Count II), civil conspiracy (Count III), conversion (Count IV), unjust enrichment (Count V), and violation of the Lanham Act (Count VI). On October 12, 2006, Simpler filed a motion for summary judgment as to Counts I, II, IV and VI. (Document No. 37, Plaintiff's Motion for Summary Judgment on Counts I, II, IV and VI of the First Amended Complaint ("Simpler's Motion")). At the conclusion of the February 21, 2007 oral argument on Simpler's Motion, Judge Hardiman granted Simpler's Motion as to Count II of the Complaint. (Docket No. 61). The Order on Simpler's Motion, which was entered on March 1, 2007, granted Simpler's Motion as to Count II and ordered that Simpler file a brief in support of damages and/or injunctive relief and that Defendants file a response. (Docket No. 66). Such Order was stayed and then suspended indefinitely while the parties engaged in settlement negotiations. (Docket Nos. 69, 71).

On April 6, 2007, following Judge Hardiman's elevation to the United States Court of Appeals for the Third Circuit, this action was assigned to the undersigned Judge. Thereafter, the parties continued to engage in settlement negotiations. In addition, this Court suggested that the parties consider mediation. (Docket No. 72). Following a Status Conference with the Court on May 14, 2007, the parties represented to the Court that neither further settlement negotiations nor mediation would be fruitful. (Text Only Docket Entry Dated June 13, 2007). Accordingly, on June 13, 2007, this Court Ordered that Simpler file a brief in support of damages and/or injunctive relief as Ordered by Judge Hardiman on March 1, 2007. Id.

During the July 11, 2007 motion hearing on Simpler's Motion for Injunctive Relief (Docket No. 75), the Court discussed with the parties the potential need for further briefing related to Simpler's Motion because of the length of time that had elapsed since Simpler's Motion was filed. Accordingly, the Court provided the parties with the opportunity to supplement the law cited in the briefs in support of and in opposition to Simpler's Motion and to respond to any supplement filed by the opposing party. (Docket No. 85 at ¶¶ 6-7).

On August 29, 2007, Defendants filed a Supplemental Brief in Opposition to Plaintiff's Motion for Summary Judgment on the Issue of Copyright Infringement. (Docket No. 96). On September 12, 2007, Plaintiff filed a Reply to Defendants' Supplemental Brief. (Docket No. 97). On October 1, 2007, following this Court's Order granting Defendants' request for leave to file an additional supplemental brief (Docket No. 99), Defendants filed a Reply Brief to Plaintiff's Reply to Defendants' Supplemental Brief. (Docket No. 100). On October 25, 2007, Plaintiff filed at response to Defendants' October 1, 2007 brief. (Docket No. 104). On November 2, 2007, the undersigned Judge ordered that no further briefing would be allowed as to Simpler's Motion. On March 20, 2008, this Court granted Defendants' Motion to Strike (Docket No. 94) and denied Simpler's Motion for Injunctive Relief and Damages (Docket Nos. 68, 75). (Docket No. 129). Despite this Court's November 2, 2007 Order, Plaintiff filed a Reply to the Declaration of David Spear on March 24, 2008. (Docket No. 130).

Currently pending before this Court is Simpler's Motion as to Counts I, IV and VI. Upon consideration of Simpler's Motion and briefs in support thereof, Defendants' response thereto, and the above-referenced supplemental briefs, and as set forth in detail below, Simpler's Motion [37] is DENIED as to Counts I, IV and VI.

II. Relevant Factual Background*fn3

Wall was employed by Simpler between 1999 and 2004. (Docket No. 39, Plaintiff's Concise Statement of Material Facts ("Plaintiff's Facts") at ¶ 1; Docket No. 50, Defendants' Responsive Concise Statement ("Defendants' Facts") at ¶ 1).*fn4 On August 23, 2004, Simpler and Wall entered into a Settlement Agreement and General Release (the "Agreement") for the purpose of settling an EEOC claim filed by Wall against Simpler and an action filed by Simpler against Wall in the Court of Common Pleas of Allegheny County. (Plaintiff's Facts at ¶¶ 2-3). The Agreement contained certain restrictive covenants which were at issue in Count II of the Complaint.

During or following his employment with Simpler, Wall formed BESCorp, a company which competes with Simpler. (Plaintiff's Facts at ¶ 5; Defendants' Facts at ¶ 5). Wall owns 44% of BESCorp and serves as its president. (Plaintiff's Facts at ¶ 6). The balance of the company is owned by Wall's wife and mother in law. (Plaintiff's Facts at ¶ 6).

In 2004, Northrup Grumman, a global defense and technology company providing systems, products and solutions in information and services, electronics, aerospace and shipbuilding to government and commercial customers,*fn5 requested that Wall join its team as a subcontractor to compete for a bid for a contract to work on the Naval Sea Systems Command of the United States Navy (the "NAVSEA" contract). (Plaintiff's Facts at ¶ 7). Wall provided input to Northrup Grumman for submission of the bid for the NAVSEA contract and Northrup Grumman submitted its bid with BESCorp as a subcontractor. (Plaintiff's Facts at ¶ 7). Simpler also submitted a bid for the NAVSEA contract through the VSE Corporation as a primary contractor. (Plaintiff's Factsat ¶ 8). The NAVSEA contract was awarded to Northrup Grumman, with BESCorp as its sub-contractor. (Plaintiff's Facts at ¶ 9).

Simpler alleges that, following the award of the NAVSEA contract to Northrup Grumman and BESCorp, Wall and BESCorp provided various presentations and written materials to NAVSEA and Northrup Grumman in connection with BESCorp's consulting services. (Complaint at ¶ 28). Simpler alleges that these materials included multiple pages copied or derived from documents owned and copyrighted by Simpler. (Complaint at ¶ 28). Further, Simpler alleges that such presentations and materials were identical or substantially similar to documents owned and copyrighted by Simpler. (Complaint at ¶ 37). Defendants generally deny such facts in their Answer and Affirmative Defenses. (Docket No. 50 at ¶¶ 28, 37).

The documents at issue are contained in Appendices K and O to Plaintiff's Memorandum of Law in Support of Motion for Summary Judgment on Counts I, II, IV and VI of the First Amended Complaint (Docket No. 38 at p. 25; Docket No. 58 at p. 19). Appendix K contains slides created by Wall that were incorporated into a NAVSEA training module titled "Transforming Value Stream." (Plaintiff's Facts at ¶ 40, 45, 47; Appendix K; Defendants' Facts at ¶ 42). Appendix O contains slides created by Wall that were incorporated into a document entitled "Executive Planning Session." (Plaintiff's Facts at ¶ 48; Appendix O). Simpler alleges that the images contained in Appendices K and O are the property ...


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