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Nesselrotte v. Allegheny Energy

March 23, 2009

TONI M. NESSELROTTE, PLAINTIFF,
v.
ALLEGHENY ENERGY, INC., ALLEGEHENY ENERGY SERVICE CORPORATION, AND DAVID B. HERTZOG, DEFENDANTS.



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

MEMORANDUM OPINION

I. INTRODUCTION

Defendants Allegheny Energy, Inc. and Allegheny Service Corporation (collectively, "Allegheny") have asserted claims of breach of fiduciary duty and breach of contract against Plaintiff Toni M. Nesselrotte's ("Plaintiff" or "Nesselrotte"). (Docket No. 92). Before this Court is Allegheny Energy, Inc., Allegheny Service Corporation, and David B. Hertzog's ("Hertzog") Motion for Partial Summary Judgment on their After-Acquired Evidence Affirmative Defense and Liability as to Counterclaims (Docket No. 121). Specifically, Defendants*fn1 argue that pursuant to Federal Rule of Civil Procedure ("Rule") 56 and Local Rule ("LR") 56.1, partial summary judgment on liability will permit application of the After-Acquired Evidence affirmative defense to limit or preclude Plaintiff's remedies. (Docket No. 121). For the foregoing reasons, Defendants' motion is GRANTED.*fn2

II. FACTUAL BACKGROUND

Toni Nesselrotte is an attorney who worked for Allegheny for over twenty years. (Docket No. 241 at ¶ 1). Prior to her termination, Nesselrotte was employed as a Senior Attorney at Allegheny, and was a member of the bars of the Commonwealth of Pennsylvania and the State of West Virginia. (Id. at ¶¶ 2-3).

On April 7, 2000, Nesselrotte signed an employee confidentiality agreement ("Confidentiality Agreement") that defined her obligations and responsibilities as they pertained to Allegheny's confidential and proprietary information. (Docket No. 241 at ¶ 4). The Confidentiality Agreement defines "confidential information" as follows: all information, including but not limited to, proprietary information and/or trade secrets, and all information disclosed to Employee or known by Employee as a consequence of or through Employee's employment, which is not generally known in the industry in which [Allegheny Energy Service Corporation, or its parents, affiliates or subsidiaries, or any successors or assigns (hereinafter, "AE Companies")] are or may become engaged, about the AE Companies' business, products, processes, and services, including, but not limited to, information relating to Inventions and/or Words, research, development, computer program designs, computer data, flow charts, source or object codes, products or services under development, pricing and pricing strategies, marketing and selling strategies, sources of supply, customer lists, customer requirements, business methods or practices, training and training programs, and the documentation thereof. It will be presumed that information supplied to the AE Companies from outside sources is Confidential Information unless and until it is designated otherwise. (Docket No. 124-5 at ¶ 1). The Confidentiality Agreement also covers all "works" prepared by Plaintiff, including "all material and information which is fixed in a tangible medium of expression including, but not limited to" notes, memoranda, correspondence, documents, and intellectual property. (Id. at ¶ 2).

Pursuant to the Confidentiality Agreement, Plaintiff agreed to "safeguard and maintain" all confidential documents, as the term "confidential" is defined in the Confidentiality Agreement, and not "use, divulge, or disseminate" confidential information or works without first having obtained Allegheny's written permission. (Docket No. 124-5 at ¶¶ 1, 2). Finally, under the Confidentiality Agreement, Plaintiff agreed that upon termination of her employment she would deliver to Allegheny "all Confidential Information, including, but not limited to, the originals and all copies of notes...memoranda, correspondence and documents, records, notebooks...and other repositories of Confidential Information then in Employee's possession or under Employee's control, whether prepared by Employee or by others." (Id. at ¶ 6).*fn3

On October 11, 2004, Plaintiff was informed that she was being terminated and that her last day of employment would be October 31, 2004. (Id. at ¶ 13). On or around October 6, 2004, Plaintiff began to download certain documents in anticipation of her potential termination. (Docket No. 241 at ¶ 17). Between October 11 and October 31, 2004, Plaintiff downloaded a number of documents from her work computer at Allegheny to a computer disk, some of which were subject to attorney-client privilege. (Docket No. 236 at ¶ 14-15). Among the documents Plaintiff downloaded were a series of emails between Plaintiff and David Hertzog; most of these emails were also marked confidential and were subject to the attorney-client privilege. (Docket No. 241 at ¶¶ 16, 18).*fn4

Plaintiff did not have permission from anyone at Allegheny to take the documents in question. (Id. at ¶ 21). After taking the documents, she showed them to her attorneys, but did not share them with anyone else. (Id. at ¶ 22). Plaintiff claims she retained copies of the emails and other documents at issue to prove that she was competent, and that she felt she needed the documents to "protect herself" because she felt that Defendants had discriminated against her. (Docket No. 236 at ¶¶ 23-24).

Both Plaintiff and Defendants hired consultants whom they believed to be authors, scholars, and experts in the field of legal ethics. For the Defendants, Professor Steven Lubet*fn5 opined that Plaintiff's conduct had violated her professional obligations under the West Virginia Rules of Professional Conduct and Pennsylvania Rules of Professional Conduct. (Docket No. 123 at ¶ 32). For Plaintiff, Professor Thomas Ross*fn6 opined that Plaintiff did not violate any of her ethical responsibilities by either copying and retaining the documents at issue in this litigation or showing said documents to her counsel in pursuing her discrimination claims. (Docket No. 236 at ¶ 32).

III. PROCEDURAL HISTORY

Defendants filed the instant Motion for Partial Summary Judgment on After-Acquired Evidence Affirmative Defense and Liability as to Counterclaims on March 4, 2008. (Docket No. 121). Said motion was accompanied by a Brief in Support (Docket No. 122), a Concise Statement of Undisputed Material Facts (Docket No. 123), and an Appendix (Docket No. 124). The Court held the instant motion in abeyance pending the outcome of several intervening motions,*fn7 and upon their resolution, ordered Defendants to file a supplement to their Motion for Partial Summary Judgment. (Docket No. 196). Defendants filed said supplemental brief on August 29, 2008. (Docket No. 199).

Plaintiff responded to the motion by filing a Brief in Opposition on October 7, 2008. (Docket No. 206).*fn8 Plaintiff filed her Response to Defendants' Statement of Undisputed Material Facts in Support of Their Motion for Partial Summary Judgment filed her response on February 2, 2009. (Docket No. 236). Defendants filed a revised Reply Brief in support of the instant motion on February 17, 2009 (Docket No. 240), along with a reply in support of their Concise Statement of Material Facts, (Docket No. 241) and Appendix (Docket No. 242). The issues are now fully briefed and the motion is ripe for disposition.

IV. LEGAL STANDARD

Summary judgment may only be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED.R.CIV.P. 56(c). Pursuant to Rule 56, the Court must enter summary judgment against the party "who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A motion for summary judgment will not be defeated by the mere existence of some disputed facts, but will be defeated when there is a genuine issue of material fact. Anderson v. Liberty Lobby, 477 U.S. 242, 247-248 (1986).

A dispute of fact is genuine if the evidence is such that a reasonable jury could return a verdict for the non-moving party. McGreevy v. Stroup, 413 F.3d 359, 363 (3d Cir. 2005). In determining whether the dispute is genuine, the court's function is not to weigh the evidence or to determine the truth of the matter, but only to determine whether the evidence of record is such that a reasonable jury could return a verdict for the non-moving party. McGreevy, 412 F.3d at 249. As to materiality, the relevant substantive law identifies which facts are material. Anderson, 477 U.S. at 248. "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id. "Factual disputes that are irrelevant or unnecessary will not be counted." Id.

In evaluating the evidence, the Court must interpret the facts in the light most favorable to the non-moving party, and draw all reasonable inferences in their favor. Watson v. Abington Twp., 478 F.3d 144, 147 (3d Cir.2007). However, the court must not engage in credibility determinations at the summary judgment stage. Simpson v. Kay Jewelers, 142 F.3d ...


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