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Strategic Wealth Group, LLC and Jerome v. Matthew Canno

January 31, 2011

STRATEGIC WEALTH GROUP, LLC AND JEROME BUTKUS, PLAINTIFFS,
v.
MATTHEW CANNO, BRET BINDER,PHILADELPHIA SETTLEMENT BROKERS, LLC AND BINDER & CANNO, LLC, DEFENDANTS.



The opinion of the court was delivered by: Norma L. Shapiro, J.

MEMORANDUM

Before the court are two motions: (1) to dismiss the amended complaint of Strategic Wealth Group, LLC ("SWG") and Jerome Butkus ("Butkus") under Federal Rule of Civil Procedure 12(b)(6); and (2) to strike under Rule 12(f). Plaintiffs' amended complaint alleges: violations of the Stored Communications Act, 18 U.S.C. § 2701(a); the United States Computer Fraud and Abuse Act, 18 U.S.C. § 1030; and nine state law torts. There is jurisdiction over the federal claims under 28 U.S.C. § 1331. Plaintiffs assert jurisdiction over pendent state-law claims under 28 U.S.C. § 1367. Defendants' motions to dismiss the federal claims and the Pennsylvania statutory claim will be denied. The New Jersey statutory claim will be dismissed under 28 U.S.C. § 1367(c)(1). The state common-law claims will be dismissed under 28 U.S.C. § 1367(a). Defendants' motion to strike will be denied.

I. BACKGROUND

The following factual allegations are accepted as true. See Philips v. Cnty. of Allegheny, 515 F.3d 224, 228 (3d Cir. 2008).

Plaintiff Jerome Butkus was employed by Philadelphia Settlement Brokers ("PSB"). After his voluntary departure from PSB in October 2007, Butkus formed SWG. On May 1, 2008, defendant PSB filed an action that alleged breach of contract and related tort claims in the Philadelphia County Court of Common Pleas ("Common Pleas action") against Butkus, SWG, Nicholas Sawuk, Park Venture Advisors, LLC, Phoenix Life Insurance Company and Crump Life Insurance Services, Inc. Co-defendants Binder & Canno ("B & C") represented SWG in the action.

On January 12, 2009, defendant Binder e-mailed plaintiffs and Sawuk. He threatened to send a letter to unnamed third parties about the ongoing litigation unless they settled the Common Pleas action on terms favorable to PSB. When no settlement was reached, Binder, acting as counsel to PSB, served forty-seven subpoenas duces tecum by certified mail upon parties defendants assumed were doing business with Butkus and Sawuk. A letter accompanying each subpoena accused Butkus and Sawuk of wrongdoing, and advised its recipient to cease commercial transactions with the two men to avoid exposure to potential tort liability. Though B&C designated each subpoena as a deposition subpoena duces tecum under Pennsylvania Rule of Civil Procedure 4009.21, PSB took no depositions. Under Pennsylvania Rule of Civil Procedure 4009.21, SWG, Butkus and Sawuk did not have an opportunity to object to any subpoena prior to service.

On May 4, 2009, as part of the Common Pleas action, B&C served requests for admission and interrogatories on Butkus and SWG. Attached to the requests for admission were copies of e-mails accessed and printed from personal, password-protected e-mail accounts of Sawuk and Butkus. Neither Sawuk nor Butkus had allowed SWG access to their private e-mail accounts. Neither man had provided the attached e-mails to SWG.

On May 15, 2009, B&C filed a motion for sanctions. Attached to the motion was the prior-filed request for admissions, including e-mails from the accounts of Sawuk and Butkus. The motion was not redacted, and included social security numbers, private passwords, confidential business communications and the licensure information of Sawuk and Butkus. B&C withdrew the motion on May 22, 2009.

On June 15, 2009, Sawuk, Butkus and SWG filed a motion for protective order to seal the May 15 motion for sanctions and to bar the use of any e-mails obtained from the personal e-mail accounts of Sawuk or Butkus. The Court of Common Pleas scheduled an August 10, 2009 hearing on the motion, but PSB voluntarily dismissed the action on August 7, 2009. At the time of the voluntary dismissal, motions for judgment on the pleadings were pending against PSB. All but one of the tort claims asserted in the Common Pleas action are now time-barred.*fn1

In addition to unauthorized access to his e-mails, Butkus claims emotional distress as a result of the Common Pleas action. Plaintiffs Butkus and SWG aver the action interfered with existing agency relationships with Crump Life Insurance Services, Inc and ING, and potential business relationships with Park Venture Associates, LLC.

II. MOTIONS TO DISMISS

Butkus and SWG's joint amended complaint alleges violations of the Stored Communications Act, the United States Computer Fraud and Abuse Act and nine state-law torts.*fn2 All defendants move, in separately-filed motions, to dismiss Counts Four, Five, Six and Ten. Defendants Binder, Canno and B&C move to dismiss Counts Seven and Eight. Also, Binder and B&C move to dismiss Counts Nine and Eleven, and Canno and PSB move to dismiss Counts One and Three.

Federal Rule of Civil Procedure 12(b)(6) provides that a court may dismiss all or part of an action for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is "plausible on its face." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is plausible on its face when the plaintiff pleads sufficient factual content to allow the court to draw a reasonable inference that the defendant is liable for the misconduct alleged. Iqbal, 129 S. Ct. at 1949. The plausibility standard is not a "probability requirement," but it does demand more than a possibility that a defendant has acted unlawfully. Id. Defendants bear the burden of demonstrating the plaintiffs have not stated a claim upon which relief can be granted. Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005).

In deciding a motion to dismiss, the court may consider the allegations in the complaint, exhibits attached to the complaint and matters of public ...


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