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Linda Eagle v. Sandi Morgan

December 22, 2011

LINDA EAGLE, PLAINTIFF,
v.
SANDI MORGAN, HAITHAM SAEAD, JOSEPH MELLACI, ELIZABETH SWEENEY, LISA ARNSPERGER, QAMAR ZAMAN, AND EDCOMM, INC., DEFENDANTS.



The opinion of the court was delivered by: Buckwalter, S. J.

MEMORANDUM

Currently pending before the Court is Motion by Plaintiff Linda Eagle ("Plaintiff" or "Dr. Eagle") to Dismiss the Counterclaims of Defendant Edcomm, Inc. ("Edcomm"). For the following reasons, the Motion is granted in part without prejudice and denied in part.

I. FACTUAL AND PROCEDURAL BACKGROUND

According to the Complaint, Plaintiff Linda Eagle holds a Ph.D. in communication and psychology and has extensive experience in the fields of financial services and training. (Compl. ¶ 11.) In 1987, Dr. Eagle and a man named Clifford Brody founded Edcomm, Inc. ("Edcomm") to provide such services, and were later joined as co-owners by David Shapp. (Id. ¶ 12.) Dr. Eagle maintains a prominent reputation in the field of banking training and has cultivated relationships with thousands of individuals and organizations. (Id. ¶ 13.) She has invested time, effort, and money in developing her reputation in the financial education industry by speaking at conferences, publishing in journals, magazines and newspapers, and traveling around the world to meet banking leaders. (Id. ¶ 14.)

In 2008, Dr. Eagle established an account on LinkedIn, which is a professional network on the Internet. (Id. ¶¶ 15-16.) Other LinkedIn users with whom a particular user has connected are referred to as that user's "connections" and users can "recommend" their connections to others. (Id. ¶ 23.) A user's profile also contains sections for associations, honors, and awards. (Id. ¶ 24.) When an individual creates a LinkedIn account, he or she must agree to the user agreement, which constitutes "a legally binding agreement with LinkedIn Corporation." (Id. ¶ 20.) Thus, information provided to LinkedIn is owned by the LinkedIn user, subject to the other terms of the User Agreement. (Id. ¶ 25.) Users can maintain only one LinkedIn account at a time. (Id. ¶ 26.) Dr. Eagle used her account to promote Edcomm's banking education services; foster her reputation as a businesswoman; reconnect with family, friends, and colleagues; and build social and professional relationships. (Id. ¶ 17.) Defendant Elizabeth Sweeney assisted Dr. Eagle in maintaining her LinkedIn account and had access to Dr. Eagle's password. (Id. ¶ 17.)

On October 7, 2010, a company named Sawabeh Information Services Company ("SISCOM") entered into a term sheet with Edcomm, Dr. Eagle, Mr. Brody, and Mr. Shapp, wherein SISCOM purchased all of the outstanding common shares of Edcomm. (Id. ¶ 27.) Dr. Eagle, Mr. Brody, and Mr. Shapp originally remained employed as Edcomm executives, but, on June 20, 2011, they were involuntarily terminated by Defendant Mr. Haitham Saead. (Id. ¶ 28.) Just before the termination meeting, Mr. Brody changed his LinkedIn password. (Id. ¶ 29.) After the meeting, he changed his employment status to show he was no longer employed by Edcomm. (Id.) Dr. Eagle, on the other hand, did not make any changes to her LinkedIn account prior to her termination, but when she tried to access it later in the day on June 20, 2011, she could not. (Id. ¶¶ 30-31.) The following day, Edcomm publicly announced that Defendant Sandi Morgan had been appointed Interim Chief Executive Officer of Edcomm, Defendant Joseph Mellaci had been named Vice President of Global Markets, and Qamar Zaman had been named Financial Controller. (Id. ¶¶ 32-34.)

On June 20 or 21, 2011, at the Edcomm offices in Fort Washington, Pennsylvania, Defendants Morgan, Saead, Sweeney, Lisa Arnsperger, Joseph Mellaci, and Qamar Zaman allegedly attempted to access and hijack Dr. Eagle's and Mr. Brody's LinkedIn accounts. (Id. ¶ 35.) As noted above, Ms. Sweeney knew Dr. Eagle's password due to her assistance in maintaining Dr. Eagle's account. (Id. ¶ 36.) Ms. Sweeney purportedly provided the password to Mr. Saead and/or Ms. Arnsperger, then used the password to gain unauthorized access to Dr. Eagle's account. (Id. ¶¶ 37-38.) One of the foregoing individuals then changed the password so that Dr. Eagle could no longer access the account, and then changed Dr. Eagle's account profile to display Ms. Morgan's name and photograph. (Id. ¶¶ 39-40.) On the same date, Defendants also tried to hijack Mr. Brody's LinkedIn account. (Id. ¶ 42.) Ms. Sweeney, Mr. Mellaci, and Ms. Arnsperger allegedly contacted LinkedIn in an unsuccessful attempt to obtain Mr. Brody's new LinkedIn password. (Id.)

As a result of the unauthorized access of Dr. Eagle's LinkedIn account, individuals searching for Dr. Eagle were routed to a LinkedIn page featuring Ms. Morgan's name and photograph, but Dr. Eagle's honors and awards, recommendations, and connections. (Id. ¶¶ 47-53.) Plaintiff believes that Defendants used Dr. Eagle's account both to prevent her connections from reaching her, and to acquire business connections for the benefit of Ms. Morgan and Edcomm. (Id. ¶ 54.) In addition, they falsely represented that Dr. Eagle voluntarily resigned from Edcomm. (Id. ¶ 55.) The alleged misappropriation of the account has cost Plaintiff time, money, loss of good will, damage to reputation, and diminution of the fair market value of her name. (Id. ¶ 57.) As of the date of the Complaint, Defendants had refused to return Dr. Eagle's LinkedIn account to her. (Id. ¶ 59.)

On June 17, 2011, Defendant Edcomm and SISCOM brought suit against Dr. Eagle in the United States District Court for the Southern District of New York. (Compl., Sawabeh Info. Servs. Co. & Edcomm, Inc. v. Clifford Brody, Linda Eagle, and David Shapp, No. Civ.A.11-4164 (S.D.N.Y. June 17, 2011).) This action alleged claims of securities fraud, fraudulent inducement, common law fraud, breach of contract, breach of the covenant of good faith and fair dealing, and other common law claims and demands for injunctions, declaratory relief, and indemnification. (Id.)

On July 1, 2011, Plaintiff initiated the present litigation in this Court setting forth eleven causes of action, as follows: (1) violation of the Computer Fraud and Abuse Act ("CFAA"), 18 U.S.C. § 1030(a)(2)(C); (2) violation of the CFAA, 18 U.S.C. § 1030(a)(5)(C); (3) violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(A); (4) unauthorized use of name in violation of 42 Pa.C.S. § 8316; (5) invasion of privacy by misappropriation of identity; (6) misappropriation of publicity; (7) identity theft under 42 Pa.C.S. § 8315; (8) conversion; (9) tortious interference with contract; (10) civil conspiracy; and (11) civil aiding and abetting. (Id. ¶ 61-141.)

Thereafter, on August 1, 2011, Defendants filed their Answer and Defendant Edcomm filed a Counterclaim Complaint. The Counterclaim Complaint alleged that Edcomm, while under Dr. Eagle's management, implemented a policy requiring Edcomm's employees to create and maintain LinkedIn accounts. (Countercl. ¶ 1.) These employees were required to: (a) utilize their Edcomm email address for LinkedIn accounts; (b) utilize a specific form template, created and approved by Edcomm, for their description of Edcomm, work history, and professional activities, as well as photographs taken by a professional photographer hired by Edcomm; (c) contain links to Edcomm's website on LinkedIn accounts and the Banker's Academy webpage, as well as Edcomm's telephone number; and (d) utilize Edcomm's template for replying to individuals through LinkedIn. (Id. ¶ 2.) Certain Edcomm employees monitored these LinkedIn accounts, corrected any violations of Edcomm policy, and maintained accounts for several employees for the benefit of Edcomm. (Id. ¶ 3.) In fact, all discussions, connections, and content were added by Ms. Arnsperger or Ms. Sweeney at the direction of, or on behalf of Edcomm. (Id. ¶ 10.) According to the Counterclaim, for all departing employees, Edcomm, at the direction of management, requested and retrieved Edcomm-related LinkedIn connections and content from the departing employees' accounts. (Id. ¶ 4.)

Dr. Eagle's LinkedIn account was used for Edcomm business and Edcomm personnel developed and maintained all connections and much of the content on her account. (Id. ¶¶ 5-6.) Defendants now contend that Plaintiff has wrongfully misappropriated both Edcomm's connections on the LinkedIn account and Edcomm's telephone number. (Id. ¶ 7.) Indeed, approximately three weeks after initiating the present action, Plaintiff regained control of the LinkedIn account, but has refused to return to Edcomm its proprietary information on the account (Id. ¶¶ 8-9.)

In addition, during the times relevant to this case, Edcomm held an account with AT&T through which it purchased cellular telephones, maintained accounts, and paid usage bills for those employees who had sales responsibilities. (Id. ¶ 11.) The cellular telephone numbers were on Edcomm's account and were Edcomm's property. (Id. ¶ 12.) When any employee who had such a phone left Edcomm, the company either disabled the related number or transferred it to another employee. (Id. ¶ 13.) Upon Dr. Eagle's termination, Edcomm followed the same protocol and disabled her number. (Id. ¶¶ 14, 16.) Because Dr. Eagle made plain her intent to compete with Edcomm and because her cellular number appeared on numerous Edcomm materials, it was particularly important for her number to be disabled. (Id. ¶ 17.) Defendants allege, however, that Dr. Eagle misrepresented her affiliation with Edcomm and misused Edcomm's EIN number to transfer the number to another cellular phone with an account at AT&T. (Id. ¶ 20.)

Finally, the Counterclaim asserts that during her tenure at Edcomm, Dr. Eagle had a laptop personal computer issued by Edcomm. (Id. ¶ 23.) At the time of her termination, Dr. Eagle refused to return the Edcomm-issued laptop. (Id. ¶ 24.) Just prior to her departure, Dr. Eagle took the laptop from the premises and, despite repeated requests from Edcomm, she has failed to return it. (Id. ¶¶ 25-26.)

In connection with these additional allegations, Defendant Edcomm raised the following counterclaims: (1) violation of the CFAA, 18 U.S.C. § 1030(a)(2)(C); (2) violation of the CFAA, 18 U.S.C. § 1030(a)(5)(C); (3) misappropriation; (4) unfair competition; (5) conversion; (6) tortious interference with contract; (7) violation of the Pennsylvania Uniform Trade Secrets Act, 12 Pa.C.S. § 5301, et seq., and (8) tortious interference with prospective relations. (Id. ¶¶ 27-71.) On September 21, 2011, Plaintiff filed a Motion for Judgment on the Pleadings as to Defendant Edcomm's Counterclaims, and Defendant responded on October 19, 2011. Plaintiff then filed a Reply Brief on October 28, 2011, making this Motion ripe for judicial review.

II. STANDARD OF REVIEW

Under Rule 12(c) of the Federal Rules of Civil Procedure, "[a]fter the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings." FED. R. CIV. P. 12(c). While motions to dismiss for failure to state a claim pursuant to Rule 12(b)(6) must be brought before, and in lieu of, filing answers, a Rule 12(c) motion is appropriate after the defendants have answered the complaint. Id. The difference between Rules 12(b)(6) and 12(c), however, is purely procedural and there is "no material difference in the applicable legal standards." Spruill v. Gillis, 372 F.3d 218, 223 n.2 (3d Cir. 2004). Accordingly, the Court turns to Rule 12(b)(6) jurisprudence for further guidance on the appropriate standard of review.

Under Rule 12(b)(6), a defendant bears the burden of demonstrating that the plaintiff has not stated a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6); see also Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). In Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), the United States Supreme Court recognized that "a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555. Following these basic dictates, the Supreme Court, in Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937 (2009), subsequently defined a two-pronged approach to a court's review of a motion to dismiss. "First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id., 129 S. Ct. at 1949. Thus, although "Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era . . . it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Id. at 1950. Second, the Supreme Court emphasized that "only a complaint that states a plausible claim for relief survives a motion to dismiss." Id. "Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. A complaint alleges, but does not show, an entitlement to relief when the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct. Id.; see also Phillips v. Cnty. of Allegheny, 515 F.3d 224, 232-34 (3d Cir. 2008) (holding that: (1) factual allegations of complaint must provide notice to defendant; (2) complaint must allege facts suggestive of the proscribed conduct; and (3) the complaint's "'factual allegations must be enough to raise a right to relief above the speculative level.'" (quoting Twombly, 550 U.S. at 555)).

Notwithstanding these new dictates, the basic tenets of the Rule 12(b)(6) standard of review have remained static. Spence v. Brownsville Area Sch. Dist., No. Civ.A.08-626, 2008 WL 2779079, at *2 (W.D. Pa. July 15, 2008). The general rules of pleading still require only a short and plain statement of the claim showing that the pleader is entitled to relief and need not contain detailed factual allegations. Phillips, 515 F.3d at 233. Further, the court must "accept all factual allegations in the complaint as true and view them in the light most favorable to the plaintiff." Buck v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260 (3d Cir. 2006). Finally, the court must "determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Pinkerton v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002).

III. DISCUSSION

The present motion seeks dismissal of the entirety of Defendant Edcomm's Counterclaim Complaint. The Court addresses each cause of action individually.

A. Computer Fraud and Abuse Act Claims (Counts I and II)

Counts I and II of the Counterclaim Complaint allege that Plaintiff violated the CFAA by accessing, without authorization, Edcomm's AT&T account, which is a "data storage facility" under the Act and which is hosted on AT&T's computer. Plaintiff argues that this claim is simply not viable.

The CFAA, although initially a criminal statute that penalized computer hacking activities, presently authorizes private civil actions in certain situations. P.C. Yonkers, Inc. v. Celebrations the Party & Seasonal Superstore, LLC, 428 F.3d 504, 510 (3d Cir. 2005) (citing 18 U.S.C. § 1030(g)). The CFAA proscribes seven actions that will result in civil and criminal liability. 18 U.S.C. § 1030(a)(1)-(7); Fontana v. Corry, No. Civ.A.10-1685, 2011 WL 4473285, at *4 (W.D. Pa. Aug. 30, 2011). Defendant Edcomm premises its allegations on sections 1030(a)(2)(C) and 1030(a)(5)(C) of the CFAA, which state:

(a) Whoever-- . . .

(2) intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains-- . . .

(C) information from any protected computer; . . . [or] . ..

(5)(C) intentionally accesses a protected computer without authorization, and as a result of such ...


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