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Transportation Compliance Associates Inc. & Simplified Service v. Adam J.

February 24, 2012

TRANSPORTATION COMPLIANCE ASSOCIATES INC. & SIMPLIFIED SERVICE CORPORATION D/B/A LANTEK COMPUTER SERVICES, PLAINTIFFS,
v.
ADAM J. HAMMOND, DEFENDANT.



The opinion of the court was delivered by: Arthur J. Schwab United States District Judge

ELECTRONICALLY FILED

MEMORANDUM OPINION RE: DEFENDANT'S MOTION TO DISMISS ACTION FOR LACK OF SUBJECT MATTER JURISDICTION, FAILURE TO STATE A CLAIM UPON WHICH A RELIEF CAN BE GRANTED, AND FAILURE TO JOIN A "NECESSARY" AND "INDISPENSABLE" PARTY UNDER RULE 19 [FRCP 12(b)(1), 12(b)(6), 12(b)(7)] (DOC. NO. 29)

I. Introduction

Presently before the Court is Defendant Adam J. Hammond's ("Defendant's") Motion To Dismiss Action for Lack of Subject Matter Jurisdiction, Failure to State a Claim Upon Which a Relief Can Be Granted, and Failure to Join a "Necessary" and "Indispensable" Party Under Rule 19 [FRCP 12(B)(1), 12(B)(6), 12(B)(7)] (doc. no. 29) with respect to Plaintiffs Transportation Compliance Associates Inc. ("TCA") and Simplified Service Corporation's (collectively "Plaintiffs'") Amended Complaint (doc. no. 15). The parties' dispute centers around the Plaintiffs' use of Defendant's software program and Defendant's retention of confidential materials that belongs to TCA and Amazon, one of TCA's customers.

Count I of the Amended Complaint seeks a declaratory judgment that Plaintiffs are not infringing any of Defendant's copyright or other intellectual property rights, that Plaintiffs do not owe Defendant any money for software licensing, and that the data in the possession of Defendant belongs to TCA and Amazon. Doc. No. 15, ¶¶ 65-73. Count II of the Amended Complaint alleges that Defendant is depriving TCA of its property and the property of Amazon that has been entrusted to TCA. Id., ¶¶ 74-85. Count III of the Amended Complaint alleges that Defendant breached his contractual obligation to TCA by refusing to return the property that belongs to TCA and the property which has been entrusted to TCA by Amazon. Id., ¶¶ 86-92. Count IV of the Amended Complaint alleges that Defendant is interfering with TCA's current contract with Amazon and a prospective future contract between TCA and Amazon. Id., ¶¶ 93-105.

Defendant argues that the Amended Complaint should be dismissed for three reasons. First, he argues that this Court lacks subject matter jurisdiction because there are no federal questions involved and the amount in controversy does not exceed $75,000. Doc. No. 31, 2-9. Next, he argues that the Amended Complaint does not state a claim for which relief can be granted. Id., 9-11. Finally, he argues that the Amended Complaint should be dismissed because an indispensable party, Amazon, is not a party to this action. Id., 11-12. After careful consideration of the Motion to Dismiss (doc. no. 29), Brief in Support of the Motion to Dismiss (doc. no. 31), Plaintiffs' response thereto (doc. no. 39), and Defendant's Reply in Opposition (doc. no. 41-3), Defendant's Motion To Dismiss Action for Lack of Subject Matter Jurisdiction, Failure to State a Claim Upon Which a Relief Can Be Granted, and Failure to Join a "Necessary" and "Indispensable" Party Under Rule 19 [FRCP 12(B)(1), 12(B)(6), 12(B)(7)] (doc. no. 29) will be DENIED.

II. Factual Background

For the purposes of this Memorandum Opinion,*fn1 the Court assumes that the following facts are true. TCA hired Defendant to serve as an independent contractor in 2010. Doc. No. 15, ¶¶ 9, 37. As part of his work, Defendant was given confidential data belonging to TCA and Amazon, so Defendant signed a confidentiality agreement with TCA that stated that upon his termination he would return all of the property belonging to TCA and TCA's customers. Id., ¶ 28. Defendant installed his software on Plaintiffs' computer systems without Plaintiffs asking for it to be installed. Id., ¶¶ 16, 17. There was no written license agreement between Plaintiffs and Defendant. Id., ¶ 54. Defendant has claimed that Plaintiffs are infringing his copyright. Id., ¶ 59. Defendant has refused to return TCA and Amazon's data. Id., ¶ 60. The refusal to return this data has harmed TCA and could force TCA to layoff most of its workforce. Id., ¶¶ 82, 83.

III. Standard of Review

A. Rule 12(b)(1)

A Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(1) challenges this Court's "very power to hear the case." See Judkins v. HT Window Fashions Corp., 514 F. Supp. 2d 753, 759 (W.D. Pa. 2007) (quoting Mortenson v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977)). As the party asserting jurisdiction, Plaintiff "bears the burden of showing that its claims are properly before the district court." Dev. Fin. Corp. v. Alpha Housing & Health Care, 54 F.3d 156, 158 (3d Cir. 1995). In reviewing a Motion to Dismiss pursuant to Rule 12(b)(1), this Court must distinguish between facial attacks and factual attacks. See Petruska v. Gannon Univ., 462 F.3d 294, 302 (3d Cir. 2006).

A facial attack challenges the sufficiency of the pleadings, and the Court must accept the Plaintiff's allegations as true. Id. A Defendant who attacks a complaint on its face "[asserts] that considering the allegations of the complaint as true, and drawing all reasonable inferences in favor of [plaintiff], the allegations of the complaint are insufficient to establish a federal cause of action." Mullen v. Thompson, 155 F. Supp. 2d 448, 451 (W.D. Pa. 2001). Dismissal is proper under Rule 12(b)(1) only when "the claim clearly appears to be immaterial and made solely for the purpose of obtaining jurisdiction or. . . is wholly insubstantial and frivolous." Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir. 1991) (quoting Bell v. Hood, 327 U.S. 678, 682 (1946)).

When, as in this case, a Defendant launches a factual attack on subject matter jurisdiction, "no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims." Petruska, 462 F.3d at 302 (quoting Mortenson, 549 F.2d at 891). In a factual attack, this Court must weigh the evidence relating to jurisdiction, with discretion to allow affidavits, documents, and ...


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