United States District Court, E.D. Pennsylvania
E. Frank Hopkins Seafood, Co., Inc., Plaintiff
Elio Olizi; Cheryl Olizi; and Pure Fish Seafood, LLC, Defendants
MEMORANDUM AND ORDER
the court are Defendants' Motion to Dismiss (Doc. No. 6)
and Plaintiff's Response in Opposition thereto (Doc. No.
8). For the reasons set forth in this Memorandum, the Motion
is denied in its entirety.
E. Frank Hopkins Seafood, Co., Inc. (“Hopkins”)
is a wholesale seafood distributor located in Philadelphia,
Pennsylvania. (Compl. ¶ 3). To facilitate its business,
Hopkins has developed and maintains lists of customers and
suppliers, order histories for these parties, and pricing
strategies. (Compl. ¶¶ 11-13). To protect this
information, which is not available to the public, Hopkins
limits which employees may access it. (Compl. ¶¶
15-16). Hopkins' employees are aware of the
information's confidentiality. (Compl. ¶ 17).
Elio Olizi (“Mr. Olizi”), a resident of New
Jersey, was employed by Hopkins until he quit in September
2016. (Compl. ¶¶ 4, 18). Because Mr. Olizi was
responsible for negotiating prices with customers, he had
access to the aforesaid non-public information and had
contact with Hopkins' suppliers and customers, both
current and prospective. (Compl. ¶¶ 22-23).
August 2016, Mr. Olizi and his wife, Defendant Cheryl Olizi
(“Mrs. Olizi”), formed Defendant Pure Fish
Seafood, LLC (“Pure Fish”) under the laws of New
Jersey. (Compl. ¶ 30). Shortly thereafter, Mr. Olizi
terminated his employment with Hopkins without notice.
(Compl. ¶ 24). He then worked for Samuels and Son
Seafood Co., Inc. (“Samuels”), a regional
competitor of Hopkins, for three months. (Compl. ¶¶
25-26). Upon ceasing his work there, Mr. Olizi sought to
return to Hopkins but was denied. (Compl. ¶¶
alleges that Defendants used information that Mr. Olizi
obtained as an employee to entice existing and prospective
customers of Hopkins to instead contract with Pure Fish.
(Compl. ¶¶ 32-38). The Complaint also asserts that
several existing customers actually terminated their
contracts with Hopkins and became customers of Pure Fish, and
that several prospective customers instead contracted with
Pure Fish, all due to Defendants' use of Hopkins'
confidential information. (Compl. ¶ 40).
for Plaintiff corresponded with Mr. Olizi, demanding he cease
and desist the alleged unlawful use of Hopkins'
confidential information and return all such information to
Hopkins. (Compl. ¶¶ 43-44). Mr. Olizi replied
through counsel, denying possession of such information.
(Compl. 45). In response to the alleged continued possession
and use of Hopkins' information by Defendants, Hopkins
sent two more letters repeating its demands, which were met
with no reply. (Compl. ¶¶ 46-49). Hopkins filed a
complaint on April 6, 2017, alleging tortious interference
with contractual relations, tortious interference with
prospective contractual and business relationships,
misappropriation of trade secrets, unfair competition,
conversion, civil conspiracy, and accounting. Subsequently,
Defendants filed a Motion to Dismiss under Federal Rules of
Civil Procedure 12(b)(3), 12(b)(6), and 12(b)(7), and
Plaintiff filed a Response in Opposition thereto.
Standard of Review
pleading is “a short and plain statement of the claim
showing that the pleader is entitled to relief.” Fed.
R. Civ. Pro. 8(a)(2). This is “in order to ‘give
the defendant fair notice of what the . . . claim is and the
grounds upon which it rests.'” Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley
v. Gibson, 355 U.S. 41, 47 (1957)); accord Palakovic
v. Wetzel, 854 F.3d 209, 219 (3d Cir. 2017).
Furthermore, in considering dismissal under Rule 12(b)(6), we
“accept all factual allegations as true, construe the
complaint in the light most favorable to the plaintiff, and
determine whether, under any reasonable reading of the
complaint, the plaintiff may be entitled to relief.”
Phillips v. County of Allegheny, 515 F.3d 224, 233
(3d Cir. 2008) (citations omitted).
complaint “does not need detailed factual allegations,
” but it does need “more than labels and
conclusions, and a formulaic recitation of the elements of a
cause of action will not do.” Twombly, 550
U.S. at 555. While “[f]actual allegations must be
enough to raise a right to relief above the speculative
level, ” all that is required is “a reasonable
expectation that discovery will reveal evidence of [the
alleged unlawful activity].” Id. at 555-56. In
other words, the claim must be “plausible on its face,
” not merely conceivable. Id. at 570.
Ashcroft v. Iqbal, the Supreme Court clarified that
“[a] claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” 556 U.S. 662, 678 (2009);
accord Palakovic, 854 F.3d at 219. After
Twombly and Iqbal, the Third Circuit
formulated a three-step test:
First, the court must “tak[e] note of the elements a
plaintiff must plead to state a claim.” Second, the
court should identify allegations that, “because they
are no more than conclusions, are not entitled to the
assumption of truth.” Finally, “where there are
well-pleaded factual allegations, a court should assume their
veracity and then determine whether they plausibly give rise
to an entitlement for relief.”
Burtch v. Milberg Factors, Inc., 662 F.3d 212, 221
(3d Cir. 2011) (quoting Santiago v. Warminster Twp.,
629 F.3d 121, 130 (3d Cir. 2010)).
Complaint alleges seven counts arising from Defendants'
alleged taking, retention, and use of Plaintiff's
confidential information. Broadly, Defendants argue that
Plaintiff failed to sufficiently plead facts in support of
essential elements of its claims; that several of
Plaintiff's tort claims are preempted by state statute,
the elements of which are also not sufficiently pleaded; that
Plaintiff failed to join an indispensable party under Federal
Rule of Civil Procedure 19, as required by Rule 12(b)(7); and
that Plaintiff failed to establish proper venue under 28
U.S.C. § 1391, as required by Rule 12(b)(3). We first
address the 12(b)(6) motion with respect to each claim, then
we address the 12(b)(7) and 12(b)(3) motions.
Motion to Dismiss for Failure to State a Claim under Federal
Rule of Civil Procedure 12(b)(6)
Tortious Interference with Contractual Relations
Pennsylvania Supreme Court expressly adopted the following
standard for tortious interference with contractual
One who intentionally and improperly interferes with the
performance of a contract (except a contract to marry)
between another and a third person by inducing or otherwise
causing the third person not to perform the contract, is
subject to liability to the other for the pecuniary loss
resulting to the other from the third person's failure to
perform the contract.
Adler, Barish, Daniels, Levin and Creskoff v.
Epstein, 393 A.2d 1175, 1183 (Pa. 1978) (quoting
Restatement (Second) of Torts § 766 (Am. Law. Inst.,
Tentative Draft No. 23, 1977)). In their interpretation of
this section, Pennsylvania courts have delineated four
elements necessary to state such a claim:
(1) the existence of a contractual, or prospective
contractual relation between the complainant and a third
(2) purposeful action on the part of the defendant,
specifically intended to harm the existing relation, or to
prevent a prospective relation from occurring;
(3) the absence of privilege or justification on the part of
the defendant; and
(4) the occasioning of actual legal damage as a result of the
Ira G. Steffy & Son, Inc. v. Citizens Bank of
Pa., 7 A.3d 278, 288-89 (Pa. Super. 2010) (footnote
omitted) (quoting Strickland v. Univ. of
Scranton, 700 A.2d 979, 985 (Pa. Super. 1997)). In their
motion, Defendants do not contest element (2); however, they
do contend that Plaintiff's Complaint does not
demonstrate the existence of a contractual relation, address
the lack of privilege or justification on the part of the
Defendants, or identify any consequent damage. (Motion to
Dismiss, Doc. No. 6, p. 3). The sufficiency of the pleading
of those three elements is considered seriatim.
Existence of Contractual Relations
case is not even in the discovery phase, requiring a
plaintiff to list the specific contracts which it alleges
have been harmed would be an extreme and unnecessary burden.
Aetna, Inc. v. Health Diagnostic Lab. Inc., No.
15-1868, 2015 WL 9460072, at *6 (E.D. Pa. Dec. 28, 2015).
Here, Defendants argue that Plaintiff “fails to
identify a single existing contractual relationship.”
(Motion to Dismiss, Doc. No. 6, p. 3). To the contrary,
Plaintiff's Complaint alleges that: Plaintiff maintains a
list of current and prospective customers, (Compl.
¶¶ 11-12, 34); a number of Plaintiff's
customers have terminated their contracts with Plaintiff in
order to contract with Defendants instead, (Compl. ¶
39); and Defendants solicited Plaintiff's two largest
customers, (Compl. ¶ 54). These allegations are more
than mere legal conclusions and establish a reasonable
expectation that discovery will reveal evidence of this
element of the claim.
Absence of Privilege of Justification
Pennsylvania law, a plaintiff must make a prima facie showing
that the defendant's interference was unjustified (i.e.,
improper). Ira G. Steffy & Son, Inc., 7 A.3d at
288 n.13 (citing Triffin v. Janssen, 626 A.2d 571,
574 n.3 (Pa. Super. 1993)). Broadly, “[t]he general
issue is ‘whether, upon a consideration of the relative
significance of the factors involved, the conduct should be
permitted without liability, despite its effect of harm to
another.'” Crivelli v. General Motors
Corp., 215 F.3d 386, 395 (3d Cir. 2000) (quoting
Adler, 393 A.2d at 1184 n.17). To determine
impropriety, a defendant's conduct should be assessed
with regard to the “‘rules of the game' which
society has adopted.” Adler, 393 A.2d at 1184
(quoting Glenn v. Point Park Coll., 272 A.2d 895,
899 (Pa. 1971)). More specifically, courts consider:
(a) the nature of the actor's conduct,
(b) the actor's motive,
(c) the interests of the other with which the actor's
(d) the interests sought to be advanced by the actor,
(e) the social interests in protecting the freedom of action
of the actor and the contractual interests of the other,
(f) the proximity or remoteness of the actor's conduct to