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Filing # 132885316 E-Filed 08/17/2021 10:53:45 PM
IN THE CIRCUIT COURT OF THE
FIFTEENTH JUDICIAL CIRCUIT IN AND
FOR PALM BEACH COUNTY, FLORIDA
CASE NO.: 50-2021-CA-6978-XXXX-MB
CHAITHANYA SAMA, derivatively
on behalf of BPMLINKS LLC,
Plaintiff,
Vs.
ZAKI AHMED SIDDIQUI KHAZI,
SATHIANARAYANAN
AVANASHILINGAM, and
aannrarrr
UUrLNAL
NARAYANASAMYRAJAGOPAL,
individually,
Defendants,
and
BPMLINKS LLC, a Florida limited
liability company,
Nominal Defendant.
/
DEFENDANTS’ MOTION TO DISMISS FIRST
AMENDED DERIVATIVE COMPLAINT.
Defendants, ZAKI AHMED SIDDIQUI KHAZI, SATHIANARAYANAN
AVANASHILINGAM and GOPINATH NARAYANASAMYRAJAGOPAL, by and through
their undersigned counsel, file this their Motion to Dismiss First Amended Derivative Complaint,
and in support thereof states as follows:
INTRODUCTION
This case involves the typical scenario of business partners in a dispute over operation of
a hnecinacc Dlaintiff wha ic fifty (SNA) nercant mamher af RPMI INK
facies, W. ainy \ousoy perccue Denies aon wyatt
TIC (RPM
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LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021
CHEN. DAIAARCACUAAIINTY Cl INCEDU ARDIIV7ZN FLED NaN7nnns 4n-62-45 DNA
HILLY. PAL DLA VUUINE TT, PL, VUOL IE mDNUeey, ULUIAN, Yorieue! bu.u.ty civ(Defendants collectively are the other fifty (50%) percent members), ran to the company’s
attorneys (as often happens in such disputes) and had this “member derivative lawsuit” prepared
alleging a “parade of horribles” committed by Defendants with respect to BPM’s business and
customers.
To avoid compliance with the requirement of pre-suit demand, Plaintiff alleges demand
would be futile because Defendants cannot independently determine if this lawsuit should proceed
since they are the target of the claims. Plaintiff has used this bare-bones futility claim to shut
Defendants out of BPM, effectively crowning himself “king”, and now holds the company hostage.
Defendants have been denied access to the company’s bank accounts and their e-mail access has
been cut off which is causing difficulty with their continuing to service BPM’s clients. Yet,
Plaintiff seems content to have Defendants continue to do work for BPM bringing revenue into
the company, including Defendants recently renewing a significant contract with one of BPM’s
clients.
Since Defendants have quite a bit of evidence of Plaintiff’s wrongdoing which has caused
harm to BPM, including his diverting business opportunities to other companies in which he is an
owner and his starting competing companies which he did not disclose to Detendants, Plaintiff's
own improper conduct perhaps explains his failure to make demand as the results of an
independent investigation may not prove favorable for him. And that is the reason demand is
necessary in this case — to obtain a full picture of what is being done by all members of BPM.
Thus, the empty shell of this futility claim does not cut it to satisfy the pre-suit demand
requirement.
I. Derivative Demand Futility Not Met
Gantinn LAE NONI Dlasida Gtaty
SUCUCH UUS.voUZ, F10TiGa Satu
2
LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021A member may maintain a derivative action to enforce a right of a limited
liability company if
(1) The member first makes a demand on the other members in a
member-managed limited liability company or the managers of a manager-
managed limited liability company requesting that the managers or other
members cause the company to take suitable action to enforce the right, and
the managers or other members do not take the action within a reasonable
time, not to exceed 90 days; or
(2) A demand under subsection (1) would be futile, or irreparable
injury would result to the company by waiting for the other members or the
managers to take action to enforce the right in accordance with subsection
(1).
See Section 605.0802 (emphasis added).
Plaintiff did not make a demand upon Defendants before filing this lawsuit, instead alleging
that demand would be futile because “Defendants lack the sufficient independence with which to
render a disinterested decision on whether to pursue the derivative claims” because Defendants are
alleged to be engaging in misconduct. See §{] 55-56 of Amended Complaint. If that were the
standard to be applied — a Plaintiff simply alleges other members or shareholders are engaged in
wrongdoing so no demand needs to be made as it would be futile — the demand requirement would
be rendered meaningless. See Guttman v. Huang, 823 A.2d 492, 500 (Del. Ch. 2003)(“If the legal
rule was that demand was excused whenever, by mere notice pleading, the plaintifts couid state a
breach of fiduciary duty claim against a majority of the board, the demand requirement of the law
would be weakened and the settlement value of so-called ‘strike suits’ would greatly increase.”).
Florida appellate courts do not appear to have addressed the standard for claiming futility
of demand under Section 605.0802 of the Revised LLC Act, and the language of the statute offers
no insight. However, demand requirements in the corporate context are instructive. See Firehouse
Gallery, LLC v. Phillips, 2009 WL 4015575, at *5 (M.D. Fla. Nov. 19, 2009)(dismissing derivative
3
LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021claim of Complaint where futility was not properly pled and noting that “[w]hile this case involves
an LLC, such a business organization is analogous to a corporation.”)
Section 607.0742, Florida Statutes sets forth the requirements for demand on a corporation
which includes a) the complaint must allege “with particularity” the demand made upon the board
or [‘t]he reason or reasons the shareholder did not make the effort to obtain the desired action from
the board of directors or comparable authority”. See Section 607.0742(2)(c).
The fault with Plaintiffs contrived notion of futility is that it falsely presumes demand
upon Defendants to decide whether to investigate Plaintiffs claims is the only path. Nothing
precluded Plaintiff from requesting an independent investigation be conducted so that Defendants
would have some semblance of corporate due process, as opposed to the “lock the door and kick
them out” approach Plaintiff took in usurping control of BPM in the name of “futility” of demand.
Section 607.0744 provides for such an independent process:
(1) A derivative proceeding may be dismissed, in whole or in part, by the
court on motion by the corporation if a group specified in subsection (2) or
subsection (3) has determined in good faith, after conducting a reasonable
inquiry upon which its conclusions are based, that the maintenance of the
derivative proceeding is not in the best interests of the corporation. In all
such cases, the corporation has the burden of proof regarding the
qualifications, good faith, and reasonable inquiry of the group making the
determination...
(3) Upon motion by the corporation, the court may appoint a panel
consisting of one or more disinterested and independent individuals to
make a determination required in subsection (1).
Ta. can anaa sc.
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jaded).
Florida courts often look to Delaware case law for guidance on matters of corporate law.
See Williams v. Stanford, 977 So. 2d 722, 727-28 (Fla. 1st DCA 2008)(noting that “Florida courts
routinely consult Delaware case law when construing Florida statutory law governing
corporations”)(citing Boettcher v. IMC Mortgage Co., 871 So. 2d 1047, 1052 (Fla. 2d DCA
4
LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 330212004)). According to the Delaware Chancery Court, the demand futility requirement “serves an
important policy function of promoting internal resolution, as opposed to litigation, of corporate
disputes and grants the corporation a degree of control over any litigation brought for its benefit”.
See Rattner v. Bidzos, 2003 WL 22284323, at *7 (Del. Ch. Sept. 30, 2003). See also Grimes v.
Donald, 673 A.2d 1207, 1216 (Del. 1996) (“By requiring exhaustion of intracorporate remedies,
the demand requirement invokes a species of alternative dispute resolution procedure which might
avoid litigation altogether.”), overruled on other grounds by Brehm y. Eisner, 746 A.2d 244 (Del.
2000).
In Silver Crown Investments, LLC v. Team Real Estate Mgt., LLC, 349 F. Supp. 3d 1316
(S.D. Fla. Sept. 29 2018), the district court addressed whether futility of demand as to a claim for
breach of fiduciary duty under the Revised LLC Act was properly pled. The district court initially
pointed out that the purpose of the pre-suit demand is “‘to give corporate directors an opportunity
to correct any internal abuses without lawsuit’ thereby conserving company and judicial
resources.” Id. at 1327 (quoting McCabe v. Foley, 424 F. Supp. 2d 1315, 1319 (M.D. Fla. 2006)).
In dismissing the claim, the district court concluded that:
Here, Piaintiffs simply aliege that a § 605.0802 pre-suit demand to
Defendants would have been futile because Defendants had a guilty
participation in the wrongs complained of. (ECF. No. 40, § 68). Plaintiffs
however, do not allege what specific acts each Defendant committed which
contributed to Plaintiff's injury. This is analogous to stating that
Defendants ‘faced a substantial likelihood of liability’ which, by itself, is
insufficient to establish that a pre-suit demand would be futile.
Id. at 1328.
In Long v. Odland, 2012 WL 13019034 (S.D. Fla. Aug. 15, 2012), the district court
dismissed a derivative lawsuit for failure to properly plead futility. Jd. at *8. The Complaint
allanad that: “tha antiva Affine Dannt Raard and canine manacamant nartisinated in tha weanac
@ucgeG ula ue Cure Uaice Vepor wOarG ana Senior managenieme paruciparca ia ule Wrongs
5
LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021complained of,’ and the directors are ‘not disinterested or independent,’ as they are ‘interested in
maintaining their positions on the Board so as to safeguard their substantial compensation and
stock options’ and also ‘their actions have subjected Office Depot to...potential liability for
violations of applicable securities laws.”” Jd. at *3. Rejecting that such allegations were sufficient
to demonstrate futility, the district court stressed that: “Plaintiff cannot ‘bootstrap allegations
of futility’ by merely pleading that directors on the Board ‘participated in the challenged
transaction or that they would be reluctant to sue themselves’...’Nor can mere allegations that the
directors would act to preserve their positions satisfy the requirements of
demand futility pleading.’” Jd. at *8 (quoting Story v. Kang, 2006 WL 163078, at *2 (M.D. Fla.
Jan. 20, 2006)).
Here, Plaintiff's allegations in support of futility of demand are insufficient, conclusory
and fail to show that demand would have been futile. The allegations fail to identify what each
individual Defendant did or why each is incapable of independent evaluation of a demand. Instead,
Plaintiff lumps Defendants together for the alleged acts of wrongdoing offered for the purported
futility of pre-suit demand. Accordingly, as futility has not been properly alleged for the pre-suit
demand requirement, thts lawsuit should be dismissed.
Il. Counts II-TV Fraudulent Concealment
In Counts II, III and IV, Plaintiff alleges Fraudulent Concealment against each individual
Defendant premised upon Defendants misrepresenting that certain employees were terminated or
resigned due to poor job performance or cost cutting measures, when the true reason was a plan to
divert those employees to Clarium Tech and Clarium Managed Services — two companies with
which Plaintiff alleges Defendants are involved as owners and employees. See {| 73-74, 80-81
and 00_ON Af Amandad Cam
ana o7-7u G1 ninenaca Corn
6
LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021For the Fraudulent Concealment claims Plaintiff must allege that: 1) Defendants
“concealed or failed to disclose a material fact”, 2) “knew or should have known the material fact
should be disclosed”, 3) “concealment of or failure to disclose the material fact would induce the
plaintiffs to act”, and 4) detrimental reliance on the misinformation. See RJ Reynolds Tobacco v.
Martin, 53 So. 3d 1060, 1068 (Fla. Ist DCA 2010)(citations omitted). Plaintiff fails to allege any
facts to support how he relied upon the representation of employees being terminated or resigning
to his detriment. Thus, essential elements of the claim, but for alleging the appropriate buzz words,
have not been sufficiently alleged.
Tl. | Count V—Computer Fraud Abuse Act
In Count V, Plaintiff alleges that Defendants violated the Computer Fraud and Abuse Act
because they “knowingly, intentionally, and with the intent to defraud BPM directly and/or
indirectly accessed BPM’s computers, data, architectural documents and design, frameworks,
Azure cloud, AWS cloud, source codes and trade secrets.” See 96 of Amended Complaint. The
alleged “intend to defraud” is based on 18 U.S.C. § 1030 which makes it a violation of the CFAA
for anyone who:
knowingiy and with intent to defraud, accesses a protected computer
without authorization, or exceeds authorized access, and by means of
such conduct furthers the intended fraud and obtains anything of value,
unless the object of the fraud and the thing obtained consists only of the use
of the computer and the value of such use is not more than $5,000 in any 1-
year period.
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added).
As alleged in the Amended Complaint, Defendants are members, officers and employees
of BPM:
12. Sathia...is a member and Chief Technology Officer of BPM.
13. Zaki...is a member and Chief Information Officer of BPM.
1
LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 3302114. Gopi is...a member and the Chief Operating Officer and Chief
Digital Officer of BPM.
37. Defendants Sathia and Gopi were not only receiving from BPM
approximately double the salaries they received from their previous
employers, but each also became a 16.67% owner in BPM without
contributing any capital to the company.
See J{ 12, 13, 14 and 37 of Amended Complaint. As members and officers of BPM, Defendants
who collectively have the same membership percentage as Plaintiff, are authorized to access
BPM’s computers and any information contained within the company’s computers. Therefore, the
legal basis of this claim conflicts with the facts alleged and necessarily fails.
The key terms for this claim from the portion of the CFAA cited above are “without
authorization” and “exceeds authorized access”. In June of this year, the Supreme Court in Van
Buren v. U.S., 141 S.Ct. 1648 (2021) addressed the scope of conduct which constitutes a violation
of the CFAA as to those very terms. Van Buren, a former police officer, conducted a license plate
search in a law enforcement computer database in exchange for money. /d. at 1652. Van Buren
was convicted of violating the CFAA and appealed to the Eleventh Circuit arguing that the term
“exceeds authorized access” only applies to persons who obtain information from a computer
beyond their permitted access, not to someone who misuses authorized access. Jd. at 1653. Noting
that several Circuit Courts of Appeal agree with Van Buren’s narrow view of the CFAA, and the
Eleventh Circuit and other Circuits having taken a broader view, the Supreme Court granted
Certiorari to Fesoive ine coniict among ine Circuits. a. at 1053- 1054.
Finding Van Buren’s narrow approach to access to be more sensible, the Supreme Court
concluded that:
In sum, an individual ‘exceeds authorized access’ when he accesses a
pawnuton with nuthavication hat than nhtiaing jnfaumation Ineatad in
Compuier Wik Guinicrilaucn Cue mien Ceidins yormaicon waa in
particular areas of the computer—such as files, folders, or databases—that
8
LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021are off limits to him. The parties agree that Van Buren accessed the law
enforcement database system with authorization. The only question is
whether Van Buren could use the system to retrieve license-plate
information. Both sides agree that he could. Van Buren accordingly did
not ‘excee[d] authorized access’ to the database, as the CFAA defines that
Phrase, even though he obtained information from the database for an
improper purpose. We therefore reverse the contrary judgment of the
Eleventh Circuit and remand the case for further proceedings consistent
with this opinion.
Id. at 1662 (emphasis added).
In Royal Truck & Trailer Sales and Service, Inc. v. Kraft, 974 F.3d 756 (6th Cir. 2020), a
case cited by the Van Buren Court as being from one of the Circuits taking a narrow view of
application of the CFAA, the definition of “exceeds authorized access” was discussed:
The Act defines ‘exceeds authorized access’ as ‘to access a computer with
authorization and to use such access to obtain or alter information in the
computer that the accesser is not entitled so to obtain or alter.’ 18 U.S.C. §
1030(e)(6). Critical to that formulation are the terms ‘access,’
‘authorization, ’ and ‘obtain or alter.’ We have previously defined the term
‘authorization,’ at least in the inverse: ‘[A/ defendant who accesses a
computer ‘without authorization,’’ we have said, ‘does so without sanction
or permission.’ Pulte Homes, 648 F.3d at 304 (citing LVRC Holdings, LLC
v. Brekka, 581 F.3d 1127, 1132-33 (9th Cir. 2009)). ‘Authorization’ thus
means to have sanction or permission.
Id. at 759 (emphasis added). In affirming dismissal of the CFAA claim, the Sixth Circuit reasoned
that:
The CFAA prohibits accessing data one is not authorized to access. United
States v. Nosal, 676 F.3d 854, 858 (9th Cir. 2012). And Royal has not
contested either Kraft’s or Matthews’s authorization to access the company
files in question. Because Defendants had authorization to access that
injormation, ineiF conauci aid noi ‘exceed’ ineiF ‘auinorizea access,’ as
those terms are used in § 1030(a)(2). To be sure, Royal does allege that
Kraft and Matthews later misused the information they accessed. But the
CFAA does not reach that conduct.
Id. at 760 (emphasis added). See also LVRC Holdings LCC v. Brekka, 581 F.3d 1127, 1133 (9th
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LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021computer ceases when an employee resolves to use the computer contrary to the employer’s
interest. Rather, the definition of ‘exceeds authorized access’ in § 1030(e)(6) indicates that
Congress did not intend to include such an implicit limitation in the word "authorization.”).
One purpose of the narrow interpretation of the CFAA was explained by the Fourth District
in WEC Carolina Energy Solutions LLC v. Miller, 687 F.3d 199 (4th Cir. 2012) — another case
cited by the Van Buren Court:
Where, as here, our analysis involves a statute whose provisions have both
civil and criminal application, our task merits special attention because our
interpretation applies uniformly in both contexts. See Leocal v.
Ashcroft, 543 U.S. 1, 11 n. 8, 125 S.Ct. 377, 160 L.Ed.2d 271 (2004). Thus,
we follow ‘the canon of strict construction of criminal statutes, or rule of
lenity.’ United States v. Lanier, 520 U.S. 259, 266, 117 S.Ct. 1219, 137
L.Ed.2d 432 (1997). In other words, in the interest of providing fair warning
‘of what the law intends to do if a certain line is passed,’ Babbitt v. Sweet
Home Chapter of Communities for a Great Or., 515 U.S. 687, 704 n. 18,
115 S.Ct. 2407, 132 L.Ed.2d 597 (1995) (quoting United States v. Bass, 404
U.S. 336, 348, 92 S.Ct. 515, 30 L.Ed.2d 488 (1971)) (internal quotation
marks omitted), we will construe this criminal statute strictly and avoid
interpretations not ‘clearly warranted by the text,’ Crandon vy. United
States, 494 U.S. 152, 160, 110 S.Ct. 997, 108 L.Ed.2d 132 (1990).
Td. at 204.
A few months prior to the Supreme Court issuing its opinion in Van Buren, the district
court in United Federation of Churches, LLC v. Johnson, 2021 WL 764670 (W.D. Wash. Feb. 26,
2021) aptly described the interplay between the terms “without authorization” and “exceeds
authorized access” under the CFAA which underscores the reason that Plaintiff's claim here must
be disiissed:
Violating a company’s terms of use (here, the Code of Conduct) is
insufficient to state a CFAA claim. The Ninth Circuit made that clear
in United States v. Nosal, 676 F.3d 854, 857, 863 (9th Cir. 2012) (en banc).
There, the court held that, under the CFAA, the phrase ‘exceeds authorized
access “applies only to ‘violations of restrictions on access to information,
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10
LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021it held that the CFAA ‘does not extend to violations of [a company's
computer] use restrictions.’ Id.
At most, The Satanic Temple alleges that Defendants have misappropriated
the authority granted to them... But the CFAA is an ‘anti-hacking statute,’
not a ‘misappropriation statute.’ Nosal, 676 F.3d at 857. Defendants may
have very well abused their authority, but The Satanic Temple has not
alleged that they exceeded it... United States v. Nosal, 844 F.3d 1024, 1029
(9th Cir. 2016) (“Nosal IT”) (‘[A] person uses a computer ‘without
authorization’ under [the CFAA] ... when the employer has rescinded
permission to access the computer and the defendant uses the computer
anyway.’) (internal quotation marks omitted) (quoting LVRC Holdings LLC
v. Brekka, 581 F.3d 1127 (9th Cir. 2009)).
Id. at *3-4. See also U.S. v. Nosal, 676 F.3d 854, 863-64 (9th Cir. 2012)(“This narrower
interpretation is also a more sensible reading of the text and legislative history of a statute whose
general purpose is to punish hacking—the circumvention of technological access barriers—not
misappropriation of trade secrets—a subject Congress has dealt with elsewhere... Therefore, we
hold that ‘exceeds authorized access’ in the CFAA is limited to violations of restrictions
on access to information, and not restrictions on its use.”).
Most applicable to the situation here of alleged accessing and misappropriating trade
secrets, the district court in Grow Fin. Fed. Credit Union v. GTE Fed. Credit Union, 2017 WL
M.D. Fia. Aug. i5, 2017) dismissed a similar claim as the one alleged in this case:
The term, ‘exceeds authorized access’ is defined in the CFAA as ‘access to
a computer with authorization and to use such access to obtain or alter
information in the computer that the accesser is not entitled to obtain or
alter.’ Id. at 1030(e)(6). Here, Grow Financial alleges that access to the
subject information was necessary for Holliday to > perform her. job duties.
rm. 2 a.
information that she accessed when she provided it to GTE Financial while
she was still employed at Grow Financial. But, as this Court has previously
held, an improper use of data is not tantamount to exceeding
authorization under the CFAA. See Maintenx Mgmt., Inc. v.
Lenkowski, No. 8:14-cv-2440-T-30MAP, 2015 WL 310543, *2-*3 (M.D.
Fla. Jan. 25, 2015) (‘The facts put forth by Maintenx support the notion that
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he somehow exceeded his seemingly unfettered access.’)...
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LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021Notably, if the Court were to apply the CFAA to an employee like
Holliday, who allegedly divulged trade secrets that she was actually
permitted to access, or who violated computer usage policies, the Court
would be taking the CFAA beyond ‘its original purpose of targeting
computer hackers.’ Enhanced Recovery 2015 WL 1470852 at *8 (citations
omitted). Under this broad interpretation, the CFAA would be potentially
violated each time an employee accessed an employer's ‘confidential’
information for an improper purpose. The Court will not construe the
statute in this broad manner.
Id, at *2 (emphasis added).
An additional defect of this claim is the premise of civil liability under the CFAA. Section
1030(g) state that: “Any person who suffers damage or loss by reason ofa violation of this section
may maintain a civil action against the violator to obtain compensatory damages and injunctive
relief or other equitable relief.” (emphasis added). Section 1030(e)(8) defines the term “damage”
as “any impairment to the integrity or availability of data, a program, a system, or information”.
The term “loss” is defined as:
any reasonable cost to any victim, including the cost of responding to an
offense, conducting a damage assessment, and restoring the data, program,
system, or information to its condition prior to the offense, and any revenue
lost, cost incurred, or other consequential damages incurred because of
interruption of service”.
In | 99 of the Amended Complaint, Plaintiff alleges that due to Defendants accessing or
misappropriating documents, “BPM has sustained monetary damages including, but not limited
to, loss of capital, loss of valuable business, loss of profits and future profits, and loss of goodwill,
which damages are ongoing and continue at the time of filing this Complaint.” Plaintiff does not
allege damage or loss resulting from any impairment of the data contained on BPM’s computers
or interruption of service. To this point, the Van Buren court observed that:
alacianl
CnnowoZiCar
harms—such as the corruption of files—of the type unauthorized users
12
LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021cause to computer systems and data. Limiting ‘damage’ and ‘loss’ in this
way makes sense in a scheme “aimed at preventing the typical
consequences of hacking.” Royal Truck, 974 F. 3d at 760. The term’s
definitions are ill fitted, however, to remediating “misuse” of sensitive
information that employees may permissibly access using their
computers. Ibid. Van Buren’s situation is illustrative: His run of the license
plate did not impair the ‘integrity or availability’ of data, nor did it
otherwise harm the database system itself.
Van Buren, 141 S.Ct. at 1660 (emphasis added). Thus, Plaintiff here has not, and in this
circumstance cannot, allege damage or loss that affords him a claim under the CFAA.
In light of the Supreme Court’s recent decision in Van Buren, Plaintiff has not alleged a
viable claim under the CFAA as to any alleged accessing of information by other memebrs of the
company on equal footing as he is to access such information, and has not alleged any damage or
loss compensable under the CFAA. This claim must be dismissed.
IV. Count VI — Tortious Interference With Advantageous Business Relationships
The elements of tortious interference with a business relationship are: “(1) the existence
of a business relationship, not necessarily evidenced by an enforceable contract, under which the
plaintiff has legal rights; (2) the defendant’s knowledge of the relationship; (3) an intentional and
unjustified interference with the relationship by the defendant; and (4) damage to the plaintiff as
a result of the interference.” See Salit v. Ruden, McClosky, Smith, Schuster & Russell, P.A., 742
So. 2d 381, 385 (Fla. 4th DCA 1999). “For the interference to be unjustified, the interfering
defendant must be a third party, a stranger to the business relationship.” Jd. at 386. See also
ana. 44 1 ANAND ANA 1a NAA ANOVA A
Dorie vy. White Mouniains dis. Groiip, Lid., 2 4200. 50 1041, 1 LU4y (Pld. ISLULA LIFT) A iortious
interference claim exists only against persons or entities who are not parties to the contractual
relationship.”); Sobi v. Fairfield Resorts, Inc., 846 So. 2d 1204, 1208 (Fla. Sth DCA 2003)(“Under
Florida law, a cause of action for tortious interference does not exist against one who is himself a
13
LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021party to the business relationship allegedly interfered with.”)(quoting Genet Co. v. Annheuser-
Busch, Inc., 498 So. 2d 683, 684 (Fla. 3d DCA 1986)).
As alleged in the Amended Complaint, Defendants are members, officers and employees
of BPM. See §{ 12, 13, 14 and 37 of Amended Complaint. Plaintiff claims that Defendants
tortiously interfered with BPM’s business relationship by a) diverting certain employees from
BPM to Clarium Tech and b) having clients of BPM reduce their work with the company to instead
conduct that business through Clarium Tech. See { 106 of Amended Complaint.
“Under Florida law, a defendant is not a stranger to a business relationship, and thus cannot
be held liable for tortious interference, when it has a supervisory interest in how the relationship
is conducted or a potential financial interest in how a contract is performed.” Palm Beach Health
Care v. Prof. Med. Educ., 13 So. 3d 1090, 1094 (Fla. 4th DCA 2009). Defendants who are alleged
to be members and officers of BPM most certainly have both a supervisory interest in BPM’s
business relationships and financial interest in the contracts with BPM’s customers. Hence, they
are not strangers to the business relationships at issue.
In Bridge Fin. v. J. Fischer & Assoc., 310 So. 3d 45, 50 (Fla. 4th DCA 2020), the Fourth
District addressed a tortious interference ciaim tn the same context here as brought against part
owners of a company:
We agree with the trial court that, as a shareholder in JFA with a 5%
interest in the company, Adam Palas could not interfere in a business
relationship with himself. ULQ, LLC v. Meder, 293 Ga. App. 176, 666
om 94719 ranno
0.0.24 /1) (4UU0), ye aueged a
against a former officer, who still had a 10% ownership interest in the
company, for tortious interference with contractual and business
relationships arising out of his actions following his termination. Id. at 715.
The appellate court found that the tortious interference claim failed because
the former officer was not a stranger to the business or contractual
relationships. Id. at 720. The court explained that ‘[w]here a defendant has
a fia
the defendant is not a stranger to the contract or business relationship, even
14
LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021though it is not a signatory to the contract.’ Id. (citation omitted). Because
the former officer ‘was admittedly a ten percent owner in [the company] (a
party to the business relationships or contracts) at the time he allegedly
interfered, and therefore could not have been a _ stranger.’ Id.; see
also Morris vy. Buvermo Props., Inc., 510 F. Supp. 2d 112, 120 (D.D.C.
2007) (‘As a part owner of [the corporation, the defendant] is a party to the
contract ... and thus cannot be sued for tortious interference with his own
contract.’). Similarly, in this case, because Adam Palas was a partial
owner in JFA, he was not a stranger to a business relationship, and thus
cannot be held liable for tortious interference.
Id. at 50 (emphasis added).
The claim as to allegedly diverting BPM’s employees also fails because “[t]he general rule
is that an action for tortious interference will not lie where a party interferes with an at will
contract...”). See Ferris v. South Fla. Stadium Corp., 926 So. 2d 399, 402 (Fla. 3d DCA
2006)(citing U.S. Sav. Bank v. Pittman, 86 So. 567, 573 (Fla. 1920)). The reason is that “when a
contract is terminable at will there is only an expectancy that the relationship will continue.” See
Greenberg v. Mount Sinai Med. Ctr., 629 So. 2d 252, 255 (Fla. 3d DCA 1993). Plaintiff does not
allege the business relationship with the employees at issue was anything other than the standard
form under Florida law — an at-will relationship that was terminable at any time.
V. Count VII — Misappropriation of Trade Secrets Claim Preempts Other Claims
Section 688.008, Florida Statutes, which is contained in Florida’s Uniform Trade Secret
Act, provides the parameters for preemption of other claims when a plaintiff alleges a claim for
Misappropriation of Trade Secrets under the Act:
(1) Except as provided in subsection (2), ss.
conflicting tort, restitutory, and other law of this state providing civil
remedies for misappropriation of a trade secret.
(2) This act does not affect:
(a) Contractual remedies, whether or not based upon misappropriation
of a trade secret;
(b) Other civil remedies that are not based upon misappropriation of a
irade secret; or
15
LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021(c) Criminal remedies, whether or not based upon misappropriation of
a trade secret.
See Section 688.008.
Florida State appellate courts have done little to address the test for preemption under the
Act, however, as Uniform Trade Secret Acts are adopted around the country with similar
preemption schemes, federal courts have weighed in rather extensively on the matter in construing
Section 688.008 or similar provisions from other states. In one of the earliest cases from this
district to address the issue, Allegiance Healthcare Corp. v. Coleman, 232 F. Supp. 2d 1329 (S.D.
Fla. 2002), Judge Moreno determined that for preemption sake, “the issue becomes whether
allegations of trade secret misappropriation alone comprise the underlying wrong; if so, the cause
of action is barred by § 688.008.” Jd. at 1335-1336 (quoting Coulter Corp. v. Leinert, 869 F. Supp.
732, 734 (E.D. Mo. 1994)). See also New Lenox Indus., Inc. v. Fenton, 510 F. Supp. 2d 893,
908 (M.D. Fla. 2007)(“other torts involving the same underlying factual allegations as a claim for
trade secret misappropriation will be preempted by FUTSA”, but if there are “material
distinctions between the allegations comprising the additional torts and the allegations supporting
the FUTSA claim,” the other tort claims are not preempted)(citing Allegiance Healthcare, 232
F. Supp. 2d at 1335-1336)).
In the Misappropriation of Trade Secrets claim, the term “Trade Secrets” is defined as:
109. _...pricing structure, solicitation activities, financial information,
operating procedures, data, frameworks, design documents, diagrams,
software development project plans, test plans, requirement documents,
project communications, Azure cloud, AWS cloud, SOW’s, and source
codes for its software development and mobile applications, and customer
information (pricing, margins, addresses, and other personal
information) including names of contacts, decision makers, and
requirements of same (“Trade Secrets”).
See ¥ i095 of Amended Compiaint.
16
LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021In Count VI (Tortious Interference) Plaintiff alleges that:
. Defendants had knowledge of BPM’s relationships with its clients and
employees. ({ 103)
. Defendants interfered with “BPM’s business relationships by diverting
employees to Clarium Tech and having BPM’s clients “reduce their
business with BPM to conduct business directly with Clarium Tech and/or
Clarium Managed Services”. ({ 104)
Since customer information is alleged to be a trade secret in the Misappropriation claim,
and customers are alleged to have been interfered with in Count VI, there is no distinction between
these two claims, thus the Tortious Interference claim is preempted. See Pelfrey v. Mahaffy, 2018
WL 3110797, at *4 (S.D. Fla. Feb. 7, 2018)(finding tortious interference claim preempted where
employee was alleged to have used trade secret information to solicit business for a company
employee set up to unlawfully compete); Digiport, Inc. v. Foram Dev. BFC, LLC, 314 So. 3d 550
(Fla. 3d DCA 2020)(affirming summary judgment finding misappropriation of business idea claim
preempted which alleged that business idea was developed and disclosed to Foram Group which
“misappropriated the idea by disclosing its plans to other companies for its own benefit”).
The Conspiracy Claim (Count VIII) is similarly premised upon use of trade secrets
including that Defendants:
. employed “devices, scheme and artifice to misappropriate BPM’s
confidential information and trade secrets” as alleged in the
Misappropriation claim. ({ 119 a))
. engaging in overt acts “including working for, and having a financial and
ownership interest, in a competing company, Ciarium Tech, and tortiousiy
interfering with BPM’s advantageous business relationships.” ({ 119 b))
Consequently, the Conspiracy claim is also preempted under Section 688.008. See Taxinet
Corp. v. Leon, 2018 WL 3405243, at *4 (S.D. Fla. July 12, 2018)(fraud claim which relied “at
ieast in part ona misappropriation of a trade secret” and faise statements that were made to obtain
17
LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021“confidential business information” was “too intertwined with the Uniform Trade Secrets Act”
and thus warranted dismissal based on preemption); Measured Wealth Private Client Group, LLC
v. Foster, 2020 WL 3963716 (S.D. Fla. July 13, 2020)(finding FDUTPA claims based on
allegations that defendants induced Measured Wealth’s clients to become their own through other
entities, used deceptive means to obtain and concealed the misappropriation of confidential
information which they provided to other entities, were preempted as “reframed allegations from
the claims for misappropriation of trade secrets”).
Tn Count X (Unjust Enrichment) Plaintiff alleges that:
° BPM conferred a benefit upon Defendants by “providing significant
confidential information and trade secrets, client information, business
relationships, marketing, training and other opportunities”. ({ 129)
. Defendants are “using BPM’s significant confidential information and trade
secrets, clients information, business relationships, marketing, training and
other opportunities to start a competing business, Clarium Tech.” ({ 130)
. “Defendants have been enriched by the confidential information and trade
secrets, clients information, business relationships, marketing, training and
other opportunities provided by BPM.” (4 131)
There is no material distinction between the Misappropriation and Unjust Enrichment
claims as both are premised upon usage of alleged trade secret information. Thus, the Unjust
Enrichment claim is also preempted under Section 688.008. See Developmental Technologies,
LLC vy. Mitsui Chemicals, Inc., 2019 WL 1598808, at *4 (M.D. Fla. Apr. 15, 2019)(“The
underlying factual allegations that pertain to Plaintiff's FDUTPA claim involve the disclosure of
trade secrets subsequent to the parties’ execution of their NDA. These allegations underpin
Plaintiffs misappropriation of trade secret claims (Id. { 82) and are therefore preempted by
FUTSA.”).
18
LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021Since Counts VI, VIII and X are preempted by Section 688.008, those claims must be
dismissed.
VI. Count VIII — Conspiracy
As explained by the Eleventh Circuit in McAndrew v. Lockheed Martin Corp., 206 F.3d
1031 (11th Cir. 2000):
The intracorporate conspiracy doctrine holds that acts of corporate agents
are attributed to the corporation itself, thereby negating the multiplicity of
actors necessary for the formation of a conspiracy. Simply put, under the
doctrine, a corporation cannot conspire with its employees, and its
employees, when acting in the scope of their employment, cannot conspire
among themselves.
Id. at 1036. See also Nassar v. Fla. Dept. of Agriculture, 754 Fed.Appx. 903, 907 (11th Cir.
2018)(“under the intracorporate conspiracy doctrine, the employees of a corporation or
government agency cannot form a conspiracy among themselves because the organization and its
employees are treated as a single legal actor.”).
Since the only persons alleged to be involved in the conspiracy are employees of BPM,
this claim is barred by the intracorporate conspiracy doctrine. See Denney v. City of Albany, 247
F.3d 1172 (11th Cir. 2001)(affirming summary judgment on conspiracy claim under intracorporate
conspiracy doctrine where only two named conspirators were city employees and the object of the
conspiracy related to their official work duties).
CONCLUSION
-£ 42.-.4 mi
OL Gemana, rial
requirement for filing a derivative Complaint and this lawsuit should be dismissed in its entirety.
Plaintiff has failed to properly allege the required elements of Fraudulent Concealment as
no facts are alleged to support reliance and detriment based on the reasons for termination of
resignation of employees.
19
LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021The Computer Fraud and Abuse Act claim must be dismissed in light of the Supreme
Court’s recent decision in Van Buren as Plaintiff cannot show that Defendants acted without
authorization or exceeded authorized access as to information on BPM’s computers, which as
members of the company they are entitled to access, and alleged misuse of such information is not
actionable under the CFAA. Further, Plaintiff has not and cannot allege a form of damage or loss
as those terms are defined under the CFAA.
The Tortious Interference claim fails as Defendants, who are members of BPM, are not
strangers to the business relationships, thus they cannot interfere with relationships to which they
are parties.
The Misappropriation of Trade Secrets claim preempts the Tortious Interference,
Conspiracy and Unjust Enrichment claims which are also premised upon trade secrets.
Finally, the Conspiracy claim is subject to dismissal under the intracorporate conspiracy
doctrine as Defendants, who are employees of BPM, cannot conspire among themselves.
WHEREFORE, Defendants respectfully request this Honorable Court grant their Motion
to Dismiss First Amended Derivative Complaint, and for all such other relief as this Court deems
just and proper.
20
LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021Signed on this 17th day of August, 2021.
Respectfully submitted,
Law Offices of Jason Gordon, P.A.
3440 Hollywood Blvd., Suite 415
Hollywood, Florida 33021
Telephone: (954) 241-4207
Facsimile: (954) 241-4236
FOR SERVICE OF COURT FILINGS:
jg@jgordonlegal.com
service@jgordonlegal.com
By:__/s/ Jason Gordon
Jason Gordon, Esq.
Fla. Bar No. 0012973
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing was served this 17th
day of August, 2021 via Fiortda’s e-filing portai to: Alen H. Hsu, Esq., Weiss Serota Heitman Cole
& Bierman, P.L., 1200 N. Federal Highway, Suite 312, Boca Raton, Florida 33432.
21
/s/ Jason Gordon
Jason Gordon, Esq.
LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021
Preview
Filing # 132885316 E-Filed 08/17/2021 10:53:45 PM IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL CIRCUIT IN AND FOR PALM BEACH COUNTY, FLORIDA CASE NO.: 50-2021-CA-6978-XXXX-MB CHAITHANYA SAMA, derivatively on behalf of BPMLINKS LLC, Plaintiff, Vs. ZAKI AHMED SIDDIQUI KHAZI, SATHIANARAYANAN AVANASHILINGAM, and aannrarrr UUrLNAL NARAYANASAMYRAJAGOPAL, individually, Defendants, and BPMLINKS LLC, a Florida limited liability company, Nominal Defendant. / DEFENDANTS’ MOTION TO DISMISS FIRST AMENDED DERIVATIVE COMPLAINT. Defendants, ZAKI AHMED SIDDIQUI KHAZI, SATHIANARAYANAN AVANASHILINGAM and GOPINATH NARAYANASAMYRAJAGOPAL, by and through their undersigned counsel, file this their Motion to Dismiss First Amended Derivative Complaint, and in support thereof states as follows: INTRODUCTION This case involves the typical scenario of business partners in a dispute over operation of a hnecinacc Dlaintiff wha ic fifty (SNA) nercant mamher af RPMI INK facies, W. ainy \ousoy perccue Denies aon wyatt TIC (RPM wy (ee J LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021 CHEN. DAIAARCACUAAIINTY Cl INCEDU ARDIIV7ZN FLED NaN7nnns 4n-62-45 DNA HILLY. PAL DLA VUUINE TT, PL, VUOL IE mDNUeey, ULUIAN, Yorieue! bu.u.ty civ(Defendants collectively are the other fifty (50%) percent members), ran to the company’s attorneys (as often happens in such disputes) and had this “member derivative lawsuit” prepared alleging a “parade of horribles” committed by Defendants with respect to BPM’s business and customers. To avoid compliance with the requirement of pre-suit demand, Plaintiff alleges demand would be futile because Defendants cannot independently determine if this lawsuit should proceed since they are the target of the claims. Plaintiff has used this bare-bones futility claim to shut Defendants out of BPM, effectively crowning himself “king”, and now holds the company hostage. Defendants have been denied access to the company’s bank accounts and their e-mail access has been cut off which is causing difficulty with their continuing to service BPM’s clients. Yet, Plaintiff seems content to have Defendants continue to do work for BPM bringing revenue into the company, including Defendants recently renewing a significant contract with one of BPM’s clients. Since Defendants have quite a bit of evidence of Plaintiff’s wrongdoing which has caused harm to BPM, including his diverting business opportunities to other companies in which he is an owner and his starting competing companies which he did not disclose to Detendants, Plaintiff's own improper conduct perhaps explains his failure to make demand as the results of an independent investigation may not prove favorable for him. And that is the reason demand is necessary in this case — to obtain a full picture of what is being done by all members of BPM. Thus, the empty shell of this futility claim does not cut it to satisfy the pre-suit demand requirement. I. Derivative Demand Futility Not Met Gantinn LAE NONI Dlasida Gtaty SUCUCH UUS.voUZ, F10TiGa Satu 2 LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021A member may maintain a derivative action to enforce a right of a limited liability company if (1) The member first makes a demand on the other members in a member-managed limited liability company or the managers of a manager- managed limited liability company requesting that the managers or other members cause the company to take suitable action to enforce the right, and the managers or other members do not take the action within a reasonable time, not to exceed 90 days; or (2) A demand under subsection (1) would be futile, or irreparable injury would result to the company by waiting for the other members or the managers to take action to enforce the right in accordance with subsection (1). See Section 605.0802 (emphasis added). Plaintiff did not make a demand upon Defendants before filing this lawsuit, instead alleging that demand would be futile because “Defendants lack the sufficient independence with which to render a disinterested decision on whether to pursue the derivative claims” because Defendants are alleged to be engaging in misconduct. See §{] 55-56 of Amended Complaint. If that were the standard to be applied — a Plaintiff simply alleges other members or shareholders are engaged in wrongdoing so no demand needs to be made as it would be futile — the demand requirement would be rendered meaningless. See Guttman v. Huang, 823 A.2d 492, 500 (Del. Ch. 2003)(“If the legal rule was that demand was excused whenever, by mere notice pleading, the plaintifts couid state a breach of fiduciary duty claim against a majority of the board, the demand requirement of the law would be weakened and the settlement value of so-called ‘strike suits’ would greatly increase.”). Florida appellate courts do not appear to have addressed the standard for claiming futility of demand under Section 605.0802 of the Revised LLC Act, and the language of the statute offers no insight. However, demand requirements in the corporate context are instructive. See Firehouse Gallery, LLC v. Phillips, 2009 WL 4015575, at *5 (M.D. Fla. Nov. 19, 2009)(dismissing derivative 3 LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021claim of Complaint where futility was not properly pled and noting that “[w]hile this case involves an LLC, such a business organization is analogous to a corporation.”) Section 607.0742, Florida Statutes sets forth the requirements for demand on a corporation which includes a) the complaint must allege “with particularity” the demand made upon the board or [‘t]he reason or reasons the shareholder did not make the effort to obtain the desired action from the board of directors or comparable authority”. See Section 607.0742(2)(c). The fault with Plaintiffs contrived notion of futility is that it falsely presumes demand upon Defendants to decide whether to investigate Plaintiffs claims is the only path. Nothing precluded Plaintiff from requesting an independent investigation be conducted so that Defendants would have some semblance of corporate due process, as opposed to the “lock the door and kick them out” approach Plaintiff took in usurping control of BPM in the name of “futility” of demand. Section 607.0744 provides for such an independent process: (1) A derivative proceeding may be dismissed, in whole or in part, by the court on motion by the corporation if a group specified in subsection (2) or subsection (3) has determined in good faith, after conducting a reasonable inquiry upon which its conclusions are based, that the maintenance of the derivative proceeding is not in the best interests of the corporation. In all such cases, the corporation has the burden of proof regarding the qualifications, good faith, and reasonable inquiry of the group making the determination... (3) Upon motion by the corporation, the court may appoint a panel consisting of one or more disinterested and independent individuals to make a determination required in subsection (1). Ta. can anaa sc. 1G, AL OU/.U/44 (6) 44_ ay jaded). Florida courts often look to Delaware case law for guidance on matters of corporate law. See Williams v. Stanford, 977 So. 2d 722, 727-28 (Fla. 1st DCA 2008)(noting that “Florida courts routinely consult Delaware case law when construing Florida statutory law governing corporations”)(citing Boettcher v. IMC Mortgage Co., 871 So. 2d 1047, 1052 (Fla. 2d DCA 4 LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 330212004)). According to the Delaware Chancery Court, the demand futility requirement “serves an important policy function of promoting internal resolution, as opposed to litigation, of corporate disputes and grants the corporation a degree of control over any litigation brought for its benefit”. See Rattner v. Bidzos, 2003 WL 22284323, at *7 (Del. Ch. Sept. 30, 2003). See also Grimes v. Donald, 673 A.2d 1207, 1216 (Del. 1996) (“By requiring exhaustion of intracorporate remedies, the demand requirement invokes a species of alternative dispute resolution procedure which might avoid litigation altogether.”), overruled on other grounds by Brehm y. Eisner, 746 A.2d 244 (Del. 2000). In Silver Crown Investments, LLC v. Team Real Estate Mgt., LLC, 349 F. Supp. 3d 1316 (S.D. Fla. Sept. 29 2018), the district court addressed whether futility of demand as to a claim for breach of fiduciary duty under the Revised LLC Act was properly pled. The district court initially pointed out that the purpose of the pre-suit demand is “‘to give corporate directors an opportunity to correct any internal abuses without lawsuit’ thereby conserving company and judicial resources.” Id. at 1327 (quoting McCabe v. Foley, 424 F. Supp. 2d 1315, 1319 (M.D. Fla. 2006)). In dismissing the claim, the district court concluded that: Here, Piaintiffs simply aliege that a § 605.0802 pre-suit demand to Defendants would have been futile because Defendants had a guilty participation in the wrongs complained of. (ECF. No. 40, § 68). Plaintiffs however, do not allege what specific acts each Defendant committed which contributed to Plaintiff's injury. This is analogous to stating that Defendants ‘faced a substantial likelihood of liability’ which, by itself, is insufficient to establish that a pre-suit demand would be futile. Id. at 1328. In Long v. Odland, 2012 WL 13019034 (S.D. Fla. Aug. 15, 2012), the district court dismissed a derivative lawsuit for failure to properly plead futility. Jd. at *8. The Complaint allanad that: “tha antiva Affine Dannt Raard and canine manacamant nartisinated in tha weanac @ucgeG ula ue Cure Uaice Vepor wOarG ana Senior managenieme paruciparca ia ule Wrongs 5 LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021complained of,’ and the directors are ‘not disinterested or independent,’ as they are ‘interested in maintaining their positions on the Board so as to safeguard their substantial compensation and stock options’ and also ‘their actions have subjected Office Depot to...potential liability for violations of applicable securities laws.”” Jd. at *3. Rejecting that such allegations were sufficient to demonstrate futility, the district court stressed that: “Plaintiff cannot ‘bootstrap allegations of futility’ by merely pleading that directors on the Board ‘participated in the challenged transaction or that they would be reluctant to sue themselves’...’Nor can mere allegations that the directors would act to preserve their positions satisfy the requirements of demand futility pleading.’” Jd. at *8 (quoting Story v. Kang, 2006 WL 163078, at *2 (M.D. Fla. Jan. 20, 2006)). Here, Plaintiff's allegations in support of futility of demand are insufficient, conclusory and fail to show that demand would have been futile. The allegations fail to identify what each individual Defendant did or why each is incapable of independent evaluation of a demand. Instead, Plaintiff lumps Defendants together for the alleged acts of wrongdoing offered for the purported futility of pre-suit demand. Accordingly, as futility has not been properly alleged for the pre-suit demand requirement, thts lawsuit should be dismissed. Il. Counts II-TV Fraudulent Concealment In Counts II, III and IV, Plaintiff alleges Fraudulent Concealment against each individual Defendant premised upon Defendants misrepresenting that certain employees were terminated or resigned due to poor job performance or cost cutting measures, when the true reason was a plan to divert those employees to Clarium Tech and Clarium Managed Services — two companies with which Plaintiff alleges Defendants are involved as owners and employees. See {| 73-74, 80-81 and 00_ON Af Amandad Cam ana o7-7u G1 ninenaca Corn 6 LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021For the Fraudulent Concealment claims Plaintiff must allege that: 1) Defendants “concealed or failed to disclose a material fact”, 2) “knew or should have known the material fact should be disclosed”, 3) “concealment of or failure to disclose the material fact would induce the plaintiffs to act”, and 4) detrimental reliance on the misinformation. See RJ Reynolds Tobacco v. Martin, 53 So. 3d 1060, 1068 (Fla. Ist DCA 2010)(citations omitted). Plaintiff fails to allege any facts to support how he relied upon the representation of employees being terminated or resigning to his detriment. Thus, essential elements of the claim, but for alleging the appropriate buzz words, have not been sufficiently alleged. Tl. | Count V—Computer Fraud Abuse Act In Count V, Plaintiff alleges that Defendants violated the Computer Fraud and Abuse Act because they “knowingly, intentionally, and with the intent to defraud BPM directly and/or indirectly accessed BPM’s computers, data, architectural documents and design, frameworks, Azure cloud, AWS cloud, source codes and trade secrets.” See 96 of Amended Complaint. The alleged “intend to defraud” is based on 18 U.S.C. § 1030 which makes it a violation of the CFAA for anyone who: knowingiy and with intent to defraud, accesses a protected computer without authorization, or exceeds authorized access, and by means of such conduct furthers the intended fraud and obtains anything of value, unless the object of the fraud and the thing obtained consists only of the use of the computer and the value of such use is not more than $5,000 in any 1- year period. tr ANIAL_ASAN F_- a. 10Tran eo 1 OEE 10 U.D.L. 9 LUDULa)(4) (emp 44. 4y added). As alleged in the Amended Complaint, Defendants are members, officers and employees of BPM: 12. Sathia...is a member and Chief Technology Officer of BPM. 13. Zaki...is a member and Chief Information Officer of BPM. 1 LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 3302114. Gopi is...a member and the Chief Operating Officer and Chief Digital Officer of BPM. 37. Defendants Sathia and Gopi were not only receiving from BPM approximately double the salaries they received from their previous employers, but each also became a 16.67% owner in BPM without contributing any capital to the company. See J{ 12, 13, 14 and 37 of Amended Complaint. As members and officers of BPM, Defendants who collectively have the same membership percentage as Plaintiff, are authorized to access BPM’s computers and any information contained within the company’s computers. Therefore, the legal basis of this claim conflicts with the facts alleged and necessarily fails. The key terms for this claim from the portion of the CFAA cited above are “without authorization” and “exceeds authorized access”. In June of this year, the Supreme Court in Van Buren v. U.S., 141 S.Ct. 1648 (2021) addressed the scope of conduct which constitutes a violation of the CFAA as to those very terms. Van Buren, a former police officer, conducted a license plate search in a law enforcement computer database in exchange for money. /d. at 1652. Van Buren was convicted of violating the CFAA and appealed to the Eleventh Circuit arguing that the term “exceeds authorized access” only applies to persons who obtain information from a computer beyond their permitted access, not to someone who misuses authorized access. Jd. at 1653. Noting that several Circuit Courts of Appeal agree with Van Buren’s narrow view of the CFAA, and the Eleventh Circuit and other Circuits having taken a broader view, the Supreme Court granted Certiorari to Fesoive ine coniict among ine Circuits. a. at 1053- 1054. Finding Van Buren’s narrow approach to access to be more sensible, the Supreme Court concluded that: In sum, an individual ‘exceeds authorized access’ when he accesses a pawnuton with nuthavication hat than nhtiaing jnfaumation Ineatad in Compuier Wik Guinicrilaucn Cue mien Ceidins yormaicon waa in particular areas of the computer—such as files, folders, or databases—that 8 LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021are off limits to him. The parties agree that Van Buren accessed the law enforcement database system with authorization. The only question is whether Van Buren could use the system to retrieve license-plate information. Both sides agree that he could. Van Buren accordingly did not ‘excee[d] authorized access’ to the database, as the CFAA defines that Phrase, even though he obtained information from the database for an improper purpose. We therefore reverse the contrary judgment of the Eleventh Circuit and remand the case for further proceedings consistent with this opinion. Id. at 1662 (emphasis added). In Royal Truck & Trailer Sales and Service, Inc. v. Kraft, 974 F.3d 756 (6th Cir. 2020), a case cited by the Van Buren Court as being from one of the Circuits taking a narrow view of application of the CFAA, the definition of “exceeds authorized access” was discussed: The Act defines ‘exceeds authorized access’ as ‘to access a computer with authorization and to use such access to obtain or alter information in the computer that the accesser is not entitled so to obtain or alter.’ 18 U.S.C. § 1030(e)(6). Critical to that formulation are the terms ‘access,’ ‘authorization, ’ and ‘obtain or alter.’ We have previously defined the term ‘authorization,’ at least in the inverse: ‘[A/ defendant who accesses a computer ‘without authorization,’’ we have said, ‘does so without sanction or permission.’ Pulte Homes, 648 F.3d at 304 (citing LVRC Holdings, LLC v. Brekka, 581 F.3d 1127, 1132-33 (9th Cir. 2009)). ‘Authorization’ thus means to have sanction or permission. Id. at 759 (emphasis added). In affirming dismissal of the CFAA claim, the Sixth Circuit reasoned that: The CFAA prohibits accessing data one is not authorized to access. United States v. Nosal, 676 F.3d 854, 858 (9th Cir. 2012). And Royal has not contested either Kraft’s or Matthews’s authorization to access the company files in question. Because Defendants had authorization to access that injormation, ineiF conauci aid noi ‘exceed’ ineiF ‘auinorizea access,’ as those terms are used in § 1030(a)(2). To be sure, Royal does allege that Kraft and Matthews later misused the information they accessed. But the CFAA does not reach that conduct. Id. at 760 (emphasis added). See also LVRC Holdings LCC v. Brekka, 581 F.3d 1127, 1133 (9th Cie INARA 1 UI. 2uuz UNG arts TUDO. » OTUs WvIAL 3 ar 9 LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021computer ceases when an employee resolves to use the computer contrary to the employer’s interest. Rather, the definition of ‘exceeds authorized access’ in § 1030(e)(6) indicates that Congress did not intend to include such an implicit limitation in the word "authorization.”). One purpose of the narrow interpretation of the CFAA was explained by the Fourth District in WEC Carolina Energy Solutions LLC v. Miller, 687 F.3d 199 (4th Cir. 2012) — another case cited by the Van Buren Court: Where, as here, our analysis involves a statute whose provisions have both civil and criminal application, our task merits special attention because our interpretation applies uniformly in both contexts. See Leocal v. Ashcroft, 543 U.S. 1, 11 n. 8, 125 S.Ct. 377, 160 L.Ed.2d 271 (2004). Thus, we follow ‘the canon of strict construction of criminal statutes, or rule of lenity.’ United States v. Lanier, 520 U.S. 259, 266, 117 S.Ct. 1219, 137 L.Ed.2d 432 (1997). In other words, in the interest of providing fair warning ‘of what the law intends to do if a certain line is passed,’ Babbitt v. Sweet Home Chapter of Communities for a Great Or., 515 U.S. 687, 704 n. 18, 115 S.Ct. 2407, 132 L.Ed.2d 597 (1995) (quoting United States v. Bass, 404 U.S. 336, 348, 92 S.Ct. 515, 30 L.Ed.2d 488 (1971)) (internal quotation marks omitted), we will construe this criminal statute strictly and avoid interpretations not ‘clearly warranted by the text,’ Crandon vy. United States, 494 U.S. 152, 160, 110 S.Ct. 997, 108 L.Ed.2d 132 (1990). Td. at 204. A few months prior to the Supreme Court issuing its opinion in Van Buren, the district court in United Federation of Churches, LLC v. Johnson, 2021 WL 764670 (W.D. Wash. Feb. 26, 2021) aptly described the interplay between the terms “without authorization” and “exceeds authorized access” under the CFAA which underscores the reason that Plaintiff's claim here must be disiissed: Violating a company’s terms of use (here, the Code of Conduct) is insufficient to state a CFAA claim. The Ninth Circuit made that clear in United States v. Nosal, 676 F.3d 854, 857, 863 (9th Cir. 2012) (en banc). There, the court held that, under the CFAA, the phrase ‘exceeds authorized access “applies only to ‘violations of restrictions on access to information, ead on sea PTA nt QK2 KA lamnhncic viginal) These Grid HOE PES ICONS Gi 1S USC." 14, Gi 665-64 (eiipnasis it GFiZiiGiy. Tris, 10 LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021it held that the CFAA ‘does not extend to violations of [a company's computer] use restrictions.’ Id. At most, The Satanic Temple alleges that Defendants have misappropriated the authority granted to them... But the CFAA is an ‘anti-hacking statute,’ not a ‘misappropriation statute.’ Nosal, 676 F.3d at 857. Defendants may have very well abused their authority, but The Satanic Temple has not alleged that they exceeded it... United States v. Nosal, 844 F.3d 1024, 1029 (9th Cir. 2016) (“Nosal IT”) (‘[A] person uses a computer ‘without authorization’ under [the CFAA] ... when the employer has rescinded permission to access the computer and the defendant uses the computer anyway.’) (internal quotation marks omitted) (quoting LVRC Holdings LLC v. Brekka, 581 F.3d 1127 (9th Cir. 2009)). Id. at *3-4. See also U.S. v. Nosal, 676 F.3d 854, 863-64 (9th Cir. 2012)(“This narrower interpretation is also a more sensible reading of the text and legislative history of a statute whose general purpose is to punish hacking—the circumvention of technological access barriers—not misappropriation of trade secrets—a subject Congress has dealt with elsewhere... Therefore, we hold that ‘exceeds authorized access’ in the CFAA is limited to violations of restrictions on access to information, and not restrictions on its use.”). Most applicable to the situation here of alleged accessing and misappropriating trade secrets, the district court in Grow Fin. Fed. Credit Union v. GTE Fed. Credit Union, 2017 WL M.D. Fia. Aug. i5, 2017) dismissed a similar claim as the one alleged in this case: The term, ‘exceeds authorized access’ is defined in the CFAA as ‘access to a computer with authorization and to use such access to obtain or alter information in the computer that the accesser is not entitled to obtain or alter.’ Id. at 1030(e)(6). Here, Grow Financial alleges that access to the subject information was necessary for Holliday to > perform her. job duties. rm. 2 a. information that she accessed when she provided it to GTE Financial while she was still employed at Grow Financial. But, as this Court has previously held, an improper use of data is not tantamount to exceeding authorization under the CFAA. See Maintenx Mgmt., Inc. v. Lenkowski, No. 8:14-cv-2440-T-30MAP, 2015 WL 310543, *2-*3 (M.D. Fla. Jan. 25, 2015) (‘The facts put forth by Maintenx support the notion that ad Anta ha ahtainad bunw Mn cu Gala ne GULUIneE yrom wa he somehow exceeded his seemingly unfettered access.’)... le nawinutous nat that iiteTS, HOt inicat ll LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021Notably, if the Court were to apply the CFAA to an employee like Holliday, who allegedly divulged trade secrets that she was actually permitted to access, or who violated computer usage policies, the Court would be taking the CFAA beyond ‘its original purpose of targeting computer hackers.’ Enhanced Recovery 2015 WL 1470852 at *8 (citations omitted). Under this broad interpretation, the CFAA would be potentially violated each time an employee accessed an employer's ‘confidential’ information for an improper purpose. The Court will not construe the statute in this broad manner. Id, at *2 (emphasis added). An additional defect of this claim is the premise of civil liability under the CFAA. Section 1030(g) state that: “Any person who suffers damage or loss by reason ofa violation of this section may maintain a civil action against the violator to obtain compensatory damages and injunctive relief or other equitable relief.” (emphasis added). Section 1030(e)(8) defines the term “damage” as “any impairment to the integrity or availability of data, a program, a system, or information”. The term “loss” is defined as: any reasonable cost to any victim, including the cost of responding to an offense, conducting a damage assessment, and restoring the data, program, system, or information to its condition prior to the offense, and any revenue lost, cost incurred, or other consequential damages incurred because of interruption of service”. In | 99 of the Amended Complaint, Plaintiff alleges that due to Defendants accessing or misappropriating documents, “BPM has sustained monetary damages including, but not limited to, loss of capital, loss of valuable business, loss of profits and future profits, and loss of goodwill, which damages are ongoing and continue at the time of filing this Complaint.” Plaintiff does not allege damage or loss resulting from any impairment of the data contained on BPM’s computers or interruption of service. To this point, the Van Buren court observed that: alacianl CnnowoZiCar harms—such as the corruption of files—of the type unauthorized users 12 LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021cause to computer systems and data. Limiting ‘damage’ and ‘loss’ in this way makes sense in a scheme “aimed at preventing the typical consequences of hacking.” Royal Truck, 974 F. 3d at 760. The term’s definitions are ill fitted, however, to remediating “misuse” of sensitive information that employees may permissibly access using their computers. Ibid. Van Buren’s situation is illustrative: His run of the license plate did not impair the ‘integrity or availability’ of data, nor did it otherwise harm the database system itself. Van Buren, 141 S.Ct. at 1660 (emphasis added). Thus, Plaintiff here has not, and in this circumstance cannot, allege damage or loss that affords him a claim under the CFAA. In light of the Supreme Court’s recent decision in Van Buren, Plaintiff has not alleged a viable claim under the CFAA as to any alleged accessing of information by other memebrs of the company on equal footing as he is to access such information, and has not alleged any damage or loss compensable under the CFAA. This claim must be dismissed. IV. Count VI — Tortious Interference With Advantageous Business Relationships The elements of tortious interference with a business relationship are: “(1) the existence of a business relationship, not necessarily evidenced by an enforceable contract, under which the plaintiff has legal rights; (2) the defendant’s knowledge of the relationship; (3) an intentional and unjustified interference with the relationship by the defendant; and (4) damage to the plaintiff as a result of the interference.” See Salit v. Ruden, McClosky, Smith, Schuster & Russell, P.A., 742 So. 2d 381, 385 (Fla. 4th DCA 1999). “For the interference to be unjustified, the interfering defendant must be a third party, a stranger to the business relationship.” Jd. at 386. See also ana. 44 1 ANAND ANA 1a NAA ANOVA A Dorie vy. White Mouniains dis. Groiip, Lid., 2 4200. 50 1041, 1 LU4y (Pld. ISLULA LIFT) A iortious interference claim exists only against persons or entities who are not parties to the contractual relationship.”); Sobi v. Fairfield Resorts, Inc., 846 So. 2d 1204, 1208 (Fla. Sth DCA 2003)(“Under Florida law, a cause of action for tortious interference does not exist against one who is himself a 13 LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021party to the business relationship allegedly interfered with.”)(quoting Genet Co. v. Annheuser- Busch, Inc., 498 So. 2d 683, 684 (Fla. 3d DCA 1986)). As alleged in the Amended Complaint, Defendants are members, officers and employees of BPM. See §{ 12, 13, 14 and 37 of Amended Complaint. Plaintiff claims that Defendants tortiously interfered with BPM’s business relationship by a) diverting certain employees from BPM to Clarium Tech and b) having clients of BPM reduce their work with the company to instead conduct that business through Clarium Tech. See { 106 of Amended Complaint. “Under Florida law, a defendant is not a stranger to a business relationship, and thus cannot be held liable for tortious interference, when it has a supervisory interest in how the relationship is conducted or a potential financial interest in how a contract is performed.” Palm Beach Health Care v. Prof. Med. Educ., 13 So. 3d 1090, 1094 (Fla. 4th DCA 2009). Defendants who are alleged to be members and officers of BPM most certainly have both a supervisory interest in BPM’s business relationships and financial interest in the contracts with BPM’s customers. Hence, they are not strangers to the business relationships at issue. In Bridge Fin. v. J. Fischer & Assoc., 310 So. 3d 45, 50 (Fla. 4th DCA 2020), the Fourth District addressed a tortious interference ciaim tn the same context here as brought against part owners of a company: We agree with the trial court that, as a shareholder in JFA with a 5% interest in the company, Adam Palas could not interfere in a business relationship with himself. ULQ, LLC v. Meder, 293 Ga. App. 176, 666 om 94719 ranno 0.0.24 /1) (4UU0), ye aueged a against a former officer, who still had a 10% ownership interest in the company, for tortious interference with contractual and business relationships arising out of his actions following his termination. Id. at 715. The appellate court found that the tortious interference claim failed because the former officer was not a stranger to the business or contractual relationships. Id. at 720. The court explained that ‘[w]here a defendant has a fia the defendant is not a stranger to the contract or business relationship, even 14 LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021though it is not a signatory to the contract.’ Id. (citation omitted). Because the former officer ‘was admittedly a ten percent owner in [the company] (a party to the business relationships or contracts) at the time he allegedly interfered, and therefore could not have been a _ stranger.’ Id.; see also Morris vy. Buvermo Props., Inc., 510 F. Supp. 2d 112, 120 (D.D.C. 2007) (‘As a part owner of [the corporation, the defendant] is a party to the contract ... and thus cannot be sued for tortious interference with his own contract.’). Similarly, in this case, because Adam Palas was a partial owner in JFA, he was not a stranger to a business relationship, and thus cannot be held liable for tortious interference. Id. at 50 (emphasis added). The claim as to allegedly diverting BPM’s employees also fails because “[t]he general rule is that an action for tortious interference will not lie where a party interferes with an at will contract...”). See Ferris v. South Fla. Stadium Corp., 926 So. 2d 399, 402 (Fla. 3d DCA 2006)(citing U.S. Sav. Bank v. Pittman, 86 So. 567, 573 (Fla. 1920)). The reason is that “when a contract is terminable at will there is only an expectancy that the relationship will continue.” See Greenberg v. Mount Sinai Med. Ctr., 629 So. 2d 252, 255 (Fla. 3d DCA 1993). Plaintiff does not allege the business relationship with the employees at issue was anything other than the standard form under Florida law — an at-will relationship that was terminable at any time. V. Count VII — Misappropriation of Trade Secrets Claim Preempts Other Claims Section 688.008, Florida Statutes, which is contained in Florida’s Uniform Trade Secret Act, provides the parameters for preemption of other claims when a plaintiff alleges a claim for Misappropriation of Trade Secrets under the Act: (1) Except as provided in subsection (2), ss. conflicting tort, restitutory, and other law of this state providing civil remedies for misappropriation of a trade secret. (2) This act does not affect: (a) Contractual remedies, whether or not based upon misappropriation of a trade secret; (b) Other civil remedies that are not based upon misappropriation of a irade secret; or 15 LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021(c) Criminal remedies, whether or not based upon misappropriation of a trade secret. See Section 688.008. Florida State appellate courts have done little to address the test for preemption under the Act, however, as Uniform Trade Secret Acts are adopted around the country with similar preemption schemes, federal courts have weighed in rather extensively on the matter in construing Section 688.008 or similar provisions from other states. In one of the earliest cases from this district to address the issue, Allegiance Healthcare Corp. v. Coleman, 232 F. Supp. 2d 1329 (S.D. Fla. 2002), Judge Moreno determined that for preemption sake, “the issue becomes whether allegations of trade secret misappropriation alone comprise the underlying wrong; if so, the cause of action is barred by § 688.008.” Jd. at 1335-1336 (quoting Coulter Corp. v. Leinert, 869 F. Supp. 732, 734 (E.D. Mo. 1994)). See also New Lenox Indus., Inc. v. Fenton, 510 F. Supp. 2d 893, 908 (M.D. Fla. 2007)(“other torts involving the same underlying factual allegations as a claim for trade secret misappropriation will be preempted by FUTSA”, but if there are “material distinctions between the allegations comprising the additional torts and the allegations supporting the FUTSA claim,” the other tort claims are not preempted)(citing Allegiance Healthcare, 232 F. Supp. 2d at 1335-1336)). In the Misappropriation of Trade Secrets claim, the term “Trade Secrets” is defined as: 109. _...pricing structure, solicitation activities, financial information, operating procedures, data, frameworks, design documents, diagrams, software development project plans, test plans, requirement documents, project communications, Azure cloud, AWS cloud, SOW’s, and source codes for its software development and mobile applications, and customer information (pricing, margins, addresses, and other personal information) including names of contacts, decision makers, and requirements of same (“Trade Secrets”). See ¥ i095 of Amended Compiaint. 16 LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021In Count VI (Tortious Interference) Plaintiff alleges that: . Defendants had knowledge of BPM’s relationships with its clients and employees. ({ 103) . Defendants interfered with “BPM’s business relationships by diverting employees to Clarium Tech and having BPM’s clients “reduce their business with BPM to conduct business directly with Clarium Tech and/or Clarium Managed Services”. ({ 104) Since customer information is alleged to be a trade secret in the Misappropriation claim, and customers are alleged to have been interfered with in Count VI, there is no distinction between these two claims, thus the Tortious Interference claim is preempted. See Pelfrey v. Mahaffy, 2018 WL 3110797, at *4 (S.D. Fla. Feb. 7, 2018)(finding tortious interference claim preempted where employee was alleged to have used trade secret information to solicit business for a company employee set up to unlawfully compete); Digiport, Inc. v. Foram Dev. BFC, LLC, 314 So. 3d 550 (Fla. 3d DCA 2020)(affirming summary judgment finding misappropriation of business idea claim preempted which alleged that business idea was developed and disclosed to Foram Group which “misappropriated the idea by disclosing its plans to other companies for its own benefit”). The Conspiracy Claim (Count VIII) is similarly premised upon use of trade secrets including that Defendants: . employed “devices, scheme and artifice to misappropriate BPM’s confidential information and trade secrets” as alleged in the Misappropriation claim. ({ 119 a)) . engaging in overt acts “including working for, and having a financial and ownership interest, in a competing company, Ciarium Tech, and tortiousiy interfering with BPM’s advantageous business relationships.” ({ 119 b)) Consequently, the Conspiracy claim is also preempted under Section 688.008. See Taxinet Corp. v. Leon, 2018 WL 3405243, at *4 (S.D. Fla. July 12, 2018)(fraud claim which relied “at ieast in part ona misappropriation of a trade secret” and faise statements that were made to obtain 17 LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021“confidential business information” was “too intertwined with the Uniform Trade Secrets Act” and thus warranted dismissal based on preemption); Measured Wealth Private Client Group, LLC v. Foster, 2020 WL 3963716 (S.D. Fla. July 13, 2020)(finding FDUTPA claims based on allegations that defendants induced Measured Wealth’s clients to become their own through other entities, used deceptive means to obtain and concealed the misappropriation of confidential information which they provided to other entities, were preempted as “reframed allegations from the claims for misappropriation of trade secrets”). Tn Count X (Unjust Enrichment) Plaintiff alleges that: ° BPM conferred a benefit upon Defendants by “providing significant confidential information and trade secrets, client information, business relationships, marketing, training and other opportunities”. ({ 129) . Defendants are “using BPM’s significant confidential information and trade secrets, clients information, business relationships, marketing, training and other opportunities to start a competing business, Clarium Tech.” ({ 130) . “Defendants have been enriched by the confidential information and trade secrets, clients information, business relationships, marketing, training and other opportunities provided by BPM.” (4 131) There is no material distinction between the Misappropriation and Unjust Enrichment claims as both are premised upon usage of alleged trade secret information. Thus, the Unjust Enrichment claim is also preempted under Section 688.008. See Developmental Technologies, LLC vy. Mitsui Chemicals, Inc., 2019 WL 1598808, at *4 (M.D. Fla. Apr. 15, 2019)(“The underlying factual allegations that pertain to Plaintiff's FDUTPA claim involve the disclosure of trade secrets subsequent to the parties’ execution of their NDA. These allegations underpin Plaintiffs misappropriation of trade secret claims (Id. { 82) and are therefore preempted by FUTSA.”). 18 LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021Since Counts VI, VIII and X are preempted by Section 688.008, those claims must be dismissed. VI. Count VIII — Conspiracy As explained by the Eleventh Circuit in McAndrew v. Lockheed Martin Corp., 206 F.3d 1031 (11th Cir. 2000): The intracorporate conspiracy doctrine holds that acts of corporate agents are attributed to the corporation itself, thereby negating the multiplicity of actors necessary for the formation of a conspiracy. Simply put, under the doctrine, a corporation cannot conspire with its employees, and its employees, when acting in the scope of their employment, cannot conspire among themselves. Id. at 1036. See also Nassar v. Fla. Dept. of Agriculture, 754 Fed.Appx. 903, 907 (11th Cir. 2018)(“under the intracorporate conspiracy doctrine, the employees of a corporation or government agency cannot form a conspiracy among themselves because the organization and its employees are treated as a single legal actor.”). Since the only persons alleged to be involved in the conspiracy are employees of BPM, this claim is barred by the intracorporate conspiracy doctrine. See Denney v. City of Albany, 247 F.3d 1172 (11th Cir. 2001)(affirming summary judgment on conspiracy claim under intracorporate conspiracy doctrine where only two named conspirators were city employees and the object of the conspiracy related to their official work duties). CONCLUSION -£ 42.-.4 mi OL Gemana, rial requirement for filing a derivative Complaint and this lawsuit should be dismissed in its entirety. Plaintiff has failed to properly allege the required elements of Fraudulent Concealment as no facts are alleged to support reliance and detriment based on the reasons for termination of resignation of employees. 19 LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021The Computer Fraud and Abuse Act claim must be dismissed in light of the Supreme Court’s recent decision in Van Buren as Plaintiff cannot show that Defendants acted without authorization or exceeded authorized access as to information on BPM’s computers, which as members of the company they are entitled to access, and alleged misuse of such information is not actionable under the CFAA. Further, Plaintiff has not and cannot allege a form of damage or loss as those terms are defined under the CFAA. The Tortious Interference claim fails as Defendants, who are members of BPM, are not strangers to the business relationships, thus they cannot interfere with relationships to which they are parties. The Misappropriation of Trade Secrets claim preempts the Tortious Interference, Conspiracy and Unjust Enrichment claims which are also premised upon trade secrets. Finally, the Conspiracy claim is subject to dismissal under the intracorporate conspiracy doctrine as Defendants, who are employees of BPM, cannot conspire among themselves. WHEREFORE, Defendants respectfully request this Honorable Court grant their Motion to Dismiss First Amended Derivative Complaint, and for all such other relief as this Court deems just and proper. 20 LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021Signed on this 17th day of August, 2021. Respectfully submitted, Law Offices of Jason Gordon, P.A. 3440 Hollywood Blvd., Suite 415 Hollywood, Florida 33021 Telephone: (954) 241-4207 Facsimile: (954) 241-4236 FOR SERVICE OF COURT FILINGS: jg@jgordonlegal.com service@jgordonlegal.com By:__/s/ Jason Gordon Jason Gordon, Esq. Fla. Bar No. 0012973 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing was served this 17th day of August, 2021 via Fiortda’s e-filing portai to: Alen H. Hsu, Esq., Weiss Serota Heitman Cole & Bierman, P.L., 1200 N. Federal Highway, Suite 312, Boca Raton, Florida 33432. 21 /s/ Jason Gordon Jason Gordon, Esq. LAW OFFICES OF JASON GORDON, P.A. 3440 HOLLYWOOD BLVD., SUITE 415 HOLLYWOOD, FLORIDA 33021