GEORGE A. O'TOOLE, Jr., District Judge.
This case arises from an alleged disclosure of confidential information. Resolution of the pending motions hangs on an evaluation of the following allegations.
In 2007, Jacqueline and Matthew Porro sued Craig Kimmel and Kimmel & Silverman. In that suit ("Law Suit 1"), the Porros were represented by Attorney David Angueira and the law firm of Swartz & Swartz, P.C. The case settled, and the settlement agreement contained a confidentiality provision stating: "The Parties and their counsel agree not to disclose any information regarding the underlying facts leading up to or the existence or substance of this Agreement . . . ." (Settlement Agreement 5 (dkt. no. 8-2) (emphasis added).) Angueira signed his name on the Agreement under a line reading: "Approved as to form." (
Five months after that agreement was signed, Krista Lohr sued Kimmel & Silverman ("Law Suit 2"). Lohr's lawyers—again, Angueira and Swartz & Swartz—included in a court filing confidential information obtained from Law Suit 1. That confidential information was publicly available on the court docket for almost a week.
In the present action ("Law Suit 3"), Craig Kimmel and Kimmel & Silverman have brought suit against the Porros, Angueira, and Swartz & Swartz because the confidential information displayed in Law Suit 2 allegedly was disclosed by the present defendants in violation of the confidentiality agreement in Law Suit 1.
Angueira and Swartz & Swartz have moved to dismiss the claims brought against them. They argue that they were not bound by the confidentiality agreement in Law Suit 1. I disagree. First, Angueira signed that agreement. It is easy to conclude he signed both individually and as a representative of the firm. Second, the agreement provided that it bound the parties "and their counsel" not to disclose confidential information. (
They further argue that the litigation privilege requires dismissal of the tortious interference claims, which allege that the they "induced" the Porros to violate their settlement agreement. (Compl. ¶ 63 (dkt. no. 1).) "An attorney's statements are absolutely privileged `where such statements are made by an attorney engaged in his function as an attorney . . . .'"
The defendants argue, in addition, that they were ethically obligated to violate the confidentiality agreement in Law Suit 1 in order to represent their client effectively in Law Suit 2. To the contrary, the attorneys could have represented their client effectively by obtaining relevant information through proper channels of discovery without violation of the agreement.
The attorney defendants' motion (dkt. no. 19) to dismiss and motion (dkt. no. 41) for sanctions are DENIED.
The Complaint alleges that the defendants, including the Porros, had access to confidential information and disclosed this information in violation of a confidentiality agreement binding them. Although the Porros argue otherwise, these allegations, taken as true, state a plausible case for relief for breach of contract and the covenant of good faith and fair dealing.
The Complaint alleges, furthermore, that "the defendants" falsely told the plaintiffs that they would not disclose any information regarding the facts leading up to the settlement of Law Suit 1. (Compl. ¶ 74.) The Complaint does not indicate, however, which of the defendants made this statement. It also fails to indicate when or where the statement was made. It merely states that it was made and that, in May 2009, the defendants knew that the statement was false. Such allegations do not satisfy the particularity requirements for claims of fraud.
Accordingly, the Porros' motion (dkt. no. 30) to dismiss is GRANTED in so far as it seeks a dismissal of the claims of fraud against the Porros and is DENIED in so far as it seeks a dismissal of the claims of breach of contract and breach of the covenant of good faith and fair dealing. The Porros' motion (dkt. no. 46) for sanctions is DENIED.
The plaintiffs seek a preliminary injunction to protect the confidential information at issue here. In opposition, the defendants primarily argue that the plaintiffs have failed to demonstrate a likelihood of success on the merits. I disagree. The defendants here entered a confidentiality agreement in Law Suit 1. Shortly after Law Suit 1 ended, someone in Law Suit 2 obtained and recently publicized information in what appears to have been a violation of the confidentiality agreement. It is likely that one of the defendants here was the one who impermissibly disclosed that information. Further disclosure of this confidential information will likely cause irreparable harm. The defendants will suffer no substantial harm if the injunction is granted. As the Order explains, the defendants may not
For those reasons, the motion (dkt. no. 7) for a preliminary injunction is GRANTED. An accompanying Order will be entered in accordance with this decision.
In sum, the plaintiffs' motion (dkt. no. 7) for a preliminary injunction is GRANTED. The defendants' motion (dkt. no. 19) to dismiss is DENIED. The defendants' motion (dkt. no. 30) to dismiss is GRANTED IN PART and DENIED IN PART. The defendants' motions (dkt. nos. 41 & 46) for sanctions are DENIED.
It is SO ORDERED.