FREDA L. WOLFSON, District Judge.
On July 16, 2013, this Court dismissed thirteen counts asserted against Defendants Affine, Inc. ("AI") and Affine Analytics Corp. ("AAC") (collectively, "Defendants") in Plaintiff Mu Sigma, Inc.'s ("Mu Sigma" or "Plaintiff") Second Amended Complaint ("July Decision"). In the present matter, Plaintiff moves for partial reconsideration of the July Decision, or in the alternative, for leave to file a third amended complaint on the grounds that the amendments would serve the interest of justice pursuant to Fed R. Civ. P. 59(e). For the reasons that follow, the motion for reconsideration is
For the purposes of judicial economy, I will not repeat the facts here; rather, the factual recitation of this case in the July Decision is incorporated herein. I will instead set forth the procedural history. Plaintiff commenced this action in the Law Division of the New Jersey Superior Court, Somerset County on December 20, 2011. In the initial Complaint, Plaintiff filed an order to show cause, whereby it sought preliminary injunctive relief against the original defendants, including AI and AAC. In response, on March 2, 2012, the original defendants removed the case to this Court based on diversity jurisdiction. After removal, Plaintiff renewed its motion for a preliminary injunction. The original defendants then moved to dismiss the claims against them for lack of personal jurisdiction. On July 17, 2012, the Court dismissed all the defendants—Affine Analytics Ltd. and the founders of the three Affine corporations, Abhishek Anand, Manas Agrawal, Shivaprasad K.T., and Vineet Kumar (hereinafter, the "Founders")—except for AI and AAC.
On December 3, 2012, AI and AAC filed a motion to dismiss Plaintiff's Second Amended Complaint ("SAC") for failure to state a claim. On July 17, 2013, this Court granted Defendants' motion and dismissed all thirteen counts in the SAC. Plaintiff now seeks reconsideration of the dismissal as to the following claims: (1) tortious interference with prospective economic advantage, (2) tortious interference with contractual relations, (3) unfair competition, (4) misappropriation of trade secrets, and (5) alter ego. Further, Plaintiff submits that the Court should have afforded Plaintiff another opportunity to amend the SAC. In that regard, Plaintiff requests, in the alternative, that the Court Plaintiff grant leave to file a Third Amended Complaint. In connection with its request, Plaintiff has submitted a proposed Third Amended Complaint, which purportedly includes more factual specificity of its claims against Defendants. I will review and set forth those allegations in more detail later in this Opinion.
Local Civil Rules 7.1(i) governs a motion for reconsideration.
In order to succeed on a motion for reconsideration, the movant has the burden of demonstrating at least one of the following grounds: "(1) an intervening change in the controlling law; (2) the availability of new evidence that was not available when the court [issued its order]; or (3) the need to correct a clear error of law or fact or to prevent manifest injustice."
In addition, "[a] motion for reconsideration should not provide the parties with an opportunity for a second bite at the apple."
The determination of whether a party may amend a judgment or be given leave to amend a complaint is within the sound discretion of the court."
Those factors include: "undue delay, bad faith, prejudice, or futility."
The Court must bear in mind, however, that while the factors are identical in assessing both Rule 59(e) and Rule 15(a) motions, the liberal standard of Rule 15(a) is not applicable after the judgment is entered because Rule 59(e) should not be employed in a manner contrary to "favoring finality of judgments and the expeditious termination of litigation. ..."
Pursuant to L. Civ. R. 7.1(i), Plaintiff argues that the Court's dismissal of Plaintiff's Second Amended Complaint was made in clear error of fact and law, and as a result, manifest injustice will occur without intervention by the Court. In addition, Plaintiff argues that it should have been afforded the opportunity to amend its Second Amended Complaint prior to this Court granting Defendants' motion to dismiss. In response, Defendants argue that Plaintiff's motion for reconsideration must fail as a matter of law because Plaintiff merely disagrees with the judgment of this Court. Defendants further argue that this Court had no obligation to notify Plaintiff of its right to amend its Second Amended Complaint.
Prior to analyzing the motion for reconsideration, the Court first addresses Plaintiff's contention that it should have been afforded the opportunity to amend its Second Amended Complaint. The Third Circuit has cautioned that when a court permits a party to amend after an adverse decision against that party on a motion to dismiss, a threshold determination must be made whether any amendments would be inequitable or futile.
As to its motion for reconsideration, Plaintiff has not argued that there has been an intervening change in the controlling law or that new evidence is available. Instead, Plaintiff argues that the Court needs to correct a clear error of fact and law in order to avoid a manifest injustice. In so arguing, however, Plaintiff does not present this Court with any "dispositive factual matters or controlling decisions of law" that were overlooked,
In the alternative, Plaintiff requests leave to amend the Second Amended Complaint after a final judgment pursuant to Fed. R. Civ. P. 59(e). Plaintiff argues that it is able to cure the deficiencies of the Second Amended Complaint by adding more specificity to seven of its claims against Defendants. To the contrary, Defendants maintain that the proposed Third Amended Complaint is also insufficiently pled.
Before I assess the futility of Plaintiff's new amendments, I find that Plaintiff has not engaged in undue delay, bad faith, or prejudice, particularly since Defendants have not objected to Plaintiff's amendment request on these bases. Thus, my merit analysis of Plaintiff's Rule 59(e) motion focuses on the futility of the proposed Third Amended Complaint, which shall be examined under the "same standard of legal sufficiency" as a Rule 12(b)(6) motion.
The deficiency that was fatal to Plaintiff's claims in the Second Amended Complaint is the lack of any allegations of illegal actions on the part of Defendants. In that regard, the Court held that Plaintiff could not attribute the alleged wrongful acts of the Founders — committed before the incorporation of AI and AAC — to the defendant entities. In the proposed Third Amended Complaint, Plaintiff has injected sufficient specificity to cure the deficiencies of its earlier complaint.
The proposed Third Amended Complaint alleges, inter alia, that the Founders conspired and stole Mu Sigma's confidential materials during their employment at Mu Sigma for the express purpose of benefitting the defendant entities, i.e., AI and AAC.
With respect to Plaintiff's allegations of current, continuous possession of Mu Sigma's misappropriated information, Plaintiff specifically alleges that Abhishek Anand solicited, among others, a Mu Sigma customer, a global computer software developer, on behalf of Defendants.
As to both claims for tortious interference with contractual relations and prospective economic advantage, Plaintiff has identified, in its proposed Third Amended Complaint, certain of Plaintiff's protected economic clients and interests from whom the Founders attempted to solicit business by using, for the benefit of the new defendant entities, "stolen" proprietary information the Founders obtained while they were employed by Mu Sigma. As an example, Plaintiff alleges that in October 2012, Anand intentionally interfered with the business relationship of Plaintiff and a global computer software developer and other prospective customers. By doing so, Plaintiff alleges that it lost certain anticipated economic benefits, as well as Plaintiff's customers. In addition, Plaintiff claims that Defendants have "actively solicited and employed [Mu Sigma's] employees in direct violation of the non-compete and non-solicitation provisions of the respective employee's agreements with Mu Sigma without any justification or excuse." Pl. Amend. Comp., ¶ 50. I find that in light of those additional allegations, both claims for tortious interference with prospective economic advantage and contractual relations are sufficiently pled.
With respect to Plaintiff's claim for misappropriation of trade secrets, in the July Decision, the Court found that Plaintiff did not plead facts regarding how Defendants used the proprietary information to the detriment of Plaintiff. Plaintiff has also cured that defect in this claim. It is undisputed for the purpose of this motion that the proprietary information in question constitutes a trade secret. Plaintiff alleges that the Founders acquired the proprietary information, which was communicated to "Defendants in violation of their covenants not to disclose, compete, and solicit." Pl.'s Amend. Compl. ¶ 95. Plaintiff alleges that Defendants were aware that the proprietary information was acquired with knowledge of the employee's breach of confidence. Indeed, the Founders were alleged to have acted on behalf of Defendants and therefore, knowledge could be inferred. Next, Plaintiff alleges — which allegations were not included in its Second Amended Complaint — two specific instances of the secret information being used by Defendants to the detriment of Plaintiff. First, Plaintiff alleges that "Defendants convinced a top U.S. wholesale warehouse to discontinue using Mu Sigma's service and to use Affine instead." Pl.'s Amend. Compl. ¶ 98. Second, Plaintiff uses the allegations surrounding the October 2012 email in which Anand solicited a Mu Sigma customer on behalf of Defendants. Based on those allegations in the context of misappropriation, Plaintiff has connected the dots between the actions of the Founders and the actions of Defendants; that is, Plaintiff has sufficiently pled actions of Defendants using the alleged misappropriated trade secret to Plaintiff's detriment. Accordingly, this post judgment amendment as to this particular claim would not be futile.
Similarly, Plaintiff has sufficiently pled its unfair competition claim. In the July Decision, the Court found that Plaintiff did not identify any misleading or deceptive behavior on the part of AI and AAC sufficient to support a claim of unfair competition. Rather, the Court found that the crux of Plaintiff's assertions was directed at the conduct of the Founders — prior to the formation of the defendant entities. By alleging specific wrongful acts of Defendants, albeit through the actions of the Founders, Plaintiff has sufficiently pled that Defendants are utilizing Mu Sigma's confidential information to unfairly compete with Plaintiff on behalf of, and with the knowledge of, Defendants. Accordingly, based on these allegations, Plaintiff sufficiently identifies deceptive and wrongful business practices on the part of Defendants that would render competition unfair. This claim may proceed.
To state a claim for civil conspiracy, a plaintiff must allege "a combination of two or more persons acting in concert to commit an unlawful act, or to commit a lawful act by unlawful means, the principal element of which is an agreement between the parties to inflict a wrong against or injury upon another, and an overt act that results in damage."
In the instant matter, Plaintiff's Third Amended Complaint alleges that AI and AAC have conspired with the Founders to interfere with Plaintiff's prospective economic advantage and contractual relations. However, as alleged, the wrongful actions of the Founders are taken in their official capacity on behalf of Defendants. Therefore, the alleged acts of the Founders in that context cannot form the basis of a civil conspiracy since a corporation cannot conspire with itself through the conduct of its agents.
Finally, the Court addresses Plaintiff's inclusion of an alter ego claim. While there is an open question as to whether alter ego is a distinct recognizable cause of action or simply a theory of liability, the fatal defect in Plaintiff's claim is that the alleged alter ego of the defendant entities (i.e., the Founders) are not within this Court's jurisdiction, and therefore, the Founders are not within the purview of this litigation. Indeed, the Court has previously found that it lacks personal jurisdiction over the Founders, and so, even if Plaintiff were successful in piercing the corporate veil, this Court would not have the requisite personal jurisdiction to enter judgment against the individual officers. However, if discovery reveals additional facts establishing this Court's personal jurisdiction over the Founders, Plaintiff may move to add the Founders and the alter ego claim at that time.
Based on the forgoing, Plaintiff's motion for reconsideration is