# AZIMA v. DEL ROSSO

> District Court, M.D. North Carolina · December 10, 2021

URL: https://www.frixlaw.com/law-library/cases/10253910

## Case

- **Court:** District Court, M.D. North Carolina
- **Decided:** December 10, 2021
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10253910

## How later opinions describe it (automated extraction)

- characterizing “tolling of the statute of limitations . . . on the basis of defendant misconduct” as “the domain of fraudulent concealment and equitable estoppel”

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

FARHAD AZIMA, )
)
Plaintiff, )
)
v. ) 1:20CV954
)
NICHOLAS DEL ROSSO and )
VITAL MANAGEMENT SERVICES, )
INC., )
)
Defendants. )

MEMORANDUM OPINION AND ORDER
OSTEEN, JR., District Judge
This matter is before this court for review of the
Recommendation filed on August 9, 2021, by the Magistrate Judge
in accordance with 28 U.S.C. § 636(b). (Doc. 54.) In the
Recommendation, the Magistrate Judge recommends that Defendants
Nicholas Del Rosso and Vital Management Services, Inc.’s
(“Defendants”) Motion to Dismiss, (Doc. 31), be denied in part
as to Counts III, VIII, X, and XI of Plaintiff Farhad Azima’s
(“Plaintiff”) Complaint but granted in part as to Plaintiff’s
other seven claims. (Doc. 54.) The Recommendation was served on
the parties to this action on August 9, 2021, (Doc. 55). Both
Plaintiff and Defendants filed timely objections to the
Recommendation. (Docs. 56, 57.)
This court has appropriately reviewed the portions of the
Recommendation to which objections were made and has made a
de novo determination that the Magistrate Judge’s Recommendation
should be adopted in part and modified in part. This court finds
Defendants’ Motion to Dismiss as to Counts III and XI should be
granted, contrary to the findings of the Recommendation. All
other objections are overruled and the remainder of the
Recommendation will be adopted.
I. FACTUAL AND PROCEDURAL BACKGROUND

This court fully adopts and incorporates the Magistrate
Judge’s Recommendation’s factual and procedural case summary.
(Recommendation (Doc. 54) at 2-4.) It recommended that seven of
the eleven counts in the Complaint be dismissed. (Id. at 1.) The
four remaining counts that it did not recommend dismissing,
(together, the “Remaining Counts”), are for trade secret
misappropriation under federal law (Count III), trade secret
misappropriation under North Carolina law (Count VIII), civil
conspiracy under North Carolina law (Count X), and invasion of
privacy under North Carolina law (Count XI). (Id. at 38.)
On August 23, 2021, Plaintiff objected to the Magistrate

Judge’s recommendation that seven counts of the Complaint be
dismissed. (Doc. 56.) Conversely, also on August 23, 2021,
Defendants objected to the recommendation that the four
Remaining Counts not be dismissed. (Doc. 57.) Both parties
responded in opposition to the other’s objection. (Docs. 58,
59.)
II. STANDARD OF REVIEW
This court is required to “make a de novo determination of
those portions of the [Magistrate Judge’s] report or specified
proposed findings or recommendations to which objection is
made.” 28 U.S.C. § 636(b)(1)(c). This court “may accept, reject,
or modify, in whole or in part, the findings or recommendations

made by the [M]agistrate [J]udge. . . . or recommit the matter
to the [M]agistrate [J]udge with instructions.” Id.
III. ANALYSIS
This court has appropriately reviewed the portions of the
Recommendation to which objections were made and has made a
de novo determination as to each. This court concludes that the
only objection meriting written analysis is Defendants’
objection that a previous complaint filed by Plaintiff ought to
be considered in evaluating whether Plaintiff’s claims are time-
barred by the statute of limitations. All other objections are
rejected, as this court’s determination on those issues is in

accord with the Recommendation.
A. Whether the 2016 D.C. Complaint Should be Considered
The Recommendation concluded that Plaintiff’s September
2016 complaint filed in the United States District Court for the
District of Columbia (“2016 D.C. Complaint”) should not be
considered in evaluating Defendants’ statute of limitations
affirmative defense. (Recommendation (Doc. 54) at 8-9.) In the
2016 D.C. Complaint, (Ex. 5 (“2016 D.C. Complaint”) (Doc.

31-5)), Plaintiff accuses other parties — none of which are
joined to this case — of orchestrating the hacking and
publication of the hacked data. Thus, here, Defendants submitted
the 2016 D.C. Complaint to establish that Plaintiff was
sufficiently aware of this alleged wrongdoing to institute legal
action by September 2016. (See Doc. 32 at 14—15, 17.) The 2016
D.C. Complaint alleges, inter alia, that:
Based on the September 23, 2016, demand and threat
letter from Defendant’s counsel, and the disclosure of
two websites by Defendant on September 29, 2016, it is
clear that portions of the electronic data that had
been hacked and misappropriated from Mr. Azima and his
business associates on or about August 7, 2016, had
been downloaded or transferred to remote websites
known as “BitTorrent” sites and related micro-sites.

(2016 D.C. Complaint (Doc. 31-5) ¶ 18.) In the initial briefing
before the Magistrate Judge, Plaintiff did not object to
Defendants’ proffering of the 2016 D.C. Complaint or to
consideration of any of the allegations contained therein.
The Recommendation asserted that “for a statute-of-
limitations defense to succeed at the motion to dismiss stage,
‘all facts necessary to show the time bar must clearly appear on
the face of the complaint.’” (Recommendation (Doc. 54) at 6
(some internal quotation marks omitted) (quoting Dickinson v.
Univ. of N.C., 91 F. Supp. 3d 755, 763 (M.D.N.C. 2015)).) Thus,
because Plaintiff’s complaint does not mention the 2016 D.C.
Complaint, the Magistrate Judge in the Recommendation found that
it should not be considered. Defendants object, stressing that

Plaintiff had never disputed that the “Court may take judicial
notice of his 2016 complaint.” (Defs.’ Partial Obj. to Order and
Recommendation on Defs.’ Mot. to Dismiss Pursuant to Rule
12(b)(6) (“Defs.’ Obj.”) (Doc. 57) at 2, 6-14.)1 Plaintiff
opposes the objection. (Pl.’s Br. in Opp’n to Defs.’ Objs. to
Order and Recommendation (“Pl. Opp’n Br.”) (Doc. 58) at 3-4.)
This court finds Defendants’ objection should be sustained
and that the 2016 D.C. Complaint should be considered at the
motion to dismiss stage in evaluating Defendants’ statute of
limitations affirmative defense. The Recommendation correctly
notes that “[g]enerally, an affirmative defense that a complaint

1 All citations in this Memorandum Opinion and Order to
documents filed with the court refer to the page numbers located
at the bottom right-hand corner of the documents as they appear
on CM/ECF.
is barred by a statute of limitations may not form the basis of
[a] Rule 12(b)(6) dismissal unless all of the facts necessary
for the defense appear on the face of the complaint.”
(Recommendation (Doc. 54) at 6-7 (quoting Morrison v. George
E.B. Holding, No. 7:11-CV-168-BO, 2012 WL 1132787, at *3
(E.D.N.C. Apr. 4, 2012)).) However, the Recommendation neglected
a key exception to that general rule repeatedly applied by
courts in this circuit. See Morrison, 2012 WL 1132787, at *3;
Mobley v. Estes, 1:17CV114, 2018 WL 704900, at *4 (M.D.N.C.

Feb. 2, 2018). The exception holds that the general “face of the
complaint” rule “[n]otwithstanding, the Court may also consider
information in the public record when reviewing a motion to
dismiss.” Morrison, 2012 WL 1132787, at *3 (evaluating a statute
of limitations affirmative defense); see also Mobley, 2018 WL
704900, at *4 (evaluating a statute of limitations affirmative
defense and holding that “[g]enerally speaking, a court may not
rely on extrinsic materials to adjudicate a motion to dismiss”
but nevertheless “a court may properly take judicial notice of
matters of public record.” (citations and internal quotation
marks omitted)).

While the Fourth Circuit has evidently not addressed the
specific issue of whether public records may be considered by
the court when evaluating a statute of limitation affirmative
defense at the motion to dismiss stage, other circuits have
explicitly approved the practice. See, e.g., Ennenga v. Starns,
677 F.3d 766, 773-74 (7th Cir. 2012) (rejecting an argument that
“the statute-of-limitations defense was not properly raised in a
motion to dismiss because the defense was not plain on the face
of the complaint,” because “the court [properly] took judicial
notice of the dates on which certain actions were taken . . . in
the earlier state-court litigation — facts readily ascertainable
from the public court record”); Arbogast v. Kansas, 752 F. App’x

582, 584 n.1 (10th Cir. 2018); Staehr v. Hartford Fin. Servs.
Grp., Inc., 547 F.3d 406, 425-26 (2d Cir. 2008). Moreover, the
Fourth Circuit has expressly held that judicial notice of public
records may be taken when evaluating motions to dismiss
asserting res judicata affirmative defenses. Q Int’l Courier,
Inc. v. Smoak, 441 F.3d 214, 216 (4th Cir. 2006); Andrews v.
Daw, 201 F.3d 521, 524 n.1 (4th Cir. 2000).
Plaintiff argues that this Fourth Circuit precedent, such
as Q International Courier, Inc. and Andrews, only allowed
judicial notice of public records where the res judicata
“defense raise[d] no disputed issue of fact.” (Pl. Opp’n Br.

(Doc. 58) at 4 (alteration in original) (emphasis removed)
(internal quotation marks omitted) (quoting Q Int’l Courier, 441
F.3d at 216; Andrews, 201 F.3d at 524 n.1).) Plaintiff argues
that in contrast, here, Defendants’ statute of limitations
“affirmative defense requires resolution of competing factual
theories.” (Id.) Therefore, Plaintiff argues judicially noticing
a public record is inappropriate. (Id.) Plaintiff cites two
cases to argue that the court “should allow discovery to resolve
open factual questions rather than rely upon extrinsic documents
to read inferences into the Complaint.” (Id. (citing Waugh v.
Elan Fin. Serv., Civil Action No. 3:17-4378, 2018 WL 2976430
(S.D. W. Va. June 13, 2018), and Khoja v. Orexigen Therapeutics,

Inc., 899 F.3d 988 (9th Cir. 2018)).)
Neither case is relevant here. The first, Waugh, does not
address the issue of judicial notice. The second, Khoja, is an
out-of-circuit case that focuses on the risk of considering
extrinsic documents in “SEC fraud matters, where there is
already a heightened pleading standard, and the defendants
possess materials to which the plaintiffs do not yet have
access.” Khoja, 899 F.3d at 998 (citations omitted). Here,
Plaintiff’s allegations do not face a heightened pleading
standard nor do Defendants urge consideration of a document
which Plaintiff cannot access – rather, Defendants seek to

reference a publicly available record prepared for and filed on
behalf of Plaintiff.
Therefore, consistent with the practice of courts in this
circuit, e.g., Morrison, 2012 WL 1132787, at *3; Mobley, 2018 WL
704900, at *4, this court takes notice of the 2016 D.C.
Complaint in adjudicating the statute of limitations affirmative
defense asserted in Defendants’ Motion to Dismiss. Importantly,
this court’s notice does not draw any conclusions as to whether
the facts alleged in the 2016 D.C. Complaint are true or false.
Instead, this court simply notices the existence of those
factual allegations, which include that Plaintiff had been

hacked and his hacked confidential business data posted online.
(E.g., 2016 D.C. Complaint (Doc. 31-5) ¶¶ 10, 18.)
B. Whether the 2016 D.C. Complaint Establishes that the
Remaining Counts are Time-Barred

The four Remaining Counts all have three-year statutes of
limitations that accrue when the conduct underlying the
respective count was apparent or discovered, or reasonably ought
to have been apparent or discovered. (Recommendation (Doc. 54)
at 7-8.) This court concludes that Plaintiff’s factual
allegations in the 2016 D.C. Complaint — that he had been hacked
and his hacked confidential business data published online,
(e.g., 2016 D.C. Complaint (Doc. 31-5) ¶¶ 10, 18) — establish
that by 2016 Plaintiff had discovered the conduct underlying the
Remaining Counts. Accordingly, the Remaining Counts’ statutes of
limitations seemingly accrued in 2016 and lapsed in 2019 — prior
to this case’s filing in 2020. Hence, Defendants insist that the
Remaining Counts must be dismissed as time-barred.
Plaintiff responds with four arguments why the Remaining
Counts are not time-barred, even when the 2016 D.C. Complaint is
considered. (Pl.’s Opp’n Br. (Doc. 58) at 6-9.) Three of those
are unconvincing. The fourth, concerning Defendants’ alleged
2018-2019 conduct, has merit. This court will address each
argument in turn.
1. Knowledge of Defendants’ Role

First, Plaintiff argues that “nothing in the 2016 lawsuit
suggests that Azima was aware of Defendants’ conduct in 2016;
instead, Azima alleges in his Complaint that he ‘did not learn
of the role played by Del Rosso and Vital until recently[.]’”
(Id. at 6 (quoting Complaint (“Compl.”) (Doc. 1) ¶ 36).) That is
irrelevant. None of the Remaining Counts’ statutes of
limitations make accrual contingent on when a plaintiff
discovered (or should have discovered) a perpetrator’s role,2 but
rather when the misappropriation or harm itself was discovered

2 In contrast, the statutes of limitations for two counts
that the Magistrate Judge recommended dismissing on other
grounds — identity theft (Count VI) and publication of personal
information (Count VII) — do make accrual so contingent. N.C.
Gen. Stat. § 1-539.2C(c) (“Civil actions under this section must
be brought within three years from the date on which the
identity of the wrongdoer was discovered or reasonably should
have been discovered.” (emphasis added)).
(or should have been discovered). See 18 U.S.C. § 1836(d) (Count
III); N.C. Gen. Stat. § 66-157 (Count VIII); Sanders v.
Gilchrist, No. 3:10cv68, 2011 WL 9374866, at *2 (W.D.N.C.
Mar. 22, 2011) (Count X); Alexander v. City of Greensboro,
No. 1:09-CV-293, 2011 WL 3360644, at *13 n.21 (M.D.N.C. Aug. 3,
2011) (citing N.C. Gen. Stat. § 1–52(16)) (Count XI).
2. Fraudulent Concealment and Equitable Estoppel3

3 After the parties had fully briefed their objections to
the Recommendation, Plaintiff filed an “emergency motion”
seeking leave to file supplemental evidence related to his
fraudulent concealment argument. (Doc. 61.) The supplemental
evidence Plaintiff seeks to file are (1) text messages allegedly
sent in 2020 between Del Rosso and a Mr. Aditya Jain (“Jain”),
(2) a commercial contract, and (3) a letter from Plaintiff’s
U.K. counsel. (Exs. 1—3 (Docs. 61-1 — 61-3).) Plaintiff also
seeks leave to commence discovery early because this evidence
allegedly evinces “exigent circumstances.” (Doc. 61 at 7-8;
accord Doc. 64 at 1.)
First, this court admonishes Plaintiff that “attempts to
introduce new evidence after the magistrate judge has acted are
disfavored.” Galloway v. Rajjob, No. 1:20CV1033, 2021 WL
1248626, at *1 (M.D.N.C. Apr. 5, 2021) (internal quotation marks
omitted) (quoting Caldwell v. Jackson, 831 F. Supp. 2d 911, 914
(M.D.N.C. 2010)). This court has repeatedly stated that it “is
of the belief that untimely submission of evidence often serves
to undermine the magistrate review process rather than
illuminate the arguments already before the court.” Kielbania v.
Indian Harbor Ins. Co., No. 1:11CV663, 2012 WL 6554081, at *1
(M.D.N.C. Dec. 14, 2012); Universal Leather, LLC v. Koro AR,
S.A, No. 1:12CV604, 2013 WL 12327585, at *2 (M.D.N.C. Sept. 30,
2013), vacated on other grounds, 773 F.3d 553 (4th Cir. 2014).
Second, even if the supplemental evidence had been timely
submitted, there is no exception to the rule barring
consideration of extrinsic materials when adjudicating a motion
to dismiss under which the supplemental evidence may be
considered. None of the evidence qualifies as a public record,
cf., e.g., Morrison, 2012 WL 1132787, at *3, nor is any of it
(Footnote continued)
Next, Plaintiff argues that because the Complaint alleges
that “Defendants took multiple steps to fraudulently conceal
their involvement in hacking Azima. . . . Defendants should be
[equitably] estopped from arguing that Azima’s Complaint should
be dismissed on statute of limitations grounds.” (Pl.’s Opp’n
Br. (Doc. 58) at 7-8.) Three of the Remaining Counts arise under
North Carolina law (Counts VIII, X, and XI), and accordingly are
subject to North Carolina tolling doctrines. (See Recommendation
(Doc. 54) at 13.) To successfully toll these statutes of

limitations via either equitable estoppel or fraudulent

authenticated, cf., e.g., Sec’y of State For Defence v. Trimble
Navigation Ltd., 484 F.3d 700, 705 (4th Cir. 2007) (Documents
not attached to a complaint may be considered at the motion to
dismiss stage if they are “integral to the complaint and
authentic.” (emphasis added)). As Defendants note, Plaintiff
“does not provide any sworn statements authenticating these
documents, as he has done in prior filings.” (Doc. 62 at 9-10
(citing Doc. 25).) In response, Plaintiff filed yet another
motion for leave, seeking to file U.K. court filings, which
Plaintiff seems to believe authenticate the proffered text
messages. (Doc. 64.) Leave will not be granted because the U.K.
filings do no such thing. Instead, they merely establish that
Del Rosso exchanged texts with Jain in 2020, (Doc. 64-1 ¶ 81(c);
Doc. 64-2 ¶ 81(c)); they do not establish that those text
messages include the particular messages proffered by Plaintiff
here, (Doc. 61-1). In lieu of averments or other support
credibly verifying, inter alia, the supplemental evidence’s
provenance, chain of custody, and date, this court finds that it
remains unauthenticated. Therefore, because the supplemental
evidence cannot be considered at this juncture, leave to file it
will be denied. Accordingly, this court will deny as moot
Plaintiff’s corresponding request for early discovery.
concealment4 under North Carolina law, Plaintiff must establish
that he relied on Defendants’ conduct. (Id. at 14 n.4.) This
court agrees with the Magistrate Judge’s conclusion that
Plaintiff has failed to do so. (Id. at 14-15 n.4.) Thus, neither
equitable estoppel nor fraudulent concealment will toll the
statutes of limitations for the three North Carolina law
Remaining Counts.
The one other remaining count, Count III (misappropriation
of trade secrets), arises under federal law. Hence, it is

subject to federal tolling doctrines — most relevantly,
fraudulent concealment and equitable estoppel.5 See generally
Edmonson v. Eagle Nat’l Bank, 922 F.3d 535, 559 (4th Cir. 2019).

4 The exact elements of North Carolina fraudulent
concealment are murky, but “to the extent that fraudulent
concealment has been recognized by North Carolina courts as a
tolling doctrine, a plaintiff must still ‘allege reliance on the
defendant’s misrepresentations or omissions.’” (Recommendation
(Doc. 54) at 14-15 n.4 (quoting Wilkerson v. Christian, No.
1:06CV00871, 2008 WL 483445, at *12 (M.D.N.C. Feb. 19, 2008)).)

5 This court notes the existence of an additional similar
tolling doctrine known as “equitable tolling.” Edmonson, 922 at
551. However, unlike fraudulent concealment and equitable
estoppel, equitable tolling does not require defendant
misconduct. Id. at 449. Plaintiff’s invocation of tolling
doctrines is premised on Defendants’ alleged misconduct, (Pl.’s
Opp’n Br. (Doc. 58) at 7-8), and thus is more appropriately
analyzed within “the domain of fraudulent concealment and
equitable estoppel.” Edmonson, 922 F.3d at 549 (quoting
Shropshear v. Corp. Counsel of City of Chicago, 275 F.3d 593,
597 (7th Cir. 2001) (characterizing “tolling of the statute of
limitations . . . on the basis of defendant misconduct” as “the
domain of fraudulent concealment and equitable estoppel”)).
Neither are applicable here. Fraudulent concealment has three
elements: “(1) the party pleading the statute of limitations
fraudulently concealed facts that are the basis of the
plaintiff’s claim, and (2) the plaintiff failed to discover
those facts within the statutory period, despite (3) the
exercise of due diligence.” Id. at 548 (quotation marks omitted)
(quoting Supermarket of Marlinton, Inc. v. Meadow Gold Dairies,
Inc., 71 F.3d 119, 122 (4th Cir. 1995)). Plaintiff cannot
establish the second element because the 2016 D.C. Complaint’s

factual allegations demonstrate that during the statutory period
Plaintiff discovered the supposedly concealed facts undergirding
Count III. To toll the statute of limitations via federal
equitable estoppel, a plaintiff must establish that “failure to
timely file his claim derives . . . from conduct taken by the
defendant to induce the plaintiff not to timely file his claim.”
Id. at 549. In essence, a plaintiff must show reliance on a
defendant’s misconduct. As stated, supra Part III.B.1, this
court agrees with the Magistrate Judge’s conclusion that
Plaintiff has not “alleged sufficient facts in his complaint to
establish the element of reliance.” (Recommendation (Doc. 54) at

15 (rejecting Plaintiff’s invocation of equitable estoppel under
North Carolina law).) Thus, Plaintiff has failed to establish
the elements required for either fraudulent concealment or
equitable estoppel to toll the statute of limitations for the
remaining count arising under federal law.
3. Judicial Notice of Other Public Records
Plaintiff argues that “if the Court accepts Defendants’
argument that judicial notice is appropriate” for the 2016 D.C.
Complaint, “the Court should then also take judicial notice of
the public record referred to in Azima’s previous filings.”
(Pl.’s Opp’n Br. (Doc. 58) at 9.) Plaintiff insists that these
additional public records defeat Defendants’ statute of

limitations defense because they contain facts that show “Azima
could not have been aware of [Defendants’ violations] in 2016.”
(Id.) Specifically, Plaintiff urges the court to take notice of
two matters of public record.
The first is “Del Rosso’s first witness statement in the UK
trial.” (Id.) Plaintiff argues that this is relevant because it
“shows the first time Azima learned that Del Rosso provided
Azima’s hacked data to Neil Gerrard and Dechert LLP.” (Id.) Even
if that is true, it is irrelevant to Defendants’ statute of
limitations defense. As explained, supra Part III.B.1, accrual
for the Remaining Counts’ statutes of limitations is not

contingent on when Plaintiff learned of Defendants’ roles in the
alleged wrongdoing. Rather, accrual occurs when Plaintiff
discovered the wrongdoing itself. Id. Thus, the Remaining
Counts’ statutes of limitations accrued in 2016 because the 2016
DC Complaint’s allegations show Plaintiff had discovered the
hacking and misappropriation by that time. Indeed, the 2016 D.C.
Complaint even specifically alleges that Dechert had acquired
Azima’s hacked data. (E.g., 2016 D.C. Complaint (Doc. 31-5)
¶ 12.) That Plaintiff may not have uncovered Defendants’ roles
in that misappropriation until later, does not alter the accrual
analysis. Therefore, this court declines to judicially notice
Del Rosso’s first U.K. trial witness statement because it is

immaterial to Defendants’ statute of limitations affirmative
defense.
Plaintiff also urges this court to judicially notice that
“during the pendency of the motion to dismiss, Del Rosso
admitted to paying CyberRoot.” (Pl.’s Opp’n Br. (Doc. 58) at 9.)
That Del Rosso paid CyberRoot is alleged in Plaintiff’s
Complaint, (Compl. (Doc. 1) ¶ 5), and thus already assumed true
for the purposes of evaluating Defendants’ Motion to Dismiss.
Therefore, even if this court were to take the notice Plaintiff
urges, it would have no bearing on this court’s present
analysis. Hence, this court declines to notice Del Rosso’s

alleged admission to paying CyberRoot.
4. Defendants’ Alleged 2018-2019 Conduct

Plaintiff further argues that Defendants’ alleged 2018-2019
conduct means the Remaining Counts are not time-barred, even
considering the 2016 D.C. Complaint. Plaintiff insists that “the
Complaint alleges multiple violations by Defendants independent
of and long after the filing of the 2016 lawsuit.” (Pl.’s Opp’n
Br. (Doc. 58) at 7.) Specifically, Plaintiff stresses that
“[t]he Complaint alleged that Defendants disclosed and used
Azima’s hacked data in 2018 and 2019.” (Id. (citing Compl.
(Doc. 1) ¶¶ 24, 26).) Plaintiff argues that “each disclosure in
2018 and 2019 was a separate violation of the” Remaining Counts,
and “[t]hus, the statutes of limitation did not begin to run on
those claims until at least 2018 or 2019, when the conduct
occurred.” (Id.) Therefore, “[j]udicial notice of the 2016
lawsuit could not have provided any information relevant to the
statutes of limitation for Defendants’ later conduct.” (Id.)
Defendants anticipated this argument and contend that
“Azima’s allegations simply do not link Defendants to the
alleged 2018-19 conduct, so that conduct cannot be the basis for
any claim against Defendants.” (Defs.’ Obj. (Doc. 57) at 18

n.6.) This court disagrees. For purposes of surviving a motion
to dismiss, the Complaint sufficiently links Defendants to the
2018-2019 conduct. Critically, the Complaint alleges that
Del Rosso hired the Indian hacking firm CyberRoot
. . . .

. . . .

Acting at Defendants’ direction, CyberRoot
created, uploaded, and transmitted multiple
unauthorized copies of Azima’s data. . . . [A]t least
some of that data was provided to Del Rosso . . . .

. . . .

CyberRoot created BitTorrent links that contained
Azima’s stolen data and those links were posted on the
blog sites alleging fraud by Azima. . . .

. . . .

In May and June 2018, the blog sites were
modified to include new links to WeTransfer sites that
contained copies of Azima’s stolen data.

CyberRoot regularly used WeTransfer links to
transfer data to Vital. . . .

In June 2019, the links on the blog sites were
modified to include new WeTransfer links containing
some of Azima’s stolen data.

(Compl. (Doc. 1) ¶¶ 16, 19, 22, 24-26.) At the motion to dismiss
stage, these allegations - construed “in the light most
favorable to the plaintiff” - more than “allow[] the court to
draw the reasonable inference that” Defendants are sufficiently
linked to the 2018-2019 conduct. (Recommendation (Doc. 54) at 4,
5, 34 (quoting Nemet Chevrolet, Ltd. v. Consumeraffairs.com,
Inc., 591 F.3d 250, 255 (4th Cir. 2009), and Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009)).)
a. Count XI (Invasion of Privacy under North
Carolina Law)

However, this 2018-2019 conduct only relates to three of
the four Remaining Counts. It does not relate to Count XI
(invasion of privacy under North Carolina law). That invasion of
privacy count is “tied to the actual hacking in 2016 (and not
the subsequent dissemination of the data).” (See Recommendation
(Doc. 54) at 16 n.5 (discussing Counts IV (computer trespass)
and V (conversion)).) Therefore, because the 2018-2019 conduct
does not relate to the invasion of privacy count and the 2016
D.C. Complaint shows that Plaintiff discovered the hacking in
2016, this court concludes that the invasion of privacy count
accrued in 2016. Hence, its three-year statute of limitations
lapsed in 2019, before this action was filed in 2020. Thus,
Count XI must be dismissed as time-barred. This court will
modify the Magistrate Judge’s Recommendation that Defendants’
Motion to Dismiss be denied as to Count XI and instead will
grant the Motion to Dismiss as to Count XI.
b. Count III (Misappropriation of Trade Secrets
under Federal Law)

Even if the federal and state trade secret misappropriation
counts (Counts III and VIII) are implicated by the 2018-2019
conduct, Defendants still maintain that dismissal is necessary.
Defendants assert that “trade secrets claims accrue with the
original incident,” (Defs.’ Obj. (Doc. 57) at 18 n.6), meaning
that despite the later 2018-2019 conduct, these claims accrued
in 2016 when the original misappropriation was discovered. This
argument is valid as to the federal misappropriation count,
Count III. That count’s statute of limitations holds that “a
continuing misappropriation constitutes a single claim of
misappropriation.” 18 U.S.C. § 1836(d). This means that:
the first discovered (or discoverable)
misappropriation of a trade secret commences the
limitation period . . . . [A]lthough the initial
wrongful acquisition of the trade secret and each
subsequent misuse are separate acts of
misappropriation, a claim for misappropriation arises
only once . . . at the time of the initial
misappropriation, subject to the discovery rule.

B&P Littleford, LLC v. Prescott Mach., LLC, Nos. 20-1449/1451
2021 WL 3732313, at *6 (6th Cir. Aug. 24, 2021) (internal
citations and quotation marks omitted); see also In re
Outsidewall Tire Litig., Nos. 1:09cv1217/1218, 2010 WL 11474981,
at *2 (E.D. Va. June 29, 2010) (interpreting Virginia’s
misappropriation of trade secret law’s statute of limitations,
which has the same “continuing misappropriation” language that
the federal law has, and concluding that “the limitations period
for claims alleging misappropriation of a single trade secret
begins to run when the plaintiff discovers or reasonably should
have discovered the first act of misappropriation, even if the
misappropriation continues for an extended period of time”).
Therefore, the new links to Plaintiff’s data that were posted in
2018 and 2019 constituted a “continuing misappropriation” and
thus did not re-accrue the statute of limitations for the
federal misappropriation of trade secrets count. Rather, that
count maintained an accrual date of 2016, when Plaintiff first
discovered that links to his data had been posted — as alleged
in the 2016 D.C. Complaint. Hence, the count’s three-year
statute of limitations lapsed in 2019, and Count III must be
dismissed as time-barred. Therefore, this court will modify the

Magistrate Judge’s Recommendation that Defendants’ Motion to
Dismiss be denied as to Count III and instead will grant the
Motion to Dismiss as to Count III.
c. Count VIII (Misappropriation of Trade Secrets
under North Carolina Law)

In contrast to federal law, the North Carolina trade secret
misappropriation law’s statute of limitations does not include
language addressing continuing misappropriations. See N.C. Gen.
Stat. § 66-157. In lieu of such language, general North Carolina
claim accrual doctrines apply. North Carolina law features a
“continuing wrong” doctrine. Quality Built Homes, Inc. v. Town
of Carthage, 371 N.C. 60, 70, 813 S.E.2d 218, 226 (2018). The
North Carolina Supreme Court has described this doctrine as
unexceptional and part of “the usual rules governing the
operation of statutes of limitations.” Id. North Carolina’s
continuing wrong doctrine holds that “the applicable limitations
period starts anew in the event that an allegedly unlawful act
is repeated.” Id. Importantly, “the continuing wrong doctrine
does not restart the statute of limitations period for earlier
unlawful acts, it just provides that the limitations period
starts anew for subsequently committed unlawful acts of the same
nature.” Lau v. Constable, No. 16 CVS 4393, 2019 WL 6051554,
¶ 34 (N.C. Super. Ct. Sept. 24, 2019); see also Sample v. Roper
Lumber Co., 150 N.C. 161, 166, 63 S.E. 731, 732 (1909) (“[E]very

wrong invasion of plaintiffs’ property amounted to a distinct,
separate trespass day by day, and for any and all such
trespasses coming within the three years the defendant is
responsible.”).
Applying this doctrine to the original misappropriation of
Plaintiff’s trade secrets in 2016 and the more recent
misappropriations in 2018-2019, “gives rise to multiple discrete
claims corresponding to each act of misappropriation, and
[b]ecause each act violates the law on its own, each act
separately triggers its own limitations period.” Heraeus Med.
GmbH v. Esschem, Inc., 927 F.3d 727, 737 (3d Cir. 2019)

(internal quotation marks omitted) (concluding that because
Pennsylvania’s misappropriation of trade secrets law’s statute
of limitations lacked language addressing “continuing
misappropriations,” each misappropriation started the
limitations period anew). Therefore, for purposes of the North
Carolina misappropriation of trade secrets count (Count VIII),
the 2016, 2018, and 2019 conduct each separately triggered
accrual of a respective three-year limitations period for that
particular conduct. Consequently, Plaintiff’s 2020 filing of
this case fell outside the three-year period for the 2016
conduct, but within the three-year period for the 2018-2019
conduct. Therefore, as to the 2018-2019 conduct, Count VIII is

not time-barred. Thus, this court will ultimately accept, albeit
for different reasons, the Magistrate Judge’s recommendation
that Defendants’ Motion to Dismiss Count VIII be denied.
d. Count X (Civil Conspiracy under North
Carolina Law)

The final remaining count is for civil conspiracy under
North Carolina law (Count X). “A claim for conspiracy . . .
cannot succeed without a successful underlying claim,” Swain v.
Elfland, 145 N.C. App. 383, 387, 550 S.E.2d 530, 534 (2001)
(alteration in original) (quoting Jay Group, Ltd. v. Glasgow, 139
N.C. App. 595, 599, 534 S.E.2d 233, 236 (2000)). Therefore,
here, the civil conspiracy claim only survives because this
court has found that Count VIII (misappropriation of trade
secrets under North Carolina law) remains viable, supra Part
III.B.4.c. But, as “the statute of limitations for a civil
conspiracy claim is governed by the underlying claim,” Lau, 2019
WL 6051554, at *8 (citation omitted), Plaintiff’s dependent
civil conspiracy claim is likewise limited to the 2018-2019
conduct – the only allegations that are not time-barred. Thus,
this court will ultimately accept, albeit for different reasons,
the Magistrate Judge’s recommendation that Defendants’ Motion to
Dismiss Count X be denied.
IV. CONCLUSION
For the foregoing reasons,

IT IS THEREFORE ORDERED that the Magistrate Judge’s
Recommendation, (Doc. 54), is ADOPTED IN PART and MODIFIED IN
PART. The Magistrate Judge’s Recommendation to deny Defendants’
Motion to Dismiss Pursuant to Rule 12(b)(6), (Doc. 31), as to
Counts III and XI is MODIFIED and instead the Motion to Dismiss
as to Counts III and XI will be granted. The remainder of the
Magistrate Judge’s Recommendation is ADOPTED.
IT IS FURTHER ORDERED that Defendants’ Motion to Dismiss
Pursuant to Rule 12(b)(6), (Doc. 31), is DENIED IN PART as to
Counts VIII and X of Plaintiff’s Complaint but GRANTED IN PART as
to Counts I, II, III, IV, V, VI, VII, IX, and XI.
IT IS FURTHER ORDERED that Plaintiff’s Emergency Motion for

Leave to File Supplemental Information Related to Objection to
Recommended Ruling and for Leave to Commence Discovery in Light
of Newly Discovered Evidence, (Doc. 61), is DENIED.
IT IS FURTHER ORDERED that Plaintiff’s Motion for Leave to
File Supplemental Information Related to Defendants’ Opposition
to Emergency Motion for Leave to File Supplemental Information,
(Doc. 64), is DENIED.
This the 10th day of December, 2021.

Wy Uirm L. Blu,
‘United States District Ju

=- 25 =-

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10253910. Public record. Not legal advice.