Data Device Corporation v. W.G. Holt, Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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DATA DEVICE CORPORATION,

Plaintiff,

MEMORANDUM & ORDER

-against- 19-CV-4105(JS)(ARL)

W.G. HOLT, INC. d/b/a HOLT INTEGRATED

CIRCUITS, HOLT INTEGRATED CIRCUITS,

INC., and SEAN SLEICHER,

Defendants.

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APPEARANCES

For Plaintiff: John A. DeMaro, Esq.

Mark S. Mulholland, Esq.

Melissa Sanderleaf, Esq.

Ruskin Moscou Faltischek, P.C.

1425 RXR Plaza, East Tower, 15th Floor

Uniondale, New York 11556

For Defendants: Michael R. Yellin, Esq.

Cole Schotz, P.C.

25 Main Street

Court Plaza North

Hackensack, New Jersey 07601

Benjamin Charles Deming, Esq., pro hac vice

Meredith Louise Williams, Esq., pro hac vice

Michael D. Adams, Esq., pro hac vice

Rutan & Tucker LLP

611 Anton Boulevard, Suite 1400

Costa Mesa, California 92626

SEYBERT, District Judge:

Before the Court is Defendants W.G. Holt Inc. D/B/A Holt

Integrated Circuits (“W.G. Holt”), Holt Integrated Circuits, Inc.

(together with W.G. Holt, “Holt”) and Sean Sleicher’s

(collectively, “Defendants”) motion to dismiss Plaintiff Data

Device Corporation’s Second, Third, Fourth, Fifth, Sixth, and

Eighth claims for relief pursuant to Rule 12(b)(6) of the Federal

Rules of Civil Procedure, and to transfer this action to the United

States District Court for the Central District of California

pursuant to 28 U.S.C. § 1404. (Mot., D.E. 32; Defs. Br., D.E. 32-

1; Pl. Opp., D.E. 36; Defs. Reply, D.E. 37.)

For the following reasons, the motion to dismiss is

GRANTED as to Plaintiff’s Fourth, Fifth, Sixth, and Eighth claims

for relief, and DENIED as to Plaintiff’s Second and Third claims

for relief. In addition, the motion to transfer is DENIED.

FACTUAL BACKGROUND1

I. Data Device Corporation

Plaintiff Data Device Corporation (“Plaintiff” or “Data

Device”) designs and manufactures connectivity, power, and control

solutions for military, aeronautical, space and civilian

applications from its headquarters in Bohemia, New York and other

satellite offices. (Compl., D.E. 1, ¶¶ 12, 18-19.) This case

involves one of Data Device’s connectivity product lines: bus

terminals2 meeting MIL-STD-1553 specifications. MIL-STD-1553

(“1553”) is a specification established in 1973 by the United

States Air Force and Department of Defense to describe the

1 The following facts are drawn from the Complaint and are assumed

to be true for purposes of this Memorandum and Order.

2 “A bus is a subsystem that is used to connect computer components

and transfer data between them.” Bus, TECHOPEDIA (last updated Sept.

30, 2020), https://www.techopedia.com/definition/2162/bus.

operational properties of serial data buses used in many of today’s

military, space, and civilian systems. (Id. ¶ 36.) According to

Data Device, its 1553 bus solutions are designed into most

aircraft, helicopter, drones, missile programs and space systems

that utilize 1553 componentry, and its 1553 “Designer’s Guide” is

considered the industry standard for avionics engineers. (Id. ¶¶

38, 40.) In connection with its 1553 product line, Data Device

maintains confidential technical and business information,

including, as relevant here: (1) Data Device’s 1553 Driver Library

Source Code; (2) technical data sheets and user guides; and

(3) customer, product, and sales data.

Data Device’s copyrighted 1553 Driver Library Source

Code (the “1553 Driver Library”), embodied in nearly six hundred

thousand lines of source code designed for six different operating

systems, allows its 1553 customers to develop their own customized

driver programming, thereby enhancing product utility and

functionality. (Id. ¶¶ 44-45.) The underlying source code has

been written and refined over the course of approximately twenty

years, resulting in two generations: (1) the legacy EMACE Library;

and (2) the ACE-X Library, which Data Device rolled out in 2007.

(Id. ¶¶ 46, 51.) Customers access the 1553 Driver Library pursuant

to a Software License Agreement. (Id. ¶ 50.) Moreover, customers

who wish to access the ACE-X Library must execute a non-disclosure

agreement that prohibits the duplication or transfer of the

underlying source code. (Id. ¶ 53.) Internally at Data Device,

the ACE-X Library source code is maintained in a controlled-access

Software Configuration Management (“SCM”) database. (Id. ¶¶ 54-

55.) Data Device grants employees access to the SCM database

according to standard operating procedures (“SOPs”). (Id. ¶ 56.)

Data Device’s copyrighted Data Sheets and User Guides are

scientifically formatted instruction manuals that set forth

operating and performance protocols and technical information that

enable customers to integrate 1553 components into broader

platforms and on-board assemblies. (Id. ¶ 59.)

Most important to the issues here, Data Device also

maintains extensive information regarding its 1553 component

sales, such as purchaser volume information, product codes and

specifications, configuration and performance preferences, and

pricing and margin data (the “1553 Customer, Product & Sales

Data”). (Id. ¶ 66.) The 1553 Customer, Product & Sales Data is

maintained in a highly restrictive, password-protected database

accessible on a “need to know” basis and contains Data Device’s

“Cimage Fusion” database, which houses engineering documents,

drawings, and product specifications; “Glovia” platform, which

holds accumulated sales data such as purchasing histories and

pricing information; restricted-access Excel environment, which

contains Data Device’s standard pricelists, product margin

information, and pricing formulas; and “SalesLogix” customer

database. (Id. ¶ 70.)

II. Sleicher’s Employment with Data Device and Holt

Defendant Sean Sleicher (“Sleicher”) worked at Data

Device from 2002 to 2014. From 2002 until 2005, Sleicher held the

position of Senior Applications Engineer, during which time Data

Device alleges he had access to “confidential information relating

to the technical design of plaintiff’s products, including

plaintiff’s line-up of MIL-STD-1553 components” to “facilitate his

creation and revision of technical datasheets, manuals, user

guides and other literature.” (Id. ¶¶ 80-81.) Data Device further

alleges that Sleicher had access to its “Cimage Fusion,” 1553

Driver Library files, and “source code files” during that time.

(Id. ¶¶ 82-84.) When Data Device promoted Sleicher to Marketing

and Product Line Manager in 2009, Data Device alleges he gained

access to the “Glovia” platform, restricted-access Excel

environment, and “SalesLogix.” At all times during his employment,

Sleicher was bound by confidentiality obligations set forth in his

employment agreement (Employment Agmt., Ex. 17 to Compl.), Data

Device SOPs, and company ethics and privacy policies (Compl. ¶¶

75-78).

In October 2014, Sleicher informed Data Device that he

would be leaving the company; in November 2014, he started working

at Holt, a California company with an office in Hauppauge, New

York.3 (Id. ¶¶ 91-93.) In October 2018, Defendants announced the

release of new software-compatible chips intended to compete with

Data Device’s 1553 chips. (Id. ¶ 96.) In March 2019, Holt

announced the release of a new line of 1553 bus terminals

characterized as “Drop-In Replacements” for Data Device’s

proprietary 1553 terminals (“6200 Suite”). (Id. ¶ 97; Holt Press

Release, Ex. 3 to Compl.) Data Device alleges that “mounting

evidence demonstrates” Sleicher improperly assisted in the

development and design of Holt’s 1553 bus terminals by “disclosing

to [Holt] highly confidential information concerning

(i) [P]laintiff’s sales activity, (ii) customer identities,

(iii) customer configuration and operational preferences and

requirements, (iv) pricing and margin information, and

(v) confidential data relevant to [P]laintiff’s -- and now

[Holt’s] -- determination to develop and design those specifically

formatted 1553 components.” (Compl. ¶¶ 101-02.) Although not

directly relevant to the present motion, Data Device further

alleges that Holt infringed on several of its copyrights by copying

its 1553 Driver Library, Data Sheets, and User Guides. (Id. ¶¶

103-08.)

3 Plaintiff alleges that Holt established a New York office only

upon retaining Sleicher. (Compl. ¶¶ 94-95.)

PROCEDURAL HISTORY

Data Device initiated this action against Defendants on

July 16, 2016, alleging claims for (1) federal copyright

infringement, 17 U.S.C. § 101 et seq.; (2) violations of the Defend

Trade Secrets Act (“DTSA”), 18 U.S.C. § 1831 et seq.;

(3) misappropriation of trade secrets; (4) breach of Sleicher’s

fiduciary duty; (5) aiding and abetting breach of Sleicher’s

fiduciary duty; (6) unfair competition; (7) breach of contract as

to Sleicher; and (8) unjust enrichment as to Holt. (Compl. ¶¶ 110-

84.) On December 27, 2019, Defendants filed a motion to dismiss

Data Device’s Second, Third, Fourth, Fifth, Sixth, and Eighth

causes of action pursuant to Federal Rule of Civil Procedure

12(b)(6). (See Defs. Br. at 1.) Defendants also seek to strike

the Sixth Claim for Relief as redundant pursuant to Rule 12(f).

(Id.) Defendants did not move to dismiss Plaintiff’s copyright

infringement and breach of contract claims. Instead, on May 22,

2020, Defendants filed a partial answer to these claims and

asserted counterclaims against Data Device. (See Defs. Partial

Answer and Countercl., D.E. 38.) Data Device’s request for a more

definite statement of Defendants’ counterclaim is outstanding.

(D.E. 51.)

DEFENDANTS’ MOTION TO DISMISS

I. Standard for Motions to Dismiss

To withstand a motion to dismiss, a complaint must

contain factual allegations that “state a claim to relief that is

plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570

(2007)). This plausibility standard is not a “probability

requirement” and requires “more than a sheer possibility that a

defendant has acted unlawfully.” Id. (internal quotation marks

and citation omitted). In other words, the complaint must allege

“enough facts to state a claim to relief that is plausible on its

face.” Starr v. Sony BMG Music Entm’t, 592 F.3d 314, 321 (2d Cir.

2010) (quoting Twombly, 550 U.S. at 570). “A claim has facial

plausibility when the plaintiff pleads factual content that allows

the court to draw the reasonable inference that the defendant is

liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.

II. Violation of the DTSA

Defendants seek dismissal of Plaintiff’s second cause of

action for violations of the DTSA. “To state a claim for trade

secret misappropriation under the DTSA, a plaintiff must plausibly

allege that (1) it possessed a trade secret, and (2) the defendant

misappropriated the trade secret.” ExpertConnect, L.L.C. v.

Fowler, No. 18-CV-4828, 2019 WL 3004161, at *3 (S.D.N.Y. July 10,

2019) (citing 18 U.S.C. § 1836(b)(1)). The DTSA defines

“misappropriation” as the “acquisition of a trade secret of another

by a person who knows or has reason to know that the trade secret

was acquired by improper means” or “disclosure or use of a trade

secret of another without express or implied consent.” AUA Private

Equity Partners, LLC v. Soto, No. 17-CV-8035, 2018 WL 1684339, at

*4 (S.D.N.Y. Apr. 5, 2018) (quoting 18 U.S.C. § 1839(3)). Thus,

the DTSA provides three alternative bases for liability:

(1) acquisition, (2) disclosure, or (3) use. Id. (citations

omitted). However, only those acts of misappropriation that

occurred on or after May 11, 2016, the date of the DTSA’s

enactment, are covered by the Act. Id.

Both parties agree that only Data Device’s 1553

Customer, Product & Sales Data qualify as trade secrets. (See

Compl. ¶¶ 102, 137-48; Defs. Br. at 1-2.) However, the parties

disagree whether Defendants misappropriated the 1553 Customer,

Product & Sales Data. As alleged, the timeline shows that any

acquisition of Data Device’s trade secrets took place during

Sleicher’s employment there from 2002 to 2014. According to

Defendants, because any acquisition would have occurred before the

enactment of the DTSA in 2016, such conduct is not covered by the

DTSA. (Defs. Br. at 12-14.) Moreover, Defendants argue that the

Complaint pleads only conclusory allegations that Defendants used

the 1553 Customer, Product & Sales Data in developing the 6200

Suite. (Id. at 9-12.) Data Device focuses on the timeline as

well, arguing that the complaint adequately alleges ongoing use of

Data Device’s 1553 Customer, Product & Sales Data from the time

Sleicher joined Holt through the development and launch of Holt’s

6200 Suite in 2019, a development and launch made possible only

with Data Device’s trade secrets. (Pl. Opp. at 7-13.)

First, the Court agrees with Defendants that Plaintiff

has failed to allege that Defendants acquired Data Device trade

secrets in violation of the DTSA. Plaintiff does not allege that

Sleicher acquired its trade secrets after he left the company in

October 2014. Therefore, if he acquired Data Device’s 1553

Customer, Product & Sales Data, he did so as an employee sometime

between 2002 and 2014. Because Sleicher was not employed at Data

Device at the time of the DTSA’s effective date, he did not acquire

its trade secrets in violation of the DTSA.

Whether the Complaint plausibly alleges that Sleicher

disclosed and Defendants used Data Device trade secrets to roll

out the 6200 Suite is a much closer call. On this point,

Plaintiff’s allegations may be summarized as follows: (1) Sleicher

had access to Data Device’s confidential 1553 Customer, Product &

Sales Data as an employee; (2) shortly after Sleicher left Data

Device, he joined Holt, and Holt began to design and develop its

own 1553 product line, including the 6200 Suite, to compete with

Data Device; and (3) the nature and technical parameters of the

6200 Suite demonstrate that its design, development, marketing and

sale were made possible by Data Device’s confidential 1553

Customer, Product & Sales Data. As discussed below, based on such

allegations, the Court may reasonably infer that Defendants

misappropriated Data Device’s trade secrets and, therefore, the

Court finds that Data Device has met its burden, albeit barely, at

this stage.

At the pleading stage, courts may reasonably infer that

the defendant used plaintiff’s trade secret where the defendant

retains plaintiff’s employees and launches a competing product

shortly thereafter. See Oneida Group Inc. v. Steelite Int’l U.S.A.

Inc., No. 17-CV-957, 2017 WL 6459464, at *8 (E.D.N.Y. 2017). In

Oneida, the plaintiff plausibly alleged that the defendant used

its marketing strategies, margins, and customer-specific

strategies, obtained by two former employees, to sell dish products

previously sold by the plaintiff. Id. Similarly, in Medtech

Products Inc. v. Ranir, LLC, the plaintiff stated a claim for trade

secret misappropriation where the complaint alleged that two

former employees with “extensive knowledge of [plaintiff’s]

business and production process” disclosed that confidential

information to the defendant, which was able to bring a similar

product to market. 596 F. Supp. 2d 778, 790 (S.D.N.Y. 2008).

Here, although Defendants assert that, unlike in Oneida and

Medtech, they took years to design and develop the Suite 6200,

this does not rebut the plausible inference that Defendants used

Plaintiff’s confidential 1553 Customer, Product & Sales Data to

successfully design, develop, market and sell their 1553 product

line, especially given Plaintiff’s allegation, which the Court

must accept as true, that “the lead time required for defendant

[Holt] to develop its new line of MIL-STD-1553 components was

approximately 3 to 4 years.” (Compl. ¶ 98.)

To support their argument that Plaintiff failed to

allege use of its trade secrets, Defendants rely heavily on

Mastercraft Decorators, Inc. v. Orlando, 356 F. Supp. 3d 259

(W.D.N.Y. 2018), cited by Defs. Br. at 9-11. Notwithstanding its

superficial resemblance to the instant case, the Court finds

Mastercraft is distinguishable. There, the plaintiff, a custom

glassware distributor, alleged that its former employee, Orlando,

misappropriated its trade secrets, such as customer lists and

pricing information, to solicit customers at his new employer.

Id. at 264. Although the plaintiff alleged that the defendants

misappropriated its customer lists and other confidential

information to solicit its customers, it failed to identify

specific customers the defendants contacted using its trade

secrets. Id. at 273. The Mastercraft court held that the

plaintiff’s failure to identify the trade secrets at issue was

fatal to its claims and, the Court observed, obiter dictum, that

allegations as to how the defendants used its trade secrets were

conclusory. Id. at 274. However, unlike Mastercraft, this action

involves more than a simple customer list, the use of which would

have been easier to ascertain and plead. Here, Data Device alleges

that Defendants used a host of confidential data, including

customer configuration and operational preferences and

requirements, pricing and margin information, sales activity, and

customer identities to bring a new product to market and sell it

at competitive costs. (Compl. ¶ 102.) “At this stage, without

discovery, it is to be expected that Plaintiff would have limited

knowledge of the extent to which Defendant has used their trade

secrets.” Next Commc’ns, Inc. v. Viber Media, Inc., No. 14-CV-

8190, 2016 WL 1275659, at *5 (S.D.N.Y. Mar. 30, 2016) (holding

plaintiffs sufficiently alleged that defendant used their trade

secrets in developing a feature for its own app, even though the

allegations were based on “second-hand knowledge” from one of

defendant’s investors); Balance Point Divorce Funding, LLC v.

Scrantom, 978 F. Supp. 2d 341, 353 (S.D.N.Y. 2013) (concluding

plaintiff sufficiently raised an inference that defendant used its

trade secret where defendant was positioned to benefit from use of

the trade secret because “knowledge of the [trade secret] would

enable [defendant] inevitably to better compete with

[plaintiff]”). This is especially true where, as here, the way

Defendant may have used Plaintiff’s trade secrets are “peculiarly

within the opposing party’s knowledge.”4 Next Commc’ns, Inc., 2016

WL 1275659, at *5 (quoting Boykin v. KeyCorp, 521 F.3d 202, 215

(2d Cir. 2008)).

Fundamentally, Defendants’ reading of the Complaint

fails to acknowledge Plaintiff’s allegations in their entirety.

Gen. Sec., Inc. v. Comm. Fire & Sec., Inc., No. 17-CV-1194, 2018

WL 3118274, at *4 (E.D.N.Y. June 25, 2018). Defendants would have

the Court limit Plaintiff’s allegations regarding Defendants’

supposed use of Data Device trade secrets to a single paragraph in

the Complaint, that is, paragraph 102. (See Defs. Br. at 11-12

(discussing paragraph 102).) Although paragraph 102 is central to

the cause of action, Plaintiff’s allegations regarding Defendants’

use of its trade secrets are not so limited. (See, e.g., Compl.

¶¶ 96-97, 99, 109, 181 (alleging Defendants are “actively selling

[D]efendants’ new line of MIL-STD-1553 products”).) Moreover,

although not directly relevant to its DTSA claim, the Court

acknowledges Plaintiff’s allegations of copyright infringement as

to its 1553 Driver Library, Data Sheets, and User Guides. (Id. ¶¶

103-08.)

Although a close call, the Court finds that a fair

reading of the Complaint in its entirety leads to the reasonable

4 For example, it is difficult to say how Plaintiff, without

discovery, could more thoroughly plead how Defendants used

Plaintiff’s confidential margin, pricing, and forecast data to

select which 1553 components to develop.

inference that Defendants misappropriated Data Device’s trade

secrets. Accordingly, Defendants’ motion to dismiss Plaintiff’s

Second claim for relief under the DTSA is DENIED.

III. Misappropriation of Trade Secrets Under New York Common Law

Plaintiff’s third cause of action asserts a claim for

misappropriation of trade secrets under New York common law. “To

succeed on a claim for the misappropriation of trade secrets under

New York law, a party must demonstrate: (1) that it possessed a

trade secret, and (2) that the defendants used that trade secret

in breach of an agreement, confidential relationship or duty, or

as a result of discovery by improper means.” N. Atl. Instruments,

Inc. v. Haber, 188 F.3d 38, 43–44 (2d Cir. 1999), cited by

Schroeder v. Pinterest Inc., 17 N.Y.S.3d 678, 690 (N.Y. App. Div.

1st Dep’t 2015).

“The requirements are similar for showing a

misappropriation of a trade secret under the DTSA and

misappropriation under New York common law.” ExpertConnect,

L.L.C., 2019 WL 3004161, at *7 (citing Free Country Ltd. v.

Drennen, 235 F. Supp. 3d 559, 565 (S.D.N.Y. 2016)). The Court

finds that Plaintiff plausibly states a claim for misappropriation

of trade secrets under New York law for substantially the same

reasons that the Complaint sufficiently pleads a DTSA claim.

Accordingly, Defendants’ motion to dismiss Plaintiff’s Third claim

for relief for misappropriation under New York law is DENIED.

IV. Breach of Fiduciary Duty and Aiding and Abetting Breach of a

Fiduciary Duty

Defendants argue that Plaintiff’s claim for breach of

fiduciary duty (Count Four) as to Sleicher is duplicative of its

claim for breach of contract (Count Seven). (Defs. Br. at 16-18.)

The Court agrees.

Under New York law, “a cause of action alleging breach

of a fiduciary duty, which . . . is merely duplicative of a breach

of contract claim, cannot stand.” Barbagallo v. Marcum LLP, No.

11-CV-1358, 2012 WL 1664238, at *10 (E.D.N.Y. May 11, 2012)

(quoting Hylan Elec. Contr., Inc. v. MasTec N. Amer., Inc., 903

N.Y.S.2d 528, 530 (N.Y. App. Div. 2d Dep’t 2010)). Such claims

are duplicative where the allegations of fiduciary wrongdoing “are

either expressly raised in plaintiff’s breach of contract claim or

encompassed within the contractual relationship by the requirement

implicit in all contracts of fair dealings and good faith.” Balta

v. Ayco Co., LP, 626 F. Supp. 2d 347, 360 (W.D.N.Y. 2009) (quoting

Brooks v. Key Trust Co. Nat’l Ass’n, 809 N.Y.S.2d 270, 273 (N.Y.

App. Div. 3d Dep’t 2006)). Accordingly, “a plaintiff may not

maintain both a contract claim and a breach of fiduciary duty

claim, without ‘allegations that, apart from the terms of the

contract, the parties created a relationship of higher trust than

would arise from their contracts alone, so as to permit a cause of

action for breach of a fiduciary duty independent of the

contractual duties.’” Id. at 360-61 (quoting Brooks, 809 N.Y.S.

at 273) cited in Pl. Opp. at 21-22. A party may pursue a claim

for breach of fiduciary duty; however, this legal duty must “spring

from circumstances extraneous to, and not constituting elements

of, the contract. . . .” Consol. Risk Servs., Inc. v. Auto.

Dealers WC Self Ins. Trust, No. 06-CV-871, 2007 WL 951565, at *2

(N.D.N.Y. Mar. 27, 2007) (quoting LaBarte v. Seneca Res. Corp.,

728 N.Y.S.2d 618, 622 (N.Y. App. Div. 4th Dep’t 2001)).5

Plaintiff’s allegations regarding Sleicher’s alleged

breach of his fiduciary duty are duplicative of its breach-of-

contract allegations, because they are premised on Sleicher’s

contractual duty not to misappropriate Plaintiff’s confidential

trade secrets and copyrighted materials. (Compare Compl. ¶ 155

(alleging Defendant Sleicher breached his fiduciary duty by

“disclosing to [Holt] confidential and proprietary information”),

with id. ¶ 176 (alleging Defendant Sleicher breached his

contractual obligations by “disclos[ing] plaintiff’s Proprietary

Information” to Holt).) Because Plaintiff failed to allege that

Defendant Sleicher owed a duty independent of his contractual

duties, let alone a “relationship of higher trust” between the

5 The same standard applies to Plaintiff’s claim for aiding and

abetting breach of fiduciary duty (Count Five). See Uni-World

Cap., L.P. v. Preferred Fragrance, Inc., 43 F. Supp. 3d 236, 245

(S.D.N.Y. 2014) (dismissing breach of fiduciary duty claim and

aiding and abetting the same alleged breach of fiduciary duty where

they were duplicative of the alleged breach of contract).

parties, Plaintiff’s claim for breach of fiduciary duty cannot

stand.

Accordingly, Defendants’ motion to dismiss Plaintiff’s

Fourth and Fifth claims for breach of fiduciary duty and aiding

and abetting breach of fiduciary duty is GRANTED.

V. Unfair Competition Under New York Common Law

Defendant argues that Plaintiff’s Sixth claim for unfair

competition is duplicative of its trade secrets and breach of

contract claim as to Sleicher because they are based on the same

set of facts. (Defs. Br. at 15.) Again, the Court concurs.

To state a claim for unfair competition, “a plaintiff

must allege that a defendant misappropriated plaintiff’s labor,

skills, expenditures or good will, and displayed some element of

bad faith in doing so.” Schroeder, 17 N.Y.S.3d at 690; accord

Telecom Int’l Am., Ltd. v. AT&T Corp., 280 F.3d 175, 197 (2d Cir.

2001). “A claim for unfair competition based on the same

allegations as a claim for misappropriation of trade secrets is

treated as a single cause of action.” Uni-Systems, LLC v. U.S.

Tennis Ass’n, Inc., 350 F. Supp. 3d 143, 179 (E.D.N.Y. 2018)

(citing Abernathy-Thomas Eng’g Co. v. Pall Corp., 103 F. Supp. 2d

582, 600 (E.D.N.Y. 2000)); see also Mastercraft, 356 F. Supp. 3d

at 269 (“Courts often analyze misappropriation of trade secret and

confidential information and unfair competition claims

together.”). Here, Plaintiff’s claim for unfair competition is

based on its allegation that Defendants “misappropriated

[P]laintiff’s valuable, proprietary information including trade

secret materials and data.” (Compl. ¶ 166.) Therefore,

Plaintiff’s unfair competition claim is duplicative of its claim

for misappropriation of trade secrets.6 Accordingly, the Court

GRANTS Defendant’s motion to dismiss the unfair competition claim,

understanding that the two claims rise or fall together, and that

Plaintiff may not ultimately prevail on both. Uni-Systems, LLC,

350 F. Supp. 3d at 179.

VI. Unjust Enrichment

The Complaint’s eighth cause of action is a claim for

unjust enrichment made pursuant to New York law, which requires a

plaintiff to plead that: “(1) defendant was enriched, (2) at

plaintiff’s expense, and (3) equity and good conscience militate

against permitting defendant to retain what plaintiff is seeking

to recover.” Ashland Inc. v. Morgan Stanley & Co., 652 F.3d 333,

339 (2d Cir. 2011) (citation omitted); accord Georgia Malone &

Co., Inc. v. Rieder, 973 N.E.2d 743, 746 (N.Y. 2012). A plaintiff

cannot succeed on an unjust enrichment claim under New York law

“unless [plaintiff] has a sufficiently close relationship with the

other party.” Schroeder, 17 N.Y.S.3d at 690 (quoting Georgia

6 Because the Court finds that the unfair competition claim is

duplicative of the misappropriation claim, it need not decide

whether it is also duplicative of the breach of contract claim.

Malone, 973 N.E.2d at 746). Further, “[a]n unjust enrichment claim

is not available where it simply duplicates, or replaces, a

conventional contract or tort claim.” Corsello v. Verizon New

York, Inc., 967 N.E.2d 1177, 1185 (N.Y. 2012).

Here, it is uncontested that Plaintiff’s unjust

enrichment claim arises out of the same subject matter as its

breach of contract claim. (Compare Compl. ¶ 176, with id. ¶ 181.)

The Complaint’s breach of contract claim is premised on the

allegation that Sleicher breached his contractual obligations by

acquiring and using Data Device’s confidential information for

Holt’s benefit. The unjust enrichment claim arises from the same

alleged misconduct: that Defendants “benefitted by selecting for

development, developing and actually selling competitive products

-- all through the exploitation of property, know-how and

proprietary works belonging exclusively to [P]laintiff.” (Compl.

¶ 181.) Accordingly, Defendants’ motion to dismiss Plaintiff’s

unjust enrichment claim against Sleicher is GRANTED. See

ExpertConnect, L.L.C., 2019 WL 3004161, at *10.

Moreover, Plaintiff has failed to allege a sufficiently

close relationship between Data Device and Sleicher. See Georgia

Malone, 973 N.E.2d at 746. Data Device and Holt are in direct

competition. As Defendants argue, any relationship between rival

companies like Data Device and Holt is “too attenuated” to sustain

an unjust enrichment claim. Id.; see also Schroeder, 17 N.Y.S. at

670. Accordingly, Defendants’ motion to dismiss Plaintiff’s

unjust enrichment claim against Holt is GRANTED.

DEFENDANTS’ MOTION TO TRANSFER

Defendants seek a transfer pursuant to 28 U.S.C.

§ 1404(a) (“Section 1404”), which states that “[f]or the

convenience of parties and witnesses, in the interest of justice,

a district court may transfer any civil action to any other

district or division where it might have been brought . . . .” “A

motion to transfer requires a two-fold inquiry: (1) whether the

action could have been commenced in the transferee court, and

(2) whether a transfer is appropriate considering the convenience

of parties and witnesses and the interest of justice.” Sam v.

Selip & Stylianou, LLP, No. 15-CV-2780, 2015 WL 9462109, at *3

(E.D.N.Y. Dec. 28, 2015) (internal quotation marks and citations

omitted). In determining whether a transfer is warranted, this

Court may also consider

(1) convenience of witnesses; (2) convenience

of parties; (3) locus of operative facts;

(4) availability of process to compel the

attendance of unwilling witnesses;

(5) location of relevant documents and other

sources of proof; (6) relative means of the

parties; (7) relative familiarity of the forum

with the governing law; (8) weight accorded to

the plaintiff's choice of forum and (9) the

interests of justice.

Id. (quoting Kroll v. Lieberman, 244 F. Supp. 2d 100, 102 (E.D.N.Y.

2003)). “[M]otions for transfer lie within the broad discretion

of the district court and are determined upon notions of

convenience and fairness on a case-by-case basis.” Aldino v. I.K.

Sys., Inc., No. 18-CV-6781, 2019 WL 4887655, at *2 (E.D.N.Y. Sept.

30, 2019) (quoting In re Cuyahoga Equip. Corp., 980 F.2d 110, 117

(2d Cir. 1992) (further citation omitted)). However, “[t]he party

requesting transfer carries the burden of making out a strong case

for transfer, [and] the plaintiff’s choice of forum should not be

disturbed unless the balance of factors tips decidedly in favor of

a transfer.” Carson Optical, Inc. v. Hawk Importers, Inc., No.

12-CV-1169, 2013 WL 12370815, at *2 (E.D.N.Y. 2013) (internal

quotation marks and citations omitted). The Court finds that

Defendants have failed to make out a strong case for transfer, as

it would only shift the burden of inconvenience from one party to

the other. Dwyer v. General Motors Corp., 853 F. Supp. 690, 694

(S.D.N.Y. 1994) (citing Schieffelin & Co. v. Jack Co. of Boca,

Inc., 725 F. Supp. 1314, 1321 (S.D.N.Y. 1989)).

Since the parties do not dispute that this matter could

have been initiated in the Central District of California, the

Court’s inquiry is limited to whether transfer is appropriate in

light of the factors enumerated, supra. Defendants focus primarily

on the relative means of the parties and witness convenience,

particularly the convenience of non-party witnesses. (Defs. Br.

at 20-21.) Defendants argue that Holt is “very small compared to

[Data Device] (and its parent Transdigm) whose sales, employees,

and means far exceed that of Holt.” (Id. at 21.) Moreover,

Defendants identify twenty-six potential witnesses -- fifteen Holt

employees and eleven third parties -- that reside in Southern

California. (Id.)

The Court is obliged to consider the relative means of

the parties when, as here, “an apparent disparity exists.”

Pecorino v. Vutec Corp., 934 F. Supp. 2d 422, 438 (E.D.N.Y. 2012)

(citations omitted). However, “[a] party arguing for or against

transfer because of inadequate means must offer documentation to

show that transfer (or lack thereof) would be unduly burdensome to

his finances.” Id. at 439 (quoting Neil Bros. Ltd. v. World Wide

Lines, Inc., 435 F. Supp. 2d 325, 331 (E.D.N.Y. 2006)). Here,

while Defendants submit documentation detailing the comparative

size of the two companies, they fail to offer sufficient

documentation showing why litigating in New York would be unduly

burdensome to their finances. In connection with their request,

Defendants submitted an affidavit from their President and CEO,

David J. Meade. (Meade Decl., D.E. 32-2.) Meade averred that

“Holt will face hardship if forced to litigate in New York, because

travel time for Holt’s directors of design and sales, key engineers

and myself . . . will take time away from running our relatively

smaller business in California,” before conceding that “[t]his

litigation will burden Holt and disrupt our business in any event.”

(Id. ¶ 13.) This testimony is similar to testimony the Court found

insufficient in Pecorino. See Pecorino, 934 F. Supp. 2d at 439

(finding insufficient to carry Section 1404 burden reliance upon

only the declaration of defendant’s President and General Manager

that “the costs involved with sending several [defendant] employee

witnesses to trial . . . and the impact of having several members

of upper management away from [defendant’s] offices . . . will

have a substantial, negative financial effect”). As in Pecorino,

without more, this Court finds that Defendants have failed to

demonstrate that “it would be prohibitively expensive for

[Defendants] to prosecute in the current district.” Id.

Accordingly, this factor does not weigh in favor of transfer.

As to the convenience of the witnesses, this Court must

consider “the materiality, nature, and quality of each witness,

not merely the number of witnesses in each district.” Indian

Harbor Ins. Co. v. Factory Mut. Ins. Co., 419 F. Supp. 2d 395, 404

(S.D.N.Y. 2005) (quoting Royal & Sunalliance v. British Airways,

167 F. Supp. 2d 573, 577 (S.D.N.Y. 2001)). Although Defendants

list twenty-six witnesses who will be inconvenienced by

proceedings in New York, it appears they have done so selectively,

omitting seventeen other witnesses from their initial disclosures

who are located outside California. (French Decl., D.E. 34, ¶

54.) Both parties have named witnesses that reside and work in

their respective home states that would be inconvenienced by having

to travel to testify, and whose travel would inconvenience the

productivity of their companies. (Id. ¶ 40; Meade Decl., ¶ 12).

Accordingly, the convenience of witnesses cannot be accommodated

by transferring venue, as inconvenience would simply be shifted

from one set of witnesses to the other. Dwyer, 853 F. Supp. at

694.

To the extent argued, the Court is not persuaded that

the remaining factors weigh strongly in favor of transferring this

case. Accordingly, Defendants’ motion to transfer is DENIED.

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CONCLUSION

Accordingly, IT IS HEREBY ORDERED that Defendants’

motion to dismiss is GRANTED in part and DENIED in part, resulting

in Plaintiff’s Fourth, Fifth, Sixth, and Eighth claims being

dismissed, but its Second and Third claims remaining; and,

IT IS FURTHER ORDERED that Defendants’ motion to

transfer is DENIED.

SO ORDERED.

/s/ JOANNA SEYBERT______

Joanna Seybert, U.S.D.J.

Dated: November 30 2020

Central Islip, New York