# Brimer v. MDElite Laser & Aesthetic, LLC

> District Court, E.D. North Carolina · March 17, 2025

URL: https://www.frixlaw.com/law-library/cases/10826234

## Case

- **Court:** District Court, E.D. North Carolina
- **Decided:** March 17, 2025
- **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/10826234

## How later opinions describe it (automated extraction)

- stating that “the proper choice-of-law approach” is a “‘fact-intensive area”
- noting that the fraudulent inducement claim found to be covered by the choice-of-law provision in Hitachi “called into question the validity of the entire contract’’

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
SOUTHERN DIVISION
Civil Action No. 7:24-cv-00316-M-RJ

CRYSTAL BRIMER, OD, FAAO,
Plaintiff/Counter Defendant,

V. ORDER

MDELITE LASER & AESTHETIC, LLC,
Defendant/Counter Claimant.

This matter comes before the court on the Plaintiff/Counter Defendant Crystal Brimer’s
(“Brimer”) motion for partial dismissal of Defendant/Counter Claimant MDElite Laser &
Aesthetic, LLC’s (‘“MDElite”) Counterclaims [DE 14]. Brimer seeks dismissal of four of
MDElite’s seven counterclaims against her, including promissory estoppel, civil theft, replevin,
and misappropriation of trade secrets, arguing the claims are alleged under the incorrect state law
and/or fail to state claims for relief. MDElite counters that the choice-of-law provision in the
parties’ contract governs its contract-related tort claims and that it states plausible counterclaims
for relief against Brimer. For the reasons that follow, Brimer’s motion is denied.
I. Background
A. Counter Claimant’s Factual Allegations
The following are relevant factual allegations (as opposed to statements of bare legal
conclusions, unwarranted deductions of fact, or unreasonable inferences) made by MDElite in the
operative Counterclaims (DE 11), which the court must accept as true at this stage of the
proceedings pursuant to Kashdan v. George Mason Univ., 70 F.4th 694, 700 (4th Cir. 2023).

MDElite is a medical technology company seeking to provide affordable access to
advanced, light, laser, and radiofrequency technology to the aesthetic and vision industries. It
regularly collaborates with practitioners in dermatology, plastic surgery, ophthalmology, and
optometry to deploy such technologies. Brimer is a Doctor of Optometry and fellow of the
American Academy of Optometry who owns a specialty dry eye clinic (“Dry Eye Institute”).
On or about March 1, 2023, MDElite and Brimer entered into a Consulting Agreement (the
“Agreement”). Under the Agreement, MDElite retained Brimer as an independent contractor, who
was required to “perform the following Consulting Services for [MDElite] pursuant to the terms
and conditions of the Consulting Agreement”:
[a] Direct the development of clinical strategies and plans to further integrate
MDElite into the Vision market;
[b] Orchestrate and manage clinical aspects of regulatory strategies and interactions
with Health Authorities including the FDA;
[c] Oversee the analysis and interpretation of clinical trial data and reporting
clinical trial results;
[d] Lead interactions with academic thought leaders, investigators, and cooperative
groups;
[e] Provide clinical support and work with other members of the management team
to develop and communicate the overall corporate strategy;
[f] Represent [MDElite] and its programs to external audiences, including the
investment, medical and regulatory communities, as well as _ industry
collaborators/partners . . .;
[j] Provide lectures and webinars involving [MDElite] products to optometrists
throughout the year, as outlined in Exhibit B;
[k] Be reasonably available to address quick pre-sale, one off reach outs from
doc[tor]s . . .;
[m] 1-2 strategy calls monthly (marketing, legal, product development, doctor
messaging); [and]

[n] Pre-record social media and testimonial videos/allow use of [Crystal Brimer]
name and [Dry Eye Institute] ....
In addition to these services listed in the Counterclaims, the Agreement also required that Brimer
“lead[] and supervis[e] clinical research” and “have direct line responsibility for Clinical
Operations” for which she would “[p]rovide technical advice, development expertise[,] and advice
regarding the evaluation of [MDElite’s] products, prototypes, designs, and procedures.” DE 11-1
at 4.!
Brimer agreed that “[a]ll services will be performed to the best of her ability and in a timely,
competent, and professional manner.” The Consulting Services provision further permitted the
“{u]se of Crystal Brimer, OD and Dry Eye Institute (DEI) name[s] in MDElite marketing, with
prior review and written authorization by [Brimer] on each marketing piece.” In exchange,
MDElite agreed to compensate Brimer as set forth in Exhibit B to the Agreement, including
payments for attending certain events, for every device Brimer sold, and for a percentage of
MDElite’s annual gross revenue.
Under the Agreement, Brimer was to submit invoices to MDElite within twenty-one (21)
days of the quarter in which she incurred expenses and to include the Consulting Services she
performed that quarter. To assist Brimer in performing her Consulting Services, MDElite loaned
her two (2) iProX devices, one (1) SculptPro device, and one (1) iLightPro device (the ““Devices”’).
Under Paragraph Four of the Agreement, any Work Product arising out of or resulting from the
Consulting Services was to remain MDElite’s property and did not belong to Brimer:

1 The court may “consider a ‘written instrument’ attached as an exhibit to a pleading, see Fed. R.
Civ. P. 10(c), ‘as well as [documents] attached to the motion to dismiss, so long as they are integral
to the complaint and authentic.’” Occupy Columbia v. Haley, 738 F.3d 107, 116 (4th Cir. 2013)
(quoting Philips v. Pitt Cnty. Mem’l Hosp., 572 F.3d 176, 180 (4th Cir. 2009)). No party disputes
that the Agreement, a copy of which is attached to the Counterclaims, is integral to the pleading
and authentic.

Ownership of Work Product. “Work Product” shall mean any products or
publications solely or jointly conceived, developed, or reduced to practice by
[Brimer] which arise out of or result from the Consulting Services rendered under
this Agreement. Any Work Product jointly conceived, developed, or practiced by
[MDElite] and [Brimer], specific to this agreement, shall remain the property of the
[MDElite]. Contractor agrees that Work Product is and shall be work made for hire
to the full extent permitted by law, with all intellectual property rights in the Work
Product owned by [MDElite]. To the extent that Work Product does not qualify as
work made for hire under applicable law, Contractor irrevocably transfers, assigns,
and conveys to [MDElite] all rights, title, and interest in and to the Work Product.
In addition, Paragraph Five prevents the parties from disclosing any Confidential Information,
which includes information and/or trade secrets relating to the party’s management, business,
operations, technology, products, or business plans for the term of the Agreement and for a period
of three (3) years thereafter. Paragraph Five provides:
Confidentiality. The parties agree that during the Term of this Agreement and any
subsequent extensions, and for a period of three (3) years thereafter, the parties shall
not disclose without the prior written consent of the non-disclosing party any
Confidential Information. “Confidential Information” means information and/or
trade secrets relating to the party’s management, business, operations, technology,
products, or business plans, which either party knows or has reason to believe is
regarded as confidential by the other party and includes without limitation Work
Product. Confidential Information shall not include information that (i) has become
part of the public domain other than through breach of this Agreement, (ii) either
party knew prior to its disclosure to the other party, or (iii) was learned from a third-
party source having no duty of confidentiality to the party. Nothing in this section
or Agreement shall be read to prevent [Brimer] from lecturing upon, disseminating,
or publishing scientific papers arising from the Consulting Services performed for
[MDElite]. [Brimer] shall give appropriate credit to [MDElite] in any publication
directly related to jointly conceived Work Product.
Paragraph 14 of the Agreement further provides, “This Agreement shall be governed by the laws
of the State of Minnesota without regard to conflict of laws rules.”
MDElite alleges that, between March 2023 and November 2023, Brimer failed to perform
all the Consulting Services in a timely, competent, and professional manner, as agreed. These
failures include, but are not limited to:
a. Brimer was not reasonably available to address “one off reach outs” from doctors.

b. Brimer did not make herself available for strategy and sales calls and other
promotional activities. MDElite’s sales team arranged for multiple sales calls to
take place between Brimer and MDElite’s clients and business prospects, but
Brimer was difficult to reach and often unable to attend the sales calls, causing
MDElite to lose sales. When Brimer did attend sales calls with MDElite’s clients
and business prospects, Brimer frequently suggested to MDElite’s clients and
business prospects that they needed additional devices that MDElite could not
supply. These suggestions caused confusion and concern for MDElite’s clients and
business prospects, causing MDElite to lose sales.
c. Brimer was nonresponsive or slow to respond to requests from MDElite’s
marketing partner.
d. The quality of Brimer’s presentations to the medical community relating to the
Dry Eye Institute and MDElite’s products were subpar, underwhelming, and
resulted in MDElite receiving negative feedback from those who attended.
e. During the MDElite Sale Representative Training Webinar, Brimer was woefully
unprepared and frequently left the Webinar screen during the Webinar.
f. During Brimer’s Dry Eye Institute virtual training session, Brimer was
unprepared, used outdated material, and was late or absent for significant periods
of time. After the training session, MDElite’s clients provided negative feedback.
Brimer also allegedly failed to perform her clinical guidance obligations. For example,
Brimer provided no clinical support to MDElite after she began using MDElite’s Devices and
never reported the Devices’ performance to MDElite. Rather than learning about the Devices’
performance through Brimer, MDElite had to resort to learning about its Devices’ performance
through word of mouth or social media. Additionally, MDElite believes that Brimer shared
Confidential Information relating to MDElite’s business strategies with MDElite’s business
competitors.
On December 28, 2023, MDElite expressed to Brimer via letter its belief that she had
breached the Agreement. Brimer did not respond; thus, on January 8, 2024, counsel for MDElite
sent a follow-up letter regarding Brimer’s alleged breaches, suggesting the parties (1) enter a new
agreement or (2) discontinue working together. By letter dated January 22, 2024, Brimer

terminated the agreement by rejecting MDElite’s offer to continue working together and demanded
that MDElite cease and desist using Brimer’s name, image, and likeness in MDElite’s marketing
materials. MDElite complied and removed all references in its marketing materials.
The four Devices loaned to Brimer are MDElite’s proprietary property. One of the Devices,
the SculptPro, has been cleared by the Food and Drug Administration (“FDA”) but has not been
cleared for distribution by MDElite and, therefore, can be used only as part of MDElite’s clinical
assessment protocol.
After the Agreement was terminated, on February 2, 2024, MDElite sent Brimer a formal
notice that MDElite would collect MDElite’s four Devices, and requested that it be allowed to
retrieve the Devices during the week of February 12, 2024. Brimer responded, disclaiming any
obligation to return the Devices.
On February 12, 2024, MDElite sent a second letter to Brimer demanding the immediate
return of the four Devices. The four Devices carry a combined value of $200,000.00. Despite the
termination of the parties’ relationship and MDElite’s multiple demands for possession, Brimer
continued to refuse to return the Devices. MDElite believes that Brimer continues to use and profit
from MDElite’s four Devices and is creating Work Product with the Devices.
B. Procedural History
On February 26, 2024, Brimer filed this action in New Hanover County Superior Court,
alleging breach of contract and requesting a declaratory judgment or, in the alternative, monetary
damages and attorney’s fees. DE 1-1. MDElite removed the action to this court on March 28,
2024, invoking the court’s diversity jurisdiction. DE 1. On April 4, 2024, MDElite filed the
operative Answer and Counterclaims, in which it alleges claims for breach of contract, promissory

estoppel, unjust enrichment, and conversion, and for civil theft, replevin, and misappropriation of
trade secrets under Minnesota statutory law. DE 11.
Brimer filed the present motion seeking dismissal of four counterclaims—promissory
estoppel, civil theft, replevin, and misappropriation of trade secrets—arguing that, under North
Carolina’s choice-of-law rules, the claims are pled under the incorrect law (i.e., they should be
pled under North Carolina law), and/or they fail to state plausible claims for relief.
MDElite agrees that the court must apply North Carolina’s choice-of-law rules and
counters that its “contract-related” counterclaims are properly pled under Minnesota law in
accordance with the “broad” choice-of-law provision in the Agreement. MDElite argues that
“{b]Jecause Dr. Brimer and MDElite’s relationship is established by the Consulting Agreement and
therefore does not exist outside of the Agreement, any actions or omissions by Dr. Brimer arise
under the Consulting Agreement and are governed by Minnesota law.” DE 25 at 5. Alternatively,
MDElite asserts that discovery is necessary to determine factual issues, such as whether the
counterclaims are related to the Agreement, where the Agreement was formed, and where the
injur(ies) occurred.
Brimer replies that MDElite’s contention—that its counterclaims should survive this
motion because they essentially “do not allege sufficient facts to establish that Minnesota law does
not apply”—fails to acknowledge MDElite’s burden under Rule 8 of the Federal Rules of Civil
Procedure to state plausible claims for relief, including facts sufficient to establish that the claims
are permitted by the applicable choice-of-laws analysis. DE 28 at 1; see also id. at 8-9 (“MDElite
cannot hide behind the vagueness of its pleadings on the choice-of-law issue and simultaneously
survive the /qba/l pleading standard’’). Further, Brimer contends that MDElite primarily relies on
cases that do not apply North Carolina choice-of-law rules and that, if MDElite persists in its

argument that the non-contractual counterclaims “bear a close relationship to the Agreement,” then
the economic loss rule would bar the claims. Finally, Brimer argues that the allegations support a
finding that North Carolina law applies and/or that MDElite fails to state plausible claims for relief.
II. Legal Standards
When considering a Rule 12(b)(6) motion to dismiss, the court must accept as true all of
the well-pleaded factual allegations contained within the pleading and must draw all reasonable
inferences in the claimant’s favor, Hall vy. DIRECTV, LLC, 846 F.3d 757, 765 (4th Cir. 2017), but
any legal conclusions proffered by the claimant need not be accepted as true, Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (“[T]he tenet that a court must accept as true all of the allegations
contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements
of a cause of action, supported by mere conclusory statements, do not suffice.”). The /gba/ Court
made clear that “Rule 8 marks a notable and generous departure from the hypertechnical, code-
pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed
with nothing more than conclusions.” Jd. at 678-79.
To survive a Rule 12(b)(6) motion, the claimant’s well-pleaded factual allegations,
accepted as true, must “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). Twombly’s plausibility standard requires that a claimant’s
well-pleaded factual allegations “be enough to raise a right to relief above the speculative level,”
i.e., allege “enough fact to raise a reasonable expectation that discovery will reveal evidence of
illegal [conduct].” Jd. at 555-56. A speculative claim resting upon conclusory allegations without
sufficient factual enhancement cannot survive a Rule 12(b)(6) challenge. Jqgbal, 556 U.S. at 678—
79 (“where the well-pleaded facts do not permit the court to infer more than the mere possibility
of misconduct, the complaint has alleged--but it has not ‘show[n]’--‘that the pleader is entitled to

relief.’” (quoting Fed. R. Civ. P. 8(a)(2)); Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009)
(‘naked assertions’ of wrongdoing necessitate some ‘factual enhancement’ within the complaint
to cross ‘the line between possibility and plausibility of entitlement to relief.’”” (quoting Twombly,
550 U.S. at 557)). Courts must draw all reasonable inferences in favor of the claimant. Alberti v.
Rector & Visitors of the Univ. of Virginia, 65 F.4th 151, 154 n.3 (4th Cir. 2023) (citing Kensington
Volunteer Fire Dep’t v. Montgomery Cnty., 684 F.3d 462, 467 (4th Cir. 2012)).
Analysis
As previously stated, subject-matter jurisdiction for this case is based on diversity of
citizenship of the parties. See 28 U.S.C. § 1332. Federal courts sitting in diversity must apply the
substantive law of the forum state, including its choice-of-law rules. Small vy. WellDyne, Inc., 927
F.3d 169, 173 n.3 (4th Cir. 2019); see also Kenney v. Indep. Order of Foresters, 744 F.3d 901, 905
(4th Cir. 2014). Typically, the proper choice-of-law analysis in North Carolina varies depending
on how a claim is characterized: “[c]hoice of law in contracts cases is governed by the rule of /ex
loci contractus [or, where the contract was formed], see Tanglewood Land Co. v. Byrd, 299 N.C.
260, 261 S.E.2d 655, 656 (1980), and choice of law in torts cases is governed by the rule of /ex
loci delicti [or, where the injury occurred] see Boudreau v. Baughman, 322 N.C. 331, 368 S.E.2d
849, 854 (1988).” Caper Corp. v. Wells Fargo Bank, N.A., 578 F. App’x 276, 280 (4th Cir. 2014).
Relevant here, when the contracting parties have agreed “that a given jurisdiction’s substantive
law shall govern the interpretation of the contract, such a contractual provision will be given
effect.” Byrd, 299 N.C. at 262, 261 S.E.2d at 656.
A. Choice of Law
In this case, no party disputes that, under the governing choice-of-law provision, the claims
for breach of contract are governed by Minnesota law. The parties also agree that North Carolina’s

choice-of-law rules apply. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941)
(“The conflict of laws rules to be applied by the federal court in [North Carolina] must conform to
those prevailing in [North Carolina’s] state courts.”); see also Synovus Bank v. Coleman, 887 F.
Supp. 2d 659, 669 (W.D.N.C. 2012) (“A choice-of-law provision in a contract generally requires
use of a certain state’s substantive law, not the state’s conflict of laws principles.”) (citing Johnston
County v. R.N. Rouse & Co., 331 N.C. 88, 92, 414 S.E.2d 30, 33 (1992)).
The parties differ, however, as to which law applies to four of MDElite’s seven
counterclaims: Brimer contends that North Carolina law applies to the four challenged claims, but
MDElite asserts that the claims arise from the Agreement and, thus, are governed by the
Agreement’s choice-of-law provision, which requires application of Minnesota law. Before
analyzing which law applies, the court must first characterize the nature of the challenged claims.
See Synovus Bank, 887 F. Supp. 2d at 668 (citing Simms Inv. Co. v. E.F. Hutton & Co., 688 F.
Supp. 193, 197 (M.D.N.C. 1988) for the proposition that “[i]n a conflict of laws situation, a court
must determine at the outset whether the problem presented to it for resolution relates to torts,
contracts, property, or some other field, or to a matter of substance or procedure, in order to refer
to the appropriate law.”).
1. Nature of the Claims
lite relies, in substantial part, on the decision in Hitachi Credit America Corporation
y. Signet Bank, 166 F.3d 614 (4th Cir. 1999), to argue that the choice-of-law provision in the
subject Agreement should extend to the four challenged counterclaims. In Hitachi, like here, the
pleading alleged both contract and tort claims; however, the tort in Hitachi alleged fraudulent
inducement to enter the contract. /d. at 620, 623. Also, the choice-of-law provision in the subject
contract “explicitly callfed] for the application of Virginia law in the interpretation of ‘[the]

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Agreement and the rights and obligations of the parties [t]hereunder . . . including all matters of
construction, validity and performance.” /d. at 624. The Fourth Circuit “recogniz[ed] the close
relationship of the tort claims to the contract” (id. at 628) and “concluded that Virginia law applied
to the fraud claims, reasoning that the choice-of-law language in the contract ‘indicate[d] that the
parties intended to cover more than merely contract claims.’” Pasternak & Fidis, P.C. v. Recall
Total Info. Mgmt., Inc., 95 F. Supp. 3d 886, 895 (D. Md. 2015) (quoting Hitachi, 166 F.3d at 628).
MDElite contends that the challenged counterclaims bear a close relationship to the
Agreement. Brimer counters that Hitachi and MDElite’s other cited cases do not apply North
Carolina choice-of-law rules and, thus, are not applicable. While true that Hitachi and some of its
progeny do not apply North Carolina rules, the court finds these courts’ analyses instructive,
particularly here where the North Carolina Supreme Court has not spoken on the issue.
In evaluating the nature of the challenged tort claims, Hitachi and its progeny focus on
whether the claims are “closely related” to the contract at issue. See, e.g., Pasternak & Fidis, P.C.,
95 F. Supp. 3d at 895 (noting that the fraudulent inducement claim found to be covered by the
choice-of-law provision in Hitachi “called into question the validity of the entire contract’’); Volvo
Grp. N. Am., LLC v. Forja de Monterrey S.A. de C.V., No. 1:16-CV-114, 2019 WL 4919632, at
*5 (M.D.N.C. Oct. 4, 2019) (same). Here, MDElite argues, and the court agrees, that discovery is
necessary to determine whether the claims are “closely related.”
Before examining the tort claims, the court notes first that one of the challenged
counterclaims is, by nature, “contract related”: promissory estoppel. JTH Tax, Inc. v. Aime, 744
F. App’x 787, 792 (4th Cir. 2018) (characterizing the doctrine of promissory estoppel as a
“contract-related theory.”’”). Such claim is typically alleged in the alternative to a breach of contract
claim, in the event the contract may be deemed void or otherwise unenforceable. Here, MDElite

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alleges its promissory estoppel claim in the alternative to its breach of contract claim and seeks
recovery for two promises allegedly made by Brimer: (1) to perform Consulting Services for
MDElite in a timely, competent, and professional manner (“services promise’’); and (2) to return
the four Devices loaned to her by MDElite at the end of the parties’ relationship (“devices
promise”). Countercl. J 51.
For purposes of this analysis, the court must determine not whether the challenged claims
are merely “contract related,” but whether they are related to the contract at issue. See Volvo Grp.
N. Am., 2019 WL 4919632, at *5. In this case, the court finds that the ‘services promise” portion
of MDElite’s promissory estoppel claim clearly relates to the subject Agreement, which delineates
the services Brimer agreed to perform in exchange for compensation as consideration. See DE 11-
1. The “devices promise” portion of the claim, however, is not as clear; nothing in the Agreement
specifically references any loan or other transaction between Brimer and MDElite involving
MDElite’s “devices.” See id.
However, the Consulting Services section of the Agreement required that Brimer “lead[]
and supervis[e] clinical research” and “have direct line responsibility for Clinical Operations” for
which she would “[p]rovide technical advice, development expertise[,] and advice regarding the
evaluation of [MDElite’s] products, prototypes, designs, and procedures.” DE 11-1 at 4 (emphasis
added). In addition, Brimer was directed to “[p]rovide lectures and webinars involving
[MDElite’s] products to optometrists throughout the year.” Jd. (emphasis added). These required
services imply not only that Brimer would need to obtain, employ, and share knowledge of
MDElite’s “products, prototypes, designs, and procedures,” but also that the loaned “devices”
either included such products or prototypes, or, at least, assisted Brimer with research, clinical
operations, and/or education. The court finds that MDElite’s allegations raise factual questions

12

requiring further development about whether its promissory estoppel claim involving the devices
promise is closely related to the Agreement.
The same is true for the tort counterclaims of civil theft and replevin, which also seek
recovery for MDElite’s alleged injuries from Brimer’s failure or refusal to return the loaned
devices. Questions exist as to whether the devices constitute the same “products” or “prototypes”
described in the Agreement, whether MDElite loaned Brimer the devices to assist her with
performing with the Consulting Services, and whether Brimer, in fact, used the loaned devices to
perform such services. These questions require further factual development before the court can
determine whether the counterclaims are closely related to the Agreement.
Finally, like the civil theft and replevin claims, misappropriation of trade secrets is a tort
claim and, in this case, involves Brimer’s alleged continued use of MDElite’s devices after
termination of the Agreement. The claim seeks recovery for injuries stemming from “work
product” generated by Brimer through such use, which purportedly belongs to MDElite, and from
Brimer’s failure to return such work product to MDElite and/or her improper dissemination of it
to competitors. Countercl. f 79-86. MDElite alleges that ‘““Brimer was permitted to use the
SculptPro as part of MDElite’s clinical assessment protocol and [she] reported results to MDElite
as part of MDElite’s clinical testing” and that “[a]ll data and information related to patient
experience with the Devices, including the SculptPro, is Work Product which shall remain the
property of MDElite pursuant to the Agreement.” Jd. 80-81. In addition to the Consulting
Services described above, the Agreement provides that Brimer agreed to “[o]versee the analysis
and interpretation of clinical trial data and the reporting [of] clinical trial results.” DE 11-1 at 3.
Taking the allegations as true, the court may reasonably infer that Brimer used the SculptPro, leant
to her by MDElite, to perform the clinical trial service, as well as possibly the evaluation and

13

education services involving this and other of MDElite’s products. However, these are questions
requiring further factual development to determine whether the misappropriation claim is “closely
related” to the Agreement. See Movement Mortg., LLC v. McDonald, No. 317CV00716RJCDSC,
2018 WL 6733953, at *3 (W.D.N.C. Nov. 6, 2018), report and recommendation adopted, No.
317CV00716RJCDSC, 2019 WL 452773 (W.D.N.C. Feb. 5, 2019) (“A choice of law inquiry may
be very fact intensive and more appropriately undertaken after the record is sufficiently
developed.”’) (citing Terry v. Swift Transp., No. 1:16cv256, 2017 WL 1013074, at *7 (M.D.N.C.
March 14, 2017)).
2. Scope of Choice-of-Law Provision
In determining which law to apply in a conflicts of law scenario, courts examine not only
the nature of the claims, but also the language of the choice-of-law provision to determine whether
it is broad enough to encompass non-contractual claims. Here, the choice-of-law provision states,
“This Agreement shall be governed by the laws of the State of Minnesota without regard to conflict
of laws rules.” Agreement, § 14, DE 11-1. This provision is nearly identical to at least two
provisions analyzed by courts in North Carolina. In NC & VA Warranty Co., Inc., the court
distinguished a very similar choice-of-law provision from that in Hitachi, finding it was “not as
broad” and did not cover the related tort claims. No. 15-80016, 2016 WL 6658968, at *6 (Bankr.
M.D.N.C. Sept. 28, 2016) (examining a provision stating, “[t]his Agreement shall be subject to
and governed by the laws of the State of Ohio”); see also Pasternak & Fidis, P.C.,95 F. Supp. 3d
at 895 (finding no indication in the provision’s language—‘[t]his Agreement shall be governed by
the laws of the State of Georgia, without regard to its principles or conflicts of law’—that the
parties intended it to cover more than contract claims). Conversely, the court in Dash BPO, LLC
v. Lindberg, noting that the issue is “unsettled,” determined that a similar provision was

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“sufficiently broad to encompass contract-related tort claims,” and applied Illinois law to a
fraudulent concealment claim. No. 5:20-CV-625-FL, 2022 WL 107106, at *5 n.6 (E.D.N.C. Jan.
11, 2022), affd, No. 22-1146, 2024 WL 2874282 (4th Cir. June 7, 2024) (examining provision
stating the agreement “shall be governed and construed in accordance with the internal laws of the
State of Illinois”).
Mindful that courts differ as to the scope of nearly identical provisions, this court finds
persuasive the decision in Volvo Group, supra. In that case, the court was asked to determine at
the pleadings stage, inter alia, whether a choice-of-law provision in a purchase agreement, stating
that the agreement “shall be governed by and construed in accordance with the laws of the state of
New York,” was sufficiently broad to cover a claim of fraudulent inducement. 2019 WL 4919632,
at *3-4.? At the outset, the Volvo Group court noted that “North Carolina has not addressed this
precise question” and, thus, it “must predict how it believes the North Carolina Supreme Court
would rule in an appropriate case.” Jd. at *4. After a lengthy analysis of the different approaches
taken by courts both in and outside North Carolina to the issue, the Volvo Group court concluded
that its “discussion reveal[ed] a consistent theme: fidelity to the contracting parties’ intent,” and
found that the best way to give effect to the parties’ intent in that case was to construe the choice-
of-law provision as encompassing the tort claim. /d. at *5 (citing Duke Power Co. v. Blue Ridge
Elec. Membership Corp., 117 S.E.2d 812, 816 (N.C. 1961)). This court agrees with the approach,’
and will attempt to determine the parties’ intent in this case by examining both the choice-of-law
provision and the counterclaims themselves. See Hitachi, 166 F.3d at 628 (“[w]here a choice of

2 Importantly, the Volvo Group court did not simply accept the parties’ stipulation as to the
applicable law, but engaged in a comprehensive evaluation of whether the subject choice-of-law
provision governed the challenged tort claim. See id.
3 The parties have cited no recent opinions in North Carolina, and the court has performed its own
research to find that North Carolina has not yet ruled on the precise question at issue here.
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law clause . . . is sufficiently broad to encompass contract-related tort claims such as fraudulent
inducement,” courts may “honor[ ] the intent of the parties to choose the applicable law.’’).
The choice-of-law provision in this case specifies that “[¢]his Agreement shall be governed
by the laws of the State of Minnesota.” Agreement, § 14 (emphasis added). Thus, to the extent
that the challenged counterclaims arise from and are related to the terms of the Agreement, the
court may reasonably conclude the parties intended that conduct performed under the Agreement
would be governed by the choice-of-law provision. Volvo Grp., 2019 WL 4919632 at *5. As set
forth above, the court finds based on the counterclaims’ allegations and the language of the
Agreement that factual development is needed on issues such as whether the loaned devices
constitute (some of) the “products” or “prototypes” listed in the Agreement; whether the devices
were meant to assist Brimer in performing the Consulting Services listed in the Agreement;
whether Brimer, in fact, used the devices to perform some listed services, such as clinical research,
operations, and education. These “unknowns” lead the court to conclude that discovery is
necessary to determine whether the counterclaims arise and are related to the Agreement’s terms
and, thus, whether the choice-of-law provision governs the challenged counterclaims. Cf Synovus
Bank, 887 F. Supp. 2d at 669 ({T]he scope of the choice-of-law provision contained in the Note
is limited to disputes arising under the terms of that specific document. It does not dictate the
choice of law applicable to all disputes between the parties.’’).
Notably, the Fourth Circuit, in determining whether a party waived a choice-of-law
defense, recently stated:
[D]etermining what law applies to a particular claim is often a fact-intensive
undertaking. See, e.g., Kenney v. Indep. Order of Foresters, 744 F.3d 901, 907-08
(4th Cir. 2014) (stating that “the proper choice-of-law approach” is a “‘fact-intensive
area”). Parties therefore may not be able to make appropriate and persuasive
choice-of-law arguments without the benefit of discovery. District courts in this
Circuit thus regularly defer choice-of-law issues until after the parties have

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completed discovery. See, e.g., Morris v. Bank of Am., 3:18-cv-00157-RJC-DSC,
2019 WL 1421166, at *3 (W.D.N.C. Mar. 29, 2019) (declining to decide choice-
of-law issue until record was developed); Anderson Gustafsson Advokatbyra, KB
v. eScrub Sys., Inc., Civil Action No. 1:10-cv-632, 2011 WL 677053, at *2 (E.D.
Va. Feb. 15, 2011) (“The Court finds that the choice of law for tort and contract
based claims should be determined with the benefit of a more complete record
pending discovery.”); Malinowski v. Lichter Grp., LLC, Civil No. WDQ-14-917,
2015 WL 1129522, at *4 (D. Md. Mar. 11, 2015) (declining to resolve choice-of-
law issue at motion-to-dismiss stage because its “‘fact-intensive” and “context
specific” inquiry made it appropriate to defer “until after the parties have engaged
in discovery” (citation omitted)). We agree that this approach will often be the best
course....
M.D. Russell Constr., Inc. v. Consol. Staffing, Inc., No. 22-1420, 2023 WL 8798086, at *3 (4th
Cir. Dec. 20, 2023); see also Design Res., Inc. v. Leather Indus. of Am., 900 F. Supp. 2d 612, 621
(M.D.N.C. 2012) (“In light of the fact that a substantive dispute remains as to the application of
North Carolina or Washington law, this court finds that resolution of the motion to dismiss the
remaining claims should be deferred to trial.””). The court concludes that discovery is necessary to
determine which law applies to the challenged counterclaims before it can determine whether the
allegations state plausible claims for relief.
B. Failure to State Plausible Claims for Relief
Brimer argues that, notwithstanding which law applies, MDElite fails to allege facts
necessary to support a plausible misappropriation claim, in that it fails to allege the existence of a
trade secret and that Brimer used and disclosed the trade secret. The counterclaim is pled under
the Minnesota Uniform Trade Secrets Act, Minn. Stat. § 325C.01M, et seg. (“MUTSA”), which
requires that MDElite sufficiently allege “(1) trade secrets and (2) that its trade secrets were
misappropriated.” Am. Achievement Corp. v. Jostens, Inc., 622 F. Supp. 3d 749, 764 (D. Minn.
2022).
1. Existence of a Trade Secret
The MUTSA defines a trade secret as information that:

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(i) derives independent economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by, other
persons who can obtain economic value from its disclosure or use, and
(ii) is the subject of efforts that are reasonable under the circumstances to maintain
its secrecy.
Minn. Stat. § 325C.01, subd. 5. “Information which is generally known to the public or within an
industry, or is readily ascertainable, is not a trade secret.” Katch, LLC v. Sweetser, 143 F. Supp.
3d 854, 868 (D. Minn. 2015). Notably, a claimant “need not allege the nature of the trade secrets
with specificity at the pleading stage, but must describe them with more than conclusory statements
and with ‘sufficient information to infer more than a mere possibility of misconduct.’” Am.
Achievement Corp., 622 F. Supp. 3d at 764 (citation omitted).
MDElite alleges that “Brimer was permitted to use the SculptPro as part of MDElite’s
clinical assessment protocol and reported results to MDElite as part of MDElite’s clinical testing”;
“faJll data and information related to patient experience with the Devices, including the SculptPro,
is Work Product which shall remain the property of MDElite pursuant to the Agreement”; “[t]he
Agreement also includes a Confidentiality provision, which requires that such Work Product must
remain confidential”; and “[t]he Work Product generated through use of the Devices is a trade
secret because it is not generally known or readily ascertainable, it provides a competitive
advantage, has been developed at MDElite’s expense, and MDElite intended to keep it
confidential.” Countercl. ff 80-83. Taking them as true, the court finds these allegations,
supported by the attached Agreement, sufficient to state a trade secret under the MUT'SA.
Brimer cites three cases, arguing that MDElite’s allegations are insufficient to state a trade
secret. DE 15 at 18; DE 28 at 10. The court finds these cases distinguishable. First, in Hot Stuff
Foods, LLC v. Dornbach, the court determined that the plaintiff's allegations merely concluded
and failed to “‘set forth facts showing that the information [e.g., business plans, pricing, margins,

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and sales strategies] had independent economic value due to its secrecy, was not readily
ascertainable by others[,] and that Hot Stuff took efforts to maintain its secrecy.” 726 F. Supp. 2d
1038, 1044 (D. Minn. 2010). Likewise, in CHS Inc. v. PetroNet, LLC, the court found on summary
judgment that the plaintiff failed “to explain what the allegedly secret processes reflected in these
documents [e.g., “those memorializing the ‘as is’ operations and business rules of the company,
flowcharts depicting business processes, and ‘critical’ process documents providing a ‘road map’
to the software’’] are, instead giving only general categories and a few specific examples of the
documents it claims are trade secrets.” No. CIV. 10-94 RHK/FLN, 2011 WL 1885465, at *8 (D.
Minn. May 18, 2011). Finally, in Medafor, Inc. v. Starch Medical Inc., the court found allegations
describing trade secrets as, “business methodologies, formulas, devices, and compilations of
information, including suppliers and customers...” to be “so broad as to be meaningless.” No. 09-
CV-0441 PJS/FLN, 2009 WL 2163580, at *1 (D. Minn. July 16, 2009).
Conversely, in this case, MDElite alleges that it paid Brimer to generate the trade secrets
in the form of Work Product—i.e., data and information gathered from patient experiences with
the SculptPro—which, under the valid and enforceable Agreement, the parties agreed would
remain confidential and solely the property of MDElite. The court finds these allegations sufficient
to allege the existence of a trade secret under Minnesota law. See Protege Biomedical, LLC v. Z-
Medica, LLC, 394 F. Supp. 3d 924, 939 (D. Minn. 2019) (‘Protégé alleges that it developed various
trade secrets while researching and creating its inventions,” which, if made public, “would
undermine Protégé’s competitive advantage in the industry.”).
2. Misappropriation
“Misappropriation,” is the “acquisition,” “disclosure,” or “use[ ]” of another’s trade secrets
by improper means. Am. Achievement Corp., 622 F. Supp. 3d at 765 (quoting Minn. Stat. §

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325C.01, subdiv. 3). Improper means are “theft, bribery, misrepresentation, breach or inducement
of a breach of a duty to maintain secrecy, or espionage through electronic or other means.” Jd.
(quoting Minn. Stat. § 325C.01, subdiv. 2). “[A]lthough exacting specificity is not required at the
pleading stage, a plaintiff [ ] must allege that the defendant disclosed, acquired, or used some
particular trade secret in an improper manner.” CH Bus Sales, Inc. v. Geiger, No. 18-CV-2444
(SRN/KMM), 2019 WL 1282110, at *9 (D. Minn. Mar. 20, 2019) (citations omitted).
Here, MDElite alleges that Brimer caused harm when, “[u]pon information and belief, Dr.
Brimer shared MDElite’s business strategy and business plans with MDElite’s competitors.”
Countercl. J 86; see also id. § 29 (“upon information and belief, Dr. Brimer shared Confidential
Information relating to MDElite’s business strategies with MDElite’s business competitors.”).
MDElite also alleges that “[d]espite the termination of the parties’ relationship,” Brimer retained
the devices “disclaiming any obligation to return the devices,” and ‘“‘continues to use and profit
from MDElite’s four Devices and is creating Work Product with the Devices. Such Work Product,
and any profit derived therefrom, belongs solely to MDElite.” Jd. ff 38, 42-43.
Brimer contends that MDElite’s allegations are insufficient, because “mere fears” a person
“might have taken (completely undefined) trade secrets” and ‘“‘might use these trade secrets to their
advantage” do not give rise to a plausible claim under Minnesota law. DE 15 at 19 (citing CH Bus
Sales, 2019 WL 1282110, at *10) (emphasis in original). Brimer asserts that MDElite “fails to
specify how or to whom Plaintiff used or disclosed alleged trade secrets.” DE 28 at 11 (citing
Coyne’s & Co. v. Enesco, LLC, 565 F. Supp. 2d 1027, 1045 (D. Minn. 2008) (emphasis in original).
Although a close call, the court finds MDElite’s allegations sufficient to state a plausisle:
MUTSA claim at this pre-discovery stage of the litigation. According to MDElite, Brimer refused
to return the devices after two notices to collect and profited from them by continuing to use them

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to create confidential Work Product; this raises a question as to whether Brimer perceived value
in keeping and using the devices, although allegedly she had no right to do so, as set forth in the
Agreement.
The court finds these allegations, taken as true, state a plausible claim for misappropriation,
and they should proceed to discovery to flesh out whether Brimer acquired and used the
confidential Work Product by improper means. See, e.g., CH Bus Sales, 2019 WL 1282110, at
*10 (citing “recent decisions allowing a misappropriation claim past the motion to dismiss stage”
including Stratasys, Inc. v. Krampitz, No. 17-cv-5524 (DSD/HB), 2018 WL 2247265, at *3-4 (D.
Minn. May 16, 2018) (plaintiff alleged that defendant (a former employee) “sent [large amounts
of] confidential information to his [own] email account and downloaded files to a portable USB,”
while still employed with plaintiff, and then “used [plaintiff's] confidential information and trade
secrets to build his own competing [3D printing] business”) and Deluxe Fin. Servs., LLC v. Shaw,
No. 16-cv-3065 (JRT/HB), 2017 WL 3327570, at *2 (D. Minn. Aug. 3, 2017) (plaintiff alleged
that defendant (a former employee) “retained over 740 [trade secret] files on his USB devices
relating to [plaintiff's] longstanding customer,” and then used this proprietary information to steal
that customer from plaintiff during a head-to-head “RFP process”)); see also Am. Achievement
Corp., 622 F. Supp. 3d at 765 (citing Stratasys and Deluxe Fin. Servs. and finding sufficient
plaintiff's allegations that defendant asked plaintiff's former salespersons to share trade secrets
with defendant in violation of restrictive covenants and that a former executive sent trade secret
information to his personal email address and later shared the information with defendant).
IV. Conclusion
When parties expressly agree to the application of substantive law to disputes arising under
their agreement, it remains unclear in North Carolina whether such law applies to “closely related”

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tort claims. In this case, the court finds that discovery is necessary to develop factual issues before
determining which law applies to the challenged counterclaims, such as whether the devices
MDElite loaned to Brimer constitute (some of) the ‘“‘products” or “prototypes” listed in the
Agreement; whether the devices were meant to assist Brimer in performing the Consulting
Services listed in the Agreement; whether Brimer, in fact, used the devices to perform some listed
services, such as clinical research, operations, and education. Moreover, the court concludes that
MDElite alleges a plausible claim for misappropriation of trade secrets under Minnesota law,
sufficient to proceed to discovery.
Accordingly, Brimer’s motion for partial dismissal is DENIED.

SO ORDERED this the of March, 2025.
Aacl 2 (Ve trys Ab
RICHARD E. MYERS II
CHIEF UNITED STATES DISTRICT JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10826234. Public record. Not legal advice.