showing in this context and for purposes of a motion to
Kemper contends, further, that if it were racist, it would not have
entered into negotiations to lend Mr. Bagley money. It asks me to apply
the "same actor inference" in a loan context. Under this theory, "where
the same person does the hiring and firing of an individual, an inference
arises that the firing did not result from an improper discriminatory
motive." Johnson v. Zema Sys. Corp, 170 F.3d 734, 744-45 (7th Cir. 1999)
(employment context). It is not clear that the inference would be
applicable in a case like this where the "same actor" did not actually
offer a job or loan that it later refused to a person in the protected
class. There are many reasons a racist lender might pretend to give
consideration to an application from an African-American, for example, to
create a paper impression that it was not engaged in discrimination. Even
if the same-actor inference were applicable, though, it is "unlikely to
be dispositive in very many cases [because the] inference is not itself
evidence of nondiscrimination. It simply provides a convenient shorthand
for cases in which a plaintiff is unable to present sufficient evidence
of discrimination." Id. at 745. I cannot, therefore, conclude as a matter
of law that merely because Kemper negotiated with Mr. Bagley that it did
not discriminate against him in making contracts.
Finally, Kemper argues that Mr. Bagley has not shown that its
nondiscriminatory reasons were pretextual. However, Kemper adequately
replies to these reasons in his complaint (admittedly an unusual place to
do it), where he alleges, first, that Kemper provided managing general
agent status to the white-owned Lou Jones Agency of Los Angeles,
California, from 1985 to 1996, so it must have been interested in
"outside" marketing affinity groups, contrary to what it told him in the
denial letter. Kemper responds, in a footnote,*fn1 that it had no such
relations in 1997, but it does not say whether that was because of the
policy stated in the rejection letter, so on a motion to dismiss I must
draw the inference in favor of Mr. Bagley and conclude that it was not.
Second, Mr. Bagley argues that it is hard to square the proffered
nondiscriminatory reasons that Kemper was not interested in setting up an
outside competitor and had its own program about ready to go with
Kemper's extensive negotiations with him. Third, Mr. Bagley alleges that
Kemper did not begin selling liability insurance to small law firms until
after the negotiations with him, which shows that he got it interested in
the idea. Kemper denies this, also in a footnote, but I must accept Mr.
Bagley's characterization of the facts for the purposes of this motion.
Mr. Bagley has stated a claim for the violation of § 1981.
I now turn to Mr. Bagley's state law claims. In count III, he argues
that Kemper stole the ideas in his business plan, committing the state
law torts of misappropriation and unfair competition. Kemper argues that
these torts are effectively preempted by the Illinois Trade Secrets Act,
765 ILCS 1065/8, which by its terms is "intended to displace conflicting
tort, restitutionary, unfair competition, and other laws of this State
providing civil remedies for misappropriation of a trade secret."
However, the Act only displaces conflicting laws that provide civil
remedies for misappropriation of trade secrets. Mr. Bagley explains that
in count III, he does not claim that his business plan constituted a
trade secret, so he does not fall under the displacing or preemptive
effect of the Act. In count IV, Mr. Bagley does allege that the plan
constituted a trade secret, but he argues, correctly, that he is entitled
to plead in the alternative at this stage of
proceedings. Kemper offers
no independent argument that Mr. Bagley has failed to make out a claim of
misappropriation or unfair competition, so those counts stand.
The Illinois Trade Secrets Act does apply to the trade secrets claim
(count IV). To establish a violation, Mr. Bagley must show that the
information at issue was, among other things, secret, that is, not
generally known in the industry. See Service Centers of Chicago, Inc. v.
Minogue, 535 N.E.2d 1132, 1136 (Ill. App. Ct. 1989) (defining "secret").
Kemper argues that Mr. Bagley's ideas were nothing more than an attempt
to use an existing marketing vehicle — a managing general agency
— to sell insurance policies to niche firms, and this idea was
generally known in the industry. However, Mr. Bagley alleges that it was
his particular business plan for the Barrister Protection Policy and
related proposals that was confidential, not the general idea. Kemper
responds that Mr. Bagley did not make it sign a confidentiality agreement
before showing it the plan and that he admits showing it to another
industry expert. Whether efforts to maintain confidentiality were
sufficient is not a question that can be decided as a matter of law on
the kind of factual allegations that govern a motion to dismiss. The
depends on a balancing of costs and benefits that will
vary from case to case. . . . On the one hand, the
more the owner . . . spends on preventing the secret
from leaking out, the more he demonstrates that the
secret has real value . . . and that there really was
misappropriation. On the other hand, the more he
spends, the higher his costs.
Rockwell Graphic Sys., Inc. v. Dev Indus., Inc.; 925 F.2d 174, 179-80
(7th Cir. 1991) (rejecting deciding whether efforts to protect a trade
secret were sufficient on summary judgment in all but "extreme cases").
This is not an extreme case.
Kemper objects, finally, that Mr. Bagley does not allege that he took
any steps whatsoever to protect his supposed secret, but in federal court
he does not have to. See Leatherman v. Tarrant County Narcotics
Intelligence and Coordination Unit, 507 U.S. 163, 168 (1993)
("[H]eightened pleading standards" are contrary to the system of notice
pleading.) Plaintiffs need not plead facts and may plead conclusions, so
long as those conclusions provide defendants with minimum notice of the
claim. Jackson v. Marion County, 66 F.3d 151, 153 (7th Cir. 1995)
Mr. Bagley's final claim is that Kemper tortiously interfered with his
prospective business advantage in rejecting his proposal. However, in
Illinois, this tort is a triadic relationship: X must have a prospective
business relationship with Y, in which Z interferes. See Schuler v.
Abbott Laboratories, 639 N.E.2d 144, 147 (Ill. 1993). ("Plaintiff must
also allege action by the interfering party directed towards the party
with whom the plaintiff expects to do business."). The interference must
be directed towards a "specific third party." Id. (emphasis added). Mr.
Bagley alleges only a dyadic relationship, that Kemper interfered with
Mr. Bagley's prospective relationship with Kemper itself by refusing his
application because of his race. This cause of action must therefore be
I DENY Kemper's motion to dismiss counts I-IV, and GRANT its motion to
dismiss count V.