The opinion of the court was delivered by: MARTIN ASHMAN, Magistrate Judge
MEMORANDUM OPINION AND ORDER
Before the court is the motion of defendant MiTAC International
Corporation ("MiTAC") to dismiss Counts XVII and XXIII of the
Second Amended Complaint of plaintiff Joseph E. Cohen, Trustee
for the Estate of VisionTek, LLC. For the following reasons, the
court denies MiTAC's motion to dismiss those counts. I. Background
Prior to its Chapter VII bankruptcy proceedings,*fn1
VisionTek manufactured and sold 3D computer graphics accelerators
and memory modules called "cards" for the enhancement of
graphics in computer games and personal computers. In August of
2002, several VisionTek employees left to either form, or work
for, a new company, BFG Technologies, Inc. ("BFG"). In the
seventy-page, twenty-seven-count Second Amended Complaint
("Complaint"), the Trustee characterizes the employees' actions
as a mutiny against VisionTek, which involved the
misappropriation of the company's trade secrets and confidential
information. According to the Complaint, the mutinous employees
solicited VisionTek's employees, suppliers, and customers, in
order to form a new company to compete with VisionTek and run it
out of business. The Trustee has named the former employees in
counts charging breaches of those employees' non-competition
agreements and confidentiality agreements.
Defendant MiTAC is a Taiwanese corporation that manufactures
graphic cards and was a key supplier to VisionTek. MiTAC and
VisionTek had a "Mutual Confidentiality Agreement" that covered
the information that passed between them during their business
relationship. According to the Trustee, MiTAC was an essential
participant in the conspiracy: if MiTAC had not agreed to
terminate its relationship with VisionTek and do business with the new company, BFG, the former VisionTek
employees would not have carried out their plan. Thus, in Count
XXIII, the Trustee alleges that MiTAC committed tortious
interference with the contractual relationships VisionTek had
with its soon-to-be-former employees. In addition, under Count
XVII, the Trustee claims that MiTAC breached the "Mutual
Confidentiality Agreement" by using VisionTek's confidential
information to help launch the new company. MiTAC moves to
dismiss these counts, arguing that the Trustee has unnecessarily
involved it in a dispute between VisionTek and its former
employees.
For the purposes of considering the defendant's motion to
dismiss, the court accepts all of the Trustee's well-pleaded
allegations as true, and draw all reasonable inferences in the
Trustee's favor. Bressner v. Ambroziak,
379 F.3d 478, 480
(7th Cir. 2004). Founded in 1988, VisionTek, as already
noted, manufactured and distributed computer graphics cards for
use in computer games and home computers. (Complaint, ¶ 23). As
a participant in the highly competitive consumer electronics
industry, VisionTek was understandably concerned with maintaining
the confidentiality of its trade secrets and its design,
development, and manufacturing methods. (Id., ¶¶ 24-25). To
that end, the contracts it executed with its employees included
confidentiality and non-competition agreements. (Id., ¶¶ 30-33,
36-38, 40, 42-44, 46-49). VisionTek also executed a confidentiality agreement with one of its key
suppliers, MiTAC. (Id., ¶ 53). Pursuant to that "Mutual
Confidentiality Agreement," dated February 1, 2002:
[e]ach party agrees that as a condition to
Confidential Information being furnished to the
other, each party shall hold and maintain all
Confidential Information in strict confidence.
Furthermore, each party agrees not to disclose
Confidential Information to any company, entity or
person without the prior written consent of the other
party for a period of three (3) years from the date
hereof.
(Id., ¶ 53, Ex. 14, at 1).
In 2002, VisionTek began discussions with Advanced Equities,
Inc. ("AEI") regarding efforts to raise capital. (Id., ¶ 57).
The parties entered into a non-disclosure agreement to protect
any confidential information that might be exchanged during the
course of their discussions. (Id., ¶ 58). By July of 2002,
discussions had progressed to a point where the parties had
raised the possibility of AEI purchasing some or all of
VisionTek's outstanding shares, and AEI conducted a due diligence
examination of VisionTek. (Id., ¶ 60-61). On August 5, 2002,
three VisionTek representatives Ric Lewis, Robert Vance, and
Scott Herkelman met with AEI representatives Keith
Daubenspek, Dwight Badger, Christopher Pravecek, John Slevin, and
John Vosicky to negotiate AEI's purchase of VisionTek. (Id.,
¶ 64). In these negotiations, the VisionTek representatives
sought to secure positions and ownership interests in the
successor company for themselves, but their demands were
rejected. (Id., ¶ 64).
Meanwhile, according to the Trustee, the three VisionTek
employees were planning a mutiny. The Trustee alleges that the
same eight individuals engaging in the VisionTek-AEI negotiations, and perhaps others, were also
engaging in clandestine discussions regarding the formation of a
new company that would include many of VisionTek's employees.
(Id., ¶ 65). To that end, the eight individuals sought to delay
or derail the VisionTek-AEI negotiations until their plan could
come to fruition. (Id., ¶ 65). During these discussions, these
individuals "reviewed and utilized [VisionTek's] confidential
information," which they had accumulated during the employees'
tenures with VisionTek or during the AEI-VisionTek negotiations,
in order to analyze and evaluate the feasibility of creating a
new company. (Id., ¶ 66). Pursuant to their plan, the new
company would solicit VisionTek's employees, customers, and
suppliers, taking over VisionTek's business and eventually
driving it from the market. (Id., ¶ 67). In order for the
scheme to succeed, however, the mutinying VisionTek employees
would have to solicit and convince certain key suppliers to
cooperate by severing their business relationships with VisionTek
in favor of the newly formed company. (Id., ¶¶ 68, 88).
As already noted, MiTAC was one of those key suppliers. The
Trustee claims that MiTAC met with Slevin, Vosicky, Daubenspek,
Badger, Pravecek, Lewis, Vance, and Herkelman, and agreed to
cooperate with the scheme, support the new company, and cease
doing business with VisionTek. (Id., ¶ 70). According to the
Trustee, this was of vital importance to the success of the plan:
it could not succeed without MiTAC's participation. (Id., ¶
70). As a part of the scheme, the Trustee also claims that MiTAC
transferred VisionTek's confidential information to Slevin,
Vosicky, Daubenspek, Badger, Pravecek, Lewis, Vance, and Herkelman. (Id., ¶ 71). The
Trustee further alleges that, on August 5, 2002, the VisionTek
mutineers Lewis, Vance, and Herkelman had a conference call
with MiTAC's liaison officer, Anson Chen, at the VisionTek
offices. (Id., ¶ 72). Their five AEI cohorts also participated,
and the topic of the discussions was the plan to form a new
company, which MiTAC would supply, and which would run VisionTek
out of business. (Id., at ¶ 72). Pursuant to the plan, MiTAC
agreed to create excess inventory, beyond VisionTek's
requirements, for the purpose of supplying the new company.
(Id., ¶ 81). Lewis identified those VisionTek employees who
would be participating in the new company by transferring an
organizational chart to Chen. (Id., ¶ 73).
On August 13, 2002, Herkelman wrote to Chen regarding a meeting
that would take place in Taiwan sometime before September 15,
2002. (Id., ¶ 79). The next day, August 14, the three VisionTek
employees involved in the original discussions with AEI Lewis,
Vance, and Herkelman abruptly resigned from VisionTek, but not
before pirating away certain confidential files and business
plans. (Id., ¶ 75, 82-83). By August 23, 2002, the three
VisionTek mutineers solicited some additional employees among
them, John Malley and John Hall, now defendants in this lawsuit
to leave VisionTek as well. (Id., ¶ 85-86). On August 27, 2002,
the new company, BFG, was incorporated. (Id., ¶ 84). That same
day, according to the Trustee, Herkelman and Vosicky traveled to Taiwan to meet with MiTAC to discuss
supplying the new company. (Id., ¶ 79). In addition, the
trustee alleges that:
Lewis, Vance, Herkelman, Malley, Hall, Slevin,
Vosicky, Daubenspek, Badger, Pravecek, and AEI . . .
solicited suppliers of [VisionTek] to stop doing
business with [VisionTek] and to do business with
BFG. The suppliers that were solicited included: . . .
MiTAC . . .
(Id., ¶ 88).
As already noted, the Trustee names MiTAC in two of his
Complaint's twenty-seven counts. In Count XVII, the Trustee
alleges that MiTAC breached the Mutual Confidentiality Agreement
by disclosing and using VisionTek's confidential information.
(Id., ¶ 92). The Trustee also alleges, under Count XXIII, that
MiTAC is liable for tortious interference with contractual
relationships. According to the Trustee, MiTAC was aware of the
various confidentiality and non-competition agreements VisionTek
had with the employees that left it to form and work for BFG.
(Id., ¶ 91-92). The Trustee claims that, nevertheless, MiTAC
intentionally, and without justification, induced those employees
to breach those agreements. (Id., ¶ 93).
MiTAC moves to dismiss both counts. It argues that Count XVII
fails to state a claim for breach of the Mutual Confidentiality
Agreement because it fails to allege that MiTAC shared any
confidential information with any individuals who did not already
know that information. In addition, MiTAC argues that the
trustee's allegations do not establish the requisite material and substantial causal link
between MiTAC's alleged misconduct and VisionTek's damages. As
for Count XXIII, MiTAC contends that the trustee has failed to
state a claim for tortious interference with contractual
relationships because the Complaint alleges that VisionTek's
employees formulated the plan to found BFG and solicited MiTAC to
do ...