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Abanco International, Inc. v. Guestlogix Inc.

May 21, 2007

ABANCO INTERNATIONAL, INC., PLAINTIFF,
v.
GUESTLOGIX INC. D/B/A/ GUESTLOGIX ) CO., DEFENDANT.



The opinion of the court was delivered by: Elaine E. Bucklo United States District court

MEMORANDUM OPINION AND ORDER

Defendant Guestlogix Inc. d/b/a/ Guestlogix Co. ("Guestlogix") is moving to dismiss counts III-V of the complaint brought by plaintiff Abanco International, Inc. ("Abanco") for failure to state a claim under FED. R. CIV. P. 12(b)(6). For the following reasons, the motion is denied in part and granted in part.

I.

Abanco is an inventor and provider of payment processing services and systems such as credit and debit card processing, gift cards, wireless systems for inventory control, payment processing and cash management. Guestlogix is in the business of providing supply chain management solutions to businesses engaged in the guest services industries. In 2003, the parties entered into a business relationship for purposes of supplying airline carriers with electronic "buy-on-board" systems; these systems would permit passengers to pay with credit cards for beverages and other items sold in-flight and facilitate the tracking of sales and inventory.

That same year, the parties entered into a Mutual Confidentiality Agreement ("Confidentiality Agreement"), a copy of which is attached to the complaint.

Abanco alleges that after entering into the Confidentiality Agreement it provided Guestlogix with information relating to "a valuable and proprietary system" ("the Abanco System") it had developed for in-flight processing of credit card transactions and for maintaining sales and inventory information. (Compl. at ¶ 6.) As stated in the complaint Abanco provided Guest[l]ogix with information relating to the Abanco System including information that was confidential, non-public, and proprietary and which constituted Abanco trade secrets. This information included: (1) data schemes for use in connection with pre-flight inventory control, in-flight retailing and post-flight data processing, (2) detailed information related to Abanco's process for authorizing credit cards and maintaining PCI (Payment Card Industry) compliance, (3) technical details related to Abanco's method for tracking the location of handheld devices, and (4) Abanco's process for tracking change owed to passengers for cash transactions and tying such information to specific transactions." (Compl. at ¶ 9.)

In 2004, American Airlines is alleged to have initiated discussions with Abanco as a potential supplier of an electronic buy-on-board system. Guestlogix was also involved in this project; allegedly to assist Abanco in developing and supplying a discrete portion of the buy-on-board system.

The parties' relationship appears to have soured in 2006, when American Airlines notified Abanco that it did not wish to pursue further negotiations regarding the buy-on-board system. Abanco alleges that Guestlogix continued to have direct communications with American Airlines and eventually entered into a contractual relationship with the airline regarding the development and operation of a buy-on-board program. Abanco further alleges that Guestlogix "has made use of components of the Abanco System and information obtained from Abanco relating to the Abanco System that is confidential, non-public, and proprietary and which constitutes trade secrets belonging to Abanco." (Compl. at ¶ 17.) Abanco also claims Guestlogix "has derived profits and competitive advantage from its use of components of the Abanco System and information obtained from Abanco." (Compl. at ¶ 18.)

The complaint contains claims for misappropriation of trade secrets under the Illinois Trade Secrets Act ("ITSA"), 765 ILCS 1065/1 et seq. (2007) (Count I); breach of the Confidentiality Agreement (Count II); restitution/unjust enrichment (Count III); tortious interference with prospective economic advantage ("tortious interference") (Count IV); and conspiracy (Count V). Defendant is moving to dismiss counts III-V as preempted under the ITSA.

II.

In assessing defendant's motion to dismiss, I must accept all well-pleaded facts in Guestlogix's complaint as true. Thompson v. Illinois Dep't of Prof'l Regulation, 300 F.3d 750, 753 (7th Cir. 2002). I must view the allegations in the light most favorable to the plaintiff. Christensen v. County of Boone, IL, -- F.3d --, 2007 WL 841097, at *1 (7th Cir. Mar. 21, 2007); Gomez v. Illinois State Bd. of Educ., 811 F.2d 1030, 1039 (7th Cir. 1987). Dismissal is proper only if the plaintiff can prove no set of facts to support his claim. First Ins. Funding Corp. v. Fed. Ins. Co., 284 F.3d 799, 804 (7th Cir. 2002).

Defendant argues counts III-V are preempted by the ITSA.

Section 8 of the ITSA provides, in relevant part

(a) Except as provided in subsection (b), this Act is intended to displace conflicting tort, restitutionary, unfair competition, and other laws of this State providing civil ...


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