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Stereo Optical Co., Inc. v. Judy

September 8, 2008


The opinion of the court was delivered by: Charles P. Kocoras, District Judge


This matter comes before the court on the motion of Defendants Thomas Judy ("Thomas"), Jacqueline Judy ("Jacqueline"), Ralph Craig ("Ralph"), Richard Unger ("Richard"), and Vision Assessment Corporation ("Vision") to dismiss Counts I-IV and VII-XIV of the complaint of Plaintiff Stereo Optical Co., Inc. ("Stereo") pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the motion is granted in part and denied in part.


According to the allegations of the complaint, which we must accept as true for purposes of this motion, Defendants Thomas, Jacqueline, Ralph, and Richard are former employees of Stereo. Stereo produces and sells optical testing equipment, including tests used by doctors, optometrists, ophthalmologists, and clinicians in the diagnosis and treatment of eye maladies. One of these tests, the Random Dot ButterFly Test, is used to identify depth perception disorders found primarily in young children.

Thomas worked for Stereo for 18 years; for the last six of those years, he was Stereo's Chief Operating Officer. Jacqueline worked in Sales for approximately two years. Ralph served as National Sales Manager of Stereo for 12 years. Richard worked for Stereo for 27 years; approximately 24 of those were spent as a photo supervisor. In 2002, Thomas, Ralph, and Richard each executed confidentiality and intellectual property agreements*fn1 pertaining to their employment with Stereo. Jacqueline did likewise when she began working at Stereo in 2005.

On or about April 2007, Thomas, Jacqueline, Ralph, and Richard quit their jobs with Stereo. The complaint asserts that, upon their departure, they took computer and paper files containing customer lists, copies of company product information, price lists, distributor lists with contact information, historical documentation relating to purchase patterns, and documentation containing cost of production and profit capabilities. The complaint specifically alleges that Jacqueline erased all company records housed on her laptop computer, including international customer lists, distributor agreements, and data concerning pricing and profits.

In June 2007, approximately two months after leaving Stereo, the four former employees incorporated Vision. According to the complaint, Vision has reproduced copies of or created derivative works based upon vectograms and butterfly tests owned by Stereo and has marketed these to Stereo customers in various ways, including attendance at trade shows and medical conferences through November 2007.

Stereo also alleges that Defendants' actions precipitated a recreation of records and processes related to the manufacture of tests it produces. According to the complaint, the recreation is a trial-and-error process, which took several months to complete and which resulted in the waste of physical materials used in unsuccessful attempts at recreation. Finally, the complaint contends that Thomas caused two checks, each in the amount of $8,854.65, to be issued from Stereo's coffers without authorization.

In May 2008, Stereo filed the instant suit, claiming copyright infringement, violation of the Illinois Trade Secrets Act, breach of contract, conversion, tortious interference with contractual rights, civil conspiracy, breach of fiduciary duty by Thomas, and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. Defendants contend that all of Stereo's claims save those for breach of contract fail to state a claim upon which relief can be granted and therefore should be dismissed pursuant to Fed. R. Civ. P. 12(b)(6).


Fed. R. Civ. P. 12(b)(6) evaluates the legal sufficiency of a plaintiff's complaint. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In ruling on a motion to dismiss, a court must draw all reasonable inferences in favor of the plaintiff, construe all allegations of a complaint in the light most favorable to the plaintiff, and accept as true all well-pleaded facts and allegations in the complaint. Bontkowski v. First Nat'l Bank of Cicero, 998 F.2d 459, 461 (7th Cir. 1993); Perkins v. Silverstein, 939 F.2d 463, 466 (7th Cir. 1991). To be cognizable, the factual allegations contained within a complaint must raise a claim for relief "above the speculative level." Bell Atlantic Corp. v. Twombly, - U.S. -, 127 S.Ct. 1955, 1965 (2007). However, a pleading need only convey enough information to allow the defendant to understand the gravamen of the complaint. Payton v. Rush-Presbyterian-St. Luke's Med. Ctr., 184 F.3d 623, 627 (7th Cir. 1999).

With these principles in mind, we turn to the instant motion.


Counts I, XII, and XIII, though pled as independent causes of action, are actually requests for specific equitable remedies that could follow if liability is found on substantive claims appearing elsewhere in the complaint. Count II seeks a declaration of Stereo's rights in the copyrighted materials as well as the files that were allegedly taken when the four employees left. The viability of Counts I, II, and XII at this stage overlaps that of the underlying substantive claims; if the latter fails, so will the former. Consequently, it is not necessary to address them separately from the substantive causes of action.Stereo does not oppose the dismissal of Count XIII, which requests an accounting of reproductions and derivative works Defendants have produced and proceeds gained therefrom. As ...

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