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Kurt Fuqua v. Svox Ag

March 12, 2012


The opinion of the court was delivered by: Judge Ronald A. Guzman


Plaintiff has sued SVOX USA, Inc., SVOX AG, Nuance Communications, Inc., Volker Jantzen, Eugene Stermetz, Martin Reber, Eric Lehmann and Thomas Soseman for their alleged violations of § 1553 of the American Reinvestment and Recovery Act of 2009 ("ARRA") and state law. The case is before the Court on defendants' Federal Rule of Civil Procedure ("Rule") 12(b)(6) motion to dismiss. For the following reasons, the Court grants the motion as to the ARRA claim and declines to exercise supplemental jurisdiction over the state law claims.


Defendant SVOX USA, Inc. is a wholly owned subsidiary of SVOX AG, a Swiss company, both of which were acquired by defendant Nuance Communications, Inc. in June 2011 (collectively, "SVOX"). (Compl. ¶¶ 5-6, 8.) Plaintiff Kurt Fuqua is an Illinois resident who works in the fields of computational linguistics, computer speech synthesis and data encryption and has obtained copyrights and trademarks on various inventions in these fields. (Id. ¶¶ 14-15.) Plaintiff has previously been employed in U.S. defense-related contract work and is the licensee of the trade secrets of, among others, the National Institute of Science and Technology ("NIST"). (Id. ¶¶ 17-18.)

On January 28, 2009, plaintiff entered into an employment contract with SVOX. (Id. ¶ 19; see id., Ex. A, Employment Agreement.) In February 2009, SVOX sent plaintiff to Switzerland for several months on business. (Id. ¶ 25.) While he was there, SVOX provided plaintiff with, among other things, a monthly transit pass and received a payroll tax deduction each month it did so. (Id. ¶¶ 26-28.)

On June 22, 2009, defendant Stermetz, who is the President of SVOX USA and the Chief Financial Officer of SVOX AG, sent plaintiff a new employment contract that required him "to disclose and assign to SVOX, existing and future intellectual property ["IP"], which [plaintiff] had made, conceived or developed." (Id. ¶¶ 11, 35-36.) This provision "encompassed most of Plaintiff's inventions" including those "related to the NIST agency contracts." (Id. ¶ 38.)

Plaintiff repeatedly told Stermertz and others, all of whom had the authority to terminate him, that he believed the IP provision violated state and federal law. (Id. ¶¶ 40-49.)

On August 4, 2009, SVOX "effectively demoted" plaintiff by having him report to the Director of SVOX's German subsidiary, rather than defendant Jantzen, the President of SVOX USA, as contemplated by plaintiff's employment contract. (Id. ¶ 50.)

Throughout the summer and early fall of 2009, SVOX amended the new employment agreement but, because the IP provision remained, plaintiff refused to sign it. (Id. ¶ 52.)

On October 22, 2009, SVOX terminated plaintiff because he refused to sign the new agreement. (Id. ¶ 55.) On January 29, 2011, plaintiff filed a complaint with the U.S. Department of Defense's ("DoD's") Office of Inspector General alleging that SVOX had violated § 1553 of the ARRA. (Id. ¶ 77.) On May 6, 2011, the DoD's Inspector General told plaintiff there was "insufficient evidence to warrant further inquiry" into his claim because "SVOX did not receive [ARRA] funds ('covered funds')" as required for § 1553 to apply. (Id. ¶ 78; id., Ex. J, Letter from DoD to Fuqua (May 6, 2011).)


On a Rule 12(b)(6) motion to dismiss, the Court accepts as true all well-pleaded factual allegations of the complaint, drawing all reasonable inferences in plaintiff's favor. Hecker v. Deere & Co., 556 F.3d 575, 580 (7th Cir. 2009). "[A] complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations" but must contain "enough facts to state a claim for relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007).

In Count I, plaintiff alleges that defendants violated § 1553 of the ARRA, which provides: An employee of any non-Federal employer receiving covered funds may not be discharged, demoted, or otherwise discriminated against as a reprisal for disclosing . . . [to] . . . a person with supervisory authority over the employee . . . or . . . who has the authority to investigate, discover, or terminate misconduct . . . information that the employee reasonably believes is evidence of . . . a violation of law, rule, or regulation related to an agency contract . . . or grant, awarded or issued relating to covered funds.

ARRA, Pub. L. 111-5, ยง 1553(a)(5), 123 Stat. 115, 297 (2009). Plaintiff argues that SVOX received "covered funds" in the form of the transit pass tax deductions ...

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