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The Segerdahl Corp. v. Ferruzza

United States District Court, N.D. Illinois, Eastern Division

February 10, 2018

THE SEGERDAHL CORP. d/b/a SG 360º, Plaintiff,



         Plaintiff The Segerdahl Corp. d/b/a SG360º (“Segerdahl”) filed an Amended Complaint against former employees Anthony Ferruzza, Michael Ferruzza, Daniella Tucci, Christopher Knoll, Erica Knoll, Eugene “Corky” Czech, Vince Dante, and American Litho, Inc., alleging violations of the Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § 1836 et. seq., the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030 et seq., the Illinois Trade Secrets Act (“ITSA”), 765 Ill.Comp.Stat. 1065/1 et seq., breach of fiduciary duty, tortious interference with prospective economic advantage, aiding and abetting breach of fiduciary duty, conversion, unfair competition, civil conspiracy, and unjust enrichment. Defendant Vince Dante filed a Motion to Dismiss [146] pursuant to Rule 12(b)(1) and 12(b)(6) for failure to state a claim and lack of supplemental jurisdiction. For the reasons set forth herein, the motion is granted in part and denied in part.


         The following facts are taken from Plaintiff’s Amended Complaint (Dkt. 129). Segerdahl Corp. is a commercial printing and multichannel direct marketing solutions provider, headquartered in Wheeling, Illinois. (Dkt. 129 at ¶ 22). Segerdahl’s multichannel marketing services include research, concept strategy and execution, including but not limited to data programming, commercial printing, direct-mail production, data analytics, distribution and fulfillment. (Id. at ¶ 22). Segerdahl has manufacturing operations in Broadview and Wheeling, Illinois and sales locations elsewhere in Illinois, and also California, Michigan, Minnesota, New Jersey, New York, and Texas. (Id. at ¶ 22).

         Defendant Vince Dante is a former employee of Segerdahl, hired in April 2000 as a color/scanning operator. He was later promoted to Director of Infrastructure and Networking and oversaw the IT help desk, security, and Segerdahl’s network. (Id. at ¶ 36). All the individual defendants, including Dante, had access to Segerdahl’s confidential information and trade secrets, which were stored both in paper and electronic format. (Id. at ¶ 40). The individual defendants also developed working relationships with Segerdahl’s customer base while assisting in the development of new business initiatives. (Id. at ¶ 42).

         Segerdahl alleges that from October through December 2016, Dante used his position and access to Segerdahl employee credentials to login to email accounts of Segerdahl’s CEO and Chairman of the Board and former CEO to copy confidential information. (Id. at ¶ 62). Dante allegedly copied the information into emails directed to his personal email account and that of defendant Anthony Ferruzza. Dante’s alleged misconduct also includes helping Ferruzza by dismantling a Segerdahl-owned MacBook Pro laptop computer and removing the internal hard drive to remove information from the computer. (Id. at ¶ 63). Dante initially resigned from Segerdahl in January 2017, but revoked his resignation days later. Segerdahl terminated Dante on June 26, 2017. (Id. at ¶ 53). Unlike the other individual defendants, Dante is not employed by Segerdahl’s competitor defendant American Litho. (Id. at ¶ 53).

         Legal Standard

         When a party moves to dismiss based on lack of subject matter jurisdiction pursuant to Rule 12(b)(1), the district court must accept all well-pleaded facts within the complaint as true, but may also consider evidence outside of the pleadings to ensure jurisdiction is proper. Evers v. Astrue, 536 F.3d 651, 656-67 (7th Cir. 2008) (citing St. John’s United Church of Christ v. City of Chicago, 502 F.3d 616, 625 (7th Cir. 2007)).

         A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint, not its merits. Fed. R. Civ. P. 12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). When considering the motion, the Court accepts as true all well pleaded facts in the plaintiff’s complaint and draws all reasonable inferences from those facts in the plaintiff’s favor. AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011). To survive a Rule 12(b)(6) motion, the complaint must not only provide the defendant with fair notice of claim’s basis but must also be facially plausible. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed. 2d 868 (2000); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct.1955, 167 L.Ed. 2d 929 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.


         Dante moves to dismiss the Amended Complaint entirely, arguing that Counts I-VII fail to state a claim, Counts IV-X are preempted by ITSA, and that the Court should decline to exercise supplemental jurisdiction after dismissing the federal claims in Count I (DTSA) and II (CFAA). The Court will begin by examining the trade secret claims.

         1. Counts I and III: Defend Trade Secrets Act Claim and Illinois Trade Secret Act

         Dante argues that this Court should dismiss Segerdahl’s trade secret misappropriation allegations for failure to state a claim. Dante asserts that Segerdahl has not specifically identified the trade secrets at issue and that the complaint lacks allegations that the trade secrets are used in commerce or for the defendant’s business. Both statutes at issue define trade secrets.

         DTSA creates a private cause of action in favor of the “owner of a trade secret that is misappropriated…if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.” 18 U.S.C. § 1836(b)(1). Under the DTSA, the term “trade secret” is:

all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or ...

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