United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
ST. EVE, UNITED STATE DISTRICT JUDGE.
the Court granted in part and denied in part Defendants'
earlier-filed motions to dismiss,  Plaintiff Mission
Measurement Corporation (“Mission Measurement”)
brought the present nine-count Third Amended Complaint
against Defendants Blackbaud, Inc. (“Blackbaud”),
MicroEdge, LLC (“MicroEdge”), Vista Equity
Partners Management, LLC (“Vista Management”),
VFF I AIV I, L.P. (“Vista I Fund”), VFF I AIV
I-A, L.P. (“Vista I-A Fund”), Bregal Sagemount I,
L.P. (“Sagemount”), and individual Defendants
Todd Laddusaw, Preston McKenzie, Benny Melumad, Phil
Montgomery, Kristin Nimsger, and Charles Vanek
(“Individual Defendants”) alleging violations of
the Defend Trade Secrets Act of 2016 (“DTSA”), 18
U.S.C. § 1831, et seq., as well as state law
claims, including an Illinois Trade Secrets Act
(“ITSA”) claim, 765 ILCS 1-65/1, et seq.
the Court is individual Defendants Laddusaw's and
Melumad's motion to dismiss under Federal Rule of Civil
Procedure 12(b)(2) for lack of personal jurisdiction.
Defendants Laddusaw, Melumad, as well as Vista I Fund and
Vista I-A Fund (collectively “Vista Funds”), also
seek to dismiss Plaintiff's state law tortious
interference with contract and tortious interference with
prospective economic advantage claims as alleged in Counts
VII and VIII, as well as Plaintiff's unjust enrichment
claim alleged in Count VI pursuant to Rule 12(b)(6).
following reasons, the Court denies Defendants' Rule
12(b)(2) motion because Plaintiff has fulfilled its burden of
establishing a prima facie case of specific personal
jurisdiction over Defendants Melumad and Laddusaw. The Court
grants in part and denies in part Defendants' Rule
12(b)(6) motion. In particular, the Court grants
Defendants' Rule 12(b)(6) motion as to the Vista Funds
and dismisses the funds as Defendants from this lawsuit.
Otherwise, the Court denies the remainder of Defendants'
Rule 12(b)(6) motion.
Federal Rule of Civil Procedure 12(b)(2)
motion to dismiss under Rule 12(b)(2) tests whether a federal
court has personal jurisdiction over a defendant.
See Fed. R. Civ. P. 12(b)(2); Wells Fargo Bank,
N.A. v. Younan Prop., Inc., 737 F.3d 465, 467 (7th Cir.
2013). Although the “plaintiff bears the burden of
establishing personal jurisdiction, ” Brook v.
McCormley, 873 F.3d 549, 552 (7th Cir. 2017), when
ruling on a Rule 12(b)(2) motion to dismiss based on the
submission of written materials, a plaintiff need only make a
prima facie case of personal jurisdiction. Northern Grain
Mktg., LLC v. Greving, 743 F.3d 487, 491 (7th Cir.
2014). In analyzing a Rule 12(b)(2) motion without conducting
an evidentiary hearing, courts accept the well-pleaded facts
in the complaint as true. Felland v. Clifton, 682
F.3d 665, 672 (7th Cir. 2012).
Federal Rule of Civil Procedure 12(b)(6)
motion to dismiss pursuant to Federal Rule of Civil Procedure
12(b)(6) challenges the viability of a complaint by arguing
that it fails to state a claim upon which relief may be
granted.” Camasta v. Jos. A. Bank Clothiers,
Inc., 761 F.3d 732, 736 (7th Cir. 2014); see also
Hill v. Serv. Emp. Int'l Union, 850 F.3d 861, 863
(7th Cir. 2017). Under Rule 8(a)(2), a complaint must include
“a short and plain statement of the claim showing that
the pleader is entitled to relief.” Fed.R.Civ.P.
8(a)(2). Pursuant to the federal pleading standards, a
plaintiff's “factual allegations must be enough to
raise a right to relief above the speculative level.”
Bell Atlantic v. Twombly, 550 U.S. 544, 555, 127
S.Ct. 1955, 167 L.Ed.2d 929 (2007). Put differently, a
“complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is
plausible on its face.'” Ashcroft v.
Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173
L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at
570). When determining the sufficiency of a complaint under
the plausibility standard, courts must “accept all
well-pleaded facts as true and draw reasonable inferences in
the plaintiffs' favor.” Park Pet Shop, Inc. v.
City of Chicago, 872 F.3d 495, 499 (7th Cir. 2017).
Third Amended Complaint, Mission Measurement alleges that it
is the market leader in social sector data and insights
relating to social change programs aimed at addressing issues
such as poverty, hunger, access to healthcare, and climate
change. (R. 119, Third Am. Compl. ¶ 30.) One of Mission
Measurement's goals is to change the way non-profits,
corporations, governments, and foundations invest in
philanthropic endeavors by using data to measure and forecast
social impact program outcomes. (Id.) Using data
collected from social program evaluations, Mission
Measurement has compiled a database of over 75, 000 different
data points, which it has categorized into approximately 130
social outcome types. (Id. ¶ 31.) Over the last
decade, Mission Measurement has developed best practices and
tools for the outcomes space, which includes a proprietary
database, the Outcomes TaxonomyTM. (Id.
MicroEdge, a limited liability company organized under the
laws of New York, is a provider of software solutions that
automate the charitable giving process. (Id.
¶¶ 4, 33.) Vista Management is a limited liability
company and investment firm that operates the private equity
Vista Funds. (Id. ¶¶ 5, 33.) Vista
Management acquired MicroEdge in 2009 and Vista Management,
Sagemount, and the named Individual Defendants held
investments in MicroEdge during the relevant time period.
(Id. ¶ 33.)
Vista Management had significant concerns about obtaining a
return on its investment in MicroEdge and wanted MicroEdge to
innovate, MicroEdge - through Vista Management - sought out
Mission Measurement to collaborate on outcomes related
products. (Id. ¶ 36.) Specifically, because
MicroEdge would soon be put up for sale, Vista Management and
MicroEdge needed new products to increase the enterprise
value for the sale. (Id.) To that end, MicroEdge
negotiated an agreement with Mission Measurement to jointly
develop outcomes related products. (Id. ¶ 38.)
Nevertheless, despite MicroEdge's representations,
Mission Measurement alleges that MicroEdge failed to act in
good faith in negotiating an agreement, but instead - with
the other Defendants - embarked on an intentional and
consistent strategy of delay and obfuscation for the purpose
of keeping Mission Measurement out of the market as a
competitor for outcomes related products and services.
(Id. ¶ 62.)
Measurement further alleges that Vista Management, Sagemount,
and the Individual Defendants manipulated the sale price of
MicroEdge - using the relationship with Mission Measurement,
its confidential information, and its market position - to
advance their own personal economic benefit. (Id.
¶ 74.) Due to the sale of MicroEdge to Defendant
Blackbaud, the Individual Defendants, the Vista Defendants,
and Sagemount received direct financial benefits.
(Id.) In addition, following Blackbaud's
acquisition of MicroEdge, Blackbaud initiated development of
its own outcomes product using a team ...