Zebra Strategies Inc. v. Gonzalez- Nazario

Background

Zebra Strategies, Inc. sued Ada Gonzalez-Nazario, Sean Goodman, SAGO Inc., Accurate Market Research (AMR), and other named and unnamed defendants. It alleged federal trade-secret theft under the Defend Trade Secrets Act, breach of contract, conversion, breach of duty of loyalty, civil conspiracy, and unfair competition.

Zebra Strategies alleged that Gonzalez-Nazario accessed participant files without authorization and downloaded approximately 12,000 proprietary database contacts at least 39 times over about five months. It also alleged that she accessed pricing files, invoices, and statements of work; that she wiped a work laptop before it was investigated; and that SAGO contacted participants while referring to a Zebra Strategies survey. Zebra Strategies estimated that Gonzalez-Nazario, with Goodman’s assistance, downloaded more than 20,000 participant names and contact details and alleged that the information was provided or sold to competitors, including SAGO and AMR.

Goodman and AMR filed motions under Federal Rule of Civil Procedure 12(b)(6), which asks whether a complaint states a legally sufficient claim. Gonzalez-Nazario adopted Goodman’s arguments and filed her own motion to dismiss.

Trade-secret claim

The court held that Zebra Strategies had crossed the minimum pleading threshold for alleging a trade secret. The alleged information consisted of sensitive demographic and personal information about participants, including information concerning sexual orientation, gender identity, HIV status, domestic violence, and substance-abuse history. Zebra Strategies alleged that it spent substantial time and resources building relationships with participants, that the information was not generally available, that few competitors possessed comparable information, and that it protected the database by limiting access and using a third-party platform.

The court separately examined whether each moving defendant was plausibly alleged to have misappropriated the information. As to AMR, the court found no specific, non-conclusory allegations showing that Zebra Strategies’ data was given to AMR, that AMR had a relationship or contact with Goodman or Gonzalez-Nazario, or that AMR possessed information identifiable as having come from Zebra Strategies. The court therefore found that the complaint alleged only a possibility of misconduct by AMR.

As to Gonzalez-Nazario, the court found the allegations sufficient to support an inference that she improperly acquired participant information and disclosed it to SAGO. The court relied on allegations that she accessed files without authorization, downloaded thousands of contacts, accessed files she was not authorized to use, and wiped a work laptop before it was investigated, together with the allegations that SAGO contacted participants under the guise of following up on a Zebra Strategies survey.

As to Goodman, the court found no non-conclusory allegation that he himself acquired, disclosed, or used a trade secret. Even assuming Goodman gave Gonzalez-Nazario a means of accessing the database, the court stated that the federal statute does not provide a private claim for merely aiding or facilitating another person’s misappropriation.

Other claims

The breach-of-contract claim against Gonzalez-Nazario survived because Zebra Strategies alleged that she intentionally disseminated its information to SAGO in violation of confidentiality and related contract provisions. The claim against Goodman failed because the complaint did not adequately allege that he gave confidential information to an outside third party or provided Gonzalez-Nazario with access to the database.

The court dismissed the conversion claim against Goodman and Gonzalez-Nazario. Under the applicable law, conversion requires unauthorized control that excludes the owner from exercising rights over the property. The court found that Zebra Strategies did not allege that it was deprived of access to its electronic files.

The court deemed the breach-of-duty-of-loyalty claim abandoned as to both Goodman and Gonzalez-Nazario because Zebra Strategies did not meaningfully address it in opposition to the motion to dismiss. The court added that, if it reached the merits, the allegations against Gonzalez-Nazario would have been sufficient, but the claim was nevertheless dismissed based on abandonment. The court also found that the allegations against Goodman were substantively insufficient.

The unfair-competition claim against AMR failed because the complaint did not adequately allege that AMR misappropriated Zebra Strategies’ work or information. The civil-conspiracy claim failed as to all defendants because it was based only on an alleged conspiracy to violate the federal trade-secret statute, which the court said does not provide a private civil-conspiracy or secondary-liability claim.

Disposition

The court granted AMR’s and Goodman’s motions to dismiss. It denied Gonzalez-Nazario’s motion to dismiss except with respect to the claims for breach of duty of loyalty and civil conspiracy. The opinion addressed the motions filed by AMR, Goodman, and Gonzalez-Nazario; it did not state a disposition of claims against the nonmoving defendants.