JobPath Partners, LLC v. City of New York and CDW Government Services

Background

JobPath alleged that the City engaged it to adapt its proprietary software to help match veterans with City jobs. The parties’ communications included a quote for a five-year software license and support arrangement, later revised to charge $150,000 for the first two years and $250,000 for the next three years. The City issued a purchase order naming CDW-G as the intermediary, JobPath provided services, and JobPath alleged that it was paid for the first three years. The City later sent a termination notice to CDW-G and allegedly continued using JobPath’s software.

JobPath brought claims against the City for breach of contract, unjust enrichment, violations of the New Jersey Computer Related Offenses Act and the federal Computer Fraud and Abuse Act, and copyright infringement. It also brought breach-of-contract and unjust-enrichment claims against CDW-G. Both defendants moved to dismiss for failure to state a legally sufficient claim.

Rulings on the City’s motion

The court granted the motion to dismiss Count I, the breach-of-contract claim, as pleaded, but did so without prejudice and with leave to replead. JobPath identified its unexecuted licensing agreement as the contract, but the court held that the April 2020 email did not mention that agreement or show that the City agreed to it. The court nevertheless found that the complaint plausibly described a different contract formed through the quote, revised statement of work, purchase order, payment, and performance. JobPath may amend the claim to rely on that alleged arrangement instead.

The court denied the City’s motion as to Count II, the unjust-enrichment claim. Although unjust enrichment generally cannot replace a valid contract governing the same subject, the parties disputed whether a contract between JobPath and the City existed. The claim could therefore proceed as an alternative theory.

The court denied the City’s motion as to Count III, the New Jersey Computer Related Offenses Act claim. JobPath alleged more than mere access to its software: it alleged that the City continued using the software for two years without paying. The court held that this allegation was sufficient at the motion-to-dismiss stage, although it indicated that some requested damages, such as investigative costs, could not be recovered under that statute.

The court granted the motion to dismiss Count IV, the federal Computer Fraud and Abuse Act claim, without prejudice and with leave to replead. JobPath alleged investigative costs and lost revenue, but did not allege impairment to its computer system or a service interruption. The court held that the federal statute limits recoverable loss in ways that the current allegations did not satisfy.

The court granted the motion to dismiss Count V, the copyright-infringement claim, without prejudice and with leave to replead. The complaint alleged ownership of valid copyrights but did not allege that the copyright had been registered before the lawsuit or explain specifically how the City copied the software. JobPath later supplied a registration certificate in opposition papers, but the court stated that the complaint would need to allege the registration and copying facts.

Rulings on CDW-G’s motion

The court granted CDW-G’s motion to dismiss Count VI, the breach-of-contract claim, without prejudice and with leave to replead. JobPath did not identify a contract between itself and CDW-G or plead facts showing that such a contract existed. The City-CDW-G master agreement could not itself create a contract between JobPath and CDW-G because JobPath was not a party to it.

The court granted CDW-G’s motion to dismiss Count VII, the unjust-enrichment claim. JobPath alleged that the City continued using its software, but it did not allege that CDW-G used the software or benefited from the City’s continued use after the purported termination. The court held that this defect could not be cured by amendment and dismissed the claim with prejudice.

Leave to amend and disposition

The court gave JobPath 21 business days to file an amended complaint, solely as specified in the decision. It allowed amendment of the City contract, federal computer-access, and copyright claims and allowed JobPath to try to identify a contract supporting its claim against CDW-G. The court’s final disposition was that the City’s motion to dismiss was granted in part and denied in part, CDW-G’s motion to dismiss was granted, and leave to amend was granted only as specified.