Bright Kids NYC Inc. v. Kelly

Background

Bright Kids NYC, Inc., described in the opinion as a tutoring service based in New York City, sued former employees Taylor Kelly and Sara Javed, education consultant Alina Adams, and LectureLab, Inc., a competing tutoring service founded by Kelly and Javed. Bright Kids alleged that the defendants misused its trademarks and proprietary materials. Kelly and LectureLab asserted counterclaims against Bright Kids and its chief executive officer, Bige Doruk. Because Doruk was not the original plaintiff, the court noted that the claims against Doruk were technically third-party claims, although it referred to all of them as counterclaims for convenience.

The court considered two motions under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim, and a motion under Rule 12(f) to strike allegations from the amended counterclaims.

Adams’s Motion to Dismiss

The court denied Adams’s motion as to Bright Kids’s claim under the Lanham Act, the federal trademark statute. Adams argued that Bright Kids had not adequately alleged a claim based on helping others infringe its trademarks. The court found that argument beside the point because Bright Kids alleged that Adams herself used Bright Kids’s trademarks when advertising LectureLab workshops as sponsored by Bright Kids. At the motion-to-dismiss stage, the court had to accept that factual allegation as true. The court noted that the allegation might ultimately prove incorrect, but it was sufficient to keep the trademark claim in the case.

The court granted Adams’s motion as to Bright Kids’s other claims against her, including claims involving trade-secret misappropriation, conversion, unfair competition, unjust enrichment, violations of the Racketeer Influenced and Corrupt Organizations Act, a declaratory judgment, and an injunction. Those claims depended primarily on the allegation that Kelly emailed Adams a file containing Bright Kids’s proprietary contact information and that Adams knew the information had been stolen.

The court held that Bright Kids did not describe the information specifically enough to allow the court to determine whether it was a legally protected trade secret. The complaint identified the file only as containing an undefined subset of Bright Kids’s proprietary contact information. The file name suggested it might have been a list of LectureLab workshop registrants, which could mean the information was not secret. The court also held that Bright Kids did not plausibly allege that Adams knew the information belonged to Bright Kids or that Kelly lacked permission to share it. Allegations that Adams had conspired with Kelly and knew the information was stolen were conclusory and unsupported by sufficient factual details. The court therefore dismissed all of Bright Kids’s claims against Adams except the Lanham Act claim.

Counterclaims and Motion to Strike

Bright Kids and Doruk moved to dismiss counterclaims three through eight for lack of supplemental jurisdiction. Supplemental jurisdiction allows a federal court to hear additional claims that share a sufficiently strong factual connection with the claims already before it.

The court granted that motion. Counterclaims three through six concerned alleged unpaid wages and missing wage statements. The court held that their only asserted connection to Bright Kids’s claims was the parties’ shared employment relationship, which was not enough. Counterclaims seven and eight concerned alleged torts arising from communications about the lawsuit. Although the lawsuit was relevant to those claims, the court found the connection superficial and held that the claims did not share a common core of operative facts with Bright Kids’s claims. Counterclaims three through eight were therefore dismissed.

Bright Kids and Doruk also moved to strike paragraphs 23–25 and 51–74 of the amended counterclaims. The court denied that motion. It found that the moving parties had not shown that evidence supporting the allegations would be inadmissible, that the allegations had no bearing on the case, or that leaving them in the pleading would prejudice them. In particular, their assertion of prejudice was conclusory and unsupported.

Disposition and Further Proceedings

The court stated that Adams’s motion to dismiss was granted as to all claims other than the Lanham Act claims; Bright Kids and Doruk’s motion to dismiss counterclaims three through eight was granted; and the motion to strike was denied. The court declined to give Bright Kids, Doruk, Kelly, or LectureLab permission to amend their dismissed claims. The court directed Adams to answer the Lanham Act claims within three weeks unless it ordered otherwise, reinstated the initial pretrial conference, and directed the clerk to terminate Doruk as a party because the only counterclaims naming him had been dismissed. The opinion’s final paragraph spells Doruk’s name as “Dornuk.”