Intrepid Financial Partners, LLC v. Fernandez

Background

Intrepid Financial Partners, LLC sued its then-employee, Antonio C. Fernandez, seeking temporary and preliminary injunctive relief while contract claims were being considered in Financial Industry Regulatory Authority arbitration. Intrepid sought to enforce post-employment non-competition, non-solicitation, and confidentiality provisions in Fernandez’s employment agreement and to prevent him from engaging in what Intrepid characterized as competitive employment at Citigroup, Inc.

Intrepid initially claimed diversity jurisdiction but later acknowledged that diversity was absent. It amended its complaint to add a claim under the Defend Trade Secrets Act, a federal statute addressing the misappropriation of trade secrets used in interstate commerce, and relied on supplemental jurisdiction for its state-law contract claims.

The Court previously granted Intrepid a temporary restraining order and expedited discovery. Intrepid later moved for a preliminary injunction. Fernandez opposed that motion and moved to dismiss the amended complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), which address subject-matter jurisdiction and failure to state a legally sufficient claim.

Defend Trade Secrets Act Claim

The Court treated Fernandez’s challenge to the viability of the federal claim as a Rule 12(b)(6) motion because failure to state a viable federal claim would also affect the state-law claims, and because it was questionable whether the statutory elements of a trade-secret claim were jurisdictional.

The Court held that Intrepid had not pleaded a plausible trade-secret claim. Although Intrepid identified categories of information involving clients, client histories and preferences, business plans, pricing, investment models, service strategies, and marketing strategies, the Court found those descriptions too general and conclusory. The complaint did not provide enough factual detail about the information’s nature, value, uniqueness, or the measures Intrepid took to keep it secret. The Court emphasized that confidential information and trade secrets are not identical; trade secrets are a subset of confidential information requiring more specific pleading.

The Court also held that Intrepid had not plausibly alleged misappropriation. Intrepid alleged that Fernandez used or disclosed its information to solicit clients and continued to use or permit others to use it, but the Court found no specific factual allegations supporting those assertions. The allegations were therefore insufficient to satisfy the pleading requirements for a federal trade-secret claim.

Other Claims and Injunctive Relief

Because Intrepid failed to state a claim under the Defend Trade Secrets Act, the Court declined under 28 U.S.C. § 1367(c)(3) to exercise supplemental jurisdiction over the remaining state-law claims. The Court denied Intrepid’s motion for a preliminary injunction for lack of jurisdiction over viable claims and dissolved the temporary restraining order.

Disposition

The Court granted Fernandez’s motion to dismiss the amended complaint. Count Three, the Defend Trade Secrets Act claim, was dismissed under Rule 12(b)(6). The Court declined supplemental jurisdiction over Intrepid’s remaining claims, denied Intrepid’s preliminary-injunction motion, dissolved the temporary restraining order issued on November 30, 2020, entered judgment on those terms, and closed the case. Judge Laura Taylor Swain signed the order.