Dumbo Moving & Storage, Inc. v. Piece of Cake Moving & Storage LLC
- Edgardo Ramos
- 1:22-cv-05138
- U.S. District Court · Southern District of New York
- 20
In Dumbo Moving v. Piece of Cake, Judge Ramos granted in part and denied in part both the dismissal motions and Dumbo’s request to amend its complaint.
Dumbo Moving & Storage, Inc., the defendants Piece of Cake Moving & Storage LLC, Simply Moving LLC, Simply Moving Storage LLC, Stefan Marcali, Vojin Popovic, and Volodymyr Plokhykh, and the claims that were dismissed or permitted to be repleaded.
What happened
In Dumbo Moving & Storage, Inc. v. Piece of Cake Moving & Storage LLC, Dumbo alleged that the defendants copied and misused its proprietary software for moving companies. The defendants asked the court to dismiss the amended complaint, while Dumbo asked for permission to file another amended complaint.
The court allowed Dumbo’s copyright and federal trade-secret claims to continue at this stage, finding that Dumbo had plausibly alleged ownership, copying, protection of its trade secrets, and improper acquisition or use. The court dismissed Dumbo’s remaining state-law claims as barred by the three-year statute of limitations.
Judge Ramos dismissed all claims that Dumbo had withdrawn and the specified state-law claims with prejudice. He denied amendment of those state-law claims but allowed Dumbo to replead its copyright and federal trade-secret claims, so both the dismissal motions and amendment request were granted in part and denied in part.
The detailed version
- Dumbo Moving & Storage, Inc. v. Piece of Cake Moving & Storage LLC · No. 1:22-cv-05138
- Edgardo Ramos
- Aug. 21, 2023
Background
Dumbo Moving & Storage, Inc. alleged that it developed an exclusive software system to manage moving-company operations, including customer leads, bookings, scheduling, truck and crew assignments, real-time move tracking, invoices, customer communications, analytics, and instant price quotes generated through a proprietary algorithm. Dumbo alleged that it owned the software and took steps to keep it confidential.
According to Dumbo, Volodymyr Plokhykh, a former Dumbo employee, used credentials for IT Dev Group to access and copy the software without authorization. Dumbo alleged that Plokhykh then sold or provided copies to Piece of Cake Moving & Storage LLC, Simply Moving LLC, Stefan Marcali, and Vojin Popovic, and that some defendants incorporated the software into their websites. The defendants denied through their motion arguments that Dumbo had adequately pleaded its claims.
Claims at Issue
The first amended complaint originally contained eighteen causes of action. After the defendants moved to dismiss, Dumbo withdrew causes of action 5 through 8, 10, and 12 through 18, as well as its requests for statutory damages and attorney’s fees on the copyright claims. The court addressed the remaining copyright, federal trade-secret, and state-law claims.
Copyright Claims
The court denied the motions to dismiss the two copyright-infringement claims. The defendants argued that Dumbo had not plausibly alleged ownership because the complaint identified IT Dev Group as involved in developing the software, while the copyright documents identified Levgen Didenko as its author. The court concluded that the incorporated copyright documents also showed that Didenko transferred ownership to Dumbo and that the Copyright Office approved the registration after receiving confirmation of that transfer. At the motion-to-dismiss stage, the court found that Dumbo was entitled to present evidence supporting its copyright claims.
Federal Trade-Secret Claims
The court rejected the defendants’ arguments that Dumbo had not identified its trade secrets specifically enough, taken reasonable protective measures, or alleged misappropriation by improper means. The court found that Dumbo described the software’s functions and specific features sufficiently, alleged that it restricted access and stored the source code on a secured server, and alleged that the defendants knew the software belonged exclusively to Dumbo while acquiring it from Plokhykh. The trade-secret claims therefore remained viable at the pleading stage.
State-Law Claims
The court held that the applicable statute of limitations for the remaining state-law claims was three years because Dumbo primarily sought monetary damages and the claims mirrored the underlying copyright and misappropriation allegations. Dumbo alleged that the unauthorized access, copying, and sale occurred around June 2018, while it filed this action in 2022. The court therefore concluded that the remaining state-law claims were time-barred and dismissed with prejudice the claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and breach of the duty of loyalty.
Amendment
The court dismissed with prejudice all claims Dumbo had withdrawn, reasoning that allowing them to be repleaded would unfairly prejudice the defendants and that Dumbo had already had multiple opportunities to plead its claims. The court also denied leave to amend the state-law claims because amendment would be futile: the claims were time-barred.
The court granted leave to amend the copyright and federal trade-secret claims. Dumbo was permitted to replead copyright-infringement claims against Plokhykh and against Piece of Cake, Simply Moving, Marcali, and Popovic. It was also permitted to replead federal trade-secret claims against Piece of Cake, Popovic, and Plokhykh, and against Simply Moving, Marcali, and Plokhykh.
Disposition
The defendants’ motions to dismiss the first amended complaint were granted in part and denied in part. Dumbo’s motion for leave to file a second amended complaint was also granted in part and denied in part. The court directed Dumbo to file the second amended complaint by September 4, 2023, and directed the parties to appear for a telephonic status conference on October 6, 2023.
Read the full 20-page opinion on CourtListener, the free public archive maintained by the Free Law Project.