Nielsen Consumer LLC v. Circana Group, L.P.

Background

The dispute arose from a planned merger of The NPD Group, L.P. (now identified in the caption as Circana Group, L.P.) with Information Resources, Inc. Nielsen Consumer LLC, doing business as NielsenIQ, and NPD had a licensing agreement under which they shared certain data and undertook confidentiality obligations. Nielsen alleged that the merger and related conduct could result in the disclosure or use of Nielsen’s protected information by a competitor. Nielsen’s First Amended Complaint asserted seven claims: three contract claims, a claim for breach of the implied duty of good faith and fair dealing, federal and New York trade-secret misappropriation claims, and a New York unfair-competition claim.

NPD moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint alleges enough facts to support a legally plausible claim. NPD also alternatively requested a more definite statement under Rule 12(e), arguing that Nielsen had not identified its alleged trade secrets with enough detail.

Contract Claims

The court held that most of Nielsen’s contract theories could not be resolved at the pleading stage. The agreement’s language was ambiguous in relevant respects, and factual issues remained concerning the scope of the parties’ obligations, how those provisions applied to the merger, and what conduct the agreement covered. Although the court had previously found Nielsen unlikely to succeed on one aspect of its preliminary-injunction request, it concluded that dismissal of the contract claims was not warranted because discovery could clarify the contractual and factual issues.

The court dismissed Nielsen’s separate theory that NPD breached Section 3 of the agreement. The court found that Nielsen had treated Section 3 as a freestanding obligation without identifying which of the section’s stated goals applied. The court also found that Nielsen’s allegation that it would not have entered the agreement absent certain conduct was insufficient to state that theory of breach. The remainder of Nielsen’s contract claims survived.

Implied Duty of Good Faith and Fair Dealing

The court allowed Claim 4 to proceed. Nielsen alleged that NPD engaged in post-partnership conduct involving deception and an effort to prevent Nielsen from achieving an alleged contractual benefit. Reading the claim in Nielsen’s favor, the court concluded that it concerned conduct outside the obligations specifically covered by the agreement and therefore was not barred at this stage as duplicative of the contract claims.

Trade-Secret Claims

The court allowed Nielsen’s federal Defend Trade Secrets Act claim and parallel New York common-law claim to proceed. The court treated the two claims together because their elements were fundamentally the same.

For the trade-secret element, the court found that Nielsen had adequately identified fourteen alleged secrets with sufficient specificity. The opinion states that these allegations concerned Nielsen’s proprietary information and industry expertise, rather than improvements to the ReceiptPal application or its underlying technology. Nielsen also adequately alleged that it took reasonable measures to protect the information and that the information had independent economic value because of its secrecy, particularly in light of the competition between NielsenIQ and Information Resources, Inc.

For misappropriation, the court found that the complaint plausibly alleged that the merger could itself be, or could necessarily result in, an unauthorized disclosure or use of trade secrets. Whether NPD knew of a duty restricting disclosure depended on factual and legal questions, including contract interpretation. The court concluded that those issues were premature to resolve on a motion to dismiss.

More Definite Statement

The court denied NPD’s alternative motion for a more definite statement. Although Nielsen would need to develop additional facts concerning its fourteen alleged types of trade-secret information as the case progressed, the complaint provided enough notice at this early stage to permit NPD to respond.

Unfair Competition

The court dismissed Claim 7, Nielsen’s New York common-law unfair-competition claim. It found that the claim was duplicative because the parties’ agreement specifically governed the relevant allocation of rights, duties, and risks.

Disposition

The court stated that NPD’s motion to dismiss the First Amended Complaint was granted in part and denied in part. The Section 3 contract theory and the unfair-competition claim were dismissed. The remaining contract claims, Claim 4, and Claims 5 and 6 survived. The alternative motion for a more definite statement was denied. The court ordered NPD to file an answer within 21 days and directed the parties to submit a redacted version of the opinion and order for public filing.