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Microstrategy Services Corp. v. Openrisk, LLC

United States District Court, E.D. Virginia, Alexandria Division

March 17, 2015

OPENRISK, LLC, Defendant.


JAMES C. CACHERIS, District Judge.

This matter is before the Court on MicroStrategy Services Corp.'s ("MicroStrategy") Motion to Dismiss the Amended Counterclaims. [Dkt. 39.] For the following reasons, the Court will grant in part and deny in part the motion.

I. Background

In September of 2011, MicroStrategy, which provides cloud-based computing services, and OpenRisk, LLC ("OpenRisk"), a software start-up developing a platform to estimate damages to real property caused by natural disasters, entered into a contract. In exchange for payment, MicroStrategy would provide two terabytes of data storage and set up a cloud environment subject to specifications set forth in confidential, proprietary OpenRisk software architecture which OpenRisk shared with MicroStrategy. (Am. CounterCl. [Dkt. 35] 111, 5-6.) The contract had a term of five years but permitted MicroStrategy to terminate the contract for OpenRisk's failure to pay fees. ( Id. ¶ 6.)

At about the same time it entered into the MicroStrategy contract, OpenRisk was introduced to a potential investor, Marc Roston ("Roston"). ( Id. ¶ 8.) Roston offered $200, 000 for a controlling interest in OpenRisk. ( Id. ) Believing the offer was too low, OpenRisk rejected it. ( Id. ) According to the Amended Counterclaims, after OpenRisk turned down his offer, Roston conspired with three officers of the company (collectively referred to as the "former officers") to leave the company in October of 2011 so as to force OpenRisk to accept Roston's offer. ( Id. ¶ 9.) He also conspired with the former officers to steal OpenRisk's intellectual property and confidential and proprietary business information.[1] ( Id. ¶ 10.) Roston and the former officers formed a new company, Spectant Group LLC ("Spectant"), allegedly to carry out this plan. ( Id. ) MicroStrategy purportedly joined this conspiracy, facilitating the transfer of OpenRisk's information from its cloud environment to Spectrant, secretly accepting payments from Roston and the former officers (collectively "co-conspirators")[2] to be credited to OpenRisk's account without its knowledge, and secretly working with the co-conspirators to continue developing the OpenRisk platform after the former officers had left the company. ( Id. ¶ 11.) OpenRisk alleges that MicroStrategy continued in this conspiracy even after it received a cease and desist letter in December of 2011 advising MicroStrategy that the former officers had failed to return OpenRisk property. ( Id. ¶ 101.) At the time it sent this letter, OpenRisk was unaware that MicroStrategy had transferred its data to Spectrant, nor was it even aware that Spectrant existed or the scope of work undertaken by the co-conspirators. ( Id. ¶ 101.)

In November of 2011, OpenRisk notified MicroStrategy that it was no longer a going concern and asked it to discontinue services to OpenRisk. (Compl. [Dkt. 1] 1119-20.) OpenRisk missed its first quarterly payment of $63, 000. ( Id. ¶ 21.) MicroStrategy notified OpenRisk that it was in material breach of the contract and that the contract would be automatically terminated if payment was not received within thirty days. ( Id. ¶ 22.) OpenRisk did not make this or any future payment. ( Id. ¶ 23.)

OpenRisk originally sued MicroStrategy in state court in Massachusetts in June 2014. (Am. Countercl. ¶ 14.) MicroStrategy moved to dismiss the case, citing the forum selection clause in the contract. ( Id. ) Meanwhile, MicroStrategy filed this one-count breach of contract action in September of 2014. (Compl. 7 para;¶ 25-30.) In November of 2014, the Massachusetts court granted the motion to dismiss, contingent upon OpenRisk filing a counterclaim in this action or instituting a separate suit in Virginia state court. (Am. Countercl. ¶ 17.) The court's order prohibited MicroStrategy from raising the statute of limitations as a defense to any of the claims asserted in the Massachusetts action. ( Id. )

Before filing an answer, OpenRisk challenged this Court's subject matter jurisdiction, arguing that the amount-in-controversy requirement had not been satisfied. (OpenRisk's Mem. in Supp. of Mot. to Dismiss for Lack of Jurisdiction [Dkt. 11] at 1.) The Court[3] denied the motion. (11/14 Hr'g Tr. [Dkt. 19] at 16 ("[S]ubject matter jurisdiction can be addressed at any point, even after judgment; and so if as further evidence is developed it appears as a matter of certainty that you cannot reach the threshold amount, then it's perfectly appropriate for the defense to raise the issue anew[.]").)

OpenRisk filed several counterclaims and then amended them, [4] asserting the following claims: aiding and abetting breach of fiduciary duties ("Count I"), business conspiracy in violation of Virginia Code §§ 18.X-XXX-XXX ("Count II"), common law conspiracy ("Count III"), tortious interference with contract ("Count IV"), and misappropriation of trade secrets in violation of Virginia Code § 59.1-336 ("Count V"). (Am. Countercl. ¶¶ 104-132.) MicroStrategy has moved to dismiss all five of the counterclaims. (MicroStrategy's Mot. to Dismiss [Dk.t 39].) Having been fully briefed and argued, this motion is ripe for disposition.

II. Legal Standard

"A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint[.]" Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (citation omitted). The Supreme Court has stated that in order "[t]o survive a motion to dismiss, a [c]omplaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. The issue in resolving such a motion is not whether the non-movant will ultimately prevail, but whether the non-movant is entitled to offer evidence to support his or her claims.

"Determining whether a complaint states a plausible claim for relief [is]... a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679 (citations omitted). To survive a motion to dismiss, a plaintiff's complaint must demand more than "an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 555. Legal conclusions couched as factual allegations are not sufficient. Twombly, 550 U.S. at 555. Hence, a pleading that offers only "formulaic recitation of the elements of a cause of action will not do." Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 557. Nor will a complaint that tenders mere "naked assertion[s]" devoid of "further factual enhancement." Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 557.

Moreover, the plaintiff does not have to show a likelihood of success on the merits. Rather, the complaint must merely allege - directly or indirectly - each element of a ...

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