United States District Court, E.D. Virginia, Alexandria Division
MEMORANDUM OPINION & ORDER
LIAM O'GRADY JUDGE.
matter comes before the Court on Plaintiffs Motion for Leave
to Amend the First Amended Complaint (Dkt. 9) and Motion to
Remand (Dkt. 6). Both motions have been fully briefed and the
Court dispensed with oral argument. For the reasons that
follow, and for good cause shown, both Motions are hereby
Futrend Technology Inc. alleges that Defendant Microhealth
LLC (a) breached a contract by refusing to award Futrend a
subcontract after Futrend helped Microhealth obtain a
government primary contract, (b) stole Futrend's
employees, and (c) conspired with Futrend's employees to
steal Futrend's trade secrets and confidential
information. On October 18, 2018, Plaintiff Futrend sued
Defendant Microhealth and five of Futrend's former
employees in Virginia state court alleging breach of
contract, fraud, tortious interference, trade secret
misappropriation under the Virginia Uniform Trade Secret Act,
conspiracy, and other state law torts.
period of discovery, Futrend amended its state court
complaint to add additional factual allegations and counts.
Most importantly for the purposes of the present motions,
Futrend added a count alleging Defendants violated the
Virginia Computer Crimes Act by copying "computer files
containing Futrend's confidential and proprietary
business information." The First Amended Complaint was
deemed filed on March 15, 2019.
removed the case to this Court on March 29, 2019. In the
Notice of Removal, Defendants asserted this case should be
heard in federal court because the new Virginia Computer
Crimes Act count is completely preempted by the federal
week later, Plaintiff filed a Motion to Amend and a Motion to
Remand. Plaintiff challenged the sufficiency of
Defendants' Notice of Removal, arguing that Defendants
failed to sufficiently allege that the information
purportedly stolen from Plaintiffs computers was protected
under the Copyright Act. Plaintiff also moved to amend the
First Amended Complaint to remove the Virginia Computer
Crimes Act claim because Plaintiff never intended to bring
any federal claims, and argued removal would be appropriate
once that count was removed.
MOTION TO AMEND
removal of this case is based solely on Plaintiffs Virginia
Computer Crimes Act claim, which Defendants argue is
completely preempted by the federal Copyright Act. Plaintiff
has moved to amend the First Amended Complaint to remove the
Virginia Computer Crimes Act count because Plaintiff had
intended only to bring claims under state law and "did
not intend to bring a claim under the Copyright Act."
Dkt. 10 at 4, 6.
to amend should generally be "freely given" absent
undue delay, undue prejudice to the non-movant, futility of
amendment, or bad faith or dilatory motive by the movant.
Foman v. Davis, 371 U.S. 178, 182 (1962). Defendants
argue the present Motion to Amend should be denied because it
is brought solely to obtain a remand to state court and thus,
in Defendants' view, constitutes bad-faith
Fourth Circuit's opinion in Harless v. CSX Hotels,
Inc., 389 F.3d 444 (4th Cir. 2004), is directly on point
and demonstrates that Plaintiffs Motion to Amend should be
granted. In Harless, the Fourth Circuit granted
leave to amend even though the plaintiff "clearly wanted
to avoid federal court" because the plaintiff "also
had substantive reasons for amending the pleadings,"
namely, that her counsel "never intended to allege a
federal claim" and had intended "to allege a claim
based solely on state law." Id. at 448.
Following Harless, Judge Payne also recently granted
leave to amend where the plaintiff sought leave to remove a
count "largely for the purpose of seeking remand to
Virginia state court," but also in response to the
defendant's arguments that the count did not state a
viable cause of action. Boone v. CSX Transp., Inc.,
2018 WL 1308914, at *4 (E.D. Va. March 13, 2018).
Harless, Plaintiffs counsel has stated that
Plaintiff never intended to bring a federal claim and had
intended to solely bring claims under Virginia state law.
Plaintiffs counsel's assertion is supported by the fact
that all the counts in the First Amended Complaint are state
law claims and removal in this action is premised only on a
preemption argument. Id. At *5 ("[G]iven that
plaintiffs suit reached this Court only by way of
preemption-based removal, i.e., plaintiff did not
specifically plead a federal cause of action, it is probable
that, as in Harless, , plaintiff did not
'intend' to raise a raise federal claim."). It
is also worth noting that much of the computer data allegedly
stolen from Plaintiff may not even be protected by the
Copyright Act, which further supports Plaintiffs allegation
that it never intended to bring a federal Copyright Act
Indeed, Plaintiff does not claim any copyright protection for
any of the information Defendants allegedly accessed and does
not assert any claims for copyright infringement. While those
aspects of Plaintiffs complaint are not dispositive, they do
illustrate that Defendants' alleged underlying copying
is, at best, incidental to Plaintiffs core complaint of
illegal, deceitful, and unauthorized computer access to trade
secret information, ideas and concepts in order to gain an
unfair competitive advantage.
Maxient, LLC v. Symplicity Corp.,
63 F.Supp.3d 592,
597-98 (E.D. Va. 2014) (Trenga, J.).Thus, the record supports
that Plaintiff never intended to raise a federal claim, even
if, as Defendants argue, Plaintiff should have known that the
Virginia Computer Crimes Act ...