The Honorable Owen M. Panner, United States District Judge for the District 1 of Oregon, sitting by designation.



## United States Court of Appeals FOR THE EIGHTH CIRCUIT

____________ No. 98-1108

____________ Pony Computer, Inc., * * Appellant, * * Appeal from the United States v. * District Court for the * Eastern District of Missouri. Equus Computer Systems * of Missouri, Inc.; Equus * Computer Systems, Inc.; * Xiao Mei Zhou; Adam Jones; * Benjamin Liu; Andy Juang; * Der-Hisiang Hsueh; John Doe, * * Appellees. * *

____________ Submitted: June 12, 1998 Filed: December 11, 1998

____________ Befor e HANSEN and MORRIS SHEPPARD ARNOLD, Circuit Judges, an d PANNER, District Judge.

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____________ HANSEN, Circuit Judge.T he Honorable Patricia A. Gaughan, United States District Judge for th e 2 Northern District of Ohio. The Honorable Catherine D. Perry, United States District Judge for the Eastern 3 District of Missouri. 2 Pony Comput

er, Inc. (Pony) appeals the transfer of this diversity case from the Un itedStates District Court for the Northern District of Ohio to the United State s 2 District Court for the Eastern District of Missouri. Pony also appeals the distric t co urt's dismissal of three of its claims for failure to state a claim upon which relie f

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co uld be granted, see Fed. R. Civ. P. 12(b)(6), and the adverse grant of summar y judgmentagai nst it, see Fed. R. Civ. P. 56(c), regarding its remaining claims. Pon y argues that Ohio law governs this case and that summary judg ment was inappropriately granted before the completion of discovery. We affirm.
I. Pony is an Ohio corporation, maintaining its comput er system and data in Solon, Ohio, with a branch operation in St. Louis, Missouri. Defendant Equus Compute r System s of Missouri, Inc. (Equus of Missouri) is a Minnesota corporation with it s princip al place of business in St. Louis, Missouri. Defendant Equus Compute r Systems, Inc. (Equus) is also a Minnesota corporation with its principal place o f business in St. Paul, Minnesota.

An dy Juang, a Minnesota resident, started Equus in 1992 when he bought ou t Pony's St. Paul branch. Equus opened an office i n St. Louis in December 1995. Juang hired Xiao Mei Zhou, a Missouri resident, in October 1995 to work in the St. Loui s bran ch, beginning formal employment December 1, 1995. At the time, Zhou wa s employed in Pony's Return Merchandise Authorization (RMA) department as a data3

entry cl erk. Zhou performed some initial tasks to open Equus of Missouri's St. Louis branch dur

ing the end of November 1995, including: advertising for employees in the St. Louis Post-Dispatch ; using her home address and phone number to purchase an d
rec eive computer equipment; and contacting former Pony employees about potentia l employment with Equus. Some of this work was performed while Zhou was on the job at Pony, including a one-time use of Pony's fax machine and the furnishing of her work phone number to the Post-Dispatch as a contact number. In conjunction with Zhou's clerical responsibilities at Pony, she had limited access to Pony's computer files, which she accessed with a password, including customer invoices, ship ping records, receiving
reco rds, credit records, and on-site warranty records. Adam Jones, a resident o f Missouri, is also a former Pony employee in its shipping and warehouse department who leftto work for Equus of Missouri. He likewise had limited access to Pony' s compu ter files, via a password, including shipping records and customer paymen t records in the warehousing department. Pony originally filed this diversity case in federal court in Ohio against Equus, Equus of Missouri, Zhou, Jones, Juang and two other Equus managers, alleging nine counts of Ohio state law claims, including, inter alia , tampering with computer data , breach of fiduciary duty, unfair competition, fraud, disclosure of trade secrets, an d tortious interference with business contracts. The Ohio district court dis missed the case for lack of personal jurisdiction and transferred it to the United States District Court for the Eastern District of Missouri, a court in which the action could have bee n brought under 28 U.S.C. § 1406 (a) (1996). Pony then filed a first amended complaint adding an additional count under Missouri's comput er tampering statute. The Missouri district co urt dismissed three of Pony's counts under rule 12(b)(6) and granted th e defendants summary judgment on the remaining counts. Pony appeals.
II.4

A. Transfer and Choice of Law Rules
Initial ly, Pony appeals the transfer by the United States District Court for th e Northern District of Ohio to the United S tates District Court for the Eastern District of Missouri. We lack jurisdiction to review this transfer beca use it was made by a district court outside the Eighth Circuit. 28 U.S.C. § 1294 (1996). See also United States v. Copely , 25 F.3d 660, 662 (8th Cir. 1994); TEC Floor Corp. v. Wal-Mart Stores, Inc. , 4 F.3d 599, 602-03 (8th Cir. 1993). Pony arg ues that the law of Ohio should govern this case. We disagree. Th e Unite d States District Court for the Northern District of Ohio transferred the case for improper venue pursuant to 28 U.S.C. § 1406(a) (1996). Which state law applies in a diver sity case that has been transferred between federal courts is determined by the nature of the transfer. In the present context--a transfer due to impro per venue pursuant to § 1406(a)--we apply the law of the transferee forum. See Wisland v. Admira l Beverage Corp. , 119 F.3d 733, 735-36 (8th Cir. 1997), cert. denied , 118 S. Ct. 1043 (1998). Thu s, the choice of law rules of Missouri, the transferee state, apply to thi s case.
The Su preme Court of Missouri adopted the principal contacts rule of sectio n 145 of the Restatement (Second) of Conflict of Laws (1971) for choice of law problems in tort actions. See Kennedy v. Dixon , 439 S.W.2d 173, 184 (Mo. 1969) (en banc) ; D.L.C. v. Walsh , 908 S.W.2d 791, 794 (Mo. Ct. App. 1995). In conflicts cases, the forum state will apply its own procedural rules but must apply substantive law based on its conflicts of law doctrine. D.L.C. , 908 S.W.2d at 794. Section 145 of the Restatement (Second) provides: (1) The righ

ts and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that5

issu e, has the most significant relationship to the occurrence and th e parties under the principles stated in § 6. (2) Cont acts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include: (a) the place where the injury occurred, (b) the place where the conduct causing the injury occurred, (c) the domicil, residence, nationality, place of incorporation an d place of business of the parties, and (d) the place where the relationship, if any, between the parties is centered. These contacts are to be evaluated according to their relative importance with respect to the particular issue. Section 145 provides direction in the application of the general principles found in section 6, which are the heart of the choice of law considerations. D.L.C. , 90 8 S.W.2d a t 795; Greco v. Anderson , 615 S.W.2d 429, 432 (Mo. Ct. App. 1980)

. Section 6 sets forth the general principles as follows: (1) A court, subject to constitutional restrictions, will follow a statutory directive of its own state choice of law. (2 ) When there is no such directive, the factors relevant to the choice of the applicable rule of law include (a) the needs of the interstate and international systems, (b) the relevant policies of the forum, (c ) the relevant policies of other interested states and the relevant interests of those states in the determination of the particular issue, (d) the protection of justified expectations, (e) the basic policies underlying the particular field of law, (f) certainty, predictability and uniformity of result, and (g) ease in the determination and application of the law to b e applied.6

The def endants' actions of which Pony complains--including accessing an d taking computer information, providing confidential information to Equus and Equus of Mis souri, contacting former Pony employees, and working for Equus of Missour i while still employed by Pony--all occurred in Missouri. Pony was allegedly injured by the disruption of its St. Louis branch during the height of its busy season and its loss of St. Louis market share. Equus of Missouri is located in Missouri . Defendants Zhou, Jones, a nd Hsueh are Missouri residents. The only tie to Ohio is the password

acce ssible computer information which is maintained in Pony's headquarters and th e indir ectinjury to Pony headquarters through the alleged unfair competition betwee n Equus of Missouri and Pony's St. Loui s branch. Two Pony employees were contacted in Ohio but meetings between them and E quus of Missouri representatives occurred in Missouri. Regardless of whet her these Ohio contacts would subject the defendants to personal jurisdiction in Ohio, the application of the choice of law principles of section 6(2) clearl y reveals that Missouri has the greater interest in these parties an d occurrences. Thus, the district court correctly applied Missouri law.
B. Adequacy of Discovery Pony contends that the district court erred in granting summary judgment prior to the completion of discovery. "A trial court's determination that a claim is ripe fo r summary ju dgment is reviewed for abuse of discretion." In re Temporomandibula r Joint (TMJ) Implants Prod. Liab. Lit ig. , 113 F.3d 1484, 1489 (8th Cir. 1997); see also Humphreys v. Roche Biomed. Lab., Inc. , 990 F.2d 1078, 1081 (8th Cir. 1993)

. Discovery d oes not need to be complete before a case is dismissed on summar y judgment. TMJ , 113 F.3d at 1489. However, summary judgment is only proper if the nonmovant

has had adequate time for discovery. Celotex Corp. v. Catrett , 477 U.S

. 317, 322 (1986); TMJ , 113 F.3d at 1490. The nonmovant must make some showing that discov ery has been inadequate. Absent such a showing, summary judgment i s appropriate despite incomplete discovery. See Dulaney v. Carnahan , 132 F.3d 1234,7

1238-39 (8th Cir . 1997) (affirming summary judgment where nonmovant had not filed a Fed. R. Civ. P. 56(f) motion for continuance and made no affi davit regarding evidence to be obtained from additional discovery); Humphreys , 990 F.2d at 1081 (providin g summary j udgment is appropriate despite a Rule 56(f) motion for continuance wher e nonmovant failed to file affidavit specifying what further discovery might unveil) ; United States v. Light , 766 F.2d 394, 397 (8th Cir. 1985) (affirming summary judgment whe re parol evidence rule would bar evidence the nonmovant sought from additiona l discovery). The case management order allowed for nearly one year of discovery. Though Po ny claimed its discovery was inhibited by the defendants' objections to some of it s interrogatories, Pony fail ed to conduct further discovery upon receiving answers to the interrog atories one month prior to the discovery deadline. The additional discovery soug ht pertains to the defendants' communications providers and phone numbers i n order to ascertain the number and ti ming of communications among the defendants and betwee n the defendants and Pony's prior employees. However, Pony fails to explai n ho w this additional discovery will provide support for any of its claims other than t o state tha t it found out about Zhou's dealings with Equus of Missouri representative s through an examination of t elephone records. Inadequate discovery cannot be a shield against s ummary judgment without a showing of a meritorious opposition. Light , 766 F.2d at 397 . The district court found that Pony's request for an extension of th e di scovery deadline was a request for an unbounded fishing expedition. Based on th e reco rd, we are satisfied that the district court did not abuse its discretion in denyin g Pony's request for an extension of discovery.
C. Summary Judgment Pony contends that genuine issues of material fact preclude the entry of summary judgment and that the defendants are not entitled to judgment as a matter of law. We review the district court's grant of summary judgment de novo, viewing the record in8

a l ight most favorable to the nonmoving party. We will affirm only if there are n o genuine issues of material fact in the record and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Celotex , 477 U.S. at 322-23. The district court renderedsummary judgment against Pony on seven counts of Pony's ten-coun t complaint.
Count II of Pony's first amended complaint alleges defendants Zhou and Jones violated M O
. A

NN
. S TAT . § 537.525 (West 198 8) by tampering with computer data and equipment. Section 537.525 provides: "In addition to any other civil remedy available, the owner or lessee of the computer system, computer network, computer program , computer ser vice or data may bring a civil action against any person who violate s sections 569.095 to 569.099 RSMo, for com pensatory damages . . . ." Pertinent to this case, M O
. A NN
. S TAT
. § 569.095 (West Supp. 1998) provides:

A person commits the crime of tampering with computer data if he knowing lyand without authorization or without reasonable grounds t o believe that he has such authorization:

. . . . (3) Discloses or takes data, programs, or supporting documentation, residing or existing internal or external to a computer, computer system, or computer network; or

(4) Discloses or takes a password, iden tifying code, personal identification number, or other confidential information about a computer system or network that is intended to or does control access to the computer system or network;

(5) Accesses a

computer, a computer system, or a computer network, and intentionally examines information about another person; (6) Re ceives, retains, uses, or discloses any data he know s or believes was obtained in violation of this subsection.9

Pony claims that Zhou and Jones disclosed confidential informatio n learned while
acces sing the Pony computer network in the course of their employment with Pony

. The affidavits of Joseph Chou, Pony's president, and Yunchi Chen, Pony's St. Loui s branch manager, are the only evidence of any disc losure. However, these affidavits are merely conclusory, failing toenumerate specific evidence of any disclosure. Summary judgme nt is appropriate where there is no independent evidence, other than th e petitioner's unsubstantiated allegations. Davenport v. Riverview Gardens Sch. Dist. , 30 F.3d 940, 945 (8th Cir. 1994). Thus, summary judgment was appropriate as to Count II.
C o unt III alleges breach of fiduciary duty. A confidential relationship between employer and employee giving rise to fiduciary duties exists if (1) there is an express understa nding that the employee is receiving confidential information, or (2) th e em ployee acquired the information in such a way that he must have known of it s confid ential nature. National Rejectors, Inc. v. Trieman , 409 S.W.2d 1, 35-36 (Mo

. 1966) (en banc). Pony claims that because Zhou and Jones could only access the Pony computer with a password and be cause they had limited access to only the information they nee ded for their job, each must have known of the confidential nature of th e information. Pony paints too broad a picture of a confidential relationship. Zhou' s duties were primarily clerica l. She accessed the computer files to enter defective parts to be retu rned to the supplier. Jones' access to computer information was similar , involv ing warehousing duties. To base fiduciary responsibilities on passwords an d limited file access would make nearly any employee with any controlled compute r ac cess a confidant. Pony has failed to enumerate facts to support a finding that either Zhou or Jones must have known they were receiving confidential information

. Summary judgment was appropriate as to Count III.
Cou nt V alleges unfair competition, which requires a showing of: (1) th e existence of

a trade secret, (2) communication of the trade secret to another, (3) while th at party was in a position of trust and confidence, and (4) the use of the trade secret10

to injure the plaintiff. Reddi-Wip, Inc. v. Lemay Valve Co. , 354 S.W.2d 913, 917 (Mo. Ct. App. 1962). Even if the e xistence of a trade secret is conceded, Pony still failed to show proof in the record that either Zhou or Jones was in a position of confidence, that either of them communicated any information to t he other defendants, or that any of the defenda nts used the alleged trade secrets to injure Pony. Thus, Count V fails for th e reasons that Counts II and III fail.
Count VII alleges fraud against Zhou and Jones for concealing their allege d disloyal and anticompetitive acts while employed by Pony. Fraud requires a showing of: (1) a repre sentation, (2) that is false, (3) and material, (4) of which the speake r knows to be false or is ignorant of its truth, (5) made with the intent that th e repres entation be relied upon, (6) to a hearer who is ignorant of the falsity of th e representation, (7) who in fact relies on the representation, (8) who has a right to rely
on it, and (9) who suffers proximate and subsequent damages. Missouri ex rel

. Painewebber, Inc. v. Voorhees , 891 S.W.2d 126, 128 (Mo. 1995) (en banc). Silence
can be c onsidered a misrepresentation if the one making the misrepresentation has a duty tospeak, which duty arises from a confidential relationship. See id. at 129. The mi srepresentation which Pony asserts resulted in fraud was Zhou's and Jones' silenc e regarding their future employment wi th Equus of Missouri. However, we have already concluded that neither o f these defendants was in a position of confidence. Furthermore, emp loyees can agree to compete against their employer in the future and may even plan and prepare for it while still employed. Metal Lubricants Co. v

. Engin eered Lubricants Co. , 411 F.2d 426, 429 (8th Cir. 1969) (citing Nationa l Rejectors, Inc. v. Trieman , 409 S.W.2d 1 (Mo. 1966) (en banc)). Neither Zhou no r Jon es had an obligation to disclose their future employment with Equus to Pony since neither was in a confidential relationship with Pony. Thus, Pony has failed to present facts in the record to support its fraud claim.
Counts V III and X allege tortious interference with Pony's customers an d employees. Tortious interference re quires: (1) a contract or valid business expectancy,Appellant's brief states that it is appeal ing the dismissal of Count I for failure to 4 state a cla im upon which relief can be granted. However, appellant doesn't addres s Count I in the 12(b)(6) section of its brief but rather lumps it in its discussion of Count II's grant of sum

mary judgment. Count I was an action for negligence per se based on 11 (2) kno wn by the defendant, (3) a breach induced by the defendant's intentiona l interference, (4) w ithout justification, and (5) damages. Rice v. Hodapp , 919 S.W.2d 240, 245 (Mo. 1996) (en banc). Pony claims that the defendants raided it of it s employees, contacting employees that had noncompete agreements with Pony. Of the employees that actually left to work for Equus, Pony has not produced, nor alleged, a noncompete agreement. There is nothing wrong with offering employment to an at-will empl oyee to compete with his current employer, where the employee is not subject to
acovenant not to compete or a confidential relationship. Metal Lubricants , 411 F.2d at 429 -30. Though the defendants allegedly approached two employees with non

compete agreements, neither accepted employment with Equus. Thus, there was n o breach of contract. Pony fails to allege, or provide evidence of, f acts regarding business expectancies with its clients. Counts VIII and X were properly dismissed.
Count IX alleges that the defendants conspired to convert Pony's trade secrets. To establish a conspiracy under Missouri law, a claimant must show that: "(1) two or
more pers ons, (2) with an unlawful objective; (3) after a meeting of the minds; (4 ) committed at least one act in furtherance of the conspiracy; and (5) the plaintiff wa s thereby damaged." Rice , 919 S.W.2d at 245. Pony has failed to provide evidence of an unlawful act, namely that Zhou and Jones provided trade secret information to Equus who then used it to harm Pony. Reading the evidence in the light most favorable t o Pony, Pony has failed to set forth proof of a conspiracy.
D. Dismissal Under Fed. R. Civ. P. Rule 12(b)(6) Pony appeals the dismissal of two of the three claims dismissed under Rul e 12(b)(6). Pony asserts that Count IV, alleging breach of a duty of loyalty, was

4alleged violation of the statutes in Count II but appella nt doesn't address the negligence aspect of Count I in its discussion. Thus, we d ecline to address Count I in this opinion. 12 improperly dis missed for failure to state a claim under Rule 12(b)(6), because it states
a ca use of action in Missouri. If in fact Missouri recognizes a breach of a duty o f loyalty, it is only within the larger class of actions of breach of a fiduciary duty, o f which we have already disposed. See , e.g. , Peterson v. Continental Boiler Works, Inc. , 783 S.W. 2d 896, 904-05 (Mo. 1990) (en banc) (discussing a corporate director's duty of loy alty within the context of a breach of a fiduciary duty). Additionally, Pon y concedes that such an action would require a confidential relations hip. As stated above, Pony presented no evidence of such a relationship. It is well settled t hat "we may affirm the district court's judgment on any basis supported by the record." Stevens v

. Redwing , 146 F.3d 538, 543 (8th Cir. 1998) (internal quotations omitted). Count I V was properly dismissed.
Count VI alleges a faithless employee cause of action. Pony asserts Missour i courts have recognized such an action by citing to two cases which use the ter m "fait hless employee." See American Sash & Door Co. v. Commerce Trust Co. , 5 6 S.W .2d 1034, 1037 (Mo. 1932) (en banc); National Rejectors , 409 S.W.2d at 43

. However, neither case involves nor creates an action based on being a faithles s employee and neither requires the forfeiture of wages as the appropriate sanction, a s Pony seek s in its complaint. Thus, this count was properly dismissed under Rul e 12(b)(6). Even if such a claim were actionable in Missouri, Po ny must demonstrate that Zhou's and Jones' acts were so disloyal and dishonest as to permeate their service t o Pony. See Hein v. TechAmerica Group, Inc. , 17 F.3d 1278, 1282 (10th Cir. 1994 ) (describing an action for faithless employee). Pony has not provided evid ence that Zhou
or Jones provided trade secret information to Equus. Pony has not alleged that either failed to perform their d

uties. Thus, even if such a claim existed in Missouri, of which we are not convinced, Pony has failed to provide sufficient evidence of its13

elements

. Thus, it was properly subject to dismissal as a matter of law on summary judgment. Dismissal of Count VI was proper.
III. Accordingly, for the reasons stated above, we affirm the distri ct court's judgment. A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.