UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

MEDTECH PRODUCTS INC.,

Plaintiff,

-vRANIR, LLC and CVS PHARMACY, INC., 

Defendants.

Case No. 07-CV-3302 (KMK)(LMS)

 OPINION AND ORDER

 

MEDTECH PRODUCTS INC.,

Plaintiff,

-vDENTEK ORAL CARE, INC., KELLY M.

KAPLAN, RAY DUANE, and C.D.S. ASSOCIATES,

INC., 

Defendants.

MEDTECH PRODUCTS INC.,

Plaintiff,

-vPOWER PRODUCTS, INC. d/b/a SPLINTER, 

Defendant.

Appearances:

W. Edward Ramage, Esq.

Baker, Donelson, Bearman, Caldwell & Berkowitz PC

Nashville, TN

Counsel for Plaintiff Medtech Products Inc.
2

Clinton P. Sanko, Esq.

Micheline K. Johnson, Esq.

Thomas O. Helton, Esq.

John M. Phillips, Esq.

Baker, Donelson, Bearman, Caldwell & Berkowitz PC

Chattanooga, TN

Counsel for Plaintiff Medtech Products Inc.

Karl Geercken, Esq.

Alston & Bird, LLP

New York, NY

Counsel for Plaintiff Medtech Products Inc.

Samuel F. Miller, Esq.

Baker, Donelson, Bearman, Caldwell & Berkowitz PC

Memphis, TN

Counsel for Plaintiff Medtech Products, Inc.

John P. Fulco, Esq.

Petek Gunay, Esq.

Salon Marrow Dyckman Newman Broudy LLP

New York, NY

Counsel for Defendant Kelly M. Kaplan

Michael A. Freeman, Esq.

Greenberg Freeman, L.L.P.

New York, NY

Counsel for Defendants Ray Duane and C.D.S. Associates, Inc.

James H. Shalek, Esq.

Alan Federbush, Esq.

Theodore K. Cheng, Esq.

Proskauer Rose LLP 

New York, NY

Counsel for Defendant Dentek Oral Care, Inc.

Gregory J. Sieczkiewicz, Esq.

Proskauer Rose LLP

Boston, MA

Counsel for Defendant Dentek Oral Care, Inc.
1

 The case was referred to Magistrate Judge Smith for all purposes on April 24, 2007. 

The case was assigned to this Court on August 6, 2007.

3

KENNETH M. KARAS, District Judge:

Plaintiff Medtech Products Inc. (“Medtech”) filed this consolidated action against

Defendants DenTek Oral Care, Inc. (“DenTek”), Kelly M. Kaplan (“Kaplan”), Ray Duane

(“Duane”), and C.D.S. Associates, Inc. (“C.D.S.”) (collectively, “Defendants”), alleging patent,

trademark, and copyright infringement, as well as unfair competition, breach of contract, tortious

interference with contractual relations, civil conspiracy, trade secret misappropriation, and

tortious interference with an advantageous business relationship. Before the Court are

Defendants’ various motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), as

well as Medtech’s Motion to Strike DenTek’s Memorandum of Law, Medtech’s Motion to Strike

C.D.S.’ Motion to Dismiss, and DenTek’s Motion to Compel Medtech to disclose with

particularity those trade secrets that were allegedly misappropriated. 

I. Background

The Court assumes the Parties’ familiarity with the factual and procedural background of

this case as it is thoroughly set forth in Magistrate Judge Lisa Margaret Smith’s Report &

Recommendation dated June 2, 2008 (“R&R”).1

 

In her R&R, Magistrate Judge Smith has recommended that this Court adopt the

following rulings with respect to the pending motions: (1) deny Medtech’s Motion to Strike

C.D.S.’ Motion to Dismiss (R&R 3 n.3); (2) deny Medtech’s Motion to Strike DenTek’s

Memorandum of Law (id. 6-7); (3) deny Defendants’ Motions to Dismiss Medtech’s trade secret

misappropriation claims (id. 13); (4) grant Kaplan and Duane’s Motions to Dismiss Medtech’s
4

claim for breach of the Proprietary Information and Inventions Agreement (“PIIA”) (id. 20-21);

(5) deny Duane and C.D.S.’ Motion to Dismiss Medtech’s breach of contract claim based on the

non-compete and non-solicitation clauses of the Consulting Agreement (id. 22); (6) deny C.D.S.’

Motion to Dismiss Medtech’s breach of contract claim based on the confidentiality provisions of

C.D.S.’ PIIA (id.); (7) deny Duane and Kaplan’s Motions to Dismiss Medtech’s breach of

contract claim based on their respective General Releases (id.); (8) grant Defendants’ Motions to

Dismiss Medtech’s civil conspiracy claim (id. 23-24); (9) grant DenTek’s Motion to Dismiss

Medtech’s claim for tortious interference with contractual relations (id. 27); (10) grant Duane’s

Motion to Dismiss Medtech’s tortious interference with contractual relations claim (id. 28); (11)

grant Defendants’ Motions to Dismiss Medtech’s claims for tortious interference with

advantageous business relationship/economic advantage (id. 31); (12) deny DenTek’s Motion to

Dismiss Medtech’s claims for unjust enrichment and unfair competition (id. 35); and (13) deny

DenTek’s Motion to Compel Medtech to disclose the precise trade secrets allegedly

misappropriated until Medtech has had the opportunity to conduct limited discovery on the trade

secret claim (id. 37-38). All Parties have filed timely and specific objections to the R&R.

II. Discussion

A. Standard of Review

1. Review of Magistrate Judge’s Report & Recommendation

A district court reviewing a report and recommendation addressing a dispositive motion

“‘may accept, reject, or modify, in whole or in part, the findings or recommendations made by

the magistrate judge.’” Donahue v. Global Home Loans & Fin., Inc., No. 05-CV-8362, 2007

WL 831816, at *1 (S.D.N.Y. Mar. 15, 2007) (quoting 28 U.S.C. § 636(b)(1)(c)). Under 28
5

U.S.C. § 636(b)(1) and Federal Rule of Civil Procedure 72(b), parties may submit objections to

the magistrate judge’s report and recommendation. The objections must be “specific” and

“written,” Fed. R. Civ. P. 72(b)(2), and must be made “[w]ithin 10 days after being served with a

copy of the recommended disposition.” Id.; see also 28 U.S.C. § 636(b)(1)(c).

Where a party submits timely objections to a report and recommendation, as the Parties

have here, the district court reviews the parts of the report and recommendation to which the

party objected under a de novo standard of review. See 28 U.S.C. § 636(b)(1)(c) (“A judge of

the court shall make a de novo determination of those portions of the report or specified

proposed findings or recommendations to which objection is made.”); Fed. R. Civ. P. 72(b)(3)

(“The district judge must determine de novo any part of the magistrate judge’s disposition that

has been properly objected to.”); see also Donahue, 2007 WL 831816, at *1. The district court

may adopt those portions of a report to which no objections have been made, as long as those

portions are not clearly erroneous. See Pizarro v. Bartlett, 776 F. Supp. 815, 817 (S.D.N.Y.

1991).

With regard to a magistrate judge’s decision on a non-dispositive matter, such as a

discovery dispute between the parties, “[t]he district judge in the case must consider timely

objections and modify or set aside any part of the order that is clearly erroneous or is contrary to

law.” Fed. R. Civ. P. 72(a). “Pursuant to this highly deferential standard of review, magistrates

are afforded broad discretion in resolving discovery disputes.” Aurora Loan Servs. v. Posner,

499 F. Supp. 2d 475, 477 (S.D.N.Y. 2007) (internal quotation marks omitted).
6

2. Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(6)

The Supreme Court has held that “[w]hile a complaint attacked by a Rule 12(b)(6)

motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide

the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a

formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v.

Twombly, 127 S. Ct. 1955, 1964-65 (2007) (citations omitted and second alteration in original). 

In Twombly, id. at 1964-69, the Supreme Court also abandoned reliance on the oft-cited line

from Conley v. Gibson, 355 U.S. 41, 45-46 (1957), that, “a complaint should not be dismissed

for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of

facts in support of his claim which would entitle him to relief.” As the Court explained, a literal

application of Conley’s “no set of facts” rationale is improper because “a wholly conclusory

statement of claim would survive a motion to dismiss whenever the pleadings left open the

possibility that a plaintiff might later establish some ‘set of [undisclosed] facts’ to support

recovery.” Twombly, 127 S. Ct. at 1968 (alteration in original). Instead, the Court emphasized

that “[f]actual allegations must be enough to raise a right to relief above the speculative level . . .

[,]” id. at 1965, and “once a claim has been stated adequately, it may be supported by showing

any set of facts consistent with the allegations in the complaint[,]” id. at 1969. Plaintiffs must

allege “enough facts to state a claim to relief that is plausible on its face.” Id. at 1974. If

Plaintiffs “ha[ve] not nudged their claims across the line from conceivable to plausible, [their]

complaint must be dismissed.” Id.; see also Iqbal v. Hasty, 490 F.3d 143, 157-58 (2d Cir. 2007)

(“After careful consideration of the Court’s opinion and the conflicting signals from it that we

have identified, we believe the Court is not requiring a universal standard of heightened fact
7

pleading, but is instead requiring a flexible ‘plausibility standard,’ which obliges a pleader to

amplify a claim with some factual allegations in those contexts where such amplification is

needed to render the claim plausible.” (emphasis in original)).

A Rule 12(b)(6) motion to dismiss requires a court to “accept[] all factual allegations in

the complaint and draw[] all reasonable inferences in the plaintiff's favor.” Ruotolo v. City of

New York, 514 F.3d 184, 188 (2d Cir. 2008); see also Grandon v. Merrill Lynch & Co., 147 F.3d

184, 188 (2d Cir. 1998) (noting court must “accept as true the factual allegations made in the

complaint and draw all inferences in favor of the plaintiffs”); Blimpie Int’l, Inc. v. Blimpie of the

Keys, 371 F. Supp. 2d 469, 470-71 (S.D.N.Y. 2005). “‘In adjudicating a Rule 12(b)(6) motion, a

district court must confine its consideration ‘to facts stated on the face of the complaint, in

documents appended to the complaint or incorporated in the complaint by reference, and to

matters of which judicial notice may be taken.’” Glidepath Holding B.V. v. Spherion Corp., No.

04-CV-9758, 2007 WL 2176072, at *10 (S.D.N.Y. July 26, 2007) (quoting Leonard F. v. Israel

Disc. Bank of N.Y., 199 F.3d 99, 107 (2d Cir. 1999)).

B. Analysis

1. Medtech’s Motions to Strike

Magistrate Judge Smith recommended that this Court deny Medtech’s Motion to Strike

C.D.S.’ Motion to Dismiss. (R&R 3 n.3.) Medtech has not objected to this recommendation. 

Having reviewed the recommendation for clear error and found none, the Court adopts

Magistrate Judge Smith’s recommendation and denies Medtech’s Motion to Strike C.D.S.’

Motion. 
2

 More specifically, Plaintiff identifies the following documents as improperly relied

upon and referenced in DenTek’s Motion to Dismiss: (1) the Declaration of Brad Conley (Dkt.

No. 112); (2) Paragraphs 3, 6, 7, 9, 10, 11, 12, and 13 of the Declaration of Theodore K. Cheng

(Dkt. No. 113); and (3) Exhibits B, E, F, H, I, J, K, and L to the Declaration of Theodore K.

Cheng (Dkt. No. 113).

3

 Because discovery in this case is ongoing, Magistrate Judge Smith recommended that

this Court decline to convert the Motion to one for summary judgment in light of DenTek’s

submissions. (R&R 7.) This recommendation was not objected to by the Parties, and, in any

case, the Court finds no clear error in this sensible conclusion. 

8

Medtech also moved to strike DenTek’s Motion to Dismiss on the ground that it is

“replete with information that cannot be considered in determining a motion to dismiss.” (Pl.

Medtech Products Inc.’s Mot. to Strike DenTek Oral Care, Inc.’s Mot. and Mem. of Law in

Supp. of its Mot. for (A) Partial Dismissal of the Second Am. Compl. and (B) Entry of a

Protective Order and Order Compelling Disclosure of Alleged Trade Secrets 1-2 (“Pl.’s Mot. to

Strike DenTek’s Mot.”).) 2 In the R&R, Magistrate Judge Smith recommended that this Court

deny Medtech’s Motion to Strike, finding that “such drastic measures . . . need not be taken.” 

(R&R 7.) Instead, Magistrate Judge Smith excluded improper exhibits from consideration on

this Motion. (Id.)

3

 None of the Parties has objected to this portion of the R&R. The Court

adopts Magistrate Judge Smith’s recommendation in this regard and denies Medtech’s Motion to

Strike DenTek’s Motion to Dismiss. 

2. Motions to Dismiss

a. Trade Secret Misappropriation Claims

In the R&R, Magistrate Judge Smith recommended that this Court deny Defendants’

Motions to Dismiss Plaintiff’s trade secret misappropriation claims. (R&R 13.) Defendants

have all filed timely objections to this portion of the R&R, so this Court has reviewed de novo
4

 Defendants C.D.S. and Duane (collectively, the “Duane Defendants”) have adopted and

incorporated by reference the objections filed by DenTek and Kaplan with regard to Magistrate

Judge Smith’s recommendation that their respective Motions to Dismiss Plaintiff’s trade secret

misappropriation claim be denied. (Objections by Defs. Ray Duane and C.D.S. Associates, Inc.

to the Magistrate Judge’s Report and Recommendation, Dated June 2, 2008 (“Duane Defs.

Obj.”) 8.)

5

 Courts use the following factors to determine whether information constitutes a trade

secret: 

(1) the extent to which the information is known outside of the

business; (2) the extent to which it is known by employees and

others involved in the business; (3) the extent of measures taken by

9

the issue of whether Plaintiff has sufficiently alleged a claim for trade secret misappropriation.4

For the reasons set forth in Magistrate Judge Smith’s thorough R&R, as well as for those stated

below, the Court concludes that, for purposes of the present Motions, Medtech has adequately

alleged a claim of trade secret misappropriation and, therefore, Defendants’ Motions to Dismiss

that claim should be denied.

“To succeed on a claim for the misappropriation of trade secrets under New York law, a

party must demonstrate: (1) that it possessed a trade secret, and (2) that the defendants used that

trade secret in breach of an agreement, confidential relationship or duty, or as a result of

discovery by improper means.” N. Atl. Instruments, Inc. v. Haber, 188 F.3d 38, 43-44 (2d Cir.

1999); see also Faiveley Transp. Malmo AB v. Wabtec Corp., — F. Supp. 2d —, No. 08-CV3330, 2008 WL 3884346, at *2 (S.D.N.Y. Aug. 22, 2008) (citing N. Atl. Instruments). New

York courts define a “trade secret” as “any formula, pattern, device or compilation of

information which is used in one’s business, and which gives [the owner] an opportunity to

obtain an advantage over competitors who do not know or use it.” N. Atl. Instruments, 188 F.3d

at 44 (internal quotation marks omitted).5

 A trade secret, however, “is not simply information as
the business to guard the secrecy of the information; (4) the value

of the information to the business and its competitors; (5) the

amount of effort or money expended by the business in developing

the information; (6) the ease or difficulty with which the

information could be properly acquired or duplicated by others.

N. Atl. Instruments, 188 F.3d at 44 (quoting Ashland Mgmt v. Janien, 624 N.E.2d 1007, 1013

(N.Y. 1993)). These factors, however, are difficult to apply in the absence of discovery, making

their consideration sometimes futile in the context of a motion to dismiss. See, e.g., SD

Protection, Inc. v. Del Rio, 498 F. Supp. 2d 576, 585-86 (E.D.N.Y. 2007) (“To consider these

factors now [on a motion to dismiss] would be premature. . . . Without discovery, I cannot

possibly weigh the six factors discussed in Ashland . . . .”). 

10

to single or ephemeral events in the conduct of the business; rather, it is a process or device for

continuous use in the operation of the business.” Sit-Up Ltd. v. IAC/InterActiveCorp., No. 05-

CV-9292, 2008 WL 463884, at *8 (S.D.N.Y. Feb. 20, 2008) (quoting Softel, Inc. v. Dragon Med.

& Scientific Commc’ns, Inc., 118 F.3d 955, 968 (2d Cir. 1997)). “The most important

consideration remains whether the information was secret.” Payment Alliance Int’l, Inc. v.

Ferreira, 530 F. Supp. 2d 477, 481 (S.D.N.Y. 2007) (quoting Lehman v. Dow Jones & Co., 783

F.2d 285, 298 (2d Cir. 1986)) (internal quotation marks omitted). Whether the information was

secret is “generally a question of fact.” Ashland Mgmt., 624 N.E.2d at 1013 (internal citations

omitted).

Medtech alleges that it, and its predecessor in interest, Dental Concepts LLC (“Dental

Concepts”), “expended considerable time, effort, and money developing its trade secrets,

including but not limited to manufacturing cost details, drawings, test data, and other information

about the design and manufacturing process for its dental protectors.” (Second Am. Compl.

(“SAC”) ¶ 275.) Medtech alleges that Kaplan and Duane were “involved extensively in every

aspect of the NIGHTGUARDTM business including brand development and marketing, and the
11

formulation of strategic sales and market goals and initiatives . . . [, and were] intimately familiar

with Dental Concepts’ consultants, brokers, designers, suppliers, product formulation and

production sources, and marketing strategies.” (Id. ¶ 41.) Further, Medtech alleges that it shared

its trade secrets with Kaplan and Duane pursuant to confidentiality agreements, in which they

“agreed not to divulge or appropriate for their own use or to the use of others any secret or

confidential information or knowledge obtained by them or disclosed to them during their

employment at Medtech.” (Id. ¶ 278.) Despite these confidentiality agreements, according to

Medtech, “Duane and Kaplan used Medtech’s trade secrets in the performance of their duties at

DenTek for their own benefit and disclosed Medtech’s trade secrets to DenTek and its

employees and officers.” (Id. ¶ 280.) Medtech alleges that DenTek had “reason to know and,

upon information and belief, did know at and/or after the time that Duane and Kaplan disclosed

Medtech’s trade secrets, and at and/or after the time DenTek made use of these trade secrets, that

these trade secrets came from Medtech, and that Duane and Kaplan owed a duty to Medtech to

maintain their secrecy.” (Id. ¶ 281.) 

According to Medtech, DenTek had no experience in the dental protector market (id. ¶

127), yet “[b]y virtue of Duane and Kaplan’s inside information, DenTek was able to virtually

eliminate the development time normally associated with entering into a new line of products”

(id. ¶ 128). Further, Medtech alleges that “[a]ll evaluation and vetting processes were truncated

based on Duane and Kaplan’s inside information about suppliers, designers, consultants, and

legal advisors.” (Id. ¶ 129.) In sum, Medtech alleges that due to the confidential and proprietary

information provided to DenTek by Duane and Kaplan, DenTek was aware of Medtech’s

strategic decisions (for example, to maintain a three-size platform for its product) and was able
6

 DenTek argues that, at best, Medtech’s Complaint can be read to identify the following

three alleged trade secrets: (1) Medtech’s strategic decision to maintain a three-size

configuration for the NightGuardTM; (2) Medtech’s use of certain vendors and advisors (e.g.,

attorneys, manufacturers, etc.) in connection with the development of the NightGuardTM dental

protector; and (3) “‘manufacturing cost details, drawings, test data, and other information about

12

to create a competing product on an expedited basis, cutting out a time-consuming and expensive

development process, and allowing DenTek to seize a limited opportunity with a large retailer.

(R&R 11-12; SAC ¶¶ 110, 123-124, 127-130, 163, 181-82, 275-77, 280.)

Magistrate Judge Smith recommended that this Court find these allegations sufficient to

survive Defendants’ Motions to Dismiss Plaintiff’s trade secret misappropriation claims. (R&R

12-13.) Defendants object to this recommendation, arguing that Plaintiff’s vague and conclusory

allegations do not sufficiently allege its possession of trade secrets. (Def. Kelly M. Kaplan’s

Objections to Magistrate Judge Smith’s Report and Recommendation Dated June 2, 2008

Regarding, Among Other Things, Defs.’ Mots. to Dismiss the Second Am. Compl. (“Kaplan

Obj.”) 4-5; Def. DenTek Oral Care, Inc.’s Objections to the Report & Recommendation of

Magistrate Judge Smith Dated June 2, 2008 (“DenTek Obj.”) 6-9.) In particular, Defendants

contend that Plaintiff never identified the allegedly misappropriated trade secrets. (Kaplan Obj.

4; DenTek Obj. 5 (“DenTek seeks a specific identification of the trade secrets allegedly used by

DenTek now so that it may assess whether they are in fact trade secrets under the factors that

apply under New York law, whether any use was ever made by DenTek of any such ‘secrets,’

and to forestall needless burden and expense.”).) Further, Defendants argue that any trade

secrets that can be gleaned from Plaintiff’s allegations – such as Medtech’s decision to maintain

its three-size platform and its relationships with various vendors – do not qualify as trade secrets. 

(DenTek Obj. 10-15; Kaplan Obj. 5, 9-10.)6

 Finally, Defendants object to Magistrate Judge
the design and manufacturing process for’” the Medtech dental protector. (DenTek Obj. 8.) 

According to DenTek, “Medtech simply alleges a laundry list of independently

unprotectable items, none of which are confidential, and does not allege that DenTek even used

much of this information . . . . In sum, the specific ‘combination of characteristics or

components’ which Medtech claims to be a trade secret allegedly used by DenTek is not actually

identified within the SAC.” (Id. 9.) 

As Magistrate Judge Smith appropriately pointed out, however, “the secrecy of particular

information is an issue of fact and cannot be decided at the motion to dismiss stage.” (R&R 12);

see also SD Protection, Inc., 498 F. Supp. 2d at 586 (stating that discovery is necessary before

the court can determine whether the alleged trade secrets are protectable); Kosower v. Gutowitz,

No. 00-CV-9011, 2001 WL 1488440, at *8-9 (S.D.N.Y. Nov. 21, 2001) (denying motion to

dismiss where plaintiff alleged that certain items were trade secrets and noting that whether the

items actually were trade secrets could not be determined on a motion to dismiss).

13

Smith’s conclusion that Plaintiff sufficiently alleged the second element of its trade secret

misappropriation claim because, again, the trade secrets allegedly misappropriated are not

identified, so, according to Defendants, Medtech has failed to allege that any particular trade

secret was improperly disclosed by Kaplan and Duane and used by DenTek. (DenTek Obj. 17-

18; Kaplan Obj. 10-12.)

The Court recognizes that Medtech, for the most part, does not specify the particular

trade secrets at issue in this case, but instead categorizes them generally as “manufacturing cost

details, drawings, test data, and other information about the design and manufacturing process

for its dental protectors.” (SAC ¶ 275.) However, specificity as to the precise trade secrets

misappropriated is not required in order for Medtech to defeat the present Motions to Dismiss. 

See SD Protection, Inc., 498 F. Supp. 2d at 586 (denying motion to dismiss where plaintiff

alleged the existence of legitimate trade secrets, and making clear that plaintiff “has no

obligation to reveal those secrets in the Complaint simply to prove that they exist”); Am. Bldg.

Maint. Co. of N.Y. v. Acme Prop. Servs., Inc., 515 F. Supp. 2d 298, 309 (N.D.N.Y. 2007)
7

 As an alternative to its Motion to Dismiss Medtech’s trade secret misappropriation

claim, DenTek filed a Motion to Compel Medtech’s identification of the alleged trade secrets at

issue. Magistrate Judge Smith recommended that “Medtech should be allowed limited discovery

on the trade secret claim prior to being required to identify the precise trade secrets it is alleging

were misappropriated. However, . . . after Medtech’s limited discovery on the trade secret claim,

DenTek is entitled to receive a list of the specific trade secrets Medtech is alleging were

misappropriated forthwith.” (R&R 37.)

Because this ruling deals with a non-dispositive, discovery matter, Defendants’ objection

to the ruling requires the Court to review the ruling and ensure that it is not “clearly erroneous or

14

(denying defendant’s motion to dismiss plaintiff’s claim for trade secret misappropriation, and

finding plaintiff’s allegations, “which the Court must accept at this stage of the litigation, suggest

that it could prevail on this cause of action and entitle it to gather and present related evidence”);

Gaetano Assocs. Ltd. v. Artee Collections, Inc., No. 05-CV-3329, 2006 WL 3026080, at *2

(S.D.N.Y. Oct. 25, 2006) (addressing argument that defendants’ trade secret misappropriation

counterclaim failed to specify certain details, by stating that “[u]nder the notice pleading

standard, however, defendants are not required to do so”). 

The Court is no more persuaded by the claim that Medtech has failed to identify the trade

secrets Kaplan and Duane revealed to the other Defendants. It is true that Medtech does not

deny that the Second Amended Complaint for the most part fails to specify the particular trade

secrets allegedly misappropriated by Defendants. Medtech nonetheless argues that “[t]o require

any greater level of specificity in the Second Amended Complaint would place an onerous

burden on Medtech, essentially requiring it to detail information to which it has no access

outside of discovery.” (Pl. Medtech Products Inc.’s Response to Defs.’ DenTek Oral Care,

Inc.’s, Kelly M. Kaplan’s, Ray Duane’s, and C.D.S. Associates, Inc.’s Mots. to Dismiss 20.) 

According to Medtech, identification of the allegedly misappropriated trade secrets is not

required until Medtech has had the opportunity for discovery. (Id.)7

 In fact, the case principally
. . . contrary to law.” Fed. R. Civ. P. 72(a). Having undertaken such a review here, the Court

adopts Magistrate Judge Smith’s recommendation that Medtech is entitled to limited discovery

on its trade secret misappropriation claim, but that it will, shortly thereafter and in accordance

with a schedule to be set by Magistrate Judge Smith, be required to identify the trade secrets

Defendants are alleged to have misappropriated or risk dismissal of its trade secret

misappropriation claim. 

15

relied on by Defendants for the proposition that specificity is required in the Complaint granted

defendants’ motion for summary judgment (and not a motion to dismiss), “following massive

document discovery.” See Sit-Up Ltd., 2008 WL 463884, at *5, 12.

 Here, there has been no discovery, but the Court finds that Medtech has stated a claim

for trade secret misappropriation. Medtech alleges that Kaplan and Duane, who had extensive

knowledge of Medtech’s business and the production process for the NightGuardTM, disclosed

Medtech’s trade secrets in violation of confidentiality agreements in place, and that, shortly

thereafter, DenTek, a company with no experience in the dental protector market, was able to

rush a dental protector to the market, without going through any development process. These

allegations make Medtech’s claim for trade secret misappropriation plausible. See Twombly,

127 S. Ct. at 1974. The question of whether it will ultimately be successful cannot be answered

at this stage of the case. Thus, for these and the reasons outlined by Magistrate Judge Smith,

Defendants’ Motions to Dismiss Medtech’s trade secret misappropriation claim are denied. 

b. Breach of Contract Claims

i. Application of the Non-Compete and Non-Solicitation Clause of 

 the Consulting Agreement

Medtech alleges that the Duane Defendants breached the non-compete and nonsolicitation clause (“NC/NS clause”) of the Consulting Agreement entered into by Dental

Concepts and the Duane Defendants on September 30, 1999, by “working for a company
8

 In pertinent part, the NC/NS clause provides: 

[C.D.S.] and Duane agree that, commencing as of the date hereof

and during the period of [C.D.S.’] engagement by [Dental

Concepts] (whether under this Agreement or otherwise) and for a

period of twenty-four (24) months from and after the date of

termination of such engagement, if such engagement is terminated

by [C.D.S.] or is terminated by [Dental Concepts] for Just Cause,

neither [C.D.S.] nor Duane shall . . . (ii) . . . solicit, entice or

induce, or cause, any person who presently is, or any time during

[C.D.S.’] engagement by [Dental Concepts] shall be or shall have

been, a client, customer, supplier or account of [Dental Concepts] .

. . ; [or] . . . (iv) become an employee, consultant, [etc.] . . . of . . .

any other person or entity who is engaged in any line of business

competitive with any of the Activities engaged in during the period

of [C.D.S.’] engagement with [Dental Concepts] or during the 24-

month period prior thereto . . . . 

(SAC, Ex. A, ¶ 7(b)(ii), (iv).)

16

competitive to Dental Concepts; and soliciting, enticing and inducing suppliers and accounts of

Medtech; soliciting, enticing and inducing employees of Medtech.” (SAC ¶ 231.)8 The Duane

Defendants moved to dismiss this claim, arguing that the NC/NS clause was inapplicable in this

case. (Mem. of Law by Defs. Ray Duane and C.D.S. Associates, Inc. in Supp. of Their Mot. to

Dismiss the Second Am. Compl. and For Other Relief (“Duane Defs.’ Mem.”) 9-10.) 

Magistrate Judge Smith, finding the Consulting Agreement and the NC/NS clause

unambiguous, rejected the Duane Defendants’ argument and recommended that this Court find

that the NC/NS clause of the Consulting Agreement applied under the circumstances

surrounding Duane and C.D.S.’ termination from Dental Concepts. (R&R 16-17.) In particular,

Magistrate Judge Smith found that Plaintiff’s allegation that “CDS and Duane declined

continued employment in a sales position that was offered by Prestige” (SAC ¶ 88), the company

that acquired Dental Concepts in 2005 and ultimately integrated Dental Concepts into Medtech,
17

sufficiently alleged that the Consulting Agreement was terminated voluntarily by the Duane

Defendants. (R&R 17.)

The Duane Defendants object to Magistrate Judge Smith’s recommendation, and argue

that the NC/NS clause does not apply in this case because the Second Amended Complaint fails

to allege that the Consulting Agreement was terminated by the Duane Defendants or by Dental

Concepts for just cause, which are the only two triggering events for the clause. (Duane Defs.

Obj. 9-10.) The Duane Defendants argue further that the allegation that they turned down

“employment” offered to them by Prestige establishes only that the Duane Defendants were

offered an inferior position to that which they held under the Consulting Agreement – one which

Prestige knew the Duane Defendants would turn down. (Id. 11-12.) 

Prestige acquired Dental Concepts in November 2005 (SAC ¶ 71), but Medtech alleges

that “CDS and Duane continued consulting for Medtech through and including February 2006[,

and that] Duane stayed on board until Dental Concepts was completely transitioned into

Medtech” (id. ¶ 87). Moreover, Medtech alleges that “[t]he Consulting Agreement’s Covenant

Not to Compete and Non-Solicitation Agreement survived the acquisition and were applicable to

any consulting work of Duane and CDS after the acquisition.” (Id. ¶ 93.) Accepting all factual

allegations in the Second Amended Complaint and drawing all reasonable inferences in the

plaintiff's favor, the Court finds these allegations, combined with the allegation that the Duane

Defendants “declined continued employment in a sales position that was offered by Prestige” (id.

¶ 88), sufficient to make plausible the fact that the NC/NS clause was triggered when the Duane

Defendants declined continued employment with Prestige. 
9

 The Duane Defendants expressed concern that Magistrate Judge Smith’s R&R could be

read to conclusively determine, as a matter of law, that the NC/NS clause was triggered in this

case. (Duane Defs. Obj. 10 n.6.) To alleviate any confusion, the Court finds that Medtech’s

allegations are sufficient to make the applicability of the NC/NS clause plausible and, therefore,

to defeat the Duane Defendants’ Motion to Dismiss on this ground. However, the Duane

Defendants will have the opportunity to prove, during summary judgment or at trial, that the

NC/NS clause actually does not apply because of the manner in which the consulting

engagement was terminated.

18

The Duane Defendants quibble with Medtech’s use of the words “employment” and

“sales position” (id. ¶ 88), and argue that their decision to “‘decline[]’” such a position is not the

same as terminating the engagement under the Consulting Agreement. (Duane Defs. Obj. 12.) 

According to the Duane Defendants, “the SAC does not allege that the ‘sales position’ offered to

the Duane Defendants was comparable to the position they held under the Consulting

Agreement.” (Id.) Yet the fact that the Consulting Agreement describes the Duane Defendants’

engagement with Dental Concepts as “direct[ing] and supervis[ing] the sales of [Dental

Concepts’] products” (SAC, Ex. A, ¶ 1) undercuts the Duane Defendants’ argument that the

Court should somehow be able to glean from the term “sales position” that Medtech’s allegation

refers to something other than the consulting engagement. In any event, the Duane Defendants’

factual arguments can be addressed at an appropriate time, when the Parties will have the

opportunity to present evidence from which a determination can be made as to whether the

Duane Defendants’ declination of the sales position constituted their termination of the

consulting engagement under the terms of the Consulting Agreement and its NC/NS clause. 

Thus, for these, and the reasons set forth in the R&R, the Court finds that Medtech’s allegations

survive the Duane Defendants’ Motion to Dismiss on the issue of the NC/NS clause’s

applicability.9
10 Magistrate Judge Smith also recommended that this Court find that the “confidentiality

provision of the PIIA survived the execution of the General Release with regard to CDS.” (R&R

18-19 n.7.) No Party has objected to this recommendation, and the Court adopts it for the

reasons set forth in the R&R. 

19

ii. The Effect of the General Releases on the PIIAs

Duane (on behalf of himself and C.D.S.) and Kaplan each signed a PIIA with Dental

Concepts in September 1999 (SAC, Exs. C, D), which contains a confidentiality provision that

they are alleged to have breached by providing confidential and proprietary information to

DenTek (id. ¶¶ 232, 241). Duane and Kaplan later each signed a General Release in November

2005 (id., Exs. G, H), the confidentiality provisions of which they are also alleged to have

breached “by providing DenTek with Medtech’s confidential and proprietary information” (id.

¶ 250). Defendant Kaplan and the Duane Defendants argue that Medtech’s breach of contract

claims based on the PIIAs should be dismissed because the confidentiality provisions of the PIIA

were superseded by the confidentiality requirements in their respective General Releases.

Magistrate Judge Smith recommended this Court conclude that “because the

confidentiality provisions of the PIIAs and the General Releases cover the same rights of the

parties and address precisely the same subject matter – confidentiality – and in light of the

integration and merger clause in the General Releases, the confidentiality provisions of the PIIAs

are superseded by the General Releases with respect to Duane and Kaplan[, and therefore that]

Medtech’s claim against Duane and Kaplan for breach of the PIIAs should be dismissed.” (R&R

21.)10 

Medtech objects to this recommendation, arguing that “the terms of the General Release

do not supersede the PIIA, and that its claims for breach of the PIIA are proper causes of action,”
20

because “[t]he PIIA and the General Release were intended to serve different purposes and,

accordingly, cover different subject matters.” (Pl. Medtech Products Inc.’s Objections to

Magistrate Judge’s Report and Recommendation Regarding Defs.’ Mots. to Dismiss (“Medtech

Obj.”) 9-10.) In its objections, Medtech parses the PIIA and General Release in an effort to

demonstrate to the Court the ways in which the PIIA’s scope exceeds that of the General Release

and covers subject matters not dealt with by the General Release. (Id. 10-12.) Indeed, Medtech

appears to be objecting to what it perceives as Magistrate Judge Smith’s recommendation that

this Court conclude that the PIIA in its entirety was superseded by the General Release. 

The Court does not read the R&R quite as broadly as does Medtech, making certain

aspects of Medtech’s objections irrelevant. In particular, the Court does not read the R&R as

suggesting the PIIAs were superseded in their entirety by the General Releases. Instead,

Magistrate Judge Smith recommended that this Court find that the confidentiality provisions in

the PIIAs (SAC, Exs. C ¶ D(1), D ¶ D(1)), were superseded by the confidentiality provisions in

the General Releases (id., Exs. G ¶ 7, H ¶ 7). (R&R 20.) 

Though “[i]t is a well settled principle of contract law that a new agreement between the

same parties on the same subject matter supercedes the old agreement,” Ottawa Office

Integration, Inc. v. FTF Bus. Sys., 132 F. Supp. 2d 215, 219 (S.D.N.Y. 2001), “a subsequent

agreement supersedes only those terms of the earlier contract that are of the same subject

matter.” CreditSights, Inc. v. Ciasullo, No. 05-CV-9345, 2007 WL 943352, at *6 (S.D.N.Y.

Mar. 29, 2007); see also Kreiss v. McCown De Leeuw & Co., 37 F. Supp. 2d 294, 301 (S.D.N.Y.

1999) (finding that provisions in new agreement superseded provisions in older agreement only

to the extent that they covered the same subject matter where new agreement contained merger
11 The Duane Defendants urged this Court to dismiss Medtech’s breach of contract claim

premised on the NC/NS clause of the Consulting Agreement on the ground that Medtech did not

adequately allege the applicability of the NC/NS clause in this case. Having already rejected

that argument above, the Court denies the Duane Defendants’ Motion to Dismiss Medtech’s

claim for breach of the Consulting Agreement. 

21

and integration clause providing: “This Agreement contains the entire agreement between the

parties hereto with respect to the subject matter hereof and supersedes all prior arrangements or

understandings . . . with respect thereto.” (alterations and emphasis in original)). Therefore, as

pointed out by Medtech, there are certain terms in the PIIA that are not covered in, and are

therefore not superseded by, the General Release. With respect to the confidentiality provisions

in particular, however, the Court is persuaded by Magistrate Judge Smith’s careful analysis and

comparison of the two provisions, as well as by her ultimate conclusion that the terms cover the

same subject matter – confidentiality owed to Medtech, both during and after Kaplan’s and

Duane’s respective engagements with Medtech. Therefore, the Court finds, for reasons laid out

by Magistrate Judge Smith, that the confidentiality provisions of the PIIAs are superseded by the

confidentiality provisions of the General Releases. Because Medtech has alleged that Duane and

Kaplan breached the confidentiality provisions of their PIIAs, those claims are dismissed. (SAC

¶¶ 232, 241.) See CreditSights, Inc., 2007 WL 943352, at *6 (stating “a plaintiff must identify

what provisions of the contract were breached as a result of the acts at issue”). 

iii. Allegations of Breach

Magistrate Judge Smith recommended that this Court conclude that Medtech has

sufficiently alleged breaches of the following: (1) the NC/NS clause of the Consulting

Agreement by the Duane Defendants;11 (2) the confidentiality provisions of the PIIA by C.D.S.;

and (3) the confidentiality provisions of the General Releases by Kaplan and Duane. (R&R 22.) 
22

The Duane Defendants and Kaplan object to these recommendations, arguing that the

Second Amended Complaint fails to adequately allege that they divulged Medtech’s trade secrets

to DenTek. (Duane Defs. Obj. 13; Kaplan Obj. 14-15.) As already discussed in the trade secret

misappropriation section above, the Court finds that Medtech has sufficiently alleged that

Kaplan, Duane, and C.D.S. (through Duane) divulged Medtech’s trade secrets to DenTek. 

Therefore, as Magistrate Judge Smith recommended, this Court denies Duane’s Motion to

Dismiss Medtech’s breach of contract claim premised on the General Release, C.D.S.’ Motion to

Dismiss the breach of contract claim premised on the PIIA, and Kaplan’s Motion to Dismiss the

breach of contract claim premised on the General Release. 

c. Civil Conspiracy Claims

“To establish its claim of civil conspiracy, the [plaintiff] must demonstrate the primary

tort, plus the following four elements: (1) an agreement between two or more parties; (2) an

overt act in furtherance of the agreement; (3) the parties’ intentional participation in the

furtherance of a plan or purpose; and (4) resulting damage or injury.” World Wrestling Fed’n

Entm’t, Inc. v. Bozell, 142 F. Supp. 2d 514, 532 (S.D.N.Y. 2001) 

In her R&R, Magistrate Judge Smith recommended that Medtech’s claim for civil

conspiracy should be dismissed on the ground that Plaintiff had not sufficiently alleged the first

element of the claim: “[t]here are no allegations in the complaint that the Defendants

specifically agreed to use[] the trade secrets that Duane and Kaplan gleaned from their

employment with Medtech in order to produce DenTek’s competing product.” (R&R 24.) 

Medtech objects to this recommendation, first, by identifying allegations that it contends

sufficiently allege, under the liberal pleading standards against which they are to be considered,
23

an agreement among Defendants to misappropriate Medtech’s trade secrets (Medtech Obj. 6

(citing SAC ¶¶ 120, 128, 130, 163, 270)), and second, and in the alternative, by arguing that

“[t]he allegations in the SAC were made at a time when virtually no discovery had taken place,

and thus any requirement that Medtech state with specificity the exact time, place, and manner of

the agreement between DenTek, Duane, and Kaplan is unrealistic” (id. 7). 

The Court has thoroughly reviewed the allegations flagged by Medtech in its objections,

and finds them too conclusory and lacking in factual detail to survive Defendants’ Motions to

Dismiss the civil conspiracy claim. Though a claim for civil conspiracy is measured against the

liberal pleading requirements of Federal Rule of Civil Procedure 8(a), and not the more rigorous

requirements of Rule 9(b), merely conclusory allegations are insufficient. See Hecht v.

Commerce Clearing House, Inc., 897 F.2d 21, 26 n.4 (2d Cir. 1990) (“[T]he complaint must

allege some factual basis for a finding of a conscious agreement among the defendants.”); Grove

Press, Inc. v. Angleton, 649 F.2d 121, 123 (2d Cir. 1981) (“The damage for which recovery may

be had in a civil action is not the conspiracy itself but the injury to the plaintiff produced by

specific overt acts. Accordingly, a bare conclusory allegation of conspiracy does not state a

cause of action.” (internal quotation marks and citations omitted)); Fierro v. Gallucci, No. 06-

CV-5189, 2008 WL 2039545, at *16 (E.D.N.Y. May 12, 2008) (“[T]o survive a motion to

dismiss, a complaint must contain more than general allegations in support of the conspiracy. 

Rather, it must allege the specific times, facts, and circumstances of the alleged conspiracy.”

(internal quotation marks omitted)); Brownstone Inv. Group v. Levey, 468 F. Supp. 2d 654, 661

(S.D.N.Y. 2007) (same); see also Ciambriello v. County of Nassau, 292 F.3d 307, 325 (2d Cir.

2002) (finding allegations of conspiracy to violate plaintiff’s constitutional rights too conclusory
12 The Court is cognizant of the line of cases – some of which are cited by Medtech – that

state that courts should give plaintiffs particular leeway in pleading conspiracy. See, e.g.,

Maersk, Inc. v. Neewra, Inc., 554 F. Supp. 2d 424, 458 (S.D.N.Y. 2008) (“In order to plead the

conspiracy, it is important that within the pleader’s ability to do so, and without going into

unnecessary detail, the opposing party be informed of the nature of the conspiracy charged . . . .

Where possible, there should be some details of time and place and the alleged effect of the

conspiracy . . . Moreover, great leeway should be allowed the pleader, since by the nature of the

conspiracy, the details may not be readily known at the time of pleading.” (internal quotation

marks omitted) (alterations in original)); In re Harvard Knitwear, Inc., 153 B.R. 617, 628

(E.D.N.Y. 1993) (“It should be recognized that the nature of conspiracies often make it

impossible to provide details at the pleading stage. A plaintiff therefore should be allowed to

resort to the discovery process and not easily be subject to dismissal of his complaint alleging

conspiracy.”). The Court does not, however, read these cases as giving plaintiffs carte blanche

to plead the existence of conspiracy through solely conclusory allegations. In fact, even the

cases calling for leeway contemplate allegations beyond the purely conclusory. See id. at 628

(“[A] complaint alleging civil conspiracy must contain sufficient information for the court to

determine whether or not a valid claim for relief has been stated and to enable the defendant to

prepare an adequate responsive pleading.”). 

24

to survive motion to dismiss because plaintiff did “not provide[] any details of time and place,

and he has failed to specify in detail the factual basis necessary to enable [defendants]

intelligently to prepare their defense” (internal quotation marks and citations omitted)).12

The only allegation that can be fairly read to allege an agreement among Defendants to

misappropriate Medtech’s trade secrets reads as follows: “Upon information and belief,

DenTek, Duane, CDS, and Kaplan conspired, agreed, and planned to use Medtech’s confidential

and proprietary information . . . .” (SAC ¶ 270). This Court, like Magistrate Judge Smith, finds

that Medtech’s Second Amended Complaint merely concludes that an agreement existed without

any factual basis to make the allegation plausible. See Twombly, 127 S. Ct. at 1968 (rejecting

notion that “a wholly conclusory statement of claim [c]ould survive a motion to dismiss

whenever the pleadings left open the possibility that a plaintiff might later establish some ‘set of

[undisclosed] facts’ to support recovery”). Therefore, Medtech’s civil conspiracy claims are
25

dismissed without prejudice.

d. Tortious Interference Claims

i. Tortious Interferences with Contractual Relations

With respect to Medtech’s claims for tortious interference with contractual relations,

Magistrate Judge Smith recommended that this Court grant both DenTek’s and Duane’s Motions

to Dismiss. (R&R 27-28.) Medtech’s claim against DenTek is premised on DenTek’s alleged

interference with the Consulting Agreement, the PIIAs, and the General Releases between

Dental Concepts and Kaplan and Dental Concepts and Duane. With regard to Medtech’s claim

against Duane, he is alleged to have tortiously interfered with the PIIA and General Release

between Dental Concepts and Kaplan by inducing Kaplan to breach the confidentiality

provisions contained therein. 

“Under New York law, the elements of tortious interference with contract are (1) the

existence of a valid contract between the plaintiff and a third party; (2) the defendant’s

knowledge of the contract; (3) the defendant's intentional procurement of the third-party’s breach

of the contract without justification; (4) actual breach of the contract; and (5) damages resulting

therefrom.” Kirch v. Liberty Media Corp., 449 F.3d 388, 401-402 (2d Cir. 2006) (citing Lama

Holding Co. v. Smith Barney Inc., 668 N.E.2d 1370, 1375 (N.Y. 1996)) (internal quotation marks

omitted). 

Medtech has filed objections to Magistrate Judge Smith’s recommendation that this

Court dismiss its tortious interference with contractual relations claims based on Medtech’s

failure to adequately allege the second and third elements with respect to DenTek and the third

element with respect to Duane. Medtech argues that DenTek’s knowledge of the agreements is a
13 The Court notes that Medtech similarly alleged Duane’s knowledge as follows: 

“Duane knew or should have known of the valid contract between Kaplan and Dental Concepts/

Medtech.” (SAC ¶ 265.) Allegations that DenTek and Duane “should have known” of the

contracts, however, even if proven, will not ultimately satisfy the second element of this claim,

and are therefore stricken from the Second Amended Complaint with prejudice. New York law

is clear on its requirement that a defendant charged with tortiously interfering with a contractual

relationship have actual knowledge of the breached contract. See LinkCo, Inc., 230 F. Supp. 2d

at 496 (in context of motion for judgment as a matter of law, rejecting notion that “actual

knowledge” of a specific contract can be presumed because such contracts were “a matter of

course” and “common practice” in employment); A A Tube Testing Co. v. Sohne, 246 N.Y.S.2d

247, 248 (App. Div. 1964) (“[T]he plaintiff must allege that the defendants had actual

knowledge; an allegation that they ‘should have known’ of the existence of the contract is

insufficient.”).

In support of its argument that an allegation that DenTek and Duane “should have

known” of the agreements at issue is sufficient to survive Defendants’ Motions to Dismiss,

26

question of fact that cannot be resolved on a motion to dismiss (Medtech Obj. 2), that Magistrate

Judge Smith applied an incorrect standard by insisting that Medtech must allege that the tortious

interference was accomplished by “wrongful means,” and that, in any case, the issue of whether

the alleged interference was done without justification cannot be appropriately determined on a

motion to dismiss (id. 4-5). Therefore, the Court has undertaken a de novo review of this portion

of the R&R.

With respect to the second element, “[a]lthough a defendant need not be aware of all the

details of a contract, it must have actual knowledge of the specific contract.” LinkCo, Inc. v.

Fujitsu Ltd., 230 F. Supp. 2d 492, 495 (S.D.N.Y. 2002) (internal quotation marks omitted). 

Medtech alleges DenTek’s knowledge as follows: (1) “DenTek knew or should have known of

the valid contracts between Duane and Dental Concepts/Medtech and Kaplan and Dental

Concepts/Medtech” (SAC ¶ 258); and (2) “DenTek is a sophisticated entity well aware of the

industry practice of securing confidentiality agreements, as evidenced by its own conduct with

Duane, Kaplan and the Tufts Doctors” (id. ¶ 259).13
Medtech cites Rahl v. Bande, 328 B.R. 387 (S.D.N.Y. 2005). Rahl is unhelpful, however,

because it did not involve a tortious interference with contract claim. In particular, the Rahl

court denied a motion to dismiss the plaintiff’s claim that a defendant caused a company to issue

an illegal dividend, because the plaintiff sufficiently alleged that the defendant “should have

known” that the company was insolvent; under the applicable law in that case, actual knowledge

of insolvency was not required. Id. at 422.

27

Even if the Court were inclined to accept Medtech’s wholly conclusory allegation that

DenTek knew of the contracts at issue, see Kirch, 449 F.3d at 402 (finding plaintiff’s allegation

that defendants “were aware” of the contract at issue insufficient to plead defendant’s actual

knowledge of the contract) – and assuming that this allegation is consistent with counsel’s Fed.

R. Civ. P. 11 obligation that there be a good faith basis for the allegation – Medtech is not out of

the woods. The Second Amended Complaint contains specific allegations that are hardly

consistent with the conclusory claim that DenTek had actual knowledge of the contracts with

which it allegedly interfered. For instance, Medtech alleges that “DenTek did not ask to see any

employment agreements with Dental Concepts,” and that “Duane allegedly failed to inform [the

DenTek representative with whom he met] . . . that he was bound by the terms of a noncompetition covenant.” (SAC ¶¶ 113, 116.) From these allegations, it cannot be said that

Plaintiff is claiming that DenTek saw the governing contracts and therefore was aware of the

limitations they imposed on Duane and Kaplan. Given these allegations, the Court finds

inadequate the general claim of DenTek’s knowledge of the contracts. See Elliot v. City of New

York, No. 06-CV-296, 2008 WL 4178187, at *4 (S.D.N.Y. Sept. 8, 2008) (noting that an

adequately stated claim “‘may be supported by showing any set of facts consistent with the

allegations in the complaint’” (quoting Twombly, 127 S. Ct. at 1979)). Therefore, for these and

the reasons set forth in the R&R, Medtech has failed to adequately allege the second element in
14 Courts consider the following factors in deciding whether the intentional procurement

was “without justification”: 

the nature of the conduct of the person who interferes, the interest

of the party being interfered with, the relationship between the

parties, the motive and interests sought to be advanced by the one

who interferes, the social interests in protecting the freedom of

action of that person, the contractual interests of the party

interfered with and the proximity or remoteness to the interference

of the conduct complained of.

Cerveceria Modelo, S.A. De C.V. v. USPA Accessories LLC, No. 07-CV-7998, 2008 WL

1710910, at *4 (S.D.N.Y. Apr. 10, 2008).

Though, as Medtech points out, this analysis is necessarily a fact-intensive inquiry, see

id. at *5 (“[A]s a rule, whether the actions of one party or the other were improper or justified

ought not be decided [on a motion to dismiss].”), this fact does not allow Medtech to survive the

present Motions where Medtech has not even pled that the alleged interferences were unjustified.

28

its tortious interference with contractual relations claim against DenTek.

With respect to the third element – the defendant’s intentional procurement of the

third-party’s breach of the contract without justification – the Court finds Medtech’s allegations

inadequate to survive DenTek and Duane’s Motions to Dismiss. Even accepting as true

Medtech’s conclusory allegations that “DenTek procured Duane’s and Kaplan’s breaches of [the

contracts at issue]” (SAC ¶ 260), and that “Duane procured Kaplan’s breach of [the General

Release]” (id. ¶ 266), Medtech does not allege in the Second Amended Complaint that the

alleged procurement by DenTek and Duane was done without justification.14 Where a plaintiff

alleges interference with a valid, enforceable contract, as Medtech has here, there is legal

authority establishing that it is not necessary to allege that the interference was malicious or done

through wrongful means. See, e.g., Cerveceria Modelo, 2008 WL 1710910, at *4 (“[T]o state a

claim for tortious interference with contract under New York law, [plaintiff] need not allege

malice on the part of [defendants] or that [defendants] used wrongful means to procure the
15 DenTek argues that, in order to state a claim for tortious interference with contractual

relations, Medtech must allege that DenTek used “wrongful means” to procure the breach of the

contracts at issue. (Def. DenTek Oral Care, Inc.’s Response to Pl. Medtech’s Objections to the

Report & Recommendation of Magistrate Judge Smith Dated June 2, 2008 (“DenTek Resp.”) 4.) 

In support of this proposition, DenTek cites Wolff v. Rare Medium, Inc., 171 F. Supp. 2d 354

(S.D.N.Y. 2001) (hereinafter, “Wolff I”), and this Court’s opinion in Darby Trading Inc. v. Shell

Int’l Trading & Shipping Co., — F. Supp. 2d —, No. 07-CV-400, 2008 WL 852787 (S.D.N.Y.

Mar. 31, 2008). Neither case requires Medtech to allege “wrongful means” in order to state a

claim for tortious interference with contractual relations.

In Wolff I, the court stated that under New York law, a party claiming tortious

interference with contractual relations must plead that defendant employed “wrongful means” to

procure a third-party’s breach. 171 F. Supp. 2d at 359. In a later proceeding, the Wolff court

again stated that plaintiff “must plead that a defendant used ‘wrongful means’ to induce the third

party to breach the contract.” Wolff v. Rare Medium, Inc., 210 F. Supp. 2d 490, 499 (S.D.N.Y.

2002) (hereinafter “Wolff II”), aff’d, 65 Fed. App’x 736 (2d Cir. 2003). The Wolff court’s

dismissal of plaintiff’s tortious interference claim in Wolff II was affirmed by the Second Circuit

in an unpublished opinion, in which the Second Circuit clarified the requirement that tortious

interference with contractual relations claims allege “unjustified procurement of a breach,” but

that tortious interference with a prospective business relationship claims allege the “use of

dishonest, unfair, or improper means.” Wolff, 65 Fed. App’x at 739. 

With regard to this Court’s opinion in Darby, DenTek quotes the following language

from the Court’s discussion of plaintiff’s tortious interference with contractual relations claim: 

“[A]s with Plaintiff’s previous tortious interference claim [with business relations], Plaintiff has

failed to properly allege ‘wrongful means,’ a necessary element of the claim.” (DenTek Resp. 4

(quoting Darby, 2008 WL 852787, at *16) (internal quotation marks omitted) (alteration in

DenTek Resp.)). However, in Darby, plaintiff was required to allege “wrongful means” because

the contract with which defendant was alleged to have interfered was found to be unenforceable

and voidable. Darby, 2008 WL 852787, at *15 (stating that “unenforceable contracts contain no

legal guarantee of future performance, and so should only be allowed limited tort protection,”

and therefore that they “must satisfy the more demanding standard [of ‘wrongful means’]

required of claims of tortious interference with business relations” (internal quotation marks

omitted)). Because Plaintiff alleges the breach of enforceable contracts, Darby is inapposite. 

29

breach. [Plaintiff] need only allege facts that show that [defendants’] procurement of the breach

was without justification.”); NBT Bancorp Inc. et al. v. Fleet/Norstar Fin. Group., 664 N.E.2d

492, 496 (N.Y. 1996); cf. Carvel Corp. v. Noonan, 3 N.Y.3d 182, 190 (N.Y. 2004) (“[W]here a

suit is based on interference with a nonbinding relationship, the plaintiff must show that

defendant’s conduct was not ‘lawful’ but ‘more culpable.’”).15 Because Medtech has not pled
16 Medtech requested that, if this Court dismisses any of its claims, the Court do so

without prejudice and with leave for Medtech to amend the Second Amended Complaint upon

discovery of additional information supporting the dismissed claims. (Medtech Obj. 1.) 

Defendants vehemently oppose this request on grounds of waiver and futility. (Def. Kelly M.

Kaplan’s Response to Pl.’s Objections to Magistrate Judge Smith’s Report and Recommendation

Regarding Defs.’ Mots. to Dismiss (“Kaplan Resp.”) 10-11; DenTek Resp. 7-10.) 

The Court finds it appropriate at this juncture to dismiss these claims without prejudice,

see Van Buskirk v. N.Y. Times Co., 325 F.3d 87, 91 (2d Cir. 2003) (“[A] court granting a

12(b)(6) motion should consider a dismissal without prejudice when a liberal reading of the

complaint gives any indication that a valid claim might be stated.” (internal quotation marks

omitted)), but the Court believes it unnecessary, at this time, to decide whether an amendment to

the Second Amended Complaint, if sought, will be permitted. If Medtech wishes to seek leave to

amend the Second Amended Complaint, it shall do so by way of a motion to amend, consistent

with the Court’s Individual Practices. Defendants, at that time, will have the opportunity to

oppose any such request.

30

that the alleged interferences were unjustified, the Court dismisses Medtech’s tortious

interference with contractual relations claims against DenTek and Duane, again, without

prejudice.

ii. Tortious Interference with Advantageous Business 

Relationship/Economic Advantage

Magistrate Judge Smith also has recommended that this Court grant DenTek’s Motion to

Dismiss Plaintiff’s claim based on tortious interference with advantageous business

relationship/economic advantage. Medtech explicitly does not object to this recommendation. 

(Medtech Obj. 1 n.2.) Thus, the Court, finding no clear error in Magistrate Judge Smith’s

analysis, adopts her recommendation and grants DenTek’s Motion to Dismiss this claim.16

e. Unfair Competition and Unjust Enrichment Claims

Finally, Magistrate Judge Smith recommended that this Court conclude that Medtech’s

allegations “sufficiently support Medtech’s theory that its unjust enrichment and unfair

competition claims are based on an ‘additional element’ of breach of duty or trust and therefore