Source: http://il.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20180731_0001600.NIL.htm/qx
Timestamp: 2019-04-19 17:24:30+00:00

Document:
FindACase | NEXT Payment Solutions, Inc. v. CLEAResult Consulting, Inc.
NEXT Payment Solutions, Inc. v. CLEAResult Consulting, Inc.
NEXT Payment Solutions, Inc. ("Plaintiff) filed this action against CLEAResult Consulting, Inc. ("Defendant") alleging violations of the Defend Trade Secrets Act ("DTSA"), 18 U.S.C. § 1831 et seq., and the Lanham Act, 15 U.S.C. § 1125(a). (R. 36, Am. Compl. ¶¶ 194-205, 250-60.) Plaintiff also asserts several state-law claims against Defendant. (Id. ¶¶ 206-49.) Pursuant to Federal Rule of Civil Procedure 12(b)(6), Defendant moves to dismiss the amended complaint in its entirety for failure to state a claim. (R. 45, Second Mot. to Dismiss.) Also pending before the Court are two motions to compel. First, there is Plaintiff's motion to compel Defendant to re-designate thousands of documents from "attorney's eyes only" to "confidential" so that Plaintiffs chief executive officer ("CEO") may assist Plaintiffs counsel in reviewing those documents. (R. 102, Pl.'s Mot. to Compel at 6.) Second, there is Defendant's motion to compel supplemental interrogatory responses. (R. 104, Def, 's Mot. to Compel.) For the reasons stated below, Defendant's motion to dismiss is granted in part and denied in part, Plaintiffs motion to compel is granted, and Defendant's motion to compel is granted in part and denied in part.
A complaint must set forth a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). "A motion to dismiss pursuant to Rule 12(b)(6) challenges the viability of a complaint by arguing that it fails to state a claim upon which relief may be granted." Firestone Fin. Corp. v. Meyer, 796 F.3d 822, 825 (7th Cir. 2015) (citation and internal alteration omitted). "Although detailed factual allegations are unnecessary, the complaint must have 'enough facts to state a claim to relief that is plausible on its face.'" Pierce v. Zoetis, Inc., 818 F.3d 274, 277 (7th Cir. 2016) (quoting Bell Atl Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "Determining whether a complaint states a plausible claim for relief will... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679. "To rise above the speculative level of plausibility, the complaint must make more than threadbare recitals of the elements of a cause of action, supported by mere conclusory statements." Oakland Police & Fire Ret. Sys. v. Mayer Brown, LLP, 861 F.3d 644, 649 (7th Cir. 2017) (citation, internal alteration, and internal quotation marks omitted). In deciding a motion to dismiss, however, the Court accepts the factual allegations in the complaint as true and draws all reasonable inferences in favor of the plaintiff. Tobey v. Chibucos, 890 F.3d 634, 645 (7th Cir. 2018).
A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes. Fed.R.Civ.P. 10(c). So are documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice. Geinosky v. City of Chicago, 675 F.3d 743, 745 n.1 (7th Cir. 2012).
As a preliminary matter, the Court considers which state's substantive law to apply to Plaintiffs state-law claims. The parties do not offer much discussion regarding the substantive law that governs Plaintiffs state-law claims beyond identifying a choice of law provision in the MSA that selects the substantive law of Texas as controlling. (R. 47, Mem. at 5 n.3; R. 69, Resp. at 2 n. 1.) At the same time, however, the parties cite to both Illinois and Texas law in their briefs without raising any choice-of-law argument. (E.g. R. 47, Mem. at 5 n.3, 10-15; R. 69, Resp. at 2 n. 1, 11 -15.) Accordingly, the Court addresses as a threshold issue whether it must apply the substantive law of Illinois or Texas to Plaintiffs state-law claims.
First, the Court must determine which state's choice of law rules apply. See Berger v. AXA Network LLC, 459 F.3d 804, 809 (7th Cir. 2006) (analyzing first the applicable choice of law rules). When a federal court sits in diversity or exercises supplemental jurisdiction over state-law claims, it generally applies the choice-of-law rules of the state in which it sits. In re Jafari, 569 F.3d 644, 648 (7th Cir. 2009); see also McCoy v. Iberdrola Renewables, Inc., 760 F.3d 674, 684 (7th Cir. 2014) ("Federal courts hearing state law claims under diversity or supplemental jurisdiction apply the forum state's choice of law rules to select the applicable state substantive law."). Here, the Court has both supplemental and diversity jurisdiction over Plaintiffs state-law claims. Accordingly, the Court will apply Illinois' choice of law rules. See In re Jafari, 569 F.3d at 648; McCoy, 760 F.3d at 684.
The MSA has a choice of law provision that selects the substantive law of Texas to govern the MSA, (R. 36-1, MSA at 8), and the parties do not dispute that Texas law therefore governs the MSA. (R. 47, Mem. at 5 n.3; R. 69, Resp. at 2 n.1.) "Illinois courts generally adhere to a contract's choice of law provisions," and because there is no compelling reason to dishonor the MSA's choice of law provision, the Court will apply Texas law to Plaintiffs breach of contract claim related to the MSA. Sound of Music Co. v. Minn. Mining & Mfg. Co., 477 F.3d 910, 915 (7th Cir. 2007); see also La. Firefighters' Ret. Sys. v. N. Tr. Invs., N.A., 312 F.RD. 501, 508 (N.D. Ill. 2015) (explaining that Illinois enforces choice-of-law provisions unless "(1) the chosen State has no substantial relationship to the parties or the transaction or (2) application of the chosen law would be contrary to a fundamental public policy of a State with a materially greater interest in the issue in dispute." (citation and internal quotation marks omitted)).

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