Court Opinion

ID: 4272907
Source: CourtListenerOpinion
Date Created: 2018-05-04 20:00:18.842759+00
Date Added: 2024-06-11T09:24:15.486590
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 ____________

                                       No. 17-2221
                                      ____________

                                    JEREMY ARGUE,

                                                       Appellant

                                             v.

                     TRITON DIGITAL INC.; ANDO MEDIA LLC;
                         VECTOR TRITON (LUX) 1, S.A.R.L.
                                 ____________

                     On Appeal from the United States District Court
                        for the Western District of Pennsylvania
                                (D.C. No. 2-16-cv-00133)
                      District Judge: Honorable Mark A. Kearney
                                     ____________

                      Submitted Under Third Circuit L.A.R. 34.1(a)
                                    May 1, 2018

     Before: SMITH, Chief Judge, HARDIMAN, and RESTREPO, Circuit Judges.

                              (Opinion Filed: May 4, 2018)
                                     ____________

                                        OPINION*
                                      ____________

       *
        This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does
not constitute binding precedent.
HARDIMAN, Circuit Judge.

       While working for Defendants Ando Media LLC and Triton Digital Inc., Plaintiff

Jeremy Argue proposed a number of valuable improvements to his employers’ internet

radio technology. After he was terminated from Triton, Argue believed that the

companies had never fairly compensated him for his contributions. Argue sued in the

United States District Court for the Western District of Pennsylvania, claiming that his

ideas were proprietary and that Ando and Triton had unjustly enriched themselves at his

expense. The District Court disagreed and granted summary judgment for Defendants.

We will affirm.

                                              I

                                             A

       Triton is a technology company serving the internet radio industry. Triton’s

software products enable radio stations to stream audio over the internet, collect data

about their listeners, deliver targeted advertising, engage with their audiences, and sell

advertising opportunities. Ando is now a wholly-owned subsidiary of Triton, but before

its acquisition by Triton it developed a significant portion of the products that Triton

currently offers.1

       Argue began working for Ando in 2008 as a Support Engineer. His written

employment agreement stated that Ando would own any inventions, products, or methods

that Argue created in the course of his employment. When Triton bought Ando in 2009,

       1
       Defendant Vector Triton (Lux) 1, S.A.R.L., no longer exists, having been
merged into other entities owned by one of Triton’s corporate parents.
                                              2
Argue became a Triton employee. Argue’s written agreement with Ando was never

assigned to Triton, and Argue never signed a written agreement with his new employer.

       Argue was by all accounts a productive employee during his time with Triton and

Ando, as demonstrated by the series of promotions Argue received. In about four years

Argue went from working as an Ando Support Engineer to serving as Triton’s Director of

Audio Strategy. Each of Argue’s roles at Triton and Ando was primarily customer-facing.

He would teach customers how to use Triton/Ando products, assist them with technical

issues, and help them develop advertising strategies.

       Argue’s familiarity with customer needs also gave him a role to play in Ando and

Triton’s product-development process. Throughout his time working for those

companies, Argue would receive customer feedback and pass it along to his colleagues

who were involved in improving their products. That role was made explicit in Argue’s

official job description as he moved into leadership positions at Triton. As Director of

Advertising Strategy, Argue was expected to “[l]iaise with other departments,” including

the product and engineering teams, “to ensure that all products . . . promote[d] established

advertising strategy goals and objectives.” App. 1188. But even before Triton listed that

role in Argue’s duties, he felt it was “part of everybody’s job” to share customer

feedback—regardless of whether it was “listed in the specific bullet points” of a formal

job description. App. 1169–70. Argue testified that he shared feedback with his

colleagues specifically so that Ando and Triton could “incorporate that feedback into

[their] operations.” App. 1164–65. Prior to Ando’s acquisition, he even “worked

specifically with the lead product manager . . . and the head of engineering . . . [as] an

                                              3
informal committee to oversee, advance, and manage . . . products.” App. 1220. That

team would improve Ando’s products by incorporating the customer feedback that Argue

passed on.

       The parties do not dispute that Argue contributed to the development of Ando and

Triton’s products. Some of those contributions originated directly from client feedback

that Argue relayed to his colleagues, and others appear to have been his own ideas. Argue

characterizes those contributions to Triton and Ando’s products as “inventions,” and

maintains that because he was not “hired to invent,” those ideas belonged to him, not his

employers. Argue Br. 20. In addition to disputing that Argue’s ideas qualified as

“inventions,” Defendants maintain that Argue was simply “doing his . . . job” by

proposing improvements to his employers’ products. Defs. Br. 28. In Ando and Triton’s

view, Argue was already paid a salary to play that part, and no reasonable jury could find

that it was unjust for his employers to profit from his efforts.

       Vector bought Triton in 2015, and Triton terminated Argue shortly thereafter. At

the time he was terminated, Argue was paid about $108,000 in salary and received an

annual bonus of around $5,000. Argue’s base salary had increased every year he spent at

Triton, and he had never asked for additional compensation.

                                              B

       Argue brought suit in 2016, asserting three claims for relief. First, he alleged that

since his “inventions” contributed to Triton’s valuation in its sale to Vector, it was unjust

for Triton and/or Ando to retain all of the consideration received in that sale without

paying Argue for the value of his ideas. Second, he alleged that Defendants had

                                              4
converted his “inventions” to their own use. Third, he sought a declaration that he is an

inventor and an owner of several patents and patent applications—relating to products

called Content Wire and a2x— which he claimed were based on his ideas.

       The District Court granted in part Defendants’ motion to dismiss for failure to

state a claim. The Court dismissed Argue’s claims as preempted by federal patent law to

the extent they challenged the validity of any patent, disputed a pending patent

application, or sought a declaration of inventorship. But it denied Defendants’ motion as

to any claims for unjust enrichment, conversion, or declaratory relief to the extent that

Argue could plead them purely under state law.

       Argue filed an amended complaint, and Defendants moved to strike large portions

of it as falling outside the scope of the state law theories previously approved by the

District Court. The Court agreed. It struck all references to Argue’s ownership of patents

or of materials subject to patent applications. Importantly, it also struck Argue’s

conversion and declaratory judgment claims. The Court did so because those claims were

not brought under the state law theory that Defendants had “converted [Argue’s] . . .

work papers and work product,” but rested instead on the essentially federal (and

therefore preempted) theory that Defendants had misappropriated his useful ideas. App.

81, 83–84.

       With Argue’s case limited to a single unjust enrichment claim, the parties

conducted discovery and Defendants moved for summary judgment. The District Court

granted that motion, and Argue timely appealed.

                                              5
                                             II2

                                             A

       The elements of an unjust enrichment claim under Pennsylvania law are

“(1) benefits conferred on defendant by plaintiff, (2) appreciation of such benefits by

defendant, and (3) acceptance and retention of such benefits under such circumstances

that it would be inequitable for defendant to retain the benefit without payment of value.”

Mark Hershey Farms, Inc. v. Robinson, 171 A.3d 810, 817 (Pa. Super. Ct. 2017) (citation

and modifications omitted). Unjust enrichment does not exist whenever one party

benefits another; rather, a plaintiff must show circumstances that would make it

“unconscionable” for the defendant to retain the benefit conferred. Id. (citation omitted).

“The most important factor . . . is whether the enrichment of the defendant is unjust.”

Schenck v. K.E. David, Ltd., 666 A.2d 327, 328 (Pa. Super. Ct. 1995).

       Assuming without deciding that Argue made valuable contributions to his

employers’ products, and that Defendants have been enriched as a result, we consider

whether that enrichment was unjust. That issue turns on one factual question: when

Argue proposed the relevant improvements to Ando and Triton’s products, was he

essentially doing what those companies were already paying him to do, or was he so

exceeding the scope of those duties that it might be unjust not to compensate him further?

       2
         The District Court had jurisdiction under 28 U.S.C. § 1332(a). We have
jurisdiction under 28 U.S.C. § 1291. We exercise plenary review over the District Court’s
grant of summary judgment, Paladino v. Newsome, 885 F.3d 203, 207 n.16 (3d Cir.
2018), and may affirm for any reason supported by the record, Grp. Against Smog and
Pollution, Inc. v. Shenango Inc., 810 F.3d 116, 127 n.12 (3d Cir. 2016).
                                             6
There is no dispute on the governing law—Argue concedes that he “cannot claim unjust

enrichment if [he was] just doing [his] job” Argue Br. 37 (quoting Bowden v. Schenker,

2016 WL 3981354, at *5 (E.D. Pa. July 25, 2016), aff’d, 693 F. App’x 157, 160 (3d Cir.

2017)).

       Argue described in his deposition what he considered his “inventive” work. First,

he would use his “exceptional industry knowledge” to evaluate what existed in the

market, what gaps there were in the market, and “what could help clients.” App. 1229.

Then he would “distill[] that information down into new feature sets and new inventions

that [Ando/Triton] could use to help [clients].” Id. Finally, he would pass those ideas on

to the “product teams” at Ando and Triton. App. 1229–30.

       The District Court found no genuine dispute that this was anything other than “the

work Defendants paid Mr. Argue to do.” Argue v. Triton Digital, Inc., 2017 WL

1611254, at *4 (W.D. Pa. Apr. 28, 2017). We agree. Helping Ando and Triton keep up on

trends and opportunities in the internet radio marketplace was an important part of

Argue’s job duties. Sometimes that involved passing on immediate customer feedback,

something Argue considered as a matter of “common sense” to be “part of everybody’s

job.” App. 1169–70. Other times that meant traveling overseas for discussions with

potential customers and visits to industry conferences. Moreover, it was always the

expectation that Argue would use his industry knowledge to help his employers improve

their product offerings. As Director of Advertising Strategy at Triton, Argue’s job duties

included “[l]iais[ing]” with other departments—including the product and engineering

teams—“to ensure that all products . . . promoted established advertising strategy goals.”

                                             7
App. 1188. Indeed, the internal announcement of Argue’s promotion to that role

specifically stated that he would “provide a channel of communication back to the

product team.” App. 1325, 1331.

       In sum, we agree with the District Court that the record shows that by maintaining

up-to-date industry knowledge, identifying needs in the marketplace, and proposing

product improvements to meet those needs, Argue was simply doing his job.3 Because he

did so voluntarily and without promises of or requests for additional compensation, we

agree with the District Court that no reasonable jury could find that Defendants were

unjustly enriched.4

                                              B

       Argue raises two other arguments on appeal, neither of which persuades us to

disturb the judgment of the District Court.

       First, Argue objects to the District Court’s decision to strike his conversion and

declaratory judgment claims from his amended complaint. The essence of his challenge

appears to be that the District Court abused its discretion by striking his claims as

       3
         Argue makes much of the fact that he was never specifically hired or assigned
“to make inventions or develop new products,” Argue Br. 37–38, but that narrow view of
the scope of Argue’s employment is inappropriate in this context. Unjust enrichment is
“essentially an equitable doctrine,” Schenck, 666 A.2d at 328 (citation omitted), in which
“our focus is not on the intention of the parties, but rather on whether the defendant has
been unjustly enriched,” id. Whether Argue acted precisely within the confines of his job
duties does not determine whether it was unjust for Ando and Triton to profit from his
work.
       4
         Because summary judgment was appropriate, we do not reach the District
Court’s alternative holdings that Argue’s unjust enrichment claim is either preempted by
federal patent law or barred by the written contract between Argue and Ando.
                                              8
inconsistent with his representation at oral argument that he would pursue only non-

patent claims. Argue claims he never actually made such a representation, but we need

not resolve that dispute to dispose of his challenge on appeal. In ruling on Defendants’

motion to dismiss for failure to state a claim, the District Court dismissed Argue’s

complaint to the extent it asserted federal patent rights “under a guise of state law.” App.

82 n.1 (citation omitted). The Court’s subsequent order granting Defendants’ motion to

strike simply trimmed material from Argue’s amended complaint that continued to assert

claims preempted by federal patent law in contravention of the earlier dismissal.

       Both of those rulings relied not on Argue’s representation about the scope of his

claims—which the District Court mentioned only to the extent that they “clarified” the

issues, App. 82 n.1, 84 n.1—but on an independent analysis of federal patent preemption.

Since Argue makes no argument addressed to the actual basis for the District Court’s

ruling, focusing instead on an essentially collateral issue, he has forfeited his challenge

on appeal.

       Argue’s final claim is that the District Court abused its discretion by refusing to

compel Defendants to answer an interrogatory expanding on the affirmative defenses

listed in their answer. Even if that were error, however, Argue does not contend that it

independently merits reversal. Rather, he asks us to order discovery re-opened only “if

and when” we vacate and remand to the District Court. Argue Br. 47. Our decision to

affirm vitiates this claim.

                                       *      *      *

       For the foregoing reasons, we will affirm the District Court’s summary judgment.

                                              9