Sarkissian Mason, Inc. v. Enterprise Holdings, Inc. , 572 F. App'x 19 ( 2014 )

13-3052-cv
Sarkissian Mason, Inc. v. Enterprise Holdings, Inc.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order
filed on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate
Procedure 32.1 and this court’s Local Rule 32.1.1. When citing a summary order in a
document filed with this court, a party must cite either the Federal Appendix or an
electronic database (with the notation “summary order”). A party citing a summary order
must serve a copy of it on any party not represented by counsel.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 9th day of July, two thousand fourteen.
PRESENT:
JOSÉ A. CABRANES,
SUSAN L. CARNEY,
CHRISTOPHER F. DRONEY,
Circuit Judges.
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SARKISSIAN MASON, INC., a Michigan Corporation,
AUTOMATIC, LLC, a Delaware Limited Liability Company,
Plaintiffs-Appellants,
-v.- No. 13-3052-cv
ENTERPRISE HOLDINGS, INC., a Missouri Corporation,
Defendant-Appellee.
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FOR PLAINTIFFS-APPELLANTS: KEVIN F. O’SHEA (Sharon S.
Almonrode, on the brief), The Miller
Law Firm, P.C., Rochester, MI.
FOR DEFENDANT-APPELLEE: DANIEL D. EDELMAN (Douglas W.
Sullivan, Joel D. Smith, San Francisco,
CA, on the brief), Crowell & Moring
LLP, New York, NY.
1
Appeal from the July 18, 2013 judgment of the United States District Court for the Southern
District of New York (Lorna G. Schofield, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the July 18, 2013 judgment of the District Court be AFFIRMED.
Plaintiffs Sarkissian Mason, Inc. and its subsidiary AutoMatic, LLC (jointly, “Sarkissian”)
appeal the judgment of the District Court granting summary judgment for defendant Enterprise
Holdings, Inc. (“Enterprise”) on all five of Sarkissian’s claims for: (1) breach of contract; (2)
promissory estoppel; (3) unjust enrichment; (4) fraudulent misrepresentation; and (5)
misappropriation of trade secrets. We assume familiarity with the factual and procedural history of
the case and repeat only those details necessary to the resolution of this appeal.
BACKGROUND
Enterprise is the largest rental car business in the United States. Sarkissian is a digital
marketing agency. In October 2010, Sarkissian and Enterprise entered into a nondisclosure
agreement (“NDA”) in connection with a venture to develop a program unrelated to the claims in
this case. The NDA definition of “Confidential Information” excluded information that was “part
of the public domain,” “was in the lawful possession of the Receiving Party prior to its disclosure”
or “is developed independently by the Receiving Party.” Joint App’x 862-63. In 2011, Enterprise
showed Sarkissian a study showing that consumers renting cars in the “insurance replacement
market” were more likely to buy the type of rental car they were driving, because they are frequently
in the market for a new car.1 Enterprise wanted Sarkissian to design a program that would enhance
the value of Enterprise’s insurance replacement rental fleet to the car manufacturers by enabling
manufacturers to use the rental experience to promote their cars to rental customers.
Between March and June 2011, Sarkissian sent Enterprise five PowerPoint presentations
setting forth a proposal for a “car buying service using mobile engagement technology to connect
renters and vehicle manufacturers . . . for the purpose of generating new car sales” that would be
called “AutoMatic Buying Service” (“ABS”). Appellants’ Br. 7. Central to the proposal was a
website, to be built and operated by Sarkissian at the cost of $1.25 million. The renter would
initially connect with the website through the placement of a so-called “QR code” somewhere in the
car which, when scanned by a mobile device, would connect that device to the website. These “QR
codes” were popular in a variety of markets by 2011, including car manufacturers. Sarkissian and
Enterprise would share revenue from the manufacturers for sales “leads” generated by the program.
Enterprise began discussing the concept of a QR code-based program that would connect
car renters with manufacturers with Mazda, a car manufacturer who agreed to act as a test case.
1 Consumers in the “insurance rental market” are those whose insurance companies paid for a rental car as part
of the insurance coverage for a “totaled” or damaged car.
2
Sarkissian was also discussing its concept with car manufacturers during this time, to gauge their
interest in Sarkissian’s platform, ABS.
In August 2011, Sarkissian sent Enterprise a draft “Strategic Relationship Agreement” (the
“Agreement”) pursuant to which Sarkissian, through ABS, would act as “middleman” between
Enterprise and manufacturers. The Agreement contained an exclusivity provision that required
manufacturers dealing with Enterprise to use the Sarkissian platform.2 Enterprise objected to the
exclusivity provision, and never signed the Agreement, but stated that it would be willing to test their
proposed third-party website, if Sarkissian could get other manufacturers on board. Sarkissian was
unable to do so. At the same time Enterprise was working with manufacturers to implement a
similar QR-based program using the manufacturers’ own websites. In November 2011, Enterprise
announced a new program, OnRamp, as “the first . . . comprehensive QR code-based [car] renter
engagement campaign.” Joint App’x 1193. No car manufacturer ever agreed to use Sarkissian’s
design, and Sarkissian never became involved in OnRamp.
Sarkissian filed this action on December 22, 2011. In a July 15, 2013 Opinion, the District
Court granted summary judgment for defendants on all counts. This timely appeal followed.
DISCUSSION
We review de novo an order of a district court granting summary judgment. Terwilliger v.
Terwilliger, 206 F.3d 240, 244 (2d Cir. 2000). To survive summary judgment, a plaintiff must produce
specific facts showing that there is a genuine dispute as to a material fact, requiring a trial. Niagara
Mohawk Power Corp. v. Jones Chem. Inc., 315 F.3d 171, 175 (2d Cir. 2003). See also Fed R. Civ. P. 56(c).
After concluding that Missouri law governed all claims in this diversity action, the District
Court addressed each of the five claims. It dismissed Count I for breach of the NDA on the basis
that “[u]nder the plain meaning of the contract, Confidential Information excluded [the]
information Enterprise disclosed”―information regarding the basic idea of connecting rental car
users with car manufacturers through QR codes―was lawfully in possession of Enterprise and/or
publicly available. The only confidential information―Sarkissian’s actual platform―was not
disclosed or used by Enterprise. Joint App’x 1481. We agree.
On Count V for misappropriation of trade secrets, the District Court applied the Missouri
Uniform Trade Secrets Act (“MUTSA”)3 to plaintiffs’ alleged “trade secrets” as set forth in the five
2 Sarkissian contends that it was flexible on that point, but the Agreement is clear. Moreover, the only evidence
of Sarkissian’s flexibility was its own assertion that Sarkissian “was flexible regarding the mobile website landing page”
and would “implement the mobile engagement concept in whatever fashion the [manufacturers] desired.” Joint App’x
877. This flexibility still contemplates that Sarkissian would act as the intermediary.
3 The only issue was whether ABS constituted a “trade secret” within the meaning of MUTSA. Courts use the
following factors to determine whether information constitutes a trade secret under MUTSA: “(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 [the business] to guard the secrecy of the information; (4) the value
3
PowerPoint presentations, and concluded that ABS did not merit legal protection as a trade secret
because “[a]ll of the component parts of the idea were publicly known and in use before Plaintiffs
presented their proposal to Enterprise.” Joint App’x 1475-76. Even if plaintiffs’ marketing
proposal combining these idea was novel, it is not a trade secret because it is (and was) easily
replicated. Id. Plaintiffs never developed, and Enterprise never appropriated, technology or logistics
for implementing the program, which might have been protected under MUTSA. Id. We agree that
OnRamp was a different concept than ABS “created from a similar collection of public[ly] available
ideas,” id. at 1480, and was not a misappropriation of a trade secret.
The District Court held that the claims for estoppel, unjust enrichment and fraud (Counts
II-IV) were preempted by MUTSA, which “displace[s] conflicting . . . laws of this state providing
civil remedies for misappropriation of a trade secret.” MUTSA § 417.463(1). Even if these claims
are not preempted,4 Sarkissian has produced no facts showing that Enterprise, having declined to
enter into the Agreement, made any actionable promise to Sarkissian as required for an estoppel
claim. See 1861 Group, LLC v. Wild Oats Markets, Inc., 728 F. Supp. 2d 1052, 1061 (E.D. Mo. 2010).
Nor have they produced evidence that Enterprise made actionable misrepresentations regarding its
willingness to negotiate with Sarkissian. Finally, Sarkissian makes no argument on appeal supporting
its contention that Enterprise was unjustly enriched at Sarkissian’s expense, and our review of the
record reveals no basis for this claim.
CONCLUSION
We have considered all of plaintiffs’ arguments and find them without merit.5 Accordingly,
for the reasons set out above, we AFFIRM the July 18, 2013 judgment of the District Court.
FOR THE COURT,
Catherine O’Hagan Wolfe, Clerk of Court
of the information to [the business] and to [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.” Secure Energy, Inc. v. Coal Synthetics, LLC, 708 F. Supp. 2d 923, 926 (E.D. Mo. 2010) (citation and
quotation marks omitted).
4 Because we agree that no trade secrets are implicated, it is not clear that these claims are preempted. See
Hallmark Cards, Inc. v. Monitor Clipper Partners, LLC, 757 F. Supp. 2d 904, 917 (W.D. Mo. 2010) (“[I]f the information does
not qualify as a trade secret, then the Trade Secret Act has no application” and common law claims are not preempted).
5 We agree with the District Court that plaintiffs’ expert, Nils-Erik von Zelowitz, whose testimony consisted
largely of the legal opinion that plaintiffs’ presentation, as a whole, constituted a trade secret, did not create a genuine
issue of material fact that would render summary judgment inappropriate. See Am. Family Mut. Ins. Co., 169 S.W.3d 905,
910 (Mo. App. W.D. 2005) (existence of a trade secret under MUTSA is a conclusion of law).
4