IP Law Daily, TRADE SECRETS—E.D. Pa.: Healthcare payment consulting company states trade secret misappropriation claim against competitor, former employee, (Jul 12, 2013)

By Cheryl Beise, J.D.

A healthcare payment recovery consultant stated a trade secret misappropriation claim against a former employee and her employer, according to the federal district court in Philadelphia (Triage Consulting Group, Inc. v. Implementation Management Assistance, Inc., July 11, 2013, Baylson, J.).

Triage Consulting Group, Inc. (“Triage”) is in the business of providing consulting and payment recovery services to healthcare institutions. Defendant Implementation Management Assistance, Inc. (“IMA”) is a direct competitor of Triage. Triage alleged that IMA, with the assistance of Liana Hans and Sarah Lewis, two former Triage employees who worked for IMA, misappropriated Tirage’s proprietary information and recovery resolution processes, including Triage’s “Trakker” database. With the help of Hans and Lewis, IMA allegedly developed its own database using information from Trakker.

Triage ultimately filed suit against IMA and Lewis, alleging misappropriation of trade secrets under section 5302 of the Pennsylvania Uniform Trade Secrets Act (“PUTSA”) against both defendants, breach of contract against Lewis, and intentional interference with contractual relations against IMA.

In its second amended complaint, Triage alleged: (1) in April 2012, Triage notified IMA that it believed that IMA possessed its proprietary information; (2) IMA agreed to investigate, pay for the investigation, and remove any Triage information, if found; (3) on April 30, 2012, Lewis notified Hans that IMA’s systems contained Plaintiff’s proprietary information; (4) at Lewis’s suggestion, IMA tried to delete the Triage information; (5) the subsequent investigation revealed that IMA’s systems contained significant amounts of Triage’s proprietary information; (6) IMA refused to pay for the investigation or delete Triage information, in particular the Trakker information used in IMA’s new database; (7) IMA terminated Hans as result of the investigation, but continued to employ Lewis.

Trade secret misappropriation. IMA and Lewis contended that Triage failed to allege facts that, even if true, could establish that Lewis engaged in misappropriation as that term is defined in section 5302 of the PUTSA. The court disagreed. Triage’s allegations were sufficient to support the reasonable conclusion that Lewis knew, or should have known, at least as of April 30, 2012, that she was using Triage’s proprietary information to assist IMA in the creation of its new database and that whoever divulged Triage’s information had a duty of secrecy to Triage. Such allegations were sufficient to satisfy the definition of misappropriation under section 5302 of the PUTSA, according to the court.

PUSTA preemption. IMA and Lewis also argued the PUTSA preempted Triage’s breach of contract claim against Lewis and its intentional interference with contractual relations claim against IMA. Again, the court disagreed.

Section 5308(a) of the PUTSA generally preempts tort, restitutionary, and other claims under Pennsylvania law “providing civil remedies for misappropriation of a trade secret.” However, section 5308(b) makes it clear that the PUTSA does not preempt “contractual remedies, whether or not based upon misappropriation of a trade secret,” and “other civil remedies that are not based upon misappropriation of a trade secret.” Therefore, by its express terms, the PUTSA did not preempt Triage’s breach of contract claim against Lewis, “regardless of whether it is based on Lewis’s alleged misappropriation of Plaintiff’s trade secrets,” the court said.

Regarding Triage’s intentional interference with contractual relations claim against IMA, the court explained that tort claims and PUTSA claims may be pled in the alternative, even though the tort claims ultimately could be deemed preempted pursuant to a factual finding that the information underlying the dispute is, in fact, a trade secret. In view of the fact that the defendants had not conceded that Triage’s confidential information qualified for trade secret status, the court declined to force Triage to choose between pleading a PUTSA claim or a tort claim at this stage in the proceeding.

The case is No. 12-4266.

Attorneys: Ronald J. Ventola (Schnader Harrison Segal & Lewis LLP) for Triage Consulting Group, Inc. Michael J. Torchia (Semanoff, Ormsby, Greenberg & Torchia LLC) for Implementation Management Assistance, Inc.

Companies: Triage Consulting Group, Inc.; Implementation Management Assistance, Inc.

Cases: TradeSecrets PennsylvaniaNews\