United States District Court, D. Columbia.
COUNCIL ON AMERICAN-ISLAMIC RELATIONS ACTION NETWORK, INC., et al., Plaintiffs
PAUL DAVID GAUBATZ, et al., Defendants
For CAIR-FOUNDATION, INC., COUNCIL ON AMERICAN-ISLAMIC RELATIONS ACTION NETWORK, INC., Plaintiffs: Gadeir Abbas, LEAD ATTORNEY, PRO HAC VICE, Munia Jabbar, COUNCIL ON AMERICAN-ISLAMIC RELATIONS, Washington, DC; Nina Kraut, LEAD ATTORNEY, COUNCIL ON AMERICAN-ISLAMIC RELATIONS, Washington, DC.
For CENTER FOR SECURITY POLICY, INC., CHRISTINE BRIM, ADAM SAVIT, SARAH PAVLIS, Defendants: David Eliezer Yerushalmi, LEAD ATTORNEY, American Freedom Law Center, Washington, D.C.; J. Thomas Smith, PRO HAC VICE, J. THOMAS SMITH ATTORNEY AT LAW, Franklin, TN; Robert J. Muise, AMERICAN FREEDOM LAW CENTER, Ann Arbor, MI.
For DAVID YERUSHALMI, Defendant: David Eliezer Yerushalmi, LEAD ATTORNEY, American Freedom Law Center, Washington, D.C.; Robert J. Muise, AMERICAN FREEDOM LAW CENTER, Ann Arbor, MI.
For SOCIETY OF AMERICANS FOR NATIONAL EXISTENCE, Defendant: David Eliezer Yerushalmi, LEAD ATTORNEY, American Freedom Law Center, Washington, D.C.; Robert J. Muise, AMERICAN FREEDOM LAW CENTER, Ann Arbor, MI; J. Thomas Smith, PRO HAC VICE, J. THOMAS SMITH ATTORNEY AT LAW, Franklin, TN.
For UNITED STATES OF AMERICA, Interested Party: Lynn E. Haaland, U.S. ATTORNEY'S OFFICE, Washington, DC.
COLLEEN KOLLAR-KOTELLY, United States District Judge.
Plaintiffs Council on American-Islamic Relations Action Network, Inc. (" CAIR-AN" ) and CAIR-Foundation, Inc. (" CAIR-F" ) bring this action against Chris Gaubatz, his father Paul David Gaubatz (" David Gaubatz" ), the Center for Security Policy, Inc. (" CSP" ), and three of its employees, Christine Brim, Adam Savit, and Sarah Pavlis, the Society of Americans for National Existence (" SANE" ), and David Yerushalmi. The Court refers to Chris Gaubatz and David Gaubatz by their first names to avoid confusion, and the Court refers to all defendants other than Chris and David as the " Secondary Defendants." In this action, Plaintiffs seek relief under the Federal Wiretap Act, 18 U.S.C. § § 2510-2522; the District of Columbia Wiretap Act, D.C. Code § § 23-541--23-556; and the Stored Communications Act, 18 U.S.C. § § 2701-2712. Plaintiffs also seek relief pursuant to various common law and statutory provisions of District of Columbia law. In essence, Plaintiffs' claims all arise from a scheme in which Chris was placed in an internship with Plaintiffs under an assumed identity, enabling him to remove internal documents and to record private conversations of Plaintiffs' employees without consent or authorization.
On March 27, 2014, the Court granted in part and denied in part Defendants'  Motion for Summary Judgment. As relevant here, with respect to several state law claims--breach of fiduciary duty, trespass, conversion, fraud, unjust enrichment, and misappropriation of trade secrets--the Court denied the motion for summary judgment without prejudice. The Court required Plaintiffs to file a notice setting out, for each of those remaining claims, the conduct underlying the claim, the injury proximately caused by this conduct, and the theory of damages associated with this injury. At that time, the Court also set out further requirements for this notice, noting that each plaintiff's injury, proximate cause, and compensable damages appeared to be threshold issues for most, if not all, of those claims. The Court stated that, following the filing of this notice, Defendants would be allowed to file a renewed motion as to these remaining state law claims. Plaintiffs filed their  Notice of Additional Briefing on Common Law and Statutory Claims, and Defendants' filed their  Renewed Motion for Summary Judgment, which is now before the Court. Upon consideration of the pleadings, the relevant legal authorities, and the record as a whole, the Court GRANTS IN PART and DENIES IN PART Defendants'  Renewed Motion for Summary Judgment. The Court GRANTS the motion with respect to the claims for conversion, breach of fiduciary duty, unjust enrichment, fraud, and misappropriation of trade secrets. With respect to the trespass claim, the Court DENIES the motion as to Chris Gaubatz and GRANTS the motion as to all other defendants.
The Court set out the complex background of this case at length in previous opinions. Specifically, the Court set out the full factual and procedural background in the Court's March 27, 2014, Memorandum Opinion resolving the parties' motions for summary judgment. See Council on American-Islamic Relations Action Network v. Gaubatz (" CAIR IV " ), 31 F.Supp.3d 237 (D.D.C. 2014). Because the renewed motion under consideration in this opinion relies on the same facts as CAIR IV, the Court does not recite the full background here. The Court assumes familiarity with the previous opinions in this case and provides the necessary background for the resolution of the individual arguments before the Court today in the discussion below.
II. LEGAL STANDARD
Summary judgment is appropriate where " the movant shows that there is no genuine dispute as to any material fact and [that it] is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The mere existence of some factual dispute is insufficient on its own to bar summary judgment; the dispute must pertain to a " material" fact. Id. Accordingly, " [o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Nor may summary judgment be avoided based on just any disagreement as to the relevant facts; the dispute must be " genuine," meaning that there must be sufficient admissible evidence for a reasonable trier of fact to find for the non-movant. Id.
In order to establish that a fact is or cannot be genuinely disputed, a party must (a) cite to specific parts of the record--including deposition testimony, documentary evidence, affidavits or declarations, or other competent evidence--in support of its position, or (b) demonstrate that the materials relied upon by the opposing party do not actually establish the absence or presence of a genuine dispute. Fed.R.Civ.P. 56(c)(1). Conclusory assertions offered without any factual basis in the record cannot create a genuine dispute sufficient to survive summary judgment. Ass'n of Flight Attendants-CWA, AFL-CIO v. U.S. Dep't of Transp., 564 F.3d 462, 465-66, 385 U.S.App.D.C. 347 (D.C. Cir. 2009). Moreover, where " a party fails to properly support an assertion of fact or fails to properly address another party's assertion of fact," the district court may " consider the fact undisputed for purposes of the motion." Fed.R.Civ.P. 56(e).
When faced with a motion for summary judgment, the district court may not make credibility determinations or weigh the evidence; instead, the evidence must be analyzed in the light most favorable to the non-movant, with all justifiable inferences drawn in its favor. Liberty Lobby, 477 U.S. at 255. If material facts are genuinely in dispute, or undisputed facts are susceptible to divergent yet justifiable inferences, summary judgment is inappropriate. Moore v. Hartman, 571 F.3d 62, 66, 387 U.S.App.D.C. 62 (D.C. Cir. 2009). In the end, the district court's task is to determine " whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Liberty Lobby, 477 U.S. at 251-52. In this regard, the non-movant must " do more than simply show that there is some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); " [i]f the evidence is merely colorable, or is not sufficiently probative, summary judgment may be granted." Liberty Lobby, 477 U.S. at 249-50 (internal citations omitted).
Defendants move for summary judgment as to six claims: Count 3, Conversion; Count 4, Breach of Fiduciary Duty; Count 7, Trespass; Count 8, Unjust Enrichment; Count 9, Fraud; and Count 10, Trade Secret Misappropriation. Defendants argue summary judgment is warranted on each of these counts with respect to Chris Gaubatz, David Gaubatz, and all of the Secondary Defendants. The Court addresses each claim in turn.
A. Count 3: Conversion
Plaintiffs claim that Defendants " combined and conspired" to convert documents belonging to CAIR-AN and CAIR-F. Third Am. Compl. ¶ 97. In their Notice, Plaintiffs' clarified that they are claiming that Chris is liable directly for conversion for removing documents from the premises of Plaintiffs' office. See Pls.' Notice at 27-28. They also clarified that they are claiming that the remaining defendants are liable for a conspiracy to convert documents and for aiding and abetting Chris in his conversion of the documents. See id. at 29-33. Defendants argue that summary judgment is warranted for all Defendants. The Court first discusses the conversion claim against Chris and then discusses the claims against David and the Secondary Defendants.
Pursuant to District of Columbia law, conversion is " an unlawful exercise of ownership, dominion, and control over the personalty of another in denial or repudiation of his right to such property." Washington Gas Light Co. v. Pub. Serv. Comm'n of D.C., 61 A.3d 662, 675 (D.C. 2013) (quoting Baltimore v. District of Columbia, 10 A.3d 1141, 1155 (D.C. 2011)).
Defendants argue that CAIR-AN's claims against all defendants must fail because none of the documents belong to CAIR-AN (as opposed to CAIR-F). Plaintiffs do not respond to this argument in their Opposition, and the Court considers it conceded. Moreover, as Defendants point out, the Court previously determined that none of the documents in this litigation belonged to CAIR-AN, quoting Plaintiffs' 30(b)(6) witness to the effect that all documents in this litigation belonged to CAIR-F and not to CAIR-AN. See CAIR IV, 31 F.Supp.3d at 271. In a footnote in Plaintiffs' Notice, Plaintiffs stated that, while the conversion claim pertains " mostly" to CAIR-F, a " small subset of 68 stolen documents" belong to CAIR-AN. See Pls.' Notice at 23 n.13. However, Plaintiffs cannot seek to revisit the Court's previous determination regarding the ownership of the documents through a footnote in their Notice. In addition, while Plaintiffs appear to be correct that the subset of documents identified pertain to CAIR-AN's ownership of the building in which the office is located, there is nothing about the documents themselves that suggests that the documents themselves were the property of CAIR-AN--as opposed to the property of CAIR-F, like the rest of the documents. Plaintiffs have not provided any sworn statement stating that these documents were removed by Chris or that they belonged to CAIRAN. Certainly, this is not enough to controvert the testimony of Plaintiffs' own 30(b)(6) witness that all of the documents at issue belonged to CAIR-F, not CAIR-AN. Accordingly, summary judgment against CAIR-AN on its conversion claim against all Defendants is warranted.
Plaintiffs base their claim for conversion on their deprivation of the physical documents between the time Chris removed the documents and time they were returned through the proceedings in this action. Defendants argue that Plaintiffs have not identified any loss or damage as a result of their deprivation of the documents. The Court agrees. " Conversion is a tort based on the theory that the defendant 'has in some way treated the goods as if they were his own, so that the plaintiff can properly ask the court to decree a forced sale of the property.'" Greenpeace, Inc. v. Dow Chem. Co., 97 A.3d 1053, 1064 (D.C. 2014) (quoting Pearson v. Dodd, 410 F.2d 701, 706, 133 U.S.App.D.C. 279 (D.C. Cir. 1969)). Because the documents were ultimately returned, Plaintiffs are not entitled to the full value of the documents; Plaintiffs are, at most, entitled to damages for the period during which they were deprived of the documents. See Restatement (Second) of Torts, § 922 (" The amount of damages for the conversion of a chattel is diminished by its recovery or acceptance by a person entitled to its possession." ); Welch v. Kosasky, 24 Mass.App.Ct. 402, 509 N.E.2d 919, 921 (Mass.App.Ct. 1987) (" Where, as here, the rightful owner elects to receive back the converted goods, the rule of damages, as the defendant correctly observes, is still based on value at the time of the conversion, but the converter is (1) credited with the value of the returned goods at the time of their return, and (2) charged with damages for loss of use of the goods during the period of the detention." ). However, Plaintiffs have not identified any actual loss or damage caused by the time that they were deprived of the documents.
Plaintiffs never claim that the documents were damaged or otherwise diminished in value as a result of the period of detention. Plaintiffs also never claim that they were deprived of access to information in the documents because of their removal, and indeed Plaintiffs claim that the content of the documents is immaterial. See supra note 3. Instead, Plaintiffs claim that they were deprived of the value of the paper used for printing the documents originally--which was, in their estimation, $200. However, because Plaintiffs had already printed the documents, the removal of the documents did not cause any additional loss. That is, because Plaintiffs had already printed on the paper in question, they do not--and cannot--claim that they would have used that paper for other purposes during the time when the documents were removed from their possession.
Plaintiffs also point to their inability to destroy the documents, citing this Court's opinion in Council on American-Islamic Relations Action Network v. Gaubatz (" CAIR II " ), 793 F.Supp.2d 311 (D.D.C. 2011). However, the Court only decided, in resolving Defendants' Motion to Dismiss, that Plaintiffs would not necessarily be precluded from recovering for conversion of items slated for destruction--because the right to destroy an object was one of the many sticks in an owner's bundle of property rights. See id. at 339 (citing Almeida v. Holder, 588 F.3d 778, 788 (2d Cir. 2009)). That conclusion at the Motion to Dismiss stage does not foreclose the Court's conclusion in resolving a motion for summary judgment, after discovery, that Plaintiffs have not shown loss or damage as a result of their inability to destroy the documents during the ultimately finite period of deprivation.
Plaintiffs' suggestion that damages can be measured by the amount of time necessary to produce the documents misses the point. The problem here is not an inability of Plaintiffs to measure damages; it is Plaintiffs' inability to point to any loss or injury that, in actuality, resulted from their being deprived of the documents. Because Plaintiffs cannot point to any basis in the record to support the awarding of actual damages on the conversion claim, Plaintiffs' claim for punitive damages also fails. See Feld v. Feld, 783 F.Supp.2d 76, 77 (D.D.C. 2011) (citing Maxwell v. Gallagher, 709 A.2d 100, 104-105 (D.C. 1998)).
Plaintiffs' arguments ultimately amount to a claim that the mere fact of deprivation of the documents entitles them to damages. But that is not the law. Because they have not claimed any actual loss or damage, let alone pointed to any facts in the record that would support such loss, Plaintiffs cannot sustain a claim for conversion. ...