United States District Court, W.D. Wisconsin
OPINION AND ORDER
D. PETERSON DISTRICT JUDGE
Allison Steers and Cyndee Redfearn are former employees of
plaintiff DF Institute, LLC, which goes by the name Kaplan
Professional. Kaplan brings both state and federal claims
against Steers and Redfearn, as well as their current
employer Dalton Education, LLC, for using Kaplan's
confidential information to obtain a competitive advantage
over Kaplan. Both Kaplan and Dalton sell products and
services for those preparing to be certified financial
Kaplan's claims is that Steers and Redfearn violated a
“Confidentiality and Restriction” agreement they
had with Kaplan. Dkt. 1, ¶¶ 159-64. In a
counterclaim, Steers and Redfearn contend that the agreement
includes unenforceable restrictive covenants and that Kaplan
tortiously interfered with their business relationships by
attempting to enforce the agreement. Dkt. 69, ¶¶
4-5. Now Kaplan moves to dismiss the counterclaim under
Federal Rule of Civil Procedure 12(c). Dkt. 75. (Because the
counterclaim doesn't involve Dalton, the court will refer
to Steers and Redfearn as “defendants” for the
remainder of the opinion.) For the reasons discussed below,
the court will deny Kaplan's motion.
seeks dismissal of defendants' counterclaim for tortious
interference on two grounds: (1) defendants failed to provide
fair notice of the claim, as required by Federal Rule of
Civil Procedure 8; and (2) defendants cannot satisfy one of
the elements of a tortious interference claim. The court will
consider each contention in turn.
contends that defendants failed to provide fair notice of
their tortious interference claim by failing to identify
which restrictive covenants are unenforceable and by failing
to explain why they are unenforceable. But even if
defendants were required to provide that information, they
did so in both their opposition to Kaplan's motion for a
preliminary injunction and in their opposition to
Kaplan's motion for judgment on the pleadings.
Specifically, defendants say that that the Confidentiality
and Restrictive Agreement includes: (1) an anti-solicitation
provision that is overbroad because it prohibits them from
engaging in “any activity to induce any employee to
terminate employment with Kaplan”; (2) a
non-interference provision that is overbroad because it has
an unlimited scope; and (3) a confidentiality provision that
is invalid because it isn't necessary to protect
Kaplan's legitimate business interests.
plaintiff is not held to the factual allegations of his
complaint when he is faced with a motion to dismiss it for
failure to state a claim. He can oppose the motion . . . with
any factual allegations that are consistent with the
allegations of the complaint.” Smith v. Boyle,
144 F.3d 1060, 1064-65 (7th Cir. 1998). Because Kaplan
doesn't contend that the additional information provided
in defendants' brief is insufficient, the court will not
dismiss the counterclaim for failing to provide fair notice.
Lack of justification or privilege
contends that defendants' tortious interference
counterclaim fails because defendants haven't shown that
any interference was “not justified and
privileged.” A threshold question is which state's
law determines the elements of the claim. Defendants say that
Wisconsin law should apply. Kaplan points to an Illinois
choice-of-law provision in the “Confidentiality and
Restriction” agreement, but Kaplan doesn't contend
that the provision should apply to a tort claim, it
doesn't advance an argument for applying Illinois law,
and it denies that there are any differences between Illinois
and Wisconsin law. Courts presume that the law of the forum
state applies in the absence of an argument to the contrary,
see FutureSource LLC v. Reuters Ltd., 312 F.3d 281,
283 (7th Cir. 2002), so the court will apply Wisconsin law.
parties agree that one part of a tortious interference claim
is that the party being sued “was not justified or
privileged to interfere.” Brew City Redevelopment
Group, LLC v. Ferchill Group, 2006 WI 128, ¶ 37 n.
9, 297 Wis.2d 606, 724 N.W.2d 879. Kaplan assumes in its
opening brief that defendants have the burden on this issue,
but Kaplan doesn't attempt to rebut defendants'
contention in their opposition brief that Kaplan has the
burden to show that any interference was justified or
privileged. See Fed. Pants, Inc. v. Stocking, 762
F.2d 561, 569 (7th Cir. 1985) (“[T]he burden of proving
the justification for such interference is upon the
defendant.”); Finch v. Southside Lincoln-Mercury,
Inc., 2004 WI.App. 110, ¶ 38, 274 Wis.2d 719, 749,
685 N.W.2d 154, 169 (“The burden of proving lack of
privilege, however, is generally not ascribed to the
plaintiff. Rather, proof of intentional interference with the
existing contractual relations of another is sufficient to
establish liability, shifting the burden of proving the
justification for such interference upon the
defendant.” (internal quotations omitted)).
says that a restrictive covenant provides the justification
for any interference based on the covenant until a court
determines that the covenant is unenforceable. But the
authority Kaplan cites doesn't support that proposition.
In its opening brief, Kaplan cites First Weber Grp., Inc.
v. Horsfall, 738 F.3d 767, 775 (7th Cir. 2013), but that
case does nothing more than recite the elements of a tortious
interference claim. And it didn't involve a restrictive
covenant, so it's not instructive. In its reply brief,
Kaplan takes a more nuanced approach, citing several cases
from outside Wisconsin for the proposition that “a
party is justified and privileged to enforce its contractual
rights as long as it has a reasonable, good faith belief in
the validity of the contract.” Dkt. 84, at 3-4. But
even if that is a correct statement of Wisconsin law, Kaplan
doesn't explain why its belief was reasonable.
Specifically, it doesn't explain why it believes that any
of the restrictive covenants at issue are valid, under either
Wisconsin or Illinois law. In the absence of a developed
argument on this issue, Kaplan isn't entitled to a
dismissal of the counterclaim.
ORDERED that plaintiff DF Institute, LLC's motion for
judgment on ...