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Ozone Solutions, Inc. v. Hoekstra

United States District Court, N.D. Iowa, Western Division

August 19, 2019

OZONE SOLUTIONS, INC., Plaintiff,
v.
TRAVIS HOEKSTRA and MICHAEL ROZEBOOM, Defendants.

          MEMORANDUM OPINION AND ORDER

          LEONARD T. STRAND, CHIEF JUDGE.

         I. INTRODUCTION

         This case is before me on a motion (Doc. No. 20) to dismiss by defendant Travis Hoekstra and a motion (Doc. No. 23) to dismiss by defendant Michael Rozeboom. Plaintiff Ozone Solutions, Inc. (Ozone) has filed resistances (Doc. Nos. 24, 25). I find that oral argument is not necessary. See Local Rule 7(c).

         II. FACTUAL ALLEGATIONS AND PROCEDURAL HISTORY

         Ozone filed its complaint (Doc. No. 1) and a motion (Doc. No. 2) for temporary restraining order (TRO) and preliminary injunction on March 14, 2019. The complaint invokes federal question jurisdiction pursuant to 28 U.S.C. § 1331, alleging claims arising under the Computer Fraud and Abuse Act (CFAA) and supplemental jurisdiction pursuant to 28 U.S.C. § 1367 over state law claims. See Doc. No. 1 at 1.

         Ozone alleges that Hoekstra was employed by Ozone as an IT Network Administrator and Ozone Application Specialist from approximately January 2014 until January 10, 2019. Id. at 2. He was responsible for managing and maintaining Ozone's server systems and backups; planning and building its computer network infrastructure; managing and maintaining workstations, laptops, tablets and software; engaged in sales and customer service; and worked with customer installations of Ozone's equipment. Id.

         Ozone alleges that its computers and networks utilize log-in credentials and passwords to protect information contained on its computers and servers. Employee access to confidential and proprietary information is limited by virtue of the permissions that are associated with their log-in credentials. Id. As IT Network Administrator, Hoekstra had access to the entirety of Ozone's computer network, computers and servers. Id. at 3.

         Rozeboom was employed by Ozone as a Sales Application Engineer from approximately 2008 through November 2018. Id. He signed a Noncompete, Nonsolicitation and Confidentiality Agreement (Agreement) with Ozone.[1] Ozone has records reflecting ongoing communications an Nonsolicitationd solicitations between Rozeboom and Ozone customers. Id.

         In the days leading up to Hoekstra's final day of employment, Ozone alleges that Hoekstra downloaded numerous files and sent himself numerous emails containing confidential and proprietary customer information, product plans and specifications, product cost and pricing information and vendor information. Id. On his final day of employment, Ozone alleges Hoekstra took a laptop computer belonging to Ozone, which is believed to contain files downloaded from Ozone's network and server. Id.

         Hoekstra later obtained employment with Global Aquaculture Supply Company, LLC (Global). Global manufactures and provides various aquacultural products, including, but not limited to, ozone equipment with application relating to aquaculture. Id. Ozone alleges that Hoekstra has disclosed to employees of Ozone that he and Rozeboom have met with customers of Ozone with the intention of diverting business to entities other than Ozone. Id. at 4.

         Ozone alleges the following claims:

. Count I - Violation of Computer Fraud and Abuse Act (against Hoekstra)
. Count II - Breach of Contract (against Rozeboom)
. Count III - Misappropriation of Trade Secrets (against Hoekstra and Rozeboom)
. Count IV - Conversion (against Hoekstra and Rozeboom)
. Count V - Breach of Fiduciary Duties (against Hoekstra)
. Count VI - Tortious Interference with Contract (against Hoekstra and Rozeboom)

See Doc No. 1.

         I held a hearing on the motion for TRO and preliminary injunction on March 21, 2019. I orally granted Ozone's motion for a TRO at the hearing and memorialized it in an order (Doc. No. 14) the following day. I reserved ruling on the preliminary injunction. See Doc. No. 14. The parties later agreed to extend the term of the TRO and continue the hearing on the motion for preliminary injunction to a later date if necessary. See Doc. No. 22.

         III. ...


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