LLC v. Behram

          MEMORANDUM OPINION

          DEBORAH K. CHASANOW, UNITED STATES DISTRICT JUDGE

         Presently pending in this employment dispute case are cross motions for summary judgment and motions to seal. The issues have been briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, Plaintiffs/Counter-Defendants’ motion for summary judgment will granted and Defendant/Counter-Plaintiff’s motion for summary judgment will be granted in part and denied in part. The motions to seal will be granted as to all but one exhibit.

         I. Background^[1]

         Nancy Behram, M.D., Defendant/Counter-Plaintiff, is “a board-certified physician specializing in obstetrics and gynecology.” (ECF No. 72-4, at 2). She co-owned an obstetrics and gynecological practice, OB-GYN Associates, P.A. (“OBA”), with two other physicians, Bradford Kleinman, M.D. and Carolyn Morales, M.D. (ECF No. 2-1, at 6). The three owners sold OBA to Maryland Physician’s Edge, LLC and Advantia Health, LLC (collectively “MPE”), in May, 2014. (Id.). Dr. Behram entered into three contractual agreements with MPE as part of the sale: (1) an asset purchase agreement entered jointly with Dr. Behram’s OBA co-owners to dispose of OBA’s non-medical assets (ECF No. 2-1); (2) a purchase agreement entered jointly with Dr. Behram’s co-owners to dispose of OBA’s medical assets (ECF No. 2-2); and (3) a senior physician employment agreement (“SPEA”) entered independently and providing terms for Dr. Behram’s employment with MPE following the sale (ECF No. 63-4).

         Per the SPEA, Dr. Behram’s employment with MPE “commence[d] as of the [e]ffective [d]ate” of the SPEA and would “continue for a period . . . of five (5) years[.]” (ECF No. 63-4, at 10). The SPEA’s preamble initially defines the “Effective Date” as May 29, 2014. Id. at 2. Later in the preamble, however, the SPEA states that “this Agreement shall be effective as of the closing date of the Transaction (the “Effective Date”), which date shall be confirmed by a letter from the Employer to the Physician[.] Id. The closing date was September 2, 2014. (ECF No. 64-4, at 316:7-11).

         Nearly three years later, in the spring of 2017, MPE attempted to renegotiate their employment agreement with Dr. Behram. Dr. Behram felt “pressured and bullied into signing a new contract” at this time. (ECF No. 64-4 at 57:3-4). Dr. Behram began to consider her options for alternative employment. Id. at 57:9.

         Dr. Behram’s husband, Steve Behram, M.D., also owns an obstetrics and gynecology practice named Steve Behram, M.D. & Associates, PC. (ECF No. 72-12, at 13:12-13). Dr. Steve Behram’s practice goes by the business name “Congressional OB-GYN.”^[2] (ECF No. 72-12, at 14:11). Congressional OB-GYN became affiliated with Privia Medical Group (“PMG”) in January 2016. (ECF No. 72-12, at 46:1-20). In June, 2017, Dr. Behram spoke to Dr. Steve Behram and the chief financial officer of Privia Health^[3], David Mountcastle, about the possibility of employment with Congressional. (ECF No. 72-13, at 2-3). As part of these discussions, Dr. Behram sent her employment agreement as well as certain of her “productivity reports, ” to PMG. (ECF No. 72-4, 72-11, 72-12).

         In mid-July, Dr. Behram reset her Council for Affordable Quality Healtchare (“CAQH”) password as part of the necessary re-credentialing process that would come with a change of employment. (ECF No. 63-1, at 2). Tracy Moran, an administrator who had worked with Dr. Behram for years, had, up until that point, been the primary manager of Dr. Behram’s CAQH account. (ECF No. 63-20, at 24). On discovering that the password had been reset, Ms. Moran grew suspicious. (ECF No. 63-20, at 27-28).

         Following a series of confused communications which appeared to link Dr. Behram to her husband’s practice at Congressional OB-GYN, Ms. Moran confronted Dr. Behram. In the ensuing conversation, Ms. Moran “said I assume you are trying to go with Steve and that is what prompted all of this.” (ECF No. 72-5, at 217:9-13). Dr. Behram responded to Ms. Moran by stating that she had “not done anything with CAQH” and that she had “not signed anything with Privia.” Id. Ms. Moran reported this information to MPE executives Brent Westhoven, Sean Glass, and Peter Glass. (ECF No. 72-19, at 88:2-13). MPE launched an investigation following Ms. Moran’s report. The investigation revealed certain suspicious statements Dr. Behram had made to patients about potentially leaving MPE. (ECF No. 72-11, 30:19-22, 31:1-9).

         MPE terminated Dr. Behram on July 31, 2017 for “violation of section 7(d)(vi)(A) and (F) of the [SPEA.]” (ECF No. 22-2, at 2). Section 7(d)(vi)(A) provided MPE the ability to terminate Dr. Behram’s employment immediately if MPE made a good faith determination that she “engaged in any act of personal dishonesty, gross negligence, or willful misconduct that ha[d] a material adverse effect on [MPE], its business operations, financial condition, assets, prospects or reputation[.]” (ECF No. 22-1, at 12). Similarly, section 7(d)(vi)(F) provided MPE the ability to terminate Dr. Behram immediately if MPE made a good faith determination that she “knowingly disclosed any confidential or other similar information, or breached any covenant against competition or solicitation, including a violation of” the restrictive covenants listed in the SPEA. (ECF No. 22-1, at 12).

         Before her termination, Dr. Behram downloaded a filtered and cultivated list of certain MPE patients. (ECF No. 22, at 6). Dr. Behram also sent the aforementioned “productivity reports” which contained financial information about MPE, its services, and Dr. Behram’s work for MPE, to Privia while still employed at MPE. (ECF No. 64-4, at 74-75).

         Subsequently, MPE filed a complaint against Dr. Behram on September 15, 2017, alleging seven counts: (1) misappropriation of trade secrets under 18 U.S.C. § 1836, et seq. (“DTSA”); (2) misappropriation of trade secrets under the Maryland Commercial Code, §§ 11-201, et seq. (“MUTSA”); (3) breach of employment agreement contract; (4) breach of non-medical asset purchase agreement contract; (5) breach of medical asset purchase agreement contract; (6) injunctive relief; and (7) breach of implied covenant of good faith and fair dealing. (ECF No. 1, at 12-19). In response, Defendant/Counter-Plaintiff filed an answer and counterclaim on October 19, 2017, alleging five counts: (1) declaratory judgment; (2) breach of contract; (3) violation of the Maryland Wage Payment Collection Law; (4) tortious interference with business expectancy; and (5) injunctive relief and specific performance. (ECF No. 22, at 25-36).

         II. Motions to Seal

         MPE and Dr. Behram filed motions to seal. A motion to seal must comply with Local Rule 105.11, which provides:

Any motion seeking the sealing of pleadings, motions, exhibits or other papers to be filed in the Court record shall include (a) proposed reasons supported by specific factual representations to justify the sealing and (b) an explanation why alternatives to sealing would not provide sufficient protections. The Court will not rule upon the motion until at least 14 days after it is entered on the public docket to permit the filing of objections by interested parties. Materials that are the subject of the motion shall remain temporarily sealed pending a ruling by the Court. If the motion is denied, the party making the filing will be given an opportunity to withdraw the materials.

         This rule endeavors to protect the common law right to inspect and copy judicial records and documents, Nixon v. Warner Commc'ns, Inc., 435 U.S. 589, 597 (1978), while recognizing that competing interests sometimes outweigh the public's right of access, In re Knight Publ'g Co., 743 F.2d 231, 235 (4^th Cir.1984).

         Before sealing any documents, the court must provide the non-moving party with notice of the request to seal and an opportunity to object. Id. This notice requirement may be satisfied by either notifying the persons present in the courtroom or by docketing the motion “reasonably in advance of deciding the issue.” Id. at 234.

         Finally, the court should consider less drastic alternatives to sealing, such as filing redacted versions of the documents. If the court decides that sealing is appropriate, it should also provide reasons, supported by specific factual findings, for its decision to seal and for rejecting alternatives. Id. at 235.

         Both parties seek to seal certain exhibits in connection with the cross-motions for summary judgment. Both motions stand unopposed after having been on the docket for several months, and one of the two motions is in fact a consent motion. All of the documents the parties wish to seal have been produced under a stipulated protective order under a “Confidential” designation. In this case, that designation is mostly fitting.

         The exhibits which the parties seek to file under seal are: 1) a draft employee agreement, 2) an actual employee agreement, 3) a set of PowerPoint slides containing confidential terms, conditions, covenants and agreements among the parties, and 4) Dr. Behram’s 2016 productivity reports, which, as discussed below, contain sensitive information and may indeed constitute trade secrets. Given that this action revolves in large part around MPE’s efforts to prevent disclosure of these materials, it is appropriate to seal them here. See Int'l Ass'n of Machinists & Aerospace Workers v. Werner–Masuda, 390 F.Supp.2d 479, 485 (D.Md.2005) (sealing materials that went to “heart of th[e] case” concerning trade secrets); Padco Advisors, Inc. v. Omdahl, 179 F.Supp.2d 600, 614–15 (D.Md.2002) (sealing materials in action “based on enforcing a non-compete clause in an employment contract in order to protect these trade secrets”).

         Redacting, or taking other less restrictive measures, would defeat the usefulness of the bulk of the exhibits in a case such as this, where the court must get a complete view of these materials to understand whether MPE is correct that they never should have been disclosed.

         On the other hand, redaction appears to be more fitting as to the PowerPoint slides comprising Exhibit 26. While the other exhibits are all, in some form, the basis of trade secret litigation, the power point slides are not, and the justification for their being sealed contains only boilerplate recitations. Neither the motions to seal, nor the information available to the court suggest that redaction would not provide sufficient protection. The parties shall have 21 days from the date of this order publicly to file redacted copies of the PowerPoint slides.

         III. Motions for Summary Judgment

         A. Standard of Review

         A motion for summary judgment will be granted only if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); Emmett v. Johnson, 532 F.3d 291, 297 (4^th Cir. 2008). To prevail on a motion for summary judgment, the movant generally bears the burden of showing that there is no genuine dispute as to any material fact. Liberty Lobby, 477 U.S. at 248-50. A dispute about a material fact is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. at 249. In undertaking this inquiry, a court must view the facts and the reasonable inferences drawn therefrom “in the light most favorable to the party opposing the motion, ” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)); see also EEOC v. Navy Fed. Credit Union, 424 F.3d 397, 405 (4^th Cir. 2005), but a “party cannot create a genuine dispute of material fact through mere speculation or compilation of inferences.” Shin v. Shalala, 166 F.Supp.2d 373, 375 (D.Md. 2001) (citation omitted). If a party “fails to make a showing sufficient to establish the existence of an element essential to that party’s case ... which that party will bear the burden of proof at trial[, ]” there can be no “genuine issue as to any material fact, since a complete failure of proof concerning an essential element of the nonmoving party’s case necessarily renders all other facts immaterial.” Celotex Corp., 477 U.S. at 323.

         B. Dr. Behram’s Motion for Partial Summary Judgment

         Dr. Behram seeks summary judgment as to four of MPE’s claims. She does not seek judgment as a matter of law on any of her own claims, nor does she seek judgment on MPE’s three other claims. For the following reasons, the court will grant Dr. Behram’s summary judgment motion as to Counts VI and VII of MPE’s Complaint as neither state cognizable, independent claims under Maryland law. As to Counts I and II – the trade secret claims – the court will deny Dr. Behram’s motion.

         1. Trade Secret Claims (MPE Counts I and II)

         In their complaint, MPE alleges that the “confidential, proprietary, and trade secret information” that forms the basis of their Maryland Uniform Trade Secrets Act (“MUTSA”) claim “relates to MPE’s patient list.” (ECF No. 1, at 31). Likewise, MPE’s Defend Trade Secrets Act (“DTSA”) claim focuses exclusively on patient lists. Id. at 39. Dr. Behram addresses her motion for summary judgment not just to the patient lists, but to the SPEA and certain “productivity reports” which Dr. Behram allegedly furnished to Privia. (ECF No. 69-1, at 30). In their reply in support of their motion for summary judgment, however, MPE makes no mention of the SPEA forming any basis of their MUTSA or DTSA claims, but does allege that the patient lists and productivity reports are trade secrets. (ECF No. 73, at 38). Only those two items will be considered. Under both DTSA and MUTSA, plaintiff must prove that the alleged trade secret meets the respective statutory definition. These definitions are similar, but distinct.

         MUTSA defines as a trade secret as:

information, including a formula, pattern, compilation, program, device, method, technique, or process, that:

(1) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain ...