BETH LASCH VS. STUART KOPERWEIS (L-3917-16, MONMOUTH COUNTY AND STATEWIDE) ( 2019 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4352-17T1
BETH LASCH,
Plaintiff-Appellant,
v.
STUART KOPERWEIS and KBBC
KEYPORT BAYFRONT BUSINESS
COOPERATIVE,
Defendants-Respondents.
_______________________________
Submitted March 25, 2019 – Decided May 31, 2019
Before Judges Haas and Mitterhoff.
On appeal from Superior Court of New Jersey, Law
Division, Monmouth County, Docket No. L-3917-16.
Beth Lasch, appellant pro se.
Manna & Bonello, PA, attorneys for respondents (John
L. Bonello, on the brief).
PER CURIAM
Plaintiff Beth Lasch appeals pro se from the trial court's April 13, 2018
order granting summary judgment to defendants Stuart Koperweis and the
Keyport Bayfront Business Cooperative ("KBBC") on her trade secret and
tortious interference with prospective business relationship claims. We affirm
substantially for the reasons set forth in the Honorable Mara E. Zazzali-Hogan,
J.S.C.'s well-reasoned oral decision. We add only the following comments.
I.
We derive the following facts from the record below. The Borough of
Keyport established a "special improvement district" ("SID") 1 with a "district
management corporation" ("DMC") 2, in accordance with N.J.S.A. 40:56-65 to
-89.3 By borough ordinance, Keyport designated a SID known as the "Business
1
A SID is "an area within a municipality designated by municipal ordinance as
an area in which a special assessment on property within the district shall be
imposed for the purposes of promoting the economic and general welfare of the
district and the municipality." N.J.S.A. 40:56-66(b).
2
A SID's DMC is "an entity created by municipal ordinance or incorporated
pursuant to Title 15A of the New Jersey Statutes and designated by municipal
ordinance to receive funds collected by a special assessment within a special
improvement district, as authorized by this amendatory and supplementary act."
N.J.S.A. 40:56-66(c).
3
The purpose of the legislation is to "assist municipalities in promoting
economic growth and employment within business districts." N.J.S.A. 40:56-
65(b)(1).
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Improvement District" ("BID").4 Keyport's DMC is a non-profit corporation
known as the Keyport Business Alliance, Inc. (also known as the Keyport
Bayfront Business Cooperative). Defendant Koperweis served as the Executive
Director of the KBBC.
Plaintiff is a resident of Keyport, New Jersey, but she does not have a
business located in Keyport's BID. Plaintiff's business includes producing
commercial advertisements on cable television and on YouTube. She operates
several municipality-oriented YouTube channels, and she solicits business
owners in those municipalities.
On April 17, 2015, plaintiff sent an email to the KBBC in which she
referenced "a meeting last fall where I presented the idea of running local TV
commercials promoting Keyport." She indicated that "[a]ttached[] is a proposal
to review with more details about airing in Monmouth County on cable TV."
The email did not indicate that the proposal or email should remain confidential.
Plaintiff never subsequently informed defendants that the email or proposal
should remain confidential.
4
Keyport, NJ, Mun. Code (1988),
http://www.keyportonline.com/filestorage/4135/5720/5882/5888/BOROUGH_
OF_KEYPORT_ORDINANCES.pdf.
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Plaintiff's proposal included two "projects." Project #1 called for "8
commercials for Keyport to air on cable TV in Monmouth and Middlesex
counties, running on major TV channels . . . [and to] run the ads in the cable
TV's digital opportunities . . . , for those who look for local news online." Project
#2 called for one thirty-second "commercial for the Spring activities coming
up." The ad would run on cable TV in Monmouth and Middlesex counties and
"in the cable TV's digital opportunities."
In May 2015, after plaintiff submitted the proposal, she spoke to defendant
Koperweis, who informed her that there was no video budget. Plaintiff did not
bid on a project involving defendants.
In or about June 2016, plaintiff discovered that a YouTube channel titled
"Visit Keyport" had been created and videos had been uploaded. A company
known as "Direct Development," which trades a "Market Me," and which was
hired to do video production work for defendants, created the page and uploaded
the videos. The "Visit Keyport" YouTube channel did not include the same
advertisements that were provided for in plaintiff's proposal. The KBBC also
did not air commercials on cable TV in Monmouth or Middlesex counties, nor
on major TV channels.
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Plaintiff filed the instant action against defendants Stuart Koperweis and
the KBBC alleging that defendants appropriated her trade secret by creating a
YouTube channel and utilizing the proposal that she provided without paying
for its use. As part of plaintiff's lawsuit, she claimed $55,000 in damages, which
is not supported by any documentary evidence in the record.
At oral argument on defendants' motion for summary judgment, plaintiff
conceded that the KBBC was producing videos prior to the creation of their
YouTube channel, but contended that they were of a lower quality and they did
not promote businesses. Plaintiff further conceded that defendants did not
produce the eight videos that she included in her proposal, but she contended
that they produced a video advertisement for a garden walk, which was included
in her proposal, and a radio advertisement for the township's Memo rial Day
parade.
In an oral decision, the trial court granted summary judgment to
defendants. The trial found that plaintiff's proposal was not a trade secret
because there was no indication that she attempted to keep the infor mation
confidential.
Regarding the tortious interference claims, the trial court further found
that giving plaintiff the benefit of every inference in her favor, her YouTu be
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channel ideas gave her "a reasonable expectation of economic advantage"
because her business is primarily producing videos for businesses. Nonetheless,
the court granted summary judgment based on its finding that defendants did not
act unlawfully, maliciously, or unjustly toward plaintiff and that plaintiff did not
provide any support for her claim of damages. The instant appeal followed.
II.
On appeal, plaintiff argues that the trial court erred by not reopening
discovery, despite her failure to make a motion for same. We disagree.
Generally, "issues not raised below will . . . not be considered on appeal
unless they are jurisdictional in nature or substantially implicate the public
interest." N.J. Div. of Youth & Fam. Servs. v. M.C. III, 201 N.J. 328, 339
(2010). However, "appellate court[s] may, in the interests of justice, notice plain
error not brought to the attention of the trial or appellate court[,]" if "it is of such
a nature as to have been clearly capable of producing an unjust result[.]" R.
2:10-2.
Here, we decline to reach the merits of plaintiff's argument that the trial
court should have reopened discovery. See M.C. III, 201 N.J. at 339; R. 2:10-2.
Discovery in the instant matter ended on October 1, 2017 and oral argument
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took place on April 13, 2018. Plaintiff did not make a motion to extend
discovery at any point between the discovery end date and oral argument.
Plaintiff argues that, being a pro se party, she was not aware of all of the
intricacies of discovery. However, the trial court relaxed the rules for plaintiff
on several occasions, including considering her opposition to defendants' motion
for summary judgment despite its procedural deficiencies. Further, the first time
she suggested reopening discovery was during the summary judgment oral
argument. See, e.g., A.T. v. Cohen, 445 N.J. Super. 300, 305 n.7 (App. Div.
2016) (refusing to address the merits of the plaintiff's argument where "it was
not properly raised to the trial judge").
III.
Although plaintiff's sole argument on appeal was that the trial court erred
by not reopening discovery, for the purposes of completeness we will address
her claims on the merits. We conclude that the trial court correctly granted
summary judgment to defendants on the trade secret and tortious interference
claims.
The standard of review for a grant of summary judgment is de novo.
Conley v. Guerrero, 228 N.J. 339, 346 (2017) (citing Templo Fuente De Vida
Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 199 (2016)).
A-4352-17T1
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[W]hen deciding a motion for summary judgment under
Rule 4:46–2, the determination whether there exists a
genuine issue with respect to a material fact challenged
requires the motion judge to consider whether the
competent evidential materials presented, when viewed
in the light most favorable to the non-moving party in
consideration of the applicable evidentiary standard,
are sufficient to permit a rational factfinder to resolve
the alleged disputed issue in favor of the non-moving
party.
[Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520,
523 (1995).]
New Jersey Trade Secrets Act
"In any trade secret case, the Court must first determine whether there
exists, in fact, a trade secret." Baxter Healthcare Corp. v. HQ Specialty Pharma
Corp., 157 F. Supp. 3d 407, 424 (D.N.J. 2016) (citing Merckle GmbH v. Johnson
& Johnson, 961 F. Supp. 721 (D.N.J. 1997)). Prior to adopting the New Jersey
Trade Secrets Act, N.J.S.A. 56:15-1 to -9 (the "Act"), trade secret claims were
decided under common law. The Act "supercede[s] conflicting tort,
restitutionary, and other law of this State providing civil remedies for
misappropriation of a trade secret." N.J.S.A. 56:15-9(b). Under the Act, a
"[t]rade secret" means information, held by one or more
people, without regard to form, including a formula,
pattern, business data compilation, program, device,
method, technique, design, diagram, drawing,
invention, plan, procedure, prototype or process, that:
(1) Derives independent economic value, actual or
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potential, from not being generally known to, and not
being readily ascertainable by proper means by, other
persons who can obtain economic value from its
disclosure or use; and (2) Is the subject of efforts that
are reasonable under the circumstances to maintain its
secrecy.
[N.J.S.A. 56:15-2.]
"The subject matter of a particular trade secret . . . must be secret. In other
words, '[m]atters of public knowledge' or information 'completely disclosed by
[marketed] goods' cannot qualify as trade secrets." Baxter Healthcare, 157 F.
Supp. 3d at 424 (citations omitted) (alterations in original) (internal quotations
omitted).
Here, plaintiff's proposal does not meet the statutory definition of trade
secret. See N.J.S.A. 56:15-2. Initially, plaintiff's proposal provided for
advertisements that would be uploaded to plaintiff's Keyport YouTube channel
and aired on cable television. However, as YouTube dominates the internet in
terms of video-sharing and video-hosting, plaintiff's concepts for both video
advertising and a Keyport YouTube channel were clearly "readily ascertainable
by proper means." See ibid.5
5
See Jay E. Grenig & William C. Gleisner, III, The Impact of Social
Networking on e-Discovery, 1 eDiscovery & Digital Evidence § 14:4 (Oct.
2018) (footnote omitted) ("YouTube is a social networking system built around
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Moreover, even if plaintiff could satisfy the first prong of the test, she did
not establish that her proposal was "the subject of efforts that are reasonable
under the circumstances to maintain its secrecy." See N.J.S.A. 56:15-2. There
is no indication or marking on either the email plaintiff sent to defendants or the
attached proposal that the contents or communication should remain
confidential. Further, as plaintiff voluntarily provided a copy of the proposal to
defendants, voluntarily explained her ideas, and did not indicate that the
proposal should remain confidential, plaintiff's proposal does not qualify as a
trade secret. See ibid.
Common Law Trade Secret
Under New Jersey's common law, "[a] trade secret may consist of any
formula, pattern, device or compilation of information which is used in one's
business, and which gives him an opportunity to obtain an advantage over
competitors who do not know or use it." Hammock v. Hoffman-LaRoche, Inc.,
142 N.J. 356, 384 (1995) (quoting Smith v. BIC Corp., 869 F.2d 194, 199 (3d
videotapes uploaded from users and often accompanied by a comments section
in the nature of a blog. . . . YouTube makes the dissemination of personal and
potentially embarrassing videotape information very easy for the most novice
computer user. With its simple interface, YouTube makes it possible for anyone
with an Internet connection to post a video.")
A-4352-17T1
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Cir. 1989)). "[I]nformation that is in the public domain . . . cannot be protected
as trade secrets." Ibid."[T]he definition of trade secret does not include a marketing concept or
a new product idea." Johnson v. Benjamin Moore & Co., 347 N.J. Super. 71, 96
(App. Div. 2001) (citing Hudson Hotels Corp. v. Choice Hotels Int'l, 995 F.2d
1173 (2d Cir. 1993)). In Johnson, the plaintiff met with one of the defendant's
employees about an idea for a new product that the plaintiff wanted to submit.
Id. at 78-79. The defendant's employee suggested that the plaintiff put his
proposal in writing, and the plaintiff complied. Id. at 79. According to the
plaintiff, the defendant's employee called and informed that he was going to
present the proposal to his superiors. Ibid.
The proposal was for a "Mural in a Can[,]" a step-by-step, do-it-yourself
art project. Ibid. The first page of the proposal included the following written
statement, which both parties signed:
I UNDERSTAND IT IS YOUR PRACTICE TO
ENTERTAIN OR RECEIVE IDEAS OR
SUGGESTIONS FOR THE MERCHANDISING OF
BENJAMIN MOORE PAINT PRODUCTS. I HAVE
DEVELOPED SUCH AN IDEA AND PRODUCT FOR
SUBMISSION AND WOULD LIKE TO DISCLOSE
IT TO YOU. I UNDERSTAND THAT IF YOU USE IT
YOU WILL PAY ME A REASONABLE
COMPENSATION BASED ON CURRENT
INDUSTRY STANDARDS.
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PLEASE ACKNOWLEDGE THE RECEIPT OF THIS
LETTER WITH YOUR DATED SIGNATURE
BELOW.
[Ibid.]
The plaintiff also provided the defendant with a disclaimer that provided for an
initial fee of $500,000 and a royalty fee of $25,000 annually, if the defendant
utilized the plaintiff's "Mural in a Can" product proposal. Id. at 80. The
defendant stated that he never saw the disclaimer, while the plaintiff states that
it was included with his submitted proposal. Ibid.
The defendant subsequently worked with Crayola on the implementation
of the Crayola Paints program, which included the "umbrella concept" of "a line
of paint and related decorating products positioned for parents who want to
create fun and imaginative environments for, and with, their children." Id. at
80-81.
When the plaintiff saw an advertisement for "Crayola Paints," he sued the
defendant and alleged, among other things, that the defendant misappropriated
trade secrets by developing a product for which the plaintiff had submitted a
proposal. Id. at 77, 81. The trial court granted summary judgment to the
defendant on all of the plaintiff's claims. Id. at 75. We affirmed and held that
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the "[p]laintiff's idea for Mural in a Can and his broad concept of marketing
materials for murals for the masses are not trade secrets." Id. at 96.
Here, plaintiff's trade secret claim is clearly weaker than the plaintiff's in
Johnson. Here, unlike in Johnson, plaintiff did not take steps to protect her
proposal. See id. at 79-80. As in Johnson, plaintiff voluntarily provided her
proposal and information about her services to defendants. See id. at 79.
However, unlike the plaintiff in Johnson, she did not take any steps to protect
her proposal. See ibid. For instance, she did not include a provision for initial
or royalty payments in the event her proposal was implemented, nor did she
include an acknowledged signed receipt. See ibid. Thus, we conclude that the
trial court correctly rejected plaintiff's trade secret claim under the common law
doctrine.
Common Law "Use-of-Idea"
[W]here a person communicates a novel
idea to another with the intention that the
latter may use the idea and compensate him
for such use, the other party is liable for
such use and must pay compensation if he
actually appropriates the idea and employs
it in connection with his own activities.
[Id. at 84 (quoting Flemming v. Ronson Corp., 107 N.J.
Super. 311, 317 (L. Div. 1969), aff'd, 114 N.J. Super.
221 (App. Div. 1971)).]
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To state a claim for "use of idea" the party must "establish as a perquisite
to relief that (1) the idea was novel; (2) it was made in confidence, and (3) it
was adopted and made use of." Ibid. In Johnson, we held that the trial court
correctly granted summary judgment to the defendant's on the plaintiff's "use of
idea" claim because his "Mural in a Can" proposal was not "novel." Id. at 85.
Additionally, YouTube is "recognized by experts as the clear leader in the
[social media] industry." Ibid. See also Franklin Graves & Michael Lee, The
Law of YouTubers, 9 No. 5 Landslide 8, 9 (2017) ("It's undeniable that, by
generating billions of daily views and hundreds of millions of hours in watch
time over the course of a single day, YouTube is the go-to destination for video
consumption on the internet.") (footnotes omitted).
In the instant matter, we conclude that plaintiff cannot establish a claim
for common law "use of idea." First, plaintiff's proposal was not novel. See id.
at 84. Advertising, generally, is very common on all platforms. Specifically, as
YouTube is the most used social media platform, creating video advertisements
for a channel dedicated to a township and using YouTube as the means to
disseminate the advertisements is not novel. See Graves & Lee, 9 No. 5
Landslide at 9.
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Second, even if plaintiff's proposal was novel, as stated above, they were
not made in confidence. See Johnson, 347 N.J. Super. at 84.
Lastly, plaintiff has not established that defendants made use of her
proposal. See ibid. Plaintiff submitted a proposal that included ideas for eight
commercials that would be uploaded to plaintiff's Keyport YouTube channel and
would also air on cable television. Defendants created one video Spring-themed
commercial and one radio commercial about Keyport's Memorial Day Parade.
None of plaintiff's other ideas or concepts from her written proposal were
created. Thus, defendants did not make use of her proposal and plaintiff cannot
state a claim for "use of idea." See ibid.
Tortious Interference
In an action for tortious interference with a prospective business
relationship, a plaintiff is required to prove that:
(1) [she] had some reasonable expectation
of economic advantage; (2) the defendants'
actions were malicious in the sense that the
harm was inflicted intentionally and
without justification or excuse; (3) the
interference caused the loss of the
prospective gain or there was a reasonable
probability that the plaintiff would have
obtained the anticipated economic benefit,
and (4) the injury caused the plaintiff
damage.
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[Singer v. Beach Trading Co., Inc., 379 N.J. Super. 63,
81 (App. Div. 2005) (quoting Mandel v.
UBS/PaineWebber, Inc., 373 N.J. Super. 55, 79-80
(App. Div. 2004)) (alteration in original).]
In determining whether a party acted with malice,
the ultimate inquiry is whether the conduct was "both
injurious and transgressive of generally accepted
standards of common morality or of law." In other
words, was the interference by defendant "sanctioned
by the rules of the game." There can be no tighter test
of liability in this area than that of the common
conception of what is right and just dealing under the
circumstances.
[Printing Mart-Morristown v. Sharp Elec. Corp., 116
N.J. 739, 757 (1989) (quoting Sustick v. Slatina, 48 N.J.
Super. 134, 144 (App. Div. 1957)).]
Here, the trial court did not err by granting summary judgment to
defendants on plaintiff's tortious interference claim. Initially, granting plaintiff
every inference in her favor, she established that she had "some reasonable
expectation of economic advantage." Singer, 379 N.J. Super. at 81. At oral
argument she stated that she was hired to make videos for at least two local
businesses and that she primarily gets her business by soliciting the businesses
personally.
However, plaintiff cannot establish any of the other elements of tortious
interference. As the trial court found, defendants did not act "malicious[ly] in
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the sense that the harm was inflicted intentionally and without justification or
excuse." Ibid. Even accepting plaintiff's allegation that defendants utilized her
proposal when they created a YouTube channel and uploaded videos of the town,
they were not legally prohibited from doing so. Plaintiff sent defendants an
unsolicited, non-proprietary proposal for a basic advertising idea. In the absence
of wrongdoing, utilizing those ideas in their own marketing scheme is not
"transgressive of generally accepted standards of common morality or of law"
or a violation of "the common conception of what is right and just dealing under
the circumstances." See ibid.Additionally, there was no "reasonable probability that . . . plaintiff would
have obtained the anticipated economic benefit" in the absence of defendant
KBBC creating video advertisements for the local businesses. See ibid.Although plaintiff stated that she worked with local businesses in the past, she
came forth with no additional evidence to suggest that the forty-one businesses
she solicited would have agreed to work with her in the absence of defendant
KBBC's making video advertisements free of charge.
Lastly, plaintiff has not proven damages. "Anticipated profits that are too
remote, uncertain, or speculative are not recoverable." Desai v. Bd. of Adj. of
Phillipsburg, 360 N.J. Super. 586, 595 (App. Div. 2003), certif. denied, 177 N.J.
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492 (2003) (citing Stanley Co. of Am. v. Hercules Powder Co., 16 N.J. 295, 314
(1954)). Plaintiff claims $55,000 in damages, primarily based on the contract
between defendant KBBC and Direct Development. However, she provided no
expert or lay testimony regarding how much money she would have received if
she contracted with defendants. She also did not provide any prior contracts or
receipts to substantiate her damages. Thus, her claim for damages is speculative
and uncertain, and the trial court did not err in granting summary judgment to
defendants on plaintiff's tortious interference claim. See ibid.To the extent we have not specifically addressed any of plaintiff's
remaining arguments, we find them without sufficient merit to warrant
discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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