Ocean Casino’s effort to have charges of “executive poaching” against it dismissed should be ignored by a federal judge, Atlantic City casino Borgata charged in its latest filing last week.
The most recent filing by Ocean argued that “while Borgata claims Ocean improperly acquired trade secrets, it does not allege Ocean used or disclosed those secrets.”
“Not so,” Borgata attorneys replied of information that might have been obtained from those high-ranking executives who last summer defected to Ocean, the Boardwalk-based successor to the ill-fated Revel casino (born 2012, died 2014):
“As just one example, Ocean has used customer contacts and other proprietary information stored on one Borgata former employee’s phone.
“Ocean is also wrong on the law. The [relevant trade secret laws] prohibit the improper acquisition of trade secrets regardless of whether the defendant used or disclosed them.”
Background of this ‘War at the Shore’
Borgata filed its lawsuit in federal court last August, after what eventually became a full-fledged hiring spree by Ocean of defecting Borgata executives. At issue is whether this was merely an aggressive effort by an up-and-coming business, or an effort to gain illegal advantage by learning details of big-spending gamblers’ personal preferences.
The accusation of federal racketeering by Ocean and its obtained executives was disputed by Ocean attorneys, on the basis that all of the issues alleged occurred merely among Ocean’s own employees.
“Of course, no case supports the theory that conspirators can avoid RICO liability by going into business together,” Borgata’s attorneys replied.
Instead, Borgata alleges that Ocean schemed with co-conspirators before hiring them.
“While Ocean argues that it benignly hired ’employees from another Atlantic City casino’ who wanted to leave, that assertion, even if true, ignores that a ‘benign, or pro-competitive, motive does not absolve misconduct’ and ‘a defendant-competitor’ … must justify not only its motive and purpose but also the means used.
“More critically, Ocean ignores that the [amended complaint in question] alleges improper motives and means, namely that Ocean discussed with key Borgata executives ‘potential methods to circumvent the restrictive covenants contained in their employment agreements’ while they were still Borgata employees.
“Ocean also knowingly helped a former Borgata executive violate her non-compete agreement. And Ocean manufactured a new position for another executive — a position for which he had no experience — in hopes that no one would notice a violation of his non-compete.”
The trade secrets allegations
The Borgata response continues: “Ocean likewise induced the misappropriation of customer contacts and other trade secrets on a Borgata-issued cell phone, and, after enlisting former Borgata executives to help solicit more Borgata employees, hired roughly half a dozen more marketing and public relations specialists precisely because Ocean knew they would inevitably use Borgata’s proprietary information in the course of their employment with Ocean.
“Ocean intended to leverage Borgata’s trade secrets for its own benefit, which was dishonest and beyond the custom in the industry.
“Unable to show prejudice, delay, or futility, Ocean spins a strawman argument about waiver, claiming Borgata somehow consented to dismissal of several claims.
“Tellingly, Ocean never raised this argument when the parties met and conferred about Borgata’s proposed amendment. Nor does Ocean dispute that Borgata opposed Ocean’s prior motion to dismiss. Ocean instead argues that, to the extent Borgata’s opposition to dismissing the original complaint was lacking, Borgata is barred from filing an amended complaint. That argument for the effective dismissal of most claims with prejudice perverts logic.
“Ocean’s argument is also procedurally senseless. Even if Borgata ‘waived’ its right to oppose dismissal of certain claims in its original complaint, that has no bearing on whether Borgata can file an amended complaint.
“At worst, if the Court denies leave to amend, it should allow Borgata to submit another motion for leave to amend that cures any basis for the Court’s futility determination.”