Phonedog v. Kravitz Case Study Example

In the case of PhoneDog v. Kravitz, the plaintiff (PhoneDog) filed suit against the defendant (Kravitz) – who was a former employee – because he allegedly continued to use the company’s Twitter account that was meant to be accessed by employees only, since the account contained confidential company and customer information. (United States District Court) PhoneDog claimed that Kravitz committed “misappropriation of trade secrets, intentional interference with prospective economic advantage, negligent interference with prospective economic advantage, and conversion”. (United States District Court)

Afterwards, Kravitz moved to dismiss these claims based on “the failure to state a claim and for lack of subject matter jurisdiction”. (United States District Court) The issue here was determining whether these claims were valid in order to judge whether or not to grant or deny Kravitz’s motion to dismiss them.

In resolution of this issue, the court examined each of PhoneDog’s claims with respect to Rule 12(b)(6) – which states that “a court may dismiss a claim when it does not contain enough facts to state a claim to relief that is plausible on its face”. (United States District Court) To decide judgment on the claim for lack of subject matter jurisdiction, the court considered Rule 12(b)(1) – which allows for a case or complaint to be dismissed if the appointed court lacks jurisdiction to make a judgment based on the subject matter such as facts or evidence. 

Because the parties had varying opinions regarding the monetary value of the Twitter account – and because PhoneDog expressed financial damages related to other claims – it is difficult to say whether this amount in question is not of legal jurisdiction of the court. With this ambiguity, it is only proper to deny the motion to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). When it comes to the dismissal of the claims made by PhoneDog for “misappropriation of trade secrets, intentional interference with prospective economic advantage, negligent interference with prospective economic advantage, and conversion” (United States District Court), it is reasonable to grant the dismissal of the claims for intentional and negligent interference with prospective economic advantage because PhoneDog does not provide enough evidence to prove how the actions of Kravitz caused a disruption in relationships and economic harm. However, PhoneDog does supply sufficient evidence supporting the claims for conversion and misappropriation of trade secrets against Kravitz – and the arguments Kravitz made against these claims do not show much of any basis.

After deliberating, the court denied Kravitz’s motion to dismiss for lack of subject matter jurisdiction as well as his motions to dismiss the claims regarding misappropriation of trade secrets and conversion. The motions to dismiss both intentional and negligent interference with prospective economic advantage were granted. In this case, the protected trade secret is the Twitter account – or more specifically – the account password and the followers of the account. What does a ruling like this mean for employers in the modern workplace who have an increased reliance on technology? More protection! Information related to any social media account can potentially be considered a trade secret and therefore be protected by law from disclosure or theft. For employers, this is vital to both the security and viability of their business. As technology becomes further integrated into businesses of all types, protecting private information is essential. Imagine that you ran an online business solely through an Instagram account. Then, one of your employees – who knew the password – quit their job and stole the identity of the account. Now, you have completely lost access to your entire business. Without the ability to claim online information or accounts as trade secrets, businesses can run into numerous problems and face damages they will be unable to seek recuperation for.