United States District Court, D. Delaware
E. Moore, Bindu A. Palapura, Stephanie E. O'Byrne, Potter
Anderson & Corroon LLP, Wilmington, DE; Ryan Tyz, Erin
Jones, Aaron Myers, Tyz Law Group PC, San Francisco, CA
-attorneys for Plaintiff
E. Farnan, Michael J. Farnan, Farnan LLP, Wilmington, DE; Ian
Feinberg, Elizabeth Day, Marc Belloli, Feinberg Day Alberti
Lim & Belloli LLP, Menlo Park, CA - attorneys for
NOREIKA, U.S. DISTRICT JUDGE.
the Court is a motion to dismiss (D.I. 40) filed by Defendant
NSS Labs, Inc. ("Defendant" or "NSS"),
alleging that Plaintiff CrowdStrike, Inc.
("CrowdStrike") has failed to state a claim upon
which relief can be granted with respect to Counts VI
(Tortious Interference with Contract) and VII (Common Law
Fraud) of the Second Amended Complaint (D.I. 34). For the
reasons set forth below, the Court denies Defendant's
motion to dismiss.
is a privately-owned cybersecurity company founded in 2011.
(D.I. 34 ¶ 15). CrowdStrike developed the "Falcon
Platform" software to provide cybersecurity to its
customers. (Id.). NSS is a company that, among other
things, tests cybersecurity software and tools available in
the marketplace to determine how well they stand up to
attacks. (D.I. 34 ¶¶ 22-23). In addition to
conducting public tests, NSS also conducts private tests of
cybersecurity platforms under contracts with vendors.
about April 11, 2016, CrowdStrike and NSS entered a written
private testing agreement ("the Private Agreement")
whereby NSS was to conduct a private test of
CrowdStrike's Falcon cybersecurity platform ("the
Falcon Platform") and to provide CrowdStrike with a
report detailing the results of the test. (D.I. 34 ¶
31). CrowdStrike alleges that NSS failed to perform the tests
in a way that CrowdStrike deemed accurate. (Id.
¶38). NSS conducted additional testing in an attempt to
remedy the failures CrowdStrike identified. (Id.
¶¶ 38-39). On January 18, 2016, during discussions
regarding a third round of private testing, NSS notified
CrowdStrike that it was planning to perform a public test of
the Falcon Platform. (Id. at ¶ 40).
alleges that the Private Agreement prohibited NSS from
retaining or using CrowdStrike's confidential information
(including software) and prohibited NSS from using
CrowdStrike's information to perform any public testing
without separate express written approval from CrowdStrike.
(Id. ¶¶ 32, 35). CrowdStrike never
provided "separate express written approval" to
NSS. (Id. ¶ 162). Moreover, CrowdStrike alleges
that it told NSS that, because of NSS's repeated testing
failures, CrowdStrike would not participate in a public group
test or authorize use of its products for that purpose.
(Id. ¶ 42). NSS allegedly responded that it
would test CrowdStrike products anyway, using login
credentials of a CrowdStrike customer. (Id. ¶
43). CrowdStrike explained that any such access was
unauthorized and forbidden under CrowdStrike's terms and
conditions of service. (Id. ¶ 44).
Nevertheless, according to CrowdStrike, NSS engaged David
Thomason of Thomason Technologies LLC ("Thomason")
to find a client willing to enter a contract with CrowdStrike
for a Falcon Platform pilot license ("the
License"). (Id. ¶¶ 50-51).
allegedly agreed to pay Thomason if he would gain access and
credentials from the client and provide those to NSS once the
purchase order went through. (Id. ¶¶ 51,
53). Thomason submitted a purchase order to CrowdStrike.
(Id. ¶ 52). CrowdStrike alleges that, although
NSS and Thomason both knew that the purpose of the purchase
order was for NSS to gain access to CrowdStrike products and
that neither Thomason nor his client would pay for the
purchase, those details were deliberately concealed from the
purchase order and from CrowdStrike. (Id.
¶¶ 52, 53, 164). It further alleges that had the
purchase order disclosed that the purchase was made to enable
NSS to access and use CrowdStrike's Falcon Platform,
CrowdStrike would never have approved it. (Id.
¶ 166). And it alleges that that NSS's access under
false pretense caused CrowdStrike damage.
reviewing a motion to dismiss pursuant to Rule 12(b)(6), the
Court conducts a two-part analysis. Fowler v. UPMC
Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). First, the
Court separates the factual and legal elements of a claim,
accepting "all of the complaint's well-pleaded facts
as true, but [disregarding] any legal conclusions."
Id. at 210-11. Second, the Court determines
"whether the facts alleged in the complaint are
sufficient to show a 'plausible claim for
relief.'" Id. at 211 (quoting Ashcroft
v. Iqbal, 556 U.S. 662, 679 (2009)). "The issue is
not whether a plaintiff will ultimately prevail but whether
the claimant is entitled to offer evidence to support the
claims." In re Burlington Coat Factory Sec.
Litig., 114 F.3d 1410, 1420 (3d Cir. 1997) (quoting
Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). The
court may grant a motion to dismiss only if, after
"accepting all well-pleaded allegations in the complaint
as true and viewing them in the light most favorable to
plaintiff, [the] plaintiff is not entitled to relief."
survive a motion to dismiss, a complaint cannot rely on
labels, conclusions, "and a formulaic recitation of the
elements of a cause of action," Bell Atlantic Corp.
v. Twombly, 550 U.S. 644, 555 (2007), but instead
"must contain sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its
face," Zuber v. Boscov's, 871 F.3d 255, 258
(3d Cir. 2017) (citing Santiago v. Warminster Twp.,
629 F.3d 121, 128 (3d Cir. 2010). A claim is facially
plausible where "plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged."
Iqbal, 556 U.S. at 678. Further, "[t]he
complaint must state enough facts to raise a reasonable
expectation that discovery will reveal evidence of [each]
necessary element" of the plaintiffs claim.
Wilkerson v. New Media Tech Charter Sch. Inc., 522
F.3d 315, 321 (3d Cir. 2008) (internal quotations omitted).
Lastly, "[i]n deciding a Rule 12(b)(6) motion, a court
must consider only the complaint, exhibits attached
to the complaint, matters of public record, as well as
undisputed authentic documents if the complainant's
claims are based upon these documents." Mayer v.
Belichick, 605 F.3d 223, 230 (3d Cir. 2010) (emphasis
9(b) of the Federal Rules of Civil Procedure provides that
"[i]n alleging fraud ... a party must state with
particularity the circumstances constituting fraud ....
Malice, intent, knowledge, and other conditions of a
person's mind may be alleged generally." The purpose
of Rule 9(b) is to provide defendants with notice of the
precise nature of the claim against them, not to test the
factual allegations of the claim. See Seville Indus. Mack
Corp. v. Southmost Mach. Corp., 742 F.2d 786, 791 (3d
Cir. 1984). Date, place, and time allegations are not
required to satisfy Rule 9(b), so long as the circumstances
of the alleged fraud are pled sufficiently "to place the
defendants on notice of the precise misconduct with which
they are charged, and to safeguard defendants against
spurious charges of immoral and fraudulent behavior."
Id.; Van Roy v. Sakhr Software Co., C.A.
No. 11-00863 (LPS), 2014 WL 3367275, at *3 (D. Del. July 8,