MEMORANDUM DECISION and ORDER I. INTRODUCTION On May 25, 2021, plaintiff Drew Austin Speckman (“Speckman” or “plaintiff”) filed a complaint against defendants Cosimo Fabrizio (“Fabrizio”), Adrian Lee (“Lee”), Reza Madhavan (“Madhavan”), and Jake McEvoy1 (“McEvoy,” collectively “defendants”). Essentially, plaintiff alleges an improper corporate takeover by defendants, his business partners and former college classmates. With his complaint, plaintiff also moved for a temporary restraining order (“TRO”) against defendants looking to reverse their alleged efforts to disrupt his rights to exercise ownership over RapStudy, Inc. (“RapStudy”). The Court granted Speckman’s TRO that same day and set a hearing to consider whether to convert the TRO into a preliminary injunction. Defendants not only opposed granting plaintiff’s preliminary injunction, they also cross-moved to dismiss the complaint in its entirety under Federal Rule of Civil Procedure (“Rule”) 12(b)(6). The Court heard oral argument on both motions on Thursday, June 17, 2021. The cross-motions will now be decided on the parties’ submissions and oral arguments. II. BACKGROUND In 2018, Speckman was a student at Cornell University.2 Dkt. 17 (“Compl.”), 20. While in school, plaintiff had an idea that would eventually sprout into RapStudy. Id. As RapStudy’s name suggests, plaintiff’s idea was to pair modern, popular music with educational lyrics as a teaching tool. See id. 18. But having an idea and bringing it to life are two decidedly different things. To that end, Speckman reached out to defendant Fabrizio in October of 2018 to bring him aboard the fledgling company. Compl. 22. In the process, plaintiff had Fabrizio sign a non-disclosure agreement (“NDA”) on October 28, 2018. Dkt. 17, pp. 26-34.3 By the NDA’s terms, Fabrizio was prohibited from using any information plaintiff shared with him “for any purpose that might be directly or indirectly detrimental” to plaintiff. Id. at 28. The NDA similarly prohibited Fabrizio from interfering with plaintiff’s relationship with any other employees and contractors he might employ. Id. at 29-30. By November of 2019, RapStudy had begun to round into form, so Speckman looked for more potential employees. See Compl. 23 He found them in defendants Madhavan, Lee, and McEvoy. Id. All three would sign NDAs of their own: Madhavan on November 5, 2019, McEvoy on November 7, and Lee on November 12. Id. The Lee NDA notes that all materials Lee produced would be plaintiff’s sole property. Dkt. 17, p. 36. The Madhavan NDA is essentially the same. Id. at 38. However, the McEvoy NDA provides that any materials he produced would be plaintiff’s property “and/or” the property of “those involved with RapStudy at present or in the future.” Id. at 40. In any case, having started to assemble a team of employees, Speckman filed articles of incorporation for RapStudy in the State of Delaware on November 20, 2019. Dkt. 17, pp. 22-24. The certificate of incorporation lists plaintiff as the “Sole Incorporator.” Id. at 22, 24. Eventually, plaintiff also became RapStudy’s CEO, and as that role demands he claims he began negotiating contracts with school districts, arranging for licensing, and generally managing his nascent business and helping it to grow. Compl.
4, 21. Through Speckman’s and defendants’ combined efforts, RapStudy developed apace until early fall of 2020, when the company’s once-bright horizons began to threaten a storm. Around that time, plaintiff started dating one of the company’s employees, Claire Choi (“Choi”). Compl. 24. By all accounts, that relationship was purely consensual. Id. Nevertheless, apparently plaintiff and Choi did not disclose it to any other RapStudy employee at the time. See id. 24. Neither the relationship nor its secrecy would last forever. Apparently, Choi and Speckman broke up not long after they became involved. See Compl. 24. Choi kept the relationship secret until April 26 and 27, 2021, when she finally confided in defendants that she and plaintiff had been an item. Id. On May 3, 2021, defendants escalated matters by submitting a notice of misconduct criticizing Speckman for his handling of his relationship with Choi. Compl. 25. The notice of misconduct alleged that plaintiff had shown: (1) an inability to separate his work and personal lives, (2) poor judgment and general misconduct; and (3) had otherwise violated defendants’ trust. Id. As a consequence, defendants requested that plaintiff take a leave of absence until August 8, 2021. Id. 26. They similarly expressed their discomfort in having plaintiff continue as CEO of RapStudy. Id. If the notice of misconduct signaled defendants’ escalation, their next steps amounted to a declaration of war. On May 11, 2021, Speckman got an alert that his passwords had been changed for all of his RapStudy-related Google accounts. Compl. 27. By extension, plaintiff was effectively locked out of the company’s files and was cut off from responding to any emails as CEO of RapStudy. Id. 28. According to plaintiff, he knows that defendants were responsible because the four defendants have access to RapStudy’s Google account, while every other employee does not. Id. 29. On May 13, 2021, Speckman discovered that he was also locked out of RapStudy’s bank account and his name was removed as an account holder. Compl. 32. Defendant Fabrizio alone is a joint signatory on RapStudy’s bank account. Id. 33. Finally, plaintiff claims defendant Fabrizio removed him from RapStudy’s digital storage site for its program source code, called “GitHub.” Id. 35. Suddenly cut off from accessing this series of accounts — each apparently critical to RapStudy’s operations — Speckman filed a complaint and TRO application on May 25, 2021. Dkt. 1. On June 7, 2021, plaintiff submitted an amended complaint adding McEvoy as a defendant. Dkt. 17. Plaintiff’s complaint as amended alleges seven counts: (I) a request for a declaratory judgment under the Declaratory Judgment Act (“DJA”), 28 U.S.C. §2201, affirming his status as sole incorporator, CEO, and exclusive owner of RapStudy; (II) a violation of the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. §1030; (III) Conversion; and (IV-VII) breaches of contract against Fabrizio, Madhavan, Lee, and McEvoy respectively. On June 8, 2021, defendants cross-moved to dismiss plaintiff’s complaint for failure to state a claim and lack of subject-matter jurisdiction. Dkt. 18. The Court heard oral argument on both motions on June 17, 2021. Text Minute Entry Dated 6/17/2021. This decision follows. III. LEGAL STANDARD A. Motion to Dismiss To survive a motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). That factual matter may be drawn from “the facts alleged in the complaint, documents attached to the complaint as exhibits, and documents incorporated by reference in the complaint.” DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010). Importantly, “the complaint is to be construed liberally, and all reasonable inferences must be drawn in the plaintiff’s favor.” Ginsburg v. City of Ithaca, 839 F. Supp. 2d 537, 540 (N.D.N.Y. 2012) (citing Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002)). If the complaint and its additional materials — when viewed through that pro-plaintiff lens — are not enough to raise the plaintiff’s right to relief on a claim above the speculative level, that claim must be dismissed. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). B. Preliminary Injunction The Second Circuit requires a plaintiff seeking a preliminary injunction to prove four elements: (1) a likelihood of irreparable harm; (2) either a likelihood of success on the merits or sufficiently serious questions as to the merits plus a balance of hardships that tips decidedly in [the movant's] favor; (3) that the balance of hardships tips in [the movant's] favor regardless of the likelihood of success; and (4) that an injunction is in the public interest.4 Chobani, LLC v. Dannon Co., 157 F. Supp. 3d 190, 199 (N.D.N.Y. 2016) (analyzing changes to Second Circuit preliminary injunction standard and comparing existing standards). The movant must make a “clear showing” that each of these elements is met. Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 22 (2008). If a movant’s desired injunction would alter, rather than preserve, the status quo, that injunction is mandatory in nature and subject to heightened scrutiny. Yang v. Kosinski, 960 F.3d 119, 127-28 (2d Cir. 2020). To satisfy that heightened burden, the movant must make a “strong” showing of irreparable harm and demonstrate a “clear or substantial likelihood of success on the merits.” Id. at 128. IV. DISCUSSION Two motions are pending. But if the Court finds merit in defendants’ motion to dismiss, Speckman’s motion for a preliminary injunction falls away as moot. Accordingly, the Court will consider defendants’ motion first and only turn to plaintiff’s afterwards if necessary. A. Plaintiff’s CFAA Claims The CFAA is a federal criminal statute intended to punish frauds enacted through computers. See generally, 18 U.S.C. §1030. But as anyone with an email account can attest, computer-based frauds are decidedly commonplace. To help make sure that digital fraudsters are held accountable without overheating federal prosecutors, Congress included a civil enforcement provision in the CFAA allowing private citizens to bring their own claims under that statute. Id. at §1030(g). Among several other permutations of computer fraud, §1030(a)(4) of the CFAA prohibits: (1) “knowingly and with intent to defraud”; (2) “accessing a protected computer”; (3) “without authorization” or by exceeding whatever authorization was granted; and (4) furthering an intended fraud and obtaining something of value through accessing the protected computer. Scottrade, Inc. v. BroCo Invs., Inc., 774 F. Supp. 2d 573, 583 (S.D.N.Y. 2011) (citing 18 U.S.C. §1030(a)(4)) (cleaned up). Defendants levy several attacks on Speckman’s complaint, but recent developments draw the Court’s focus to the third element of acting “without authorization” or “exceeding whatever authorization was granted.” To meet that element, plaintiff argues that although defendants had the authorization credentials needed to access RapStudy’s Google and GitHub accounts, they exceeded the access he granted them by locking him out in violation of the NDAs. Compl.
