Plaintiffs Trying to 'Plead Around' Contract in Fraud Claim, Says AT&T

Plaintiffs EDN Global and its CEO, Jerome Edmondson, are seeking a “do-over,” trying to “plead around” a contract at the heart of a fraud claim against AT&T Global Services, said the defendant in a Friday memorandum (docket 3:23-cv-00355) in support of its amended motion to dismiss in U.S. District Court for Northern Texas in Dallas.

No amount of noncontractual “kitchen-sink” claims can avoid the “dispositive effect of the parties’ express agreement” on all of EDN’s claims, said AT&T. The defendant cited U.S. District Court Judge J.P. Boulee for Northern Georgia’s reading that “there is an express agreement ... that covers” the parties’ relationship, when he granted AT&T's motion to transfer the case to the Texas federal court in March (see Ref:2304030038]). The court should reject EDN’s attempt to “plead around the parties’ express agreement and dismiss the Complaint with prejudice," AT&T said.

In January 2018, EDN and AT&T Global signed the AT&T Alliance Program agreement, authorizing EDN to promote and market certain AT&T products and services. A July addendum allowed EDN to promote and submit orders for certain AT&T FirstNet Authority services, said the memorandum. The complaint alleges AT&T terminated the agreement and addendum “for convenience” in 2019 and then hired some of plaintiff’s consultants.

Plaintiffs allege two AT&T employees -- Steve Driscoll and Doug Clark -- required them to put their customer leads and referral lists into AT&T’s Salesforce customer relationship management platform, making their customer leads open and visible to them and other AT&T Solution providers. EDN alleges Driscoll and Clark contacted their customer leads and “conspired" with the other defendants to “appropriate Plaintiffs’ business relationships” and to prevent EDN from being compensated for the “opportunities stolen" by the defendants,” said the memorandum.

Plaintiffs, which said they were “the only African American FirstNet authorized dealer” at that time, claimed AT&T didn’t give them the same sales tools as nonminority providers and dealers, changed rules of engagement and interfered with sales contracts and deals, said the memorandum.

Plaintiffs’ first complaint against AT&T asserted claims for breach of contract and misappropriation of trade secrets for stealing sales leads. An amended complaint, asserted the same two causes of action but named AT&T Global, AT&T Mobility, Driscoll and Clark as defendants, said the memorandum. AT&T filed a motion challenging the attempted joinder of Georgia citizens AT&T Mobility and Driscoll. Plaintiffs voluntarily dismissed the initial action.

In June, EDN filed the current action in Superior Court of Fulton County, Georgia, asserting the same allegations as the first complaint but omitting almost all references to the parties’ agreement, said the memorandum. “In essence, Plaintiffs attempt to assert claims predicated on the same set of facts as the first action, but avoid addressing any terms of the parties’ written Agreement that are applicable to those claims,” the memorandum said.

Plaintiffs' 16 "purported claims" are for (1) tortious interference with contract; (2) tortious interference with business relations; (3) fraud; (4) theft of trade secrets; (5) theft by deception; (6) theft by taking; (7) conversion; (8) violation of the Georgia Racketeer Influenced and Corrupt Organizations Act; (9) breach of fiduciary duty; (10) breach of confidential relationship; (11) aiding and abetting breach of fiduciary duty; (12) civil conspiracy; (13) trespass; (14) intentional infliction of emotional distress; (15) unfair competition; and (16) “surprise.”

EDN’s claims fail for three reasons, said the memorandum: (1) the agreement between EDN and AT&T Global (now AT&T Corp.) governs the parties’ relationships and precludes plaintiffs’ claims, (2) the economic loss rule and trade secret preemption bar EDN’s tort claims and (3) EDN’s trade secret and intentional infliction of emotional distress claims “independently fail as a matter of law,” it said.