Barnett v. Ubimodo - MTD

Case 6:18-cv-00418-MC Document 27 Filed 06/07/18 Page 1 of 13
Michael R. McLane, OSB No. 904435

mmclane@lynchconger.com
Shannon McCabe, OSB No. 143812
smccabe@lynchconger.com
LYNCH CONGER MCLANE, LLP
1567 SW Chandler Avenue, Suite 204
Bend, Oregon 97702
Telephone: 541.383.5857
Facsimile: 541.383.3968
Attorneys for Defendants Ubimodo, Inc., Ubimodo

Insurance LLC, and Ubimodo LTD Canada
UNITED STATES DISTRICT COURT
DISTRICT OF OREGON
EUGENE DIVISION
KELLY A. BARNETT, Case No. 6:18-cv-418-MC
Plaintiff, DEFENDANTS UBIMODO, INC.,

UBIMODO INSURANCE LLC, AND
v. UBIMODO LTD CANADA’S MOTION TO
DISMISS FOR FAILURE TO STATE A
UBIMOCO, INC.; UBIMODO CLAIM AND LACK OF SUBJECT
INSURANCE LLC; UBIMODO LTD MATTER JURISDICTION
CANADA; ITS ADVISORY
BOARD/BOARD OF DIRECTORS;
THE SOTERIA INSTITUTE; ITS
ADVISORY BOARD/BOARD OF Request for Oral Argument by Telephone
DIRECTORS; SCOTT WARNER; Conference
STARR COMPANIES; ARMOUR
RISK MANAGEMENT aka
TREBUCHET HOLDING LLC aka
BEVIDERE; JOINTLY AND
SEVERABLE
Defendants
Page 1 - DEFENDANT UBIMODO’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM AND LACK OF SUBJECT
MATTER JURISDICTION
L YNCH C ONGER M C L ANE LLP
AT T ORNE YS AT LA W
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4831-1598-2147, v. 1 1567 SW CHA ND LE R AVE N UE , S UIT E 204
BE ND, ORE G ON 97702
LOCAL RULE 7-1 CERTIFICATION STATEMENT
Pursuant to LR 7-1(a), counsel for Defendants Ubimodo, Inc.; Ubimodo
Insurance LLC, Ubimodo LTD Canada; its advisory board/board of directors, and Scott Warner
(collectively “Ubimodo”) certifies that they made a good faith effort to confer regarding this
motion. Ubimodo requests oral argument on this motion by telephone conference.
MOTION
Defendant Ubimodo hereby moves to dismiss all claims in this case for lack of
subject matter jurisdiction under Fed R Civ P 12 (b)(1) and (6). The Amended Complaint fails to
allege federal question jurisdiction because no federal law cited by Plaintiff gives rise to a claim
– leaving only state law claims alleged. More specifically, Plaintiff has failed to allege a valid
claim against Ubimodo in the Amended Complaint under state or federal law. In addition, while
the Amended Complaint lists Ubimodo, Inc., Ubimodo Insurance LLC, and Ubimodo LTD
Canada as defendants in the caption and mentions those entities in the Amended Complaint, the
Plaintiff fails to name Ubimodo, Inc. as a defendant in the section listing the four defendants. It
is impossible to tell which claims are being alleged against which specific defendant. As such,
all claims should be dismissed from this action. In support of its motion, Ubimodo respectfully
submits the following memorandum of points and authorities.
INTRODUCTION
Plaintiff initiated this lawsuit on March 9, 2018, and filed an Amended Complaint
on April 27, 2018, alleging under Claim One a violation of “Misappropriation of Trade Secrets,
Failure to Defend Trade Secrets, National Stolen Property Act, Economic Espionage Act,
Conspiracy, Copyright.” Under Claim Two, Plaintiff alleges “Fraud, Employment of
manipulative and deceptive devices, Wire Fraud, Free Speech.” Plaintiff is pro se and indicated
that the court has jurisdiction because a federal question was involved. Plaintiff cites the
following federal law for subject matter jurisdiction: 18 USC 1831, 1832; 18 USC 1312; 18 USC
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514; 17 CFR § 240. 12b-20, 10b-5; 18 USC 1030; 18 USC 1343; Federal Copyright Act; and the
First Amendment to the US Constitution.
For the purposes of this motion, Ubimodo will argue as if the Amended
Complaint properly identifies each defendant but does not waive the argument that the Amended
Complaint should be dismissed against it based on Plaintiff’s failure to properly allege claims
against each specific defendant.
LEGAL STANDARD
The court must dismiss a case if it determines at any time that it lacks subject
matter jurisdiction. Fed R Civ P 12 (h)(3). Under the Constitution federal judicial powers
extend to cases “arising under” the Constitution and the laws and treaties of the United States.
US Const Art III, §2. The party invoking federal jurisdiction bears the burden of establishing
that subject matter jurisdiction exists. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992).
A plaintiff fails to state a claim if the complaint does not allege sufficient facts to
support each element of a cause of action which, if accepted as true, would provide adequate
grounds for relief. Bell Atlantic Corp. v. Twombly, 550 US 544, 554-55 (2007). Although “the
pleading standard under [Fed R Civ P] 8 does not require ‘detailed factual allegations,’ . . . . it
demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft
v. Iqbal, 556, US 662, 678 (2009) (citing Twombly, 550 US at 570). “A pleading that offers
‘labels and conclusions’ or a ‘formulaic recitation of the elements of a cause of action will not
do.’ Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual
enhancement.’” Id. (quoting Twombly, 550 US at 557). Generally, when deciding a motion to
dismiss, a court may not consider any material beyond the pleadings. Branch v. Tunnell, 14 F3d
449, 453 (9th Cir 1994) overruled on other grounds by Galbraith v. Cty. of Santa Clara, 307 F3d
1119 (9th Cir 2002).
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ARGUMENT
First Claim for Relief
Plaintiff alleges under her First Claim for Relief in parenthetical that Defendant
Ubimodo damaged her in six ways. As set forth below, based on Ubimodo’s reading of the
Complaint, Plaintiff does not allege a cause of action under federal law or state law in Claim
One.
a. Misappropriation of Trade Secrets
Plaintiff’s claim of “Misappropriation of Trade Secrets” is a state law claim based
on ORS 646.461, which Plaintiff asserts as the authority for the claim. 1 Because Plaintiff’s
claim against Defendant Ubimodo for allegedly misappropriating a trade secret is a state law
claim, it cannot present the court with a federal question.
As for the state claim under ORS 646.461, the court should dismiss the claim
because Plaintiff did not allege facts sufficient to show that her “Patent Figure 9c” or other
alleged protectible information met the definition of “trade secret” under ORS 646.461:
(4) “Trade secret” means information, including a drawing, cost data, customer
list, formula, pattern, compilation, program, device, method, technique or
process that:
(a) Derives independent economic value, actual or potential, from not being
generally known to the public or to other persons who can obtain
economic value from its disclosure or use; and
(b) Is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.
Ubimodo’s reading of the Amended Complaint does not produce an allegation that “Patent
Figure 9c” or any other protectible information derived independent value from being secret and
was subject to reasonable efforts to maintain its secrecy. Indeed, Plaintiff failed to allege
anything specific that met both criteria.
1
ORS 646.461 to 646.475 is the Uniform Trade Secrets Act. ORS 646.473 states “ORS 646.461 to 646.475
supersede conflicting tort, restitution or other law of Oregon providing civil remedies for misappropriation of a trade
secret.”
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b. Failure to Defend Trade Secrets
Plaintiff’s claim of damages from an alleged “Failure to Defend Trade Secrets” is
also a state law claim. Under the Oregon Uniform Trade Secrets Act, “[a] complainant is
entitled to recover damages adequate to compensate for misappropriation, unless a material and
prejudicial change of position by a defendant prior to acquiring knowledge or reason to know of
the misappropriation renders a monetary recovery inequitable.” ORS 646.465.
“Misappropriation” is defined as:

(a) Acquisition of a trade secret of another by a person who knows
or has reason to know that the trade secret was acquired by
improper means;
(b) Disclosure or use of a trade secret of another without express or
implied consent by a person who used improper means to
acquire knowledge of the trade secret;
(c) Disclosure or use of a trade secret of another without express or
implied consent by a person who, before a material change of
position, knew or had reason to know that it was a trade secret
and that knowledge of it had been acquired by accident or
mistake; or
(d) Disclosure or use of a trade secret of another without express or
implied consent by a person, who at the time of disclosure or
use, knew or had reason to know that the knowledge of the trade
secret was:
(A) Derived from or through a person who had utilized improper
means to acquire it;
(B) Acquired under circumstances giving rise to a duty to
maintain its secrecy or limit its use; or
(C) Derived from or through a person who owed a duty to the
person seeking relief to maintain its secrecy or limit its use.
ORS 646.461(2) (emphasis added).
“‘Improper means’ includes theft, bribery, misrepresentation, breach or inducement of a breach
of a duty to maintain secrecy or espionage through electronic or other means.” ORS 646.461(1)
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(emphasis added). Because Plaintiff’s claim against Ubimodo for allegedly failing to defend a
trade secret is a state law claim, it cannot present the court with a federal question.
Further, as mentioned above, Plaintiff has failed to allege a claim under ORS
646.461 because she does not plead a specific protectible interest that was both private and of
independent economic value due to that privacy.
c. National Stolen Property Act
Plaintiff claims she was damaged from an alleged violation by Ubimodo of the
National Stolen Property Act (NSPA), 18 U.S.C. §§ 2311–2323. Plaintiff did not list the NSPA
in her Complaint as the basis for giving the court federal question jurisdiction. Nevertheless, the
Plaintiff cannot maintain a civil action against Ubimodo for an alleged violation of the federal
criminal code and, specifically, the NSPA. As such, the Plaintiff’s claim for a violation of the
NSPA should be dismissed.
d. Economic Espionage Act
Plaintiff claims she was damaged from an alleged violation of Economic
Espionage Act (EEA), citing as authority 18 USC §§ 1831 and 1832. The two statutes cited by
Plaintiff are criminal statutes that don’t specifically give rise to a civil remedy for her alleged
damages. As with 9 other criminal code claims that Plaintiff has in her Amended Complaint, the
EEA is a part of the federal criminal code and Plaintiff, as a civilian, cannot bring criminal
claims in federal court.
Nevertheless, the EEA defines the term "economic espionage" as the theft of a
trade secret with the intent or knowledge “that the offense will benefit any foreign government,
foreign instrumentality, or foreign agent[.]” 18 USC § 1831(a). 2 Plaintiff has not alleged that
Ubimodo acted intending or knowing “that the offense will benefit any foreign government,
2
The term “foreign instrumentality” means any agency, bureau, ministry, component, institution, association, or any
legal, commercial, or business organization, corporation, firm, or entity that is substantially owned, controlled,
sponsored, commanded, managed, or dominated by a foreign government. 18 USC § 1839 (1).
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foreign instrumentality, or foreign agent[.]” 18 USC § 1831(a). Indeed, Plaintiff’s allegation is
routed in that Ubimodo had a profit motive for all of its actions. Congress did not create the
EEA to punish illegal engagement with foreign customers; the EEA prohibits theft for the benefit
of foreign governments.
Further, under 18 USC § 1832, the Plaintiff fails to allege a claim because she did
not allege that her protectible information derived independent economic value “from not being
generally known to, and not being readily ascertainable through proper means by, another person
who can obtain economic value from the disclosure of use of the information.” 18 USC §
1839(3). 18 USC § 1839(3) reads very similar to ORS 646.461(4), and its variation does not
alter the same conclusion. Without showing both a specific protectible information that has
economic value and is not otherwise known to the public, the Plaintiff cannot maintain a civil
action under the EEA.
Because Plaintiff failed to allege an EEA claim, she cannot maintain an action
against Defendant Ubimodo for violation of the EEA and that claim should be dismissed.
e. Conspiracy
None of the federal authority listed in the Amended Complaint for federal
question jurisdiction by the court address a claim for conspiracy. There are, based on Ubimodo’s
understanding of the federal criminal code, dozens of statutes that prohibit various conspiracies.
However, Plaintiff is not authorized to bring a civil action for a criminal conspiracy. Certainly,
the Amended Complaint fails to allege a civil cause of action for conspiracy and as such the
claim should be dismissed.
f. Copyright
Plaintiff alleges a violation of the Federal Copyright Act (FCA) in her Amended
Complaint as one of the bases of the court’s federal question jurisdiction. The FCA provides that
“no civil action for infringement of the copyright in any United States work shall be instituted
until preregistration or registration of the copyright claim has been made in accordance with this
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title. 17 USC § 411(a). Plaintiff alleges that she both filed for and received registration of
“Patent Figure 9c” as a copyright on May 17, 2016. Amended Complaint ¶¶ 1 and 44.
The FCA states specifically that the “issuance of a design patent under title 35,
United States Code, for an original design for an article of manufacture shall terminate any
protection of the original design under this chapter.” 17 USC § 1329. In paragraph 1 of the
Amended Complaint, Plaintiff alleges that “Plaintiff, Kelly A Vanscoy Barnett is the rightful
owner of a United States Patent Serial No. US 9,398,880 82 issued on July 26, 2016.” The
Plaintiff alleges that “[i]t became apparent that Dr. Alain Anyouzoa and others were attempting
to invent around her Patent Figure 9 (also copyrighted) for software code, databases and
Application Programming Interface (API).” Amended Complaint, ¶ 25. Paragraph 94 of the
Amended Complaint shows that the Plaintiff is seeking to recover under the FCA for what is
alleged to be patent infringement or an alleged trade secret violation. “Based on facts and
circumstances, the Plaintiff believes the defendants reduced at a minimum, her copyright to
practice as part of their Smart Safety App being sold with their insurance policies of Starr
Companies.” Amended Complaint, ¶ 94.
Further, Plaintiff alleges in Paragraph 44 of the Amended Complaint that “the
Plaintiff registered her copyright at the US Copyright Office on 5-17-2016” as a defensive
measure to an alleged “improper use of the Plaintiff’s intellectual property by Ubimodo and The
Soteria Institute.” Simply put, the Plaintiff cannot obtain FCA protection of her patent by
registering a figure to that patent as a copyright work. Therefore, the FCA claim of Plaintiff
should be dismissed.
Second Claim for Relief
Plaintiff alleges under her Second Claim for Relief in parenthetical that Ubimodo
damaged her in four ways. As set forth below, based on Ubimodo’s reading of the Amended
Complaint, Plaintiff does not allege a cause of action under federal law in Claim Two.
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a. Fraud
Common law fraud is a state-law based claim sounding in tort. Plaintiff’s
Amended Complaint does not allege common law fraud under the Second Claim for Relief,
specifically how Plaintiff was damaged by an alleged misrepresentation intentionally made. As
shown below, Plaintiff did not purchase any security sold by Ubimodo.
As to federal law, Plaintiff cites to three statutes that are not otherwise addressed
below. The first, 18 USC § 1030, is a criminal prohibition against fraud in connection to
computers. That statute does not give authority to a civil litigant to bring an action in court.
Again, Plaintiff cannot bring a civil action against a defendant in federal court for violating a
criminal statute unless there is specific authorization from Congress to do so. Therefore, any
action under 18 USC § 1030 must be dismissed.
Second, the Plaintiff cited as federal question jurisdiction for the court 18 USC §
514 (Fictitious Obligations). That statute does not give authority to a civil litigant to bring an
action in court. Therefore, any action under 18 USC § 514 must be dismissed.
Third, the Plaintiff cited as federal question jurisdiction for the court 18 USC §
1312. That statute does not exist. Therefore, any action under 18 USC § 1312 must be
dismissed.
Fourth, the Plaintiff cited to ORS 165.543 as federal question jurisdiction for the
court. While ORS 165.543 does not give rise to federal jurisdiction independently, it should also
be dismissed because it is a part of Oregon’s state criminal code. As discussed previously,
Plaintiff cannot bring an action as a civil litigant to enforce a criminal code violation. As such,
any claim under ORS 165.543 should be dismissed.
b. Employment of manipulative and deceptive devices
Securities regulations contain a prohibition on the use of manipulative or
deceptive devices relating to the purchase and sale of securities. Plaintiff listed as the basis of
federal question jurisdiction two such regulations, 17 CFR § 240. 12b-20, 10b-5.
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To establish her claim under Rule 10b-5, Plaintiff must show that she is a
purchaser of the security. S.E.C. v. Rana Research, Inc., 8 F3d 1358, 1364 (9th Cir 1993) (“only
an actual purchaser or seller may maintain a private damage action under Rule 10b–5”). There is
no such allegation in the Complaint. As well, 17 CFR § 240. 12b-20 states:
In addition to the information expressly required to be included in a

statement or report, there shall be added such further material
information, if any, as may be necessary to make the required
statements, in the light of the circumstances under which they are
made not misleading.
Because Plaintiff is not a purchaser of a security offered by Ubimodo, she cannot maintain any
action for an alleged violation of 17 CFR § 240. 12b-20.
Because Plaintiff has not alleged in the Complaint that she has standing to bring
an action for damages arising from the employment of manipulative and deceptive devices, the
claim against Defendant Ubimodo must be dismissed.
As with Rule 10b and 12b, any action under Oregon securities law must be
dismissed. Plaintiff cited to ORS 59.135 as a basis for her Amended Complaint. ORS 59.137 is
clear that a plaintiff, in order to recover damages under ORS 59.135, must prove that he or she is
a purchaser or seller of securities. Because Plaintiff failed to make any such allegation, her
action under ORS chapter 59 must be dismissed.
c. Wire Fraud
The Plaintiff states in her Complaint that she was damaged by an alleged wire
fraud committed by Ubimodo; the Amended Complaint lists the Wire Fraud criminal statute, 18
USC § 1343, as giving the court federal question jurisdiction. Nothing in Chapter 63 of the
federal criminal code, which includes Wire Fraud, gives Plaintiff authority to bring this civil
action in federal court. As discussed previously, Plaintiff cannot bring a civil action against a
defendant in federal court for violating a criminal statute unless there is specific authorization
from Congress to do so. Therefore, any action under 18 USC § 1343 must be dismissed.
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d. Free Speech
Plaintiff cited the First Amendment to the US Constitution as the basis for her
dispute in federal law as it concerns an alleged violation of her rights to free speech. There is no
allegation that Ubimodo did any act under the color of state law, or that it is a public entity. As
such, Plaintiff cannot maintain an action for a violation of the First Amendment. The Bill of
Rights only restrains government actors. In order for Ubimodo to be liable for violating
Plaintiff’s First Amendment rights, Plaintiff must allege that Ubimodo was acting under color of
state law. See Lee v. Katz, 276 F3d 550, 554-55 (9th Cir 2002) (“when private individuals or
groups are endowed by the State with powers or functions governmental in nature, they become
agencies or instrumentalities of the State and subject to its constitutional limitations.”).
The same would be true with regard to any free speech claims under the Oregon
Constitution Article 1, Section 8, which Plaintiff cites as a claim under her Amended Complaint.
Any such claim should be dismissed, because there is no allegation that any Ubimodo defendant
acted under color of state law or acted as a state agent.
In sum, as with the First Claim for Relief, the Complaint does not present a valid
federal claim or state claim in the Second Claim for Relief.
//
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CONCLUSION
This case should be dismissed because the court lacks subject matter jurisdiction.
The Plaintiff fails to raise a question of federal law because no federal claim alleged by Plaintiff
is valid. As well, Plaintiff fails to state an Oregon law-based claim.
Dated: June 7, 2018.
LYNCH CONGER MCLANE, LLP
/s/ Michael R. McLane
Michael R. McLane, OSB No. 904435

mmclane@lynchconger.com
Shannon McCabe, OSB No. 143812
smccabe@lynchconger.com
Phone: 541.383.5857
Fax: 541.383.3968
Attorneys for Defendant Ubimodo
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CERTIFICATE OF SERVICE
I hereby certify that I served the foregoing DEFENDANTS UBIMODO, INC.,
UBIMODO INSURANCE LLC, AND UBIMODO LTD CANADA’S MOTION TO
DISMISS FOR FAILURE TO STATE A CLAIM AND LACK OF SUBJECT MATTER
JURISDICTION on:
Kelly A. Barnett
P.O. Box 5362
Bend, Oregon 97708
by the following indicated method or methods on the date set forth below:
 CM/ECF system transmission.
 E-mail. As required by Local Rule 5.2, any interrogatories, requests for

production, or requests for admission were e-mailed in Word or WordPerfect
format, not in PDF, unless otherwise agreed to by the parties.
 Facsimile communication device.
 First-class mail, postage prepaid.
 Hand-delivery.
 Overnight courier, delivery prepaid.
DATED this 7th day of June, 2018.
/s/ Michael R. McLane
Attorneys for Defendant Ubimodo.
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Case 6:18-cv-00418-MC Document 27 Filed 06/07/18 Page 1 of 13

Michael R. McLane, OSB No. 904435

Attorneys for Defendants Ubimodo, Inc., Ubimodo

UNITED STATES DISTRICT COURT

KELLY A. BARNETT, Case No. 6:18-cv-418-MC

Plaintiff, DEFENDANTS UBIMODO, INC.,

LOCAL RULE 7-1 CERTIFICATION STATEMENT

Pursuant to LR 7-1(a), counsel for Defendants Ubimodo, Inc.; Ubimodo

motion. Ubimodo requests oral argument on this motion by telephone conference.

submits the following memorandum of points and authorities.

Conspiracy, Copyright.” Under Claim Two, Plaintiff alleges “Fraud, Employment of

First Amendment to the US Constitution.

against each specific defendant.

demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft

1119 (9th Cir 2002).

First Claim for Relief

a. Misappropriation of Trade Secrets

Plaintiff’s claim of “Misappropriation of Trade Secrets” is a state law claim based

claim, it cannot present the court with a federal question.

anything specific that met both criteria.

b. Failure to Defend Trade Secrets

Plaintiff’s claim of damages from an alleged “Failure to Defend Trade Secrets” is

prejudicial change of position by a defendant prior to acquiring knowledge or reason to know of

the misappropriation renders a monetary recovery inequitable.” ORS 646.465.

“Misappropriation” is defined as:

“‘Improper means’ includes theft, bribery, misrepresentation, breach or inducement of a breach

independent economic value due to that privacy.

c. National Stolen Property Act

NSPA should be dismissed.

d. Economic Espionage Act

Plaintiff claims she was damaged from an alleged violation of Economic

claims in federal court.

foreign instrumentality, or foreign agent[.]” 18 USC § 1831(a). Indeed, Plaintiff’s allegation is

action under the EEA.

claim should be dismissed.

Application Programming Interface (API).” Amended Complaint, ¶ 25. Paragraph 94 of the

Companies.” Amended Complaint, ¶ 94.

Further, Plaintiff alleges in Paragraph 44 of the Amended Complaint that “the

Plaintiff registered her copyright at the US Copyright Office on 5-17-2016” as a defensive

Second Claim for Relief

Common law fraud is a state-law based claim sounding in tort. Plaintiff’s

specifically how Plaintiff was damaged by an alleged misrepresentation intentionally made. As

action under 18 USC § 1030 must be dismissed.

be dismissed because it is a part of Oregon’s state criminal code. As discussed previously,

any claim under ORS 165.543 should be dismissed.

b. Employment of manipulative and deceptive devices

Securities regulations contain a prohibition on the use of manipulative or

no such allegation in the Complaint. As well, 17 CFR § 240. 12b-20 states:

In addition to the information expressly required to be included in a

action for an alleged violation of 17 CFR § 240. 12b-20.

claim against Defendant Ubimodo must be dismissed.

action under ORS chapter 59 must be dismissed.

agencies or instrumentalities of the State and subject to its constitutional limitations.”).

acted under color of state law or acted as a state agent.

federal claim or state claim in the Second Claim for Relief.

is valid. As well, Plaintiff fails to state an Oregon law-based claim.

Dated: June 7, 2018.

LYNCH CONGER MCLANE, LLP

/s/ Michael R. McLane

Michael R. McLane, OSB No. 904435

Attorneys for Defendant Ubimodo

I hereby certify that I served the foregoing DEFENDANTS UBIMODO, INC.,

UBIMODO INSURANCE LLC, AND UBIMODO LTD CANADA’S MOTION TO

DISMISS FOR FAILURE TO STATE A CLAIM AND LACK OF SUBJECT MATTER