Coastal Electrical Construction LLC v. Jernigan - Trade Secrets Dismissed

Jump To

Top Caption Trial Court Document The text of this document was obtained by analyzing a scanned document and may have typos.

Support FLP

CourtListener is a project of Free
Law Project, a federally-recognized 501(c)(3) non-profit. Members help support our work and get special access to features.

Please become a member today.

Join Free.law Now

April 21, 2026 Get Citation Alerts Download PDF Add Note

Coastal Electrical Construction, LLC v. Kenneth Jernigan and Lineco, LLC

District Court, D. Delaware

• Citations: None known
• Docket Number: 1:25-cv-01295

• Precedential Status: Unknown Status

• Opinion

• Authorities (10)

• Cited By (0)

• Summaries (0)

• Similar Cases (90.2K)

• PDF

Trial Court Document

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
COASTAL ELECTRICAL
CONSTRUCTION, LLC,
Plaintiff,
V. Civil Action No, 25-1295-GBW
KENNETH JERNIGAN and LINECO, LLC,

Defendants.

Benjamin P. Chapple, REED SMITH LLP, Wilmington, Delaware; David W. Long-Daniels,
REED SMITH LLP, Atlanta, Georgia.
Counsel for Plaintiff
Stephanie S. Riley, WOMBLE BOND DICKINSON (US) LLP, Wilmington, Delaware; Richard
JR. Raleigh, Jr. Christopher L. Lockwood, WOMBLE BOND DICKINSON (US) LLP,
Huntsville, Alabama.
Counsel for Defendants

MEMORANDUM OPINION
April 21, 2026
Wilmington, Delaware

Hava
GREGORY B. WILLIAMS
U.S. DISTRICT JUDGE
Plaintiff Coastal Electrical Construction, LLC (“Plaintiff or “Coastal”) filed this action
against Defendants Kenneth Jernigan (“Mr. Jernigan” or “Jernigan”) and Lineco, LLC (“Lineco”)
(together, “Defendants”) on October 22, 2025. D.I. 1. Plaintiff's Complaint purports to allege
against Defendants one federal law claim (misappropriation of trade secrets pursuant to the Defend
Trade Secrets Act) and several state law claims (breaches of the non-compete and non-solicitation
provisions of the purchase agreement, common law tort claims, and unfair competition). D.I. 1
86-116, 161-180. In addition, Plaintiffs Complaint purports to allege against only Mr. Jernigan
various state law claims (multiple breaches of the separation agreement, breach of common law
employee duty of loyalty and fraudulent misrepresentation). D.I. 1 {J 117-160, 181-190.
Pending before the Court is Defendants’ Motion to Dismiss for Failure to State a Claim
(“Defendants’ Motion”) (D.I. 10), which has been fully briefed (D.I. 11; D.I. 14; D.I. 16). After
evaluating Plaintiffs Complaint and both sides briefing, the Court finds that Plaintiff fails to
sufficiently state its federal law claim. Lacking federal question jurisdiction, the Court exercises
its discretion to decline supplemental jurisdiction over the remaining state law claims. Thus, the
Court grants Defendants’ Motion (D.I. 10). Without any viable claims before it, the Court denies-
as-moot Defendants’ Motion to Stay Discovery (D.I. 22). The Court also denies-as-moot
Plaintiff's and Defendants’ Requests for Oral Argument (D.I. 17, D.L. 19).
I. BACKGROUND
The following are factual allegations from Plaintiffs Complaint (the “Complaint”) (D.I. 1)
and are taken as true for the purpose of resolving Defendants’ Motion.
Mr. Jernigan founded Coastal in or around 2014. D.I. 1 919. In 2020, Mr. Jernigan
founded Lineco. Jd. § 20. In August 2020, Mr. Jernigan, his wife (a co-owner of Coastal), and

Lineco executed a Membership Interest Purchase Agreement (“Purchase Agreement”) to sell
Coastal to Barlett Holdings, Inc. (“Bartlett”). Jd. 23. The Purchase Agreement included non-
compete and non-solicitation provisions effective for a period of five years following the August
2020 closing date. Jd. 4] 25, 28-29. The Purchase Agreement further required Defendants to
“keep confidential, not use, not disclose, and take commercially reasonable efforts to prevent the
disclosure of, any Confidential Information.” Jd. 30.
Following the sale of Coastal and until his resignation on August 8, 2023, Mr. Jernigan
held an executive role at Coastal where he retained authority over operations, staffing, and strategic
decisions. Jd. 434. Through his executive role, Mr. Jernigan retained access to Coastal’s
confidential and proprietary business information, including customer identities, pricing, bidding
strategies, operational plans, and new development strategies for customers. Jd. 437. Following
his resignation on August 8, 2023, Mr. Jernigan entered a Separation Agreement where he
acknowledged having access to trade secrets and proprietary business information of Coastal
during his employment and agreed not to use or disclose such information. Id. 41-44. Mr.
Jernigan also agreed not to solicit employees or customers of Coastal for a period of two years.
Id. § 47.
After Mr. Jernigan resigned from Coastal, he continued to secretly operate Lineco, a
competitor of Coastal with overlapping customers and projects. Jd. J] 48-49. Coastal learned that
Mr. Jernigan had also been operating Lineco while he was a Coastal executive, during which
Lineco performed work for customers in Coastal’s service territory. Id. 50. To operate Lineco,
Mr. Jernigan utilized Coastal’s resources and confidential information and solicited Coastal’s
customers and employees. Jd. 4] 53-76.

Il. LEGAL STANDARD
To state a claim on which relief can be granted, a complaint must contain “a short and plain
statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Such
claim must plausibly suggest “facts sufficient to “draw the reasonable inference that the defendant
is liable for the misconduct alleged.’” Doe v. Princeton Univ., 30 F.4th 335, 342 (3d Cir. 2022)
(quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)) (citing Bell Atl. Corp. v. Twombly, 550 U.S.
544, 557 (2007)). “A claim is facially plausible ‘when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.’” Klotz v. Celentano Stadtmauer & Walentowicz LLP, 991 F.3d 458, 462 (3d Cir. 2021)
(quoting Iqbal, 556 U.S. at 678). But the Court will “disregard legal conclusions and recitals of
the elements of a cause of action supported by mere conclusory statements.” Princeton Univ., 30
F.4th at 342 (quoting Davis v. Wells Fargo, 824 F.3d 333, 341 (3d Cir. 2016)).
In evaluating a motion to dismiss, “[t]he issue is not whether a plaintiff will ultimately
prevail but whether the claimant is entitled to offer evidence to support the claims.” Jn re
Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1420 (3d Cir. 1997) (quoting Scheuer □□□
Rhodes, 416 U.S. 232, 236 (1974)). Rule 12(b)(6) requires the Court to “accept all factual
allegations in a complaint as true and take them in the light most favorable to Plaintiff.” Brady v.
Static Media, Civ. No. 23-1078-GBW, 2024 WL 4103719, at *2 (D. Del. Sep. 6, 2024). “A motion
to dismiss ‘may be granted only if, accepting all well-pleaded allegations in the complaint as true,
and viewing them in the light most favorable to plaintiff, plaintiff is not entitled to relief.’”
McCrone v. Acme Markets, 561 F. App’x 169, 172 (3d Cir. 2014) (quoting Burlington Coat
Factory, 114 F.3d at 1420). The “movant bears the burden of demonstrating that the complainant
failed to state a claim upon which relief may be granted.” Abbott Diabetes Care, Inc. v. DexCom,
Inc., C.A. No. 23-239 (KAJ), 2024 WL 2804703, at *1 (D. Del. May 31, 2024).

Ill. DISCUSSION
Plaintiff fails to state a claim under the Defend Trade Secrets Act (““DTSA”) as a matter of
law. The DTSA defines a trade secret as “information that (i) ‘the owner thereof has taken
reasonable measures to keep ... secret’ and (ii) ‘derives independent economic value, actual or
potential, 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 or use of [such]
information.’” Power Integrations, Inc. v. Silanna Semiconductor N. Am., Inc., No. 19-1292-LPS, 2020 WL 3508078, at *2 (D. Del. June 29, 2020) (quoting 18 U.S.C. § 1839 (3)).
To survive a motion to dismiss for failure to state a claim for trade secret misappropriation
under the DTSA, the plaintiff must have alleged “(1) a trade secret (2) connected to interstate [or
foreign] commerce (3) that defendants misappropriated.” JPMorgan Chase Bank, Nat'l Ass’n v.
Argus Info. & Advisory Servs. Inc., 765 F. Supp. 3d 367, 374 (D. Del. 2025) (citing Oakwood
Lab’ys LLC y. Thanoo, 999 F.3d 892, 906 (3d Cir. 2021)); 18 U.S.C. § 1836 (b)(1). A plaintiff
must identify its alleged trade secrets with a “reasonable degree of precision and specificity ...
such that a reasonable jury could find that plaintiff established each statutory element of a trade
secret.” Dow Chem. Canada Inc. v. HRD Corp., 909 F. Supp. 2d 340, 346 (D. Del. 2012).
In Eastman Chemical Co. v. AlphaPet Inc., the court found that the plaintiff alleged
“sufficient factual information to provide adequate notice of the plausible grounds for [p]laintiff's
misappropriation claim” because the complaint made “repeated references” to the specific
“IntegRex™ PET technology” that gave rise to the misappropriation claim. C.A. No. 09-971-
LPS-CJB, 2011 WL 5402767, at *5 (D. Del. Nov. 4, 2011), report and recommendation adopted, 2011 WL 6148637 (D. Del. Dec. 9, 2011). Similarly, in Courier NetWork, Inc. y. Airspace
Technologies, Inc, this Court found the following list of alleged misappropriated trade secrets
sufficient to survive a motion to dismiss:

[Plaintiff's] customer list; rates and terms of service; suppliers;
routings; business policies finances and business plans; financial
projections; customized software; marketing and supplies; shipment
operations; account terms; pricing of sales contracts; names and
addresses of [plaintiff's] employees and other business contacts of
[plaintiff]; and techniques, methods and strategies by which
[plaintiff] develops, markets, distributes and sells its services.
C.A. No. 25-214-GBW, 2026 WL 25755, at *3 (D. Del. Jan. 5, 2026) (cleaned up). Although the
list did not “spell out the details of the trade secret,” the Court found that the plaintiffs had at least
identified “the boundaries within which the secret lies.” Jd. at *4 (quoting Oakwood, 999 F.3d at
906).
In contrast, in Varonis Systems, Inc. v. Guanciale, this Court found insufficient a list of
vague categories of confidential information, including “current and prospective customer details,
business arrangements, price strategies, product information... , product development roadmaps,
product integration capabilities, procedures and protocols for providing technical support and
after-sales services, marketing strategies, and importantly, competitive analyses... .” C.A. No.
25-571-GBW, 2026 WL 370958, at *3 (D. Del. Feb. 10, 2026). In so doing, the Court noted that
the categories of trade secrets alleged provided “almost no guidance as to the nature of the alleged
trade secret[(s)], leaving the defendant [and the Court] to guess at which of the legions of its
unidentified [items] was alleged to have been wrongfully misappropriated.” Jd. (alterations in
original) (quoting Power Integrations, 2020 WL 3508078, at *3).
The similarities between the complaint in Varonis and Plaintiff's Complaint in this action
are salient. In this action, Plaintiff identifies the following list of confidential information that
Defendants allegedly misappropriated: “Coastal’s customer information, customer relationship
management processes, bidding information and strategies, pricing information and strategies,
proposal templates, financial information and strategies, operational plans, and developmental

information and strategies.” D.I. 1 4/88. These categories are even broader than those listed in
Varonis, which the Court found to be “so broad as to be meaningless.” Varonis, 2026 WL 370958,
at *3 (citing Medafor, Inc. v. Starch Med. Inc., No. 09-CV-0441 PJS/FLN, 2009 WL 2163580, at
*1 (D. Minn. July 16, 2009)). Unlike Courier Network, where the complaint described specific
items (e.g., a customer list, account terms, customized software, and financial projections),
Plaintiff's Complaint in this action fails to describe the alleged trade secrets with any level of
specificity. Although Plaintiff describes the general subject matter of its alleged trade secrets (e.g.,
customers, bidding, pricing), Plaintiff does not specify the allegedly misappropriated items related
to that subject matter. Plaintiff merely lists broad categories of “information and strategies,”
“processes,” “plans,” and “templates,” which fails to put Defendants on proper notice of what
items those information and strategies, processes, plans, and templates, could actually be. Thus,
Plaintiff fails to sufficiently state a claim for violation of the DTSA as a matter of law, and the
Court grants Defendants’ Motion.
Without any viable federal cause of action before it, the Court exercises its discretion to
decline supplemental jurisdiction over the remaining state law claims. See Varonis, 2026 WL
370958, at *4 (dismissing a DTSA claim and “declin[ing] supplemental jurisdiction over the
remaining state claims”); Lithero, LLC v. AstraZeneca Pharms. LP, C.A. No. 19-2320-RGA, 2020
WL 4699041, at *2 (D. Del. Aug. 13, 2020) (same).
IV. CONCLUSION
For all the foregoing reasons, the Court grants Defendants’ Motion (D.I. 10). Without any
viable claims before the Court, the Court denies-as-moot Defendants’ Motion to Stay Discovery
(D.I. 22). The Court also denies-as-moot Plaintiff's and Defendants’ Requests for Oral Argument
(D.I. 17, D.I. 19). The Court will issue an Order consistent with this Memorandum Opinion.