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

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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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