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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Case 2:13-cv-00415-TLN-CKD Document 35 Filed 07/18/13 Page 1 of 18 1 2 3 4 5 6 7 IN THE UNITED STATES DISTRICT COURT 8 FOR THE EASTERN DISTRICT OF CALIFORNIA 9 ANHEUSER-BUSCH COMPANIES, LLC, a ) 10 Delaware limited liability ) 2:13-cv-00415-GEB-CKD company, and ANHEUSER-BUSCH, ) 11 LLC, a Missouri limited ) liability company, ) ORDER GRANTING MOTION TO 12 ) DISMISS AND DENYING SPECIAL Plaintiffs, ) MOTION TO STRIKE 13 ) v. ) 14 ) JAMES ALAN CLARK, an individual, ) 15 ) Defendant. ) 16 ________________________________ ) 17 18 Defendant moves for dismissal of Plaintiffs’ return of 19 personal property claim and seeks to strike Plaintiffs’ lawsuit under 1 20 California’s anti-SLAPP statute, Cal. Civ. Proc. Code § 425.16. 2 21 Plaintiffs oppose the motions. 22 1 “SLAPP” is an acronym for a strategic lawsuit against public 23 participation. Oasis W. Realty, LLC v. Goldman, 51 Cal. 4th 811, 815 n.1 (2011). 24 2 Plaintiffs also request oral argument or leave to file a surreply 25 to point out what they characterize as “clearly erroneous statements of 26 facts and law” in Defendant’s reply brief. (Pls.’ Req. for Oral Arg., ECF No. 31, 1:20.) This request is denied since it is unnecessary to 27 disposition of the pending motions. See Guidiville Band of Pomo Indians v. NGV Gaming, Ltd., 531 F.3d 767, 787 (9th Cir. 2008) (Smith, J., 28 dissenting) (approving district court’s refusal to allow surreply deemed (continued...) 1 Case 2:13-cv-00415-TLN-CKD Document 35 Filed 07/18/13 Page 2 of 18 1 I. FACTUAL ALLEGATIONS 2 Plaintiffs allege in their complaint that Defendant left 3 Plaintiffs’ employ in June 2012, (Compl. ¶ 2), and “wrongfully 4 misappropriated, disclosed, disseminated, and/or used [Plaintiffs’] 5 confidential, proprietary, and/or trade secret information, prior to the 6 termination of his employment, and since the termination of his 7 employment.” (Id. ¶ 21.) On February 8, 2013, Plaintiffs “invoked the 8 certification provision of [Defendant’s] Confidentiality Agreements due 9 to [their] belief that [Defendant] violated the[se] provisions . by 10 improperly using or disclosing [Plaintiffs’] confidential, propriety 11 [sic], and/or trade secret information.” (Id. ¶ 22.) Defendant “refused 12 to provide the written [non-disclosure] certification under oath” 13 required by his Confidentiality Agreements. (Id. ¶¶ 22, 23.) 14 II. DISCUSSION 15 A. Supersession by the California Uniform Trade Secrets Act 16 Defendant argues Plaintiffs’ return of personal property claim 17 should be dismissed because it is superseded by the California Uniform 18 Trade Secrets Act (“CUTSA”),3 which was enacted to “make uniform the law” 19 concerning trade secrets. Cal. Civ. Code § 3426.8. Although CUTSA lacks 20 21 2(...continued) unnecessary to the disposition). 22 3 Both parties use the word “preempt” instead of the word 23 “supersede” when discussing CUTSA’s effect on Plaintiffs’ return of personal property claim. (E.g., Def.’s Mot. to Dismiss 1:26; Pls.’ Opp’n 24 to Mot. to Dismiss 1:3.) However, in California, “preemption concerns whether a federal law has superseded a state law or a state law has 25 superseded a local law, not whether one provision of state law has 26 displaced other provisions of state law.” Zengen, Inc. v. Comerica Bank, 41 Cal. 4th 239, 247 n.5 (2007). Accordingly, since CUTSA itself employs 27 the term “supersede” to describe its effect on other California laws, see Cal. Civ. Code § 3426.7(a), the term “supersede” is employed here 28 throughout. See Silvaco Data Sys. v. Intel Corp., 184 Cal. App. 4th 210, 232 n.14 (2010) (adopting the term “supersede” in this context). 2 Case 2:13-cv-00415-TLN-CKD Document 35 Filed 07/18/13 Page 3 of 18 1 an explicit supersession provision, it implicitly supersedes all claims 2 not covered by its savings clauses, which exempt from supersession 3 “contractual remedies,” “criminal remedies,” and “other civil remedies 4 that are not based upon misappropriation of a trade secret.” Cal. Civ. 5 Code § 3426.7(b);4 K.C. Multimedia, Inc. v. Bank of Am. Tech. & 6 Operations, Inc., 171 Cal. App. 4th 939, 954 (2009). Defendant argues 7 that Plaintiffs’ return of personal property claim is subject to CUTSA’s 8 implicit supersession since it is not covered by any of CUTSA’s savings 9 clauses. Plaintiffs counter that their claim is exempted from 10 supersession under § 3426.7(b)(2) because the claim is “not based” in 11 full “upon misappropriation of a trade secret.” (See Pls.’ Opp’n to Mot. 12 to Dismiss, ECF No. 18, 3:8—10 (asserting that “[t]o the extent that the 13 return of personal property claim is not based solely on the 14 misappropriation of trade secrets, it is not subject to preemption”).) 15 Plaintiffs also argue that Defendant’s supersession motion is 16 “premature” since Plaintiffs are “entitled to plead multiple and 17 alternate theories,” and their return of personal property claim is “in 18 addition to” or “an alternative to” their CUTSA trade secrets 19 misappropriation claim. (Id. 1:16—17, 3:5.) 20 The parties advance—and courts have employed—three distinct 21 approaches when defining the scope of Cal. Civ. Code § 3426.7(b)(2)’s 22 exemption from supersession for “other civil remedies that are not based 23 24 25 4 26 CUTSA’s savings clauses state in full: “This title does not affect (1) contractual remedies, whether or not based upon misappropriation of 27 a trade secret, (2) other civil remedies that are not based upon misappropriation of a trade secret, or (3) criminal remedies, whether or 28 not based upon misappropriation of a trade secret.” Cal. Civ. Code § 3426.7(b). 3 Case 2:13-cv-00415-TLN-CKD Document 35 Filed 07/18/13 Page 4 of 18 1 upon misappropriation of a trade secret.”5 Under one approach a claim has 2 been found exempt from supersession by § 3426.7(b)(2) so long as the 3 claim requires the allegation of “something more” than just CUTSA trade 4 secrets misappropriation. E.g., Leatt Corp. v. Innovative Safety Tech., 5 LLC, No. 09-CV-1301-IEG (POR), 2010 WL 2803947, at *6 (S.D. Cal. July 6 15, 2010) (rejecting CUTSA supersession since in their complaint 7 plaintiffs “base their injury not only the theft of their trade secrets, 8 but also on other ‘confidential’ and/or ‘proprietary’ information”) 9 (emphases added); PostX Corp. v. Secure Data in Motion, Inc., No. C 02- 10 04483 SI, 2004 WL 2663518, at *3 (N.D. Cal. Nov. 20, 2004) (denying 11 CUTSA supersession since plaintiff’s common law and CUTSA claims “are 12 not based on precisely the same nucleus of facts,” but involve “new 13 facts” as well) (emphases added). Another approach has found a claim 14 exempt from supersession under § 3426.7(b)(2) unless it is based on the 15 taking of information that is ultimately adjudged to be a trade secret. 16 E.g., Ali v. Fasteneres for Retail, Inc., 544 F. Supp. 2d 1064, 1072 17 (E.D. Cal. 2008) (denying CUTSA supersession dismissal motion since “at 18 this point, it is still unclear how much of the allegedly 19 misappropriated information was a trade secret”). Under this approach, 20 since designation of information as a trade secret involves a “largely 21 factual” inquiry that can rarely be conducted via a dismissal motion, 22 K.C. Multimedia, Inc., 171 Cal. App. 4th at 954, dismissal motions are 23 typically denied as “premature,” Ali, 544 F. Supp. 2d at 1072, or 24 “inappropriate for resolution at th[e dismissal] stage.” Strayfield 25 26 5 Because CUTSA explicitly exempts contractual and criminal remedies 27 from supersession, Cal. Civ. Code § 3426.7(b)(1), (3), contractual and criminal remedies are not discussed here. Thus all references to 28 supersession of claims under CUTSA concern only civil noncontractual claims. 4 Case 2:13-cv-00415-TLN-CKD Document 35 Filed 07/18/13 Page 5 of 18 1 Ltd. v. RF Biocidics, Inc., No. CIV. S-11-2613 LKK/GGH, 2012 WL 170180, 2 at *1 (E.D. Cal. 2011). Other courts have found § 3426.7(b)(2) only 3 saves a claim from supersession if a plaintiff “assert[s] some other 4 basis” beside trade secrets law for a property right in the information 5 at issue. E.g., Silvaco Data Sys. v. Intel Corp., 184 Cal. App. 4th 210, 6 237—39 & n.22 (2010), disapproved of on other grounds by Kwikset Corp. 7 v. Superior Court, 51 Cal. 4th 310, 337 (2011) (setting forth this 8 approach and rejecting the alternative CUTSA supersession approaches, 9 referenced herein as the “premature” and “something more” approaches); 10 K.C. Multimedia, Inc., 171 Cal. App. 4th at 958 (rejecting the 11 “something more” approach). See generally Roger M. Milgrim, Milgrim on 12 Trade Secrets, § 1.01[3][a], at 1.240.14(73)—(75), 1.240.14(78)(a)—(82) 13 (discussing these divergent approaches to supersession generally and 14 noting that courts remain divided on the issue). 15 Here, the success of Defendant’s dismissal motion depends on 16 which approach is employed when determining the CUTSA supersession 17 issue.6 Plaintiffs urge the Court to adopt either the “something more” 18 or the “premature” approach, arguing that either of these approaches 19 warrants denial of Defendant’s dismissal motion. (See Pls.’ Opp’n to 20 Mot. to Dismiss 4:24, 3:8—10 (asserting Defendant’s “motion to dismiss 21 22 6 Plaintiffs’ claim for return of personal property is based 23 essentially on the allegation that Defendant took Plaintiffs’ “confidential, proprietary, and/or trade secret information.” (Compl.
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