Superior Consulting Services, Inc. v. Steeves-Kiss

Filing 43

ORDER by Judge Edward M. Chen Granting 18 Defendant's Motion to Dismiss and 24 Motion for Sanctions. (emcsec, COURT STAFF) (Filed on 3/8/2018)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SUPERIOR CONSULTING SERVICES,

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Case No. 17-cv-06059-EMC

INC.,
Plaintiff,

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v.

ORDER GRANTING DEFENDANT’S
MOTION TO DISMISS AND MOTION
FOR SANCTIONS
Docket Nos. 18, 24

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For the Northern District of California

United States District Court

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JENNIFER L STEEVES-KISS,
Defendant.

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The Court ruled from the bench on March 1, 2018, granting Ms. Steeves-Kiss’ motion to

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dismiss and her motion for sanctions. See Docket Nos. 18, 24. This order summarizes the Court’s

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reasoning, which was stated on the record.

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The motion to dismiss is granted in light of the 2005 confidentiality agreement’s expiration

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clause that freed Procter & Gamble from any obligations regarding the disclosure and use of the

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purportedly confidential information. Superior Consulting identified no cognizable property right

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that survives the expiration clause and no act in contravention of property law. See Silvaco Data

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Sys. v. Intel Corp., 184 Cal. App. 4th 210, 236-40 (2010), as modified on denial of reh’g (May 27,

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2010), disapproved of on other grounds, Kwikset Corp. v. Superior Court, 51 Cal. 4th 310 (2011).

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The disputed information appears to have been plead as a trade secret, but any trade secret

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protection was eviscerated by the expiration provision. Plaintiff failed to identify or establish any

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other basis for a property right and none which survives the unlimited disclosure permitted under

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the 2005 agreement.

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The Court takes judicial notice of the confidentiality agreement in this motion to dismiss

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because its authenticity is not contested and it is referenced in the First Amended Complaint and

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lays the predicate for the other allegations, particularly that of the disputed information’s

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confidentiality. See Lee v. City of Los Angeles, 240 F.3d 668, 688 (9th Cir. 2001). Even if the

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Court did not take the confidentiality agreement into account, the California Uniform Trade

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Secrets Act preempts Plaintiff’s claims. See K.C. Multimedia, Inc. v. Bank of Am. Tech. &

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Operations, Inc., 171 Cal. App. 4th 939, 957-58 (2009); Mattel, Inc. v. MGA Entm’t, Inc. v.

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Consol. Actions, 782 F. Supp. 2d 911, 987 (C.D. Cal. 2010).

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The motion for sanctions is granted under Rule 11. Sanctions are warranted in part

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because the First Amended Complaint misleadingly plead the disputed information was

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confidential. The FAC and ¶ 32 in particular should have contained the critical fact of the

no colorable basis to support a property right and therefore nothing to support the legal claims.

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For the Northern District of California

expiration provision’s existence and terms permitting disclosure. Furthermore, the FAC contained

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United States District Court

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Finally and secondarily, the timing of the complaint’s filing and service – on the eve of Ms.

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Steeves-Kiss’ deposition in the Florida litigation – suggests that Superior Consulting filed suit at

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least in part to intimidate Ms. Steeves-Kiss. This is particularly so given that Plaintiff indicated at

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the motions hearing that it had discovered the factual basis for their complaint four (4) weeks prior

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to filing; yet it took Plaintiff four (4) weeks to file a threadbare complaint. Attorney’s fees shall

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be granted to Ms. Steeves-Kiss. The minute entry details the timeline regarding the fee request.

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See Docket No. 40.

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This order disposes of Docket Nos. 18 and 24.

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IT IS SO ORDERED.

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Dated: March 8, 2017
______________________________________
EDWARD M. CHEN
United States District Judge

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