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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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 SUPERIOR CONSULTING SERVICES, 8 Case No. 17-cv-06059-EMC INC., Plaintiff, 9 10 v. ORDER GRANTING DEFENDANT’S MOTION TO DISMISS AND MOTION FOR SANCTIONS Docket Nos. 18, 24 12 For the Northern District of California United States District Court 11 JENNIFER L STEEVES-KISS, Defendant. 13 14 The Court ruled from the bench on March 1, 2018, granting Ms. Steeves-Kiss’ motion to 15 dismiss and her motion for sanctions. See Docket Nos. 18, 24. This order summarizes the Court’s 16 reasoning, which was stated on the record. 17 The motion to dismiss is granted in light of the 2005 confidentiality agreement’s expiration 18 clause that freed Procter & Gamble from any obligations regarding the disclosure and use of the 19 purportedly confidential information. Superior Consulting identified no cognizable property right 20 that survives the expiration clause and no act in contravention of property law. See Silvaco Data 21 Sys. v. Intel Corp., 184 Cal. App. 4th 210, 236-40 (2010), as modified on denial of reh’g (May 27, 22 2010), disapproved of on other grounds, Kwikset Corp. v. Superior Court, 51 Cal. 4th 310 (2011). 23 The disputed information appears to have been plead as a trade secret, but any trade secret 24 protection was eviscerated by the expiration provision. Plaintiff failed to identify or establish any 25 other basis for a property right and none which survives the unlimited disclosure permitted under 26 the 2005 agreement. 27 The Court takes judicial notice of the confidentiality agreement in this motion to dismiss 28 because its authenticity is not contested and it is referenced in the First Amended Complaint and 1 lays the predicate for the other allegations, particularly that of the disputed information’s 2 confidentiality. See Lee v. City of Los Angeles, 240 F.3d 668, 688 (9th Cir. 2001). Even if the 3 Court did not take the confidentiality agreement into account, the California Uniform Trade 4 Secrets Act preempts Plaintiff’s claims. See K.C. Multimedia, Inc. v. Bank of Am. Tech. & 5 Operations, Inc., 171 Cal. App. 4th 939, 957-58 (2009); Mattel, Inc. v. MGA Entm’t, Inc. v. 6 Consol. Actions, 782 F. Supp. 2d 911, 987 (C.D. Cal. 2010). 7 The motion for sanctions is granted under Rule 11. Sanctions are warranted in part 8 because the First Amended Complaint misleadingly plead the disputed information was 9 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. 12 For the Northern District of California expiration provision’s existence and terms permitting disclosure. Furthermore, the FAC contained 11 United States District Court 10 Finally and secondarily, the timing of the complaint’s filing and service – on the eve of Ms. 13 Steeves-Kiss’ deposition in the Florida litigation – suggests that Superior Consulting filed suit at 14 least in part to intimidate Ms. Steeves-Kiss. This is particularly so given that Plaintiff indicated at 15 the motions hearing that it had discovered the factual basis for their complaint four (4) weeks prior 16 to filing; yet it took Plaintiff four (4) weeks to file a threadbare complaint. Attorney’s fees shall 17 be granted to Ms. Steeves-Kiss. The minute entry details the timeline regarding the fee request. 18 See Docket No. 40. 19 This order disposes of Docket Nos. 18 and 24. 20 21 IT IS SO ORDERED. 22 23 24 25 Dated: March 8, 2017 ______________________________________ EDWARD M. CHEN United States District Judge 26 27 28 2

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