Syngenta Seeds, LLC v. Warner
Filing
159
OPINION AND ORDER: Defendants Farmer's Business Network and Joshua Sleper's Motion to Dismiss 61 is GRANTED IN PART and DENIED IN PART. See Order for specifics. (Written Opinion). Signed by Judge Eric C. Tostrud on 2/22/2021. (RMM)
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UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Syngenta Seeds, LLC,
File No. 20-cv-1428 (ECT/BRT)
Plaintiff,
v.
OPINION AND ORDER
Todd Warner, Joshua Sleper, and Farmer’s
Business Network,
Defendants.
________________________________________________________________________
Kerry L. Bundy, Bryan K. Washburn, Michael M. Sawers, and Matthew B. Kilby, Faegre
Drinker Biddle & Reath LLP, Minneapolis, MN; Matthew Burkhart, Faegre Drinker Biddle
& Reath LLP, Indianapolis, IN, for Plaintiff Syngenta Seeds, LLC.
Daniel J. Supalla and Joel D. O’Malley, Nilan Johnson Lewis P.A., Minneapolis, MN, for
Defendant Todd Warner.
Bruce H. Little, Autumn Gear, and Timothy Y. Wong, Barnes & Thornburg LLP,
Minneapolis, MN, for Defendant Joshua Sleper.
Claude M. Stern and Kaitlin E. Keohane, Quinn Emanuel Urquhart & Sullivan LLP,
Redwood Shores, CA; Ryan Landes, Quinn Emanuel Urquhart & Sullivan LLP, Los
Angeles, CA; Caitlin Gehlen, Dean A. LeDoux, and Loren L. Hansen, Lathrop GPM LLP,
Minneapolis, MN, for Defendant Farmer’s Business Network.
Syngenta Seeds, LLC believes that two of its former employees—Todd Warner and
Joshua Sleper—took its confidential business information and trade secrets and used them
to help a competitor called Farmer’s Business Network (“FBN”). Syngenta originally filed
this lawsuit against Warner only, but after some expedited discovery, it amended its
complaint to add Sleper and FBN as Defendants. It now claims that Warner and Sleper
breached their contractual obligations; that FBN violated the California Unfair
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Competition Law, Cal. Bus. & Prof. Code § 17200; and that all three Defendants
misappropriated its trade secrets, tortiously interfered with its contractual relations, and
engaged in a civil conspiracy to harm it. See Second Am. Compl. ¶¶ 90–139 [ECF No.
69]. Warner filed an answer to the Amended Complaint, but Defendants Sleper and FBN
moved to dismiss the counts against them for failure to state a claim. ECF No. 61; see Fed.
R. Civ. P. 12(b)(6).
Defendants’ motion will be granted in part and denied in part. Syngenta has
plausibly alleged that Sleper breached his employment contract and that Sleper and FBN
misappropriated its trade secrets and engaged in a civil conspiracy. The motion will
therefore be denied with respect to those claims. Syngenta has not plausibly alleged that
FBN and Sleper tortiously interfered with its contractual relations, and its claim under the
California Unfair Competition Law is preempted. Those claims will be dismissed without
prejudice to give Syngenta an opportunity to amend its complaint.
I1
A
Syngenta is an “agtech company” that develops and produces seeds and “crop
protection innovations, including hybrid varieties and biotech crops.” Second Am. Compl.
¶ 9. The goal of its business is to produce new varieties of seeds that maximize desirable
genetic characteristics and minimize undesirable ones. Id. ¶¶ 19–20, 27. To do this, it
1
In accordance with the standards governing a motion under Rule 12(b)(6), and
unless otherwise noted, the facts are drawn entirely from Plaintiff’s Second Amended
Complaint. See Gorog v. Best Buy Co., 760 F.3d 787, 792 (8th Cir. 2014).
2
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interbreeds “parent plants” and evaluates the resulting progeny, sometimes over “several
years and across a wide range of environments.” Id. ¶¶ 20, 22. It then selects the best
progeny for release on the market, “for use in hybrid seed production,” or for use “as a
parental line in further breeding efforts.” Id. ¶ 22. After expending “a considerable amount
of time and effort and large sums of money,” Syngenta has developed “a diverse and
valuable germplasm pool and commercially valuable seeds.” Id. ¶ 26.
Syngenta maintains a great deal of valuable information related to this process. Id.
¶ 24. Most notably, this includes “genetic data” for the “millions of different varieties” of
seeds in its catalogue, as well as
pedigree information; genetic maps; stage in pipeline;
performance (yield) data; general combining ability of earlystage lines; molecular marker (genotyping) data; data
generated from pan-genomic analytics using DNA sequence
data; trial data; results of analytics; characterization of
Syngenta’s proprietary Family Based Association Mapping;
genetic modifications of seeds; integration of genetic
modifications into Syngenta’s germplasm; seed breeding
processes and procedures; seed testing data; strategic plans for
future lines of seeds; and the performance of current and future
products.
Id. ¶¶ 23–24. Syngenta also uses “proprietary methods” to “materially accelerate[] its
breeding process beyond industry standards”; “internal modeling techniques and costoptimization strategies”; and “internal financial information” that describes how best to
allocate research-and-development resources. Id. ¶¶ 30–31.
3
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Syngenta takes a number of measures to ensure that its information is “maintained
in confidence.”2 Id. ¶ 21. For example, it limits visitor access in its buildings and requires
key cards for entry. Id. ¶ 77. It stores its data on “secure servers” and limited-access
“cloud-based storage systems.” Id. ¶¶ 77–78. As discussed in more detail below, Syngenta
requires its employees to sign nondisclosure agreements, but it also documents its
confidentiality policies in writing elsewhere, including an “Employee Handbook,” a
“Security Code of Practice,” and a “Code of Conduct.” Id. ¶¶ 77, 80–82. Employees
undergo an annual training on the company’s confidentiality policies, must acknowledge
their understanding of these policies each time they access Syngenta’s network and
computers, and must “formally re-acknowledge their confidentiality obligations” upon
departure from the company. Id. ¶¶ 77, 83–84.
B
This dispute involves the alleged conduct of two former Syngenta employees: Todd
Warner and Joshua Sleper. Warner, a Minnesota resident, was a “leader in Syngenta’s
research and development division,” serving most recently as the “Head of Field Analytics”
and one of four members of a “Quantitative Breeding Leadership Team.” Id. ¶¶ 10–11,
42. In those roles, he “managed dozens of ongoing Syngenta genetic projects, including
experimental breeding, seed testing, data, analysis, trialing, and results.”
Id. ¶ 41.
Unsurprisingly, he had access both to a significant amount of confidential data and to the
company’s “long-term strategic plan.” Id. ¶¶ 39–40, 42–43.
2
Syngenta patents—i.e., publicly discloses—“some of its seed technology,” but not
its “hybrids or . . . information about how they are developed.” Id. ¶ 87.
4
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Sleper, also a Minnesota resident, was a research and development scientist on
Syngenta’s “Genomic Prediction Team,” which involved “delivering novel validated
genomic prediction methods and tools for analysis.” Id. ¶ 12. This gave him “unlimited
access” to “data on germplasm and traits.” Id. ¶ 44. Although he worked out of Minnesota,
he “would at times travel” to Syngenta’s “primary seeds research facility” in North
Carolina. Id. ¶ 25.
Both men signed “identical” Employment Agreements with Syngenta. Id. ¶¶ 32–
33. Those agreements contain three provisions that are relevant to this case. The first was
a non-compete provision, which generally prohibited employees from “engag[ing],”
“directly or indirectly, as principal, agent, [or] consultant,” in the same type of “Business”
as Syngenta during their employment and for one year thereafter. Landes Aff., Exs. A, B
¶¶ 5(c), 11, 13 (“Employment Agreement”) [ECF Nos. 66-1, 66-2]; see Second Am.
Compl. ¶ 35 n.2.3
The second was a nondisclosure provision, which required employees to “keep and
maintain” a defined subset of “Confidential Information in strictest confidence” and,
except as required for their assigned work, to refrain from “us[ing],” “publish[ing],” or
“disclos[ing]” “any information, knowledge or data relating to the Company” or “owned
by, controlled by or in the possession of the Company.” Employment Agreement ¶ 6(a);
3
Defendants attached the full Employment Agreements to a request for judicial
notice. ECF Nos. 64–66. It is appropriate to consider the Agreements without converting
Defendants’ motion into one for summary judgment because the Agreements are
“contemplated by [and] expressly mentioned in the complaint.” Dittmer Props., L.P. v.
F.D.I.C., 708 F.3d 1011, 1021 (8th Cir. 2013).
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Second Am. Compl. ¶ 36. “Confidential Information” was defined elsewhere to include a
long list of items ranging from “product or service information” to “trade secrets” to “fees,
costs and pricing structures” and “all similar and related information in whatever form.”
Second Am. Compl. ¶ 33 n.1.
The third was a provision requiring employees to return certain company property
upon the termination of employment. Employment Agreement ¶ 14(a); Second Am.
Compl. ¶ 37. This requirement applied to all “documents, whether or not obtained from
[Syngenta], which pertain to [Syngenta], contain Confidential Information or were
received or used by [the e]mployee in connection with [his] employment[.]” Id.
C
In early 2019, Warner and Sleper began planning to leave Syngenta to join a
competitor called Farmer’s Business Network, a Delaware corporation headquartered in
California. Second Am. Compl. ¶¶ 13, 45. By May of that year, Warner was in touch with
Ron Wulfkuhle, a former Syngenta employee who had become the head of FBN’s Seed
R&D Department. Id. ¶ 46. Warner wrote to Wulfkuhle that he was “interest[ed] in the
opportunity to setup a cutting edge molecular breeding and modeling team,” that he and
Sleper had worked together to create the systems currently in place at Syngenta, and that
they needed to “get things moving as fast as possible to develop new germplasm to support
FBN farmers.” Id. ¶ 47.
These initial contacts led to a meeting between Warner, Sleper, and Wulfkuhle at a
restaurant in Albert Lea, Minnesota, in June 2019, while both Warner and Sleper were still
employed at Syngenta. Ahead of the meeting, Warner wrote that he and Sleper could
6
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“share the vision about how we can jump start early stage breeding at FBN.” Id. ¶ 49.
After the meeting, which lasted “a couple of hours,” Wulfkuhle wrote to another FBN
employee that Warner and Sleper had “great ideas about how to bring genomics and
phenomics concepts to life . . . to outperform the multinationals.” Id. ¶ 50. According to
Syngenta, these communications indicate that Warner and Sleper “provided FBN with
Syngenta Confidential Information” at the meeting. Id.
In the hours and days after the Albert Lea meeting, Sleper “accessed” two types of
information, apparently from the Syngenta network: (1) “information related to breeding
values and genotyping” and (2) “early-stage breeding information.” Id. ¶¶ 52–53. Both
are relevant for starting a seed breeding program. See id. A few days later, Warner and
Sleper sent Wulfkuhle an email with the subject line, “Seed R&D Plans,” in which they
“disclosed Syngenta confidential cost structures” that would allegedly help FBN create a
seed breeding program.
Id. ¶ 54.
Specifically, they attached a PDF entitled
“BreedingPlanCosts,” which allegedly “included detailed Syngenta Confidential
Information about developing germplasm and accelerating genetic gain beyond industry
standards.” Id. ¶ 55. The PDF appears to describe, in general terms, strategies and cost
allocations for a hypothetical breeding program. See Sawers Decl., Ex. A [ECF No. 72].4
The “concepts” in the document were allegedly a “copycat of the early-stage breeding”
information that Sleper accessed a few days earlier. Id. ¶ 56.
4
The PDF, which Syngenta submitted as an exhibit when it filed its response brief,
is also appropriate to consider because it is “contemplated by [and] expressly mentioned in
the complaint.” Dittmer Props., L.P., 708 F.3d at 1021.
7
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Over the next several months, Warner and Sleper continued to work for Syngenta
but kept in touch with FBN. In text messages between the two men in October 2019, Sleper
wrote that “no one gets how much we know”; asked Warner about the expiration date for
a particular patent; and suggested that they “find some more data.” Id. ¶¶ 57–59. In late
2019 and early 2020, Warner officially interviewed for a position with FBN. Id. ¶ 61.
Shortly thereafter, FBN employees presented a “breeding plan” to the company’s chief
executive officer and chief financial officer that Syngenta believes contained confidential
Syngenta information that Warner and Sleper had provided. Id. ¶ 62.
As contacts with FBN continued, both Warner and Sleper allegedly copied some
Syngenta information to external storage devices. Most relevant to this motion, in April
2020, Sleper inserted USB storage devices into his Syngenta-issued laptop and then
“navigated between his local hard drive and the external USB storage devices,” which is
“behavior consistent with copying data.” Id. ¶ 70. Syngenta alleges that Sleper and Warner
copied and took at least the following information:
a. Collection of trade secret information about Syngenta corn and
soy germplasm. . . .
b. Datasets about Syngenta’s North America breeding program
for corn and soy.
c. Syngenta germplasm information, including information about
seed pedigree, genetic maps, the pipeline state of the seeds,
performance (yield) data, general combining ability of earlystage lines, molecular marker (genotyping) data, and additional
genotyping data generated from pan-genomic analytics using
DNA sequence data.
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d. Corn drought program for Syngenta Artesian product pipeline,
including trial data, results of the analytics, and important
germplasm information such as pedigree information.
e. Syngenta trial information from 2011-13, including locations,
planting dates, and annotation of the trials using an internal
environmental classification system which enables GxE
analytics (genetics by environment) that assess the
performance of germplasm in different environmental
conditions.
Id. ¶ 76.
On April 24, Sleper announced his resignation from Syngenta, effective May 1, and
he eventually joined FBN. Id. ¶¶ 12, 72. In May, FBN offered Warner a job and he
resigned from Syngenta. Id. ¶¶ 73–74. Syngenta does not allege that Warner is currently
an employee at FBN.
D
Syngenta originally brought this action in June 2020 against Warner for breach of
contract and misappropriation of trade secrets under federal and state law. Compl. ¶¶ 71–
96 [ECF No. 1]. By stipulation, the Parties agreed that Syngenta could conduct expedited
third-party discovery of FBN and its employees. ECF Nos. 6–9. That discovery led
Syngenta to amend its complaint to add claims against Sleper and FBN. See Am. Compl.
¶¶ 90–139 [ECF Nos. 38–39]. Syngenta now includes claims for breach of contract;
violations of the North Carolina Trade Secrets Protection Act, N.C. Gen. Stat. § 66-153;
violations of the federal Defend Trade Secrets Act, 18 U.S.C. § 1836(b); tortious
interference with a contract; violations of the California Unfair Competition Law, Cal. Bus.
& Prof. Code § 17200; and civil conspiracy. Warner filed an answer to the Amended
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Complaint, ECF No. 53, but FBN and Sleper filed the present joint motion to dismiss it for
failure to state a claim. ECF No. 61. Shortly before filing a response to the motion,
Syngenta filed a Second Amended Complaint that asserts the same claims as the First
Amended Complaint. ECF No. 69.
II
In reviewing a motion to dismiss for failure to state a claim under Rule 12(b)(6), a
court must accept as true all of the factual allegations in the complaint and draw all
reasonable inferences in the plaintiff’s favor. Gorog v. Best Buy Co., 760 F.3d 787, 792
(8th Cir. 2014) (citation omitted). Although the factual allegations need not be detailed,
they must be sufficient to “raise a right to relief above the speculative level . . . .” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted). The complaint must “state
a claim to relief that is plausible on its face.” Id. at 570. “A claim has facial plausibility
when the plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009).
III
Before addressing the merits of Defendants’ motion, there is a preliminary issue:
whether Syngenta’s Second Amended Complaint moots Defendants’ motion to dismiss the
First Amended Complaint. The filing of an amended complaint “[o]rdinarily” renders a
Rule 12(b)(6) motion moot because the amendments usually “address deficiencies
identified in the motion” and “add allegations not addressed by the motion.” Crandall v.
Miller & Stevens, P.A., No. 20-cv-1793 (ECT/LIB), 2020 WL 6158214, at *2 (D. Minn.
10
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Oct. 21, 2020). Sometimes, however, it is appropriate to construe the pending motion as a
motion to dismiss the amended complaint, particularly where the Parties’ agree to that
approach. See Manos v. Fed. Bureau of Prisons, No. 18-cv-427 (PJS/HB), 2019 WL
1494604, at *2 (D. Minn. Mar. 11, 2019), report and recommendation adopted, 2019 WL
1491789 (D. Minn. Apr. 4, 2019); Onyiah v. St. Cloud State Univ., 655 F. Supp. 2d 948,
958 (D. Minn. 2009).
Defendants’ motion is not moot. The changes between the First and Second
Amended Complaints are limited. Defendants had a chance to address those changes in
their reply brief, and they request a merits decision on their motion “[i]n the interest of
judicial economy.” Defs.’ Reply Mem. at 1 [ECF No. 83]. Plaintiffs do not object to this
proposal. For the sake of efficiency, and because there is no reason to believe that
additional briefing would be helpful to the Parties, Defendants’ motion will be treated as a
motion to dismiss the Second Amended Complaint.
IV
First things first, there is a choice-of-law question with implications for several of
Syngenta’s claims. Relevant to this motion, Sleper’s Employment Agreement contained
the following choice-of-law provision: “This Agreement shall be subject to and governed
by the substantive laws of the State of North Carolina, without giving effect to the conflicts
of laws provisions thereof.” Employment Agreement § 15(c). According to Syngenta, this
provision requires the application of North Carolina law both to its breach-of-contract
claim and to most of its statutory and common-law tort claims. See Pl.’s Mem. at 17–22,
35–36. Defendants argue that Syngenta waived application of this provision by filing suit
11
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in Minnesota; that applying North Carolina law would be unconstitutional; and that, even
if North Carolina law applies to the breach-of-contract claim, it does not apply to
Syngenta’s other claims. Defs.’ Mem. at 12–17 [ECF No. 63].
This question matters because of a relevant conflict between Minnesota and North
Carolina law. See Nw. Airlines, Inc. v. Astraea Aviation Servs., Inc., 111 F.3d 1386, 1393
(8th Cir. 1997) (explaining that the first step of a choice-of-law analysis is to determine
“whether a conflict actually exists between the different states”). If Minnesota law applies,
then Syngenta’s state statutory claim for misappropriation of trade secrets will be governed
by the Minnesota Uniform Trade Secrets Act (“MUTSA”), Minn. Stat. §§ 325C.02–.03.
That statute contains a provision that “displace[s] conflicting tort, restitutionary, and other
law of this state providing civil remedies for misappropriation of a trade secret.” Id.
§ 325C.07(a). Courts have interpreted this provision to preempt all “claim[s] that assert[]
nothing more than misappropriation or misuse of a trade secret.” Schlief v. Nu-Source,
Inc., No. 10-cv-4477 (DWF/SER), 2011 WL 1560672, at *6 (D. Minn. Apr. 25, 2011)
(citing SL Montevideo Tech., Inc. v. Eaton Aerospace, LLC, 292 F. Supp. 2d 1173, 1179–80
(D. Minn. 2003)). This would prevent Syngenta from pursuing some of its non-contractual
claims unless it can show that those claims sweep more broadly than the alleged
misappropriation of trade secrets. See Defs.’ Mem. at 20–22, 27 n.7 (arguing that
Syngenta’s claims are preempted). By contrast, if North Carolina law applies, then
Syngenta’s state statutory trade-secret claims will be governed by the North Carolina Trade
Secrets Protection Act (“NCTSPA”), N.C. Gen. Stat. § 66-153. That statute, unlike the
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MUTSA, does not contain a preemption provision, so if it applies, most of Defendants’
preemption arguments would fall away.
When faced with a choice-of-law question, “[a] federal court sitting in diversity
ordinarily must follow the choice-of-law rules of the [s]tate in which it sits.” Atl. Marine
Constr. Co. v. U.S. Dist. Court for W. Dist. of Tex., 571 U.S. 49, 65 (2013). Under
Minnesota law, courts generally enforce contractual choice-of-law provisions, subject to
two limitations. See St. Jude Med. S.C., Inc. v. Suchomel, No. 19-cv-2400 (JRT/BRT),
2020 WL 1853653, at *5 (D. Minn. Apr. 13, 2020). First, as a matter of Minnesota law,
the parties must have “acted in good faith and without an intent to evade the law.” St. Jude
Med. S.C., Inc. v. Biosense Webster, Inc., 818 F.3d 785, 788 (8th Cir. 2016) (citation and
alterations omitted). Defendants do not argue that there was any bad faith or intent to evade
the law here. Second, as a matter of federal constitutional law, the state chosen must have
a “significant contact or significant aggregation of contacts, creating state interests, such
that choice of its law is neither arbitrary nor fundamentally unfair.” Allstate Ins. Co. v.
Hague, 449 U.S. 302, 313 (1981). Moreover, a contractual choice-of-law provision may
govern more than just contractual claims, extending to those non-contractual claims that
are “closely related to the interpretation of the contract[].” Nw. Airlines, Inc., 111 F.3d at
1392.
A
Start with Defendants’ waiver argument. To support this argument, Defendants
point to the following forum selection clause, which comes immediately after the choiceof-law clause in Sleper’s Employment Agreement: “The parties hereby submit to the
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exclusive jurisdiction and venue of the state and federal courts of North Carolina and
Company and Employee agree that each are required to enforce, and seek interpretation or
declaration of, their rights hereunder exclusively in such courts.” Employment Agreement
§ 15(c).
In Defendants’ view, Syngenta “waived application of the choice-of-law
provision” by filing suit in Minnesota instead of North Carolina. Defs.’ Mem. at 15; Defs.’
Reply Mem. at 6 (citing Stericycle, Inc. v. Carney, No. 12 C 9130, 2013 WL 3671288
(N.D. Ill. July 12, 2013)).
Courts have generally rejected similar waiver arguments on the ground that they
conflate choice of law with a plaintiff’s choice of forum. See Merrill Lynch Cap. Servs.,
Inc. v. Apache Structures LLC, No. CV 09-6166 DMG (RZx), 2010 WL 11549358, at *3
(C.D. Cal. May 10, 2010) (finding “no reason to infer a waiver of one clause from the
waiver of an entirely distinct and only tangentially related clause”); Ackerley Media Grp.,
Inc. v. Sharp Elec. Corp., 170 F. Supp. 2d 445, 451 (S.D.N.Y. 2001) (similar); see also
Great Am. Opportunities, Inc. v. Kent, 352 F. Supp. 3d 1126, 1132 (D. Colo. 2018). This
is not surprising; “[a] choice-of-law clause and a forum selection clause are not the same,
and address different needs and concerns.” Robbins & Meyers, Inc. v. J.M. Huber Corp.,
No. 01-CV-201E(F), 2001 WL 967606, at *3 (W.D.N.Y. Aug. 23, 2001) (citation omitted);
see also Allegra Holdings, LLC v. Davis, No. 13-CV-13498, 2014 WL 1652221, at *4
(E.D. Mich. Apr. 24, 2014) (“A choice of forum is not tantamount to a choice of law.”).
Defendants identify no persuasive reason to reach a different result here.
The
appropriateness of Minnesota as a forum is not at issue on this motion, and in any event,
the choice of forum does not dictate which law applies.
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Stericycle, the case on which Defendants rely, does not support their argument. The
contract at issue in that case, like this case, contained both a choice-of-law clause and a
forum-selection clause. Id. at *4 n.6. In a footnote, the court concluded that the plaintiff
had waived any objection to venue by filing suit in a state other than that mandated by the
forum-selection clause. Id. And, as Defendants point out, the court applied the law of the
forum state rather than the state specified in the choice-of-law clause. Id. But the court
based its choice of law on the fact that neither party had identified a relevant conflict of
law. Id. In other words, the court did not say that its venue and choice-of-law rulings were
related to one another or that a waiver with respect to one clause constituted a waiver with
respect to the other. The bottom line is that Syngenta has not waived application of North
Carolina law.
B
Defendants next argue that applying North Carolina law in this case would be
unconstitutional because of the lack of connection between the Parties and that state. They
point out that Syngenta is a Delaware corporation headquartered in Illinois; that both
Warner and Sleper lived and worked in Minnesota; and that FBN is a Delaware corporation
headquartered in California. Defs.’ Mem. at 12–13.
A choice-of-law provision is generally constitutionally permissible if at least one
party to the contract has “significant contact or [a] significant aggregation of contacts” with
the chosen state. Allstate Ins. Co., 449 U.S. at 313; see Suchomel, 2020 WL 1853653, at
*5 (concluding that a choice-of-law provision was “clearly constitutional” based only on
the plaintiff’s contacts with Minnesota); St. Jude Med., S.C. v. Biosense Webster, Inc., 994
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F. Supp. 2d 1033, 1041 (D. Minn. 2014) (similar). And a party’s agreement in advance to
apply the law of a particular state can itself be considered a contact with that state. See
Brand Advantage Grp., Inc. v. Henshaw, No. 20-cv-225 (JRT/HB), 2020 WL 1891772, at
*5 (D. Minn. Apr. 16, 2020).
Syngenta’s allegations make it at least plausible that the choice-of-law provision in
Sleper’s contract is constitutionally permissible. First, Syngenta alleges that its “primary
seeds research facility” is located in North Carolina and that the “primary leaders” of its
research and development team either live in North Carolina or travel there regularly.
Second Am. Compl. ¶ 25. Sleper lived and worked in Minnesota, but he “engaged daily”
with other Syngenta employees located in North Carolina, and he traveled to the North
Carolina research facility for work on multiple occasions, “as recently as January 2020.”
Id. Second, the fact that Sleper agreed in advance to the application of North Carolina law
detracts from any arbitrariness argument. See Henshaw, 2020 WL 1891772, at *5; cf.
Allstate Ins. Co., 449 U.S. at 318 n.24 (explaining that there was “no element of unfair
surprise or frustration of legitimate expectations” involved in applying a particular state’s
law because the relevant party “had to have anticipated” it).
Defendants rely on Menzies Aviation (USA), Inc. v. Wilcox, 978 F. Supp. 2d 983 (D.
Minn. 2013), but it is distinguishable. In denying a motion for a temporary restraining
order, the court in that case concluded that applying a Florida choice-of-law provision was
likely unconstitutional because “the record demonstrate[d] no connection to Florida” and
the party seeking to apply it “ma[de] no argument that Florida ha[d] any connection to the
parties or case before the [c]ourt.” Id. at 997. Aside from the fact that different standards
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apply to a Rule 12(b)(6) motion and a motion for a temporary restraining order, the record
in this case is not devoid of contacts with North Carolina. To be sure, North Carolina law
does not seem like the most natural choice to govern a contract between the Parties to this
case, but that is a far cry from concluding that it is a fundamentally unfair one.
C
Defendants do not really dispute that, if the choice-of-law provision applies at all,
then it governs Syngenta’s breach-of-contract claims. They argue, however, that it cannot
extend to Syngenta’s state statutory trade-secret claims or its tortious-interference claims.
See Defs.’ Reply Mem. at 6. This question has consequences for the analytical framework:
once a court concludes that a choice-of-law provision governs a claim, it need not apply
Minnesota’s normal multi-factor choice-of-law test to determine what law governs that
claim. See, e.g., Airtel Wireless, LLC v. Montana Elec. Co., 393 F. Supp. 2d 777, 784 (D.
Minn. 2005).
“In some circumstances, choice of law clauses can control which jurisdiction’s law
will govern statutory or tort claims in addition to breach of contract claims arising out of
the agreements of which the clauses are a part.” Khoday v. Symantec Corp., No. 11-cv-180
(JRT/TNL), 2014 WL 1281600, at *18 (D. Minn. Mar. 13, 2014) (alteration omitted)
(quoting Superior Edge, Inc. v. Monsanto Co., 964 F. Supp. 2d 1017, 1031–32 (D. Minn.
2013)). Whether a choice-of-law clause governs a non-contractual claim is a contextspecific question that depends on both the language of the clause and the nature of the
claim asserted. For example, the Eighth Circuit has held that a clause providing that an
agreement would “be governed by and interpreted in accordance with” Minnesota law
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applied to a plaintiff’s claims for negligent performance, misrepresentation, deceptive trade
practices, and unjust enrichment. Nw. Airlines, Inc., 111 F.3d at 1392; see also Holden
Farms, Inc. v. Hog Slat, Inc., 347 F.3d 1055, 1061 (8th Cir. 2003); Nat’l Agri-Services,
Inc. v. AGCO Corp., No. 04-cv-4530 (JMR/FLN), 2006 WL 8445121, at *2–3 (D. Minn.
Feb. 15, 2006).
When a choice-of-law provision contains narrower language—for
example, saying that the chosen law governs only the “interpretation” of the contract—it
may not extend to non-contractual claims. Heating & Air Specialists, Inc. v. Jones, 180
F.3d 923, 930 (8th Cir. 1999) (applying Arkansas law). If the language is broad enough to
implicate non-contractual claims, then the chosen law will apply to those claims if they are
“‘closely related’ to the terms of the contract, such that the [c]ourt would need to interpret
the contract in order to resolve the . . . claim.’” Warren E. Johnson Cos. v. Unified Brand,
Inc., 735 F. Supp. 2d 1099, 1105 (D. Minn. 2010) (adopting report and recommendation);
cf. Inacom Corp. v. Sears, Roebuck & Co., 254 F.3d 683, 687–88 (8th Cir. 2001)
(concluding that a choice-of-law provision did not apply to a fraudulent-concealment claim
that “arose out of the circumstances surrounding the formation of the contract”).
First, the North Carolina choice-of-law provision applies to Syngenta’s state
statutory trade-secret claim. Like the clause at issue in Northwest Airlines, the provision
here says that Sleper’s Employment Agreement would be “governed by” North Carolina
law, not just that North Carolina law would “govern its interpretation.” Compare Nw.
Airlines, Inc., 111 F.3d at 1392, with Heating & Air Specialists, Inc., 180 F.3d at 930. It
is therefore broad enough to encompass at least some non-contractual claims. And
determining whether Sleper misappropriated Syngenta’s trade secrets will likely require
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“interpret[ing] the scope of the [Agreement’s] confidentiality provision[s].” Superior
Edge, Inc., 964 F. Supp. 2d at 1032 (applying a choice-of-law provision to a statutory tradesecret claim); cf. Katch, LLC v. Sweetser, 143 F. Supp. 3d 854, 866–67 (D. Minn. 2015)
(similar, but addressing a motion for a preliminary injunction).
That’s because a
misappropriation claim requires a plaintiff to show that the defendant acquired, disclosed,
or used a trade secret “without express or implied authority or consent.” N.C. Gen. Stat.
§ 66-152(1); accord Minn. Stat. § 325C.01, subd. 3; see also Katch, LLC, 143 F. Supp. 3d
at 867 n.11. The North Carolina Trade Secret Protection Act will therefore be applied to
Syngenta’s state statutory trade-secret claim.
For the same reasons, North Carolina law will be applied to Syngenta’s civilconspiracy claim. As discussed below, the alleged misappropriation of Syngenta’s trade
secrets is the only plausible tort on which Syngenta could base its conspiracy claim. And
because North Carolina law applies to the trade-secret claim, it would make little sense to
apply any other state’s law to the civil-conspiracy claim, which is a derivative theory of
liability rather than a freestanding cause of action. See Dove v. Harvey, 608 S.E.2d 798,
800 (N.C. Ct. App. 2005); accord Prairie Field Servs., LLC v. Welsh, __ F. Supp. 3d __,
No. 20-cv-2160 (ECT/KMM), 2020 WL 6336705, at *13 (D. Minn. Oct. 29, 2020).
It seems even clearer that the choice-of-law provision covers Syngenta’s claims for
tortious interference with a contract. Evaluating those claims will require determining,
among other things, whether Warner and Sleper breached their Employment Agreements.
See Beverage Sys. of the Carolinas, LLC v. Associated Beverage Repair, LLC, 784 S.E.2d
457, 462 (N.C. 2016); Kallok v. Medtronic, Inc., 573 N.W.2d 356, 362 (Minn. 1998). It
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almost goes without saying, then, that the claims are “closely related to the interpretation
of the contracts.” Nw. Airlines, 111 F.3d at 1392.
V
With the choice-of-law questions out of the way, next is the breach-of-contract
claim against Sleper. In their opening brief, Defendants raised two arguments: (1) that
Syngenta Seeds LLC does not have standing to make this claim because the Employment
Agreement lists Syngenta Seeds, Inc. as a party; and (2) that Syngenta has not adequately
alleged that Sleper breached the Agreement. Defs.’ Mem. at 9–12. The Second Amended
Complaint took care of the first argument by adding allegations that Syngenta converted
from a Delaware corporation to an LLC in 2015 and that the two entities are “deemed to
be the same.” Pl.’s Mem. at 12 (quoting 8 Del. Code § 266(h)); see Second Am. Compl.
¶ 8. Defendants acknowledge this and abandon the standing argument in their reply brief.
See Defs.’ Reply Mem. at 2. That leaves only the second argument. To survive a motion
to dismiss, Syngenta must plausibly allege, among other things, “the facts constituting the
breach.” Frye v. Brunswick Cnty. Bd. of Educ., 612 F. Supp. 2d 694, 708 (E.D.N.C. 2009).
Syngenta claims that Sleper breached three provisions of his Employment
Agreement: the confidentiality provision, the noncompete provision, and the provision
requiring him to return company property upon his resignation. Pl.’s Mem. at 13–16.
Defendants argue that Syngenta’s allegations are conclusory and show, at most, that Sleper
accessed confidential information while employed at Syngenta and discussed future plans
during a job-interview process with FBN. See Defs.’ Reply Mem. at 2–5.
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A
First, in light of the Employment Agreement’s broad language, it is plausible that
Sleper breached the confidentiality provision. Recall that this provision prohibited Sleper
from “us[ing] for [himself] or for others . . . or disclos[ing] to any third party any
information, knowledge or data relating to” Syngenta or “any other information,
knowledge or data owned by, controlled by or in the possession of” Syngenta.
Employment Agreement § 6(a). There is no doubt that Sleper had access to information
that fell into these broad categories and that FBN plausibly knew he did. Warner made
clear in his initial contacts with FBN that he and Sleper worked “as a team” to develop
Syngenta’s “trial design, trial analysis, and molecular breeding systems” and that they
could “share the vision” for how to “jump start early stage breeding at FBN.” Second Am.
Compl. ¶¶ 47, 49. Sleper then attended at least one face-to-face meeting with an FBN
representative, where he shared “great ideas” about “genomics and phenomics concepts.”
Id. ¶ 50. Immediately after the meeting, Sleper accessed “information related to breeding
values and genotyping” and information “regarding early-stage breeding practices at
Syngenta,” both of which included information that Syngenta “deemed confidential.”
Second Am. Compl. ¶¶ 52–53.
He then used that information to create the
BreedingPlanCosts PDF, which he emailed to FBN just a few days later. Id. ¶¶ 54–56.
Whether or not these allegations show that Sleper directly disclosed any particular piece of
Syngenta information to FBN, it is at least plausible that he “indirectly” disclosed company
information or that he “use[d]” such information “for [himself] or for [FBN].” That is
enough under the language of the contract. Employment Agreement § 6(a).
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B
It is also plausible that Sleper breached the provision requiring him to return all
“documents . . . which pertain to the Company, contain Confidential Information, or were
received or used by [him] in connection with [his] employment.” Employment Agreement
§ 14(a). Syngenta alleges that, on multiple occasions, Sleper “inserted external USB
storage devices into his Syngenta-issued laptop,” “accessed Syngenta information,” and
“navigated between his local hard drive and the external USB storage devices,” which is
“behavior consistent with copying data.” Second Am. Compl. ¶ 69. Despite this, he did
not “leave any USB devices in his office” or otherwise return them to the company when
he departed. Id.; see id. ¶ 92. Syngenta does not identify exactly what Sleper copied to
those external storage devices, but elsewhere it details more specific “examples of the
information taken” when both Warner and Sleper “downloaded Syngenta Confidential
Information.” Id. ¶ 76. Considered together, these allegations make it plausible that Sleper
breached his duty to return Syngenta’s information.5
5
After the Parties completed their briefing on Defendants’ motion, Syngenta
requested and received leave to file a sur-reply. See ECF Nos. 88, 90. According to the
sur-reply and supporting documents, Sleper recently deleted from his personal device
“material that he retained from his time as a Syngenta employee”—specifically, “four (4)
Excel spreadsheets [he] received from a colleague that contained Plant Variety Protection
(‘PVP’) information for breading lines.” Pl.’s Sur-reply Mem. at 2–3 [ECF No. 94]; see
Sawers Decl., Exs. 1–2 [ECF Nos. 98, 98-1]. The destruction allegedly occurred in
October, but Defendants did not disclose it to Syngenta until December 30, after Syngenta
had filed its Second Amended Complaint and its response brief. Sawers Decl., Ex. 2 at 2.
Syngenta argues that this conduct is an “additional reason[]” to deny Defendants’ motion
to dismiss with respect to its breach-of-contract claims. Pl.’s Sur-reply Mem. at 4. Because
these allegations are not in the Second Amended Complaint, they have no bearing on the
resolution of this motion. As discussed below, however, they do bear on the question of
whether Syngenta should have another opportunity to amend its complaint.
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C
Whether Syngenta has plausibly alleged a breach of Sleper’s covenant not to
compete is a closer call. According to Syngenta, Sleper was effectively working for FBN
by “help[ing] jumpstart its R&D Department” while Syngenta still employed him. Pl.’s
Mem. at 16. Sleper argues that, at most, he was “interviewing and describing the contours
of the position, his plans, and qualifications,” not actively competing with Syngenta. Defs.’
Reply Mem. at 4.
Relevant here, the noncompete provision required Sleper to refrain from
“engag[ing] in the ‘Business’,” “directly or indirectly, as principal, agent, [or]
consultant[.]” Employment Agreement § 5(c).6 The “Business” is, essentially, “the
research [and] development . . . of chemical, seed and agricultural input products and
services.” Employment Agreement § 13. The Agreement does not define what it means
to “engage” as a “principal, agent, [or] consultant.” Under North Carolina law, “any
undefined, nontechnical word” in a contract “is ‘given a meaning consistent with the sense
in which [it is] used in ordinary speech, unless the context clearly requires otherwise.’”
State v. Philip Morris USA Inc., 685 S.E.2d 85, 91 (N.C. 2009) (quoting Wachovia Bank
& Tr. Co. v. Westchester Fire Ins. Co., 172 S.E.2d 518, 522 (N.C. 1970)). To “engage”
6
Although the noncompete provision, on its face, applies both during the period of
employment “and for a period of one year after termination of [Sleper’s] employment for
any reason,” Employment Agreement §§ 5(c), 11, Syngenta has not argued that Sleper
breached the covenant by joining FBN less than one year after he left the company. Nor
have Defendants argued that the covenant not to compete is invalid as a matter of law. See
generally Med. Staffing Network, Inc. v. Ridgway, 670 S.E.2d 321, 327 (N.C. Ct. App.
2009).
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usually means to “involve oneself” or to “participate”—i.e., to “be active” in some way.
Engage,
Am.
Heritage
Dictionary
of
the
Eng.
Language,
https://ahdictionary.com/word/search.html?q=engage (last visited Feb. 22, 2021);
Participate,
Am.
Heritage
Dictionary
of
the
Eng.
Language,
https://ahdictionary.com/word/search.html?q=participate (last visited Feb. 22, 2021). And
a “consultant” is one who “gives expert or professional advice.” Consultant, Am. Heritage
Dictionary of the Eng. Language, https://ahdictionary.com/word/search.html?q=consultant
(last visited Feb. 22, 2021). With these definitions in mind, it seems apparent that Sleper
would only breach the noncompete provision if, by rendering professional advice, he was
actively participating in FBN’s efforts to develop new seed products. Absent an element
of active, present participation, any hypothetical discussions about a future business
relationship—even discussions that involved the use or disclosure of Syngenta
information—would not be enough. Cf. Dalton v. Camp, 519 S.E.2d 82, 87 (N.C. Ct. App.
1999) (holding that an employee does not breach the common law duty of loyalty by
“[m]erely preparing to compete” with her employer).
On this record, Syngenta has not plausibly alleged any active participation. To be
sure, the months-long back-and-forth between Sleper and FBN does not seem like a typical
interview process, but there are no allegations that Sleper actually participated in efforts to
develop new seed products or services for FBN while he was still employed at Syngenta.
Instead, the discussions focused on the nature of Sleper’s then-hypothetical future role at
FBN and how he could use his skills to develop a new seed-breeding program. See Second
Am. Compl. ¶¶ 47, 49–51. Indeed, the Complaint says that FBN did not actually begin its
24
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new “pilot program” until the “2020 season,” and it did not announce its “Independent
Breeding Network” until December 2020, months after Sleper had left Syngenta. Id. ¶¶ 13,
72.
In short, Syngenta has plausibly alleged that Sleper breached his Employment
Agreement in other ways, but not that he breached his covenant not to compete.
VI
Syngenta also alleges that FBN and Sleper misappropriated its trade secrets, and it
asserts claims under both the DTSA and the NCTSPA. Second Am. Compl. ¶¶ 95–116.7
Defendants argue that Syngenta has not identified any trade secrets with enough specificity
or plausibly alleged that any misappropriation occurred. Defs.’ Mem. at 17–20.
When, as here, a plaintiff brings parallel claims under the DTSA and a state tradesecret statute, courts will commonly analyze those claims together.
See Prime
Therapeutics LLC v. Beatty, 354 F. Supp. 3d 957, 967 (D. Minn. 2018) (addressing claims
under the DTSA and Minnesota Uniform Trade Secrets Act and noting the statutes’
“functionally equivalent definitions”). Usually, this makes sense. The DTSA is largely
“modeled on the Uniform Trade Secrets Act [UTSA], versions of which have been adopted
by 48 states.” Heska Corp. v. Qorvo US, Inc., No. 1:19CV1108, 2020 WL 5821078, at *4
(M.D.N.C. Sept. 30, 2020) (quoting H.R. Rep. No. 114-529, at 199 (2016)). Because North
Carolina is one of only two states that has not adopted the UTSA, however, it is not clear
that the combined approach is appropriate when the NCTSPA is involved. See id. at *4–9
(analyzing claims under the DTSA and similar Michigan and Minnesota statutes together
7
Syngenta asserts claims under both the NCTSPA and the DTSA against Sleper, but
only a claim under the DTSA against FBN. See id.
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but separately analyzing a claim under the NCTSPA). Nonetheless, most of the Parties’
arguments in this case do not implicate any differences between the DTSA and the
NCTSPA. For that reason, they will be applied together, and any notable differences will
be highlighted along the way.
A
Start with the argument that Syngenta has not plausibly alleged the existence of
trade secrets. The DTSA and NCTSPA define a “trade secret” as, essentially, “business or
technical information” that (1) is the subject of “reasonable efforts” to maintain its secrecy
and (2) derives “actual or potential” “independent economic value” from not being
“generally known or readily ascertainable.” N.C. Gen. Stat. § 66-152(3); 18 U.S.C.
§ 1839(3); see CPI Card Grp., Inc. v. Dwyer, 294 F. Supp. 3d 791, 807 (D. Minn. 2018);
Prometheus Grp. Enters., LLC v. Viziya Corp., No. 5:14-CV-32-BO, 2014 WL 3854812,
at *7 (E.D.N.C. Aug. 5. 2014). Defendants do not argue that Syngenta fails to meet these
requirements—i.e., that it has failed to allege the existence of information that derives
value from being secret or that it has taken insufficient measures to protect that information.
Instead, Defendants argue that Syngenta has not described its alleged trade secrets with
enough specificity. Defs.’ Mem. at 17.
Under both statutes, “a plaintiff must identify a trade secret with sufficient
particularity[.]” Krawiec v. Manly, 811 S.E.2d 542, 547–48 (N.C. 2018); see Integrated
Process Sols., Inc. v. Lanix LLC, No. 19-cv-567 (NEB/LIB), 2019 WL 1238835, at *4 (D.
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Minn. Mar. 18, 2019).8 This does not mean that a plaintiff in a trade-secret case must
comply with the strictures of Federal Rule of Civil Procedure 9(b) (unless, of course, the
plaintiff’s claims are premised on fraudulent conduct). See Garcia v. Vertical Screen, Inc.,
Civ. No. 19-3184, 2020 WL 2615624, at *2 & n.1 (E.D. Pa. May 22, 2020). Instead, this
“particularity” requirement appears to reflect a judicial effort to balance two interests that
have special importance in trade-secret cases. On one hand, trade-secret statutes protect
only a subset of valuable and confidential business information, and a plaintiff must give
defendants fair notice of what it thinks meets the statutory definition. See Mgmt. Registry,
Inc. v. A.W. Cos., Inc., No. 17-cv-5009 (JRT/KMM), 2019 WL 7838280, at *9 (D. Minn.
Sept. 12, 2019); see also Volt Power, LLC v. Butts, No. 7:19-cv-149-BO, 2020 WL
3979659, at *4 (E.D.N.C. July 14, 2020). At the same time, including too much detail
“would paradoxically jeopardize the plaintiff’s ability to protect its trade secrets.” Protégé
Biomedical, LLC v. Z-Medica, LLC, 394 F. Supp. 3d 924, 939 (D. Minn. 2019) (internal
quotation marks and citation omitted); see Krawiec, 811 S.E.2d at 611–12 (acknowledging
this concern). So, while a complaint need not “precisely describe all of the reasons” that a
plaintiff’s information is a trade secret, Superior Edge, Inc., 964 F. Supp. 2d at 1042, it
also may not describe the alleged trade secrets with only “general allegations in sweeping
and conclusory statements,” Washburn v. Yadkin Valley Bank & Tr. Co., 660 S.E.2d 577,
585–86 (N.C. Ct. App. 2008).
8
Neither Party argues that the degree of specificity required differs between the
DTSA and NCTSPA.
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The Second Amended Complaint describes at least some trade secrets with enough
particularity for the pleading stage. Syngenta provides an extensive list of the types of
confidential information that it maintains as part of its seed-breeding business, including
things like “data generated from pan-genomic analytics using DNA sequence data,”
“genetic maps,” and “molecular marker (genotyping) data.” Second Am. Compl. ¶ 24. It
also identifies “examples of the information taken” by Warner and Sleper when they left
the company, which included “[d]atasets about Syngenta’s North America breeding
program for corn and soy” as well as “trial data” and “results of the analytics” for a “[c]orn
drought program for Syngenta Artesian product pipeline.” Second Am. Compl. ¶ 76. It is
undoubtedly plausible that this type of competitive information would derive value from
its secrecy, and Syngenta extensively describes the security measures that it took to protect
it. Id. ¶¶ 77–78, 80–84; see N. Am. Deer Registry, Inc. v. DNA Sols., Inc., Civ. No.
4:17-CV-00062, 2017 WL 2402579, at *7–8 (E.D. Tex. June 2, 2017) (holding that a
plaintiff’s “deer genetic information,” which included “biological materials” and
“genotype analysis data,” amounted to trade secrets). To be sure, Syngenta uses somewhat
broad strokes to describe its information, and for the most part, it does not name specific
files or products taken. But courts have accepted similar levels of generality at the pleading
stage.
See, e.g., Stratasys, Inc. v. Krampitz, No. 17-cv-5524 (DSD/HB), 2018 WL
2247265, at *3 (D. Minn. May 16, 2018) (denying a motion to dismiss when a plaintiff
identified, among other things, “CAD files (3D drawings), proposals, machine pricing . . . ,
margins, material pricing, staffing and consulting rates, [and] proprietary spreadsheets and
software”); Deluxe Fin. Servs., LLC v. Shaw, No. 16-cv-3065 (JRT/HB), 2017 WL
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3327570, at *1, 3 (D. Minn. Aug. 3, 2017) (denying a motion to dismiss when a plaintiff
identified “customer pricing data, production costs, check unit volumes, profitability, sales
analyses, sales strategies, deal structures, sales plans, ‘key account’ data, check program
management techniques, and account details”); cf. Washburn, 660 S.E.2d at 586 (holding
that “business methods; clients, their specific requirements and needs; and other
confidential information pertaining to [plaintiff’s] business” was not enough).
Although Syngenta has plausibly alleged the existence of some trade secrets, other
allegations are not so specific. Most notably, it claims that the BreedingPlanCosts PDF
that Sleper created and sent to FBN contained trade secrets that it identifies as “information
related to breeding values and genotyping” and information “regarding early-stage
breeding practices at Syngenta.” Id. ¶¶ 52–56. As noted above, the PDF appears to outline
high-level plans and budgeting for a hypothetical breeding program, but it does not mention
Syngenta, nor does it seem to contain any actual breeding data or analytics related to
Syngenta’s breeding program. See ECF No. 72. Considered alongside the document itself,
Syngenta’s allegations about its contents seem more like the vague and “sweeping”
statements that courts have found insufficient. AECOM Tech. Corp. v. Keating, No. 11
CVS 9225, 2012 WL 370296, at *2–3 (N.C. Super. Ct. Feb. 6, 2012); see also Washburn,
660 S.E.2d at 586; Volt Power, 2020 WL 3979659, at *4. Without some more specific
identification of what in the document deserves protection, Syngenta has not plausibly
alleged that the BreedingPlanCosts PDF contains trade secrets.
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B
Next, Defendants argue that Syngenta has not plausibly alleged that any trade
secrets were misappropriated.
Under the NCTSPA, “[m]isappropriation” means
“acquisition, disclosure, or use of a trade secret of another without express or implied
authority or consent[.]” N.C. Gen. Stat. § 66-152(1). The DTSA’s definition, although
similar, is more complicated. Under that statute, misappropriation can occur through
“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.” 18 U.S.C. § 1839(5)(A). It can also
occur, as relevant here, through
(B) disclosure or use of a trade secret of another without
express or implied consent by a person who—
(i) used improper means to acquire knowledge of the
trade secret; [or]
(ii) at the time of the disclosure or use, knew or had
reason to know that the knowledge of the trade secret
was—
(I) derived from or through a person who had
used improper means to acquire the trade secret;
(II) acquired under circumstances giving rise to
a duty to maintain the secrecy of the trade secret
or limit [its] use . . .; or
(III) derived from or through a person who owed
a duty to the person seeking relief to maintain
[its] secrecy[.]
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Id. § 1839(5)(B). “[I]mproper means,” in turn, “include[] theft, bribery, misrepresentation,
breach or inducement of a breach of a duty to maintain secrecy, or espionage through
electronic or other means[.]” Id. § 1839(6)(A).
Several principles help illustrate how to apply these definitions to this case. A
plaintiff must generally do more than allege that a former employee who had access to its
trade secrets left to work for a competitor.9 See CH Bus Sales, Inc. v. Geiger, No. 18-cv2444 (SRN/KMM), 2019 WL 1282110, at *10 (D. Minn. Mar. 20, 2019) (stating that
“[m]ere fears” that a former employee might have taken undefined trade secrets and that a
new employer might use them does not give rise to a plausible misappropriation claim). In
that scenario, the employee has typically acquired the trade secrets with her employer’s
permission, so there has been no improper acquisition, use or disclosure. Second, even
when an employee has retained trade secrets after leaving, there may be no
“misappropriation” absent an allegation that the employee has acquired them improperly
or used or disclosed them in her new employment. See CPI Card Grp., Inc. v. Dwyer, 294
F. Supp. 3d 791, 810 (D. Minn. 2018) (concluding that a plaintiff was unlikely to succeed
on the merits of a DTSA claim where a departing employee had forwarded emails
containing alleged trade secrets to his personal email account because no policy prohibited
9
Under some circumstances, a plaintiff asserting a misappropriation claim may be
entitled to relief on an “inevitable disclosure” theory—i.e., by showing that the
“defendant’s new employment will inevitably lead him to rely on the plaintiff’s trade
secrets.” Merck & Co. v. Lyon, 941 F. Supp. 1443, 1457 (M.D.N.C. 1996) (quoting
PepsiCo, Inc. v. Redmond, 54 F.3d 1262, 1269 (7th Cir. 1995)); see Prime Therapeutics
LLC v. Beatty, 354 F. Supp. 3d 957, 969 (D. Minn. 2018) (noting that plaintiffs must meet
a “high bar” to show that disclosure would be inevitable). Syngenta has not pursued an
inevitable-disclosure theory here.
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the email forwards and there was no evidence of use or disclosure); cf. AUA Priv. Equity
Partners, LLC v. Soto, No. 1:17-cv-8035-GHW, 2018 WL 1684339, at *7 (S.D.N.Y. Apr.
5, 2018) (concluding that a plaintiff had plausibly alleged that an employee had
misappropriated trade secrets by uploading them to a personal cloud-based storage system
“in direct violation of [] confidentiality agreements”). Misappropriation is plausible,
however, when a departing employee has retained trade secrets under suspicious
circumstances and there is reason to believe that the employee has used or disclosed the
trade secrets in her new employment. See, e.g., Volt Power, LLC, 2020 WL 3979659, at
*4 (holding that a departing employee plausibly misappropriated trade secrets by taking
them “without consent following his resignation” and using them in his new employment);
Protégé Biomedical, LLC, 394 F. Supp. 3d at 939–40; Stratasys, Inc. v. Krampitz, No. 17cv-5524 (DSD/HB), 2018 WL 2247265, at *3 (D. Minn. May 16, 2018); Deluxe Fin.
Servs., LLC v. Shaw, No. 16-cv-3065 (JRT/HB), 2017 WL 3327570, at *4 (D. Minn. Aug.
3, 2017); see also Arthur J. Gallagher & Co. v. Tarantino, __ F. Supp. 3d __, No. 20-cv05505-EMC, 2020 WL 6415272, at *11–12 (N.D. Cal. Nov. 2, 2020); Kraus USA, Inc. v.
Magarik, No. 17-CV-6541 (ER), 2020 WL 2415670, at *6–7 (S.D.N.Y. May 12, 2020).
And, significantly, surrounding circumstances may give rise to a reasonable inference of
misappropriation at the pleading stage even without a direct allegation of a specific use or
disclosure. See Heska Corp., 2020 WL 5821078, at *7, 9.
Under the specific circumstances of this case, Syngenta has plausibly alleged under
both statutes that Sleper misappropriated at least some of its trade secrets. Several facts,
taken collectively, support this conclusion. Sleper’s role with Syngenta gave him “access
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to [its] confidential and trade secret information,” and he agreed to broad confidentiality
obligations. Second Am. Compl. ¶ 12. Over many months, he discussed the prospect of
building a competing seed breeding program at FBN while he was still creating and
maintaining trade-secret information at Syngenta. During that time, he attended a face-toface meeting with Wulfkuhle, a former Syngenta employee, who reported that Sleper
shared “great ideas” about “genomics and phenomics.” Id. ¶¶ 49–50. Just before his
departure from Syngenta, Sleper accessed alleged trade secret information and engaged in
“behavior consistent with copying [the] data,” but, despite his contractual obligations to
return Syngenta’s property, he did not leave any of his external storage devices behind.
Id. ¶¶ 69, 72, 76. He then joined FBN, and over the next several months, FBN announced
a “new Independent Breeding Network” and “executed a pilot program . . . to test
germplasm and try out breeding combinations,” id. ¶ 13, activities that undoubtedly would
have benefitted from the types of data that Sleper allegedly took. On these facts, it is
plausible that Sleper used or disclosed Syngenta’s trade secrets “without express or implied
authority or consent,” N.C. Gen. Stat. § 66-152(1), and knowing that he had acquired the
trade secrets “under circumstances giving rise to a duty to maintain [their] secrecy.”
18 U.S.C. § 1839(5)(B)(ii).
For similar reasons, Syngenta has plausibly alleged that FBN misappropriated its
trade secrets under the DTSA. Wulfkuhle, who was Sleper’s main point of contact at FBN,
was a former Syngenta employee who presumably knew the nature of Sleper’s
confidentiality obligations and the types of Syngenta information that he could access.
Second Am. Compl. ¶¶ 46, 118. With this knowledge, FBN engaged in a months-long
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back-and-forth with Sleper—including a face-to-face meeting—about building a seedbreeding program to compete with Syngenta. Along the way, FBN employees internally
shared information they had learned from Warner and Sleper. Id. ¶¶ 50, 62. And shortly
after Sleper joined FBN (while allegedly retaining Syngenta’s trade secrets without
permission), FBN announced new developments in its seed breeding program. Id. ¶ 13.
Although there are no direct allegations that Sleper disclosed a specific piece of tradesecret information at a specific time, Syngenta’s allegations make it plausible that FBN
acquired its trade secret information from Sleper “without express or implied consent” and
used that information knowing that Sleper had a “duty . . . to maintain [its] secrecy.”
18 U.S.C. § 1839(5)(B)(ii).
Defendants frame the facts differently.
They argue that the communications
between FBN and Sleper were benign; that their discussions about a new seed-breeding
program were hypothetical, forward-looking, and unrelated to Sleper’s role at Syngenta;
and that FBN has not used any protected Syngenta information. See Defs.’ Mem. at 19.
This is a plausible interpretation of the record, but it is not the only one. See Arthur J.
Gallagher & Co., __ F. Supp. 3d __, 2020 WL 6415272, at *11. At this stage, Syngenta
has done enough to avoid dismissal of its trade-secret claims.
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VII
Next, Syngenta claims that FBN and Sleper tortiously interfered with its contracts.
See Second Am. Compl. ¶¶ 117–31. Defendants argue that Syngenta’s claim is both
legally impossible and factually implausible. See Defs.’ Mem. at 22–24.10
A
Defendants’ first argument rests on a flawed framing of Syngenta’s claim.
According to Defendants, Syngenta is attempting to “bootstrap[]” Sleper into liability for
interfering with his own contract because the alleged tortious interference was all part of
one conspiracy among the three Defendants to misappropriate Syngenta’s trade secrets.
Defs.’ Mem. at 23 (citation omitted). This legal theory would not work, Defendants argue,
because “a party to a contract cannot tortiously interfere with that contract.” McLucas v.
Home Depot U.S.A., Inc., No. 5:19-CV-437-FL, 2020 WL 6326097, at *4 (E.D.N.C. Oct.
28, 2020) (citation omitted).11 But Defendants’ argument ignores the legal theory that
Syngenta has pursued, which is that there are really four separate tortious-interference
claims here: one against Sleper for interfering with Warner’s contract, one against Warner
10
Two of Defendants’ arguments on this claim do not require much discussion. First,
Syngenta mooted the argument that it lacks standing to assert interference with the
contracts when it alleged in the Second Amended Complaint that it is the legal successor
to Syngenta Seeds, Inc. Second Am. Compl. ¶ 8. Second, Defendants’ argument that this
claim is preempted by either the Minnesota or California trade-secret statute fails because
the NCTSPA—which does not contain a preemption provision—applies.
11
Of course, this argument would not provide a basis to dismiss the tortiousinterference claim against FBN because FBN was not a party to either Employment
Agreement.
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for interfering with Sleper’s contract, and two against FBN for interfering with Warner’s
and Sleper’s contracts, respectively. Second Am. Compl. ¶¶ 122–24. In other words,
Syngenta does not claim that Sleper interfered with his own contract or conspired to do so.
Defendants also seem to raise a separate but similar argument: that the tortiousinterference claim against Sleper fails because he could not wrongfully interfere with a coemployee’s contract. Defs.’ Mem. at 23 (citing Nordling v. N. States Power Co., 478
N.W.2d 498, 507 (Minn. 1991)). Neither Minnesota law (which Defendants cite) nor North
Carolina law supports this broad argument. Under Nordling, an employee is “privileged
to interfere with . . . another employee’s employment contract . . . if that person acts in
good faith, . . . believing that his actions are in furtherance of the company’s business.”
478 N.W.2d at 507. Similarly, under North Carolina law, “[w]hen a tortious interference
claim based on an employment contract is brought against the plaintiff’s co-employee[],
the plaintiff must show that the alleged interference was unrelated to a legitimate business
interest of the employee.” Schwarz v. St. Jude Med., Inc., 842 S.E.2d 119, 127 (N.C. Ct.
App. 2020) (internal quotation marks and citation omitted). If these principles apply when,
as here, the plaintiff is the employer itself, they still do not require dismissal. Syngenta
alleges that Sleper interfered with Warner’s employment contract to help Syngenta’s
competitor, not to further Syngenta’s business interests.
B
The question, then, is whether Syngenta has plausibly alleged actionable
interference. In order to succeed on its tortious-interference claims at this stage, Syngenta
must plausibly allege that FBN “intentionally induce[d]” Warner and Sleper to breach their
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Employment Agreements and that Sleper “intentionally induce[d]” Warner to breach his.
Eli Rsch., Inc. v. United Commc’ns Grp., LLC, 312 F. Supp. 2d 748, 756 (M.D.N.C. 2004).
But it must also plausibly allege that, in doing so, FBN and Sleper “act[ed] without
justification.” Beverage Sys., LLC, 784 S.E.2d at 462.
First, there are no significant allegations that Sleper induced Warner to breach his
Employment Agreement.
Indeed, the complaint suggests that Warner—who was
apparently senior to Sleper in the Syngenta hierarchy—took the lead in contacting FBN on
behalf of the two men. See Second Am. Compl. ¶¶ 46–47, 49. The allegations show that
Warner and Sleper acted parallel to one another, accessing and taking confidential
information, see id. ¶¶ 47, 49, 52–54, 64–66, 69–71, but there is no reason to believe that
Sleper’s actions had any effect on Warner’s. The only potential indicator of influence
occurred in October 2019—while both men were still employed at Syngenta—when Sleper
texted Warner, “We should try to find some more data[.]” Id. ¶ 59. Syngenta frames this
as a suggestion that the two men “mine more Syngenta Confidential Information for FBN,”
id., but no factual allegations support this framing or otherwise make it plausible that Sleper
was enticing Warner to breach his contractual obligations to Syngenta when he sent that
text message.
There are different problems with the tortious-interference claim against FBN. The
gist of this claim is that FBN “dangled the prospect of new jobs in front of” Warner and
Sleper in order to obtain Syngenta’s confidential data and gain an unlawful competitive
advantage. Id. ¶ 6. Syngenta has plausibly alleged that FBN was aware of the men’s
contractual obligations; after all, FBN had recently hired at least two other former Syngenta
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employees who were presumably under similar obligations. See id. ¶ 118. But it is not
reasonable to infer from the complaint that FBN induced Warner and Sleper to breach their
duties to maintain confidentiality and to return Syngenta’s property.
First, Warner
apparently initiated the communications about building a new seed-breeding program at
FBN. Id. ¶ 46. FBN did not request the meeting with Warner and Sleper in Albert Lea,
nor did it apparently take any action to induce Warner and Sleper to divulge confidential
information in that meeting. After the meeting, FBN “reassured” the two men that it
“anticipated moving forward with [them]” and encouraged them to “think about [their]
ideal role profiles,” but it mentioned nothing about Syngenta’s confidential information.
Id. ¶¶ 51, 57. Finally, Syngenta does not allege that FBN did anything to encourage Warner
and Sleper to save Syngenta’s confidential information on external storage devices and
keep that information after their departure from the company. Moreover, because Syngenta
has not plausibly alleged that Sleper breached his noncompete obligations, it has, at most,
alleged that FBN induced Warner to breach his covenant not to compete.
It is not necessary to decide whether Syngenta has plausibly alleged that FBN
induced a breach of Warner’s non-compete, however, because either way, Syngenta has
not alleged that FBN acted “without justification.” Beverage Sys., LLC, 784 S.E.2d at 462.
As North Carolina courts have consistently held, “[c]ompetition in business constitutes
justifiable interference in another’s business relations and is not actionable so long as it is
carried on in furtherance of one’s own interest and by means that are lawful.” Wells Fargo
Ins. Servs. USA, Inc. v. Link, 827 S.E.2d 458, 476 (N.C. 2019) (quoting Peoples Sec. Life
Ins. Co. v. Hooks, 367 S.E.2d 647, 650 (N.C. 1988)). “The recruitment of employees from
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a business competitor is presumptively privileged competitive activity, absent an allegation
of legal malice.” Id. at 477. “Legal malice” in this context means “intentionally doing a
wrongful act or exceeding one’s legal right or authority,” and the act “must be taken with
the design of injuring one of the parties to the contract or of gaining some advantage at the
expense of a party.” Murphy v. McIntyre, 317 S.E.2d 397, 401 (N.C. Ct. App. 1984). “To
survive dismissal, a complaint alleging tortious interference ‘must admit of no motive for
interference other than malice.’” Movement Mortg., LLC v. McDonald, No. 3:17-CV-716RJC-DSC, 2018 WL 6733953, at *5 (W.D.N.C. Nov. 6, 2018) (quoting Pinewood Homes,
Inc. v. Harris, 646 S.E.2d 826, 832–33 (N.C. Ct. App. 2007)), report and recommendation
adopted, 2019 WL 452773, at *1 (W.D.N.C. Feb. 5, 2019). To be sure, Syngenta makes
some conclusory assertions that FBN intended to injure it. Second Am. Compl. ¶ 125. But
even after expedited discovery, the facts pleaded in support of these assertions do not
plausibly show that FBN was “motivated by anything other than an interest in successfully
competing against” Syngenta. Link, 827 S.E.2d at 477; see also 360 Mortg. Grp., LLC. v.
Stonegate Mortg. Corp., No. 5:14-CV-310-F, 2016 WL 4943933, at *8 (E.D.N.C. Sept.
14, 2016) (granting summary judgment to defendant under similar circumstances); cf.
McDonald, 2018 WL 6733953, at *6 (denying motion to dismiss where plaintiff plausibly
alleged that a former employee remained employed, even after starting to work for a
competitor, in order to “gather trade secrets and confidential information and to recruit
employees to follow him”). For these reasons, Syngenta’s tortious-interference claims
against Sleper and FBN will be dismissed.
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VIII
Syngenta also claims that FBN violated the California Unfair Competition Law,
which prohibits “unlawful, unfair or fraudulent business act[s] or practice[s].” Cal. Bus.
& Prof. Code § 17200. According to Syngenta, FBN engaged in unfair business practices
by interfering with its contractual relationships and by misappropriating its confidential
information. Second Am. Compl. ¶¶ 132–36. After first hinting that California law should
not apply to this claim, Defendants argue that Syngenta has not alleged the requisite
economic injury and that the claim is nonetheless preempted. Defs.’ Mem. at 24–27.
Defendants first suggest that California law should not apply at all, and specifically,
that it is “opportunistic[]” for Syngenta to argue that North Carolina law applies to some
of its claims and then to invoke California law for this one. Defs.’ Mem. at 24; Defs.’
Reply Mem. at 13. As Syngenta points out, however, courts have allowed claims under
the California Unfair Competition Law as long as some of the wrongful conduct occurred
in California, even when a plaintiff asserts statutory and tort claims under the laws of other
states. See Inteliquent, Inc. v. Free Conferencing Corp., __ F. Supp. 3d __, No. 16-cv6976, 2020 WL 7027583, at *15–16 (N.D. Ill. Nov. 30, 2020); TruePosition, Inc. v. Sunon,
Inc., No. 05-cv-3023, 2006 WL 1451496, at *5–6 (E.D. Pa. May 25, 2006). Syngenta
alleges that FBN is headquartered in California. Second Am. Compl. ¶ 13. It also argues
that FBN received and used “Warner’s and Sleper’s wrongful assistance” in California by
using the BreedingPlanCosts PDF and that Warner “traveled to FBN as part of the scheme.”
Pl.’s Mem. at 40; see Second Am. Compl. ¶¶ 62–63. These latter allegations do not
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explicitly state that the conduct in question occurred in California, but it seems reasonable
to infer that it did.12
Next, Defendants argue that Syngenta has not alleged the requisite economic injury
to state a claim under the UCL. See Cal. Bus. & Prof. Code § 17204 (providing that only
those who have “lost money or property as a result of the unfair competition” may sue
under the UCL); see also Stoba v. Saveology.com, LLC, No. 13-cv-2925-BAS (NLS), 2014
WL 3573404, at *4 (S.D. Cal. July 18, 2014). A plaintiff can show an economic injury in
“innumerable ways”—some more tangible than others. Kwikset Corp. v. Superior Ct., 246
P.3d 877, 885 (Cal. 2011). For example, a plaintiff might “surrender in a transaction more,
or acquire in a transaction less, than he or she otherwise would have” or “have a present or
future property interest diminished.” Id. at 885–86. “‘[G]eneral factual allegations of
injury resulting from the defendant’s conduct may suffice’ at the pleading stage.” In re
Toyota Motor Corp., 790 F. Supp. 2d 1152, 1162 (C.D. Cal. 2011) (quoting Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560 (1992)).
Syngenta’s allegations, while somewhat sparse, make an economic injury at least
plausible. Its conclusory statement that FBN’s actions “have caused and continue to cause
economic injury to” it is not entitled to a presumption of truth, Second Am. Compl. ¶ 135;
see Ashcroft v. Iqbal, 556 U.S. 662, 680–81 (2009), but taken as a whole, the complaint
12
No Party argues that this claim, which seems to be based on essentially the same
conduct as Syngenta’s other claims against FBN, is “closely related” to Sleper’s
Employment Agreement, such that the North Carolina choice-of-law provision should
govern. Nw. Airlines, 111 F.3d at 1392.
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does more. Syngenta has plausibly alleged that FBN misappropriated trade secrets that it
spent millions of dollars to develop. Second Am. Compl. ¶ 9. Under the circumstances, it
is plausible that Syngenta’s “property interest” in those trade secrets was “diminished.”
Kwikset Corp., 246 P.3d at 885–86; see Fields v. QSP, Inc., No. CV 10-5772 CAS (SSx),
2011 WL 1375286, at *6 (C.D. Cal. Apr. 8, 2011) (holding that an alleged misappropriation
of trade secrets was “sufficient to establish a loss of property”); see also Law Offices of
Mathew Higbee v. Expungement Assistance Servs., 153 Cal. Rptr. 3d 865, 879 (Cal. Ct.
App. 2013) (holding that less tangible injuries like “lost business” and the diminished
“value of [a] law practice” can suffice as injuries under the UCL).13
Finally, Defendants argue that Syngenta’s UCL claim is preempted by the
California Uniform Trade Secrets Act, which, like the MUTSA, “supersede[s] other civil
remedies ‘based upon misappropriation of a trade secret.’” Silvaco Data Sys. v. Intel Corp.,
109 Cal. Rptr. 3d 27, 51 (Cal. Ct. App. 2010) (quoting Cal. Civil Code § 3426.7), abrogated
on other grounds by Kwikset, 246 P.3d 877. The CUTSA preempts a claim under the UCL
that “relies on the same facts as [a] misappropriation claim.” K.C. Multimedia, Inc. v. Bank
of Am. Tech. & Ops., Inc., 90 Cal. Rptr. 3d 247, 263 (Cal. Ct. App. 2009) (citation
omitted).14
13
Defendants also appear to argue that Syngenta lacks standing under the UCL
because it has not plausibly alleged that it will be able to recover restitution. Defs.’ Mem.
at 26. The California Supreme Court has held that ineligibility for restitution is not a basis
to deny standing under the UCL because the two issues are “wholly distinct.” Kwikset
Corp., 246 P.3d at 894–95.
14
One might reasonably wonder why the CUTSA would preempt the UCL claim when
the NCTSPA—which does not have a preemption provision—governs Syngenta’s
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This argument has merit. According to Syngenta, its UCL claim is not preempted
because it sweeps more broadly than the misappropriation of trade secrets. Pl.’s Mem. at
40. Specifically, it alleges that FBN’s “unfair business acts or practices” include both
“tortious interference with [its] valid contractual relationships and misappropriation of
confidential information.” Second Am. Compl. ¶ 134. There are two problems with this
argument.
First, as discussed above, Syngenta has not plausibly alleged that FBN
wrongfully interfered with Warner’s and Sleper’s contracts. Second, under California law,
Syngenta cannot avoid preemption by claiming that FBN misappropriated confidential
information that does not rise to the level of a trade secret. To do so, it would have to
“allege wrongdoing materially distinct from the wrongdoing alleged in” its trade-secret
claim. Waymo LLC v. Uber Techs., Inc., 256 F. Supp. 3d 1059, 1062–64 (N.D. Cal. 2017).
Nowhere does Syngenta distinguish between FBN’s conduct with respect to its alleged
trade secrets and FBN’s conduct with respect to its other, non-trade-secret information. In
other words, Syngenta’s UCL claim will be dismissed because it “relies on the same facts
as [its] misappropriation claim.” K.C. Multimedia, Inc., 90 Cal. Rptr. 3d at 263.
statutory trade-secret claim. But the Parties do not address this issue, and other courts have
appeared to rely on the CUTSA’s preemption provision even when some other state’s law
governs a plaintiff’s misappropriation claim. See You Map, Inc. v. Snap Inc., No. 20-162CFC, 2021 WL 106498, at *8–10 (D. Del. Jan. 12, 2021), report and recommendation
adopted, 2021 WL 327388 (D. Del. Feb. 1, 2021); AirWatch LLC v. Mobile Iron, Inc., No.
1:12-cv-3571-JEC, 2013 WL 4757491, at *3, 6 (N.D. Ga. Sept. 4, 2013). The CUTSA’s
preemption provision will therefore be applied here.
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IX
Syngenta’s final claim is that Warner, Sleper, and FBN engaged in a “civil
conspiracy” to unlawfully harm it. Second Am. Compl. ¶¶ 137–39. Under North Carolina
law, civil conspiracy “is not a separate civil action[.]” Dove v. Harvey, 608 S.E.2d 798,
800 (N.C. Ct. App. 2005). Instead, it is a theory of liability, premised on an underlying
tortious act, that allows a plaintiff to “associate [multiple] defendants together and perhaps
liberalize the rules of evidence to the extent that under the proper circumstances the acts of
one may be admissible against all.” Krawiec, 811 S.E.2d at 613 (quoting Henry v. Deen,
310 S.E.2d 326, 334 (N.C. 1984)). The elements are “(1) a conspiracy, (2) wrongful acts
done by certain of the alleged conspirators in furtherance of that conspiracy, and (3) injury
as a result of that conspiracy.” Id. at 614 (citation omitted). Defendants do not frame their
arguments around these elements. They argue that the conspiracy claim fails because it is
not a standalone cause of action, because it is preempted, and because Syngenta has not
plausibly alleged any underlying wrongful acts to support it. Defs.’ Mem. at 27; Defs.’
Reply Mem. at 14–15. Syngenta responds that its conspiracy claim is not preempted and
that it should survive because the other claims do. Pl.’s Mem. at 42–43.
At this stage, and given the relative lack of briefing on the question, Syngenta has
the better arguments. First, although Defendants are correct that there is no freestanding
cause of action for civil conspiracy, North Carolina courts consistently allow plaintiffs to
raise it as a separate count in their complaints, see, e.g., PDF Elec. & Supply Co. v.
Jacobsen, No. 20 CVS 4609, 2020 WL 5415220, at *4, 11 (N.C. Super. Ct. Sept. 9, 2020),
so civil conspiracy’s status as a theory of liability rather than a cause of action is not reason
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enough to dismiss the claim. Second, Defendants’ argument that the civil-conspiracy claim
is preempted rests entirely on their conclusion that either the MUTSA or CUTSA should
govern Syngenta’s statutory trade-secret claim. See Defs.’ Mem. at 27 n.7. As noted
above, however, the NCTSPA—which has no preemption provision—governs the state
trade-secret claims in this case. Finally, Syngenta has plausibly alleged that Sleper and
FBN misappropriated its trade secrets. Because that claim provides an underlying tort, and
because Defendants have not challenged any other elements of the conspiracy claim at this
stage, dismissal would be inappropriate. See Eli Rsch., Inc., 312 F. Supp. 2d at 757, 763–
64 (denying a motion to dismiss under similar circumstances); PDF Elec. & Supply Co.,
2020 WL 5415220, at *11 (same).
X
The only remaining question is whether the dismissal of Syngenta’s tortiousinterference and UCL claims should be without prejudice to give Syngenta an opportunity
to amend its complaint. See Pl.’s Mem. at 43. “Federal courts have disagreed to some
extent over whether a dismissal under Rule 12(b)(6) is ‘normally one with prejudice or
without prejudice,’” but courts “ultimately have discretion to decide between” the two.
Miles v. Simmons Univ., No. 20-cv-2333 (ECT/KMM), 2021 WL 195798, at *7 (D. Minn.
Jan. 20, 2021) (citation omitted). “A dismissal with prejudice is typically appropriate when
a plaintiff has shown persistent pleading failures despite one or more opportunities to
amend . . . or when the record makes clear that any amendment would be futile. Id.
(internal quotation marks and citations omitted). But when a plaintiff’s claims “might
conceivably be repleaded with success,” a without-prejudice dismissal may be the better
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option. Washington v. Craane, No. 18-cv-1464 (DWF/TNL), 2019 WL 2147062, at *5
(D. Minn. Apr. 18, 2019), report and recommendation adopted, 2019 WL 2142499 (D.
Minn. May 16, 2019).
Several factors arguably weigh in favor of dismissing Syngenta’s claims with
prejudice. Syngenta has already amended its complaint twice, and it has had the chance to
conduct limited discovery. This may diminish the probability that more discovery will
allow Syngenta to plausibly replead the dismissed claims. Nonetheless, discovery will
proceed on Syngenta’s remaining claims. The Parties are currently engaged in several
contentious discovery disputes, see ECF Nos. 102, 108, 138, and the late-breaking
revelations about Sleper’s alleged destruction of Syngenta property have already shown
that expedited discovery did not reveal all relevant information, see ECF No. 94; supra n.5.
All of this suggests that new information implicating Sleper and FBN could come to light.
See Miles, 2021 WL 195798, at *7. Under these circumstances, the better answer is to
dismiss Syngenta’s deficient claims without prejudice.
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ORDER
Based on the foregoing, and on all the files, records, and proceedings herein, IT IS
ORDERED that Defendants Farmer’s Business Network and Joshua Sleper’s Motion to
Dismiss [ECF No. 61] is GRANTED IN PART and DENIED IN PART as follows:
1. The motion is GRANTED with respect to Counts IV and V of the Second
Amended Complaint [ECF No. 69] and those counts are DISMISSED
WITHOUT PREJUDICE.
2. The motion is DENIED in all other respects.
Date: February 22, 2021
s/ Eric C. Tostrud
Eric C. Tostrud
United States District Court
47
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