Steves and Sons, Inc. v. Jeld-Wen, Inc.

Filing 1424

MEMORANDUM OPINION. PLAINTIFF STEVES AND SONS, INC.'S MOTION FOR SUMMARY JUDGMENT ON JELD-WEN COUNTERCLAIMS (ECF No. 885) was granted as to the Fourth and Fifth Counterclaims and denied as to the First and Third Counterclaims, except to the extent that the motion concerned JELD-WEN's damages claims for trade secret misappropriation, which will be addressed in a separate opinion. SEE OPINION FOR DETAILS. Signed by District Judge Robert E. Payne on 04/16/2018. (tjoh, )

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Richmond Division STEVES AND SONS, INC., Plaintiff, Civil Action No. V. JELD-WEN, 3:16-cv-545 INC., Defendant. MEMORANDUM OPINION This SONS, matter INC.'S COUNTERCLAIMS is before MOTION (ECF No. the FOR 885). Court on SUMMARY For the PLAINTIFF JUDGMENT reasons ON set the motion was granted in part and denied in part, extent that Steves & Sons, Inc. judgment on the basis that JELD-WEN, expert failed misappropriated to trade apportion secrets, ("Steves") Inc.'s issue forth below, except to the sought between on AND JELD-WEN summary ("JELD-WEN") damages an STEVES which damages specific the Court ordered further briefing because Steves raised it for the first time at oral argument. See ECF No. be addressed in a separate opinion. 1290. Those contentions will BACKGROUND A. Factual Background^ 1. Steves' Relationships with Pierce Steves molded and JELD-WEN doorskin are both participants market in the United States. doorskin is used to make interior molded doors, to resemble molded solid doorskin wood plants, doorskins to build door currently done so. much create molded slabs a that type cost. ship Interior doorskins manufacturers are then of which are built lower and door That interior sold to use to the retailers or Steves is an independent door manufacturer that is a to produce result, manufacturers. door where unable As at manufacturers assembly distributors. doors in the i t must JELD-WEN, manufacturer, its meaning own and purchase doorskins however, that doorskins, is it a both has never from doorskin vertically produces integrated doorskins and uses those doorskins internally to manufacture and sell finished doors. Steves currently purchases to long-term supply pursuant a entered into in 2012 ^ Steves' doorskins agreement from that JELD-WEN the parties ("the Supply Agreement"). Statement of Undisputed Facts ("SUF") focuses almost entirely on procedural details about the litigation of JELDWEN' s counterclaims, rather than the underlying facts. See Steves Br. (ECF No. 884) (Under Seal) at 2-9. Accordingly, this factual background relies mostly on JELD-WEN's narrative statement of facts, to which Steves has not responded. In John March 2015, Pierce purposes. ("Pierce"), First, information Steves would manufacturing plant, Pierce as a a former JELD-WEN consultant for employee, two primary Steves wanted Pierce to provide i t with certain that "MDS project" hired as ("the MDS allow part it to of what Project"). could help verify the build Steves Second, accuracy of its own doorskin referred to as its Steves believed that JELD-WEN's key input costs for doorskins that it manufactured. Those input costs were the basis for the prices that JELD-WEN doorskins under the Supply Agreement, charged Steves for and JELD-WEN was required to provide the costs to Steves on an annual basis. When he worked at JELD-WEN, Pierce and JELD-WEN had entered into multiple employment contracts indicating that be exposed to certain confidential or trade Pierce not secrets could to any information secrets, disclose third the that or both. parties except JELD-WEN Under confidential as Pierce would considered those contracts. information required by or law. trade The confidentiality provision in the most recent employment contract applied even after Steves later Pierce hired confidentiality retired Pierce, agreement he with from JELD-WEN notified JELD-WEN in 2012. When Steves that the prevented him from disclosing JELD-WEN's trade secrets or confidential information. Between information March about 2015 and JELD-WEN's June doorskin 2016, Pierce manufacturing obtained methods. processes, and employees: Ed Fedio Reed and whether Reed did not information, (ECF SUF f No. remember conceded 28; of giving also the or Pierce (Under f that a trade Seal) Pierce Pierce any 28. Pierce knew and to it the given secret was to is Pierce disputed. confidential ("SUF he did Response") Williams did not information, but he confirmed from his previous SUF Response f 30. Bruce Borrell possible SUF Similarly, have JELD-WEN Jay any specific or non-public could five ("Williams"), information acknowledged that Response telling Williams with ("Takes"), JELD-WEN's 1008) SUF SI 30; Dale confidential recall but interactions Takes substance is information that WEN. Greg The it through ("Reed"), ("Fedio"), ("Borrell"). so. costs confidential work with JELD- Fedio could only specifically recall saying to Pierce that JELD-WEN had received good news on favorable resin pricing, and did not realize that he had given Pierce any allegedly confidential by counsel during this not believe information or he ever trade information until litigation. SUF gave secrets, Pierce but was 32-33. JELD-WEN's unable to he was told Takes also did confidential respond allegedly because of the attorney-client privilege.^ fully Id. f 35; ^ Why the attorney-client privilege would bar disclosure of the nature of the information passed on by Fedio defies imagination. And, the parties have not explained what information Borrell may have provided to Pierce, SUF Response 1 35. with Pierce, but they could not None of the employees were fired for meeting some received disciplinary communications that elaborate on allegedly because of the attorney- client privilege.^ See SUF if 29, 31, 34, 36; SUF Response SISI 29, 31, 34, 36. In any event. information According that to Pierce conveyed to Steves some or all of the he acquired JELD-WEN, Pierce provide him to do so. from Steves JELD-WEN specifically Steves with that In addition, those information had employees. requested and, in fact, that paid Steves found that information helpful in furthering the MDS Project.'' 2. Steves' Relationship with Ambruz and Use of JELD-WEN's Information In or Strategic 2015, LLC, a Steves company then managed retained Global by Ambruz John as a consultant to assist with the MDS Project. Like Ambruz into an from disclosing viewed July Partners ("Ambruz"), Pierce, around was employment during a former agreement JELD-WEN with confidential his employment. employee JELD-WEN information That or who that had prevented him trade prohibition entered secrets applied he even ^ It is difficult to conceive how the privilege would apply. ^ Steves apparently disagrees with this characterization of its actions, given its claim that "disputed issues of material fact exist as to [the misappropriation] element" of JELD-WEN's claims. Steves Reply (ECF No. 1124) (Under Seal) at 9. However, Steves has not identified the particular facts that it disputes. after his employment was terminated in April 2014. aware of Ambruz's confidentiality obligations Steves became at some point, although i t is unclear when exactly that occurred. In November 2015, principal officers, Brothers"), to discuss plant. analysis the concerning manufacturing, the with possible Pierce Steves the met Pierce and Edward Steves and Sam Steves II manufacturing for Ambruz construction subsequently Brothers effect of "die ("the Steves of a thereby doorskin a prepared (and Steves' detailed Steves, changes"^ on too) doorskin which suggested ways to mitigate the cost of die changes in order to maximize doorskin production efficiency at a single 2016, doorskin Ambruz assessing doorskin alleged Study that manufacturing feasibility manufacturing both included Pierce plant, Pierce and the of plant die Steves ("the change information or around March analysis into a study building an Feasibility analysis that in was Study"). and derived independent It is the Feasibility from information obtained from JELD-WEN. Sam Steves that Then, incorporated parts of that the that plant. had sent subsequently compiled the memoranda sent those to Steves documents about in an June and independent 2016 to e-mails doorskin Ambruz and ^ A die is a device used to create a specific doorskin design during the manufacturing process. Because a plant cannot run all its dies simultaneously, the dies in service are rotated as required to meet a company's doorskin design needs. Gregory Wysock vertically ("Wysock")-a integrated former another Steves hired Wysock to help with the MDS Project in July 2016. Shortly his he conducted another die analysis review reveals of that capacities, doorskin manufacturer, of Masonite. thereafter, doorskin employee Pierce's Wysock die was productivity, manufacturing change also and analysis. aware of related plants, that was based on Other the configurations, processes which evidence for JELD-WEN JELD-WEN's asserts that Pierce had obtained from JELD-WEN employees. Since then, and still is Steves has continued to work on the MDS Project considering the doorskin manufacturing plant. feasibility For customers who purchase its doors Project at different communications stages. with plant. one Indeed, partner, instance, about about building Steves its has own informed the progress of the MDS Steves manufacturing manufacturing partners of has also partners creating a had and recent equipment doorskin manufacturing it was in the process of negotiating a deal with Proteak, when this litigation caused the deal to fall apart. B. Procedural Background Steves 2016, initiated this asserting antitrust related to Manufacturing, JELD-WEN's Inc. and action against and contract 2012 JELD-WEN claims acquisition JELD-WEN's subsequent on June against of 29, JELD-WEN CraftMaster breaches of the Supply Agreement. Complaint (ECF No. 5) (Under Seal). The parties then engaged in discovery. On Answer WEN' s March and 27, to 2017, add counterclaims recent discovery, discovery, that information furtherance of asserted the the COUNTERCLAIM Act, trade to Texas Remedies COUNTERCLAIM FOR MDS JELD-WEN; amend based on have used JELD-WEN's Project. ECF by No. proposed Violation of Pierce 101 and at the Defend Defend Trade Secret Annotated §§ RELIEF, FIFTH Act, Secrets FOR RELIEF, Secrets Texas 134A.001 Tortious FOR Fair RELIEF, Dealing RELIEF, Breach Under COUNTERCLAIM the Delaware Breach of Contract. On May 17, 2017, Violation of Practice 134A.008; Interference 18 with & FOURTH Contract relating to Pierce's employment contract contract of Act, Civil - FIRST Trade THIRD COUNTERCLAIM FOR RELIEF, Trade JELD-WEN counterclaims: Violate employment JELD- Ambruz—in 1-2. FOR RELIEF, Interference with Contract Under Texas Common Law, Ambruz's its confidential COUNTERCLAIM Under Texas Common Law, with to Steves SECOND Uniform Code leave 1836; U.S.C. § 1832(a)(5); the against secrets—obtained RELIEF, 18 U.S.C. § Conspiracy may following FOR sought from documents produced by Steves during Steves and JELD-WEN with JELD-WEN; Implied Law; Covenant and ECF No. SIXTH of SEVENTH 106 (Under Tortious relating to COUNTERCLAIM Good Faith and COUNTERCLAIM FOR Seal) SIf 41-78. the Court granted JELD-WEN's request, and JELD- WEN filed the counterclaims. Counterclaims (ECF No. 252) (Under Seal). Two First, other the causing aspects Fourth Pierce employment of and and the Counterclaims Fifth Counterclaims Ambruz, contracts with are were respectively, JELD-WEN by the Second, First, JELD-WEN Second, requested damages "providing Third its actual secrets misappropriation, that was not Alternatively, royalty for secrets. Steves as accounted JELD-WEN Steves' Counterclaims. loss well for sought past In addition, fSl 62, requested multiple types and for based to and confidential information to Steves." Id. added). relevant as as JELD-WEN reflecting the sought an on Steves breach their trade 68 secrets (emphasis of relief It the trade enrichment actual a loss. reasonable misappropriated order: for primarily of unjust JELD-WEN's damages of result Steves' in use a here. (1) trade enjoining from acquiring any further trade secrets or confidential information from JELD-WEN and from using such trade secrets; and (2) requiring Steves to JELD-WEN's trade Alternatively, to pay a secrets. At secrets at the Counterclaims, or records and destroy any of confidential information. JELD-WEN requested an injunction requiring Steves reasonable Id. search its royalty for every future use of the trade 47-49. same time that it allowed JELD-WEN to add the the Court also ordered that those claims be tried separately from the antitrust and contract claims. ECF Nos. 239240. Trial January favor for 29, on verdict 2018, all is the and counts not antitrust the on and jury returned February relevant to contract 15, the a claims began verdict ECF 2018. Court's in 1022. No. decision on Steves' That on Steves' the Second, summary judgment motion. On Sixth, June and 19, 2017, Seventh Steves moved Counterclaims for to dismiss failure to The Court granted the motion on September 13, those counterclaims with prejudice. ECF Nos. JELD-WEN alleging then several filed trade an action secrets and state 2017, a claim. dismissing 353-354. in Texas related state claims court, against the Steves Brothers and Pierce based on the same underlying facts as the Counterclaims. voluntarily dismiss motion, Shortly the concluding thereafter, Counterclaims, that the trade JELD-WEN but moved to the Court denied the secrets litigation had advanced to a stage where dismissal would prejudice the parties and that JELD-WEN's sole explanation for voluntary dismissal was lacking. ECF Nos. 579, 734.® The Court then granted motions by the Steves Brothers and defendants in this action. Pierce As a to result, intervene as counter- the Steves Brothers are ® The Texas action has been stayed. This case is currently set for trial on April 30, the trial until July. 2018, but 10 Steves has moved to continue now counter-defendants Counterclaims, and Third and to the Pierce is Counterclaims. First, a Third, Fourth, counter-defendant ECF Nos. 832-833, and the to Fifth First However, those parties' status as co-defendants to Steves is immaterial here. On April 19, misappropriated 2017, trade identify the secrets. ECF No. the Court ordered JELD-WEN to secrets witnesses 143. who to be would JELD-WEN presented prove that responded by Seal). of descriptions the After Steves raised concerns and the Court noted 350) statement, strike at 131:17, ECF No. portions of 2017. that 9, In addition, side of making that there (Under 420) JELD-WEN vagueness trade secrets [the statement] no (Under (Under Seal) on an room The at that then were moved to imprecise, ECF No. so crystal clear and so precise for 22:6-8. amended October Seal). secrets the Court urged JELD-WEN to "err . . . on the can be filed 185 2017 Transcript Steves statement updated Seal). contention vague and leaving the door open." Oct. No. trade ECF No. and the Court granted that motion in part on October 6. 424. to statement the the and were a the JELD-WEN served Steves with an updated 357-2 the they about needed to be "specifically identified," Aug. (ECF No. trial filing of misappropriated trade secrets on April 26, (Under at list 9 Amended Trended Statement 11 you are 2017 Transcript being (ECF Following those instructions, statement ("the 3, that of misappropriated Statement"). contained a ECF number trade No. 428 of rows of trade secrets, but some rows contained Amended more Statement than one conduct its paragraph of information. Steves subsequent WEN' s relied Rule two single 30(b)(6) whether Mallard secret, also designees. they combination individual depositions trade secret both item rows responded in the the confidential row a Reed also does list of keep a information confidential, into items or groups. Steves' JELD- Mallard counsel asked the rows multiple to contain trade in secret. explained, and trade row SUF fSI 10-11/ secrets, that considers Reed each a the whole though, a secrets. considers confidential information trade Brooks JELD-WEN be trade Response SIf 10-11. through the Amended Statement, that cumulative and in to and certain or to JELD-WEN Reed understood different and that not of During those depositions, Testifying about and the corporate ("Mallard"). witnesses on is SUF JELD-WEN all its and does not separate that information SUF f 10; SUF Response I 10. JELD-WEN then filed an updated statement of misappropriated trade secrets to be asserted at Statement"). WEN moved Statement ECF No. for leave based 468 to on (Under Seal). add the including JELD-WEN's Morrison ("Morrison"), trial several on November 2 Shortly thereafter, trade declarations industry expert that they 12 ("the Trial and had secrets of to two former the JELDTrial individuals, employee discovered James additional misappropriated trade secrets and confidential information while reviewing documents produced by Steves. The trade secrets described by Morrison related to sales data from internal JELDWEN documents reflected that he in Ambruz's Morrison created viewed during his employment—which Feasibility Study for while working for Steves—and JELD-WEN. ECF (Under Seal). After the Court granted the motion, were formulas No. 511-2 JELD-WEN filed its amended statement of misappropriated trade secrets for trial ("the Amended Trial Statement") on November 29. ECF No. 588 (Under Seal). During questioned Amended Morrison's him about Trial subsequent the trade Statement. Morrison could internal JELD-WEN documents had seen not As sales data Ambruz had access, was "generally receiving. the data data that an employee, number of databases added further number of JELD-WEN's that he did because he of shipments in the information, seen in stated that he to had which he and Feasibility Study data. not added he but counsel SUF S[ 18; need was that to knew SUF research from customers his were SUF Response ff 17-19. Morrison Amended a were sales the specific Steves' that and that the data in the He recollection employment in secrets to as reflective" Response SI5 17-19. this identify deposition, Trial also testified Statement, about having 13 been the information retained by in the JELD-WEN to express his expert confidential, SUF f 25. trade protected, When not and that retained certain said to give an SUF f showing contained that the document Id. SISl 24, 26; No. 884-6) summary expert judgment filed its after the also 22. Morrison responding on a that whether single secret evaded JELD-WEN particular SUF Response fSI 21-22.^ in the Amended Trial 28 rows of discovery on opposition jury Morrison Annotated Trial Statement, trade secrets. (Under Seal). After see a was Id. 5 23; trade was information constituted a trade secret. rows JELD-WEN. it opinion Morrison then numbered the information was questioning by to that information that combination." of him whether valuable whether in line on and Morrison "[s]eparately had asked secret, answering opinion January on returned was completed, 24, 2018. February the antitrust and contract claims, 14. verdict Steves' Steves ECF ECF in Statement No. No. 885. 1005. Steves' moved for JELD-WEN Then, favor (ECF on soon its counsel indicated that i t would seek to amend its motion to incorporate relevant aspects of that verdict, and the parties agreed to have Steves move for ^ JELD-WEN's lay witnesses also avoided similar questions upon instruction expert) secret. from JELD-WEN's counsel that witnesses (lay or could not opine whether something was or was not a trade Although that is correct, it is irrelevant. witnesses were required to respond to whether testifying about a single alleged trade secret or combination trade secret. 14 The they were an alleged leave to amend pursuant to an expedited briefing schedule. 20, 2018 Steves' Transcript counsel (ECF notified No. the not move for leave to amend. as scheduled on March 5, to the strike and damages counterclaims—neither Court in for issue at the 13:14-18:16. next As a result, 2018. certain arguments verdict 1039) ECF No. having been on March 15, JELD-WEN would not Court instructed trade secrets secret and detail than WEN pertained to tortious interference addressed an Statement") the in be the to asserted the at an trial that Trial statement 21, 2018. generalized Trial submit source Amended March removed Amended ECF No. Steves' 1207. after JELD-WEN's counsel advised that JELD-WEN updated on in assert but one combination trade secret, explained filed statement to would that opening brief—and the Court granted the motion. Finally, it JELD-WEN then moved reply JELD-WEN's that However, Steves filed its reply 1124. Steves' day Feb. Statement of the ("the trade In 1218 also of trade in more response, JELD- Amended Trial (Under from each secret Second information statement delineated Statement. ECF No. and updated the Seal). several removed That rows entirely in the information constituting several trade secrets. At oral argument, Steves again expressed concern about the specificity of certain trade secrets in the Second Amended Trial Statement therein as and Steves' part of its inability summary 15 to examine judgment the motion. information During oral argument, trial JELD-WEN's counsel confirmed that it would pursue at only one combination trade secret. The Court Steves to move separately for sanctions under Fed. R. permitted Civ. P. 37 based on JELD-WEN's purported failure to comply with the Court's earlier orders to define the trade secrets with specificity. Court also given allowed JELD-WEN's Statement. See Steves to seek modifications ECF No. a in continuance the Second of the Amended The trial Trial 1290. DISCUSSION I. Legal Standard Under Fed. R. Civ. P. 56, a court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Rule 56 requires the entry of summary judgment "after adequate time for discovery and upon motion, sufficient to against a party establish the that party's case, For a fails proof party's v. Catrett, court to enter summary judgment, concerning case make a showing essential to and on which that party will bear the burden genuine issue as to any material fact, of to existence of an element of proof at trial." Celotex Corp. (1986). who renders an essential all other (internal quotations omitted). 16 317, 322 "there can be no since a complete failure element facts 477 U.S. of the immaterial." nonmoving Id. at 323 When reviewing a motion for suiranary judgment, interpret the light most Elec. facts Indus. (1986); 2017). Lee v. court must and any inferences drawn therefrom in the favorable Co. a to v. the nonmoving Zenith Town of Radio Seaboard, party. Corp., 863 See Matsushita 475 574, 587 323, F.3d U.S. 327 (4th Cir. To successfully oppose a motion for summary judgment, nonmoving party specific facts Anderson v. However, " suffice' to judgment, Andrews, Potomac "Where . rational must demonstrate to Liberty Lobby, [c] onclusory oppose a there are genuine issue for trial. that would create a See Inc., or the 477 court U.S. speculative properly that the 242, 250 allegations supported motion (1986). do for not summary 'nor does a mere scintilla of evidence.'" Matherly v. 859 F.3d 264, Elec. . . Power the trier 280 Co., 312 F.3d taken record of (4th Cir. as fact to 2017) 645, a find (quoting Thompson v. 649 whole for (4th Cir. could not the 2002)). lead non-moving a party, disposition by summary judgment is appropriate." United States V. II. Lee, 943 F.2d 366, (4th Cir. 1991). First and Third Counterclaims Steves Counterclaims cannot seeks on satisfy misappropriation Act 368 ("DTSA") summary two judgment grounds. First, the elements all claim under the on the it First contends of federal a Defend that trade Third JELD-WEN secrets Trade or the Texas Uniform Trade Secrets Act 17 and Secrets ("TUTSA"), because JELD-WEN's in the Amended inadequate description of the trade Trial Statement means the existence of any trade secrets. JELD-WEN's that it Second, cannot secrets establish Steves asserts that DTSA and TUTSA damages claims must fail because the report and testimony of JELD-WEN's damages expert, John Jarosz ("Jarosz") reflect that the damages asserted are speculative and inconsistent with JELD-WEN's allegations and Steves' conduct.® As noted, the damages arguments will be addressed in a separate opinion when all those issues have been fully briefed. Under the DTSA, misappropriated injunctive "[a]n may relief] owner bring a . . . if a civil the product or service used in, of trade action trade [for secret or intended for secret is use or foreign commerce." 18 U.S.C. § 1836(b)(1), that is damages related in, or to a interstate (3)(A)-(B). Thus, to prevail on that claim, a plaintiff must establish that: "(1) it owns a trade misappropriated; and or foreign Inc., No. 2, secret; (3) commerce." (2) the trade secret was the trade secret implicates interstate Space Sys./Loral, LLC v. 417CV00025RAJLRL, 2018 WL 701280, at *5 Orbital ATK, (E.D. Va. Feb. 2018). And, of course, the plaintiff must prove damages. A trade secret is defined by the DTSA to mean g Steves also contradicted calculations, been stricken, argued that the verdict in the antitrust trial the assumptions underlying Jarosz's damages Steves Reply at 19-25, but those arguments have see ECF No. 1207. 18 all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, . . . (A) the reasonable if— owner thereof measures to information secret; has keep taken such and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic disclosure 18 U.S.C. § 1839(3). "acquisition," or value use of the from Misappropriation "disclosure[,] certain circumstances. Id. § or use" the information. of is a defined trade secret as under 1839(5). The TUTSA similarly allows a plaintiff "to recover damages for misappropriation" "[i]n addition to or in lieu of injunctive relief," Tex. statute's definitions nearly id. Civ. identical § 134A.002(3), require Prac. the same of trade to (6). & Rem. secret their In effect, elements, Code § 134A.004(a). The and misappropriation are DTSA then, except the counterparts. a See DTSA and TUTSA claim latter need not involve any trade secrets that implicate interstate or foreign commerce. Steves acknowledges that JELD-WEN has presented evidence creating a genuine dispute about whether Steves misappropriated any trade secrets. It also appears 19 to concede that the trade secrets must relate do so, doorskins as that interstate to interstate the trade were, or secrets according commerce. foreign Indeed, it manufacture of concern the Steves' to Compl. SI 31. commerce. Complaint, As a result, sold Steves is in only contesting the existence of trade secrets that JELD-WEN owns. A. Specific Description of Trade Secrets Because comprise nature the DTSA multiple of Steves' and TUTSA elements, it challenge. In definitions is of necessary this motion, "trade to secret" clarify Steves does not to keep discuss whether JELD-WEN "has taken reasonable measures [the] information 18 U.S.C. § [in its 1839(3) (A), Amended Tex. Code § 134A.002(6) (A), so the has generally giving argued known that or in this not Court motion readily information independent Civ. Prac. Instead, & Rem. secret," Prac. need not & Rem. address whether could satisfy that element. that information ascertainable argument is not addressed in detail. Tex. Statement] Civ. JELD-WEN has produced evidence that Steves Trial economic by was other value. Steves But, secrets claimed. the subject that See 18 U.S.C. § 1839(3) (B) ; Code § 134A.002(6)(B). the core of Steves' cannot not means, argument is that JELD-WEN has not identified its trade secrets with enough specificity, that the apply the required elements to the such trade A plaintiff bears the burden of "describ[ing] matter of its alleged 20 trade secrets in sufficient detail to establish each element of a trade 996 F.2d 655, secret." 661 Trandes Corp. V. Guy F. Atkinson Co.^ As such, the plaintiff must "'identify, with particularity, trade secret it claims was misappropriated. allow the finder legitimately simply a of trade confidential fact to secret but a available information.'" Inc. , 15-CV00589-GBL-IDD, No. Feb. 25, S.A. , 2016) 331 BladeRoom F. (quoting Supp. Grp. Kancor secret, Ams., 2016 Inc. WL 740061, MicroStrategy Inc. must the 396, 418 (E.D. Facebook, Inc., No. (N.D. Cal. subject Jan. matter 23, of ATC at which is that is is publicly Ingredients, *14 v. Va. at *3 or v. v. 2018 WL 514923, that information 2d Ltd. Mescribe other trade each This must be done to distinguish from not (4th Cir. 1993). (E.D. Bus. Va. Objects, 2004))/ see also 5:15-CV-01370-EJD, 2018) the ("The plaintiff trade secret with sufficient particularity to separate it from matters of general knowledge in the trade persons . . . skilled (quoting Imax Corp. 65 (9th Cir. "must its the of special trade.'" Cinema Techs., knowledge (alteration Inc., may than fail produce for singles out any created and safeguarded PrimeSource Bldg. lists lack particular Prod., that Inc. of of trade general v. 21 those in original) secret, 1164- the plaintiff information," particularity particular of 152 F.3d 1161, 1998))). To satisfy this requirement, do more claim v. in or if it explaining bit Huttig Bldg. of and "never how it information." Prod., Inc., No. 16 CV 11390, 2017 WL 7795125, at *15 (N.D. 111. Dec. 9, 2017) (internal quotations omitted).^ The annotations by JELD-WEN's industry expert, his deposition contained 28 indicated rows Statement. Steves' manner his of 33) in Second that because of 30(b) (6) secrets. Amended See Trial report. Trial See Morrison Annotated Trial Halton Statement—that JELD-WEN might statements at these trade secrets, Report also by the assert at Morrison their actual trial and depositions (ECF No. 1008- number was two JELD-WEN asserted that the Amended Trial Rule claimed Statement rows in the Amended was Steves highlighted Rows 2 and 3 in support of this contention. Those rows, subsequent trade indecipherable JELD-WEN's that of individually and in combination. vague because of how it was structured. the Statement industry expert numbered the rows in the same designees Steves the at Steves initially argued—before JELD-WEN filed the Amended secrets trade expert SIS[ 48-198. that Morrison, Trial like many of Statement, had a ® With one exception, these cases did not specifically concern DTSA or TUTSA claims. However, their statements statutes codifying the Uniform Trade Secrets Act result, those laws have almost identical concerned state ("UTSA"). definitions of As a "trade secret" to the DTSA and the TUTSA, so the logic of those cases applies equally here. See BladeRoom Grp., 2018 WL 514923, at *2 (California UTSA); PrimeSource Bldq., 2017 WL 7795125, at *13 (DTSA and parallel Illinois Trade Secrets Act); Kancor Ams. , 2017 WL 740061, at *14 (Virginia UTSA); Trandes, 996 F.2d at 661 (Maryland UTSA). 22 similar format: described in sentences secrets. 5, 28, or a general that statement particular paragraphs about row, claiming the followed specific by 10, and 12-14, 30, as the flaws describe statements to about financial of the every data). trade ambiguity structure would not, did of at the with components of a 62. pieces constitute 593 general rows in the 12. make even summary judgment i t is clear that if trade Insights, (4th Cir. Inc. 2009); with if information together constituted conjunction or to information information secret 25-26, the individual secrets read Sentia Grp., v. when Inc., Trandes, 996 F.2d at 661- it might be the case that JELD-WEN grouped particular of Moreover, 4- trade secret in isolation or in information, See Decision App'x 586, Thus, (Rows combination trade secret are not identified with specificity individually. 311 F. other trade however, only making for lack of specificity appropriate. After all, combination not, secret, by itself, information may be considered a 3-10 (Rows 21-23, Steves more as " [n\] any of Amended Trial Statement." Steves Br. This or information and 18-19); i ^ at 10-12 secrets two See Morrison Annotated Trial Statement at 7-8, enough trade all Steves' in any secrets of a the trade other objection the therein in rows, with 23 the same secret only information concerns each more row the row in because when the read specificity in paragraph. substance described that the than of the trade in the cases cited (plaintiff and by Steves. asserted "refused to See only Trandes, that provide it any information and, similarly, Tunnel both a had F.2d at possessed "secret formulas" at trial, System 996 661-62 'formulas'" whatsoever about the "presented evidence that the structure and an organization, but explained neither how the program was structured nor how it was organized"); Kancor Ams., 2016 WL 740061, at *14-15 (summary judgment granted where counter-plaintiff gave "merely conclusory identification target samples potential meant); of its obtained customers," see alleged also trade by such [counter-plaintiff] and did not PrimeSource secrets," explain what Bldg., 2017 WL as "[a]11 from "target 7795125, its sample" at *15 (plaintiff was unlikely to succeed on merits of its claim where it "pointed only to general marketing secrets"). Unlike provided a significant amount of detail about its asserted trade the And, even where Amended subsequent specificity. plaintiffs Trial or those was somewhat paragraphs instance. cases, Row 7 trade in a that the has row generalized, provided stated to JELD-WEN introductory sentence Statement sentences For the in amount[ed] and information secrets. assert[ed] of budgeting the it categories in the necessary JELD-WEN "has developed processes and know-how for manufacturing refined fiber in a way that ensures that the 24 resin can properly bond fiber bundles together," and then described the precise nature of that know-how. Morrison Annotated Trial However, the facial Statement was only testimony of relevant whether trade the secrets, ambiguity compounded, one not JELD-WEN information in Statement at Row of the resolved, witnesses. 5 trade Amended by For constituted combination 4. the deposition example, several secret, Trial or asked individual both. Reed stated that JELD-WEN considers "[a]ll of the multiple individual items . . . to specify be that confidential," "these things and are that considered JELD-WEN does individual, things are considered a group or a cluster." Reed Dep. 884-2) (Under Seal) at question about Row 21, these it's [paragraph] however. are . . the . . . compilation the picture, Dep. 99:5-100:10. so to speak, (ECF No. 884-3) testified that information combination." meant, response of and to these (ECF No. the same Mallard said that "while each of . confidential of all these and a trade secret, that give[s] together that's the real trade secret." Mallard (Under Seal) at 331:9-13. Finally, Morrison he understands Row 2 Pressed a for trade an JELD-WEN secret explanation to information as noted that only a on what or "all 25 the and this combination this in phrase testify about separate of consider "[s]eparately Morrison responded that he could not existence secret, in In not the trade information is considered by JELD-WEN to be confidential." Morrison Dep. No. 884-5) (Under Seal) (ECF at 94:18-97:10. Those explanations confounded the description of the trade secrets Row in 2, the Amended Trial for combination secrets instance, trade (based could secret; on Statement. the have (2) number 12 of As Steves contained: separate, pointed out. (1) a single individual sub-paragraphs), which trade may or may not combine to also form a single combination trade secret; or (3) some third alternative in between those two.^° Even if one conclusion might have appeared more likely based on the plain language of the Amended Trial Statement, the testimony of JELD- WEN' s impossible witnesses Consequently, Statement, if some specificity. In made it JELD-WEN of its sum, virtually were trade as of the secrets the motion for summary judgment, relying on the might date that to tell. Amended fail for Steves Trial lack filed of this JELD-WEN had materially obfuscated identification of the trade secrets to be tried, and this was accomplished deliberately. Steves multiple also contended details in Row that 2 certain could sub-paragraphs themselves have with contained multiple trade secrets. But the Amended Trial Statement clearly indicated that "the plant configuration and capacity for each of its door skin facilities" are each an individual trade secret. Morrison Annotated Trial Statement at 1. The details that JELD- WEN provided ambiguity of about those those trade configurations secrets; particularity of those secrets. 26 they did not only increase added to the the For Second that reason Amended Trial representation trade secret, trade the that has secrets ordered Statement JELD-WEN cured in Court the which, will the along pursue structural Amended JELD-WEN Trial to with only one problems file the counsel's combination obscuring the JELD-WEN has Statement, separated each trade secret into its own row and identified the source of the trade secret. Statement Furthermore, contained numerous Second Amended Trial rows Statement where the Amended Trial with multiple paragraphs, contains only a few, the in which a general statement about "know-how" or "knowledge" is followed by several sub-paragraphs explaining that detail. See, 15, 18). whether e.g.. These changes information combination trade The further Second Amended have know-how or Trial mostly constitutes an Statement removed individual knowledge at any trade 6-8 doubt in (Nos. about secret or a secret. explanations clarified the of JELD-WEN's matter. counsel Steves' at counsel oral argument contested the specificity of several trade secrets in the Second Amended Trial Statement—15, 18, 22, 23, 62, 63, 66, and 67—on the same grounds it raised with respect to the Amended Trial Statement. Like many of the rows in the Amended Trial Statement, those the eight trade category of several secrets consist information sub-paragraphs in of a the detailing that 27 the descriptions for general trade statement about secret, general followed description. by See id. at 6-7, at 7-8, No. 15 No. elements); ("know-how" consisting of six elements); 18 id. ("negative at 9-10, know-how" No. 22 consisting ("unique 23 id. factors") ; on id. investment" at 23, and No. 62 associated ("projected and know-how" "negative No. 63 ("projected costs and return on certain things at JELD-WEN's Louisiana plant); ("projected volumes" customers certain in percentages" of certain 22, 63, 62, that 66, the of doorskins for years); id. at 25-26, shipped to counsel indicated and 67 are information trade therein id. does customers that 66 ("projected Nos. in their not No. for third-party 67 third-party secrets at 23- at 25, to No. doorskins id. investment" shipped JELD-WEN's years). such at 10-11, costs certain processes at JELD-WEN's West Virginia plant); 24, of ("knowledge" of the need to "regularly monitor and adjust [eight] return four combination knowledge" about the interaction of six factors); No. of id. 15, in 18, "entirety," constitute a trade secret if JELD-WEN cannot prove at trial that each sub-paragraph does not meet the statutory elements of a trade secret. Mar. 2018 Transcript that the secret, last because (ECF trade none No. 1295) at 70:24-71:5. secret. No. of sub-paragraphs the 23, is a She also stated combination are trade 26, trade secrets individually but qualify as a trade secret when read as a whole. Id. at 71:8-21. Notwithstanding any ambiguity on the face of the Second Amended Trial Statement, these statements make JELD-WEN's 28 position trial. clear and Therefore, thereby Steves' enable motion Steves will to be defend denied to itself the at extent that it seeks summary judgment on specificity grounds. B. Elements of Specific Trade Secrets Even if JELD-WEN particularity, granted as Trial to can Steves argues some Statement information of the because therein identify that trade its summary secrets JELD-WEN constitutes trade judgment in cannot a secrets the should be Second Amended establish trade with that secret.Where the a plaintiff has identified specific information that might qualify as a "•*3 trade secret, fact-intensive Insights, Nan Ya 311 a MicroStrategy, the App'x 996 conclusion facts a trade question to be Plastics Corp., also Trandes, is F, whether at 592 174 F.3d 661 of 411, based 331 F. present . Supp. . . Hoechst 419 upon to the is generally trial.'" Decision Diafoil (4th Cir. ("The existence 2d at 416 serve exists resolved at (quoting F.2d at law secret of a Co. 1999)); trade applicable v. see secret facts."); ("The question is whether elevate . . . information to the status of trade secrets."). However, summary judgment may be Steves' arguments pertained to the Amended Trial Statement, given that the Second Amended Trial Statement was only recently filed, but Steves presumably has the same problems with the latter to the extent that the challenged information is still claimed as a trade secret. 29 appropriate if JELD-WEN has failed to present enough evidence to satisfy the required elements under the DTSA and the TUTSA. As appears noted, to the only challenge trade secrets this motion in elements are that (1) whether information in question was not generally known to, readily ascertainable who obtain can through economic value proper from means the by, Steves and (2) "another disclosure or use the not person of the information," such that the information has independent economic value. 18 U.S.C. § 1839(3) (B). refers not to the knowledge by the public at knowledge persons who of other can MicroStrateqy, The "generally known" members gain of economic large, but the relevant benefit from 331 F. Supp. 2d at 416. requirement rather "to industry—the the In addition, secret." the "readily ascertainable" requirement asks whether the claimed trade secret can be acquired "through legitimate means. easily discover the information If a competitor could legitimately, that the information was either essentially minimus economic value." Id. at 416-17. the inference 'public' The or is of de "proper means which one could learn a trade secret" include "observ[ing] product on public use or display or . . . review[ing] available literature." Id. Byrne, 123 F. Supp. 3d at 417; 909, information by observation, is lawful, but information 915 see also A.M. (S.D. Tex. experimentation, is 30 unlawfully by the publicly Castle & Co. 2015) is v. ("Obtaining or general inquiry obtained if it is gained through omitted)). a breach "What of confidence." (internal readily ascertainable constitutes quotations through proper means is heavily fact-dependent and simply boils down to assessing the ease with which a trade secret independently discovered." MicroStrategy^ could 331 F. have been Supp. 2d at 417 (emphasis in original). As an initial information instance, to matter, which Steves makes it is Steves' the important arguments to do sweeping statement highlight not the apply. that For "much of the information in the Amended Trial Statement is generally known or readily ascertainable by proper means" information was given to Steves by Pierce, Steves Br. is not at 16. simply because an "industry expert." Even if Pierce is such an expert, necessarily true that he that acquired the however, claimed it trade secrets from that position, instead of through his employment at JELD-WEN. that it was has that Moreover, Steves has "generally known" to not demonstrated the element. failure Pierce secrets Likewise, not Steves' to discipline employees and JELD-WEN's lack are any industry experts absence of identified only marginally relevant about disclosed written do not influence the 31 of to whether the Court's so about JELD-WEN's information record possessed by JELD-WEN constitutes trade secrets. contentions Pierce, genuine dispute assertions who a of a like information its to trade information These overbroad determination of whether trade secrets exist, and the Court will focus only on the specific trade secrets attacked by Steves. Steves points to only three rows from the Amended Trial Statement that purportedly contain information that is generally known or readily ascertainable assertions are misguided. (1) Row 29, formulas because noted WEN 0pp. in (ECF No. factors door skin Second Nos. and to 1008) plant," 64-67 the in in source of constitute (Under Seal) deciding Morrison Trial the withdrew the on a at Amended sales a trade "the But claim secret, Steves' optimal And, Trial and that see (2) secret the Trial 4-5. data its trade Annotated Statement Second means. at 10 n.l2; longer claims as consider Amended row proper rows are no longer at issue here: JELD-WEN that because JELD-WEN no Two by to Row Statement—the highlighted JELD- Row 3, list of location Statement as the are of at a 2; 30—now substance contested. Steves cites Morrison's testimony to establish that the data is not confidential, asserted, and JELD-WEN, however, underlying was reflects not found notes information in he worked there.Indeed, Whether that in this something in that other internal Morrison confidential than JELD-WEN recalled JELD-WEN what is documents. viewing documents the when the Court allowed JELD-WEN to add Row recollection is admissible has not been pressed motion. 32 30 to the declaration Amended to Trial that Statement effect. See based Morrison on Decl. Morrison's (ECF 29) SI 10. These disagreements are not surprising, No. 1008- given that the secrecy elements of trade secrets are highly fact-dependent. MicroStrategy, has shown a those rows F. Supp. genuine is proper means, III. 331 not 2d dispute generally at as 416-17. to But whether because the See JELD-WEN information in known and readily available through summary judgment cannot be granted. Fourth and F i f t h Counterclaims Steves moves Counterclaims on for the summary sole judgment basis that on the those Fourth tortious and Fifth interference with contract claims are preempted by the Third Counterclaim for trade secrets misappropriation under the TUTSA. The TUTSA restitutionary, remedies Prac. & affect Rem. and or (2) other "displaces law misappropriation Code § certain whether [or] for generally not 134A.007(a). claims, based other of a [Texas] trade However, including: upon civil of "(1) remedies that also argued that JELD-WEN has the of Tex. TUTSA a does Civ. not remedies, trade not civil secret; based upon § 134.007(b). presented evidence to obtain damages on either claim, 14, but the Court has stricken that argument, 33 secret." are tort, providing contractual misappropriation misappropriation of a trade secret." Id. Steves conflicting insufficient Steves Reply at 12see ECF No. 1207. The parties dispute whether JELD-WEN's tortious interference claims are "based upon misappropriation of a secret. Resolving "whether the that facts relied interference] claim[s] claim." AMID, 241 three arise claims acquisition of issue F. on differ Supp. from trade requires from 3d at the secrets to those exact Court support 826. and the to Steves same consider the supporting [tortious the contends TUTSA that conduct—the confidential trade all alleged information by Pierce and Ambruz, who conveyed the information to Steves. Thus, The Court would not even need to decide this question if JELDWEN's tortious interference with construed as "contractual remedies" Mortg. Grp., 00847-SS, (finding contract LLC 2016 breach claims concerning "depend[ed] v. WL of not Homebridge 900577, Fin. at contract *7 and preempted under contract claims under the TUTSA. Servs., (W.D. Inc., Tex. tortious can See No. be 360 A-14-CA- Mar. 2, 2016) interference with TUTSA preemption provision "contractual remedies," on the existence and because content both of a claims written agreement"). JELD-WEN has implicitly adopted this assertion by citing 360 Mortgage Group on that point. See JELD-WEN 0pp. at 36 n.36. However, 360 Mortgage Group's conclusion on the tortious interference preemption issue appears to be mistaken. Most courts applying the TUTSA or similar statutes to tortious interference claims recognize that tortious interference is a tort claim, not a contract claim-making the question of whether the claim is "based upon the misappropriation of a trade secret" relevant. See, e.g., Downhole Tech. LLC v. Silver Creek Servs. Inc. , No. CV H-17-0020, 2017 WL 1536018, at *3 (S.D. Tex. Apr. 27, 2017); AMID, Inc. v. Medic Alert Found. U.S., Inc., 241 F. Supp. 3d 788, 826-27 (S.D. Tex. 2017) (citing cases involving other Uniform Trade Secrets Acts). Moreover, preemption "is not avoided simply because a claim requires different elements of proof than a [TUTSA] claim." AMID, 241 F. Supp. 3d at 826 (internal quotations omitted). Therefore, it is immaterial that JELD-WEN must demonstrate the existence of a contract tortious interference claims but not its TUTSA claim. 34 for its the tortious interference misappropriation of a those claims certain the as a hand, in case qualifies asserts preemption issue at are necessarily based upon the trade secret, backstop information other claims as that this a it and JELD-WEN is only using they cannot trade is establish secret. premature to stage given the parties' that JELD-WEN, resolve on the disagreement about whether JELD-WEN can establish that any of its information is a trade secret. evidence that and Ambruz's its Furthermore, tortious disclosure JELD-WEN does not assert says JELD-WEN, interference claims of some is a confidential trade secret, it has produced rely on Pierce's information that so those claims are not premised entirely on trade secret misappropriation, as they must be to be preempted. The scope of the TUTSA is a the TUTSA was interpreted the to have done Fresh Tex so enacted, few Texas scope of its preemption provision. so in detail, Produce, acknowledged recently question of Texas that in Super Starr LLC, 531 S.W.3d the TUTSA "^was law. courts (Tex. intended have The only one International, 829 Because LLC v. App. 2017),^^ to prevent The Court may look to this decision for guidance here because the precise question presented here—whether a tortious interference claim based on the misappropriation of both trade secrets and confidential information is preempted by a TUTSA claim—has not been addressed by the Texas Supreme Court. See Webb V. City of Dallas, 314 F.3d 787, 795 (5th Cir. 2002). 35 inconsistent eliminating theories of alternative relief for theories the of same underlying harm by common law recovery which are premised on the misappropriation of a trade secret.'" Id. at 843 (quoting Smithfield Ham & Prod. Co. v. Portion Pac, Inc., 905 F. Supp. 346, 348 (E.D. Va. 1995)).^® As a result, the court found that a distributor's TUTSA claim preempted its separate breach of fiduciary duty claim because the latter was alleged in such a way that the breaches of fiduciary duty could not have occurred "without the use of alleged trade secrets." Id. The effect interference might not claims are that claims apply to this is on case, the information. Super position that a Starr . . holding unclear. this founded confidential out of where use that information) of a not JELD-WEN's notes the Super Starr potentially both Texas that trade federal conclusively tortious preempted secrets court pointed preclude alleged trade the holding was secrets (not merely confidential were a necessary component of the facts Software, [the] premised on the supporting the breach of fiduciary duty claim." Embarcadero Techs., Redqate and . claim based on confidential information is not preempted by TUTSA because finding JELD-WEN Indeed, "did on Inc., No. 1:17-CV-444-RP, 2018 WL Inc. v. 315753, at Although Smithfield was discussing the preemption provision of the Virginia UTSA ("VUTSA"), that provision is nearly identical to the TUTSA's preemption provision. Compare Va. Code § 59.1-341 with Tex. Civ. Prac. & Rem. Code § 36 134A.007. *3 (W.D. Tex. Jan. 5, 2018). JELD-WEN takes this silence to mean that TUTSA preempts only those claims that are based entirely on trade secret misappropriation—that is, claims that could not also be based on confidential information misappropriation. Super Starr assertion. Its does statement misappropriation of a T[UTSA]" 531 with of simply S.W.3d two which including 843. Texas to tortious misappropriation ("[Plaintiff]'s the misuse of include trade ("[Plaintiff] misappropriated alternatively the offer as both secrets."); sought for based that relied 2017 that on a the theory consistent Starr, . both tort claims, the alleged confidential . also at *4 alleges which may or may not F. Supp. theory protected on Starr, 1536018, claim . 241 is and WL information,' Super certain Tech., on See Super secrets relief the preceding preempted AMID, is reading trade information under claim language. interference ^confidential support then it is preempted by the cases interference, tortious a JELD-WEN's court Downhole any "[w]here TUTSA's dismiss of See that, However, federal refused itself trade secret, repeats at information. not as that 3d that trade the at 827 [defendant] secrets, and misappropriated information was not a trade secret but was confidential."). Those cases observed, as many have, decide whether before a an alternative plaintiff has shown, theory or it 37 is that it is premature to of relief not is disputed, preempted that the misappropriated information constituted trade secrets. 241 F. on a Supp. 3d at 826-27 motion to See AMID, ("''Where courts have found preemption dismiss, they repeatedly establish that the information in issue as alleged constitutes trade secrets before reaching the preemption question.'" Inc. V. Friedman, 658-59 (E.D. Va. Excavating, Va. Billings, 2002))); Inc., July 24, No. see existence entitlement F. the Supp. of to 2d at Corp., by 108 fiduciary duty substantial information constitute[d] ("[U]nless in question dismiss the F. secret, WL claim was that that the it trade & (N.D. confidential allegations not yet *7 (W.D. was proven its Fin., 191 Stone Castle a trade Betts 111. Corp. 2000) this misuse of (breach and of [wa]s related [plaintiff] Court same way, as Panduit evidence from the relief v. data took Furthermore, secret, of "[t]he sales allegedly about at argument theories the VUTSA's preemption provision in the "conjunctive" Commonwealth can be clearly discerned that preempted where secrets"). 2d 652, sufficiently alleged ha[d] 972 [defendant] v. 3830500, ha[d] Thomas 968, Supp. preemption alternative 2d F. Inc. constitutes VUTSA."); Supp. it 191 AWP, 2013 [plaintiff] trade 659 cannot preempted also relief under the VUTSA"); information [c]ourt a & Co., (defendant's premature where "although the Ramsey 5:13CV031, 2013) (quoting Stone Castle Fin., has read finding that "confidential information and trade secrets" precluded preemption because they 38 "reveal[ed] that predicated on [plaintiff]'s the claims misappropriation [we]re trade Indus./ Inc., DuPont de Nemours & Co. v. 443, 2009) solely secrets." If would (E.D. Va. that be evidence Steves' logic can improper, to create be applied because a JELD-WEN genuine misappropriation of JELD-WEN's actions employment caused contracts Pierce with then has dispute in addition to its trade secrets. Steves' here, 688 of F. E.I. (emphasis in original). 453 Kolon of not Supp. summary judgment presented material confidential enough fact about information JELD-WEN clearly alleged that and JELD-WEN Ambruz by to "providing breach trade their secrets and confidential information to Steves." Counterclaims Slf 62, (emphasis added). And, 2d contrary to what Steves asserts, 68 JELD-WEN cites multiple pieces of evidence that establish that Pierce and Ambruz may JELD-WEN (Under had does Seal), not cited discussed asserted cannot trade have misappropriated not consider a Seal). that evidence, it trade at confidential secret trial Although motions to dismiss, summary secret. (Under establish secret. trade 1008-31 above-use as a confidential judgment to show that those See Moreover, could information ECF even Nos. if still—under information tortious that information cases concerned 1008-6 JELD-WEN the cases is also interference such that if constitutes preemption it a on their common principle still applies at the stage, given that 39 there are genuine disputes about the issue here. on categorization Dismissing preemption that the misappropriated JELD-WEN's grounds inconsistently of would tortious reward JELD-WEN's information interference Steves alleged for trade at claims asserting secrets are trade secrets for purposes of deciding the TUTSA claim, not but are trade secrets for purposes of deciding the tortious interference claims. That result makes Nonetheless, a little sense. closer examination of Super Starr shows that the TUTSA's preemption provision should not be read so narrowly. Even though Super Starr found the breach of fiduciary duty claim at issue was preempted because the claim necessarily depended on "the use of information alleged underlying "confidential (emphasis reference as and trade secrets," that proprietary added). to trade claim was information." Consequently, secrets. the misappropriated alleged 531 Starr requiring preemption both where a is tort misappropriation of trade secrets alone, be at 843 S.W.3d notwithstanding Super to its properly specific understood claim depends on the and where such a claim is dependent on the misappropriation of either trade secrets or confidential information. Indeed, Embarcadero precisely that encompasses all confidential way, Technologies finding that has "TUTSA's read Super preemption Starr in provision claims based on the alleged improper taking of business information." 40 Embarcadero Techs., 2018 WL 315753, at *3. underlying preclude purpose harm recovery trade of the "^inconsistent underlying law Concluding by are Id. Moreover, [that theories would of relief alternative premised on the Super courts UTSA was the provision for the theories Starr, 531 of S.W.3d common to of a at 843). question this intended to same misappropriation considering the] frustrate preemption (quoting "Mni]ost determined TUTSA's eliminating which secret.'" otherwise have preempt all claims based upon the unauthorized use of information,'" whether or not that information Mortg. Mats, Grp. , UTSA 2016 LLC V. ("Most of constitutes WL Keener, the preemption 900577, 989 courts a F. that extends trade at *8); Supp. have to secret. see 2d 522, for also 534 considered claims Id. New (S.D. this the (quoting S. Equip. Miss. issue 360 2013) hold that misappropriation of confidential or proprietary information that does not qualify as trade secrets."); Mattel, 2d 911, 987 claims definition Bentley (C.D. Cal. on the based information, Inc. v. 2011) MGA Entm't, ("[T]he . Inc., . 782 F. . UTSA misappropriation of Supp. supersedes confidential whether or not that information meets the statutory of Pharm., a trade Inc., secret."); 388 F. Supp. Ethypharm 2d 426, S.A. 433 (D. France Del. v. 2005) ("Because all claims stemming from the same acts as the alleged misappropriation displaced even are if intended the to be information 41 displaced, at issue a is claim not can a be trade secret. issue Thus, a determination constitutes prior to a making Clearing 948-49 a Niagara, 2d 943, trade determining whether [Michigan] Dole, Here, taken by But 2018 "to of & Tech. have a is [Steves] preclude are the a court 109 from by the one. See Richard (citing the of F. Uniform Trade (2014)). in Embarcadero Technologies, that claim for qualifies claim escape status majority by 95, F. displaced *3 Law L. Rev. 270 disputed for all the fact all as the of [its] trade a of that does not qualify as a cannot addressed Supp. at State be Bond Co., claims TUTSA interference] [Steves] JELD-WEN Other not at Bliss not 315753, information displacement."); ("[T]he approach WL the need Brake does or . of the plaintiff taken by [tortious . 2003) claim This like wants . Midwest secret 17 SMU Sci. just information a a Preemption Secrets Act, and trade Techs., Jr., JELD-WEN a secret Mich. UTSA."). Embarcadero v. (W.D. as whether determination Inc. information of secret information trade secret." Id. that its tortious interference claims are based on exactly the same conduct as its TUTSA claim—namely, Steves' acquire confidential give to it Steves inducement information for use in of from the Pierce JELD-WEN MDS and Ambruz employees Project. The to and tortious interference claims might not be preempted if they also relied on some other factual confidential information. predicate See, e.g., 42 besides the Kolon Indus., taking 688 F. of Supp. 2d at 453 (complaint alleged facts that did not involve misappropriation but could establish tortious interference, as defendant employee 349 to (even sending commit representatives tortious "without acts); considering defendant's "exploitation of direct solicitation tortious not, of [a interference with however, to Smithfield, third party] contractual plaintiff s 905 misappropriation [plaintiff's] presented recruit F. Supp. at allegations," knowledge through the might still relations"). evidence such of constitute JELD-WEN any other has non- misappropriation basis for its tortious interference claims. JELD-WEN's the contrary unavailing. attempts to reconcile conclusion Although in Downhole the cases Technology cites with Technologies Embarcadero it are and AMID suggest that the TUTSA preemption provision should not be applied to dismiss claims prematurely, courts in how those to interpret Embarcadero Technologies the case proper breadth is insists far that in Kolon that it more of the the Court must that the guidance provision. preemption provision, here. Likewise, reach the the Court discussing lacked In 452 (emphasis Texas contrast, "the same so that although result here added). recent JELD-WEN as i t did specifically noted in that prevailing . . That 43 analysis case . interpretation the VUTSA in the Eastern District of Virginia." 688 F. at of could rely on Super Starr to determine persuasive Industries, was courts would Supp. certainly of 2d be helpful in interpreting the analogous Texas courts had spoken on the issue. read the TUTSA to allow dismissal on TUTSA provision if no But those courts have not the basis of preemption only if a claim is "solely predicated on the misappropriation of trade from secrets." one state Id. at cannot 453. be The Court's applied to reading overcome of a a statute different interpretation of another state's statute by the courts in that state, result, manner no matter the similarity between those statutes. As a considering the TUTSA preemption provision in the broad suggested JELD-WEN's by tortious Super Starr interference preemption grounds. 44 and Embarcadero claims will be Technologies, dismissed on CONCLUSION For INC.'S (ECF the foregoing MOTION No. FOR 885) SUMMARY was and Counterclaims, except damages denied to as as the claims PLAINTIFF JUDGMENT granted Counterclaims JELD-WEN's reasons, ON to to extent for trade STEVES JELD-WEN the First the secret and and motion is so ORDERED. /s/ Date: Virginia April _02_i 2018 45 Third misappropriation, Robert E. Payne Senior United States District Judge Richmond, Fifth concerned which will be addressed in a separate opinion. It SONS, COUNTERCLAIMS Fourth the that AND

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