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Northern District of California Holds That CUTSA Supersedes Common Law Claims Where Plaintiff Alleges a Confidentiality Agreement But Failed to Allege Defendant Was Bound by It

In Preemption on February 14, 2012 at 3:52 pm
English: Golden hamster Français: Hamster doré...

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District Judge Jeffrey S. White of the Northern District of California held that the California Uniform Trade Secret Act (“CUTSA”) superseded common law claims for misappropriation, conversion, unjust enrichment, and trespass to chattels.  Heller v. Cepia, L.L.C., No. C1101146JSW, 2012 WL 13572 (N.D. Cal. Jan. 4 2012) (slip op.).  Plaintiff alleged the existence of confidentiality agreements but not that defendants were bound by them.  Id.

Background

Plaintiff Heller was the sole proprietor of Floating Lightbulb Toys. Id. *1. He accused Cepia, A-Tech, The Bean and Ying Leung International Limited (“Ying Leung”) of misappropriating his trade secrets regarding his toy hamster project.  Id.  Cepia moved to dismiss Plaintiff’s claims for failure to state a claim and for sanctions under FRCP 11. Id. Plaintiff filed a counter-motion for sanctions against Cepia. Id. The Bean and A-Tech moved to dismiss based on lack of personal jurisdiction. Id.

Discussion

Cepia argued that Plaintiff’s common law claims were superseded by CUTSA. Id. Citing Silvaco Data Systems v. Intel Corp., 184 Cal.App.4th 210 (April 29, 2010), the court noted that “common law claims premised on the wrongful taking of information that does not qualify as a trade secret are also superseded, unless the plaintiff identifies some law which confers property rights protecting the information.”   Heller, 2012 WL 13572, at *1.

While Plaintiff argued that his confidential information that was not a trade secret is still property because he entered into agreements providing that any non-secret confidential and proprietary business information would remain his property. Id. The court disagreed, dismissing the common law claims:

[W]hile Heller may be able to state a breach of contract claim against the party or parties who signed this agreement, Heller does not allege that Cepia signed this agreement or is otherwise legally bound by such agreement. Moreover, Heller has not identified any law that confers property rights on his non-trade secret confidential information. Therefore, Heller’s common law claims against Cepia premised on the wrongful taking and use of confidential business and proprietary information, regardless of whether such information constitutes trade secrets, are superseded by the CUTSA. Accordingly, the Court grants Cepia’s motion to dimiss Heller’s common law claims against it.

Id.

Judge and Attorneys

District Judge Jeffrey S. White.

Robert Craig Matz, The Law Office of Robert C. Matz LLP, Alameda, CA, for Plaintiff.

Jeffrey R. Chanin, Matthew Mickle Werdegar, Warren Andrew Braunig, Keker & Van Nest LLP, Edwin Ken Prather, Law Offices of Edwin Prather, San Francisco, CA, for Defendants.

By CHARLES JUNG

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