United States District Court, W.D. Washington, Seattle
ORDER GRANTING IN PART AND DENYING IN PART MOTIONS TO
RICARDO S. MARTINEZ, CHIEF UNITED STATES DISTRICT JUDGE
matter comes before the Court on Defendant U.S. Bank's
Motion to Dismiss and the individual Defendants' joinder
in that motion. Dkts. #62 and #63. Defendants argue that: 1)
Plaintiff's claims for conversion, intentional
interference with business relationships and breach of
fiduciary duty of loyalty are all preempted by
Washington's Uniform Trade Secret Act
(“UTSA”); 2) Plaintiff fails to state a claim for
relief for misappropriation of trade secrets under state and
federal law; and 3) Plaintiff fails to state a claim for
relief under the Computer Fraud and Abuse Act
(“CFAA”) against the individual Defendants.
Id. Plaintiff responds that it has adequately pled
facts to support its claims separate and apart from those
facts that support its statutory trade secrets claims, and
that its remaining claims have been adequately pled under
Federal Rule of Civil Procedure 8. Dkt. #64. For the reasons
set forth below, the Court now GRANTS IN PART and DENIES IN
PART Defendants' motions to dismiss.
instant matter was filed in this Court on November 22, 2017.
Dkt. #1. Plaintiff MUFG Union Bank, N.A. (“Union
Bank”) alleges that a group of its former employees
resigned en masse after planning for several months
to take trade secrets, documents and confidential information
that they are now utilizing to take business from it and
unfairly compete with it. Dkt. #1 at ¶ ¶ 8-22.
Plaintiff further alleges that Defendant U.S. Bank knew of
the individuals' actions and encouraged them.
Id. at ¶ ¶ 19-22. Based on these
allegations, Union Bank asserts six claims for relief against
the Defendants: 1) breach of fiduciary duty of loyalty
(against all Defendants); 2) intentional interference with
business relationships (against all Defendants); 3)
misappropriation of trade secrets under Washington's
UTSA, RCW 19.108.010, et seq. (against all
Defendants); 4) conversion (against all Defendants); 5)
misappropriation of trade secrets under the Defend Trade
Secrets Act (“DTSA”), 18 U.S.C. § 1831,
et seq. (against all Defendants); and 6) violations
of the Computer Fraud and Abuse Act (“CFAA”), 18
U.S.C. § 1030, et seq. (against the individual
Defendants). Id. at ¶ ¶
23-56. Defendants have now moved to dismiss all
deciding a 12(b)(6) motion, this Court is limited to the
allegations on the face of the Complaint (including documents
attached thereto), matters which are properly judicially
noticeable and other extrinsic documents when “the
plaintiff's claim depends on the contents of a document,
the defendant attaches the document to its motion to dismiss,
and the parties do not dispute the authenticity of the
document, even though the plaintiff does not explicitly
allege the contents of that document in the complaint.”
Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir.
2005). The Court must construe the complaint in the light
most favorable to the Plaintiff and must accept all factual
allegations as true. Cahill v. Liberty Mutual Ins.
Co., 80 F.3d 336, 337-38 (9th Cir. 1996). The Court must
also accept as true all reasonable inferences to be drawn
from the material allegations in the Complaint. See Brown
v. Elec. Arts, Inc., 724 F.3d 1235, 1247-48 (9th Cir.
2013); Pareto v. F.D.I.C., 139 F.3d 696, 699 (9th
Cir. 1998). However, the Court is not required to accept as
true a “legal conclusion couched as a factual
allegation.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007)).
Claims at Issue
move for the dismissal of all causes of action in this
matter. The Court addresses each of those claims, in turn,
Plaintiff's Claims for Breach of Fiduciary Loyalty,
Intentional Interference with Business Relationships and
first move to dismiss Plaintiff's First, Second and
Fourth Claims for Relief alleged against all Defendants, on
the basis that Washington's trade secret laws displace
those theories of liability. Dkts. #62 at 4-8 and #63 at 3-5.
Plaintiff opposes the motion, arguing that the facts
supporting the claims for breach of fiduciary duty of
loyalty, intentional interference with business
relationships, and conversion are different that those facts
it relies on in support of its claim for misappropriation of
trade secrets. Dkt. #64 at 5-9.
UTSA prohibits misappropriation of trade secrets. RCW 19.108,
et seq.; Thola v. Henschell, 140 Wn.App.
70, 76, 164 P.3d 524, 528 (2007). Before the legislature
enacted the UTSA, the common law prohibited similar acts.
See, e.g., J.L. Cooper & Co. v.
Anchor Secs. Co., 9 Wn.2d 45, 64, 113 P.2d 845 (1941)
(allowing equitable action against a former employee who used
a confidential customer list in his new business venture).
But the UTSA is not a catch-all for industrial torts.
Electro-Craft Corp. v. Controlled Motion, Inc., 332
N.W.2d 890, 897 (Minn. 1983). The UTSA “displaces
conflicting tort, restitutionary, and other law of this state
pertaining to civil liability for misappropriation of a trade
secret.” RCW 19.108.900(1). However, it does not affect
“[c]ontractual or other civil liability or relief that
is not based upon misappropriation of a trade secret.”
examining whether a civil claim is preempted by the UTSA,
courts often utilize a three-step analytical framework as a
“helpful guide, ” beginning with the premise that
a plaintiff “may not rely on acts that constitute trade
secret misappropriation to support other causes of
action.” Thola, 140 Wn.App. at 82 (citing to
Mortgage Specialists, Inc. v. Davey, 153 N.H. 764,
778-79, 904 A.2d 652 (2006) and Ed Nowogroski Ins., Inc.
v. Rucker, 88 Wn.App. 350, 358, 944 P.2d 1093 (1997),
aff'd, 137 Wn.2d 427 (1999) (Rucker
I)). Using this framework, the Court: (1) assesses the facts
that support the plaintiff's civil claim, (2) asks
whether those facts are the same as those that support the
plaintiff's UTSA claim, and (3) will conclude that the
UTSA preempts liability on the civil claim unless the common
law claim is factually independent from the UTSA claim.
See Mortgage Specialists, Inc. v. Davey, 153 N.H.
764, 778-79, 904 A.2d 652 (2006). This three-step analysis is
meant to preclude duplicate recovery for a single wrong.
Accordingly, the Court now turns to each of Plaintiff's
Claim One, Plaintiff asserts a breach of the fiduciary duty
of loyalty. Dkt. #1 ¶ ¶ 23-29. Plaintiff alleges
that the individual Defendants owed Union Bank an undivided
duty of loyalty which prohibited them from soliciting
customers for their own benefit and/or for rival businesses
and from acting in direct competition with Union Banks'
business interests, and that they breach that duty by
soliciting Amazon.com business on behalf of themselves and
U.S. Bank while still employed by Union Bank, soliciting
individuals who had received pre-approval from Union Bank to
move their business to U.S. Bank, and stealing Union
Bank's confidential and trade secret business and
customer information in order to unfairly compete against
Union Bank. Dkt. #1 at ¶ ¶ 24-25. Plaintiff further
alleges that individual Defendants Tyler and Fogliani, who
worked in managerial positions, breached the duty by
soliciting other employees to leave and work for their
competitor, and by disclosing Plaintiff's confidential
financial compensation information to Defendant U.S. Bank.
Id. at ¶ 26. Finally, Plaintiff alleges that
Defendant U.S. Bank conspired and agreed with the individual
Defendants to misappropriate Plaintiff's trade secrets
and confidential information, and aided, abetted, and
assisted the individual Defendants in breaching the duty owed
to Plaintiff. Id. at ¶ ¶ 27-28.
Court agrees with Defendants that those facts focus on the
alleged misappropriation of confidential and proprietary
information, and that Plaintiff's UTSA claim relies on
the same facts. Id. at ¶ ¶ 35-39. Indeed,
in its Third Claim for Relief, Plaintiff alleges that prior
to leaving employment, the individual Defendants
misappropriated customer lists, pricing information, customer
contact information, customer financial data, social security
numbers, and forms 1003 Uniform Residential Loan
Applications, that U.S. Bank aided, abetted and facilitated
those actions, and that Defendants used the information for
their own benefit. Id.
attempts to salvage Claim One by noting it alleged
specifically that the individual Defendants solicited
Amazon.com in support of its breach of duty claim but not in
support of its trade misappropriate claim, and therefore the
claims do not rest on the same facts. Dkt. #64 at 6-7. The
Court is not persuaded. When comparing the two claims, the
essence of both is that the Defendants allegedly used
misappropriated information to make such solicitations,
inter alia, for their own benefit. Thus, the Court