United States District Court, W.D. Washington, Seattle
C. COUGHENOUR UNITED STATES DISTRICT JUDGE
matter comes before the Court on Plaintiff's motion to
amend its First Amended Complaint (Dkt. No. 29). Having
thoroughly considered the parties' briefing and the
relevant record, the Court finds oral argument unnecessary
and hereby GRANTS in part and DENIES in part the motion for
the reasons explained herein.
Inteum Company, LLC licensed knowledge management software to
Defendant National University of Singapore for many years,
but lost its contract to competitor Wellspring in a 2016
bidding process. (Dkt. No. 29 at 2.) Plaintiff subsequently
sued Defendant for breach of contract and misappropriation of
trade secrets. (Dkt. No. 1-2.) The Court dismissed the
initial complaint for failure to state a claim, but granted
Plaintiff leave amend. (Dkt. No. 24.) Plaintiff filed an
amended complaint, and the parties began conducting
discovery. (Dkt. No. 25.) Based on documents obtained in
discovery, Plaintiff now moves to amend its complaint to add
a claim for civil conspiracy, as well as supporting factual
allegations. (Dkt. No. 29 at 1.) Defendant opposes the
addition of this cause of action as futile and asks the Court
to strike certain factual allegations. (Dkt. No. 30 at 6.)
Rule of Civil Procedure 15(a)(2) provides that “a party
may amend its pleading only with the opposing party's
written consent or the court's leave.” Courts
should “freely” grant such leave “when
justice so requires.” Id. However, a court may
deny leave to amend based on futility of amendment.
Johnson v. Buckley, 356 F.3d 1067, 1077 (9th Cir.
2004). An amendment is futile if it attempts to add a claim
that could not withstand a motion to dismiss. Jones v.
Community Redevelopment Agency of Los Angeles, 733 F.2d
646, 650-51 (9th Cir. 1984).
establish a claim for civil conspiracy, a plaintiff must show
“(1) two or more people combined to accomplish an
unlawful purpose, or combined to accomplish a lawful purpose
by unlawful means; and (2) . . . an agreement to accomplish
the conspiracy.” Woody v. Stapp, 146 Wn.App.
16, 22 (Wash.Ct.App. 2008) (internal citation omitted). A
claim for civil conspiracy must be predicated on “a
cognizable and separate underlying claim.” Gossen
v. JPMorgan Chase Bank, 819 F.Supp.2d 1162, 1171 (W.D.
bases its proposed civil conspiracy claim on allegations of
(1) misappropriation of its trade secrets, (2) interference
with its prospective economic advantage, (3) breach of
contract, and (4) bid-rigging in violation of the Singapore
Government Procurement Act (“SGPA”). (Dkt. Nos.
29 at 1, 30 at 9.) The Court finds that none of these
underlying allegations is legally sufficient to support a
civil conspiracy claim. Therefore, the addition of
Plaintiff's proposed civil conspiracy claim would be
Misappropriation of Trade Secrets
alleges Defendant conspired with Wellspring to misappropriate
its trade secrets. (Dkt. No. 29-1 at 19.) Defendant argues
that this claim is preempted by Washington's Uniform
Trade Secret Act (“USTA”). (Dkt. No. 30 at 13.)
The UTSA “displaces conflicting tort, restitutionary,
and other [Washington] law pertaining to civil liability for
misappropriation of a trade secret.” Wash. Rev. Code
19.108.900(1). It does not preempt “contractual or
other civil liability or relief that is not based on
misappropriation of a trade secret.” Id. at
preemptive scope of the UTSA is an unsettled issue in
Washington. See T-Mobile USA, Inc. v. Huawei Device USA,
Inc., 115 F.Supp.3d 1184, 1197 (W.D. Wash. 2015). Other
UTSA jurisdictions are split between a “weak” and
a “strong” view of preemption. Id. at
1198- 99. Under the “strong” view, a plaintiff
“may not rely on acts that constitute trade secret
misappropriation to support [another cause] of action”
even if it requires proof of additional elements.
Id. at 1198; Thola v. Henschell, 164 P.3d
524, 530 (Wash.Ct.App. 2007). To avoid preemption, a claim
must be “wholly independent” of facts used to
prove trade secret misappropriation. T-Mobile USA,
115 F.Supp.3d at 1199. Alternatively, in jurisdictions
adopting the “weak” view, a claim is not
preempted if it includes additional elements that
“require some allegation or factual showing beyond
those required under the UTSA.” Thola, 164
P.3d at 530 n. 5.
Court determines that the strong form of preemption applies.
Courts in this district have routinely predicted that the
Washington Supreme Court would embrace this approach.
T-Mobile USA, Inc., 115 F.Supp.3d at 1199
(collecting cases applying Washington law); International
Paper Co. v. Stuit, No. C11-2139-JLR, slip op. at 8
(W.D. Wash. May 21, 2012) (“the weight of authority has
tipped away from” the view that common law claims are
not preempted if the claims require additional elements).
This conclusion is informed by the Washington Court of
Appeals' statement that a plaintiff “may not rely
on acts that constitute trade secret misappropriation to