United States District Court, W.D. Washington, Tacoma
ORDER ON MOTION TO DISMISS DKT. # 31
B. Leighton United States District Judge
MATTER is before the Court on Defendant Minh Khai
Nguyen's Motion to Dismiss Plaintiff Regal West
Corporation's First Amended Complaint (FAC). Dkt. # 31.
Regal alleges claims related to Nguyen's misuse of
Regal's secret information and intellectual property.
Nguyen argues that the Court lacks personal jurisdiction
because all of the alleged misuse occurred outside
Washington. Nguyen also argues that Regal's Lanham Act
claims, trade secrete misappropriation claims, and Computer
Fraud and Abuse Act (CFAA) claim are implausible.
response, Regal contends that Nguyen waived several of his
arguments by failing to raise them in his motion to dismiss
the initial complaint, which was withdrawn. See Dkt.
Regal contends that the Court does not lack personal
jurisdiction and that its claims satisfy Rule 12(b)(6).
following reasons, the Court GRANTS Nguyen's Motion to
Dismiss with respect to Regal's false advertising and
CFAA claims but otherwise DENIES Nguyen's Motion.
provides its customers with “complete end-to-end
logistics solutions, including cross-docking, transportation,
and assembly and repackaging services.” Dkt. # 27 at 3.
Regal alleges that it began developing software that would
allow its customers to access real-time information about
inventory and shipments decades ago. Around 1999, Regal
contracted with a third-party company to continue developing
this software, at which time Nguyen was a subcontractor or
employee of this third party.
2000, Nguyen took the lead on Regal's software
development project and visited Regal's place of business
in Fife, Washington, to discuss the project. Nguyen continued
to work for Regal for roughly 20 years in this capacity,
during which time Nguyen allegedly “was given access to
. . . Regal's customer database and customer-coding
system, as well as pricing information, Regal's customer
contracts, and Regal's accounting system.” Dkt. #
27 at 5. This was “solely for the purpose of developing
and maintaining Regal's software and with the
understanding that Nguyen would not disclose such
confidential and proprietary information.” Id.
Regal and Nguyen parted ways in February 2019 when Regal
terminated its relationship with Nguyen's company,
alleges that Nguyen stole its proprietary information and
trademarks while working for Regal to further Nguyen's
new business venture, Retail Exchange Network, Inc. (RXN).
According to Regal, RXN advertises itself as “an
outgrowth of a warehouse management proprietary information
technology systems [sic] that has been in place and developed
over the last decade.” Dkt. # 27 at 6. Regal claims
that this description refers to Regal's own custom
software that Nguyen helped develop. Regal also alleges that
RXN is using Regal's customer database and coding system,
based partly on images that RXN uses in its online videos.
One of those videos also includes background images of
Regal's warehouse and a list of several Regal companies,
such as Walmart and Amazon.com.
initial complaint, Regal sued both Nguyen and one of
Nyguyen's companies, Softketeers, Inc. Dkt. # 1. That
complaint included contract- and fraud-based claims against
both defendants. Nguyen moved to dismiss, stay, or transfer
Regal's initial complaint but withdrew his motion after
Regal amended its complaint. Dkt. # 30. Regal's FAC
dropped Softketeers as a defendant and omitted the three
contract-based claims against Nguyen and Softketeers. Nguyen
then brought the current Motion challenging the FAC.
Nguyen already moved to dismiss Regal's initial complaint
without contesting personal jurisdiction or Regal's
trademark infringement and unfair competition claims, Regal
contends that Nguyen cannot raise those arguments now. Nguyen
responds that, because the initial Complaint contained
contract claims against Nguyen and Softketeers that clearly
supported personal jurisdiction, a 12(b)(2) defense was not
available at that time. Regal replies that the defense was