Opinion
C 23-04804 WHA
02-29-2024
ROADRUNNER RECYCLING, INC., Plaintiff, v. RECYCLE TRACK SYSTEMS, INC. and RECYCLESMART SOLUTIONS, INC., Defendants.
ORDER GRANTING LEAVE TO AMEND
WILLIAM ALSUP, UNITED STATES DISTRICT JUDGE
In this breach-of-contract action, plaintiff moves for leave to amend its complaint to take another pass at pleading trade secret misappropriation claims under the Defense of Trade Secrets Act (“DTSA”) and the California Uniform Trade Secrets Act (“CUTSA”).
The underlying facts were detailed in the order granting defendants' motion to dismiss the trade secret misappropriation claims (Dkt. No. 43). That order found the trade secrets alleged - as well as the trade secrets merely alluded to - were overly general and/or already disclosed, so plaintiff did not show possession of anything qualifying for trade secret protection. But that order expressly allowed plaintiff to seek leave to file an amended complaint by motion, which it has now done (Dkt. No. 45). To assist the undersigned, plaintiff also filed a very detailed explanation of these alleged trade secrets under seal (Dkt. No. 46). This order follows full briefing and oral argument.
The judge is wary of prematurely sacking the trade secret misappropriation claims at this early stage without a better handle on the facts at hand. Plaintiff has plausibly pleaded at least some material qualifying for trade secret protection. And, plaintiff has plausibly pleaded that the reverse engineering at issue may have been done by way of improper means, not fair and honest ones, such that trade secrets were misappropriated. See Aqua Connect, Inc. v. Code Rebel, LLC, No. C 11-05764 RSWL, 2012 WL 469737, at *2 (C.D. Cal. Feb. 13, 2012) (Judge Ronald S.W. Lew); Khoros, LLC v. Lenovo (United States), Inc., No. C 20-03399 WHO, 2020 WL 12655516, at *9 (N.D. Cal. Oct. 5, 2020) (Judge William H. Orrick). Out of an abundance of caution, plaintiff's motion is GRANTED, subject to paring down these amended allegations during discovery and subsequent motion practice with the benefit of a better record. The answer is due in FOURTEEN DAYS.
IT IS SO ORDERED.