Cases from Lawrence K. Karlton

E.D. Cal.
Court Finds CUTSA Preemption Issue Must be Raised at Summary Judgment, not Motion to Dismiss

U.S. Legal Support, Inc., a provider of court reporting services, sued two of its former employees and their new employer for misappropriating its customer lists in order to set up a competing business in the area of Northern California.

In a decision that may be reviewed by the circuit court, the E.D. Cal found that defendants' motion to dismiss some claims based on the pre-emption of common law trade secrets claims by California's Uniform Trade Secrets Act (CUTSA) was premature. The court said that the question turned in part on whether plaintiffs had succeeded in showing that defendants had violated a common law property right that was based "on grounds that are qualitatively different from the grounds upon which trade secrets are considered property" (citing Bryant v. Mattel, Inc., No. CV 04–9049 DOC (RNBx), 2010 WL 3705668 at *22 (C.D. Cal. Aug. 2, 2010)). Because this was a question of fact rather than law, "[d]efendants can determine in discovery whether Plaintiff’s contentions have any merit, and when appropriate, bring a summary judgment motion as to the issue of supersession."