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MDTV Medical News, Inc. v. Weinstock

February 6, 2007

MDTV MEDICAL NEWS, INC. AND PAUL ARGEN, DEFENDANTS/THIRD PARTY PLAINTIFF,
v.
STEPHEN WEINSTOCK, M.D. AND WEINSTOCK LASER EYE CENTER PLAINTIFF/THIRD PARTY DEFENDANT.



The opinion of the court was delivered by: Hon. Roger T. Benitez United States District Judge

[Doc. No. 191]

ORDER RE MOTION FOR SUMMARY JUDGMENT

Plaintiff /Counter Defendant Stephen Weinstock, M.D. ("Weinstock") and Third Party Defendant Weinstock Laser Eye Center ("WLEC") (collectively "Defendants") move for summary judgment on all counts Defendant/Counter Claimant and Third Party Plaintiff MDTV Medical News Now, Inc. ("MDTV") and Defendant/Counter Claimant Paul Argen ("Argen") (collectively "Plaintiffs") assert against them. For the reasons that follow, Defendants' Motion is GRANTED in part and DENIED in part.

BACKGROUND

This diversity action was initiated by Plaintiffs Eye Laser, Nevyas Eye Associates and individual doctors--Herbert Nevyas, Michael Mazaheri, Stephen Weinstock, Norman Rappaport, and Warren Cross against MDTV and MDTV's Chief Executive Officer, Argen.*fn1 Plaintiffs purchased commercial advertising and marketing programs from MDTV. Plaintiffs allege MDTV and Argen misrepresented their services, overcharged Plaintiffs, did not produce their television programs with adequate production capabilities, did not run their television programs at the appropriate times, did not honor the exclusivity provisions, and refused to refund their money.

MDTV and Argen answered and asserted the following counterclaims against Weinstock*fn2 (1) breach of duties of confidentiality and loyalty; (2) tortious interference with contractual relations and with prospective economic advantage; (3) breach of contract; (4) breach of duty of good faith and fair dealing; (5) conversion; and (6) defamation.

MDTV also filed a Third Party Complaint against WLEC, which it later amended.*fn3 In its First Amended Third Party Complaint, MDTV asserts against WLEC the same six counts it counterclaims against Weinstock, along with a seventh cause of action for misappropriation of trade secret under Cal. Civ. Code §§ 3426-3426.10.

STANDARD OF REVIEW/BURDEN OF PROOF ON SUMMARY JUDGMENT

As noted, Weinstock and WLEC are moving for summary judgment on claims or counterclaims asserted against them by MDTV and Argen--claims which MDTV and Argen would have the burden of proof at trial. Thus, Weinstock and WLEC are "not required to produce evidence showing the absence of a genuine issue of material fact with respect to" to the asserted claims. United Steelworkers of America v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir. 1989) (citation omitted). Nor are they required to "support [their] motion with affidavits or other similar materials negating" the claims. Id. at 1543. Rather, Weinstock and WLEC "need only point to shortfalls in the [Plaintiffs'] case to demonstrate the absence of evidence" supporting its claims. United Steelworkers of America v. Phelps Dodge Corp., 865 F.2d 1539, 1543 (9th Cir. 1989) (alterations not in original).*fn4 Defendants may do so by simply pointing to the pleadings and arguing that Plaintiffs have failed to establish an element essential to their case. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); see also id. ("[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answer to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." (internal quotations and citations omitted)). See also Ayala-Gerena v. Bristol Myers-Squibb Co., 95 F.3d 86, 94 (1st Cir. 1996) ("The function of summary judgment is to pierce the boilerplate of the pleadings and assay the parties' proof in order to determine whether trial is actually required." (citation and internal quotations omitted).

To defeat summary judgment, MDTV and Argen "must respond with more than mere hearsay and legal conclusions."Orr v. Bank of America, NT & SA, 285 F.3d 764, 783 (9th Cir. 2002) (citation omitted). MDTV and Argen also "must do more than simply show that there is some metaphysical doubt as to the material facts*fn5 ." Id. (citation omitted); see also Matsushita Elec. Industrial Co. v. Zenith Radio, 475 U.S. 574, 586 (1986). Rather, they must come forward with sufficient evidence demonstrating to the Court that there are genuine issues of material fact to be decided at trial. Fed. R. Civ. P. 56(e). To do so, MDTV and Argen "may not rely merely on the unsupported or conclusory allegations of [their] pleadings." Coverdell v. Department of Social and Health Services, State of Wash., 834 F.2d 758, 769 (9th Cir. 1987) (citations omitted); see also Celotex Corp., 477 U.S. at 324. MDTV and Argen instead must "present affirmative evidence from which a jury might return a verdict in his favor." Phelps Dodge Corp., 865 F.2d at 1542 (citation and internal quotation omitted). And, "a complete failure of proof concerning an essential element of [their] case necessarily renders all other facts immaterial." Celotex Corp., 477 U.S. at 323.

DISCUSSION

I. Preemption Under California Uniform Trade Secrets Act, Cal. Civ. Code §§ 3426.1 et seq.

Weinstock and WLEC first argue they are entitled to judgment on Count I (breach of duties of confidentiality and loyalty), Count II (tortious interference), Count V (conversion), and Count VI (defamation) because they are based on allegations of misappropriation of trade secrets and thus preempted by California Uniform Trade Secrets Act, Cal. Civ. Code §§ 3426.1 et seq. ("CUTSA").*fn6

"[A] common law cause of action based upon allegations of trade secret misappropriation is preempted by the Uniform Trade Secrets Act." Embedded Internet Solutions, Inc., 403 F. Supp. 2d 968, 978 (N.D. Cal. 2005); see also Digital Envoy, Inc. v. Google, Inc., 370 F. Supp. 2d 1025, 1035 (N.D. Cal. 2005); Accuimage Diagnostics Corp. v. Terarecon, Inc., 260 F. Supp. 2d 941, 954 (N.D. Cal. 2003) (holding that plaintiff's common law claim for misappropriation of trade secrets was preempted by the UTSA); Callaway Golf Co. v. Dunlop Slazenger Group Americas, Inc., 318 F. Supp. 2d 216, ...


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