The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge
Plaintiff Sierra Environmental Technologies, Inc. ("Sierra" or Plaintiff") seeks both monetary and injunctive relief from Robert F. Gale, Fallen Leaf Industries, Inc., and Robert G. Gale (collectively "Defendants") for claims arising under the Computer Fraud and Abuse Act ("CFFA"), 18 U.S.C. § 1030, and the Lanham Act, 15 U.S.C. § 1051 et seq.
In addition to those federal claims, Plaintiff alleges various state law claims, including conversion, breach of fiduciary duty, breach of non-competition agreements, breach of confidentiality agreements, trade secret misappropriation, intentional interference with contractual relations, intentional interference with prospective economic advantage, negligent interference with prospective economic advantage, and violations of the California Unfair Business Practices Act as codified in California Business and Professions Code § 17200, et seq.
Presently before the Court is Defendants' Motion to Dismiss, which argues both that Plaintiff's claims should have been raised by way of compulsory counterclaims in Defendants' ongoing state court proceedings, and that this Court should abstain from exercising its jurisdiction in any event because important state interests are implicated by the parties' dispute. For the reasons set forth below, Defendants' Motion will be granted.
Plaintiff Sierra Environmental Technologies, Inc. "provides specialized engineering and consulting services to the building cleaning services industry, and other business sectors." Compl. ¶ 8. It "combines a variety of advanced engineering principles with internally developed methodologies, insights and other know-how to dramatically reduce labor costs in large commercial and industrial settings." Id.
In 2005, Defendant Robert F. Gale ("Bob Gale") invested substantial sums in Sierra. He became a project manager and eventually was designated as Plaintiff's Chief Financial Officer ("CFO").
In January 2006, Plaintiff hired Bob Gale's son, Robert G. Gale ("Robert Gale"), on a part-time basis. In April 2007, Robert Gale became a full-time project associate.
In June 2008, Plaintiff removed Bob Gale from his position as CFO, but he remained a shareholder, director, and creditor. Plaintiff alleges that sometime in 2008, Bob Gale started a company called Lucent Cleaning Services. Lucent named Bob Gale as its president.
Defendant Bob Gale ultimately filed suit against Plaintiff in Santa Clara County Superior Court on July 23, 2008 based on alleged fraudulent misrepresentations made by Sierra. Bob Gale's allegations in that state lawsuit include fraud in the inducement, promissory fraud (concealment), breach of fiduciary duty, wrongful termination, rescission, unjust enrichment, accounting, and constructive trust.
On October 17, 2008, Plaintiff terminated Robert Gale's employment. Plaintiff alleges that at the time of termination, Robert was instructed to return a laptop computer which had been issued to him, as well as all electronic files and property belonging to Plaintiff. Plaintiff asserts that they sent numerous requests for this information and that it was not returned for months.
On June 12, 2009, Defendant Robert Gale also filed a civil action against Plaintiff in Santa Clara County Superior Court. On December 8, 2009, a first amended complaint was filed on Robert's behalf based on non-payment of wages, waiting time penalties under the California Labor Code, tortious discharge, breach of the implied covenant of good faith and fair dealing, violation of California Business and Professions Code § 17200, and fraud.