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Rspe Audio Solutions, Inc., A California Corporation v. Vintage King Audio

March 18, 2013


The opinion of the court was delivered by: Dean D. Pregerson United States District Judge




Presently before the court is Defendant Vintage King Audio Inc. ("Vintage King")'s Motion to Dismiss Plaintiff's Second, Third and Fourth causes of action. Defendants Chris Bolitho and Robert Alexander join in the motion. Having considered the submissions of the parties and heard oral argument, the court grants the motion and adopts the following order.

I. Background

Plaintiff RSPE Audio Solutions, Inc. ("RSPE") provides professional audio and video equipment and consulting and engineering services to its clients. (Second Amended Complaint ("SAC") ¶ 10.) RSPE maintains confidential information, such as customer lists, employee compensation terms, deal proposals, and the like, that RPSE alleges constitute trade secrets. (SAC ¶ 12.)

Defendants Bolitho and Alexander were, until May 2012, RSPE employees. (SAC ¶ 15.) Bolitho had special access to RSPE's confidential information. (SAC ¶ 16.) RSPE alleges that on April 19, 2012, Bolitho and Alexander accessed RSPE systems from unauthorized computers and made unauthorized copies of RSPE's trade secrets. (SAC ¶ 17.) RSPE further alleges that Bolitho and Alexander used RSPE secrets to contact and solicit RSPE customers for the benefit of competitor Vintage King. (SAC ¶ 18.)

The SAC further alleges that Bolitho and Alexander engaged in other wrongful acts ostensibly unrelated to the theft of trade secrets. (SAC ¶¶ 19-27). The SAC alleges, for example, that Bolitho and Alexander referred to RSPE proposed offer terms to draft bid sheets for Vintage King. (SAC ¶ 19.) Bolitho also tampered with RSPE e-mail systems to divert messages to his personal e-mail address, obtain duplicates of customer support "live chat" transcripts, intentionally overstated RSPE prices so as to sabotage RSPE deals, and regularly collaborated with Vintage King on plans to divert customers to Vintage King. (SAC ¶¶ 20-23.) RSPE further alleges that Bolitho hijacked its eBay store and directed RSPE's online business to Vintage King. (SAC ¶ 25.)

In early May 2012, Bolitho and Alexander resigned from RSPE and went to work for Vintage King. (SAC ¶ 8.) Bolitho continued his wrongful acts as a Vintage King employee and committed additional bad acts, such as changing the passwords to RSPE's account and deleting RSPE's Amazon sale listings. (SAC ¶¶ 8, 21-22, 25-26.)

RSPE filed suit against Bolitho, Alexander, and Vintage King in California state court. RSPE's SAC alleges six causes of action, including the First Cause of Action for Misappropriation of Trade Secrets in violation of California's Uniform Trade Secrets Act ("CUTSA"), Civil Code Section 3426, et seq. The Second, Third, and Fourth Causes of Action allege intentional interference with prospective economic advantage, unfair business practices, and aiding and abetting misappropriation of trade secrets, respectively, against all Defendants.*fn1 Bolitho and Alexander removed to this court. Vintage King, joined by Bolitho and Alexander, moved for judgment on the pleadings as to the Second, Third, and Fourth Causes of Action of RSPE's First Amended Complaint. This court granted the motion, with leave to amend. RSPE then refined its claims and filed the SAC. Vintage King, again joined by Bolitho and Alexander, now moves to dismiss the SAC's Second, Third, and Fourth Causes of Action.

II. Legal Standard

A complaint will survive a motion to dismiss when it contains "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its SACe." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). When considering a Rule 12(b)(6) motion, a court must "accept as true all allegations of material fact and must construe those facts in the light most favorable to the plaintiff." Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). Although a complaint need not include "detailed factual allegations," it must offer "more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal, 556 U.S. at 678. Conclusory allegations or allegations that are no more than a statement of a legal conclusion "are not entitled to the assumption of truth." Id. at 679. In other words, a pleading that merely offers "labels and conclusions," a "formulaic recitation of the elements," or "naked assertions" will not be sufficient to state a claim upon which relief can be granted. Id. at 678 (citations and internal quotation marks omitted).

"When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement of relief." Id. at 679. Plaintiffs must allege "plausible grounds to infer" that their claims rise "above the speculative level." Twombly, 550 U.S. at 555. "Determining whether a complaint states a plausible claim for relief" is a "context-specific task that ...

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