United States District Court, N.D. California, San Jose Division
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT'S MOTION TO DISMISS Re: Dkt. No. 114
J. DAVILA United States District Judge.
a case about data centers, “which are the buildings
that house the vast arrays of computer servers that form the
backbone of the internet and the high-technology
economy.” Second Am. Compl. (“SAC'), Dkt. No.
107, at ¶ 1. Plaintiffs BladeRoom Group Limited
(“BRG”) and Bripco (UK) Limited
(“Bripco”) are two English companies who allege that
Defendants Facebook, Inc. (“Facebook”), Emerson
Electric Co. (“Emerson”), Emerson Network Power
Solutions, Inc. and Liebert Corporation enticed them to
reveal their data center designs and construction methods
with promises of acquisition and partnership, only to then
copy those designs and methods and pass them off as their
jurisdiction arises pursuant to 28 U.S.C. §§ 1331
and 1332. Presently before the court is Facebook's Motion
to Dismiss the SAC under Federal Rule of Civil Procedure
12(b)(6). Dkt. No. 114. Plaintiffs have filed written
opposition to this motion. Having carefully considered the
parties' arguments, the court concludes that most but not
all of the SAC withstands a Rule 12(b)(6) review. Thus,
Facebook's motion will be granted in part and denied in
part for the reasons explained below.
Plaintiffs and the BladeRoom Technology
developed and perfected a method for manufacturing and
installing a type of prefabricated data center known as a
“BladeRoom.” Id. at ¶ 4. ____
Id. at ¶ 26. Plaintiffs built the first
BladeRoom in 2009, and have since built over 40 BladeRooms on
four continents. Id. at ¶ 27.
some of the techniques used to build a BladeRoom are publicly
disclosed, Plaintiffs keep others as confidential trade
secrets and limit the release of this information in several
ways. Id. at ¶¶ 28, 31. They ensure that
private disclosure to potential clients, suppliers and others
is covered by non-disclosure agreements. Id. at
¶ 31. The computer systems containing the trade secrets
are password-protected and the facilities where they are
stored are physically secured. Id. Additionally,
employee access to trade secrets is limited to only those
that need to know of them and is subject to confidentiality
is the legal owner, and BRG is the licensee, of all right,
title and interest in the trade secrets and other
confidential information developed by BRG, including the
BladeRoom technology. Id. at ¶ 5.
Discusses BladeRoom Technology with Emerson and
August 2011, BRG entered into ___ Id. at ¶ 34.
Emerson executed a non-disclosure agreement before any
substantive discussions occurred, ____. Id. at
¶ 35. BRG then hosted a meeting for several Emerson
executives at its factory in England in September, 2011, ___
Id. at ¶ 47. Emerson later informed BRG in
October, 2011, ___. Id. at ¶ 48.
also began discussing the BladeRoom technology with Facebook
in October, 2011. Id. at ¶ 37. In connection
with those discussions, BRG and Facebook entered into a
nondisclosure agreement ___ Id. at ¶ 40. ___,
Facebook “urgently requested” a proposal to
supply BladeRooms for a data center in North Carolina.
Id. at ¶ 49. BRG provided the proposal in
November, 2011, ____. Id. According to BRG,
“[f]eedback from Facebook was positive, and Facebook
quickly began asking to learn even more details about”
BladeRooms. Id. at ¶ 50. BRG representatives
met with Facebook in California, and two Facebook
representatives met with BRG in England in March, 2012.
Id. at ¶ 51. During this trip, BRG took the
Facebook representatives on a tour of an operating BladeRoom
and provided them with additional confidential information.
Id. Subsequently, “Facebook continued to
request yet more detailed confidential information from BRG,
” and “suggested that the next step should be for
a team of Facebook design and engineering staff to travel to
BRG in England for an in-depth workshop with BRG's
technical teams to enable Facebook to learn more . . .
.” Id. at ¶ 52.
alleges that soon after the March, 2012, meeting in England,
one of the attending Facebook representatives met with an
Emerson Network Power executive ___. Id. at ¶
53. ___, Emerson contacted BRG and sought to reopen
discussions, to which BRG agreed. Id. Emerson told
BRG, however, that a group of individuals other than the ones
who had visited BRG in 2011 ___. Id. Emerson
proposed that several of its representatives visit BRG's
facilities in June, 2012. Id. at ¶ 54.
29th and May 30, 2012, BRG attended a meeting with Facebook
at its data center campus in Prineville, Oregon, and was told
the purpose of the meeting was to “survey and
physically see the functionality of a Facebook data center
and meet Facebook's lead architect and engineers.”
Id. at ¶ 56. Third party architects and
contractors also attended. Id. Facebook told BRG it
would request a proposal for an expansion of the Prineville
data center campus and asked BRG to present and discuss
BladeRoom technology, which it did. ___ Id. at
¶ 57. BRG alleges that unbeknownst to it at the time,
Facebook had already agreed that its construction contractor
Id. at ¶ 58.
previously discussed in-depth workshop with Facebook occurred
in England between June 19th and June 21, 2012, during which
BRG revealed additional confidential information.
Id. at ¶¶ 60, 61. A meeting between BRG
and Emerson, during which BRG also revealed confidential
information, occurred at the same time. Id. at
¶ 64. To maintain the confidentiality of the respective
discussions, BRG ensured the two companies'
representatives were separated during their visits.
despite BRG's efforts, representatives from Facebook and
Emerson did engage in a “pre-arranged, clandestine
meeting” in London on June 21, 2012, and
“compared notes” on what each had learned from
their meetings with BRG. Id. at ¶ 68. Facebook
also continued to indicate an interest in partnering with BRG
and requested more information and proposals. Id. at
Facebook and Emerson Allegedly Misappropriate the BladeRoom
never placed an order for BladeRooms. Id. at ¶
71. Instead, BRG alleges that Facebook and Emerson ___
Id. at ¶ 74. ___ Id. at ¶¶
75, 80. On January 16, 2013, Emerson publicly announced that
it was launching a new business focusing on “serving
the needs of massive data centers” using
“customized, highly scalable, and often modular
infrastructures.” Id. at ¶ 78. And in
May, 2014, Facebook announced it had chosen Emerson to
construct a pre-fabricated, modular data center in Sweden,
which it alleges will be constructed using appropriated
BladeRoom technology. Id. at ¶ 113.
Facebook's Disclosure of BRG Confidential
alleges that after Emerson's announcement, Facebook began
revealing BRG's confidential information through its
initiative called the “OpenCompute Project, ” the
goal of which “is to give the public ‘full access
to the specifications' used by Facebook in its data
centers in order to ‘spark a collaborative
dialogue” about how to improve its approach to data
centers.” Id. at ¶¶ 83, 84. BRG
alleges that on January 28, 2014, a Facebook representative
made a public presentation at an OpenCompute forum and
referred to the BladeRoom technology as one the “rapid
deployment data center” (“RDDC”) method
created by Facebook. Id. at ¶ 89. The same
Facebook representative also authored and published an
OpenCompute blog post that allegedly included details of the
BladeRoom technology. Id. at ¶ 100.
The Instant Action
initiated this action on March 23, 2015, and the court
granted in part and denied in part Facebook's motion to
dismiss the original complaint. Dkt. No. 59. Plaintiffs then
filed an amended complaint and, later, the SAC. Dkt. Nos. 62,
107. This motion followed.
Rule of Civil Procedure 8(a) requires a plaintiff to plead
each claim with sufficient specificity to “give the
defendant fair notice of what the . . . claim is and the
grounds upon which it rests.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007) (internal quotations
omitted). The factual allegations in the complaint
“must be enough to raise a right to relief above the
speculative level” such that the claim “is
plausible on its face.” Id. at 556-57. A
complaint that falls short of the Rule 8(a) standard may be
dismissed if it fails to state a claim upon which relief can
be granted. Fed.R.Civ.P. 12(b)(6). “Dismissal under
Rule 12(b)(6) is appropriate only where the complaint lacks a
cognizable legal theory or sufficient facts to support a
cognizable legal theory.” Mendiondo v. Centinela
Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008).
deciding whether to grant a motion to dismiss, the court must
generally accept as true all “well-pleaded factual
allegations.” Ashcroft v. Iqbal, 556 U.S. 662,
664 (2009). The court must also construe the alleged facts in
the light most favorable to the plaintiff. See Retail
Prop. Trust v. United Bhd. of Carpenters & Joiners of
Am., 768 F.3d 938, 945 (9th Cir. 2014) (providing the
court must “draw all reasonable inferences in favor of
the nonmoving party” for a Rule 12(b)(6) motion).
However, “courts are not bound to accept as true a
legal conclusion couched as a factual allegation.”
Iqbal, 556 U.S. at 678.
the court usually does not consider any material beyond the
pleadings for a Rule 12(b)(6) analysis. Hal Roach
Studios, Inc. v. Richard Feiner & Co., 896 F.2d
1542, 1555 n. 19 (9th Cir. 1990). Exceptions to this rule
include material submitted as part of the complaint or relied
upon in the complaint, and material subject to ...