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Anheuser-Busch Companies, LLC v. Clark

United States District Court, E.D. California

March 23, 2017

ANHEUSER-BUSCH COMPANIES, LLC, a Delaware limited liability company, and ANHEUSER-BUSCH LLC, a Missouri limited liability company, Plaintiffs,
v.
JAMES ALAN CLARK, an individual, Defendant.

          ORDER DENYING DEFENDANT'S MOTION TO STRIKE PLAINTIFFS' STRATEGIC LITIGATION AGAINST PUBLIC PARTICIPATION

          Troy L. Nunley United States District Judge.

         This matter is before the Court pursuant to Defendant James A. Clarke's (“Defendant”) Motion to Strike Plaintiffs' Strategic Litigation Against Public Participation (“SLAPP”) suit. (ECF No. 56.) Plaintiffs Anheuser-Busch Companies, LLC and Anheuser-Busch, LLC (collectively “Plaintiffs”) filed an opposition to Defendant's motion. (ECF No. 57.) Defendant filed a reply to Plaintiffs' opposition. (ECF No. 58.) Without leave of the Court, Plaintiffs filed a Response to Defendant's Objections to Evidence in Support of his Special Motion to Strike Plaintiffs' SLAPP.[1] (ECF No. 59.) Having carefully reviewed the briefing filed by both parties and for the reasons stated below, Defendant's Motion to Strike Plaintiffs' SLAPP suit (ECF No. 56) is hereby DENIED.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Plaintiffs allege that Defendant worked at Anheuser-Busch “from or about” November 2, 1998 until June 9, 2012. (Compl., ECF No. 1 ¶ 2.) Plaintiffs allege that during Defendant's time at Anheuser-Bush, Defendant had access to the company's confidential, proprietary, and/or trade secret information and documents. (ECF No. 1 ¶ 2.) Plaintiffs allege that Defendant signed an “Employee Agreement As To Intellectual Property and Confidentiality” (“Confidentiality Agreements”) on two separate occasions. (ECF No. 1 ¶ 14.) The Confidentiality Agreements provide that, upon termination of his employment from Anheuser-Busch, Defendant would return all Anheuser-Busch confidential information and would not make or keep copies, and would not disclose any Anheuser-Busch confidential, proprietary, and/or trade secret information to anyone. (ECF No. 1 ¶ 4.) The Confidentiality Agreements also required Defendant, upon request, to certify under oath in writing that he had not disclosed or used, in any way any confidential information following termination of his employment with the company. (ECF No. 1 ¶ 4.)

         Plaintiffs allege that Defendant took a document that contains a wide range of confidential and trade secret information[2] and failed to return the confidential information upon the termination of his employment. (ECF No. 1 ¶ 21.) Plaintiffs further allege that Defendant wrongfully used, disseminated, and disclosed Anheuser-Busch's confidential and trade secret information. (ECF No. 1 ¶ 27.) Plaintiffs allege that Defendant's acts violated his contractual and legal obligations to Anheuser-Busch, as well as his duty of loyalty. (ECF No. 1 ¶ 21.)

         On February 8, 2013, Plaintiffs invoked Defendant's Confidentiality Agreements, and requested Defendant provide a written certification under oath that he had not used or disclosed in any way, any confidential information learned or obtained during his employment. (ECF No. 1 ¶ 22.) On February 19, 2013, Plaintiffs allege that Defendant replied by letter refusing to provide the written certification required by the Confidentiality Agreements. (ECF No. 1 ¶ 23.) Plaintiffs allege that Defendant only denied providing any Anheuser-Busch competitor, vendor, or supplier with any trade secret or confidential information since the end of his employment with the company. (ECF No. 1 ¶ 23.) Plaintiffs allege that Defendant has not provided any written certifications under oath that he has not disclosed or used any confidential information belonging to the company.

         On February 22, 2013, various consumers from multiple states filed a class action suit against Plaintiffs, alleging that Plaintiffs intentionally overstate the alcohol content of many of their malt beverages on their labels. In re Anheuser-Busch Beer Labeling Mktg. & Sales Practices Litig., 644 F. App'x 515, 515-16 (6th Cir. 2016). On March 1, 2013, Plaintiffs filed the Complaint in the instant action against Defendant in the United States District Court, Eastern District of California alleging breach of contract, misappropriation of trade secrets, and return of personal property. (ECF No. 1.) Defendant filed a motion to dismiss and the instant motion to strike the Complaint under the California anti-SLAPP statute. Defendant argues that Plaintiffs' claims “attempt to punish [Defendant] for exercising his constitutional rights of petition and free speech in connection with class action litigation filed against [Plaintiffs by Defendant] exactly one week prior to this action.” (ECF Nos. 12, 14 at 1.)

         On July 18, 2013, the district court dismissed Plaintiffs' claim for return of personal property and denied Defendant's anti-SLAPP motion, holding that Plaintiffs' claims did not arise out of Defendant's protected litigation activity.[3] The court did not address whether Plaintiffs established a probability of prevailing on their claims challenged by the anti-SLAPP motion. Defendant filed an interlocutory appeal of the court's order. (ECF No. 36.)

         On November 13, 2015, the United States Court of Appeals for the Ninth Circuit reversed the district court and reasoned that Plaintiffs' suit against Defendant arises out of his constitutionally protected pre-litigation activity, and therefore Defendant satisfied the first prong of the anti-SLAPP motion. Anheuser-Busch Companies, LLC v. Clark, 622 F. App'x 671, 672 (9th Cir. 2015). The Ninth Circuit vacated the order denying the anti-SLAPP motion and remanded so that the court could consider in the first instance whether Plaintiffs can establish a probability that they will prevail on their claims against Defendant under the second prong of the anti-SLAPP statute. Id.

         II.STANDARD OF REVIEW

         A SLAPP suit is a civil lawsuit aimed at preventing citizens from exercising their political rights or punishing those who have done so. Simpson Strong-Tie Co., Inc. v. Gore, 49 Cal.4th 12, 21 (2010). “SLAPP suits masquerade as ordinary lawsuits, ” but “are generally meritless suits brought primarily to chill the exercise of free speech or petition rights by the threat of severe economic sanctions against the defendant.” Id. (quotation omitted); accord Hilton v. Hallmark Cards, 599 F.3d 894, 902 (9th Cir. 2009). California enacted the anti-SLAPP statute to vindicate free speech and petition for rights due to concern over “a disturbing increase” in such suits. Cal. Civ. Proc. Code § 425.16; Oasis W. Realty, LLC v. Goldman, 51 Cal.4th 811, 815 n.1 (2011). The purpose of the anti-SLAPP statute is to prevent meritless litigation designed to chill the exercise of First Amendment rights. Makaeff v. Trump University, 715 F.3d 254, 261-62 (9th Cir. 2013). Under the statute, a defendant subjected to a SLAPP suit may file a special motion to strike in state or federal court to expedite the early dismissal of the plaintiff's unmeritorious SLAPP claims. Price v. Stossel, 620 F.3d 992, 999 (9th Cir. 2010); Simpson Strong-Tie Co., 49 Cal.4th at 21.

         The anti-SLAPP statute posits a two-step process for determining whether an action is a SLAPP action and subject to a special motion to strike. First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from a protected activity. Navellier v. Sletten, 29 Cal.4th 82, 89 (2002). In order to satisfy the first prong, a defendant must simply demonstrate that he engaged in “protected activity” and that each of the plaintiffs' claims against him “arises from” that protected activity. Id. If the court finds that the defendant has made such a showing, it must then determine whether the plaintiff has demonstrated a probability of prevailing on the claim. Id.

         In order to establish the requisite probability of prevailing, the plaintiff need only have “stated and substantiated a legally sufficient claim. Id. (quoting Briggs v. Eden Council for Hope & Opportunity, 19 Cal.4th 1106, 1123 (1999)). The plaintiffs must demonstrate that the complaint is supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited. Makaeff, 715 F.3d at 261; Batzel v. Smith, 333 F.3d 1018, 1024 (9th Cir. 2003). The anti-SLAPP statute “poses no obstacle to suits that possess minimal merit.” Navellier, 29 Cal.4th at 93. Once a plaintiff shows a probability of prevailing on any part of its claim, the plaintiff has established that its cause of action has some merit and the entire cause of action stands. Oasis, 51 Cal.4th at 815.

         III. ANALYSIS

         For each of Plaintiffs' causes of action, the Court proceeds to determine whether Plaintiffs can establish a probability that they will prevail on their claims against Defendant under the second prong of the anti-SLAPP statute. To prevail on an anti-SLAPP motion, the moving defendant must first make a prima facie showing that the plaintiff's suit arises from an act in furtherance of the defendant's constitutional rights to petition and to free speech. Makaeff, 715 F.3d at 261. If the court finds that such a showing has been made, the burden then shifts to the plaintiff to establish a reasonable probability that it will prevail on its claim. Cal. Civ. Proc. Code § 425.16(b)(1); Makaeff, 715 F.3d at 261. Because the Ninth Circuit found that Defendant satisfied the first prong of the anti-SLAPP motion, the Court focuses its analysis on the second prong, whether Plaintiffs can establish a probability that they will prevail on their claims against Defendant.

         A. Misappropriation of a Trade Secret

         Plaintiffs allege that Defendant's actions constitute willful misappropriation of trade secrets under California's Uniform Trade Secret Act (“UTSA”). A claim for misappropriation of trade secrets under UTSA requires the plaintiff demonstrate: (1) the plaintiff owned a trade secret; (2) the defendant acquired, disclosed, or used the plaintiff's trade secret through improper means; and (3) the defendant's actions damaged the plaintiff. Cal. Civ. Code § 3426.1; CytoDyn of New Mexico, Inc. v. Amerimmune Pharmaceuticals, Inc., 160 Cal.App.4th 288, 297 (Cal.Ct.App. 2d Dist. 2008). “A ‘[t]rade secret' means information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) [d]erives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) [i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” Cal. Civ. Code § 3426.1.

         i. Consideration of declaration of Kristi Skinner

         As a preliminary matter, Defendant argues that Plaintiffs rely on inadmissible hearsay in the form of a declaration to support its position that Page 13 constitutes a trade secret. However, Defendant fails to cite any authority to show that submitting a declaration attesting to the trade secret nature of the document in question is impermissible. For purposes of an anti-SLAPP motion, courts consider “the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.” Cal. Civ. Pro. § 425.16, subd. (b)(2). Courts may also consider declarations supporting or opposing an anti-SLAPP motion so long as they are based on personal knowledge and executed under penalty of perjury. See Sweetwater Union High School Dist. v. Gilbane Building Co., 245 Cal.App.4th 19, 33 n.12 (Cal.Ct.App. 4th Dist. 2016) review granted and opinion superseded, 371 P.3d 223 (Cal. 2016); see Raining Data Corp. v. Barrenechea, 175 Cal.App.4th 1363, 1372 (Cal.Ct.App. 4th Dist. 2016); see also Gilbert v. Sykes, 147 Cal.App.4th 13, 26 (Cal.Ct.App. 3d Dist. 2007). “Declarations that lack foundation or personal knowledge, or that are argumentative, speculative, impermissible opinion, hearsay, or conclusory are to be disregarded.” Sykes, 147 Cal.App.4th at 26; see Tuchscher Dev. Enterprises, Inc. v. San Diego Unified Port Dist., 106 Cal.App.4th 1219, 1238 (Cal.Ct.App. 4th Dist. 2003) (rejecting a declaration “supported only by information and belief or his mere understanding of events”).

         Plaintiffs refer to the allegedly misappropriated trade secrets in a declaration submitted under penalty of perjury by Kristi Skinner, the Anheuser-Busch employee allegedly responsible for maintaining the confidential Anheuser-Busch document known as Page 13. (ECF No. 21.) According to her declaration, Skinner has worked at Anheuser-Busch since 1986 and serves as a “Subject Matter Expert I - Technical in Quality Assurance, Zone Brewery Support department, Supply division.” (ECF No. 21 ¶ 2.) Skinner states she is ...


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