United States District Court, N.D. California, San Jose Division
ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND
[RE: ECF 15]
LABSON FREEMAN UNITED STATES DISTRICT JUDGE
Inc. (“Krypt”) brings this suit against its
former employee Clay Robinson (“Robinson”) and
Ropaar LLC (“Ropaar”) in connection with
Robinson's decision to leave Krypt's employ and join
Ropaar. Ropaar now moves to dismiss the claims against it
pursuant to Federal Rule of Civil Procedure 12(b)(2) on the
ground that this Court does not have personal jurisdiction
over Ropaar. For the reasons discussed below, the motion to
dismiss is GRANTED WITH LEAVE TO AMEND.
otherwise noted, the following factual allegations are drawn
from the Complaint, ECF 1 (“Compl.”).
Krypt is a California corporation with its principal place of
business in San Jose, California. Compl. ¶ 13. It is a
“business and systems consulting firm, which provides
System Applications Products (‘SAP') solutions for
small and large corporations.” Id. ¶ 16.
Specifically, Krypt provides “consulting services,
pre-developed products, and specialized methodologies”
for its customers. Id.
Ropaar is a Texas limited liability corporation with its
principal place of business in Texas. According to Krypt, Ropaar
“also provides SAP solutions for corporations”
and thus is “currently a direct competitor of
Krypt's.” Id. ¶ 3, 17. Ropaar
disputes that it is a “direct competitor” of
Krypt, however. In declarations submitted by Jitendra Singh,
Ropaar's sole managing member, Ropaar explains that it
“is rare for Ropaar to be bidding on the same contracts
as Krypt” because Ropaar is much smaller than Krypt and
“works in a subset of IT consulting domains that Krypt
targets.” ECF 26-1 (“Second Singh Decl.”)
¶ 6. Moreover, with regard to geographic competition,
Ropaar represents that it “does not transact any
business in California, ” that it currently “does
not have any contracts with California companies, ” and
that its relationship with its only former California
customer ended in February 2013. ECF 15-1 (“First Singh
Decl.”) ¶¶ 3-4. Ropaar further asserts that
none of Ropaar's employees or contractors are residents
of California and that it “does not have any assets or
property in California. Id. ¶¶ 3, 5.
Robinson worked at Krypt from May 1, 2016 to February 12,
2019, Compl. ¶ 32, and now works at Ropaar, id.
¶ 48. Although Krypt is headquartered in California and
Ropaar is headquartered in Texas, Robinson was a resident of
Washington County, Arkansas “at all times relevant to
the Complaint.” Id. at 15.
at Krypt, Robinson served as a Professional Services
Consultant. As a result, Robinson was apparently
“entrusted with access to all of Krypt's
Confidential Information, including but not limited to
information about Krypt's strategy and expansion plans,
as well as customer lists concerning clients and prospective
clients.” Id. ¶ 38. He also
“provided services in California on one or more
occasion, including from Krypt's California offices, and
including to California-based Krypt clients.”
Id. ¶ 41. On January 29, 2019, Robinson
resigned from Krypt, explaining that “a member of his
family had health problems that limited Robinson's
ability to travel.” Id. ¶ 43. Robinson
also told Krypt that he “was leaving the SAP industry
entirely and would begin working for Smithfield Foods, a
meat-packing company.” Id.
April 4, 2019, however, Krypt learned that Robinson had not
left Krypt to join Smithfield Foods but had instead began
working for Ropaar. Id. ¶ 48. Following that
revelation, Krypt conducted a forensic examination of
Robinson's company-issued laptop. Id. ¶ 49.
At the outset, Krypt found that Robinson had deleted his
local account on the computer prior to his departure.
Id. ¶ 50. Nevertheless, the forensic
examination was able to discover “that on February 5,
2019-seven days before his last day of employment with
Krypt-Robinson used his Krypt-issued laptop to log into and
access his Ropaar email.” Id. ¶ 51. The
forensic examination also suggested that, between January 29,
2019 and February 12, 2019, Robinson “accessed a number
of files containing Krypt's Confidential
Information” and uploaded a “substantial
amount” of that information “to non-Krypt cloud
accounts at DropBox, OneDrive, and/or to a USB flash
drive.” Id. ¶ 52. Finally, the forensic
examination “show[ed] that Robinson uploaded . . . a
complete copy of his laptop's ‘desktop' to some
unknown form of storage.” Id. ¶ 54.
Krypt believed that Ropaar had “launched a campaign to
poach Krypt's employees . . . after they had been trained
by Krypt and given access to Krypt's invaluable
Confidential Information.” Id. ¶ 28. For
example, Ropaar purportedly made an employment offer to
Rajesh Malle in May 2015, which Malle ultimately accepted.
Krypt alleges that at least four of Ropaar's seven
employees were recruited directly from Krypt. Id.
on the forensic examination of Robinson's computer and
Krypt's belief that Ropaar has been systematically
poaching Krypt employees, Krypt now alleges that
“Ropaar and Robinson have been acting in concert to
design and execute a plan to obtain and misappropriate
Krypt's Confidential Information.” Id.
on June 7, 2019, Krypt filed a complaint against Robinson and
Ropaar. See ECF 1. The Complaint contains three
claims: (1) a claim for misappropriation of trade secrets
under the federal Defend Trade Secrets Act, 18 U.S.C.
§§ 1836 et seq., against both Defendants;
(2) a claim for misappropriation of trade secrets under the
California Uniform Trade Secrets Act, Cal. Civ. Code
§§ 3426 et seq., against both Defendants;
and (3) a common law breach of contract claim against
Robinson. Id. ¶¶ 56-83. The breach of
contract claim-which is not at issue in the instant motion-is
based upon Robinson's alleged breach of two agreements he
signed upon accepting the position at Krypt: an offer letter
(the “Offer Letter”) and a Confidential
Information and Invention Assignment Agreement (the
“CIIAA”). See Id. ¶¶ 33, 78,
August 9, 2019, Ropaar moved to dismiss the two claims
against it for lack of personal jurisdiction. ECF 15
(“Mot.”). The motion has been fully briefed, ECF
24 and 26, and the Court heard oral argument on December 5,
2019, ECF 37.
Rule of Civil Procedure 12(b)(2) authorizes a defendant to
seek dismissal of an action for lack of personal
jurisdiction. See Fed. R. Civ. P. 12(b)(2).
“In opposing a defendant's motion to dismiss for
lack of personal jurisdiction, the plaintiff bears the burden
of establishing that jurisdiction is proper.”
CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d
1066, 1073 (9th Cir. 2011). Courts may consider evidence
presented in affidavits and declarations in determining
personal jurisdiction. Doe v. Unocal Corp., 248 F.3d
915, 922 (9th Cir. 2001). “Where, as here, the
defendant's motion is based on written materials rather
than an evidentiary hearing, the plaintiff need only make a
prima facie showing of jurisdictional facts to withstand the
motion to dismiss.” Ranza v. Nike, Inc., 793
F.3d 1059, 1068 (9th Cir. 2015) (internal quotation marks and
allegations in the complaint must be taken as true, and
factual disputes are construed in the plaintiff's
favor.” Freestream Aircraft (Bermuda) Ltd. v. Aero
Law Grp., 905 F.3d 597, 602 (9th Cir. 2018). If,
however, the defendant adduces evidence controverting the
allegations, the plaintiff must “come forward with
facts, by affidavit or otherwise, supporting personal
jurisdiction, ” Scott v. Breeland, 792 F.2d
925, 927 (9th Cir. 1986), for a court “may not assume
the truth of allegations in a pleading which are contradicted
by affidavit.” Data Disc, Inc. v. Sys. Tech.
Assocs., Inc., 557 F.2d 1280, 1284 (9th Cir. 1977).
Moreover, conclusory allegations or “formulaic
recitation of the elements” of a claim are not entitled
to the presumption of truth. Ashcroft v. Iqbal, 556
U.S. 662, ...