Olson Kundig Inc v. 12th Avenue Iron Inc, No. 2:2022cv00825 - Document 40 (W.D. Wash. 2022)
Court Description: ORDER granting Plaintiff's 36 Motion to Dismiss 12th Avenue Iron, Inc.s Amended Counterclaims of Violation of the Uniform Trade Secrets Act & Violation of Washington Consumer Protection Act. Further, the court DENIES Olson Kundig's request for payment of its attorneys' fees and expenses associated with bringing the instant motion to dismiss. Signed by Judge James L. Robart. (LH)
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Olson Kundig Inc v. 12th Avenue Iron Inc Doc. 40 Case 2:22-cv-00825-JLR Document 40 Filed 11/16/22 Page 1 of 16 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 9 10 OLSON KUNDIG, INC., CASE NO. C22-0825JLR ORDER Plaintiff, 11 v. 12 13 12TH AVENUE IRON, INC., Defendant. 14 15 16 I. INTRODUCTION Plaintiff Olson Kundig, Inc. (“Olson Kundig”) moves to dismiss Defendant 12th 17 Avenue Iron, Inc.’s (“12th Avenue Iron”) Washington Uniform Trade Secrets Act 18 (“WUTSA”) and Washington Consumer Protection Act (“WCPA”) counterclaims. (Mot. 19 (Dkt. # 36); Reply (Dkt. # 39). 1) 12th Avenue Iron opposes the motion. (Resp. (Dkt. 20 # 38).) The court has considered the parties’ submissions, the balance of the record, and 21 1 22 When citing to the parties’ pleadings, the court uses the pleadings’ internal pagination unless otherwise stated. ORDER - 1 Dockets.Justia.com Case 2:22-cv-00825-JLR Document 40 Filed 11/16/22 Page 2 of 16 1 the applicable law. Being fully advised, 2 the court GRANTS Olson Kundig’s motion to 2 dismiss. 3 II. 4 BACKGROUND This dispute stems from the parties’ business dealings with respect to the “Tom 5 Kundig Collection”—a hardware and home furnishings line that is, according to 12th 6 Avenue Iron, “owned and designed by” 12th Avenue Iron and Olson Kundig. (See 7 generally 1st Am. Answer (Dkt. # 34) ¶ C19. 3) 8 A. The Parties 9 Stephen Marks is a founder and the current owner of 12th Avenue Iron. (See id. 10 ¶ C7.) 12th Avenue Iron “designs, builds, and installs custom architectural metalwork, 11 sculpture, and furniture for commercial, residential, and public environments.” (Id. 12 ¶ C6.) 13 Tom Kundig is an architect and an owner and design principal of Olson Kundig, 14 an architectural firm. (See Compl. (Dkt. # 1) ¶¶ 10-11; 1st Am. Answer ¶ C8.) 15 According to Olson Kundig, the firm “has been a worldwide leader in architectural 16 design for several decades”; its work “encompasses museums, commercial and 17 // 18 19 20 21 22 2 Neither party has requested oral argument (see Mot. at 1; Resp. at 1), and the court has determined that oral argument would not be helpful to its disposition of the motions, see Local Rules W.D. Wash. LCR 7(b)(4). 3 Because 12th Avenue Iron separately numbers the paragraphs in the counterclaim section of its answer (see 1st Am. Answer at 13-27), the court uses “A” to refer to the paragraphs in the answer section and “C” to refer to the paragraphs in the counterclaim section. ORDER - 2 Case 2:22-cv-00825-JLR Document 40 Filed 11/16/22 Page 3 of 16 1 mixed-use design, exhibit design, interior design, places of worship, and residences.” 2 (Compl. ¶ 10.) 3 B. 4 The Tom Kundig Collection In or about December 2009, Mr. Kundig and Mr. Marks “started discussions 5 concerning the formation of a business relationship between” Olson Kundig and 12th 6 Avenue Iron. (1st Am. Answer ¶ C9.) During the parties’ discussions, Mr. Marks 7 allegedly proposed that the two companies work together to create a product line for 8 hardware and home furnishings. (See id. ¶¶ C10-12.) 9 The precise nature of the parties’ relationship as well as the existence, validity, 10 and enforceability of any contract or agreement between them remain subject to dispute. 11 According to 12th Avenue Iron, Mr. Marks and Mr. Kundig “orally agreed that this line 12 of products developed together, although called the ‘Tom Kundig Collection[,]’ would be 13 a partnership and joint venture.” 4 (Id. ¶ C13.) Although Olson Kundig circulated a 14 written agreement regarding the Tom Kundig Collection at one point, 12th Avenue Iron 15 alleges that the agreement was “never negotiated, discussed, or signed by anyone.” (Id. 16 ¶¶ C17-18.) 17 Leading up to the Tom Kundig Collection’s launch in 2012, the parties worked 18 together to create the Tom Kundig Collection products. (See id. ¶¶ C14-16.) According 19 to 12th Avenue Iron, Mr. Kundig designed and sketched the products while Mr. Marks 20 “researched all the suppliers, vendors, and made rounds of prototypes to create perfect, 21 4 22 Olson Kundig disputes 12th Avenue Iron’s characterization of the relationship as a partnership. (See, e.g., Compl. ¶¶ 18-26, 36.) ORDER - 3 Case 2:22-cv-00825-JLR Document 40 Filed 11/16/22 Page 4 of 16 1 high-end products for the Tom Kundig Collection.” (Id. ¶ C16; see also id. ¶ C15 2 (claiming that Mr. Marks “invested intensive time and energy developing the sources, 3 products and processes for the [Tom Kundig Collection] product line”); id. ¶ C21 4 (alleging that 12th Avenue Iron “fully participated in the design of all the products with 5 Olson Kundig”).) 6 12th Avenue Iron claims that since the Collection’s launch in 2012, the parties 7 have “had a partnership in designing and manufacturing the products launched under the 8 Tom Kundig Collection.” (Id. ¶ C20; see also id. ¶¶ C19, C24-25 (explaining that 9 customers could purchase the Tom Kundig Collection products through 12th Avenue 10 Iron’s official website, and 12th Avenue Iron was responsible “for all sales transactions 11 as well as delivery and shipping of the products.”); id. ¶ C23 (alleging that Olson Kundig 12 “relied on 12th Ave[nue] Iron’s participation in the design of each of the products in the 13 Tom Kundig Collection as it was necessary to determine the feasibility in the fabrication 14 and development of shop drawings to enable manufacturing of said products”); id. ¶ C27 15 (“For over the past ten (10) years, the parties collaborated to design and develop the 16 various products sold on 12th Ave[nue] Iron’s website.”).) In light of the significant 17 amount of time that 12th Avenue Iron has spent developing the Tom Kundig Collection, 18 it alleges that it holds “ownership interests in the supplier and vendor information, 19 customer lists developed through its website, as well as design, fabrication, and 20 manufacturing trade secrets and intellectual property to products launched under the Tom 21 Kundig Collection.” (Id. ¶¶ C22, C15, C27.) 22 // ORDER - 4 Case 2:22-cv-00825-JLR Document 40 Filed 11/16/22 Page 5 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 C. Termination of the Business Relationship Between Olson Kundig and 12th Avenue Iron and Commencement of this Lawsuit According to 12th Avenue Iron, “[i]n 2020, due to factors out of 12th Ave[nue] Iron’s control, it temporarily fell behind on fulfilling some orders for the Tom Kundig Collection.” (Id. ¶ C28.) Olson Kundig then proposed using another Seattle-based metal fabrication company, Argent Fabrication, LLC (“Argent”), “to assist 12th Ave[nue] Iron in fulfilling its orders.” (Id. ¶ C29.) 12th Avenue Iron states that it understood Olson Kundig’s proposal as “instructing 12th Ave[nue] Iron to allow Argent to assist 12th Ave[nue] Iron with its orders.” (Id. ¶ C31). Thus, 12th Avenue Iron “opened its doors and showed everything to Argent – including its supplier and vendor information, customers developed through the website, and of course its design, fabrication, and manufacturing trade secrets and intellectual property developed for the [Tom Kundig Collection].” (Id.; see also id. ¶ C34 (claiming that Olson Kundig “pushed for a merger between Argent and 12th Ave[nue] Iron”).) According to 12th Avenue Iron, for several months, Argent sent its crew to fulfill Tom Kundig Collection orders for 12th Avenue Iron, “frequently without properly consulting [Mr. Marks],” and invoiced 12th Avenue Iron over $120,000 for work performed during a three-month period. (Id. ¶ C32.) 12th Avenue Iron and its customers 18 were allegedly dissatisfied with Argent’s work product. (See id. ¶ C33 (stating that 19 “Argent’s work turned out to be substandard and shoddy” and customers “demanded 20 refunds or refused to pay 12th Ave[nue] Iron until Argent’s poor workmanship [was] 21 repaired”).) 22 ORDER - 5 Case 2:22-cv-00825-JLR Document 40 Filed 11/16/22 Page 6 of 16 1 On April 28, 2022, Olson Kundig notified 12th Avenue Iron that Olson Kundig 2 intended to terminate the parties’ relationship and demanded that 12th Avenue Iron 3 “remove the Tom Kundig Collection line from its website, return all shop drawings, other 4 designs/drawings, and any other documents provided by or created by Olson Kundig, and 5 return customer’s payments for any unfulfilled orders.” (Id. ¶ C35.) 12th Avenue Iron 6 alleges that Olson Kundig also interfered with its business, leading to significant losses. 7 (See id. ¶ C37.) For instance, according to 12th Avenue Iron, Olson Kundig “sent a mass 8 email to its customers and clients instructing them not only to cease ordering from 12th 9 Ave[nue] Iron, but also to order from Argent instead.” (Id. ¶ C36.) As a result, 12th 10 Avenue Iron claims that Olson Kundig is “allowing Argent to use 12th Ave[nue] Iron’s 11 trade secrets and intellectual property to make products from the Tom Kundig 12 Collection.” (Id. ¶ 38.) 13 Because 12th Avenue Iron allegedly continued to manufacture, market, and sell 14 Tom Kundig Collection products after receiving Olson Kundig’s termination letter, Olson 15 Kundig commenced this case against 12th Avenue Iron on June 12, 2022. (See generally 16 Compl. ¶¶ 48, 51-56.) Olson Kundig brings claims against 12th Avenue Iron for: breach 17 of contract; infringement of the D352, D197, D933 and D422 Design Patents under 35 18 U.S.C. § 271; infringement of the OLSON KUNDIG trademark under 15 U.S.C. § 1114; 19 infringement of the TOM KUNDIG COLLECTION trademark under Washington 20 common law; violation of the Washington Personality Rights Act (“WPRA”), RCW 21 63.60.010 et seq.; and violation of the WCPA, RCW 19.86.010 et seq. (See id. at 10-20.) 22 12th Avenue Iron brings counterclaims against Olson Kundig for: breach of contract; ORDER - 6 Case 2:22-cv-00825-JLR Document 40 Filed 11/16/22 Page 7 of 16 1 unjust enrichment; violation of the WCPA; and violation of the WUTSA, RCW 2 19.108.010 et seq. (See generally 1st Am. Answer at 18-27; Answer (Dkt. # 12) at 3 18-22.) 4 On September 28, 2022, the court granted in part Olson Kundig’s motion to 5 dismiss 12th Avenue Iron’s unjust enrichment, WCPA, and WUTSA counterclaims. (See 6 generally 1st MTD (Dkt. # 19); 9/28/22 Order (Dkt. # 31).) Specifically, the court 7 dismissed 12th Avenue Iron’s WUTSA counterclaim because 12th Avenue Iron “failed to 8 adequately (1) describe its alleged trade secrets; (2) identify its efforts to maintain the 9 secrecy of its alleged trade secrets; and (3) establish how its alleged trade secrets were 10 misappropriated.” (9/28/22 Order at 24.) The court, however, granted 12th Avenue Iron 11 leave to amend its WUTSA counterclaim. (Id.) Additionally, the court dismissed 12th 12 Avenue Iron’s WCPA counterclaim without prejudice and without leave to amend 13 pursuant to 12th Avenue Iron’s stipulation. (Id. at 25; see Resp. to 1st MTD (Dkt. # 24) 14 at 7 (agreeing to dismiss its WCPA counterclaim without prejudice and without leave to 15 amend).) 16 12th Avenue Iron timely filed its first amended answer, again bringing 17 counterclaims against Olson Kundig for: breach of contract; unjust enrichment; violation 18 of the WCPA; and violation of the WUTSA, RCW 19.108.010 et seq. (See generally 1st 19 Am. Answer at 18-27; Dkt.) 20 21 22 III. ANALYSIS Olson Kundig again moves to dismiss 12th Avenue Iron’s WUTSA and WCPA counterclaims pursuant to Federal Rule of Civil Procedure 12(b)(6). (See generally Mot.) ORDER - 7 Case 2:22-cv-00825-JLR Document 40 Filed 11/16/22 Page 8 of 16 1 It argues that the court should dismiss those counterclaims because: (1) 12th Avenue 2 Iron’s WCPA claim is procedurally improper given that the court previously dismissed 3 this claim without leave to amend pursuant to 12th Avenue Iron’s stipulation; (2) 12th 4 Avenue Iron’s WCPA counterclaim is substantively improper because it “fails to 5 plausibly plead a causal link between 12th Avenue Iron’s alleged injury and Olson 6 Kundig’s alleged conduct”; and (3) 12th Avenue Iron’s WUTSA counterclaim still 7 suffers from the same flaws identified in the court’s September 28, 2022 order. (See 8 generally id. at 1.) 12th Avenue Iron again agrees to dismiss its WCPA counterclaim, 9 noting that “it was an unintentional error to not remove” the WCPA counterclaim from its 10 amended answer. (Resp. at 12.) On reply, Olson Kundig asks the court to order 12th 11 Avenue Iron to pay the attorneys’ fees and costs that Olson Kundig incurred in having to 12 move to dismiss the WCPA counterclaim again. (See Reply at 8-9.) 13 Because 12th Avenue Iron again agrees to dismiss its WCPA counterclaim. the 14 court will address only 12th Avenue Iron’s WUTSA counterclaim below. The court 15 discusses whether 12th Avenue Iron has sufficiently pled its WUTSA counterclaim 16 before addressing Olson Kundig’s request for fees. 17 A. Whether 12th Avenue Iron’s WUTSA Counterclaim States a Claim Upon Which Relief Can Be Granted 18 The court sets forth the relevant legal standard before analyzing the sufficiency of 19 12th Avenue Iron’s WUTSA counterclaim. 20 // 21 // 22 ORDER - 8 Case 2:22-cv-00825-JLR Document 40 Filed 11/16/22 Page 9 of 16 1 1. Legal Standard 2 Federal Rule of Civil Procedure 12(b)(6) provides for dismissal of a complaint for 3 “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). “To 4 survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted 5 as true, to ‘state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678 6 (quoting Twombly, 550 U.S. at 570). A claim is facially plausible “when the pleaded 7 factual content allows the court to draw the reasonable inference that the defendant is 8 liable for the misconduct alleged.” Id. While “detailed factual allegations” are not 9 required, a [pleading] must include “more than an unadorned, 10 the-defendant-unlawfully-harmed-me accusation.” Id. The same pleading standard, and 11 standard of review, applies to counterclaims. See Starr v. Baca, 652 F.3d 1202, 1216 12 (9th Cir. 2011) (“[A]llegations in a . . . counterclaim . . . must contain sufficient 13 allegations of underlying facts to give fair notice and to enable the opposing party to 14 defend itself effectively.”); see also Lemman v. Foley, No. C20-0591JCC, 2020 WL 15 7181055, at *1 (W.D. Wash. Dec. 7, 2020) (noting that a motion to dismiss a 16 counterclaim is evaluated under the same standards applicable to a motion to dismiss a 17 complaint). 18 When considering a Rule 12(b)(6) motion, the court may consider the pleading, 19 documents attached to the pleading, documents incorporated therein, or matters of 20 judicial notice. See United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003); 21 Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 (9th Cir. 2010). The court must 22 accept the non-moving party’s well-pleaded factual allegations as true and draw all ORDER - 9 Case 2:22-cv-00825-JLR Document 40 Filed 11/16/22 Page 10 of 16 1 reasonable inferences in favor of the non-moving party. See Hines v. Youseff, 914 F.3d 2 1218, 1227 (9th Cir. 2019); Daniels-Hall, 629 F.3d at 998. However, the court is not 3 required to accept as true “allegations that are merely conclusory, unwarranted 4 deductions of fact, or unreasonable inferences.” Daniels-Hall, 629 F.3d at 998; Chavez v. 5 United States, 683 F.3d 1102, 1008 (9th Cir. 2012) (stating that the court is not required 6 to accept as true legal conclusions or “formulaic recitation[s] of the elements of a cause 7 of action”). 8 2. WUTSA Counterclaim 9 Olson Kundig argues that the court must dismiss 12th Avenue Iron’s WUTSA 10 counterclaim because (1) 12th Avenue Iron does not sufficiently plead that it made 11 reasonable efforts to maintain the secrecy of its alleged trade secrets, and (2) 12th 12 Avenue Iron does not sufficiently identify how its alleged trade secrets were 13 misappropriated, as it “fails to plead any facts to show that Olson Kundig disclosed or 14 used any of 12th Avenue Iron’s alleged trade secrets.” (See Mot. at 2-5; Reply at 2-8.) 15 “A claim under the WUTSA requires a plaintiff to plead (1) the existence of a 16 protectable trade secret, and (2) facts constituting misappropriation.” NW Monitoring 17 LLC v. Hollander, 534 F. Supp. 3d 1329, 1336 (W.D. Wash. 2021). In order to state a 18 claim for trade secret misappropriation, a plaintiff must also establish that it made 19 reasonable efforts to maintain the secrecy of its alleged trade secrets. See RCW 20 19.108.010(4). “[R]easonable efforts to maintain secrecy have been held to include 21 advising employees of the existence of a trade secret, limiting access to a trade secret on 22 need-to-know basis, and controlling plant access.” Machen, Inc. v. Aircraft Design, Inc., ORDER - 10 Case 2:22-cv-00825-JLR Document 40 Filed 11/16/22 Page 11 of 16 1 828 P.2d 73, 76-79 (Wash. Ct. App. 1992), overruled on other grounds by Waterjet 2 Tech., Inc. v. Flow Int’l Corp., 996 P.2d 598 (Wash. 2000). “On the other hand, public 3 disclosure of information . . . can preclude protection.” Id. 4 Olson Kundig argues that 12th Avenue Iron’s amended answer “still fails to plead 5 facts to show any reasonable efforts it took under the circumstances to safeguard the 6 secrecy of its allegedly protectable trade secrets in connection with its disclosure of these 7 trade secrets to Argent.” (Mot. at 2.) The court agrees. 12th Avenue Iron continues to 8 admit that it “opened its doors and showed everything to Argent—including its supplier 9 and vendor information, customers developed through the website, and of course its 10 design, fabrication, and manufacturing trade secrets and intellectual property developed 11 for the” Tom Kundig Collection. (1st Am. Answer ¶ C31.) As to the Argent employees 12 who assisted 12th Avenue Iron with its manufacturing work, 12th Avenue Iron alleges 13 that it did not provide these employees with “full access to its network and files” but also 14 admits that it gave these employees some access to information it claims are trade secrets. 15 (See id. ¶ 79 (alleging that 12th Avenue Iron “concealed available shop drawings and 16 only provided Argent with limited descriptions of items Argent was assisting 12th 17 Ave[nue] Iron with”); see also id. ¶ 71 (describing 12th Avenue Iron’s alleged trade 18 secrets).) 19 20 21 22 With respect to 12th Avenue Iron’s disclosure of these alleged trade secrets to Argent’s co-owner Kurt Eckman, 12th Avenue alleges, In the interest of establishing a successful and open partnership, Argent co-owner Kurt Eckman was given extensive online access to 12th Ave[nue] Iron’s books, its online store featuring the TK Collection, its manufacturing ORDER - 11 Case 2:22-cv-00825-JLR Document 40 Filed 11/16/22 Page 12 of 16 1 3 processes and shop drawings, and its relationships with all clients, vendors, and suppliers. Mr. Eckman brought his personal laptop to work in the 12th Ave[nue] Iron’s office on many occasions. Much of this information and 12th Ave[nue] Iron’s trade secrets were taken by Argent’s employees by documentation of these shop drawings and the methods. 4 (Id. ¶ 80.) 12th Avenue Iron thus admits that it voluntarily gave Argent extensive access 5 to everything, including 12th Avenue Iron’s books, online store featuring the entire Tom 6 Kundig Collection line products, manufacturing processes, shop drawings, and 7 information about its relationship with all clients, vendors, and suppliers (id.)—the exact 8 types of materials that12th Avenue Iron claims to be its trade secrets (see, e.g., id. 9 ¶ 71)—without taking any steps to safeguard the secrecy of these materials (see generally 2 10 id. ¶ 80). Moreover, 12th Avue Iron again fails to plead any facts to suggest that it 11 advised Argent’s co-owner and employees of the existence of its trade secrets and warned 12 them not to disclose such information, limited disclosure of its trade secrets to Argent on 13 any need-to-know basis, required Argent’s co-owner and employees to sign 14 confidentiality agreements regarding its alleged trade secrets, or took any other steps to 15 ensure that its alleged trade secrets would be sufficiently protected. (See generally id.); 16 see, e.g., Machen, 828 P.2d at 78-79 (dismissing trade secret claim where plaintiff shared 17 its alleged trade secrets with a third party at a trade show but did not present evidence 18 indicating that plaintiff took steps to “see that the information would be protected”). 19 12th Avenue Iron argues that it pled sufficient facts to demonstrate its efforts to 20 maintain the secrecy of its alleged trade secrets because it alleged that “12th Ave[nue] 21 Iron maintained its trade secrets by keeping all of its manufacturing in house and 22 choosing not to outsource its jobs to other fabricators” and that “12th Ave. Iron had to ORDER - 12 Case 2:22-cv-00825-JLR Document 40 Filed 11/16/22 Page 13 of 16 1 continually reinforce and remind its own employees, job superintendents and managing 2 architects that 12th Ave. Iron’s product specification drawings could not be given to 3 another fabricator and should be closely held within 12th Ave. Iron’s shop.” (1st Am. 4 Answer ¶¶ C72-73; see Resp. at 6-7 (referencing these allegations).) However, the court 5 agrees with Olson Kundig that “these general measures . . . only apply to 12th Avenue 6 Iron’s own employees, managing architects, and third-party fabricators (who are not 7 Argent)” and “are not designed to protect the disclosure of information when it comes to 8 Argent in particular.” (Reply at 2-3.) 9 In light of the omissions and admissions identified above regarding Argent’s 10 access to the information that 12th Avenue Iron claims are trade secrets (see, e.g., 1st 11 Am. Answer ¶¶ C31, C79-80 (discussing, among other things, Argent’s co-owner’s 12 “extensive online access” to information 12th Avenue Iron claims are trade secrets, as 13 well as Argent’s co-owner’s ability to access such information on his personal laptop 14 without any contractual restrictions on his access to, or use of, such information)), the 15 court also agrees with Olson Kundig’s contention that “12th Avenue Iron’s general and 16 vague protective measures (as applied to its own employees, architects, and non-Argent 17 third-party fabricators) do not sufficiently plead that it took reasonable steps to maintain 18 the secrecy of the information it now claims are trade secrets (Reply at 4). See Machen, 19 828 P.2d at 78 (stating that “general [protective] measures” may not be enough if they are 20 not “designed to protect the disclosure of information”). Accordingly, the court again 21 concludes that 12th Avenue Iron “fails to meet the ‘secrecy’ element because, not only 22 did it fail to plead any facts to [establish that it took reasonable efforts to] protect the ORDER - 13 Case 2:22-cv-00825-JLR Document 40 Filed 11/16/22 Page 14 of 16 1 alleged trade secrets, it actually pled facts showing it disclosed its trade secrets to a third 2 party.” (See 9/28/22 Order at 21 (quoting 1st MTD at 8). 5) In the absence of factual 3 allegations establishing that 12th Avenue Iron undertook reasonable efforts to protect its 4 trade secrets, 12th Avenue Iron’s WUTSA counterclaim cannot survive. 6 The court 5 therefore GRANTS Olson Kundig’s motion to dismiss 12th Avenue Iron’s WUTSA 6 counterclaim. 7 Whether to grant leave to amend is generally within the discretion of the district 8 court. In re Daisy Sys. Corp., 97 F.3d 1171, 1175 (9th Cir. 1996). This discretion is 9 particularly broad where the plaintiff has previously filed an amended complaint. 10 Sisseton–Wahpeton Sioux Tribe v. United States, 90 F.3d 351, 355 (9th Cir. 1996). Here, 11 12th Avenue Iron has already had an opportunity to remedy the deficiencies with respect 12 to its WUTSA counterclaim (see 6/13/22 Order at 17-24; 1st Am. Answer) and has not 13 requested leave to amend nor proposed any new facts or legal theories that it could not 14 have incorporated into prior iterations of its complaint (see generally Dkt.; Resp.). See, 15 e.g., Turner v. Cnty. of Los Angeles, 18 F. App’x 592, 597 (9th Cir. 2001) (concluding 16 that the court did not abuse its discretion in denying the second amended complaint with 17 18 19 20 21 22 5 See, e.g., Buffets, Inc. v. Klinke, 73 F.3d 965, 969 (9th Cir. 1996) (affirming dismissal of WUTSA claim based on the reasonableness of the employer’s security measures, stating that “[e]ven if the [job] manuals were loaned only on a “need-to-know” basis, as OCB claims, the fact that employees were advised of neither the manuals’ status as secrets, nor of security measures that should be taken to prevent their being obtained by others, suggests that OCB's interest in security was minimal”). 6 Because 12th Avenue Iron’s WUTSA counterclaim fails for this reason, the court does not address Olson Kundig’s argument that 12th Avenue Iron also fails to sufficiently identify how its alleged trade secrets were misappropriated. (See Mot. at 4-5; Reply at 4-8.) ORDER - 14 Case 2:22-cv-00825-JLR Document 40 Filed 11/16/22 Page 15 of 16 1 prejudice and without leave to amend where the court had already allowed the plaintiff to 2 amend their complaint with instructions on how to cure the complaint’s deficiencies); 3 Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 1052 (9th Cir. 2008) (“Appellants fail to 4 state what additional facts they would plead if given leave to amend . . . . Accordingly, 5 amendment would be futile.”). Therefore, the court concludes that further amendment to 6 this claim would be futile and DISMISSES 12th Avenue Iron’s WUTSA counterclaim 7 with prejudice and without leave to amend. 8 B. 9 Olson Kundig’s Request for Fees In its reply, Olson Kundig asks the court to order 12th Avenue Iron to pay the 10 attorneys’ fees and costs that Olson Kundig incurred in having to move to dismiss the 11 WCPA counterclaim again. (See Reply at 8-9.) It argues that such an award is warranted 12 because 12th Avenue Iron’s re-assertion of the WCPA counterclaim in its amended 13 answer—after agreeing to, and being ordered to, dismiss the counterclaim without leave 14 to amend—constitutes “unreasonable, reckless, and frivolous conduct.” (See id.) In 15 support of its request, Olson Kundig references 28 U.S.C. § 1927 (see id.), which states 16 that “[a]ny attorney . . . who so multiplies the proceedings in any case unreasonably and 17 vexatiously may be required by the court to satisfy personally the excess costs, expenses, 18 and attorneys’ fees reasonably incurred because of such conduct.” 19 12th Avenue Iron states that “it was an unintentional error to not remove 12th 20 Ave[nue] Iron’s WCPA claim in its amended answer.” (Resp. at 12 (stating that 12th 21 Avenue Iron “does not object to dismissal of its WCPA [c]ounterclaim”).) At present, 22 the court cannot conclude that 12th Avenue Iron’s conduct was unreasonable or ORDER - 15 Case 2:22-cv-00825-JLR Document 40 Filed 11/16/22 Page 16 of 16 1 vexatious. Instead, the court accepts 12th Avenue Iron’s characterization of its failure to 2 remove the WCPA counterclaim as an unintentional mistake. (Id.) Accordingly, the 3 court declines to order 12th Avenue Iron to pay Olson Kundig’s attorneys’ fees and 4 expenses associated with bringing the instant motion to dismiss 12th Avenue Iron’s 5 WCPA counterclaim. 6 7 IV. CONCLUSION For the foregoing reasons, the court GRANTS Olson Kundig’s motion to dismiss 8 12th Avenue Iron’s WUTSA and WCPA counterclaims (Dkt. # 36). Specifically, the 9 court (1) DISMISSES 12th Avenue Iron’s WCPA counterclaim without prejudice and 10 without leave to amend pursuant to 12th Avenue Iron’s stipulation (Resp. at 12) and 11 (2) DISMISSES 12th Avenue Iron’s WUTSA counterclaim with prejudice and without 12 leave to amend. Further, the court DENIES Olson Kundig’s request for payment of its 13 attorneys’ fees and expenses associated with bringing the instant motion to dismiss 12th 14 Avenue Iron’s WCPA counterclaim (Reply at 8-9). 15 Dated this 16th day of November, 2022. 16 17 A 18 JAMES L. ROBART United States District Judge 19 20 21 22 ORDER - 16
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