RBC Bearings Incorporated v. Caliber Aero LLC et al, No. 8:2012cv01442 - Document 26 (C.D. Cal. 2012)
Court Description: ORDER GRANTING MOTION TO DISMISS FOURTH CLAIM FOR RELIEF 16 with leave to amend. Any amendment shall be made within ten days of this order by Judge Dean D. Pregerson (lc). Modified on 11/30/2012 (lc). Modified on 11/30/2012 (lc).
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RBC Bearings Incorporated v. Caliber Aero LLC et al Doc. 26 1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 RBC BEARINGS INCORPORATED, a Delaware corporation, 12 Plaintiff, 13 v. 14 15 16 17 18 CALIBER AERO, LLC, a California limited liability company; MARY ALVARADO, an individual; DAVID McCULLOCH, an individual; DAVID RANKINE, an individual; JEFFREY L. RINDSKOPF, an individual; CHARLES SHARP, an individual, 19 20 Defendants. ___________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. SACV 12-01442 DDP (PLAx) ORDER GRANTING MOTION TO DISMISS FOURTH CLAIM FOR RELIEF [Dkt. No. 16] 21 22 Presently before the court is Defendants’ Motion to Dismiss 23 Fourth Claim for Relief in First Amended Complaint for Failure to 24 State a Claim. 25 I. Background 26 On or about September 11, 2006 Plaintiff RBC Bearings, Inc. 27 ("RBC") acquired All Power Manufacturing Co. ("All Power"). 28 Amended Complaint ("FAC") ¶ 14.) (First Defendants Mary Alvarado, David Dockets.Justia.com 1 McCulloch, David Rankine, Jeffery Rindskopf, and Charles Sharp were 2 employees of All Power and became employees of RBC after the 3 acquisition. 4 subject to the terms and conditions set forth in RBC’s Employment 5 Handbook, which acknowledges that employees maintain 6 confidentiality and that disclosing trade secrets or 7 confidentiality would result in disciplinary action. 8 Also, as a condition of their employment with RBC, the Defendants 9 agreed to RBC’s Intellectual Property Agreement, which acknowledges (FAC ¶ 14.) As employees of RBC, Defendants were (FAC ¶ 16.) 10 that employees will not disclose or use proprietary technical or 11 business information after employment with RBC. 12 (FAC ¶ 17.) At different times after the acquisition, Defendants Alvarado, 13 McCulloch, Rindskopf, Sharp and Rankine all resigned from RBC. 14 (FAC ¶ 19.) 15 Rindskopf resigned in September 2007, Sharp resigned in October 16 2007, McCulloch resigned in June 2009, and Alvarado resigned in 17 March 2012. 18 interview, upon their respective resignation, where RBC management 19 reviewed and discussed each Defendant’s confidentiality obligations 20 to RBC. 21 Rankine resigned after RBC acquired All Power, (FAC ¶ 93-97.) Each Defendant participated in an exit (FAC ¶ 19.) During their respective exit interviews, Defendants 22 represented to Plaintiff that they would not disclose or use RBC's 23 confidential and proprietary information to compete against RBC. 24 (FAC ¶ 92.) 25 Termination Acknowledgment form, which acknowledges their agreement 26 not to disclose or use any trade secrets or confidential or 27 proprietary information of RBC without RBC's consent. Except for Rindskopf, each signed the Exit Interview 28 2 (FAC ¶ 24.) 1 Plaintiff believes that Defendants have disclosed and used and 2 continue to disclose and use RBC's confidential and proprietary 3 information in their employment at Defendant Caliber Aero, LLC 4 ("Caliber") without Plaintiff's consent. 5 did not learn that Defendants' representations were false until 6 August 15, 2012. 7 representations at the exit interview were false, it would have 8 immediately terminated Defendants' employment and would have taken 9 all action available at law or in equity to prevent any disclosure (FAC ¶ 105.) (FAC ¶¶ 101-102.) RBC Had RBC known that the 10 or use of its confidential information. (FAC ¶ 107.) 11 II. Legal Standard 12 “A cause of action for fraud [under California law] requires 13 the plaintiff to prove (a) a knowingly false misrepresentation by 14 the defendant, (b) made with the intent to deceive or to induce 15 reliance by the plaintiff, (c) justifiable reliance by the 16 plaintiff, and (d) resulting damages.” Glenn K. Jackson Inc. v. 17 Roe, 273 F.3d 1192 (9th Cir. 2001) (quoting Wilkins v. Nat'l 18 Broadcasting Co., Inc., 71 Cal.App.4th 1066, 1081, 84 Cal.Rptr.2d 19 329 (1999)); see also Cal. Civ. Code § 1572. 20 “To survive a motion to dismiss for failure to state a claim 21 under Rule 12(b)(6), a complaint generally must satisfy only the 22 minimal notice pleading requirements of [Federal] Rule [of Civil 23 Procedure] 8(a)(2).” Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 24 2003). However, where a complaint includes allegations of fraud, 25 Federal Rule of Civil Procedure 9(b) requires more specificity 26 including an account of the “time, place, and specific content of 27 the false representations as well as the identities of the parties 28 to the misrepresentations.” Edwards v. Marin Park, Inc., 356 F.3d 3 1 1058, 1066 (9th Cir. 2004) (citation omitted). “To comply with Rule 2 9(b), allegations of fraud must be specific enough to give 3 defendants notice of the particular misconduct which is alleged to 4 constitute the fraud charged so that they can defend against the 5 charge and not just deny that they have done anything wrong.” 6 Bly-Magee v. California, 236 F.3d 1014, 1019 (9th Cir. 2001) 7 (citation and quotation marks omitted). 8 F.3d 756, 764 (9th Cir. 2007) 9 III. Analysis 10 Swartz v. KPMG LLP, 476 Defendants argue that Plaintiff has failed to state a claim in 11 its fraud cause of action because it fails to establish the 12 reliance prong with particularity. 13 the misrepresentations at the time of the exit interview and then 14 argue that Plaintiff could not have acted in reliance on them 15 because Defendants were already leaving its employ. “Each alleged 16 misrepresentation as to the future use of confidential information 17 was made by a defendant former employee upon their departure from 18 RBC. 19 was caused or influenced by these purportedly fraudulent 20 misrepresentations.” 21 only act Plaintiff could have taken had it not relied on the 22 misrepresentations would have been to terminate Defendants’ 23 employment, but “defendants had already quit at the time of the 24 misrepresentations.” 25 Plaintiff has failed to allege plausible reliance on the purported 26 misrepresentations. 27 28 Defendants focus exclusively on As such, the FAC does not allege any conduct or decision that (Mot. at 5.) (Mot. at 6.) According to Defendants, the Thus, according to Defendants, The court agrees with Defendants that Plaintiff could not have terminated Defendants after they had already voluntarily left 4 1 Plaintiff’s employ. 2 claims conceivably stem not only from the Exit Interview but from 3 prior representations by Defendants. Plaintiff alleges in its 4 Fourth Claim for Relief that Defendants “represented to Plaintiff 5 that they would not disclose or use RBC’s confidential and 6 proprietary information to compete against RBC.” 7 RBC known the true facts, it would have immediately terminated 8 Defendants’ employment with RBC and sought to take all action 9 available to it at law or in equity to prevent any disclosure or However, the court also finds that Plaintiff’s (FAC ¶ 92.) “Had 10 use of its confidential information to any of its competitors.” 11 (FAC ¶ 107.) 12 relied were not only the misrepresentations during the Exit 13 Interview (FAC ¶¶ 24, 86), but also representations connected to 14 Defendants’ consent to the Intellectual Property Agreement with 15 Plaintiff (FAC ¶ 66) and the terms of the Employee Handbook (FAC ¶¶ 16 15-18, 73-74). 17 The representations upon which Plaintiff allegedly The court agrees with Defendants that this claim does not meet 18 the heightened pleading standard required in cases of fraud, since 19 it does not state with particularity the “time, place, and specific 20 content of the false representations” with respect to any alleged 21 misrepresentations that are not connected with the Exit Interview. 22 The court is not convinced that the claim is subject to amendment, 23 primarily because of the requirement to plead with particularity. 24 Nonetheless, the court grants Plaintiff leave to amend. 25 /// 26 /// 27 /// 28 /// 5 1 For these reasons, the court GRANTS the Motion to Dismiss the 2 Fourth Claim for Relief in First Amended Complaint with leave to 3 amend. Any amendment shall be made within ten days of this order. 4 5 6 IT IS SO ORDERED. 7 8 9 Dated:November 30, 2012 10 DEAN D. PREGERSON 11 United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6
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