United States District Court, D. Arizona
Honorable Susan M. Brnovich United States District Judge
before this court are two motions: Defendant Paul
Shubring's Motion to Dismiss Plaintiffs' First
Amended Complaint and Request For Injunction (Doc. 20) and
Defendant Dong Weon Hwang's Motion to Dismiss
Plaintiffs' First Amended Complaint and Request For
Injunction (Doc. 41). The motions are fully briefed and there
is no request for oral argument.
Socket is a provider of technology and innovation for the
semiconductor industry, including burn-in sockets and related
components. (Doc. 11 ¶ 2, “FAC”). Defendants
Hwang and Schubring are both former Plastronics employees.
(FAC ¶¶ 3-4). Defendant Hwang worked for
Plastronics as the Chief Technology Officer from October 2004
until April 2008. (FAC ¶¶ 36, 46). Defendant
Schubring worked for Plastronics from October 2007 until
April 2009 (FAC ¶¶ 50, 54). Defendant Schubring
managed the supply chain for burn-in sockets and related
components. (FAC ¶ 50).
allege that Hwang “received, agreed, and signed a
letter agreement from Plastronics regarding the Proprietary
Information of Plastronics (the ‘Confidential
Information Acknowledgment Agreement')” upon
leaving the company and that the agreement informed Hwang of
his obligations to maintain the secrecy of the proprietary
information. (FAC ¶ 47). Plaintiffs further allege that
Schubring signed a proprietary information agreement as a
condition of his employment and that it required Schubring to
keep proprietary material confidential. (FAC ¶¶
Hwang formed HiCon Ltd. on or about April 30, 2008, to
manufacture and sell competing products. (FAC ¶ 57). On
or about July 27, 2009, Hwang formed HiCon Co. to design and
sell competing products. (FAC ¶ 60). In 2016, Hwang and
Schubring formed HiCon USA, which signed an exclusive
distribution agreement with HiCon Ltd. and/or HiCon Co. for
the territory of North America. (FAC ¶ 65).
October 10, 2018, Plaintiffs filed their First Amended
Complaint (FAC) alleging the following counts: (1) patent
infringement against HiCon USA, (2) patent infringement
against HighRel, (3-4) misappropriation of trade secrets in
violation of the Federal Defend Trade Secrets Act
(“DTSA”), 18 U.S.C. 1836(c), and the Arizona
Uniform Trade Secrets Act (“AUTSA”), A.R.S.
§ 44-401 et seq., against Hwang, (5-6)
misappropriation of trade secrets in violation of DTSA and
AUTSA against Schubring, (7) breach of contract against
Hwang, (8) breach of fiduciary duty against Hwang, (9) breach
of contract against Schubring, and (10) tortious interference
with business expectancy, prospective business relations
against all Defendants.
Legal Standard for a Motion to Dismiss under Rule
survive a Rule 12(b)(6) motion for failure to state a claim,
a complaint must meet the requirements of Rule 8(a)(2). Rule
8(a)(2) requires a “short and plain statement of the
claim showing that the pleader is entitled to relief, ”
so that the defendant has “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)
(quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).
Dismissal under Rule 12(b)(6) “can be based on the lack
of a cognizable legal theory or the absence of sufficient
facts alleged under a cognizable legal theory.”
Balistreri v. Pacifica Police Dep't,
901 F.2d 696, 699 (9th Cir. 1988). A complaint that sets
forth a cognizable legal theory will survive a motion to
dismiss if it contains sufficient factual matter, which, if
accepted as true, states a claim to relief that is
“plausible on its face.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting
Twombly, 550 U.S. at 570). Facial plausibility
exists if the pleader sets forth “factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
Id. “Threadbare recitals of the elements of a
cause of action, supported by mere conclusory statements, do
not suffice.” Id. Plausibility does not equal
“probability, ” but requires “more than a
sheer possibility that a defendant has acted
unlawfully.” Id. “Where a complaint
pleads facts that are ‘merely consistent' with a
defendant's liability, it ‘stops short of the line
between possibility and plausibility of entitlement to
relief.'” Id. (quoting Twombly,
550 U.S. at 557).
ruling on a Rule 12(b)(6) motion to dismiss, the well-pled
factual allegations are taken as true and construed in the
light most favorable to the nonmoving party. Cousins v.
Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). However,
legal conclusions couched as factual allegations are not
given a presumption of truthfulness, and “conclusory
allegations of law and unwarranted inferences are not
sufficient to defeat a motion to dismiss.” Pareto
v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998). A court
ordinarily may not consider evidence outside the pleadings in
ruling on a Rule 12(b)(6) motion to dismiss. See United
States v. Ritchie, 342 F.3d 903, 907 (9th Cir. 2003).
“A court may, however, consider materials- documents
attached to the complaint, documents incorporated by
reference in the complaint, or matters of judicial
notice-without converting the motion to dismiss into a motion
for summary judgment.” Id. at 908.
Hwang's Motion to Dismiss (Doc. 41) and Defendant
Schubring's Motion to Dismiss (Doc. 20) are both brought
under Rule 12(b)(6) and argue similar bases for dismissal so
they will be discussed together.
Trade Secret Violation under 18 U.S.C. § 1836 or A.R.S.
§ 44-401 et seq.
Hwang and Schubring argue that Plaintiffs have failed to
identify what specific information was misappropriated and
have only identified vague and broad categories of
information. Hwang and Schubring also argue that Plastronics
fails to explain how or why the information ...