Eastman Chem. Co. v. Alphapet Inc.
| Decision Date | 04 November 2011 |
| Docket Number | Civ. Action No. 09-971-LPS-CJB |
| Parties | EASTMAN CHEMICAL COMPANY, Plaintiff, v. ALPHAPET INC., INDORAMA HOLDINGS ROTTERDAM B.V., INDORAMA POLYMERS ROTTERDAM B.V., INDORAMA POLYMERS WORKINGTON LTD., and INDORAMA POLYMERS PCL, Defendants. |
| Court | U.S. District Court — District of Delaware |
In this action, Plaintiff Eastman Chemical Company ("Eastman" or "Plaintiff") has filed an Amended Complaint alleging patent infringement (Count One) against Defendants AlphaPet, Inc. ("AlphaPet") and Indorama Polymers PCL ("IRP"). (D.I. 15) The Amended Complaint also alleges breach of contract (Count Two) against IRP, as well as Defendants Indorama Holdings Rotterdam B.V. ("IHR"), Indorama Polymers Rotterdam B.V. ("IPR") and Indorama Polymers Workington Ltd. ("IPW"), and alleges trade secret misappropriation against all Defendants (Count Three). Before the Court is Defendants' motion to dismiss the breach of contract and trade secret misappropriation claims pursuant to Fed. R. Civ. P. 12(b)(6) (D.I. 19).2
For the reasons that follow, I recommend that the Court GRANT-IN-PART Defendants' motion by dismissing without prejudice the breach of contract claim asserted against IRP and the claim for breach of implied contractual provisions made against all Defendants, but otherwise I recommend that the Court DENY the motion.
Plaintiff is a Delaware corporation engaged principally in the manufacture and development of chemicals, fibers, and plastics, including polyethylene terephthalate ("PET"). (D.I. 15 at ¶ 2; D.I. 28 at 1) Defendants are all directly or indirectly related corporations whose business includes, inter alia, the manufacture and development of PET products. (D.I. 15 at ¶ 6; D.I. 20 at 1-2) In March 2008, Eastman entered into a Master Business Sale Agreement ("MBSA") with certain of Defendants,3 and into a Technology License Agreement ("TLA") with Defendants IHR, IPR, and IPW. (D.I. 15 at ¶ 13) Under the TLA, these three Defendants received a nonexclusive license to certain Eastman trade secrets, which would assist them in making certain PET polymers and compositions in Europe. (Id. at ¶¶ 16-18) The TLA is governed by Delaware law. (Id. at ¶ 25)
Pursuant to the TLA and MBSA, Eastman transferred certain of its employees to IHR, PR, and IPW. (D.I. 15 at ¶ 15) The TLA prohibits IHR, IPR, and IPW from using, transferring, making any product with, or using or modifying any process with Eastman non-licensed tradesecrets, or soliciting such information from the transferred employees. (Id. at ¶¶ 19-24) Some of those non-licensed trade secrets relate to the manufacture and formulation of PET products using Eastman's melt-to-resin IntegRex™ technology. (Id. at ¶ 38) During 2009, Defendant AlphaPet completed a melt-to-resin manufacturing plant in Decatur, Alabama. Plaintiff alleges that "former Eastman employees working for one or more [of IHR, IPR, and IPW], at the direction of one or more of the Defendants, traveled from Europe to Alabama in mid-2009 to assist in starting up production at the AlphaPet facility." (Id. at ¶ 37) These same transferred employees had also "assisted during the mid-2006 to early-2007 start-up of Eastman's advanced polyester melt phase processes at its IntegRex™ PET manufacturing plant in Gaston, South Carolina." (Id.)
Plaintiff alleges that "these former Eastman employees or other former Eastman employees, at the direction of one or more of the Defendants, improperly disclosed Eastman's confidential, proprietary, and trade secret information relating to the manufacture of PET, including information related to Eastman's IntegRex™ PET technology, to Defendants AlphaPet and IRP during the design, start-up or operation of AlphaPet's melt-to-resin PET manufacturing process, in contravention of the TLA." (Id. at ¶ 39) Plaintiff alleges that these transferred employees therefore misappropriated non-licensed trade secrets by disclosing them in breach of the TLA, and alleges that these non-licensed trade secrets, having been obtained by certain Defendants, were then used to create and/or operate the Decatur facility. (Id. at ¶¶ 39–41) This misappropriation allegedly injured Eastman "due to Defendants' improper head start in producing competing products at the AlphaPet facility, unjustified marketplace competition by these products, and unfair and uncompensated use of Eastman's technology." (Id. at ¶ 67)
Rule 8(a)(2) of the Federal Rules of Civil Procedure requires "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). In recent years, the United States Supreme Court has clarified and refined its jurisprudence concerning the standard of pleading required under Rule 8. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949-53 (2009).
Prior to 2007, district courts were permitted to dismiss a complaint for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6) only if "it appear[ed] beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). The Supreme Court, concerned that this "no set of facts" language could be read to suggest that "a wholly conclusory statement of claim would survive a motion to dismiss whenever the pleadings left open the possibility that a plaintiff might later establish some set of [undisclosed] facts to support recovery," rejected that test in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). Id. at 561 (internal quotations and citations omitted) Instead, Twombly required a plaintiff setting forth an antitrust claim for a violation of Section I of the Sherman Act to allege sufficient "factual matter (taken as true) to suggest" liability for the misconduct alleged. Id. at 556. Such a complaint need not contain "detailed factual allegations," but it must include "more than labels and conclusions" or the "formulaic recitation of the elements of a cause of action." Id. at 555. The Supreme Court did "not require heightened fact pleading of specifics," but rather held that a well-pleaded complaint should provide "enough facts to state a claim to relief that is plausible on its face," which "simply calls for enough fact to raise a reasonable expectation that discovery [would] reveal evidence" for such a claim. Id. at556, 570. In Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937 (2009), the Supreme Court extended these standards to all civil complaints. Id. at 1953.
The Third Circuit has determined that after Twombly and Iqbal, district courts faced with a motion to dismiss for failure to state a claim should perform a two-part analysis. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). First, the district court should separate the factual and legal elements of a claim, accepting any well-pleaded facts as true, but disregarding any legal conclusions. Id. Second, the district court must "determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a 'plausible claim for relief.'" Id. at 211 (quoting Iqbal, 129 S.Ct. at 1950). Determining whether a claim is plausible is '"a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.'" Id. (quoting Iqbal, 129 S.Ct. at 1949). In so doing, the court must "construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Fowler, 578 F.3d at 210 (citing Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (internal quotations omitted)).
A well-pleaded complaint may not be dismissed simply because "it strikes a savvy judge that actual proof of [the alleged] facts is improbable, and that a recovery is very remote and unlikely." Twombly, 550U.S. at 556 (internal quotations omitted). While the Supreme Court has clearly admonished that conclusory allegations are insufficient to satisfy the pleading standard required by Rule 8, "the Supreme Court did not strike [the phrase 'upon information and belief] from the lexicon." Smith v. Harvey, No. 08 C 816, 2010 WL 1292473, at *4 (N.D. Ill.. Mar. 29, 2010). As such, the touchstone of a court's inquiry in this regard is plausibility, notprobability, and whether a defendant is on notice of a claim for relief, not whether that claim has been pled with specificity or particularity. See, e.g., Iqbal, 129 S.Ct. at 1949; West Penn Allegheny Health Sys., Inc. v. UPMC, 627 F.3d 85, 98 (3d Cir. 2010) ().
Defendants argue that Plaintiff's claim for trade secret misappropriation fails to satisfy the pleading standard of Rule 8 in three principal respects. First, Defendants assert that the Amended Complaint fails to identify which of the Defendants allegedly obtained Eastman's trade secrets, and which individuals were involved in the allegedly illicit disclosure and use of that information. (D.I. 20 at 5-7) Second, Defendants argue that the description of the trade secrets that were allegedly used or disclosed is "so broad as to be meaningless." (Id. at 7) Finally, Defendants contend that "Eastman still fails to adequately plead that any [particular] defendant actually used or disclosed" any trade secrets. (Id. at 8) Viewing Plaintiff's misappropriation claim and the associated facts in the light most favorable to Plaintiff, the Court finds that Defendants have not shown that this claim should be dismissed pursuant to Rule 8.
The Delaware Uniform Trade Secrets Act ("DUTSA") governs claims for trade secret misappropriation.4 A "trade...
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