L-3 Commc'ns Corp. v. Jaxon Eng'g & Maint., Inc.

• Decision Date: 01 September 2015
• Docket Number: Civil Action No. 10-cv-02868-MSK-KMT
• Citation: 125 F.Supp.3d 1155
• Parties: L-3 Communications Corporation; and L-3 Services, Inc., Plaintiffs, v. Jaxon Engineering & Maintenance, Inc. ; Joni Ann White; Randall K. White; Susan Rettig; Charles Rettig; James Youngman; Jerry Lubell; Kelly Rice ; and John McClure, Defendants.
• Court: U.S. District Court — District of Colorado

125 F.Supp.3d 1155

L-3 Communications Corporation; and L-3 Services, Inc., Plaintiffs,

v.Jaxon Engineering & Maintenance, Inc. ; Joni Ann White; Randall K. White; Susan Rettig; Charles Rettig; James Youngman; Jerry Lubell; Kelly Rice ; and John McClure, Defendants.

Civil Action No. 10-cv-02868-MSK-KMT

United States District Court, D. Colorado.

Signed September 1, 2015

Benjamin G. Chew, Nigel Lance Wilkinson, Manatt, Phelps & Phillips, LLP, Lacy L. Kolo, Patton Boggs, LLP, Scott A. Chambers, Squire Patton Boggs (US) LLP, Washington, DC, Bryan Patrick Collins, Robert M. Fuhrer, Pillsbury Winthrop Shaw Pittman, LLP, McLean, VA, Karen Lisa Weiss, Steven L. Levitt & Associates, P.C., Mineola, NY, Steven Leon Levitt, Steven L. Levitt & Associates, P.C., Williston Park, NY, for Plaintiffs.

Robert Tyler Goodwyn, IV, Claire Molle' Maddox, Derek Allen Auito, Lora Ann Brzezynski, McKenna Long & Aldridge, LLP, Daniel Edward Johnson, Covington & Burling, LLP, Washington, DC, Abigail L. Brown, Steven Michael Masiello, Dentons US LLP, Jennette C. Roberts, McKenna Long & Aldridge, LLP, Denver, CO, for Defendants.

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART MOTIONS FOR SUMMARY JUDGMENT AND OTHER MOTIONS

Marcia S. Krieger, Chief United States District Judge

THIS MATTER comes before the Court pursuant to the Defendants' Motion for Summary Judgment (# 1175, 1185) , the Plaintiffs' response (# 1246, 1265) , and the Defendants' reply (# 1294, 1295, 1298 ); the Plaintiffs' Motion for Partial Summary Judgment (# 1176, 1186) , the Defendants' response (# 1252, 1260, 1261) , and the Plaintiffs' reply (# 1292) the Plaintiffs' Motion to Dismiss the Civil Theft Claim (# 1196) , the Defendants' response (# 1199) , and the Plaintiffs' reply (# 1200) ; the Defendants' Motion for Summary Judgment (# 1223, 1219) , the Plaintiffs' response (# 1234) , and the Defendants' reply (# 1284, 1296) ; and the Defendants' Renewed Motion to Stay (# 1227) consideration of the Plaintiffs' patent infringement claims, the Plaintiffs' response (# 1245) , and the Defendants' reply (# 1286, 1297) . Also pending are a wealth of motions by both parties seeking to restrict public access to various filings (# 1197, 1201, 1203, 1213, 1218, 1222, 1225, 1226, 1229, 1230, 1231, 1263, 1268, 1269, 1280, 1281, 1282, 1300, 1301, 1302, 1303, 1304, 1305) , all of which are unopposed.

FACTS

Given the breadth of motions at issue here, the Court dispenses with a general factual or procedural summary, deferring factual development to the appropriate portion of the analysis. It is sufficient to note here that the Plaintiffs (collectively, "L-3") are engaged in the business of performing high-altitude electromagnetic pulse ("HEMP") testing of electronics, particularly for military applications, along with designing and manufacturing HEMP testing equipment. Most of the individual Defendants were employees of L-3 until approximately 2008, at which time they left L-3 and formed Defendant Jaxon Engineering and Maintenance, Inc. ("Jaxon"), a company that competes with L-3 in HEMP testing. Among its claims, L-3 alleges that the individual Defendants misappropriated L-3 trade secrets when they left L-3 employment and that Jaxon is infringing upon L-3's patents. The Defendants have filed counterclaims against L-3, although those counterclaims are not at issue here.

ANALYSIS

A. Standard of review

The substantive motions at issue here are motions for summary judgment. Rule 56 of the Federal Rules of Civil Procedure facilitates the entry of a judgment only if no trial is necessary. See White v. York Intern. Corp. , 45 F.3d 357, 360 (10th Cir.1995). Summary adjudication is authorized when there is no genuine dispute as to any material fact and a party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). Substantive law governs what facts are material and what issues must be determined. It also specifies the elements that must be proved for a given claim or defense, sets the standard of proof and identifies the party with the burden of proof. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Kaiser-Francis Oil Co. v. Producer's Gas Co. , 870 F.2d 563, 565 (10th Cir.1989). A factual dispute is "genuine" and summary judgment is precluded if the evidence presented in support of and opposition to the motion is so contradictory that, if presented at trial, a judgment could enter for either party. See Anderson , 477 U.S. at 248, 106 S.Ct. 2505. When considering a summary judgment motion, a court views all evidence in the light most favorable to the non-moving party, thereby favoring the right to a trial. See Garrett v. Hewlett – Packard Co. , 305 F.3d 1210, 1213 (10th Cir.2002).

If the movant has the burden of proof on a claim or defense, the movant must establish every element of its claim or defense by sufficient, competent evidence. See Fed. R. Civ. P. 56(c)(1)(A). Once the moving party has met its burden, to avoid summary judgment the responding party must present sufficient, competent, contradictory evidence to establish a genuine factual dispute. See Bacchus Indus., Inc. v. Arvin Indus., Inc. , 939 F.2d 887, 891 (10th Cir.1991) ; Perry v. Woodward , 199 F.3d 1126, 1131 (10th Cir.1999). If there is a genuine dispute as to a material fact, a trial is required. If there is no genuine dispute as to any material fact, no trial is required. The court then applies the law to the undisputed facts and enters judgment.

If the moving party does not have the burden of proof at trial, it must point to an absence of sufficient evidence to establish the claim or defense that the non-movant is obligated to prove. If the respondent comes forward with sufficient competent evidence to establish a prima facie claim or defense, a trial is required. If the respondent fails to produce sufficient competent evidence to establish its claim or defense, then the movant is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett , 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

Here, both sides have filed motions seeking summary judgment in their favor. Most often such motions must be determined separately because whether there is a genuine dispute as to a material factual issue turns upon who has the burden of proof, the standard of proof and whether adequate evidence has been submitted to support a prima facie case or to establish a genuine dispute as to material fact. In re Ribozyme Pharmaceuticals, Inc., Securities Litig. , 209 F.Supp.2d 1106, 1112 (D.Colo.2002) ; see also Atlantic Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1148 (10th Cir.2000) ; Buell Cabinet Co. v. Sudduth , 608 F.2d 431, 433 (10th Cir.1979).

The Court pauses at this stage to emphasize that, given the sheer volume of briefing and exhibits submitted with regard to each of the parties' motions, the Court has scrupulously limited its analysis on a motion-by-motion basis, and within each motion, to the specific arguments and evidence identified by the parties in the pertinent portions of their respective briefs. In other words, when considering the Defendants' Motion For Summary Judgment, the Court limits its consideration to the evidence and arguments contained within that motion, L-3's response to it, and the Defendants' reply; the Court does not consider evidence or arguments contained within L-3's own summary judgment motion, even though it might be directed at the same claims. In considering the Defendants' motion directed at, for example, L-3's false advertising claim, the Court considers only the evidence and arguments specifically discussed by the parties under that heading (and any specific portion elsewhere in the brief incorporated by a precise reference), but will not consider evidence and arguments directed at, for example, the conversion or trade secrets claims.

To the extent that a party has, purposefully or accidentally, omitted a key argument or evidence from its presentation with regard to one set of motions but presented it in another, the Court can offer no solace. The sheer amount of submissions on the parties' primary motions alone—a combined 439 pages of briefing and at least 2,400 pages of supporting exhibits on the Defendants' primary summary judgment motion, and a combined 547 pages of briefing and approximately 10,000 pages of exhibits on L-3's summary judgment motion—makes it essential that the Court limit its inquiry to a precisely-constrained set of evidence and arguments. The Court lacks the time and resources to attempt to derive a unified, holistic overview of the interactions among the claims or among the parties' dispositive motions or to "hunt for truffles" that may be buried in documents submitted.

B. Defendants' Motions

1. Defendants' motion for summary judgment (# 1185)

In this motion, the Defendants seek summary judgment on: (i) Claim VII in L-3's Amended Complaint (# 33) , which sounds in misappropriation of trade secrets in violation of Colorado's Uniform Trade Secrets Act ("CUTSA"), C.R.S. § 7-74-101 ; (ii) Claims VIII through X, which allege that individual former employee Defendants breached various contracts (the "Standard Contract," the "Confidentiality Contract," and the "Ethics Contract") with L-3, and Claim XI which alleges that Defendant Jerry Lubell also breached an Exclusive Services Agreement that he signed with L-3; (iii) Claim XV, which alleges that the former employee Defendants engaged in a breach of fiduciary duty to L-3 by misusing confidential data entrusted to them; (iv) Claims XII and XIX, which allege that the former employee Defendants and Jaxon engaged in common-law conversion and in statutory civil theft¹ ; (v) Claim XIII, alleging that Defendants Jaxon, Randall White, Joni White, and Susan Retting violated the Lanham Act, 15 U.S.C. § 1125(a)(1)(B), by falsely advertising the goods or services provided by Jaxon; (vi) Claims XX through XIV, which allege individual claims of common-law fraud...