Profade Apparel, LLC v. Rd. Runner Sports, Inc.
| Decision Date | 02 September 2020 |
| Docket Number | Case No.: 18cv1254-JAH (MDD) |
| Parties | PROFADE APPAREL, LLC, Plaintiff, v. ROAD RUNNER SPORTS, INC.; and ROAD RUNNER SPORTS RETAIL, INC., Defendants. |
| Court | U.S. District Court — Southern District of California |
Pending before the Court is Defendants Road Runner Sports, Inc. ("RRS") and Road Runner Sports Retail, Inc. ("RRSR") (collectively "Defendants") motion to dismiss Plaintiff Profade Apparel, LLC's ("Plaintiff") trade secret misappropriation, trade dress, and conversion claims. See Doc. No. 5. Plaintiff filed a response to Defendants' motion and Defendants filed a reply. See Doc. Nos. 6, 7. Having carefully considered the pleadings in this action, and for the reasons set forth below, the Court hereby GRANTS Defendants' motion to dismiss.
In or around June 2015, Defendants requested Plaintiff design and develop a "new and proprietary sock" to replace a sock that Defendants carried for years.1 Doc. No. 1 at 3.From approximately June 2015 to March 2017, Defendants' employees represented that Plaintiff would be compensated for the design, development, production, and supply of the "new and proprietary sock" through the number of bulk orders Defendants would place for the "Trigonomic Arch Support Sock" ("Trigonomic Sock"). Doc. No. 1 at 4. Pursuant to Defendants' request, Plaintiff independently designed, developed, and named the Trigonomic Sock at a "significant expense," and without any assistance from Defendants. Id. Plaintiff relied on these representations in deciding to enter into a vendor agreement with Defendant RRS for the design and development of the Trigonomic Sock ("Contract"). Doc. No. 1 at 5. Both parties signed an addendum to the Contract in April 2016 which includes a Confidentiality Agreement. Doc. No. 1-2.
In or around April 2016, Defendants placed an order of the Trigonomic Sock with Plaintiff. Doc. No. 1 at 5. Defendants placed additional small batch orders of the Trigonomic Sock in December 2016 and March 2017; however, they did not adhere to prior representations of ordering sufficient bulk orders to fully compensate Plaintiff. Id. Defendants proceeded to terminate communications with Plaintiff and used another vendor, RRSR, to produce replications of the Trigonomic Sock. Id. Plaintiff alleges Defendants violated the Contract by unlawfully utilizing Plaintiff's Trigonomic Sock design to have RRSR, a vendor other than Plaintiff, to manufacture replications for Defendants. Id.
On June 12, 2018, Plaintiff filed the instant action against Defendants ("Complaint"). Doc. No. 1. Plaintiff alleges the following causes of action: (1) copyright infringement; (2) trade secret misappropriation; (3) federal unfair competition; (4) California unfair competition; (5) breach of contract; (6) breach of contract - implied covenant of good faith and fair dealing; (7) breach of contract - quantum meruit; (8) concealment; (9) intentional misrepresentation; (10) negligent misrepresentation; (11) false promise; and (12) conversion. Id. On August 27, 2018, Defendants filed the pending motion to dismiss Plaintiff's trade Secret misappropriation, trade dress, and conversioncauses of action pursuant to Rule 12(b)(6) and Rule 8. Doc. No. 5. Plaintiff filed a response to Defendants' motion and Defendants filed a reply. See Doc. Nos. 6, 7.
Defendants seek dismissal pursuant to Rule 12(b)(6) and Rule 8. Rule 12(b)(6) tests the sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is warranted under Rule 12(b)(6) where the complaint lacks a cognizable legal theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984); see Neitzke v. Williams, 490 U.S. 319, 326 (1989) (). Further, a pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief. . . ." Fed. R. Civ. P. 8(a)(2). A complaint may be dismissed, however, where it presents a cognizable legal theory yet fails to plead essential facts under that theory. Robertson, 749 F.2d at 534. While a plaintiff need not give "detailed factual allegations," he must plead sufficient facts that, if true, "raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 545 (2007); see also Pierce v. Wagner, 134 F.2d 958, 959 (9th Cir. 1943); Patten v. Dennis, 134 F.2d 137 (9th Cir. 1943).
To survive a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to 'state 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 547). A claim is facially plausible when the factual allegations permit "the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. In other words, "the non-conclusory 'factual content' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. U.S. Secret Service, 572 F.3d 962, 969 (9th Cir. 2009) (quoting Iqbal, 556 U.S. at 678). "Determining whether a complaint states a plausible claim for relief will be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679.
In reviewing a motion to dismiss under Rule 12(b)(6), the Court must assume the truth of all factual allegations and must construe all inferences from them in the light mostfavorable to the nonmoving party. Thompson v. Davis, 295 F.3d 890, 895 (9th Cir. 2002); Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). However, legal conclusions need not be taken as true merely because they are cast in the form of factual allegations. Ileto v. Glock, Inc., 349 F.3d 1191, 1200 (9th Cir. 2003); Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). When ruling on a motion to dismiss, the Court may consider the facts alleged in the complaint, documents attached to the complaint, documents relied upon but not attached to the complaint when authenticity is not contested, and matters of which the Court takes judicial notice. Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001). If a court determines that a complaint fails to state a claim, the Court should grant leave to amend unless it determines that the pleading could not possibly be cured by the allegation of other facts. See Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995); Knappenberger v. City of Phoenix, 566 F.3d 936, 942 (9th Cir. 2009).
Rule 8 requires plaintiffs only to set forth a "short and plain statement of the claim showing that the pleader is entitled to relief," and "give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Bell Atlantic Corp., 550 U.S. at 555. Each allegation in the complaint must be "simple, concise, and direct." Fed. R. Civ. P. 8(d)(1). A complaint may not be dismissed for violating Rule 8 simple because it is verbose or lengthy. See Hearns v. San Bernardino Police Dep't, 530 F.3d 1124, 1131-32 (9th Cir. 2008) (citations omitted). However, "the-defendant-unlawfully-harmed-me accusation[s]" and [a] pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do." Ashcroft, 556 U.S. at 678.
Plaintiff has requested the Court to take judicial notice of the Copyright Registration enumerated in Plaintiff's Complaint and attached to Plaintiff's Opposition to Defendants' motion to dismiss. See Doc. No. 6-1 at 2. However, it appears the Court is being asked to take notice, not just as a government document, but to accept the material depicted truth ofthe facts contained in that material. Id. The Court may take judicial notice of an adjudicative fact "not subject to reasonable dispute because it can be . . . accurately and readily determined from sources whose accuracy cannot be reasonably questioned." See Fed. R. Evid. 201; Grason Elec. Co. v. Sacramento Mun. Util. Dist., 571 F. Supp. 1504, 1521 (E.D. Cal. 1983). Defendants dispute Plaintiff's request for the Court to take judicial notice of the Copyright Registration for the purpose of distinguishing the Trigonomic Sock's functional or utilitarian aspects of the materials depicted from the non-utilitarian or artistic design elements that are capable of protection. See Doc. No. 8. The Court agrees. Accordingly, the request for judicial notice is DENIED.
Plaintiff's second cause of action is a violation of the federal Defend Trade Secrets Act of 2016 ("DTSA").2 Doc. No. 1 at 6. Defendant's argue that Plaintiff's DTSA claim fails because the existence of a trade secret is not sufficiently alleged. Doc. No. 5 at 8-9. The DTSA contains a federal private cause of action in favor of the "owner of a trade secret that is misappropriated." 18 U.S.C. § 1836(b)(1). To state a claim for trade secret misappropriation under the DTSA, a plaintiff must allege that: "(1) the plaintiff owned a trade secret; (2) the defendant[s] misappropriated the trade secret; and (3) the defendant[s'] actions damaged the plaintiff." Alta Devices, Inc. v. LG Elecs., Inc., 343 F. Supp. 3d 868, 877 (N.D. Cal. 2018) (citations omitted); see also 18 U.S.C. § 1839(5). The DTSA defines "trade secret" as "financial, business scientific, technical, economic, or engineering information" that "(A) the owner thereof has taken reasonable measures to keep ... secret; and (B) ... derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information." 18 U.S.C. § 1839(3).
Here, Defendants contend that Plaintiff's Complaint fails to...
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