Secure Energy Inc v. Coal Synthetics LLC

• Decision Date: 27 April 2010
• Docket Number: Case No. 4:08CV 1719 JCH.
• Citation: 708 F.Supp.2d 923
• Parties: SECURE ENERGY, INC., et al., Plaintiff(s),v.COAL SYNTHETICS, LLC, et al., Defendant(s).
• Court: U.S. District Court — Eastern District of Missouri

708 F.Supp.2d 923

SECURE ENERGY, INC., et al., Plaintiff(s),v.COAL SYNTHETICS, LLC, et al., Defendant(s).

Case No. 4:08CV 1719 JCH.

United States District Court,

E.D. Missouri,

Eastern Division.

April 27, 2010.

COPYRIGHT MATERIAL OMITTED

Amanda R. Sher, Sarah W. Rubenstein, Joseph F. Devereux, Jr., Robert L. Devereux, Devereux and Murphy, St. Louis, MO, for Plaintiffs.

Carl J. Pesce, Jacqueline T. Albus, Michael J. Morris, Thompson Coburn, LLP, St. Louis, MO, Jennifer N. Fuller, Paul G. Hallinan, Porter and Wright, Thomas R. Kraemer, Faruki and Ireland, P.L.L., Dayton, OH, for Defendants.

MEMORANDUM AND ORDER

JEAN C. HAMILTON, District Judge.

This matter comes before the Court on Defendants' Motion for Summary Judgment on Claims for Violation of the Missouri Trade Secrets Act (Count VI) and for Breach of Contract (Count I).(Doc. No. 191).This matter has been fully briefed and is ready for disposition.¹

SUMMARY JUDGMENT STANDARD

The Court may grant a motion for summary judgment if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”Fed.R.Civ.P. 56(c);Celotex Corp. v. Catrett,477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265(1986).The substantive law determines which facts are critical and which are irrelevant.Anderson v. Liberty Lobby, Inc.,477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202(1986).Only disputes over facts that might affect the outcome will properly preclude summary judgment.Id.Summary judgment is not proper if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.Id.

A moving party always bears the burden of informing the Court of the basis of its motion.Celotex Corp.,477 U.S. at 323, 106 S.Ct. 2548.Once the moving party discharges this burden, the nonmoving party must set forth specific facts demonstrating that there is a dispute as to a genuine issue of material fact, not the “mere existence of some alleged factual dispute.”Fed.R.Civ.P. 56(e);Anderson,477 U.S. at 248, 106 S.Ct. 2505.The nonmoving party may not rest upon mere allegations or denials of his pleading.Anderson,477 U.S. at 258, 106 S.Ct. 2505.“[A] properly supported motion for summary judgment is not defeated by self-serving affidavits.”Conolly v. Clark,457 F.3d 872, 876(8th Cir.2006)(citingDavidson & Assocs. v. Jung,422 F.3d 630, 638(8th Cir.2005)).

In passing on a motion for summary judgment, the Court must view the facts in the light most favorable to the nonmoving party, and all justifiable inferences are to be drawn in his favor.Celotex Corp.,477 U.S. at 331, n. 2, 106 S.Ct. 2548.The Court's function is not to weigh the evidence but to determine whether there is a genuine issue for trial.Anderson,477 U.S. at 249, 106 S.Ct. 2505.

DISCUSSION

I.MISSOURI UNIFORM TRADE SECRETS ACT

A.Elements

To establish a violation of the Missouri Uniform Trade Secrets Act, Mo.Rev.Stat. §§ 417.450 et seq.(“MUTSA”), Plaintiffs must demonstrate (1) the existence of a protectable trade secret, (2) misappropriation of those trade secrets by Defendants, and (3) damages.Mo.Rev.Stat. § 417.453(2).“Pursuant to MUTSA,” misappropriation of a trade secret occurs when a person uses the trade secret of another without express or implied consent if that person: (a) used improper means to acquire knowledge of the trade secret; (b) knew or had reason to know that it was a trade secret and that knowledge had been acquired by accident or mistake; or (c) at the time of the use, knew or had reason to know that knowledge of the trade secret was (1) derived from or through a person who had utilized improper means to acquire it, (2) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use, or (3) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use.Cerner Corp. v. Visicu, Inc.,667 F.Supp.2d 1062, 1077(W.D.Mo.2009)(citingMo.Rev.Stat. § 417.453(2)(b)).

B.Trade Secrets

Defendants claim that they are entitled to summary judgment on Plaintiffs' MUTSA claim because Plaintiffs cannot identify any specific misappropriated trade secrets.Court have used the following factors to determine whether information constitutes a trade secret under MUTSA: “(1) the extent to which the information is known outside of [the] business; (2) the extent to which it is known by employees and others involved in [the] business; (3) the extent of measures taken by [the business] to guard the secrecy of the information; (4) the value of the information to [the business] and to [its] competitors; (5) the amount of effort or money expended by [the business] in developing the information; (6) the ease or difficulty with which the information could be properly acquired or duplicated by others.”Cerner Corp. v. Visicu, Inc.,667 F.Supp.2d 1062, 1076-1077(W.D.Mo.2009)(citingAm. Family Mut. Ins. Co. v. Mo. Dep't of Ins.,169 S.W.3d 905, 909-10(Mo.Ct.App.2005)).

In their Response, Plaintiffs assert that eight different trade secrets were misappropriated by Defendants: (1) its engineering specifications and plans, (2) its engineering drawings, (3) its business plan, (4) its financial models, (5) its methods of identifying and evaluating plant locations, (6) its project schedule, (7) its identification and development of a vendor network and (8) its project bidding estimates.(Plaintiffs' Memorandum in Opposition to Defendants' Motion for Summary Judgment on Claims for Violation of the Missouri Trade Secrets Act (Count VI) and for Breach of Contract (Count I)(“Response”), Doc. No. 217, p. 6).As shown below, “[t]he parties have provided a great deal of evidence, but that evidence does not point all in one direction.Instead, interpreting it requires many factual and credibility determinations.”Insituform Techs. v. Reynolds, Inc.,4:05CV1116, 2007 WL 1198889, at *2, 2007 U.S. Dist. LEXIS 28941, at *6(E.D.Mo.Apr. 19, 2007).

(1) Engineering Plans and Specifications

Plaintiffs assert that their engineering plans and specifications constitute trade secrets.Plaintiffs claim that they are the only companies in North America and one of only two companies in the world that purchased the Siemens basic engineering design package.(Response, p. 6).Plaintiffs also state that they have customized, at considerable time and expense, the Siemens basic plan to suit their particular needs.(Response, pp. 6-7).

Plaintiffs provide evidence that Defendants misappropriated their engineering plans and specifications for the benefit of Coal Synthetics.Plaintiffs note several similarities between Plaintiffs' plans and drawings and Coal Synthetics's plans and drawings.( Id.)Plaintiffs claim that Coal Synthetics could not have developed its plans and drawings under the abbreviated time schedule without utilizing Plaintiffs' trade secret plans and drawings.( Id.)Plaintiffs assert that the information contained in Coal Synthetics's drawings and air permit do not derive from Plaintiffs' publicly-available air permit, which was filed in 2006, but from the engineering drawings, plans and specifications created for Secure in 2008.( Id.)²

In response, Defendants first claim that Plaintiffs have not specified “what Siemens information within the undefined engineering package is protectable or was misappropriated.”(Defendants' Reply Memorandum in Support of Motion for Summary Judgment on Claims for Violation of the Missouri Trade Secrets Act (Count VI) and for Breach of Contract (Count I)(“Reply”), Doc. No. 229, p. 4).Defendants assert that the alleged Siemens information in Coal Synthetics' air permit application can be found in the public domain.( Id.)As noted by Defendants, much of the Siemens information is licensed by Plaintiffs from Siemens.(Reply, p. 4, n. 7).“Therefore, without knowing the specific Siemens information allegedly misappropriated, this Court cannot determine whether the trade secrets at issue belong only to Siemens.”( Id.)

Defendants also note that Plaintiffs did not identify the specific engineering drawings that they claim are trade secrets.( Id.)Defendants claim that the general designs for coal plants can be found in many publicly available air permits filed by others, which makes the plant drawings not trade secrets.( Id.)Accordingly, Defendants claim that Plaintiffs must do more than compare drawings and note similarities to bring a misappropriation of trade secrets claim.( Id.)

The Court finds that there is an issue of fact for the jury to decide regarding whether Plaintiffs' engineering plans and drawings are trade secrets.SeeGronholz v. Sears, Roebuck & Co.,869 F.2d 390, 393(8th Cir.1989)(citingSurgidev Corp. v. Eye Technology, Inc.,828 F.2d 452, 455(8th Cir.1987))(“The issue of whether a plaintiff took reasonable steps under the circumstances to maintain the secrecy of information is an issue of fact.”).The jury also must determine whether Defendants misappropriated this information.Plaintiffs have presented evidence that they obtained trade secret information from Siemens, which Defendants then utilized.The record is unclear regarding what Siemens materials constitute trade secrets and are publicly available.Defendants even admit that they do not know which plans and drawings are at issue.Based upon these issues of fact, the Court denies Defendants' Motion for Summary Judgment regarding these materials.

(2) Business Plan and Financial Models

Plaintiffs assert that their business plans and financial models constitute trade secrets which were misappropriated by Defendants.Plaintiffs claim that they created financial models and forecasts “by integrating the engineering plans of the company with the company's vendor network and bidding estimates, commodity prices, identification and valuation of...