Contemporary Services Corp. v. Landmark Event Staffing ( 2017 )

FILED
UNITED STATES COURT OF APPEALS
MAR 30 2017
FOR THE NINTH CIRCUIT MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
CONTEMPORARY SERVICES No. 14-56636
CORPORATION, a California
Corporation, D.C. No.
8:09-cv-00681-BRO-AN
Plaintiff-Appellant, Central District of California,
Santa Ana
v.
LANDMARK EVENT STAFFING ORDER
SERVICES, INC., a Delaware
Corporation, PETER KRANSKE, an
individual; MICHAEL HARRISON, an
individual,
Defendants-Appellees,
Before: PREGERSON, PAEZ, and TALLMAN, Circuit Judges.
The Memorandum filed on January 30, 2017 is amended as follows: Page 2,
Line 2 is amended to insert <, Peter Kranske, and Michael Harrison> after
. Page 2, Line 3 is amended to insert
before <“Landmark”>. An Amended Memorandum is filed
concurrently with this Order.
With this amendment, Appellant’s petition for rehearing (Dkt. No. 59) is
DENIED as moot.
The panel has voted to deny Appellees’ petition for panel rehearing.
The full court has been advised of Appellees’ petition for rehearing en banc
and no judge has requested a vote on whether to rehear the matter en banc. Fed. R.
App. P. 35.
Appellees’ petition for panel rehearing and petition for rehearing en banc
(Dkt. No. 58) are DENIED.
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FILED
NOT FOR PUBLICATION
MAR 30 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
CONTEMPORARY SERVICES No. 14-56636
CORPORATION, a California
Corporation, D.C. No.
8:09-cv-00681-BRO-AN
Plaintiff-Appellant,
v. AMENDED MEMORANDUM*
LANDMARK EVENT STAFFING
SERVICES, INC., a Delaware
Corporation; PETER KRANSKE, an
individual; MICHAEL HARRISON, an
individual,
Defendants-Appellees,
Appeal from the United States District Court
for the Central District of California
Beverly Reid O’Connell, District Judge, Presiding
Argued and Submitted October 5, 2016
Pasadena, California
Before: PREGERSON, PAEZ, and TALLMAN**, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
Judge Tallman was drawn to replace Judge Noonan after oral
argument. He has read the briefs, viewed the recorded argument, and studied the
record.
Contemporary Services Corporation (“CSC”) appeals the district court’s
grant of summary judgment in favor of Landmark Event Staffing Services, Inc.,
Peter Kranske, and Michael Harrison (collectively, “Landmark”) as to its claims
for misappropriation of trade secrets under the California Uniform Trade Secrets
Act (“CUTSA”), Cal. Civ. Code § 3426 et seq., and breach of contract. We affirm
in part, reverse in part, and remand for proceedings consistent with this decision.
1. We review a district court’s grant of summary judgment de novo.
Surfvivor Media, Inc. v. Survivor Prods., 406 F.3d 625, 630 (9th Cir. 2005).
Summary judgment is appropriate where “the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a).
2. CSC asserted a CUTSA claim for misappropriation of trade secrets,
alleging that Landmark acquired and used numerous CSC-created documents.
“[A] prima facie claim for misappropriation of trade secrets requires the plaintiff to
demonstrate: (1) the plaintiff owned a trade secret, (2) the defendant acquired,
disclosed, or used the plaintiff’s trade secret through improper means, and (3) the
defendant’s actions damaged the plaintiff.” Cytodyn, Inc. v. Amerimmune Pharm.,
Inc., 72 Cal. Rptr. 3d 600, 607 (Cal. Ct. App. 2008) (internal quotation marks
omitted).
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3. A trade secret is “information, including a formula, pattern,
compilation, program, device, method, technique, or process that: (1) Derives
independent economic value, actual or potential, from not being generally known
to the public or to other persons who can obtain economic value from its disclosure
or use; and (2) Is the subject of efforts that are reasonable under the circumstances
to maintain its secrecy.” Cal. Civ. Code, § 3426.1(d). Here, CSC raised material
triable issues as to whether its customer lists (CSC California #17-18), its
deployment workbook (CSC California #12), and its PowerPoint disclosing
financial information (CSC California #2) qualify as trade secrets.1 See Abba
Rubber Co. v. Seaquist, 286 Cal. Rptr. 518, 526 (Cal. Ct. App. 1991) (where a
customer list qualified as a trade secret); id. at 529 n.9 (noting that “ease of
ascertainability is irrelevant to the definition of a trade secret”); Whyte v. Schlage
Lock Co., 125 Cal. Rptr. 2d 277, 287-88 (Cal. Ct. App. 2002) (where specific and
unique financial information qualified as a trade secret). In addition, CSC raised a
triable issue as to whether Landmark unlawfully ratified employee Grant Haskell’s
misappropriation of CSC trade secrets when Landmark failed to cease the use of
CSC documents, disavow Haskell’s conduct, or terminate Haskell’s employment
1
To the extent CSC’s misappropriation of trade secrets claim was based on
other documents, we affirm the district court’s ruling that CSC failed to raise a
triable issue as to whether those documents qualify as trade secrets.
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after Landmark “had reason to know” of Haskell’s misappropriation. Cal. Civ.
Code § 3426.1(b)(2)(B); see also PMC, Inc. v. Kadisha, 93 Cal. Rptr. 2d 663, 675
(Cal. Ct. App. 2000) (finding triable issue where employer made “no real attempt
to determine” whether trade secret misappropriation had occurred).
4. We therefore reverse the district court’s summary judgment ruling,
and conclude that CSC satisfied the first two elements of a misappropriation of
trade secrets claim under the CUTSA. The district court declined to decide
whether CSC demonstrated causation and damages, however, and we therefore
leave those issues for the district court’s consideration on remand.
5. Because CSC’s breach of contract claim was derivative of its
misappropriation of trade secrets claim, we reverse the district court’s grant of
summary judgment to Landmark on that claim.
6. In light of our disposition, we vacate the award of attorney’s fees to
Landmark as premature.
7. We also GRANT the Request for Judicial Notice by Appellees
Landmark Event Staffing Services, Inc., Peter Kranske, and Michael Harrison,
filed on Oct. 5, 2015, ECF No. 36.
8. The parties shall bear their own costs on appeal.
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For the foregoing reasons, we AFFIRM IN PART and REVERSE IN
PART the district court’s grant of summary judgment, REMAND for proceedings
consistent with this disposition, and VACATE the award of attorney’s fees in
favor of Landmark.
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