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Embarcadero Technologies, Inc. v. Red Gate Software, Inc.

United States District Court, W.D. Texas, Austin Division

January 5, 2018

EMBARCADERO TECHNOLOGIES, INC., and IDERA, INC., Plaintiffs,
v.
REDGATE SOFTWARE, INC., REDGATE SOFTWARE, LTD., DAVID FRIGNOCA, and DUSTIN ABNEY, Defendants.

          ORDER

          ROBERT PITMAN UNITED STATES DISTRICT JUDGE

         Before the Court are the partial motion to dismiss for failure to state a claim by Defendant Redgate Software, Inc., (Dkt. 42), the partial motion to dismiss for failure to state a claim by Defendant David Frignoca, (Dkt. 44), and the motion to dismiss for lack of personal jurisdiction by Defendant Redgate Software, Ltd., (Dkt. 43). After reviewing the pleadings, briefs, and relevant law, the Court GRANTS all three motions.

         BACKGROUND

         On May 11, 2017, Plaintiffs brought an action in this Court against four defendants, alleging eight claims. (Pls.' Orig. Compl., Dkt. 1). The claims arose from the departure of four employees of Embarcadero, [1] David Frignoca (“Frignoca”), Dustin Abney (“Abney”) and two others, each of whom left Embarcadero and joined the same company. That company, Redgate, Ltd., is incorporated in the United Kingdom and has a subsidiary called Redgate, Inc., (together, “the Redgate Defendants”), which is incorporated in California. Plaintiffs brought suit against Frignoca, Abney, Redgate Ltd., and Redgate Inc., alleging the following claims: (1) breach of contract (Frignoca); (2) breach of fiduciary duty (Frignoca); (3) aiding and abetting breach of fiduciary duty (the Redgate Defendants); (4) misappropriation of trade secrets in violation of the Federal Defend Trade Secrets Act of 2016, 18 U.S.C. § 1836, et seq. (Frignoca and the Redgate Defendants); (5) misappropriation of trade secrets in violation of the Texas Uniform Trade Secrets Act (“TUTSA”), Tex. Civ. Prac. & Rem. Code § 134A.001, et seq. (Frignoca and the Redgate Defendants); (6) violation of the federal Computer Fraud and Abuse Act, 18 U.S.C. § 1030, et seq. (Frignoca); (7) violation of the Texas Harmful Access by Computer Act (“HACA”), Tex. Civ. Prac & Rem. Code § 143.001, et seq. (Frignoca); and (8) breach of contract (Abney). (Am. Compl., Dkt. 33, ¶¶ 32-69). Plaintiffs requested a preliminary injunction, which the Court denied following a two-day hearing. (Order, Dkt. 78). The Court deferred until a later date a decision on the pending motions to dismiss.[2] These motions are now before the Court.

         LEGAL STANDARD

         Federal Rule of Civil Procedure 12(b)(6) provides for dismissal of an action for “failure to state a claim upon which relief can be granted.” When evaluating a motion to dismiss under Rule 12(b)(6) the “district court must accept all well-pleaded facts as true and view them in the light most favorable to the plaintiff.” Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). “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 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556).

         Similarly, in deciding a motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), the court must accept as true the plaintiff's “uncontroverted allegations, and resolve in its favor all conflicts between the facts contained in the parties' affidavits and other documentation.” Alpine View Co. Ltd. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir. 2000). “[T]he plaintiff bears the burden of establishing jurisdiction, but need only present prima facie evidence.” Revell v. Lidov, 317 F.3d 467, 469 (5th Cir. 2002).

         DISCUSSION

         Frignoca seeks to dismiss Plaintiffs' claims for breach of fiduciary duty and violation of the Texas Harmful Access by Computer Act; the Redgate Defendants seek dismissal of the claim against them for aiding and abetting a breach of fiduciary duty; Defendant Redgate, Ltd. also seeks to dismiss all claims against it, contending that the Court lacks personal jurisdiction to hear them. The Court addresses each motion in turn.

         I. TUTSA Preemption: Breach of Fiduciary Duty Claims

         Frignoca seeks dismissal of the claims against him for breach of fiduciary duty and violation of HACA on the ground that both claims are preempted by TUTSA.[3] The Redgate Defendants contend, along the same lines, that the aiding and abetting claim against them derived from the breach of fiduciary duty claim against Frignoca should be dismissed on preemption grounds, as well. TUTSA contains a preemption provision.

(a) Except as provided by Subsection (b), this chapter displaces conflicting tort, restitutionary, and other law of this state providing civil remedies for misappropriation of a trade secret.
(b) This chapter does not affect:
(1) contractual remedies, whether or not based upon misappropriation of a trade secret;
(2) other civil remedies that are not based upon misappropriation of a ...

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