United States District Court, D. Delaware
ZOPPAS INDUSTRIES DE MEXICO S.A. DE C.V., Plaintiff,
BACKER EHP, INC., Defendant.
before me are Defendant's objections (D.I. 21) to the
Magistrate Judge's Report and Recommendation issued on
December 5, 2019 (D.I. 18). The Magistrate Judge recommended
in his Report and Recommendation that I deny in part and
grant in part Defendant's motion to dismiss the Complaint
(D.I. 7). I have reviewed the Report and Recommendation, the
objections, and Plaintiffs response (D.I. 23).
Counts I and II of the Complaint allege misappropriation of
trade secrets claims under the Defend Trade Secret Act of
2016, 18 U.S.C. § 1836 et seq. (Count I) and
the Tennessee Uniform Trade Secrets Act, Term. Code Ann.
§ 47-25-1702 et seq., (Count II). Count III
alleges a claim of unjust enrichment.
Defendants moved pursuant to Federal Rule of Civil Procedure
12(b)(6) to dismiss all three counts for failure to state a
cognizable claim. D.I. 7.
referred the motion to dismiss to the Magistrate Judge. D.I.
Plaintiff did not contest the motion to dismiss Count III.
Magistrate Judge concluded that the Complaint adequately
pleads trade secret claims and recommended that I deny the
motion to dismiss those claims. D.I. 18. Because Plaintiff
did not contest the motion to dismiss Count III, the
Magistrate Judge recommended that I grant the motion to
dismiss that count.
Magistrate Judge had the authority to make his findings and
recommendation under 28 U.S.C. § 636(b)(1)(B).
Defendant objects to the Magistrate Judge's findings and
recommendation with respect to Counts I and II. I review his
findings and recommendation de novo. §
636(b)(1); see also Fed. R. Civ. P. 72(b)(3);
Brown v. Astrue, 649 F.3d 193, 195 (3d Cir. 2011).
Defendant argues first that the Report and Recommendation
"leaves open the scope of the trade secrets at
issue." D.I. 21 at 1. In Defendant's words:
"The Report analyzes only whether the purported ieg
thermostat design' trade secret is properly pled and does
not discuss other purported trade secrets." Id.
at 3. My response to this objection is: "You are
correct, and your objection is therefore overruled." The
Magistrate Judge had before him a Rule 12(b)(6) motion that
required him to determine (to use Defendant's words)
"whether the purported 'leg thermostat design'
trade secret [wa]s properly pled." That is exactly what
the Magistrate Judge did. The Magistrate Judge was not
required to "discuss other purported trade
Defendant next argues that "[t]he Report contains no
analysis regarding whether and to what extent Plaintiff
alleged that the 'leg thermostat design'... was known
only to Plaintiff and was not 'generally known' to,
or 'reasonably ascertainable' by, others in the
industry." D.I. 21 at 5. But as the Magistrate Judge
noted, the Complaint alleges that: the leg thermostat design
was developed by Plaintiff at the request of Whirlpool under
cover of a mutual nondisclosure agreement; Whirlpool and
Plaintiff agreed that the disclosure of this information
would cause irreparable harm to Plaintiff; and Plaintiff
requested the trade secrets be returned or destroyed after
its relationship with Whirlpool broke down. D.I. 18 at 5-7.
It is plausible to infer from these allegations that the leg
thermostat design was not generally known or reasonably
ascertainable by others in the industry.
Finally, Defendant faults the Magistrate Judge for rejecting
its argument that the Complaint contains no allegations that
tie Whirlpool's accessing information from Plaintiff to
Defendant's misappropriating trade secrets. D.I. 21 at
6-7. But I agree with the Magistrate Judge's
determination that it can be plausibly inferred from the
facts alleged in the Complaint "that Defendant- worried
that it would miss the relevant compliance deadline and
having previously failed to design a compliant heating
element-sought and/or obtained Plaintiffs trade secret
information from Whirlpool regarding the leg thermostat
design, and used that information in Defendant's design
and development process." D.I. 18 at 7-8.
on this 14th day of January in 2020, IT IS HEREBY ORDERED
Defendant's Objections to the Magistrate Judge's
Report and ...