Judge: Robert P. Dahlquist, Case: 37-2023-00016044-CU-BT-NC, Date: 2023-08-28 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - August 28, 2023

08/28/2023  02:30:00 PM  N-29 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Robert P Dahlquist

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Civil - Unlimited  Business Tort Demurrer / Motion to Strike 37-2023-00016044-CU-BT-NC LAWCUS LLC VS. CHROMETA LLC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Demurrer, 07/07/2023

Defendant Chrometa, LLC's demurrer (ROA # 12) is overruled. Defendant shall file an answer by September 15, 2023.

At this stage of the case, the court is required to liberally construe the allegations of the complaint, with a view to substantial justice between the parties. CCP § 452. The court should sustain a demurrer only if the facts alleged in the complaint, liberally construed, are insufficient to constitute any cognizable cause of action. The court is not persuaded that this standard is satisfied here.

Concerning the main argument presented by this demurrer – that plaintiff's non-UTSA claims are mostly or entirely displaced or preempted by California's adoption of the UTSA – the court is satisfied that plaintiff has alleged facts that constitute 'a basis [for liability] independent of any misappropriation of a trade secret,' Angelica Textile Services, Inc. v. Park (2013) 220 Cal.App.4th 495, 507. In addition, 'UTSA by its terms does not displace a contract claim, even if it is based on the misappropriation of a trade secret.' Id. at 506.

It is conceivable that once an evidentiary record is created and presented to the court, the court could find that the non-UTSA claims advanced by plaintiff are in fact 'based on the same nucleus of facts as the misappropriation of trade secrets claim.' K.C. Multimedia, Inc. v. Bank of American Technology & Operations, Inc. (2009) 171 Cal.App.4th 939, 958. As such, the overruling of defendant's demurrer is without prejudice to the possibility that defendant may present this same issue again by way of a motion for summary adjudication or a trial-related motion. That appears to be what happened in the K.C.

Multimedia case, where the 'preemption' or 'displacement' issue was presented and decided at the time of trial, immediately before a jury was impaneled and after the parties had been given ample time to develop the facts and legal theories of the case. Id. at 948.

Turning to the trade secret argument, 'the secrecy requirement is generally treated as a relative concept and requires a fact-intensive analysis.' DVD Copy Control Assn., Inc. v. Bunner (2004) 116 Cal. App. 4th 241, 251. The court cannot determine on this limited record and at this stage of the case that the information was not treated as secret.

Finally, the court believes that the allegations set forth in the amended complaint are sufficient at this stage of the case to state cognizable claims for misappropriation of trade secrets (Complaint, ¶¶ 17, 19-26 and 50), common law interference (Id. at ¶¶ 40-45, 46-50 and 52-56), Penal Code § 502(c) (Id. at ¶¶ 11, 16, 19, 21, 26 and 60) and unfair competition (Id. at ¶¶ 64-67).

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3009866 CASE NUMBER: CASE TITLE:  LAWCUS LLC VS. CHROMETA LLC [IMAGED]  37-2023-00016044-CU-BT-NC For these reasons, the demurrer is overruled.

As the case progresses, the defendant may continue to assert the arguments and defenses presented by this demurrer by way of motions and at trial.

This is the tentative ruling for an appearance hearing (in person or remote) at 2:30 p.m. on Monday, August 28, 2023. If no party appears at the hearing, this tentative ruling will become the order of the court as of August 28, 2023. If the parties are satisfied with the court's tentative ruling or do not otherwise wish to argue the motion, they are encouraged to give notice to the court and each other of their intention not to appear, though this notice is not required.

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3009866