NetApp, Inc. v. Nimble Storage, Inc.
2014 WL 1903639
N.D. Cal.2014Background
- NetApp sues Nimble Storage, Reynolds, and former NetApp employees Weber, Klute, Binning, Glick, and Alduino for alleged misappropriation and unauthorized access to NetApp data.
- Plaintiff contends Nimble recruited NetApp personnel and used confidential information to compete; Reynolds allegedly accessed NetApp databases after joining Nimble AUS.
- NetApp asserts CFAA, trespass to chattel, trade secret misappropriation, breach of contract, intentional interference with contract, and unfair competition.
- Reynolds challenges personal jurisdiction and CFAA liability; Nimble and former employees challenge subject matter jurisdiction and pleadings.
- Court grants in part and denies in part: personal jurisdiction over Reynolds sustained; CFAA claims narrowed; supplemental jurisdiction addressed; state-law claims resolved to be dismissed or retained in part.
- Judicially noticed Nimble materials and communications referenced in complaint are acknowledged; case schedule set following the May 8, 2014 hearing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Reynolds is subject to personal jurisdiction in California | NetApp asserts specific jurisdiction via Reynolds’s California-based access to NetApp systems | Reynolds contends no substantial contacts with California exist | Yes; specific jurisdiction over Reynolds established |
| Sufficiency of CFAA claims against Nimble and Reynolds | CFAA violations (a)(2)(C), (a)(4), (a)(5) pleaded; liability supported | Challenges to authorization, pleading standards, and damages | Nimble: CFAA claims dismissed with leave to amend; Reynolds: CFAA claim partly dismissed (a)(5) with leave to amend; other CFAA claims upheld or narrowed |
| Whether NetApp’s state-law claims against Nimble and Reynolds stay under supplemental jurisdiction | Claims arise from common facts with CFAA and should be kept | Discretion to decline supplemental jurisdiction due to predomination or lack of common nucleus | Denied for Nimble; retained for Reynolds; declined for Nimble’s state-law claims other than those related to CFAA |
| Preemption of trespass to chattel and unfair competition by CUTSA as to Reynolds | State claims independently actionable; not solely premised on misappropriation | CUTSA preempts non-trade-secret claims based on same nucleus of facts | Preempted; trespass to chattel and unfair competition against Reynolds dismissed with leave to amend |
| Breath of contract claim against Reynolds | Reynolds breached contractual restrictions by unauthorized access and use | No plausible engagement alleged or damages shown | Breath of contract claim survives; denied motion to dismiss |
Key Cases Cited
- Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316 (9th Cir. 1998) (test for specific jurisdiction under the 'effects' framework)
- Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme, 433 F.3d 1199 (9th Cir. 2006) (purposeful direction and minimum contacts in tort/conduct-based jurisdiction)
- Brekka v. LVRC Holdings LLC, 581 F.3d 1127 (9th Cir. 2009) (definition of 'without authorization' and 'exceeds authorized access' under CFAA)
- United States v. Nosal, 676 F.3d 854 (9th Cir. 2012) (narrow interpretation of 'exceeds authorized access' limiting hacking focus; impact on CFAA scope)
- City of Los Angeles v. San Pedro Boat Works, 635 F.3d 440 (9th Cir. 2011) (principles of preemption and ordinary interplay of claims)