Orca Communications v. Ann Noder Et vir/pitch Public
236 Ariz. 180
| Ariz. | 2014Background
- Orca Communications Unlimited, LLC sued Ann J. Noder and Christopher C. Noder and Pitch Public Relations, LLC for unfair competition based on alleged confidential information misappropriation.
- Orca alleged Noder used Orca’s confidential information and customer data to start a competing firm after leaving Orca in 2009.
- Superior Court dismissed Orca’s complaint under Rule 12(b)(6) as preempted by AUTSA to the extent claims involved misappropriation of trade secrets.
- Arizona Court of Appeals reversed in part; the supreme court granted review to resolve AUTSA’s displacement scope.
- Court held AUTSA displaces only claims based on misappropriation of a trade secret, not common-law claims based on confidential information that does not meet AUTSA’s trade-secret definition.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of AUTSA displacement | Orca argues AUTSA preempts all misappropriation claims arising from confidential information. | Noder contends AUTSA displacement covers any misappropriation of confidential information that falls within trade secrets. | AUTSA displaces only misappropriation of a trade secret. |
| Confidential information not a trade secret | Orca can pursue common-law unfair competition for confidential information outside AUTSA’s trade-secret definition. | AUTSA preemption extends to all such misuse of confidential information. | Displacement does not extend to non-trade-secret confidential information; claim not preempted as to non-trade-secret information. |
| Effect of statutory text on preemption | Literal reading of § 44-407 shows broader displacement. | Text supports displacement only for misappropriation of a trade secret. | Text limits displacement to trade-secret misappropriation. |
| Uniformity and policy concerns | Uniform Act aims for uniform remedies; broad preemption serves policy. | Uniformity not achieved by broad preemption; statutory text controls. | No forced uniform preemption; interpret statutes to favor consistency with common law. |
Key Cases Cited
- Cullen v. Auto-Owners Ins. Co., 218 Ariz. 417 (2008) (look to pleadings for Rule 12(b)(6) dismissal)
- Enter. Leasing Co. of Phx. v. Ehmke, 197 Ariz. 144 (App. 1999) (definitional scope of AUTSA trade secret)
- Hayes v. Cont’l Ins. Co., 178 Ariz. 264 (1994) (strict construction for preemption unless explicit)
- Pleak v. Entrada Prop. Owners’ Ass’n, 207 Ariz. 418 (2004) (favoring common-law consistency when interpreting statutes)
- City of Phoenix v. Butler, 110 Ariz. 160 (1973) (legislative text governs, not substitute judgments)
- Bunker’s Glass Co. v. Pilkington, PLC, 206 Ariz. 9 (2003) (uniform act interpretation without forced uniformity)
- Calisi v. Unified Fin. Servs., LLC, 232 Ariz. 103 (App. 2013) (confidential information vs. trade secrets distinction)