Pellerin v. Honeywell International, Inc.
877 F. Supp. 2d 983
S.D. Cal.2012Background
- Plaintiffs Honeywell, Sperian/Howard S. Leight, and Rad-Plugs/Radians are parties in a dispute over trade secrets and confidentiality related to foam earplug manufacturing.
- Pellerin, a longtime Honeywell/Sperian employee, allegedly possessed Honeywell trade secrets and signed non-disclosure agreements (NDAs) in 1987 and 2008.
- Pellerin left Sperian in 2010 to become VP of Manufacturing for Rad-Plugs, prompting Honeywell to warn of action if confidential information was disclosed.
- Plaintiffs filed suit in 2011 seeking declaratory relief that their manufacturing did not infringe Honeywell’s trade secrets and that the NDA was void/unenforceable; Defendants removed the action.
- In December 2011, Honeywell asserted nine counterclaims arising from Pellerin’s departure and Plaintiffs’ development of foam earplug technology; the court granted the motion to dismiss the counterclaims (with some claims dismissed without prejudice).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Honeywell adequately pleads trade secret misappropriation | Honeywell alleges possession and use of trade secrets by Pellerin and Plaintiffs. | Pellerin-related disclosures and independent development are enough to sustain misappropriation claims. | Count 4 dismissed without prejudice for lack of particularity and sufficiency. |
| Whether Honeywell pled breach of contract with sufficient particularity | Pellerin breached Employment Agreement and NDA by using Honeywell trade secrets. | Breach requires misappropriation or breach of confidential duties; allegations are boilerplate. | Count 1 dismissed without prejudice for failure to plead specific confidential information and breach. |
| Whether Honeywell sufficiently alleged intentional/negligent interference with contract | Radians and RadPlugs interfered with Honeywell-Pellerin relationship to breach obligations. | Need identifiable contract and specific inducement of breach; allegations are vague. | Counts 2 and 3 dismissed without prejudice for lack of particularized facts. |
| Whether Honeywell adequately pled breach of confidential relationship | Pellerin breached the confidential relationship by misusing information. | No sufficient facts beyond conclusory statements. | Count 9 dismissed without prejudice for lack of particularity. |
| Whether Honeywell stated a viable UCL claim based on predicate acts | Unlawful and unfair practices include misappropriation and breach interferences. | With predicate acts inadequately pled, UCL claim cannot stand; unsupported by facts. | Count 5 dismissed without prejudice for failure to plead underlying predicate acts. |
Key Cases Cited
- Diodes, Inc. v. Franzen, 260 Cal.App.2d 244 (Cal. App. 2d 1968) (requires detailed identification of trade secret to plead misappropriation)
- Acculmage Diagnostics Corp. v. Terarecon, Inc., 260 F.Supp.2d 941 (N.D. Cal. 2003) (pleading trade secret and misappropriation elements)
- Whyte v. Schlage Lock Co., 101 Cal.App.4th 1443 (Cal. App. 4th Dist. 2002) (no misappropriation by inevitable disclosure; need facts)
- Pac. Gas & Elec. Co. v. Bear Stearns & Co., 50 Cal.3d 1118 (Cal. 1990) (elements of intentional interference with contract)
- Cel‑Tech Communications, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal.4th 163 (Cal. 1999) (limits on unfair competition claims and tethering to underlying violations)
- Morgan v. AT&T Wireless Serv., Inc., 177 Cal.App.4th 1235 (Cal. App. 2d Dist. 2009) (unfair competition requires underlying predicate acts)
- Iqbal v. Ashcroft, 556 U.S. 662 (U.S. 2009) (pleading standard requiring more than a sheer possibility of wrongdoing)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for pleading claims)
- Sensible Foods, LLC v. World Gourmet, Inc., 2011 WL 5244716 (N.D. Cal. 2011) ((excluded because WL; not included in key cases))
- Les Concierges, Inc. v. Robeson, 2009 WL 1138561 (N.D. Cal. 2009) ((excluded because WL; not included in key cases))