242 Cal. App. 4th 651
Cal. Ct. App.2015Background
- Richtek Technology (Taiwan) and its U.S. subsidiary Richtek USA sued former employees (Chang, Huang, Chen) and uPI (competitor) for trade secret misappropriation, alleging theft of customer contacts and power-supply design information and loss of U.S. customers.
- The former employees had confidentiality/employment agreements that included a forum selection clause designating Xinzhu local court (Taiwan) for disputes and prohibiting post-employment use of secrets.
- Richtek filed related criminal and civil complaints in Taiwan in 2007 and later U.S. actions (ITC and N.D. Cal.); some U.S. claims were dismissed for lack of jurisdiction or stayed.
- In state court, uPI, Chang and Huang demurred asserting Taiwanese two-year statute of limitations barred the claims; Chen moved to dismiss under the forum selection clause.
- The trial court took judicial notice of the 2007 Taiwan complaints and MediaTek decision, sustained the demurrer as time-barred (finding knowledge in 2007), and granted Chen’s dismissal under the forum clause. Plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court properly used judicially noticed foreign court filings to decide a statute-of-limitations demurrer | Richtek: Judicial notice may show existence of documents, but the court cannot resolve disputed factual issues (timing of discovery) by crediting foreign complaints over plaintiff’s amended complaint allegations | Defendants: Taiwanese complaints and MediaTek decision show Richtek knew of misappropriation and identities in 2007, so Taiwan’s 2-year limit bars the claims | Reversed as to demurrer: court improperly used judicially noticed foreign complaints to resolve disputed factual issue of when plaintiff discovered the misappropriation; plaintiffs’ pleaded discovery allegations control at demurrer stage |
| Whether Taiwan’s statute of limitations applies to Richtek USA’s claims (choice-of-law/borrowing statute) | Richtek: (alternative) pleaded later discovery tolls U.S. claims; disputed, so not susceptible to decision on demurrer | Defendants: Taiwan law applies and bars claims | Court did not resolve on appeal because demurrer ruling reversed; borrowing statute and applicability left undecided |
| Whether Chen’s employment agreement forum-selection clause required dismissal/transfer to Taiwan | Richtek: Forum clause applies to employee but not necessarily to Richtek as plaintiff; language ambiguous as to whether Richtek relinquished choice of forum | Chen: Clause is mandatory—express language selecting Xinzhu local court requires dismissal | Affirmed: Clause’s mandatory language ("is to be the court with governing jurisdiction for first trial") binds both employee and Richtek; trial court correctly granted Chen’s motion to dismiss |
| Proper standard on demurrer when extrinsic documents are judicially noticed | Richtek: Court must accept pleaded facts and cannot resolve disputed factual issues via judicial notice | Defendants: Judicial notice of court records permits considering foreign complaints to resolve timeliness | Court reiterated that judicial notice may establish existence of documents but not the truth of disputed factual assertions; demurrer improper where statute-of-limitations defense depends on contested facts |
Key Cases Cited
- Evans v. City of Berkeley, 38 Cal.4th 1 (2006) (demurrer standard: assume truth of properly pleaded facts)
- Schifando v. City of Los Angeles, 31 Cal.4th 1074 (2003) (complaint must be read reasonably and in context on demurrer)
- StorMedia, Inc. v. Superior Court, 20 Cal.4th 449 (1999) (judicial notice of a document does not settle disputed truths or interpretations)
- Committee for Green Foothills v. Santa Clara County Bd. of Supervisors, 48 Cal.4th 32 (2010) (statute-of-limitations defense on demurrer requires defect to clearly and affirmatively appear)
- Fremont Indemnity Co. v. Fremont General Corp., 148 Cal.App.4th 97 (2007) (court cannot decide disputed factual questions on demurrer by judicial notice)
- Rotolo v. San Jose Sports & Entertainment, LLC, 151 Cal.App.4th 307 (2007) (appellate acceptance of inferred facts on demurrer)
- Joslin v. H.A.S. Brokerage, 184 Cal.App.3d 369 (1986) (reversal where judicially noticed document disputed identity issues relevant to statute-of-limitations defense)