Wang v. Golf Tailor, LLC
3:17-cv-00898
N.D. Cal.Nov 3, 2017Background
- Plaintiffs Jonathan Wang and GolfBestBuy sued defendants Golf Tailor and Tim Oyler alleging copyright-based counterfeiting of a golf club (XE1) and training aid (Speed Whip); defendants counterclaimed for trade‑secret theft under CUTSA.
- Defendants alleged Golf Gifts & Gallery and its principal Dean Chudy contracted Kingstar (Wang’s company) to manufacture products in China and thereby disclosed Golf Tailor’s secret designs to Wang, who obtained Chinese and U.S. patents.
- The court previously dismissed the defendants’ direct counterclaims for trade‑secret misappropriation as implausible because the alleged misappropriation occurred after public disclosure and conspiracy allegations were conclusory.
- Golf Tailor then cross‑sued Golf Gifts & Chudy for (1) CUTSA misappropriation, (2) breach of fiduciary duty (Oklahoma law), (3) contribution to UCL and Lanham Act false designation, and (4) contribution to Lanham Act trademark infringement/counterfeiting.
- Golf Gifts & Chudy moved to dismiss under Rule 12(b)(6). The court found the existence of trade secrets was plausibly pleaded but the allegations of misappropriation and conspiratorial passing of secrets were conclusory and insufficient to state contributory liability or fiduciary breach grounded in non‑trade‑secret facts.
- The court dismissed the cross‑claims with leave to amend and denied as moot a motion to strike certain paragraphs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether cross‑complaint plausibly pleads CUTSA misappropriation by Golf Gifts/Chudy | Golf Tailor: Golf Gifts misrepresented having its own Chinese manufacturing and thus passed trade secrets to Wang, causing misappropriation | Golf Gifts/Chudy: Allegations are conclusory and based on "information and belief," lacking factual support | Dismissed: Existence of trade secrets plausible, but misappropriation/conspiracy allegations are too conclusory to survive Rule 12(b)(6) |
| Whether cross‑defendants can be liable under contributory theories (UCL/Lanham Act) | Golf Tailor: Golf Gifts’ role in arranging manufacturing made it contributorily liable for unfair competition and trademark infringement | Golf Gifts/Chudy: No plausible factual nexus showing they passed secrets or aided infringement | Dismissed: Contributory claims inadequately pleaded; allegations are speculative/conclusory |
| Whether fiduciary‑duty claim (Oklahoma law) survives where based on alleged trade‑secret theft | Golf Tailor: Breach arose from Golf Gifts’ assurances and resulting disclosure of secrets | Golf Gifts/Chudy: CUTSA preempts common‑law claims based on trade‑secret misappropriation; allegations fail otherwise | Dismissed: CUTSA preempts common‑law claim tied to trade‑secret theft; pleaded facts do not establish fiduciary breach independent of secrets |
| Whether paragraphs 46–62 should be stricken as immaterial/superfluous | Golf Gifts: Those paragraphs are superfluous and unsupported | Golf Tailor: Paragraphs are part of factual narrative supporting claims | Denied as moot: Court treated motion to strike as moot since allegations are superfluous and do not affect dismissal outcome |
Key Cases Cited
- Navarro v. Block, 250 F.3d 729 (9th Cir. 2001) (Rule 12(b)(6) tests legal sufficiency of complaint)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard for pleadings)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must state a claim plausible on its face)
- LSO, Ltd. v. Stroh, 205 F.3d 1146 (9th Cir. 2000) (court accepts factual allegations and reasonable inferences on motion to dismiss)
- Shwarz v. United States, 234 F.3d 428 (9th Cir. 2000) (construe allegations in favor of nonmoving party)
- Cook, Perkiss & Liehe, Inc. v. N. Collection Serv. Inc., 911 F.2d 242 (9th Cir. 1990) (leave to amend generally required unless amendment is futile)
- K.C. Multimedia Inc. v. Bank of Am. Tech. & Operations, Inc., 171 Cal. App. 4th 939 (2009) (CUTSA preempts common‑law claims based on trade‑secret misappropriation)
- Digital Envoy Inc. v. Google Inc., 370 F. Supp. 2d 1025 (N.D. Cal. 2005) (same, on CUTSA preemption)