Alifax Holding Spa v. Alcor Scientific Inc.

357 F. Supp. 3d 147
CourtDistrict Court, D. Rhode Island
DecidedJanuary 8, 2019
DocketC. A. No. 14-440 WES
StatusPublished
Cited by10 cases

This text of 357 F. Supp. 3d 147 (Alifax Holding Spa v. Alcor Scientific Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alifax Holding Spa v. Alcor Scientific Inc., 357 F. Supp. 3d 147 (D.R.I. 2019).

Opinion

WILLIAM E. SMITH, Chief Judge

This is the latest chapter of a transatlantic saga pitting an Italian producer of diagnostic medical instruments, Alifax Holding SpA, against its Rhode Island-based competitor, Alcor Scientific, Inc., and its itinerant former employee, Francesco Frappa. In this motion for partial summary judgment, Alifax has asked the Court to answer the following question: which jurisdiction's law should define the alleged duty of confidentiality owed by Frappa to his Italian ex-employer? The answer: Italy's.

Frappa's contractual employment relationship with Sire Analytical S.r.l., an Italian company acquired by Alifax, is the only conceivable source of his alleged duty of secrecy. His decade-long employment relationship was negotiated, consummated, performed, and terminated in Italy. Neither Frappa nor his work for Sire were connected in any way to Rhode Island. Alifax's claim for trade secret misappropriation under a Rhode Island statute based on acts that occurred within the state does not alter the source of his alleged duty. Accordingly, Italian law governs the substance of Frappa's alleged duty of confidentiality to Alifax in this action.

I. Background

The stage was set for the current strife between Alifax and Alcor during Francesco Frappa's time as a student in Udine, Italy. In 2000, Frappa interned as a trainee at Sire, a local company. (Pl.'s Statement of Undisputed Facts ("PSUF") ¶ 2, ECF No. 165.) After two years, he discussed taking a permanent role with Sire's CEO and was promoted to the position of mechanical fitter apprentice.1 (Id. ¶¶ 3-4)

*153Frappa and Sire executed a hiring letter formalizing the apprenticeship in Udine on October 7, 2002.2 (Id. ¶ 5; see also SUF Ex. A at 2, ECF No. 155-1). The letter states that it was a communication pursuant to cited sections of Italian law and that, "[f]or other provisions not expressly provided for ... see the laws in effect and the National Collective Bargaining Agreement applied to the MECHANICAL ENGINEERING INDUSTRY." (PSUF Ex. A at 2 (emphasis added).) The "[a]pprenticeship length" was three-and-a-half years, and Sire agreed to pay Frappa "per [the] Collective Bargaining Agreement used by the company." (Id. )

Alifax, an Italian corporation headquartered in Padova, Italy, acquired Sire two years later.3 (SUF ¶ 11; see also Pl.'s Statement of Disputed Facts ("PSDF") ¶ 3, ECF No. 161-1.) Frappa nevertheless became a permanent mechanical fitter for Sire in October 2004. (PSUF ¶ 12.) He was promoted over seven years to different roles with more responsibility. (Id. ¶ 13-14.) His duties included hardware and software development as well as work with Alifax's erythrocyte sedimentation rate ("ESR") analyzers, clinical devices used to test blood samples for indicia of non-specific inflammation. (Id. ¶¶ 20-22.) At least some of his ESR-related duties were supervisory. (Id. ¶¶ 22-23.) Frappa worked exclusively at Sire facilities in Udine and nearby Nimis or at Alifax's Padova headquarters. (Id. ¶ 27.) He answered to supervisors in Italy and collected his pay and benefits in Italy. (Id. ¶¶ 28-29.)

Frappa gave notice of his intent to resign from Sire at the end of August 2011, citing a "change of position" as the motive for his departure. (Id. ¶ 30; PSUF Ex. B at 2.) His notice was effective September 1, 2011, but he explained that he intended "to remain at the company for the entire two-month notice period as set forth in the Contract." (PSUF Ex. B at 2.) Prior to leaving, Frappa forwarded certain information concerning an "anemia factor" and myeloma from his Sire email account to a personal email account. (See PSDF ¶ 106.)

Frappa's resignation followed a week-long trip to Rhode Island as the guest of Alcor's founder, Carlo Ruggieri. (PSUF ¶ 52.) Alcor is a Rhode Island corporation that also produces diagnostic devices. (See Pl.'s Statement of Additional Undisputed Facts ("PSAUF") ¶ 1, ECF No. 173-1.) Ruggieri invited Frappa to Rhode Island based on a lead from an industry professional to assess whether Frappa might leave Alifax and whether they might work together. (See PSUF ¶ 52; PSUF Ex. F at 4.) At the end of Frappa's two-month notice period, Ruggieri told Alcor's staff Frappa would "immediately take over full responsibility for Alcor['s] most advanced diagnostic product development projects" as a vice president of research and development. (SUF ¶ 33; SUF Ex. E at 2.)

Frappa moved to Rhode Island around May 2012 and began working on Alcor's iSED ESR analyzer. (SUF ¶ 33; PSAUF Ex. 1 at ¶ 8, ECF No. 169-6.) The iSED

*154competes with Alifax's analyzers by delivering blood test results for ESR in just twenty seconds.4 (See Second Am. & Suppl. Compl. ¶ 8, ECF No. 68; Defs.' Answer to Pl.'s Second Am. & Suppl. Compl. & First Am. Countercl. ¶ 8, ECF No. 71.) Alcor developed the iSED in Rhode Island where it is headquartered. (PSAUF ¶¶ 1, 3.) Frappa remains employed by Alcor, but now resides in Europe. (PSUF ¶ 34; PSDF ¶ 2; Defs.' Answer to Second Am. & Suppl. Compl. ¶ 2). He remains an Italian citizen. (PSUF ¶ 34.)

When Alifax discovered the iSED had rapid analytical capabilities comparable to its devices, it cried foul. It accused Alcor and Frappa of misappropriating its trade secrets and using its proprietary information to develop the iSED, thereby violating the Rhode Island Uniform Trade Secrets Act (Count II) and breaching the confidential relationship between Frappa and Alifax (Count III).5 (See generally Second Am. & Suppl. Compl.)

II. Legal Standard

A party is entitled to summary judgment if "the record, construed in the light most flattering to the nonmovant, 'presents no genuine issue as to any material fact and reflects the movant's entitlement to judgment as a matter of law.' " Lawless v. Steward Health Care Sys., LLC, 894 F.3d 9, 20-21 (1st Cir. 2018) (quoting McKenney v. Mangino, 873 F.3d 75, 80 (1st Cir. 2017), cert. denied, --- U.S. ----, 138 S.Ct. 1311, 200 L.Ed.2d 475 (2018) ); see also Fed. R. Civ. P. 56(a).

Alcor argues Alifax's request for a choice-of-law ruling under Rule 56 is improper because it will not determine any disputed claim. This is incorrect. Rule 56(a) expressly authorizes a party to seek partial summary judgment on "part of each claim or defense." Fed. R. Civ. P. 56(a) (emphasis added). The term "judgment" in this context is often a misnomer. See

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357 F. Supp. 3d 147, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alifax-holding-spa-v-alcor-scientific-inc-rid-2019.