Antaris Technologies, Inc. v. Matthews

• Court: District Court, N.D. California
• Decided: July 15, 2025
• Docket: 3:25-cv-04048
• Status: Unknown

Opinion

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 ANTARIS TECHNOLOGIES, INC., et al., 10 Case No. 25-cv-04048-RS Plaintiffs, 11 v. ORDER GRANTING IN PART, 12 DENYING IN PART DEFENDANTS’ WILLIAM E. MATTHEWS, et al., MOTION TO DISMISS 13 Defendants. 14

15 I. INTRODUCTION 16 Plaintiffs Antaris Technologies, Inc. and Antaris Technologies USA, Inc. (“Antaris”) 17 allege Defendants acted in violation of the Defend Trade Secrets Act (“DTSA”), the California 18 Uniform Trade Secrets Act (“CUTSA”), California’s Unfair Competition Law (“UCL”), 19 committed trade libel, and intentionally interfered with Plaintiffs’ contract. This dispute arises out 20 of Defendant Matthews’ past employment with Antaris. After the termination of that employment, 21 Matthews founded a company offering competing “club management software.” Plaintiffs 22 primarily aver that Matthews and his company have misappropriated Antaris’s trade secrets. 23 Defendants William E. Matthews, Gym Business Manager LLC (“GBM”), and Money 24 Movers Inc. (“MMI”) contend the exercise of personal jurisdiction over nonresident Defendants 25 Matthews and GBM is inappropriate. Next, they argue venue is improper because California is an 26 inconvenient forum with no interest in the outcome of the litigation. Finally, Defendants move 27 pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss the entirety of Plaintiffs’ 1 personal jurisdiction over Defendants Matthews and GBM. Additionally, Plaintiffs fail to state a 2 claim for trade secret misappropriation. Therefore, Defendants’ motion to dismiss is granted as to 3 Defendants Matthews and GBM and Plaintiffs’ claims brought under DTSA and CUTSA. The 4 Complaint is partially dismissed with leave to amend.1 5 II. BACKGROUND2 6 Plaintiff Antaris Technologies, Inc., is a Canadian corporation with its principal place of 7 business in Toronto, Ontario, Canada. Plaintiff Antaris Technologies USA Inc. is a Delaware 8 corporation. Defendant William E. Matthews VI is an Alabama resident and the founder and CEO 9 of Defendant Gym Business Manager LLC, an Alabama corporation. GBM acquired Defendant 10 Money Movers Inc. in January 2025. Plaintiffs, GBM, and MMI all purport to provide “club 11 management software” for gyms and health clubs. 12 Between January 2020 and April 2024, Antaris employed Defendant William Matthews. 13 After Matthews’ employment with Plaintiffs ended, he founded his own company, GBM. Rather 14 than developing its own software, GBM acquired MMI, a previously independent company. 15 Defendant GBM also hired Andrew Latta, a California resident and former Senior Account 16 Executive with Antaris. Defendants operate a club management software which competes directly 17 with Antaris’s products. 18 Plaintiffs assert that while developing, pitching, and marketing GBM’s competing 19 software solution, all Defendants have used, disclosed, and otherwise misappropriated Antaris’s 20 confidential and trade secret information without authorization and in violation of the binding 21 confidentiality obligations agreed to by Matthews. Furthermore, Plaintiffs aver Defendants induced Mr. Latta to breach his contractual obligations to maintain the secrecy of Antaris’s 22 information. Antaris seeks injunctive and monetary relief, damages, lost profits, punitive and 23 exemplary damages, attorneys’ fees, and other appropriate relief. 24

26 1 Pursuant to Civil Local Rule 7-1(b), this motion is suitable for disposition without oral argument. 27 2 This order treats well-plead factual assertions contained in the complaint as true, unless noted otherwise. 1 III. DISCUSSION 2 A. Jurisdiction Over Nonresident Defendants 3 Defendants first contend the claims against nonresident Defendants Matthews and GBM 4 should be dismissed for want of personal jurisdiction. Plaintiffs’ Complaint lacks the requisite 5 facts to support any of its purported theories of personal jurisdiction. Accordingly, there is no 6 basis for jurisdiction over Matthews and GBM, and the claims against them are dismissed without 7 prejudice. 8 California's long-arm statute authorizes the exercise of personal jurisdiction to the 9 maximum consistent with due process. Cal. Civ. Proc. Code § 410.10. Thus, courts must ensure 10 three factors are met: “(1) the defendant must either ‘purposefully direct his activities’ toward the 11 forum or ‘purposefully avail himself of the privileges of conducting activities in the forum’; (2) ‘the claim must be one which arises out of or relates to the defendant’s forum-related activities’; 12 and (3) ‘the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must 13 be reasonable.’” Axiom Foods, Inc. v. Acerchem Int'l, Inc., 874 F.3d 1064, 1068 (9th Cir. 2017) 14 (quoting Dole Food Co., Inc. v. Watts, 303 F.3d 1104, 1111 (9th Cir. 2002)). “The plaintiff bears 15 the burden of satisfying the first two prongs of the test.” Id. (quoting Schwarzenegger v. Fred 16 Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004)). Once the plaintiff satisfies that burden, “the 17 burden then shifts to the defendant to ‘present a compelling case’ that the exercise of jurisdiction 18 would not be reasonable.” Id. at 1068–69. 19 “Where, as here, the defendant's motion is based on written materials rather than an 20 evidentiary hearing, ‘the plaintiff need only make a prima facie showing of jurisdictional facts to 21 withstand the motion to dismiss.’” Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 2015) 22 (quoting CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1073 (9th Cir. 2011)). While a 23 plaintiff “may not simply rest on the ‘bare allegations of the complaint,’” “uncontroverted 24 allegations must be taken as true, and ‘conflicts between parties over statements contained in 25 affidavits must be resolved in the plaintiff's favor.’” Id. (quoting Schwarzenegger, 374 F.3d at 26 800). 27 Courts utilize the purposeful direction test for cases sounding in tort. Axiom Foods, 874 1 F.3d at 1069 (citing Dole Food, 303 F.3d at 1111). Under this test, the defendant must have “(1) 2 committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the 3 defendant knows is likely to be suffered in the forum state.” Id. (quoting Washington Shoe Co. v. 4 A-Z Sporting Goods Inc., 704 F.3d 668, 673 (9th Cir. 2012)). The “defendant’s suit-related conduct must create a substantial connection with the forum State,” and the “relationship must 5 arise out of contacts that the defendant himself creates with the forum State.” Walden v. Fiore, 571 6 U.S. 277, 284 (2014) (citations omitted). 7 Plaintiffs aver specific personal jurisdiction over Defendants is proper under multiple 8 analyses of personal jurisdiction. They point to GBM’s acquisition of MMI, a California 9 corporation, in support of an alter ego theory of jurisdiction. They additionally assert that 10 jurisdiction is proper under either purposeful availment or purposeful direction. All three theories 11 fail. 12 First, MMI’s contacts with California cannot be imputed to Matthews and GBM. “[T]he 13 alter ego test may be used to extend personal jurisdiction to a foreign parent or subsidiary when, in 14 actuality, the foreign entity is not really separate from its domestic affiliate.” Williams v. Yamaha 15 Motor Co. Ltd., 851 F.3d 1015, 1021 (9th Cir. 2017). To satisfy the alter ego test, “a plaintiff must 16 make out a prima facie case (1) that there is such unity of interest and ownership that the separate 17 personalities of the two entities no longer exist and (2) that failure to disregard their separate 18 identities would result in fraud or injustice.” Id. Plaintiffs fail on the first prong of this analysis. 19 Despite Plaintiffs’ repeated assertions in briefing that Matthews personally directed GBM’s 20 acquisition of MMI, Plaintiffs did not plead facts sufficient to support this conclusion. Plaintiffs’ 21 assertion that GBM controls MMI in its entirety is similarly unsupported. Plaintiffs’ reliance on 22 Matthews’s role as CEO of both companies is insufficient to establish the requisite unity of 23 interest. 24 Second, the purposeful availment test is inapposite, both legally and factually. There is no 25 allegation that Defendants have signed relevant contracts or otherwise conducted extensive 26 business in California. A recent employee of GBM, Andrew Latta, does reside in California. 27 1 However, a single employment contract within the forum is insufficient to support personal 2 jurisdiction. See, e.g. Parnell Pharmaceuticals, Inc. v. Parnell, Inc., 5:14-cv-03158-EJD, 2015 3 WL 5728396 at *4 (N.D. Cal. Sept. 30, 2015). There is no allegation that this dispute arises out of 4 Latta’s presence in California, or out of any of Mr. Latta’s actions in or directed to California. 5 Plaintiffs fail to establish purposeful direction for similar reasons. The Complaint makes 6 generic and conclusory statements as to Defendants’ actions, none of which support express 7 aiming at the forum state of California. The Complaint reads: “Defendants because, on 8 information and belief, Defendants (a) distribute, offer for sale, sell, advertise, and promote their products and services within the State of California; (b) regularly transact and conduct business 9 within the State of California (including, inter alia, employing employees, contractors, and agents 10 within the State of California); and/or (c) have otherwise made or established contacts with the 11 State of California sufficient to permit the exercise of personal jurisdiction.” Compl. at 22. The 12 Complaint does not aver Plaintiffs’ trade secrets or confidential information were obtained in or 13 used in California. Likewise, there is no allegation in Plaintiffs’ Complaint of any current or 14 prospective California customer that was either solicited or engaged by these Defendants or told 15 false or misleading information about Plaintiffs’ software capabilities. The only harm identified 16 with any specificity in Plaintiffs’ Complaint is potentially untrue information shared with 17 Plaintiffs’ customer Unlimited Athletic Club, a health club in Wisconsin. 18 The only connection Plaintiff asserts Matthews and GBM have with California is the 19 employment of Latta. Plaintiffs aver Defendants misappropriated Antaris’s confidential and trade 20 secret information by inducing Latta to breach his contractual obligations to maintain the secrecy 21 of Antaris’s information. This conclusory statement, without more, does not support any direct 22 action on the part of Matthews or GBM towards the forum itself, as required to warrant personal 23 jurisdiction. Therefore, the claims against the two nonresident Defendants are accordingly 24 dismissed without prejudice. 25 B. Venue 26 Defendants next contend dismissal of the entire complaint is warranted because venue is 27 improper. Here, Defendants’ arguments fail. Under Rule 12(b)(3), a defendant may move for 1 dismissal based on improper venue. Fed. R. Civ. P. 12(b)(3). Venue is governed by 28 U.S.C. § 2 1391. When considering a motion to dismiss pursuant to Rule 12(b)(3), a court need not accept the 3 pleadings as true and may consider facts outside of the pleadings. Argueta v. Banco Mexicano, 4 S.A., 87 F.3d 320, 324 (9th Cir. 1996). 5 “To prevail on a motion to dismiss based upon forum non conveniens, a defendant bears 6 the burden of demonstrating an adequate alternative forum, and that the balance of private and 7 public interest factors favors dismissal.” Ranza v. Nike, Inc., 793 F.3d 1059, 1076 (9th Cir. 2015). 8 The material private interest factors relevant to a forum non conveniens analysis are: (1) the 9 residence of the parties and the witnesses; (2) the forum’s convenience to the litigants; (3) access 10 to physical evidence and other sources of proof; (4) whether unwilling witnesses can be compelled 11 to testify; (5) the cost of bringing witnesses to trial; (6) the enforceability of the judgment; and (7) 12 all other practical problems that make trial of a case easy, expeditious and inexpensive. See, e.g., 13 Lueck v. Sundstrand Corp., 236 F.3d at 1137, 1145 (citation omitted). Public interest factors 14 include: (1) local interest of the lawsuit; (2) burden on local courts and juries; (3) congestion in the 15 court; (4) the costs of resolving a dispute unrelated to the forum; and (5) the court’s familiarity 16 with the governing law. See, e.g, id. at 1147 (citations omitted). 17 Pursuant to 28 U.S.C. § 1406(a), if the court determines that venue is improper, the court 18 must either dismiss the action or, if it is in the interests of justice, transfer the case to a district or 19 division in which it could have been brought. Whether to dismiss for improper venue, or 20 alternatively to transfer venue to a proper court, is a matter within the sound discretion of the 21 district court. See King v. Russell, 963 F.2d 1301, 1304 (9th Cir. 1992). “The plaintiff’s choice of 22 forum will not be disturbed unless the ‘private interest’ and ‘public interest’ factors strongly favor 23 trial in the foreign [venue].” Dole Food, 303 F.3d at 1118. 24 Defendants contend Alabama is an appropriate alternative forum because two Defendants, 25 Matthews and GBM, are residents of that state. Because Defendant MMI would consent to 26 jurisdiction in that forum, Defendants conclude Alabama is an available alternative. Notably, 27 Defendants Matthews has already filed a separate suit against Plaintiffs in Alabama state court. In 1 that matter, Matthews asserts violations of a settlement agreement between the parties. While this 2 alternative forum is relevant, Defendants fail to demonstrate private and public factors outweigh 3 Plaintiffs’ choice of forum. 4 Private factors do not support dismissal. Defendant MMI is incorporated in California, so it 5 stands to reason MMI, the only remaining Defendant, can answer in this forum. In the digital age, 6 access to evidence or even witnesses from a different state does not impose a large burden on the 7 parties. Defendants do not identify unwilling witnesses located outside the forum. Moreover, it is 8 unclear why such witnesses would be in Alabama rather than in California. Finally, despite 9 Defendants’ repeated references to the ongoing litigation in Alabama, that matter would not 10 duplicate proceedings here, where parties and claims differ. 11 The public interest factors similarly disfavor dismissal. Within the local interest factor, 12 courts “ask only if there is an identifiable local interest in the controversy, not whether another 13 forum also has an interest.” Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163, 1182 (9th Cir. 14 2006). Here, California has a “strong interest” in “applying its trade secrets laws to protect against 15 misappropriation of trade secrets” and in preventing torts committed “within its borders.” See, e.g., 16 Freestream, 905 F.3d at 608. In addition, Plaintiffs’ claims are brought in part under California 17 law, favoring this forum slightly over one in Alabama. Finally, Defendants provide no basis for 18 concluding that trying the matter here would be more burdensome to the public than trying the 19 same matter in Alabama. Accordingly, dismissal for forum non conveniens is not warranted. 20 C. Sufficiency of the Claims 21 Finally, Defendants move to dismiss the Complaint against all Defendants for failure to 22 state a claim. Defendants argue Plaintiffs have provided insufficient facts regarding MMI’s role in 23 the alleged wrongdoing. Defendants also challenge the sufficiency of the trade secrets 24 misappropriation claims. Overall, Plaintiffs averments are almost entirely conclusory, simply 25 stating that the elements of each claim are met without providing any factual allegations in 26 support. Because Plaintiffs’ Complaint does not contain sufficient facts to make out their trade 27 secret misappropriation claims, those counts are accordingly dismissed. While Plaintiffs’ 1 remaining claims for trade libel, unfair competition, and interference with contract survive, the 2 dearth of facts supporting those claims is also notable. 3 A complaint must contain “a short and plain statement of the claim showing that the 4 pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). While “detailed factual allegations are not 5 required,” a complaint must have sufficient factual allegations to “state a claim to relief that is 6 plausible on its face.” Ashcroft v. Iqbal, 566 U.S. 652, 678 (2009) (citing Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible “when the pleaded factual content allows 7 the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” 8 Id. This standard asks for “more than a sheer possibility that a defendant acted unlawfully.” Id. 9 A motion to dismiss a complaint under Rule 12(b)(6) of the Federal Rules of Civil 10 Procedure tests the legal sufficiency of the claims alleged in the complaint. See Parks Sch. of Bus., 11 Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). Dismissal under Rule 12(b)(6) may be 12 based on either the “lack of a cognizable legal theory” or on “the absence of sufficient facts 13 alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 14 (9th Cir. 1990). When evaluating such a motion, the court must accept all material allegations in 15 the complaint as true, even if doubtful, and construe them in the light most favorable to the non- 16 moving party. Twombly, 550 U.S. at 570. “[C]onclusory allegations of law and unwarranted 17 inferences,” however, “are insufficient to defeat a motion to dismiss for failure to state a claim.” 18 Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996); see also Twombly, 550 U.S. at 19 555 (“threadbare recitals of the elements of the claim for relief, supported by mere conclusory 20 statements,” are not taken as true). 21 i. Misappropriation of Trade Secrets 22 To state a claim for trade secret misappropriation under the CUTSA, a plaintiff must allege 23 that: (1) the plaintiff owned a trade secret; (2) the defendant misappropriated the trade secret; and 24 (3) the defendant's actions damaged the plaintiff.” Autodesk, Inc. v. ZWCAD Software Co., Ltd., 25 No. 14–1409, 2015 WL 2265479, at *5 (N.D. Cal. May 13, 2015) (citation omitted). The elements 26 of misappropriation under the DTSA are similar to those under the CUTSA. Compare 18 U.S.C. § 27 1839(5) with Cal. Civ. Code § 3426.1(b); see InteliClear, LLC v. ETC Global Holdings, Inc., 978 1 F.3d 653, 657–58 & n. 1 (9th Cir. 2020) (noting courts have analyzed claims together based on 2 similarity of elements). “A ‘trade secret’ is defined as information that: (1) derives independent 3 economic value from not being generally known to the public; and (2) is the subject of efforts that 4 are reasonable under the circumstances to maintain its secrecy.” Gatan, Inc. v. Nion Company, No. 15–1862, 2017 WL 1196819, at * 6 (N.D. Cal. Mar. 31, 2017) (citing Cal. Civ. Code § 3426.1); 5 see also Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 476 (1974) (“The subject of a trade 6 secret must be secret, and must not be of public knowledge or of a general knowledge in the trade 7 or business.”). 8 A plaintiff must therefore “describe the subject matter of the trade secret with sufficient 9 particularity to separate it from matters of general knowledge in the trade or of special persons 10 who are skilled in the trade, and to permit the defendant to ascertain at least the boundaries within 11 which the secret lies.” Pellerin v. Honeywell Int'l, Inc., 877 F. Supp. 2d 983, 988 (S.D. Cal. 2012) 12 (quoting Diodes, Inc. v. Franzen, 260 Cal. App. 2d 244, 253 (1968)). That said, a plaintiff need 13 not “spell out the details of the trade secret.” Autodesk, Inc. v. ZWCAD Software Co., 2015 WL 14 2265479, at *5 (N.D. Cal. May 13, 2015); see also Bitglass, Inc. v. Netskope, Inc., No. 20-CV- 15 05216-RS, 2020 WL 11563099, at *5 (N.D. Cal. Dec. 21, 2020). In general, “allegations that set 16 out purported trade secrets in broad, categorical terms that are merely descriptive of the types of 17 information that generally may qualify as protectible trade secrets are insufficient to state a claim.” 18 Beluca Ventures LLC v. Einride Aktiebolag, 660 F. Supp. 3d 898, 907 (N.D. Cal. 2023) (quoting 19 Cisco Sys., Inc. v. Chung, 462 F. Supp. 3d 1024, 1048 (N.D. Cal. 2020) (emphasis in Cisco)). 20 The Complaint identifies the relevant trade secrets as follows: “Antaris’s software 21 architecture, current feature set, and development pipeline and processes; its lists of past, present, 22 and prospective customers; the software feature preferences, business requirements, revenues, and 23 expenses of its past, present, and prospective customers; its lists of past, present, and prospective 24 partners; its contracts and related documents and information; its financial results and related 25 records; and its sales and accounting records.” Compl. ¶ 3. 26 As currently pled, Plaintiffs refer to mere broad categories of information that potentially 27 or generally may be subject to trade secret protection. Plaintiffs also fail to allege circumstances to 1 support an inference that Defendants have taken advantage of at least some of the information. 2 || The allegations do not go beyond mere speculation that its trade secrets are being used. See, e.g., 3 Bitglass, Inc. v. Netskope, Inc., No. 20-CV-05216-RS, 2020 WL 11563099, at *4 (N.D. Cal. Dec. 4 || 21, 2020). Therefore, Plaintiffs’ do not state a claim for trade secret misappropriation under 5 || CUTSA or DTSA. 6 il. Remaining Claims 4 Defendants do not specifically challenge the sufficiency of Plaintiffs’ trade libel, UCL, and g intentional interference claims. However, given the dismissal without prejudice of all claims 9 against Defendants Matthews and GBM, as well as the dismissal without prejudice of the trade

10 secret misappropriation claims against all Defendants, it is worth noting potential deficiencies in Plaintiffs’ remaining claims. Plaintiffs offer only slightly more than threadbare support for Plaintiffs’ assertion that MMI played a role in this alleged wrongdoing. ‘2 While Defendants argue the remaining claims should be dismissed because MMI ceased = operations in December of 2024, Plaintiffs have raised sufficient question as to whether MMI still exists as a company. If Plaintiffs choose to amend their Complaint, they must make specific 1S factual allegations beyond restating the elements of a claim and would do well to identify what 16 role MML itself played. M IV. CONCLUSION 18 For the foregoing reasons, Plaintiffs’ claims against Defendants Matthews and GBM are 19 dismissed for want of personal jurisdiction. Additionally, Plaintiffs’ trade secret misappropriation 20 claims brought under DISA and CUTSA are dismissed as insufficiently pled. Should Plaintiffs 1 wish to amend their complaint, they must do so within thirty days of this order. 22 IT IS SO ORDERED. 24 Dated: July 15, 2025 Z, / □ 25 , 26 RICHARD SEEBORG Chief United States District Judge 27 28 ORDER ON MOTION TO DISMISS CASE No. 25-cv-04048-RS