Baker Hughes, Inc. v. S & S Chemical, LLC

63 F. Supp. 3d 762, 2014 U.S. Dist. LEXIS 151302, 2014 WL 5441213
CourtDistrict Court, W.D. Michigan
DecidedOctober 24, 2014
DocketNo. 1:14-CV-531
StatusPublished
Cited by1 cases

This text of 63 F. Supp. 3d 762 (Baker Hughes, Inc. v. S & S Chemical, LLC) is published on Counsel Stack Legal Research, covering District Court, W.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Baker Hughes, Inc. v. S & S Chemical, LLC, 63 F. Supp. 3d 762, 2014 U.S. Dist. LEXIS 151302, 2014 WL 5441213 (W.D. Mich. 2014).

Opinion

OPINION

ROBERT HOLMES BELL, District Judge.

This is a trade secret case filed pursuant to Michigan’s Uniform Trade Secrets Act, Mich. Comp. Laws § 445.1902. The matter is presently before the Court on Defendants’ Motion to Dismiss (ECF No. 28). Plaintiffs have filed a Response JECF No. 41), to which Defendants have filed a Reply (ECF No. 45) and Plaintiffs have filed a Sur-Reply (ECF No. 53). For the reasons set forth below, the Court will grant in part and deny in part Defendants’ Motion to Dismiss.

I.

Defendant Stevens was an employee of the Petrolite Corporation, predecessor to Plaintiff Baker Petrolite. Plaintiffs claim to own trade secrets related to ethylene polymerization processes (EP processes) which are used in commercial production of its products.

Defendant Stevens worked for Petrolite until 1996. In conjunction with his employment, he signed an employment agreement promising to protect Petrolite’s trade secrets and other confidential information and not to disclose such to third parties. Defendant Stevens’s position made him privy to much of Petrolite’s confidential information, particularly related to its EP processes.

Around 1999, Defendant Stevens formed Defendant S & S Chemical. In 2002, in response to internal concerns that Defendant Stevens might be utilizing their confidential information, Plaintiffs’ in-house counsel sent Defendant Stevens a letter reminding him of his obligations under his confidentiality agreement.

Defendant S & S has marketed since 2004 a polyethylene product that directly competes with Plaintiffs’ products. Plaintiffs allege that Defendant S & S’s product is manufactured using their proprietary EP process. Since 2004, Defendants have only produced 40,000 pounds of competing product.

While looking for manufacturers to produce its products, Plaintiffs interviewed several companies. These companies disclosed that they had been asked by a third party to make polyethylene products using processes that appear to Plaintiffs to be their proprietary EP processes.

In 2013, Plaintiffs located a press release dated from 2012 advertising Defendants’ product. Plaintiffs researched the availability of the product and the third party manufacturers. The third party manufacturers had been required to sign non-disclosure agreements that prevent disclosure of the identities of Defendants. Plaintiffs filed a petition in Texas state court in 2014 for a pre-suit deposition of the third party in order to determine what processes were used to manufacture the product. During that litigation, Defendants Stevens and S & S informed Plaintiffs that they sold their processes to Defendant SPE. In addition, Defendants agreed to reveal their EP processes to an independent expert for confidential evalúa[765]*765tion in exchange for dismissing the deposition of the third party. The expert determined that Plaintiffs’ and Defendants’ EP processes are substantially similar.

Defendants Stevens and S & S argue that they began developing their polyethylene manufacturing processes independently in 2002. Defendants present evidence from several scientists in their employ demonstrating that, in developing their own EP processes, Defendants started from publicly available information, including U.S. patents, to develop products similar to Plaintiffs’. Defendant Stevens avers that he never shared any of Plaintiffs’ proprietary information with the scientists working to develop competing products. Defendants completed their work in 2003, and began producing and selling the products immediately, and have done so intermittently since.

Plaintiff filed the instant lawsuit on May 13, 2014. (ECF No. 1.) This Court denied Plaintiffs’ motion for preliminary injunction on July 1, 2014. (ECF No. 27.) Defendants now move to dismiss for failure to state a claim. (ECF No. 28.)

II.

In reviewing a Rule 12(b)(6) motion to dismiss, the Court must “ ‘construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff,’ ” but “ ‘need not accept as true legal conclusions or unwarranted factual inferences.’ ” Hunter v. Sec’y of U.S. Army, 565 F.3d 986, 992 (6th Cir.2009) (quoting Jones v. City of Cincinnati, 521 F.3d 555, 559 (6th Cir.2008)). Under the federal notice pleading standards, a complaint must contain “a short and plain statement of the claim showing how the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The purpose of this statement is to “give the defendant fair notice of what the claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

A complaint need not contain detailed factual allegations, but it must include more than labels, conclusions, and formulaic recitations of the elements of a cause of action. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955). To survive a motion to dismiss under Rule 12(b)(6), a complaint must allege facts that “state a claim to relief that is plausible on its face,” and that, if accepted as true, are sufficient to “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 570, 127 S.Ct. 1955.

“The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. “A claim is plausible on its face if the ‘plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’ ” Ctr. for Bio-Ethical Reform, Inc. v. Napolitano, 648 F.3d 365, 369 (6th Cir. 2011) (quoting Iqbal, 556 U.S. at 677, 129 S.Ct. 1937), cert. denied, — U.S. -, 132 S.Ct. 1583, 182 L.Ed.2d 172 (2012). Where a complaint pleads facts that are merely consistent with a defendant’s liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.’ ” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955).

Further, under Rule 10(c), the Court can consider the exhibits attached to the complaint without converting a defendant’s Rule 12(b)(6) motion into a motion for summary judgment. Fed.R.Civ.P. 10(c); see Koubriti v. Convertino, 593 F.3d 459, [766]*766462 n. 1 (6th Cir.2010) (“Documents attached to the pleadings become part of the pleadings and may be considered on a motion to dismiss.”). “In addition, when a document is referred to in the pleadings and is integral to the claims, it may be considered without converting a motion to dismiss into one for summary judgment.”

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63 F. Supp. 3d 762, 2014 U.S. Dist. LEXIS 151302, 2014 WL 5441213, Counsel Stack Legal Research, https://law.counselstack.com/opinion/baker-hughes-inc-v-s-s-chemical-llc-miwd-2014.