BlueEarth Biofuels, LLC v. Hawaiian Electric Co.

235 P.3d 310, 123 Haw. 314, 2010 Haw. LEXIS 150
CourtHawaii Supreme Court
DecidedJuly 20, 2010
Docket30144
StatusPublished
Cited by20 cases

This text of 235 P.3d 310 (BlueEarth Biofuels, LLC v. Hawaiian Electric Co.) is published on Counsel Stack Legal Research, covering Hawaii Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
BlueEarth Biofuels, LLC v. Hawaiian Electric Co., 235 P.3d 310, 123 Haw. 314, 2010 Haw. LEXIS 150 (haw 2010).

Opinion

Opinion of the Court by

DUFFY, J.

The United States District Court for the District of Hawai'i (District Court) certified the following questions of law to the Hawai'i Supreme Court:

1.When are “tort, restitutionary, and other law[s] of this state” displaced because they “conflict” with [the Hawai'i Uniform Trade Secrets Act (HUTSA) ], Hawaii Revised Statutes (“HRS”) § 482B?
2. When a claim is found to “conflict” with HUTSA, what is the scope of the preemption, or displacement, of that claim under HRS § 482B-8?
3. May a claim that is found not to “conflict” with HUTSA still be preempted, or displaced, under HRS § 482B-8?
4. Does HUTSA also preempt, or displace, claims based upon the alleged misuse of “confidential information,” which is determined, before or during trial, not to meet the definition of “trade secret” under HRS § 482B-2?

I. BACKGROUND

A. Factual Background

This case involves plans to create and construct a biodiesel production facility on Maui. Plaintiff-Appellee BlueEarth Biofuels, LLC (BlueEarth) specializes in the production of biodiesel production facilities. In or around March 2006, BlueEarth began talks with Hawaiian Electric Company, Inc. (HECO) and Maui Electric Company, Ltd. (MECO) to “jointly and exclusively develop a biodiesel production facility to be located on the Island of Maui[ (the Project).]”

In furtherance of their discussions regarding the Project, BlueEarth executed a Mutual Non-Circumvention and Non-Disclosure Agreement (NDA) with both HECO and MECO. 1 BlueEarth, HECO, and MECO also signed a confidential memorandum of understanding (Project Agreement), which set forth how the Project would be planned, developed, permitted, funded, constructed, maintained, and operated.

In 2007, BlueEarth, HECO, and MECO began discussions related to potential fuel subcontractors who would manage and run logistics for a fuel terminal, which would be used to store raw materials and fuel in connection with the Project. BlueEarth ap *316 proached Aloha Petroleum, Ltd. (Aloha) as a potential subcontractor. In furtherance of their discussions, BlueEarth and Aloha executed a NDA on January 28, 2008. As with the HECO and MECO NDAs, the Aloha NDA contained a provision that information furnished by one of the parties would be kept confidential by the receiving party and its representatives. On July 14, 2008, Blue-Earth and Aloha also executed a Mutual Confidentiality Agreement (Confidentiality Agreement), which provided that neither party shall use or disclose each other’s confidential information to third parties or solicit business from each other’s clients.

BlueEarth alleges that, contrary to the terms of the previously described Project Agreement, NDAs, and Confidentiality Agreement, HECO 2 , MECO and Aloha engaged in undisclosed negotiations with each other concerning the development, investment, and ownership of the Project with the intent to cut BlueEarth out of the Project altogether. Though the Pr.oject has yet to be built, BlueEarth claims that it expended in excess of $1.2 million working to develop the Project pursuant to the Project Agreement.

B. Procedural Background

In October of 2008, BlueEarth filed suit in the Northern District of Texas. On April 21, 2009, the ease was transferred to the District of Hawaii. On May 29, 2009, BlueEarth filed its Second Amended Complaint (SAC), alleging the following causes of action: 1) breach of contract against HECO (HECO NDA); 2) breach of contract against MECO (MECO NDA); 3) breach of contract against HECO and MECO (Project Agreement); 4) quantum meruit/unjust enrichment against HECO and MECO; 5) breach of contract against Aloha (Aloha NDA and Confidentiality Agreement); 6) unfair competition against under Hawaii Revised Statutes (HRS) § 480-2, et seq. against HECO, MECO, Stahlkopf, and Aloha; 7) tortious interference with existing contracts against HECO, MECO, Stahlkopf, and Aloha (all NDAs and the Confidentiality Agreement); 8) tortious interference with existing contract against Aloha (Project Agreement); 9) misappropriation of trade secrets against HECO, MECO, Stahlkopf, and Aloha; 10) conversion against HECO, MECO, Stahlkopf, and Aloha; and 11) breach of fiduciary duty against HECO and MECO.

On June 29, 2009, Aloha moved to dismiss the Sixth through Tenth causes of action. On the same day, HECO, MECO, and Stahlkopf (collectively the HECO defendants) moved to dismiss BlueEarth’s SAC. 3 On September 17, 2009, BlueEarth filed oppositions to both motions. Aloha and the HECO defendants filed their respective reply briefs on September 24, 2009. A hearing was held on the motions to dismiss on October 5, 2009. The District Court issued its Certified Questions on November 2, 2009. This court issued its Order On Certified Question on November 9, 2009, allowing the parties to file briefs regarding the Certified Questions in accordance with Hawaii Rules of Appellate Procedure (HRAP) Rule 28.

Aloha filed its opening brief on January 27, 2010. The HÉCO defendants also filed their opening brief on January 27, 2010. Blue-Earth filed its answering brief on April 5, 2010. Aloha and the HECO defendants filed their respective reply briefs on April 29, 2010.

II. STANDARDS OF REVIEW

A Certified Question

“The supreme court shall have jurisdiction and powers ... [t]o answer, in its discretion ... any question or proposition of law certified to it by a federal district or appellate court if the supreme court shall so provide by rule[.]” HRS § 602-5(a)(2) (Supp.2009).

*317 “When a federal district or appellate court certifies to the Hawai'i Supreme Court that there is involved in any proceeding before it a question concerning the law of Hawai'i that is determinative of the cause and that there is no clear controlling precedent in the Ha-wai'i judicial decisions, the Hawai'i Supreme Court may answer the certified question by written opinion.” HRAP 13(a) (2000).

“An issue of law presented by a certified question is reviewed by this court de novo under the right/wrong standard of review.” Lee v. HSBC Bank USA, 121 Hawai'i 287, 289, 218 P.3d 775, 777 (2009) (citing Francis v. Lee Enter., Inc., 89 Hawai'i 234, 236, 971 P.2d 707, 709 (1999)).

B. Statutory Construction

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Cite This Page — Counsel Stack

Bluebook (online)
235 P.3d 310, 123 Haw. 314, 2010 Haw. LEXIS 150, Counsel Stack Legal Research, https://law.counselstack.com/opinion/blueearth-biofuels-llc-v-hawaiian-electric-co-haw-2010.