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3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE
9 10 CONVOYANT LLC, CASE NO. C21-0310JLR 11 Plaintiff, ORDER ON MOTION FOR v. PARTIAL SUMMARY 12 JUDGMENT DEEPTHINK, LLC, 13 Defendant. 14
15 I. INTRODUCTION 16 Before the court is Defendant DeepThink, LLC’s (“DeepThink”) motion for 17 partial summary judgment. (Mot. (Dkt. # 15); Reply (Dkt. # 21.) DeepThink seeks 18 dismissal in full or in part of twelve of Plaintiff Convoyant LLC’s (“Convoyant”1) fifteen 19 20 1 DeepThink does business under the name ThinkReservations and Convoyant does business under the name ResNexus. (See Mot. at 1.) DeepThink generally uses the parties’ d/b/a 21 names in its briefing, while Convoyant generally uses the parties’ corporate names. (See generally Mot.; Resp.) In this order, the court refers to the parties as DeepThink and Convoyant, 22 and to the parties’ products as ThinkReservations and ResNexus. 1 claims. (See Mot. at 1.) Convoyant opposes the motion. (Resp. (Dkt. # 17); Surreply 2 (Dkt. # 22).) The court has considered the motion, all submissions filed in support of and
3 in opposition to the motion, the relevant portions of the record, and the applicable law. 4 Being fully advised,2 the court GRANTS in part, DENIES in part, and DEFERS in part 5 DeepThink’s motion. 6 II. BACKGROUND 7 Below, the court sets forth the factual and procedural background of this case. 8 A. Factual Background
9 Convoyant and DeepThink compete in the hospitality management software 10 industry. (See Aday Decl. (Dkt. # 16) ¶ 2.) Convoyant’s ResNexus platform includes 11 both public-facing and “back-office” services for the boutique hospitality industry (for 12 example, bed and breakfasts, boutique hotels, and campgrounds). (J. Mayfield Decl. 13 (Dkt. # 19) ¶¶ 2-3.) Convoyant refers to the lodging businesses that use its platform as
14 “Subscribers.” (Id. ¶ 3.) The ResNexus Online Booking Engine (“OBS”) is the public- 15 facing side of Convoyant’s system. (Id.) Members of the public who are seeking lodging 16 access the OBS using links on ResNexus Subscribers’ websites. (Id.) The OBS allows 17 Subscribers to display unit rates and availability and enables guests to make online 18 reservations at the Subscribers’ properties. (Id.)
19 The ResNexus Property Management System (“PMS”) is the “back-office” system 20 used by ResNexus’s Subscribers to manage their lodging businesses. (Id.) The PMS 21
2 Neither party requests oral argument (see Mot. at 1; Resp. at 1), and the court finds oral 22 argument unnecessary to its disposition of the motion, see Local Rules W.D. Wash. LCR 7(b)(4). 1 portal enables Subscribers “to manage reservations, take phone reservations, check guests 2 in and out, accept payments while the guest is on property, manage communications with
3 current and prospective customers, manage marketing communications, take customer 4 payments, manage communications with vendors, and store the personal data of 5 customers.” (Id.) The PMS portal also provides Subscribers with access to product 6 support information and announcements. (Id. ¶ 10.) Convoyant asserts that its PMS 7 system “contains valuable Convoyant-owned Private Data” including its “user interface 8 and data layout, change logs, bug-fixes, new features to be released in beta testing, and
9 institutional know-how with respect to the ResNexus platform, as well as other 10 nonpublic, commercially sensitive information.” (Id. ¶ 5.) ResNexus also contains 11 Subscribers’ private information, including guest lists, reservation information, and 12 financials. (Id. ¶ 8.) Accordingly, Subscribers must maintain usernames and passwords 13 to access the PMS for each account and agree to abide by a Subscriber Agreement that
14 prohibits them from allowing third parties to access the system or its content. (Id. ¶¶ 3, 7; 15 see Compl. (Dkt. # 1) Ex. F (“Subscriber Agreement”) at 1.) 16 DeepThink’s ThinkReservations hotel management and booking engine software 17 competes with Convoyant’s ResNexus platform. (Aday Decl. ¶ 2.) According to 18 DeepThink, Convoyant makes it difficult for a Subscriber to transition its business from
19 ResNexus to ThinkReservations. (Id. ¶ 4.) DeepThink states that in 2013, it logged into 20 the ResNexus account of a Subscriber to obtain customer data necessary for the 21 Subscriber’s transition to ThinkReservations. (Id. ¶ 3.) Because the process of manually 22 transferring the data was “arduous,” DeepThink “created an automated program to obtain 1 a Subscriber’s customer data, sufficient to transfer services from ResNexus to 2 ThinkReservations.” (Id. ¶ 4.) The parties refer to this automated software as “scraping”
3 the ResNexus website. (Id.; see also J. Mayfield Decl. ¶ 12.) 4 Leading up to May 2018, Convoyant and DeepThink submitted competing bids to 5 the Kentucky Tourism Association (“KTA”) to build a website that included a user 6 interface that updated availability for lodging. (J. Mayfield Decl. ¶ 19.) Convoyant’s bid 7 included only those properties that were in the ResNexus system. (Id.) Convoyant soon 8 learned that DeepThink’s system was using automated scraping tools to scrape the
9 public-facing OBS to find Subscribers’ availability and pricing. (Id.) Convoyant founder 10 and Vice President James Mayfield instructed Convoyant’s counsel to “request that 11 Deep[T]hink stop using automated scraping tools and to stop scraping data from publicly 12 available databases and websites.” (Id. ¶ 21.) DeepThink’s Chief Executive Officer 13 (“CEO”) Richard Aday asserts that Convoyant sent DeepThink a letter in May 2018
14 demanding that it stop scraping data from the ResNexus website; James Mayfield states 15 that he “do[es] not know” if the unsigned letter attached to Richard Aday’s declaration 16 “was actually delivered to Deep[T]hink.” (See Aday Decl. ¶ 6, Ex. A (“May 2018 17 Letter”);3 J. Mayfield Decl. ¶ 21.) In relevant part, the May 2018 Letter states, 18 It is improper and actionable for ThinkReservations to indicate to the KTA that they have permission to seamlessly gather ResNexus 19 availability/information on behalf of ResNexus clients in an effort to gain an advantage in the bidding process. 20 21
3 As discussed in more detail below, the court denies Convoyant’s motion to strike the 22 May 2018 Letter. 1 Furthermore, ThinkReservations has been gathering ResNexus’s client information off of its website and website products for commercial use and 2 for its own financial gain. In the nomenclature of the industry, this is called “scrapping [sic] a website.” This is a clear violation of the Terms of Use 3 conditions contained in ResNexus’s website which anyone accessing the website must agree to. 4 (May 2018 Letter at 1-2.) 5 DeepThink responded through counsel on June 7, 2018. (See Reed Decl. (Dkt. 6 # 22) ¶ 2, Ex. A (“June 2018 Letter”).4) In relevant part, that letter states: 7 ThinkReservations has never “indicated” to others that it is in a partnership 8 or informal understanding with ResNexus, and ThinkReservations is not scraping Re[s]Nexus’s website in violation of the web site’s Terms of Use. 9 With authorization, ThinkReservations has assisted customers in obtaining their own data from ResNexus’s website (which the customers have a right 10 to obtain).
11 (Id. at 2.) 12 In any event, according to James Mayfield, Convoyant was not aware in 2018 that 13 DeepThink was scraping private password-protected Subscriber information stored in the 14 PMS system as opposed to publicly-accessible property availability information. 15 (J. Mayfield Decl. ¶ 21.) To the contrary, Convoyant asserts that it did not learn that 16 DeepThink was scraping private information from ResNexus’s PMS until fall 2020. In 17 July 2020, Convoyant Vice President Nathan Mayfield and other Convoyant managers 18 met on a video call with DeepThink’s CEO Richard Aday and Chief Technology Officer 19 (“CTO”) Alfred Aday regarding a potential integration of the two companies’ systems. 20 (N. Mayfield Decl. (Dkt. # 20) ¶¶ 1-3.) According to Nathan Mayfield, discussions 21
4 As discussed in more detail below, the court denies Convoyant’s motion to strike the 22 June 2018 Letter. 1 stalled when DeepThink wanted to remove a provision from the parties’ agreement that 2 would have prohibited DeepThink from scraping the ResNexus system. (Id. ¶ 4.) In a
3 September 24, 2020 telephone call, Nathan Mayfield explained to Richard Aday that 4 Convoyant was concerned about companies scraping “back-office” information from the 5 ResNexus system for commercial purposes. (See J. Mayfield Decl. ¶ 25, Ex. B (audio of 6 September 24, 2020 call) at 2:55-4:10.) He asked Richard Aday if DeepThink was 7 scraping the ResNexus system. (Id. at 6:04-6:08.) Richard Aday did not deny that 8 DeepThink scraped the ResNexus system, and he told Nathan Mayfield that DeepThink
9 logged in with the Subscriber’s permission and extracted data. (Id. ¶¶ 5-6; see 10 J. Mayfield Decl. Ex. B at 6:08-7:05.) According to Convoyant, this was the first time it 11 learned that DeepThink was scraping password-protected Subscriber data from its PMS. 12 (Resp. at 12-13.) 13 C. Procedural Background
14 Convoyant filed its complaint on March 8, 2021. (See Compl.) It alleges fifteen 15 claims arising from DeepThink’s alleged practice of scraping data from the ResNexus 16 website. (See generally id.) First, it seeks an injunction preventing DeepThink from 17 “directly or indirectly scraping data” from ResNexus. (Id. ¶¶ 63-66.) Second, it alleges 18 that DeepThink violated the federal Computer Fraud and Abuse Act (“CFAA”), 18
19 U.S.C. § 1030, et seq. (id. ¶¶ 67-79); Stored Communications Act (“SCA”), 18 U.S.C. 20 §§ 2701(A), 2510, and 2707 (id. ¶¶ 80-87); and Defend Trade Secrets Act (“DTSA”), 18 21 U.S.C. § 1836, et seq. (id. ¶¶ 88-105). Third, it alleges claims against DeepThink under 22 both Washington and Utah common law for civil conspiracy (id. ¶¶ 106-12); tortious 1 interference with contract and/or business expectancy (id. ¶¶ 121-28); trespass to chattels 2 (id. ¶¶ 138-45); and unjust enrichment (id. ¶¶ 146-53). Finally, it alleges statutory claims
3 for violations of the Washington Uniform Trade Secrets Act (“WUTSA”), ch. 19.108 4 RCW (id. ¶¶ 113-16); Utah Uniform Trade Secrets Act (“UUTSA”), Utah Code § 13-24, 5 et seq. (id. ¶¶ 117-20); the Washington Consumer Protection Act (“WCPA”), ch. 19.86 6 RCW (id. ¶¶ 129-33); and the Utah Unfair Competition Act (“UUCA”), Utah Code 7 § 13-5A-101, et seq. (id. ¶¶ 134-37). On April 1, 2021, DeepThink answered the 8 complaint and asserted affirmative defenses. (Ans. (Dkt. # 8).)
9 On May 19, 2021, the court granted the parties’ stipulated motion for injunctive 10 relief. (5/19/21 Order (Dkt. #15); see Stip. Mot. (Dkt. # 14).) In relevant part, the parties 11 agreed—and the court ordered—that DeepThink would be enjoined from scraping the 12 ResNexus website and would destroy certain categories of Convoyant data in its 13 possession. (See generally 5/19/21 Order.)
14 DeepThink filed the instant motion for partial summary judgment on October 14, 15 2021. (See Mot.) 16 III. ANALYSIS 17 DeepThink moves the court for summary judgment, in full or in part, on twelve of 18 Convoyant’s fifteen claims.5 Convoyant opposes the motion and moves to strike three
19 documents filed in support of DeepThink’s motion and one document filed with 20 21
5 DeepThink has not moved for summary judgment on Convoyant’s claims for violations 22 of the DTSA, the WUTSA, or the UUTSA. (See generally Mot.) 1 DeepThink’s reply. The court considers Convoyant’s motions to strike before 2 considering DeepThink’s motion.
3 A. Motions to Strike 4 Convoyant moves to strike Exhibits A, B, and D to the declaration of DeepThink’s 5 CEO Richard Aday (Resp. at 6-7; see Aday Decl. ¶ 2, Ex. A; id. ¶ 3, Ex. B; id. ¶ 6, Ex. 6 D) and Exhibit A to the declaration of DeepThink’s attorney Christopher M. Reed along 7 with “all associated argument surrounding the same” (Surreply at 1-3; Reed Decl. (Dkt. # 8 22) ¶¶ 1-2, Ex. A). Federal Rule of Civil Procedure 56(c)(4) provides that “[a]n affidavit
9 or declaration used to support or oppose a motion must be made on personal knowledge, 10 set out facts that would be admissible in evidence, and show that the affiant or declarant 11 is competent to testify on the matters stated.” Fed. R. Civ. P. 56(c)(4). The court 12 considers each challenged document in turn. 13 1. Aday Declaration
14 First, Convoyant moves to strike Exhibit A of Richard Aday’s declaration, which 15 purports to be a copy of an article published by Convoyant and retrieved from the 16 ResNexus website on September 10, 2021. (Aday Decl. ¶ 2, Ex. A (the “ResNexus 17 article”).) Convoyant contends that the court must strike the ResNexus article as 18 irrelevant and misleading because the declaration presents a quote from the article “as
19 including ResNexus as a provider who ‘won’t give you your data,’ when in reality, this 20 interjection is an editorial comment by Deep[T]hink.” (Resp. at 6 (citing Aday Decl. 21 ¶ 2).) Richard Aday states that “ResNexus notes on their website that ‘there is no data 22 transfer method out there that is guaranteed to be 100% fool-proof if your current 1 software [e.g., ResNexus] is determined to make your exit difficult.” (Aday Decl. ¶ 2 2 (emphasis and parenthetical in original).) The court agrees that this statement does not
3 accurately represent the contents of the article, which does not refer to ResNexus as 4 software that is “determined to make [the Subscriber’s] exit difficult.” (See ResNexus 5 article.) The court, however, DENIES the motion to strike the ResNexus article as moot 6 because the court does not consider the article (or Richard Aday’s statements about it) to 7 be material to its decision on DeepThink’s motion. 8 Second, Convoyant moves to strike Exhibit B to Richard Aday’s declaration,
9 which purports to be a copy of an email “between Mark Jackson and ResNexus 10 representatives dated April 11, 2013.” (Aday Decl. ¶ 3, Ex. B.) Convoyant contends that 11 the court must strike this exhibit because it has not been properly authenticated. (Resp. at 12 6.) DeepThink responds in its reply that the email is “from ResNexus to its then- 13 Subscriber” and accuses Convoyant of “ignorantly questioning who Mark Jackson is.”
14 (Reply at 3-4.) DeepThink does not, however, provide any additional information 15 regarding Richard Aday’s personal knowledge of the authenticity of the email. (See id.) 16 Richard Aday does not explain how he came to possess the email or how he is certain 17 that the purported email between Mr. Jackson and ResNexus representatives is what he 18 claims it to be. (See Aday Decl. ¶ 3.) Therefore, the court agrees with Convoyant that
19 the email is not properly authenticated. Accordingly, the court GRANTS Convoyant’s 20 motion to strike and STRIKES Exhibit B to Richard Aday’s declaration. 21 Third, Convoyant moves to strike Exhibit D to Richard Aday’s declaration which 22 is an unsigned cease and desist letter dated May 11, 2018, from attorney George L. 1 Chingas, Jr., to Richard Aday and Alfred Aday. (Resp. at 7; May 2018 Letter.) 2 Convoyant contends that the court must strike the May 2018 Letter because it is not
3 based on Richard Aday’s personal knowledge and “is being misconstrued by 4 Deep[T]hink to reach improper conclusions of law.” (Resp. at 7.) DeepThink points out 5 that the letter was addressed to Richard Aday as CEO of DeepThink and that Richard 6 Aday confirms in his declaration that DeepThink received the letter in May 2018. (Reply 7 at 3; see Aday Decl. ¶ 6.) The court agrees with DeepThink that Richard Aday has 8 adequately authenticated the May 2018 Letter for purposes of summary judgment.
9 Convoyant’s disapproval of how DeepThink uses the letter in its motion is not a basis for 10 striking the exhibit. Therefore, the court DENIES Convoyant’s motion to strike it. 11 2. Reed Declaration 12 Convoyant also moves to strike Exhibit A to the declaration of Christopher M. 13 Reed and “all associated argument surrounding the same.” (Surreply at 1-3; June 2018
14 Letter.) Mr. Reed authenticates the letter by stating that it is a record kept in his firm’s 15 ordinary course of business, maintained electronically in the firm’s electronic file 16 database, and produced to Convoyant with DeepThink’s initial disclosures. (Reed Decl. 17 ¶¶ 1-2.) DeepThink stated in its reply that it submitted the letter “to address 18 [Convoyant’s] false statements about the [May 2018] Letter.” (See Reply at 5 n.2.)
19 Convoyant argues that (1) “there is no evidence that [the] June [2018] letter was 20 ever sent by Deep[T]hink’s counsel, or received by Convoyant” and that “[i]t is telling” 21 that DeepThink did not have the attorney who drafted the letter submit a declaration; (2) 22 the letter is irrelevant because it “says nothing about Subscribers violating Subscriber 1 Agreements, nor does it discuss the scraping of password-protected information”; and (3) 2 that DeepThink improperly makes a new argument in reply that the letter should have
3 placed Convoyant on “actual or inquiry notice that Deep[T]hink was scraping the 4 password-protected ResNexus system.” (Surreply at 1-3.) The court finds that Mr. Reed 5 adequately authenticated the June 2018 Letter as a business record and that it was not 6 improper for DeepThink to provide it with its reply in response to Convoyant’s 7 arguments about the significance of the May 2018 Letter. Therefore, the court DENIES 8 Convoyant’s motion to strike the June 2018 Letter and associated argument.
9 B. Summary Judgment Standard 10 Summary judgment is appropriate if the evidence viewed in the light most 11 favorable to the non-moving party shows “that there is no genuine dispute as to any 12 material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 13 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Beaver v. Tarsadia Hotels,
14 816 F.3d 1170, 1177 (9th Cir. 2016). A fact is “material” if it might affect the outcome 15 of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute 16 is “‘genuine’ only if there is sufficient evidence for a reasonable fact finder to find for the 17 non-moving party.” Far Out Prods., Inc. v. Oskar, 247 F.3d 986, 992 (9th Cir. 2001) 18 (citing Anderson, 477 U.S. at 248-49).
19 The moving party bears the initial burden of showing there is no genuine dispute 20 of material fact and that it is entitled to prevail as a matter of law. Celotex, 477 U.S. at 21 323. If the moving party does not bear the ultimate burden of persuasion at trial, it can 22 show the absence of such a dispute in two ways: (1) by producing evidence negating an 1 essential element of the nonmoving party’s case, or (2) by showing that the nonmoving 2 party lacks evidence of an essential element of its claim or defense. Nissan Fire &
3 Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1106 (9th Cir. 2000). If the moving party 4 meets its burden of production, the burden then shifts to the nonmoving party to identify 5 specific facts from which a factfinder could reasonably find in the nonmoving party’s 6 favor. Celotex, 477 U.S. at 324; Anderson, 477 U.S. at 250. 7 C. CFAA and SCA Claims 8 DeepThink moves for summary judgment on Convoyant’s claims under the CFAA
9 and SCA based on conduct that occurred before March 8, 2019—that is, two years before 10 Convoyant filed its complaint in this action. (Mot. at 7-8.) Claims that fall under the 11 CFAA are subject to a two-year statute of limitations. 18 U.S.C. § 1030(g) (“No action 12 may be brought . . . unless such action is begun within two years of the date of the act 13 complained of or the date of the discovery of the damage”). Claims under the SCA are
14 also subject to a two-year statute of limitations. 18 U.S.C. § 2707(f) (“A civil 15 action . . . may not be commenced later than two years after the date upon which the 16 claimant first discovered or had a reasonable opportunity to discover the violation”). 17 Convoyant filed its complaint on March 8, 2021. (See Compl.) Thus, these provisions 18 preclude Convoyant from recovering damages for statutory violations it discovered prior
19 to March 8, 2019. See Maddalena v. Toole, No. 2:13-CV-4873-ODW, 2013 WL 20 5491869, at *4 (C.D. Cal. Oct. 1, 2013). 21 DeepThink contends that Convoyant knew as early as December 2016 that 22 DeepThink was scraping the ResNexus system to obtain customer data. (Mot. at 8.) It 1 points to an email from a ResNexus representative to a former ResNexus subscriber 2 stating, in relevant part, “We are not able to reopen your account for a data pull. It is a
3 violation of our subscriber agreement for a competitor to have access to our proprietary 4 software.” (Id.; see also id. at 4 (quoting Aday Decl. ¶ 5, Ex. C (“December 2016 5 Email”)).) It further asserts that even if the December 2016 email does not establish 6 Convoyant’s knowledge of DeepThink’s scraping, there can be no dispute that 7 Convoyant was aware of that activity by either May 11, 2018 (when Convoyant sent the 8 May 2018 Letter to DeepThink) or June 7, 2018 (when DeepThink sent the June 2018
9 Letter to Convoyant). (Id. at 8; Reply at 5.) 10 Convoyant responds that neither the December 2016 Email nor the May 2018 11 Letter addresses the scraping of private information that is the basis of its claims in this 12 lawsuit. (Resp. at 8, 10.) To the contrary, according to Convoyant, the December 2016 13 Email makes no mention of scraping (id. at 8), and the May 2018 Letter “addressed only
14 Deep[T]hink’s scraping of publicly available information from publicly available 15 sources: Convoyant’s website, Subscriber websites, and the publicly available booking 16 engine utilized by Convoyant at that time” (id. at 5; see id. at 10-12). It contends that it 17 did not learn of DeepThink’s scraping of password-protected Subscriber information until 18 the discussions between Nathan Mayfield and Richard Aday in September 2020—well
19 within the two-year CFAA and SCA statutes of limitations. (Id. at 12-13.) 20 Convoyant does not dispute that it was aware of DeepThink’s scraping of 21 publicly-available information before March 8, 2019. (See Resp. at 10-12 22 (acknowledging knowledge of scraping of public information in 2018).) Therefore, the 1 court GRANTS DeepThink’s motion for summary judgment on Convoyant’s claims 2 based on that conduct, to the extent Convoyant asserts them. However, the court
3 concludes, viewing the evidence in the light most favorable to Convoyant as the 4 nonmoving party, that there are genuine issues of material fact regarding when 5 Convoyant discovered that DeepThink was scraping private, password-protected 6 Subscriber information from the ResNexus system. See Fed. R. Civ. P. 56(a). The court 7 agrees with Convoyant that the December 2016 Email, the May 2018 Letter, and the June 8 2018 Letter do not refer to allegations of using an automated program to scrape
9 password-protected Subscriber information in violation of Convoyant’s Subscriber 10 Agreements. (See Resp. at 8-9; id. at 10-12; Surreply at 2.) First, the December 2016 11 Email explains only that providing third-parties access to Subscriber accounts violates the 12 Subscriber Agreement. (See December 2016 Email.) Second, the May 2018 Letter refers 13 to scraping publicly-accessible property availability information in violation of the
14 ResNexus website’s Terms of Use; it does not refer to scraping of private information or 15 violations of the Subscriber Agreement. (See May 2018 Letter.) Finally, the June 2018 16 Letter refers to the website Terms of Use and is ambiguous about whether DeepThink 17 was scraping password-protected information or obtaining that information by other 18 means. (See June 2018 Letter.) The audio of the September 2020 call between Nathan
19 Mayfield and Richard Aday, viewed in the light most favorable to Convoyant, also 20 supports Convoyant’s argument that it did not learn that DeepThink was scraping “back 21 office” data from the PMS until after May 8, 2019. (See generally J. Mayfield Decl. Ex. 22 B.) Accordingly, because Convoyant has met its burden to raise genuine issues of 1 material fact regarding the date on which it discovered the scraping of private, password- 2 protected information that underlies its CFAA and SCA claims, the court DENIES
3 DeepThink’s motion for summary judgment on those claims.6 4 C. UTSA Preemption 5 DeepThink asserts that Convoyant’s claims under Washington and Utah law for 6 tortious interference with contract or business expectancy, civil conspiracy, trespass to 7 chattels, unjust enrichment, and violation of unfair competition statutes are preempted by 8 the WUTSA and UUTSA. (Mot. at 8-11.) The UTSA “displaces conflicting tort,
9 restitutionary, and other law of this state pertaining to civil liability for misappropriation 10 of a trade secret.” RCW 19.108.900(1); Utah Code § 13-24-8. It does not, however, 11 displace “[c]ontractual or other civil liability or relief that is not based upon 12 misappropriation of a trade secret.” RCW 19.108.900(2)(a); Utah Code § 13-24-8. Thus, 13 in both Washington and Utah, when a plaintiff raises a civil claim alongside a UTSA
14 claim, the court must determine whether the UTSA preempts the civil claim. 15 DeepThink argues that the court should apply a “fact-based” approach to 16 analyzing UTSA preemption to determine whether Convoyant’s tort and statutory claims 17 6 DeepThink also argues in its reply that Convoyant should have discovered that 18 DeepThink was scraping private Subscriber information in 2018. (Reply at 6-8.) That argument, however, is waived because DeepThink failed to raise it in its motion. (See Mot. at 7-8); see 19 Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007) (citing Koerner v. Grigas, 328 F.3d 1039, 1048 (9th Cir. 2003)); see also Bridgham-Morrison v. Nat’l Gen. Assembly Co., No. 20 C15-0927RAJ, 2015 WL 12712762, at *2 (W.D. Wash. Nov. 16, 2015) (“For obvious reasons, new arguments . . . presented for the first time on Reply . . . are generally waived or ignored.”). Even if the argument were not waived, DeepThink is not entitled to summary judgment because 21 it has not met its burden to establish that there is no genuine issue of material fact regarding whether Convoyant should have discovered that DeepThink was scraping private Subscriber 22 before March 8, 2019. (See Reply at 6-8.) 1 are preempted. (See Mot. at 9 (citing Thola v. Henschell, 164 P.3d 524, 530 (Wash. Ct. 2 App. 2007).) Under this test, courts “(1) assess the facts that support the plaintiff’s civil
3 claim; (2) ask whether those facts are the same as those that support the plaintiff’s UTSA 4 claim; and (3) hold that the UTSA preempts liability on the civil claim unless the 5 common law claim is factually independent from the UTSA claim.” Thola, 164 P.3d at 6 530; see also CDC Restoration & Constr., LC v. Tradesmen Contractors, LLC, 274 P.3d 7 317, 331 (Utah Ct. App. 2012). Convoyant also cites Thola’s fact-based preemption test. 8 (See Resp. at 18.)
9 As this court recognized in Bombardier, Inc. v. Mitsubishi Aircraft Corp., “‘the 10 preemptive scope of the UTSA is an unsettled issue in Washington.’” 383 F. Supp. 3d 11 1169, 1195 (W.D. Wash. 2019) (quoting Inteum Co., LLC v. Nat’l Univ. of Singapore, 12 No. C17-1252JCC, 2018 WL 2317606, at *2 (W.D. Wash. May 22, 2018)). The court 13 observed that two recent Washington Court of Appeals decisions had declined to apply
14 Thola’s fact-based approach in determining whether tort claims were preempted by the 15 WUTSA. See id. at 1195-96 (citing SEIU Healthcare Nw. Training P’Ship v. Evergreen 16 Freedom Found., 427 P.3d 688, 693-94 (Wash. Ct. App. 2018), rev. denied, 435 P.3d 279 17 (Wash. 2019), and Modumetal, Inc. v. Xtalic Corp., 425 P.3d 871, 883 (Wash. Ct. App. 18 2018), rev. denied, 432 P.3d 793 (Wash. 2019)). These cases held, instead, that the
19 “leading case” in Washington regarding the preemptive scope of the WUTSA is Boeing 20 Co. v. Sierracin Corp., 738 P.2d 665, 674 (Wash. 1987), which applied an “elements- 21 based” approach to preemption. See id. (citing SEIU Healthcare, 427 P.3d at 694). 22 Under the elements-based approach, “a common law claim is not preempted if the 1 elements require some allegation or factual showing beyond those required under the 2 UTSA.” SEIU Healthcare, 427 P.3d at 694. The Washington Court of Appeals
3 determined that because the Washington Supreme Court had not overruled Boeing, the 4 Thola fact-based test does not govern the analysis of whether a claim is preempted by the 5 WUTSA. See Bombardier, 383 F. Supp. 3d at 1195-96 (citing SEIU Healthcare, 427 6 P.3d at 695). Thus, based on its reading of SEIU Healthcare and Modumetal, the court 7 declined to apply Thola’s fact-based approach to preemption, even though both parties 8 urged the court to do so:
9 The court is persuaded by SEIU Healthcare that Washington courts should apply the elements analysis for UTSA preemption, rather than factual 10 preemption. Although courts in this district have applied factual preemption, that is only because “the court’s best prediction w[as] that the Washington 11 Supreme Court would embrace [Thola’s] view . . . if it were called upon to 12 make a choice between those views.” T-Mobile USA [v. Huawei Device USA, Inc.], 115 F. Supp. 3d [1184,] 1199 [W.D. Wash. 2015]. SEIU 13 Healthcare clarifies that the Washington Supreme Court has made a choice between those views, and it is not up to this court to overrule that choice. 14 Thus, the court will analyze any preemption arguments in this case under the elements approach. 15
16 Bombardier, 383 F. Supp. 3d at 1196; see also Inteum Co., LLC, v. Nat’l Univ. of 17 Singapore, 371 F. Supp. 3d 864, 871-72 (W.D. Wash. 2019) (holding that because 18 Boeing, rather than Thola, governed the preemption inquiry, the plaintiff could “support 19 its breach of contract and trade secret misappropriation claims with the same operative 20 facts”). 21 Bombardier and Inteum involved only Washington claims and preemption under 22 the WUTSA. See Bombardier, 383 F. Supp. 3d at 1195-96; Inteum, 371 F. Supp. 3d at 1 871-72. This case, however, involves claims brought under both Washington and Utah 2 law, and DeepThink argues for preemption of the Washington claims under the WUTSA
3 and the Utah claims under the UUTSA. Although it may be “unsettled” in Washington 4 whether the fact-based or element-based approach should be applied in determining 5 WUTSA preemption, see Bombardier, 383 F. Supp. 3d at 1195, there does not appear to 6 be a dispute in Utah courts that the fact-based approach applies to the UUTSA 7 preemption analysis. See, e.g., CDC Restoration & Constr., 274 P.3d at 331; Smart 8 Surgical, Inc. v. Utah Cord Bank, Inc., No. 2:20-CV-00244-JNP, 2021 WL 734954, at *4
9 (D. Utah Feb. 25, 2021).7 Applying two different tests to determine whether 10 Convoyant’s Washington and Utah claims are preempted by the UTSA—tests that may 11 very well yield different results8—is contrary to the uniformity goals of the UTSA. See 12 RCW 19.108.910 (“This chapter shall be applied and construed to effectuate its general 13 purpose to make uniform the law with respect to the subject of this chapter among states
14 enacting it.”); Utah Code § 13-24-9 (same); PTP OneClick, LLC v. Avalara, Inc., No. 15 16
7 Indeed, most jurisdictions that have enacted the UTSA appear to follow the fact-based 17 approach to analyzing preemption. See, e.g., Int’l Paper Co. v. Stuit, No. C11-2139JLR, 2012 WL 1857143, at *7-*8 (W.D. Wash. May 21, 2012) (citing cases). 18 8 Compare, e.g., Int’l Paper Co., 2012 WL 1857143, at *6 (applying fact-based approach 19 and finding tortious interference claim preempted because plaintiffs could not establish one of the five elements of the claim absent the allegation that defendants wrongfully used trade 20 secrets), with LaFrance Corp. v. Werttemberger, No. C07-1932Z, 2008 WL 5068653, at *7-*8 (W.D. Wash. Nov. 24, 2008) (applying elements-based approach and finding conspiracy claim was not preempted because “conspiracy requires an element in addition to that required to make 21 out a UTSA cause of action”); see also T-Mobile, 115 F. Supp. 3d at 1198-99 (applying Thola’s fact-based preemption approach to dismiss plaintiff’s tortious interference claim and noting that 22 the claim would have survived under the elements-based approach). 1 C19-0640JLR, 2020 WL 4729174, at *4 (W.D. Wash. May 27, 2020) (“The Uniform 2 Trade Secrets Act is to be interpreted to promote uniformity across jurisdictions.”).
3 In its reply, DeepThink acknowledges that the law regarding WUTSA preemption 4 is “somewhat unsettled” in Washington. (Reply at 8 (citing SEIU Healthcare, 427 P.3d 5 at 695).) It argues that because Boeing dealt with contractual claims rather than tort 6 claims, it does not conflict with Thola. (Id. at 9.) The SEIU Healthcare court, however, 7 noted that the test applied in Boeing to determine that the plaintiff’s breach of 8 confidentiality claim “resemble[d] an elements-based analysis more than the ‘factual
9 preemption’” test adopted in Thola. (SEIU Healthcare, 427 P.3d at 695.) Thus, it 10 concluded that “‘[u]ntil or unless the Washington Supreme Court overrules Boeing and 11 adopts the Thola analysis, Boeing controls.’” (Id. (quoting Modumetal, 425 P.3d at 12 882).) In light of the Washington Court of Appeals’s express rejection of the Thola 13 analysis, the court declines to apply Thola in this case. See Bombardier, 383 F. Supp. 3d
14 at 1196 (noting that “it is not up to this court to overrule” the Washington Supreme 15 Court’s choice of the elements-based analysis). 16 Accordingly, the court DEFERS ruling on DeepThink’s motion for summary 17 judgment based on UTSA preemption of Convoyant’s tort and unfair competition claims. 18 The court ORDERS the parties to submit simultaneous supplemental briefs no more than
19 eight (8) pages in length regarding whether the court should certify to the Washington 20 Supreme Court the question of whether the Thola fact-based approach or the Boeing 21 elements-based approach applies when analyzing WUTSA preemption. The parties shall 22 file their supplemental briefs no later than December 17, 2021. 1 IV. CONCLUSION 2 For the foregoing reasons, the court GRANTS in part, DENIES in part, and
3 DEFERS in part DeepThink’s motion for partial summary judgment (Dkt. # 15). The 4 court GRANTS DeepThink’s motion for summary judgment on Convoyant’s claims 5 based on scraping of publicly-accessible information; DENIES DeepThink’s motion for 6 summary judgment on Convoyant’s claims based on scraping of private, password- 7 protected Subscriber information; and DEFERS RULING on DeepThink’s motion for 8 summary judgment based on WUTSA and UUTSA preemption. The court ORDERS the
9 parties to submit, by December 17, 2021, supplemental briefing of no more than eight (8) 10 pages in length regarding the question set forth above. 11 Dated this 7th day of December, 2021. 12 A 13 14 JAMES L. ROBART United States District Judge 15 16 17 18 19 20 21 22