Elite Semiconductor, Inc. v. Anchor Semiconductor, Inc.

• Court: District Court, N.D. California
• Decided: June 27, 2022
• Docket: 5:20-cv-06846
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 ELITE SEMICONDUCTOR, INC., Case No. 5:20-cv-06846-EJD

9 Plaintiff, ORDER DENYING WITHOUT PREJUDICE DEFENDANTS’ MOTION 10 v. FOR SUMMARY JUDGMENT

11 ANCHOR SEMICONDUCTOR, INC., et al., Re: Dkt. No. 141 12 Defendants.

13 14 Elite Semiconductor, Inc. (“ESI”) brings this suit against Defendants Anchor 15 Semiconductor, Inc. (“Anchor”), and the Chairman and President of Anchor China, Chenmin Hu 16 (“Hu”), in connection with the alleged misappropriation of ESI’s trade secrets. Defendants move 17 for summary judgment. See Defendants Anchor Semiconductor, Inc.’s and Dr. Chenmin Hu’s 18 Motion for Summary Judgment (“MSJ”), Dkt. No. 141. ESI filed an opposition, to which 19 Defendants filed a reply. Opposition to Defendants’ Motion for Summary Judgment (“Opp.”), 20 Dkt. No. 150; Defendants Anchor Semiconductor, Inc.’s and Dr. Chenmin Hu’s Reply in Support 21 of Motion for Summary Judgment (“Reply”), Dkt. No. 153. Having considered the Parties’ 22 papers, the Court DENIES without prejudice the motion for summary judgment.1 23 24 25

26 1 Pursuant to N.D. Cal. Civ. L.R. 7-1(b), the Court found this motion suitable for consideration 27 without oral argument. See Dkt. No. 167. Case No.: 5:20-cv-06846-EJD 1 I. BACKGROUND 2 On September 30, 2021, ESI filed its original complaint against Defendants (and two now 3 dismissed defendants).2 See Dkt. No. 1. The original complaint included allegations of trade 4 secret misappropriation under California’s Uniform Trade Secrets Act (“CUTSA”) and the Defend 5 Trade Secrets Act (“DTSA”), tortious interference with contract, and conversion. Defendants 6 moved to dismiss the tortious interference and conversion claims. This Court granted the motion 7 to dismiss and dismissed the tortious interference claim without leave to amend, and the 8 conversion claim with leave to amend. Dkt No. 94. ESI filed a first amended complaint (“FAC”). 9 Dkt. No. 101. Defendants again moved to dismiss the conversion claim, which the Court granted 10 without leave to amend. Dkt. Nos. 109, 138. ESI then filed a second amended complaint 11 (“SAC”). Dkt. No. 139. 12 ESI alleges that its former employee, Defendant Lin, stole ESI’s trade secrets and 13 technology and provided it to Anchor. SAC ¶¶ 34, 53–56, 60–61, 78–80. Rather than recite the 14 factual background for a third time, the Court directs the Parties to its December 2021 order. See 15 Dkt. No. 138. 16 II. LEGAL STANDARD 17 Summary judgment is appropriate when “there is no genuine dispute as to any material fact 18 and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A material fact 19 is any factual issue that might affect the outcome of the case under the governing substantive law. 20 Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986). A dispute about a fact is “genuine” if the 21 evidence is such that a reasonable jury could return a verdict for the non-moving party. Id. “A 22 party asserting that a fact cannot be or is genuinely disputed must support the assertion 23 by . . . citing to particular parts of materials in the record” or by “showing that materials cited do 24 not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce 25

26 2 On December 21, 2021, Defendant Chin-Hsen Lin was dismissed for lack of personal jurisdiction and improper service. Dkt. No. 138. On November 30, 2021, ESI Defendant 27 Chenming Hu from the case without prejudice. Dkt. No. 27. Case No.: 5:20-cv-06846-EJD 1 admissible evidence to support the fact.” Fed. R. Civ. P. 56(c)(1)(A), (B). The court need only 2 consider the cited materials, but it may also consider any other materials in the record. Id. at 3 56(c)(3). Summary judgment may also be entered “against a party who fails to make a showing 4 sufficient to establish the existence of an element essential to that party's case, and on which that 5 party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). 6 Initially, the movant bears the burden of demonstrating to the Court the basis for the 7 motion and “identifying those portions of [the record] which it believes demonstrate the absence 8 of a genuine issue of material fact.” Id. at 323. If the movant fails to carry its initial burden, the 9 nonmovant need not produce anything. Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 10 1099, 1102–03 (9th Cir. 2000). If the movant meets its initial responsibility, the burden then shifts 11 to the nonmovant to establish the existence of a genuine issue of material fact. Id. at 1103. The 12 nonmovant need not establish a material issue of fact conclusively in its favor, but it “must do 13 more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita 14 Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). The nonmovant’s bare 15 assertions, standing alone, are insufficient to create a material issue of fact and defeat a motion for 16 summary judgment. Liberty Lobby, 477 U.S. at 247–48. “If the evidence is merely colorable, or 17 is not significantly probative, summary judgment may be granted.” Id. at 249–50 (citations 18 omitted). However, in the summary judgment context, the Court believes the nonmovant’s 19 evidence, and construes all disputed facts in the light most favorable to the nonmoving party. Id. 20 at 255; Ellison v. Robertson, 357 F.3d 1072, 1075 (9th Cir. 2004). If “the evidence yields 21 conflicting inferences [regarding material facts], summary judgment is improper, and the action 22 must proceed to trial.” O’Connor v. Boeing N. Am., Inc., 311 F.3d 1139, 1150 (9th Cir. 2002). 23 III. DISCUSSION 24 ESI brings claims for trade secret misappropriation under both CUTSA and DTSA. 25 “Courts have analyzed [CUTSA and DTSA] claims together because the elements are 26 substantially similar.” InteliClear, LLC v. ETC Global Holdings, Inc., 978 F.3d 653, 657 (9th Cir. 27 Case No.: 5:20-cv-06846-EJD 1 2020). 2 ESI argues that Defendants’ motion for summary judgment is premature and that the 3 motion should be continued pursuant to Federal Rule of Civil Procedure 56(d). Under Rule 56(d), 4 when a litigant “shows by affidavit or declaration that, for specified reasons, it cannot present facts 5 essential to justify its opposition to [summary judgment],” the district court may: “(1) defer 6 considering the motion or deny it; (2) allow time to obtain affidavits or declarations or take 7 discovery; or (3) issue any other appropriate order.” Atay v. Cnty. of Maui, 842 F.3d 688, 698 (9th 8 Cir. 2016). “The burden is on the party seeking a Rule 56(d) continuance to proffer sufficient 9 facts to show that the evidence sought exists, and that it would prevent summary judgment.” Id. 10 (quotation marks and citation omitted). 11 A court “should continue a summary judgment motion upon a good faith showing by 12 affidavit that the continuance is needed to obtain facts essential to preclude summary judgment.” 13 California v. Campbell, 138 F.3d 772, 779 (9th Cir. 1998). Rule 56(d) requests should be granted 14 freely where a party has not had a “realistic opportunity” to pursue discovery relating to its theory 15 of the case. Burlington N. Santa Fe R. Co. v. Assiniboine & Sioux Tribes of Fort Peck 16 Reservation, 323 F.3d 767, 773 (9th Cir. 2003) (citations omitted). “[T]he denial of a Rule 56[(d)] 17 application is generally disfavored where the party opposing summary judgment makes (a) a 18 timely application which (b) specifically identifies (c) relevant information, (d) where there is 19 some basis for believing that the information sought actually exists.” VISA Int’l Serv. Ass’n v. 20 Bankcard Holders of Am., 784 F.2d 1472, 1475 (9th Cir. 1986). The party making a Rule 56(d) 21 request must be able to show that it diligently pursued its previous discovery opportunities and 22 show “how allowing additional discovery would have precluded summary judgment.” Qualls v. 23 Blue Cross of Cal., Inc., 22 F.3d 839, 844 (9th Cir. 1994). 24 As in this case, Rule 56(d) is relied on when an opponent files an early motion for 25 summary judgment. Defendants move for summary judgment long before the close of discovery. 26 Indeed, fact discovery does not close for another month, and expert discovery does not close for 27 Case No.: 5:20-cv-06846-EJD 1 another four months. Further, as noted by ESI, it is still processing discovery sent by Defendants, 2 after having to move to compel production multiple times. See Dkt. Nos. 52, 59, 72, 99, 106. 3 Given that discovery has not closed and that all the discovery has not yet been processed, the 4 || Court cannot definitively say that the evidence sought by ESI does not exist. There are enough 5 factual questions remaining that cannot be resolved on the current record. For example, ESI notes 6 || that questions remain about Anchor’s engineers’ competency, discrepancies with Anchor’s 7 payroll, and source code. ESI has identified facts indicating that this discovery exists, and without 8 this key discovery, the Court cannot grant summary judgment on the current record. Accordingly, 9 || the Court DENIES without prejudice Defendants’ motion for summary judgment. Defendants 10 || may refile their motion for summary judgment at the close of discovery, 11 IV. CONCLUSION 12 For the foregoing reasons, the Court DENIES without prejudice Defendants’ motion for 13 summary judgment. IT IS SO ORDERED. 3 15 Dated: June 27, 2022 2 16

EDWARD J. DAVILA 2 18 United States District Judge 19 20 21 22 23 24 25 26 Case No.: 5:20-cv-06846-EJD 28 PONE ING WITHOUT PREJUDICE DEFENDANTS’ MOTION FOR SUMMARY