Teva Pharm. USA, Inc. v. Sandhu

291 F. Supp. 3d 659
CourtDistrict Court, E.D. Pennsylvania
DecidedJanuary 30, 2018
DocketCIVIL ACTION NO. 17–3031
StatusPublished
Cited by73 cases

This text of 291 F. Supp. 3d 659 (Teva Pharm. USA, Inc. v. Sandhu) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Teva Pharm. USA, Inc. v. Sandhu, 291 F. Supp. 3d 659 (E.D. Pa. 2018).

Opinion

Savage, J.

This misappropriation of trade secrets action requires us to decide two issues arising under the Computer Fraud and Abuse Act (CFAA) that have split the circuit courts and the Third Circuit has yet to address. First, can an employee who misuses information she was authorized to access be held liable? Second, may a plaintiff only recover losses caused by an interruption of service? Stated differently, can the plaintiff recover losses that are not linked to an interruption of service? We answer the first question in the negative, and the second in the affirmative.

Teva alleges that its former employee, Barinder Sandhu, passed trade secrets to her romantic partner, Jeremy Desai, the CEO of Apotex, its competitor. Tipped off that Sandhu had transmitted confidential documents to Apotex, Teva conducted an internal investigation that confirmed the tip. Teva then terminated her and filed this action against Sandhu, Apotex, and Desai for computer fraud under federal law, misappropriation of trade secrets under federal and state law, and state law tort claims.

Sandhu, Apotex, and Desai move to dismiss the complaint, arguing that Teva fails to allege facts giving rise to a claim for relief. Teva sufficiently pleads that its trade secrets were misappropriated; Sandhu converted its trade secrets and breached her employment contract and her fiduciary duty; and Desai and Apotex procured information by improper means, tortuously interfered with Sandhu's employment contract, and aided and abetted her breach of fiduciary duty owed to Teva. Because it fails to plead that Sandhu's accessing its computer system was without authorization or exceeded her authorization, Teva's claim under the CFAA against Sandhu is dismissed. Therefore, we shall grant the motions in part and deny them in part.

Factual Background

From June 25, 2012 until October 11, 2016, Sandhu worked at Teva in Regulatory Affairs.1 From May 2014 until her termination, she was Senior Director, overseeing the post-approval regulatory affairs for U.S. generic products.2 When she joined Teva, she signed a confidentiality agreement prohibiting her from improperly disclosing trade secrets or confidential information.3 During her employment at Teva, Sandhu was in a romantic relationship with Desai, the CEO of Apotex, a competing pharmaceutical company.4

Sometime in the summer of 2016, Teva learned from a former Apotex employee that Sandhu had shared confidential information about its products in development with Desai.5 One of the documents was a Complete Response Letter (CRL) for one of Teva's generic drug products. The CRL includes confidential correspondence from the Food & Drug Administration (FDA) regarding how a new drug may gain approval.6 Teva claims that Apotex used information in the CRL to advance the market position of its competing generic product and that it continues to use the information to inform its purchasing decisions, set production goals, and increase its visibility in the market.7

*667Acting on the tip, Teva conducted an internal investigation, searching Sandhu's company-issued laptop and email account.8 The investigation revealed that Sandhu had emailed documents marked as "confidential" and containing trade secrets to Desai at his Apotex email address.9 On her work laptop was a folder containing approximately 900 Teva files copied to her personal cloud-based repository, allowing her to access the files from anywhere.10 A document uploaded to the folder on August 8, 2016 contained information on the regulatory status of pre-approval and post-approval products, and notes on communications with the FDA regarding Teva's active drug submissions.11 The investigation also revealed that Sandhu had downloaded documents from the folder to USB drives.12 As a result, she was terminated on October 11, 2016.13

Teva then brought this action. It brings a claim under the CFAA for unauthorized access of its protected computers. It contends that Sandhu, Desai, and Apotex misappropriated its trade secrets in violation of the Defend Trade Secrets Act (DTSA) and the Pennsylvania Uniform Trade Secrets Act (PUTSA). Teva also asserts state law tort claims for conversion and procuring information by improper means against all defendants; breaches of contract and fiduciary duty against Sandhu; aiding and abetting a breach of fiduciary duty against Apotex and Desai, tortious interference with contractual relations against Apotex and Desai; and unfair competition against Apotex. In addition to demanding compensatory and punitive damages, Teva seeks to enjoin all defendants from retaining and using its improperly acquired trade secrets and confidential information.

Standard of Review

A Rule 12(b)(6) motion tests the sufficiency of the allegations contained in the complaint. In order to survive a Rule 12(b)(6) motion, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A claim is plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937.

A conclusory recitation of the elements of a cause of action is not sufficient. Phillips v. Cty. of Allegheny , 515 F.3d 224, 233 (3d Cir. 2008). The plaintiff must allege facts necessary to make out each element. Id. (quoting Twombly , 550 U.S. at 563 n.8, 127 S.Ct. 1955 ).

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Bluebook (online)
291 F. Supp. 3d 659, Counsel Stack Legal Research, https://law.counselstack.com/opinion/teva-pharm-usa-inc-v-sandhu-paed-2018.