TGG Management Company, Inc. v. Petraglia

Opinion

5 6

7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA

11 TGG MANAGEMENT COMPANY Case No. 19-cv-2007-BAS-KSC 12 INC. (dba TGG ACCOUNTING), ORDER: 13 Plaintiff, (1) GRANTING BUBBLY BRANDS’ MOTION TO 14 v. DISMISS; AND (2) GRANTING SASH 15 JOHN PETRAGLIA, et al., GROUP’S MOTION TO DISMISS 16 Defendants. [ECF Nos. 65, 69] 17 18 19 Plaintiff TGG Management Company, Inc. (“TGG”) filed a complaint against 20 eight Defendants: John Petraglia; Megan Zerba; Garrett Tapken; Erik Rhoades; 21 Sayva Solutions, Inc.; Bubbly Brands, LLC; Sash Group, Inc.; and Holiday Foliage, 22 Inc. (“Compl.,” ECF No. 1.) TGG alleges, inter alia, trade secret misappropriation 23 and violations of the Unfair Competition Law. Soon after filing its complaint, TGG 24 filed a motion for preliminary injunction, requesting the Court enjoin Defendants 25 from accessing or using TGG’s trade secret information. (“PI Mot.,” ECF No. 23.) 26 The Court permitted TGG to engage in limited, expedited discovery for the purposes 27 of its motion. (ECF No. 48.) The Court granted the preliminary injunction motion 1 Brands and Sash Group, finding that TGG had not sufficiently established that these 2 Defendants misappropriated any trade secrets. (ECF No. 89, at 13.) 3 Now, Bubbly Brands and Sash Group move to dismiss TGG’s claims against 4 them, and in the alternative, move to compel arbitration. (“BB Mot.,” ECF No. 65; 5 “Sash Mot.,” ECF No. 69.) TGG filed an opposition to the Motions, (“Opp’n,” ECF 6 No. 90), and both Defendants filed replies in support of their Motions, (ECF No. 91, 7 ECF No. 92). The Court finds resolution of these Motions is suitable without the 8 need for oral argument. See Civ. L.R. 7.1(d)(1). For the reasons discussed below, 9 the Court GRANTS the Motions to Dismiss and DENIES the alternative Motions to 10 Compel Arbitration. 11 I. FACTUAL BACKGROUND 12 The following background information is taken from the Court’s order on 13 TGG’s motion for preliminary injunction. (ECF No. 89.) 14 Plaintiff TGG provides management accounting and business advisory 15 services for business clients. (PI Mot. at 1.) TGG was founded in 2006 by its current 16 CEO Matt Garrett. Over time, TGG alleges Mr. Garrett and others developed what 17 they call “The TGG Way”— “a proven set of accounting and finance best practices, 18 processes and procedures, specially designed electronic tools, and other trade secrets, 19 coupled with financial guidance, to ensure the financial health and success of TGG’s 20 clients.” (“Garrett Decl.,” ECF No. 23-1, ¶ 9.) The TGG Way “uses an objective 21 and measurable system for implementing accounting best practices, quality control, 22 and client and team communications. It is at the center of TGG’s brand, and is what 23 differentiates TGG from its competition.” (PI Mot. at 4.) The TGG Way and TGG’s 24 trade secrets give TGG a competitive advantage. (Id.) 25 Defendant John Petraglia began working for TGG in January 2016. (Garrett 26 Decl. ¶ 41.) By virtue of his role, Petraglia had access to some of TGG’s confidential 27 trade secret information. Petraglia left TGG in April 2019 and began working for 1 began working for TGG in June 2013, had access to trade secret information while 2 at TGG, and now also works for Sayva. Upon their departure, both Petraglia and 3 Zerba refused to sign TGG’s Reminder of Confidentiality and Nonsolicitation form. 4 (Id. ¶¶ 44, 48.) On Sayva’s website, Petraglia is listed as the CFO of Sayva’s 5 Accounting Services and Zerba is listed as the Controller. (Id. ¶ 8.) TGG alleges 6 “Sayva provides outsourced professional services such as accounting, specialized 7 project consulting, and full-time recruiting services.” (PI Mot. at 3.) TGG alleges 8 that as a result of Petraglia and Zerba’s actions, Sayva has built an accounting 9 division that directly competes with TGG. (Id.) 10 After Petraglia and Zerba left, TGG hired the Berkeley Research Group to 11 conduct a forensic analysis of Petraglia’s and Zerba’s TGG-issued laptops. (Garrett 12 Decl. ¶ 62.) David Jiminez of Berkeley concluded that before Petraglia left TGG, he 13 connected a personal external USB storage device to his TGG laptop and accessed 14 various files. (“Jiminez Decl.,” ECF No. 23-24 ¶ 12.) TGG analyzed the list of files 15 Petraglia accessed and concludes, “[t]he files . . . are sweeping and include many of 16 TGG’s most valuable assets and proprietary trade secrets.” (PI Mot. at 10.) Petraglia 17 also emailed himself various TGG materials. (Id.) Zerba similarly copied TGG files 18 onto a personal USB storage device before leaving TGG. (Jiminez Decl. ¶ 14.) 19 Defendants Bubbly Brands and Sash Group are former clients of TGG. After 20 Petraglia and Zerba left TGG, these former clients began disengagement from TGG. 21 TGG believes the entities are working with Sayva (through Petraglia and Zerba), who 22 is likely using TGG’s trade secrets to perform accounting services for the clients. 23 Sayva agrees only that it has provided Bubbly Brands and Sash Group “periodic 24 accounting documents that reflect the actual financial state of their respective 25 companies” but asserts that neither it nor its employees have used TGG’s proprietary 26 material. (“Buell Decl.,” ECF No. 53-4, ¶¶ 22, 25– 32.) Sash Group was working 27 with Sayva, and it states the only documents it “received from Sayva are typical 1 at 4–5.) Sash Group no longer works with Sayva or any other accounting firm. (Id. 2 at 4.) Bubbly Brands also previously used TGG (specifically, Petraglia) for its 3 bookkeeping and accounting services. (“Urbani Decl.,” ECF No. 51-1, ¶ 11.) 4 Bubbly Brands now receives that same service from Sayva. (Id. ¶ 13.) 5 II. LEGAL STANDARDS 6 A. Motion to Dismiss 7 A complaint must plead sufficient factual allegations to “state a claim to relief 8 that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal 9 quotation marks and citations omitted). “A claim has facial plausibility when the 10 Omega pleads factual content that allows the court to draw the reasonable inference 11 that the Monte Vista is liable for the misconduct alleged.” Id. 12 A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil 13 Procedure tests the legal sufficiency of the claims asserted in the complaint. Fed. R. 14 Civ. P. 12(b)(6); Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). The court 15 must accept all factual allegations pleaded in the complaint as true and must construe 16 them and draw all reasonable inferences from them in favor of the nonmoving party. 17 Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 (9th Cir. 1996). However, the 18 court is not obligated to “accept as true a legal conclusion couched as a factual 19 allegation.” Papasan v. Allain, 478 U.S. 265, 286 (1986). Nor must the court accept 20 allegations in the complaint that are contradicted by documents the complaint 21 references. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th 22 Cir. 2008) (citing Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th 23 Cir. 2003). 24 To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed 25 factual allegations, rather, it must plead “enough facts to state a claim to relief that is 26 plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A Rule 27 12(b)(6) dismissal may be based on either a ‘lack of a cognizable legal theory’ or ‘the 1 Riverside Healthcare Sys., LP, 534 F.3d 1116, 1121 (9th Cir. 2008) (quoting 2 Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990)). 3 B. Motion to Compel Arbitration 4 The Federal Arbitration Act (“FAA”) makes agreements to arbitrate “valid, 5 irrevocable, and enforceable.” 9 U.S.C. § 2. The FAA permits a “party aggrieved 6 by the alleged failure, neglect, or refusal of another to arbitrate under a written 7 agreement for arbitration [to] petition any United States District Court . . . for an 8 order directing that . . . arbitration proceed in the manner provided for in [the 9 arbitration] agreement.” 9 U.S.C. § 4. Upon a showing that a party has failed to 10 comply with a valid arbitration agreement, the district court must issue an order 11 compelling arbitration. Id. “A party seeking to compel arbitration has the burden 12 under the FAA to show (1) the existence of a valid, written agreement to arbitrate; 13 and, if it exists, (2) that the agreement to arbitrate encompasses the dispute at issue.” 14 Ashbey v. Archstone Prop. Mgmt., Inc., 785 F.3d 1320, 1323 (9th Cir. 2015) 15 III. ANALYSIS 16 Bubbly Brands and Sash Group make similar arguments in their Motions, so 17 the Court analyzes the Motions together. 18 A. Motion to Dismiss 19 Defendants first move to dismiss TGG’s misappropriation claims and UCL 20 claim under Rule 12(b)(6). 21 1. Misappropriation 22 The Court has already found that TGG has plausibly pled it owns trade secrets. 23 (ECF No. 89, at 9–10.) As to the alleged misappropriation of those trade secrets, 24 under the California Uniform Trade Secrets Act (“CUTSA”), misappropriation is 25 defined as: 26 (1) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper 27 means; or (2) Disclosure or use of a trade secret of another without express or 1 implied consent by a person who: 2 (A) Used improper means to acquire knowledge of the trade secret; or 3 (B) At the time of disclosure or use, knew or had reason to know 4 that his or her knowledge of the trade secret was: (i) Derived from or through a person who had utilized 5 improper means to acquire it; 6 (ii) Acquired under circumstances giving rise to a duty to 7 maintain its secrecy or limit its use; (iii) Derived from or through a person who owed a duty to 8 the person seeking relief to maintain its secrecy or limit its use; 9 or (C) Before a material change of his or her position knew or had 10 reason to know that it was a trade secret and that knowledge of it 11 had been acquired by accident or by mistake. 12 Cal. Civ. Code § 3426.1(b). Misappropriation under the Defend Trade Secrets Act 13 (“DTSA”) is nearly identical. See 18 U.S.C § 1839(5). In its prior order, the Court 14 found: 15 TGG has not sufficiently established that the former client Defendants 16 are liable for misappropriation. At this point, the evidence shows that the former clients are too far removed from the problem. TGG has 17 sufficiently established that Zerba and Petraglia acquired trade secrets 18 and that Sayva is in possession of those trade secrets and is using certain documents or codes when performing accounting services for its 19 clients. But the fact that Sayva may be using certain code or 20 spreadsheets while performing accounting services for Bubbly Brands . . . and Sash Group does not mean that the [] former client Defendants 21 are “using” the confidential information. If anything, someone else is 22 using the documents for their benefit—inputting their financial information into the spreadsheets and sending the spreadsheets back to 23 them. Central Valley Gen. Hosp. v. Smith, 162 Cal. App. 4th 501, 528– 24 29 (2008) (holding that mere possession of a trade secret does not constitute misappropriation). 25 26 (ECF No. 89, at 13.) The Court went on to find, 27 misappropriation does not stretch this far. Bubbly Brands sells bath immaterial to these companies what code or Excel spreadsheets their 1 accounting company uses to perform their bookkeeping. The clients 2 are not “using” TGG’s trade secrets; while they may technically be in possession of some of TGG’s trade secrets, it is only because Sayva is 3 using the trade secrets in its accounting of the clients’ financial 4 information. The Court cannot say that these Defendants have acquired or are using TGG’s trade secrets under the misappropriation statute. 5 6 (Id. at 14.) 7 This conclusion remains true, and TGG’s arguments to the contrary do not 8 persuade the Court to find otherwise. TGG has not sufficiently pled that Bubbly 9 Brands or Sash Group are using TGG’s trade secrets as defined under the 10 misappropriation statute. The Court GRANTS the Motion to Dismiss this claim. 11 Because TGG has engaged in limited discovery and this case has progressed since 12 TGG filed its complaint, it is possible that TGG can amend its complaint to state a 13 misappropriation claim against Bubbly Brands and/or Sash Group. Thus, the 14 dismissal is without prejudice. 15 2. Unfair Competition Law (“UCL”) Claim 16 Defendants argue TGG’s UCL claim is preempted by CUTSA and should 17 therefore be dismissed. Under CUTSA, a party may recover for the “actual loss” or 18 other injury caused by the misappropriation of trade secrets. Cal. Civ. Code § 3426.3. 19 CUTSA defines misappropriation as (1) the improper acquisition of a trade secret or 20 (2) the nonconsensual disclosure or use of a trade secret. Id. § 3426.1(b). A “trade 21 secret” is information that derives “independent economic value” from its 22 confidentiality and is subject to “efforts that are reasonable under the circumstances 23 to maintain its secrecy.” Id. § 3426.1(d). “CUTSA provides the exclusive civil 24 remedy for conduct falling within its terms.” Silvaco Data Sys. v. Intel Corp., 184 25 Cal. App. 4th 210, 236 (2010), disapproved on other grounds by Kwikset Corp. v. 26 Superior Court, 51 Cal. 4th 310, 337 (2011). 27 Because CUTSA provides an exclusive remedy, courts have reasoned it 1 claims that are “based on the same nucleus of facts as the misappropriation of trade 2 secrets claim for relief.” K.C. Multimedia, Inc. v. Bank of Am. Tech. & Operations, 3 Inc., 171 Cal. App. 4th 939, 958 (2009). Stated differently, CUTSA displaces tort 4 claims where they “do not genuinely allege ‘alternative legal theories’ but are a 5 transparent attempt to evade the strictures of CUTSA by restating a trade secrets 6 claim as something else.” Silvaco, 184 Cal. App. 4th at 240. Second, CUTSA 7 displaces “all claims premised on the wrongful taking and use of confidential 8 business and proprietary information, even if that information does not meet the 9 statutory definition of a trade secret.” ChromaDex, Inc. v. Elysium Health, Inc., 369 10 F. Supp. 3d 983, 989 (C.D. Cal. 2019). 11 In its UCL claim, TGG alleges that Defendants “have engaged in numerous 12 unlawful, unfair, and fraudulent business acts or practices within the meaning of the 13 Unfair Competition Law. Such acts and practices include, but are not limited to, 14 misappropriating TGG’s confidential and proprietary information.” (Compl. ¶ 111.) 15 TGG does not identify any other wrongful acts and practices beyond the 16 misappropriation. Thus, TGG’s UCL claim is plainly based, at least in part, on the 17 same allegations as its misappropriation claim. TGG admits this. (Opp’n at 17 18 (“Although TGG’s claims are not limited to trade secret claims, they arise out of 19 similar conduct.”).) Thus, the claim is preempted. See PQ Labs, Inc. v. Yang Qi, 20 No. C 12-450 CW, 2012 WL 2061527, at *5 (N.D. Cal. June 7, 2012) (dismissing 21 unfair competition claim with leave to amend because it was “premised upon the 22 same nucleus of facts as the . . . cause of action for misappropriation of trade 23 secrets”); Sleep Sci. Partners v. Lieberman, No. 09–04200–CW, 2010 WL 1881770, 24 at *10 (N.D. Cal. May 10, 2010) (holding unfair competition claim “is preempted by 25 CUTSA to the extent that it is based on the misappropriation of Plaintiffs’ trade 26 secrets”); Digital Envoy, Inc. v. Google, Inc., 370 F. Supp. 2d 1025, 1035 (N.D. Cal. 27 2005) (dismissing unfair competition claims because they “are based on the identical 1 misappropriation, TGG does not specify any other conduct that could create a UCL 2 violation, thus, at this point, the UCL claim is preempted and dismissed. 3 Because TGG alleges its UCL claim is based on unlawful, unfair, and 4 fraudulent conduct that includes but is “not limited to” the misappropriation 5 allegations, it is possible that TGG can amend its UCL claim so it is not preempted. 6 Accordingly, the dismissal is without prejudice. 7 B. Motion to Compel Arbitration 8 Defendants alternatively argue that TGG’s claims should be arbitrated. 9 In October 2019, TGG sent letters to Bubbly Brands and Sash Group “to 10 clarify and confirm the course of action and scope of services.” (ECF No. 65-3 at 11 23; ECF No. 69-3, at 14.) The letters were accepted and agreed to by Bubbly Brands 12 and Sash Group; both letters are referred to herein as “the Agreements.” The 13 Agreements contain the following arbitration provision: 14 Any and all controversies, claims, disputes or counterclaims arising out of, relating to or in connection with this agreement, its performance or 15 its breach, whether involving disagreement about meaning, 16 interpretation, application, performance, breach, termination, enforceability or validity and whether based in statute, tort, contract, 17 common law or otherwise, shall be resolved by confidential final and 18 binding arbitration. 19 (See ECF No. 69-3, at 18.) 20 TGG has initiated arbitration against Bubbly Brands and Sash Group. TGG 21 contends that these Defendants have violated the non-solicitation provision of the 22 Agreements, the conversion fee provision, the reasonableness provision, and the 23 payment provision. (ECF No. 69-3, at 9.) Defendants claim the present dispute 24 should also be arbitrated as this dispute falls within the scope of the arbitration 25 clause.1 26 27 1 The scope of the Agreements’ arbitration clause is governed by federal law. Tracer ResearchCorp. v. Nat’l Envtl. Servs. Co., 42 F.3d 1292, 1294 (9th Cir. 1994). 1 “[W]hen parties intend to include a broad arbitration provision, they provide 2 for arbitration ‘arising out of or relating to’ the agreement.” Cape Flattery Ltd. v. 3 Titan Mar., LLC, 647 F.3d 914, 922 (9th Cir. 2011); see also Chiron Corp. v. Ortho 4 Diagnostic Sys., Inc., 207 F.3d 1126, 1131 (9th Cir. 2000). Similarly, the “in 5 connection with this Agreement” language in an arbitration provision is interpreted 6 broadly. Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 721 (9th Cir. 1999). Where an 7 arbitration clause is interpreted broadly, it reaches “every dispute between the parties 8 having a significant relationship to the contract and all disputes having their origin 9 or genesis in the contract.” Id. The “factual allegations need only ‘touch matters’ 10 covered by the contract” and “all doubts are to be resolved in favor of arbitration.” 11 Id. (quoting Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc., 473 U.S. 12 614, 624 n.13 (1985). However, “[a] court may order arbitration of a particular 13 dispute only where the court is satisfied that the parties agreed to arbitrate that 14 dispute.” Granite Rock Co. v. Int’l Broth. of Teamsters, 561 U.S. 287, 297 (2010). 15 The Supreme Court stated that the Court has “never held that [the federal policy 16 favoring arbitration] overrides the principle that a court may submit to arbitration 17 ‘only those disputes . . . that the parties have agreed to submit.’” Id. at 302 (second 18 alteration in original) (citations omitted). 19 Bubbly Brands first argues that its exposure to any trade secrets “was the result 20 of and governed by” the Agreement. (BB Mot. at 21.) Certainly, Bubbly Brands and 21 Sash Group would not be in this lawsuit and would never have received any 22 documents or information from TGG in the first place if the parties had never entered 23 into a contract with one another. But the argument that if the parties had not entered 24 into an agreement in the first place, there would be no alleged misappropriation, has 25 been rejected. See Tracer, 42 F.3d at 1295 (9th Cir. 1994) (“The fact that the tort 26 claim would not have arisen ‘but for’ the parties licensing agreement is not 27 determinative.”); see also Cape Flattery, 647 F.3d 914 at 922 (noting that in Tracer, 1 “[w]e . . . rejected the defendants’ argument that the dispute was arbitrable because 2 it would not have arisen but for the contract”). 3 Bubbly Brands also argues that if TGG’s misappropriation claims survive the 4 pleading stage, Defendants will assert defenses that are covered by the arbitration 5 provision, i.e., that the Agreement provides no duty of confidentiality, and thus, the 6 claims must be submitted to arbitration. (BB Mot. at 20.) Bubbly Brands cites no 7 authority for the proposition that a dispute is arbitrable because the defendant may 8 assert a defense regarding a provision that is missing from the parties’ contract. Nor 9 would this be logical. See Simula, 175 F.3d at 721 (holding the “factual allegations 10 need only ‘touch matters’ covered by the contract containing the arbitration clause” 11 (emphasis added).) 12 In Simula, 175 F.3d 716, the Ninth Circuit, noting that the “standard for 13 demonstrating arbitrability is not high,” held that an agreement to arbitrate “[a]ll 14 disputes arising in connection with this Agreement” must be interpreted broadly and, 15 thus, governed all of the plaintiff’s claims of defamation, trade secret 16 misappropriation, antitrust violations, and violations of the Lanham Act. As to the 17 trade secret claim, the court held that the parties’ nondisclosure agreements, a “key 18 part of” the contract, were the basis for the trade secret misappropriation claim. Id. 19 at 724–25. The nondisclosure agreements “expressly prohibited the misuse of 20 proprietary information, including . . . trade secrets.” Id. at 725. “If [defendant] had 21 fully complied with the contract, as interpreted by [plaintiff], there would be no tort 22 claims. Thus [plaintiff’s] claims will necessitate a review of the contracts between 23 [the parties] to determine whether [defendant] improperly breached the 24 nondisclosure agreements and misappropriated trade secrets.” Id. 25 Simula is distinguishable. Here, the Agreements contain no nondisclosure 26 provision. Nor do they even refer to TGG’s trade secrets, confidential information, 27 1 or its intellectual property.2 The Agreements also do not impose a duty of 2 confidentiality on Bubbly Brands or Sash Group, and do not contain any provision 3 that would serve as the basis for Defendants’ alleged misuse of the trade secrets. 4 Contra Simula, 175 F.3d at 725 (finding the nondisclosure provisions to be 5 “significant” because plaintiff would not have dealt with defendant without them, so 6 defendant only “gained access” to the confidential information because of the parties’ 7 contractual relationship); OwnZones Media Network, Inc. v. Sys. In Motion, LLC, 8 No. C14-994JLR, 2014 WL 4626302, at *4 (W.D. Wash. Sept. 15, 2014) (finding 9 that the parties’ dispute over defendant’s use of plaintiff’s trade secret “turns in part 10 on the contracts’ nondisclosure clause” and therefore the dispute is arbitrable). 11 Further, TGG’s allegations against Defendants are based on events that 12 occurred after the parties’ relationship ended. TGG states it is “not alleging that 13 Bubbly Brands and Sash [Group] improperly acquired the trade secrets at issue while 14 they were clients of TGG. Nor does TGG allege that the clients’ financial 15 information contained within the financial and accounting workbooks and templates 16 are TGG’s trade secrets.” (Opp’n at 15.) 17 The Court finds that Defendants’ alleged use of TGG’s trade secrets (as a result 18 of the actions of TGG’s former employees taken after Defendants stopped being 19 clients of TGG) constitutes “an independent wrong” and does not require 20 interpretation of the Agreements or evaluation of either party’s performance under 21 the Agreements. See Faegin v. LivingSocial, Inc., No. 14cv00418-WQH-KSC, 2014 22 WL 5307186, at *4 (S.D. Cal. Oct. 15, 2014) (finding the trademark infringement 23 claims do not “arise from or relate to” the parties’ agreement). Any liability to 24 Defendants for the misappropriation will arise from independent statutory provisions 25 26 2 The Agreements do provide that TGG acknowledges it may receive some of the clients’ 27 confidential information and that TGG will not use or disclose that information. (See ECF No. 65- | ||which give TGG rights irrespective of the Agreements. In other words, the 2 ||wrongfulness of any alleged trade secret misappropriation is determined by the 3 ||misappropriation statute, not by whether or not the Agreements listed a duty of 4 || confidentiality. And because the UCL claims are premised on misappropriation, the 5 ||same conclusion applies. See Faegin, 2014 WL 5307186, at *7 (holding because the 6 trademark infringement and false advertisement claims did not “arise from or relate 7 ||to” the agreement, “the unfair business practices claims grounded in the marked 8 ||infringement and false advertisement claims are also held not to ‘arise from or relate 9 ||to’ the Agreement’). 10 The Court is mindful of the clear federal policy favoring arbitration. See 11 || Simula, 175 F.3d at 719 (“Any doubts concerning the scope of arbitrable issues 12 ||should be resolved in favor of arbitration.”). However, it is equally clear that “a court 13 ||may submit to arbitration ‘only those disputes .. . that the parties have agreed to 14 ||submit.’” Granite Rock Co., 561 U.S. at 302 (internal citations omitted) (alteration 15 |/in original). The Court finds that the parties have not agreed to arbitrate TGG’s 16 ||misappropriation or UCL claims. 17 || IV. CONCLUSION 18 For the foregoing reasons, the Court GRANTS Bubbly Brands’ and Sash 19 ||Group’s Motions to Dismiss and DENIES their alternative Motions to Compel 20 || Arbitration. TGG is granted leave to amend and may file an amended complaint on 21 ||or before June 18, 2020. If TGG does not file an amended complaint by this date, 22 || Bubbly Brands and Sash Group will be dismissed from this case. 23 IT IS SO ORDERED. 24 25 |) DATED: May 28, 2020 i: A A (Ayphoa. 6 26 How. Cynthia Bashant United States District Judge 27 28