Serje v. Rappi, Inc.

Background

Mauricio Paba Serje, Jose David Mendoza Macanaz, and Jorge Uribe alleged that they hired Imaginamos, a Bogotá-based digital-services company owned by or associated with Simón Borrero Posada, to help develop their Kuiky phone application. They alleged that Borrero acquired Kuiky’s trade secrets and used them to create Rappi. The complaint asserted one claim under the federal Defend Trade Secrets Act and one under the California Uniform Trade Secrets Act.

The alleged trade secrets included wire frames for Kuiky’s application, as well as its business plan and market research. Rappi first launched in Colombia and served Colombia and other Latin American markets. The defendants were Borrero, Rappi S.A.S., a Colombian corporation, and Rappi, Inc., its Delaware-incorporated parent company.

Forum Non Conveniens

The court granted the defendants’ motion to dismiss based on forum non conveniens, a doctrine allowing a court to dismiss when another available country is substantially more appropriate for resolving the dispute. The court held that Colombia was an adequate alternative forum. Borrero and Rappi S.A.S. were subject to Colombian jurisdiction, and Rappi, Inc. agreed to submit to the jurisdiction of Colombian courts. Colombia also recognized a cause of action for trade-secret misappropriation.

The court addressed concern about a possible two-year limitations period in Colombia by conditioning dismissal on the defendants’ waiver of statute-of-limitations defenses in any trade-secret action the plaintiffs brought there. The court rejected the plaintiffs’ arguments that delays, fewer procedural and discovery tools, possible corruption, and limits on compensation made Colombia inadequate. Those concerns did not show that Colombia offered no remedy at all.

The public-interest factors favored Colombia. The court found that Colombia had a strong interest because the dispute involved Colombian citizens, trade secrets created and shared in Colombia, and an application initially serving the Colombian market. By contrast, the court found California’s interest comparatively low. It noted evidence that Rappi, Inc. had no physical presence, officers, or employees in California and did not appear to regularly conduct business there. The court also considered a related criminal proceeding in Colombia involving largely the same allegations.

The private-interest factors also favored Colombia. The court found that the key witnesses and evidence concerning the alleged copying of Kuiky’s wire frames and business plan were likely in Colombia. It also cited the parties’ connections to Colombia, the inconvenience and expense of translating evidence and testimony into English for a California proceeding, the difficulty of enforcing a judgment in Colombia, and the related Colombian criminal proceeding.

Personal Jurisdiction

Alternatively, the court held that the case would be dismissed for lack of personal jurisdiction. It found no general jurisdiction over Rappi, Inc. because the company had only a San Francisco mailbox and no offices, employees, officers, or assets in California. The court also concluded that the plaintiffs had not shown specific jurisdiction over the defendants because the alleged misappropriation was not expressly aimed at California. The court characterized the defendants’ California activities, including participation in Y Combinator, seeking investments in Silicon Valley, and establishing a U.S. parent company, as secondary to Rappi’s principal activities in Colombia and other Latin American countries.

Disposition

Judge Vince Chhabria ordered that the case be dismissed on forum non conveniens grounds, with dismissal conditioned on the defendants’ waiver of statute-of-limitations defenses in any trade-secret action the plaintiffs bring in Colombia. The court stated that, alternatively, the case would be dismissed because the plaintiffs failed to establish personal jurisdiction.