RoadRunner Recycling, Inc. v. Recycle Track Systems, Inc.
- William Alsup
- 4:23-cv-04804
- U.S. District Court · Northern District of California
- 2
In RoadRunner Recycling v. Recycle Track Systems, Judge Alsup granted leave to amend trade-secret claims after finding some alleged material plausibly protected.
RoadRunner Recycling, Inc. may amend its complaint to pursue the trade-secret allegations described in the order. Recycle Track Systems, Inc. and RecycleSmart Solutions, Inc. must respond by answering within 14 days, subject to later discovery and motion practice.
What happened
RoadRunner Recycling, Inc. sued Recycle Track Systems, Inc. and RecycleSmart Solutions, Inc. in a breach-of-contract case and sought to amend its complaint to try again on trade-secret misappropriation claims under federal and California law.
The court had previously dismissed those claims because the alleged trade secrets were too general or had already been disclosed. The earlier order allowed RoadRunner to ask for permission to file an amended complaint, and RoadRunner submitted that request along with a detailed sealed explanation of the alleged trade secrets.
Judge William Alsup granted RoadRunner’s motion. He found that RoadRunner had plausibly alleged that at least some material could qualify for trade-secret protection and that the alleged reverse engineering might have used improper means. The court said the allegations could later be narrowed during discovery or later motion practice, and ordered an answer within 14 days.
The detailed version
- RoadRunner Recycling, Inc. v. Recycle Track Systems, Inc. · No. 4:23-cv-04804
- William Alsup
- Feb. 29, 2024
Background
RoadRunner Recycling, Inc. brought a breach-of-contract action against Recycle Track Systems, Inc. and RecycleSmart Solutions, Inc. It moved for leave to amend its complaint to replead claims for trade-secret misappropriation under the federal Defense of Trade Secrets Act and the California Uniform Trade Secrets Act.
The court had previously granted the defendants’ motion to dismiss the trade-secret claims. That order found that the alleged trade secrets, including materials merely referenced in the complaint, were overly general and/or already disclosed, so RoadRunner had not shown that it possessed information qualifying for trade-secret protection. The earlier order expressly allowed RoadRunner to seek permission to file an amended complaint by motion. RoadRunner then filed that motion and a detailed explanation of the alleged trade secrets under seal. The court considered full briefing and oral argument.
Ruling
The court granted RoadRunner’s motion for leave to amend. It found that RoadRunner had plausibly pleaded that at least some material could qualify for trade-secret protection. It also found that RoadRunner had plausibly alleged that the reverse engineering at issue may have been performed through improper means rather than fair and honest means, supporting a possible misappropriation claim.
The court stated that the amended allegations could be pared down during discovery and later motion practice when the parties had a better factual record. The defendants’ answer was due in fourteen days. The order did not make a final merits determination that trade-secret misappropriation occurred.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.