ABB TURBO SYSTEMS AG, a Switzerland corporation, AND ABB INC., a Delaware corporation, Plaintiffs-Appellants,
TURBOUSA, INC., a Florida corporation, AND WILLEM FRANKEN, Defendants-Appellees
Appeal from the United States District Court for the Southern District of Florida in No. 0:13-cv-60394-KMM, Judge K. Michael Moore.
KURT L. GLITZENSTEIN, Fish & Richardson, P.C., of Boston, Massachusetts, argued for plaintiffs-appellants. Of counsel on the brief was WILLIAM R. TRUEBA, JR., Espinosa/Trueba, PL, of Miami, Florida.
JOHN H. PELZER, Greenspoon Marder, P.A., of Fort Lauderdale, Florida, argued for defendants-appellees.
Before PROST, Chief Judge, NEWMAN and TARANTO, Circuit Judges.
Taranto, Circuit Judge.
In this action, ABB Turbo Systems AG and ABB Inc. (collectively ABB) allege, among other things, state-law torts of misappropriation of trade secrets and conspiracy to misappropriate trade secrets. Before discovery was conducted or an answer filed on those allegations, the district court dismissed the complaint, under Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim on which relief can be granted. We reverse, concluding that the district court relied on judgments about the merits that go beyond what is authorized at the complaint stage. We remand for further proceedings. We do not rule on the defendants' arguments for upholding the dismissal on grounds that the district court did not adopt.
ABB designs, produces, and sells exhaust-gas turbochargers and turbocharger parts, primarily for use in large, ocean-
going vessels and in power plants. In 2012, ABB filed a complaint in the Middle District of Florida accusing TurboUSA, Inc., and TurboNed Service B.V. of infringing two of ABB's turbocharger-related patents. Complaint, ABB Turbo Sys. AG v. TurboNed Serv. B.V., No. 12-cv-01322 (M.D. Fla. June 13, 2012) ( Complaint ); see 28 U.S.C. § 1338 (jurisdiction over patent cases). TurboNed (" Ned" referring to the Netherlands) and TurboUSA manufacture, sell, and service parts for turbo-chargers, including ABB turbochargers. Complaint ¶ ¶ 23-24. As one basis for its allegation that the infringement was willful, ABB alleged that one of its former employees had improperly obtained and transferred to TurboUSA confidential information relating to ABB parts embodying its patented inventions. Id. ¶ ¶ 26-30. The Middle District court transferred the case to the Southern District of Florida. Order Granting Motion to Transfer Venue, ABB Turbo, No. 12-cv-01322 (M.D. Fla. Feb. 18, 2013).
After filing its original complaint, ABB received information that, it alleges, suggested that Johan (" Hans" ) Franken, who is TurboNed's former owner and TurboUSA's current indirect owner, and Willem Franken, who is TurboUSA's current president (and the son of Hans), had collaborated in the covert misappropriation of ABB's trade secrets concerning the design, manufacture, servicing, and pricing of ABB's turbochargers and parts. Motion to Amend Complaint, ABB Turbo Sys. AG v. TurboNed Serv. B.V., No. 13-cv-60394 (S.D. Fla. May 28, 2013). ABB sought and was granted leave to amend its complaint to add claims of misappropriation of trade secrets under Fla. Stat. § § 688.001-688.009 and of civil conspiracy to misappropriate trade secrets, and to join Hans and Willem Franken as defendants for those claims. Id.; Amended Complaint, ABB Turbo, No. 13-cv-60394 (S.D. Fla. July 12, 2013) ( Amended Complaint ); see 28 U.S.C. § 1367 (supplemental jurisdiction).
ABB's amended complaint makes allegations of various deceptive and improper transactions--allegations that, at this stage of the case, we simply assume to be true. Thus: Hans Franken stopped working for ABB in 1986 to found TurboNed and compete with ABB in the market for parts and servicing of ABB-sold turbochargers. Amended Complaint ¶ ¶ 36-42. For more than twenty years, from 1986 until the sale of TurboNed to a third party in 2009, Hans Franken and employees of TurboNed paid at least one ABB employee for confidential information related to ABB parts, servicing, and pricing. Id. ¶ ¶ 32, 72-73. At least one such transaction occurred in the garage of a hotel in Switzerland, and on multiple occasions TurboNed employees carried envelopes of cash to exchange for ABB's confidential information. Id. ¶ ¶ 76, 78; see also id. ¶ 82 (alleging other exchanges that occurred electronically, by mail, and in Cyprus). TurboNed employees altered confidential ABB documents in their possession to obscure references to ABB, in part to conceal the source of the information, in connection with the sale of TurboNed to a new owner in 2009. Id. ¶ ¶ 96-98. TurboNed soon went into bankruptcy in Europe. See id. ¶ 3.
The confidential information that TurboNed obtained was passed along to TurboUSA, id. ¶ ¶ 101-103--a company that Hans Franken established in the 1990s, helped to run as an officer and director at times, id. ¶ ¶ 46-48, and continues to own through his control of an intermediate holding company, id. ¶ ¶ 54-55. TurboUSA used and continues to use ABB's trade-secret information to advance its business interests. Id. ¶ ¶ 60-62, 103-05. In 2008, TurboUSA hired a former ABB employee who provided TurboUSA with confidential data that he had stolen from ABB before he left ABB's employment. Id. ¶ ¶ 115-17. Moreover, in 2009, Hans Franken used his control over TurboUSA--which his son Willem was managing--to artificially inflate the prices TurboUSA paid to TurboNed for goods or services, thereby increasing TurboNed's revenues to levels required for Hans to receive contingent, revenue-dependent compensation for his sale of TurboNed to the new owner. Id. ¶ ¶ 66-67.
After ABB filed its amended complaint, and after ABB stipulated to the bankrupt TurboNed's dismissal without prejudice, the three remaining defendants filed motions to dismiss the entire amended complaint under Rule 12(b)(6) for insufficient pleading. TurboUSA and Willem Franken's Motion to Dismiss the Amended Complaint, ABB Turbo, No. 13-cv-60394 (S.D. Fla. Aug. 12, 2013); Johan Franken's Motion to Dismiss the Amended Complaint, ABB Turbo, No. 13-cv-60394 (S.D. Fla. Sep. 12, 2013). The defendants also argued that the trade-secret and conspiracy claims should be dismissed because they were time-barred by Fla. Stat. § ...