Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_12-cv-00175/USCOURTS-azd-2_12-cv-00175-4/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:2201 Declaratory Judgment

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Food Services of America Incorporated, a 

Delaware corporation, 

Plaintiff, 

vs. 

Paul Carrington; Elba Rubio, et al., 

Defendants. 

No. CV-12-00175-PHX-GMS

ORDER 

 Pending before the Court is Defendants’ Motion for Reconsideration. (Doc. 147.) 

For the reasons discussed below, Defendants’ Motion is denied. 

BACKGROUND 

 Plaintiff Food Services of America, Inc. (“FSA”) alleges that Defendants Paul 

Carrington and Elba Rubio misappropriated confidential information during their tenure 

at FSA and now work in positions where they could use that information to their new 

employers’ competitive advantage. (Doc. 1.) FSA filed this action on January 25, 2012, 

alleging the following six claims: (1) violation of the Computer Fraud and Abuse Act 

(“CFAA”); (2) violation of the Arizona Uniform Trade Secrets Act (“AUTSA”); (3) 

violation of the Arizona Anti-Racketeering Statute; (4) breach of fiduciary duty; (5) 

conversion; and (6) unjust enrichment. 

 On April 9, 2013, FSA filed a Motion for Partial Summary Judgment on Liability 

and Available Remedies. (Doc. 105.) On May 3, 2013, Defendants filed a Motion for 

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Summary Judgment on Plaintiff’s Cause of Action under the AUTSA. (Doc. 109.) On 

August 23, 2013, the Court issued an order denying in part and granting in part Plaintiff’s 

Motion for Partial Summary Judgment and denying Defendants’ Motion for Summary 

Judgment. (Doc. 144, “August 23 Order.”) Defendants move for reconsideration of the 

Court’s Order. 

DISCUSSION 

I. Legal Standard

 Under Rule 59(e), a motion for reconsideration may be granted only on one of 

four grounds: “1) the motion is necessary to correct manifest errors of law or fact upon 

which the judgment is based; 2) the moving party presents newly discovered or 

previously unavailable evidence; 3) the motion is necessary to prevent manifest injustice 

or 4) there is an intervening change in controlling law.” Turner v. Burlington N. Santa Fe 

R.R. Co., 338 F.3d 1058, 1063 (9th Cir. 2003) (internal quotations and emphasis 

omitted). Motions for reconsideration are disfavored and are not the place for parties to 

make new arguments not raised in their original briefs. See Nw. Acceptance Corp. v. 

Lynnwood Equip., Inc., 841 F.2d 918, 925–26 (9th Cir. 1988). Nor should such motions 

ask the Court to “rethink what the court has already thought through—rightly or 

wrongly.” See United States v. Rezzonico, 32 F. Supp. 2d 1112, 1116 (D. Ariz. 1998) 

(quoting Above the Belt, Inc. v. Mel Bohannon Roofing, Inc., 99 F.R.D. 99, 101 (E.D. Va. 

1983)). 

II. Analysis 

 A. Existence of Trade Secrets 

Defendants first request that the Court reconsider its holding that the information 

obtained by Defendants includes protectable trade secrets. (Doc. 147 at 2–3.) The 

AUTSA defines a “trade secret” as information that “(a) [d]erives independent economic 

value, actual or potential, from not being generally known to, and not being readily 

ascertainable by proper means by other persons who can obtain economic value from its 

disclosure or use” and “(b) [i]s the subject of efforts that are reasonable under the 

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circumstances to maintain its secrecy.” A.R.S. § 44-401. 

 Defendants particularly request that the Court reconsider its holding that the 

information obtained by Defendants had independent economic value and that FSA took 

sufficient measures to safeguard the information. (Id. at 2–7.) 

 Defendants argue that the Court erred in relying on disputed February e-mails in 

determining that the information obtained by Defendants had independent economic 

value. As noted in the August 23 Order, Defendants do not dispute that they transmitted 

FSA information in e-mails they sent in March 2011. (Doc. 144 at 6–7.) They also do not 

dispute that this information included manufacturer and UPC codes, brand names, 

product specifications, product formulae, pricing strategies, rebates, customer contact 

information, volumes, pricing, and vendor contact information and data. (Id.) The Court 

noted that this information contains elements of common knowledge but, in combination, 

are not known to other distributors in the industry and thus provide a competitive 

advantage to FSA. Accordingly, the Court found that the compilation of data provides 

economic value to FSA. (Id. at 7–9.) 

 The Court has not yet determined an amount of damages sustained by FSA in this 

matter. Thus, the Court did not rely on any disputed e-mails to calculate such a damages 

award. Instead, the Court merely determined that some of the information obtained by 

Defendants constituted trade secrets, and thus that FSA had sustained some damages in 

the form of remediation efforts. (Id.) In addition, the Court inadvertently referred to a 

number of disputed February e-mails as undisputed March e-mails. (Id. at 7–8.) However, 

even without these disputed e-mails, the undisputed information regarding the actual 

March e-mails (Id. at 6–7) provided sufficient facts on which to grant summary judgment 

as to liability for trade secret misappropriation in these circumstances. 

 Defendants next argue that the Court failed to consider FSA’s failure to save or 

preserve the hard-drive on Defendant Carrington’s work computer in determining 

whether FSA exercised reasonable measures to protect its trade secret information. 

However, the possibility that FSA failed to follow its computer preservation policy in that 

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instance is but one fact in the inquiry of whether FSA took reasonable measures to 

protect their trade secret information. As described in August 23 Order, it is undisputed 

that FSA took several measures to protect the secrecy of its information. (Doc. 144 at 11–

17.) These measures were both reasonable and sufficient. 

 B. Proof of Actual Damages 

 Defendants next assert that the Court erred in denying Defendants’ Motion for 

Summary Judgment because the Court concluded that FSA provided some evidence of 

damages. (Doc. 147 at 7–9.) As noted in the August 23 Order, FSA substantiated its 

claim that FSA employees spent over 75 employee hours reviewing the documents that 

were misappropriated by Defendants, and argues that this expenditure of company 

resources was directly caused by the misappropriation. (Doc. 144 at 22–23.) While this 

may not indicate significant damages, FSA at least established that the existence of 

expenses is a genuine issue of material fact. Thus, the Court did not err in its denial of 

summary judgment to Defendants. 

CONCLUSION 

 The Court does not find error in its August 23 Order in finding that the 

information obtained by Defendants had independent economic value and that FSA took 

sufficient measures to protect that information. Further, the Court does not find error in 

its finding that FSA sufficiently established the existence of damages to survive summary 

judgment on that issue. 

 IT IS THEREFORE ORDERED that Defendants’ Motion for Reconsideration 

(Doc. 147) is DENIED.

 Dated this 17th day of October, 2013. 

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