Opinion ID: 870659
Heading Depth: 2
Heading Rank: 2

Heading: The Scope of Preemption

Text: Courts that have considered the UTSA's preemption provision have uniformly interpreted [it] to preempt previously existing misappropriation of trade secret actions, whether statutory or common law. Hauck Mfg. Co. v. Astec Indus., Inc., 375 F.Supp.2d 649, 654 (E.D.Tenn.2004); see also Allied Erecting & Dismantling Co., Inc. v. Genesis Equip. & Mfg., Inc., 649 F.Supp.2d 702, 720 (N.D.Ohio 2009) (citing Hauck ). All the parties agree that HUTSA displaces Hawai`i's existing statutory and common law causes of action for misappropriation of a trade secret. Two questions regarding the scope of preemption remain: (1) whether the HUTSA displaces non-contract civil claims, where such claims are based on allegations of misappropriation of a trade secret; and (2) whether a non-contract civil claim is preempted when it is based on the misappropriation of confidential information that does not rise to the level of a statutorily-defined trade secret.

BlueEarth argues that the HUTSA applies only to the duty not to improperly acquire, use, or disclose commercially valuable secret information. Thus, [b]ecause BlueEarth's non-contract causes of action remedy the breach of duties that are not dependent upon the existence of competitively significant secret information, none are affected by the [HUTSA]. BlueEarth bases its argument on the comment to the UTSA's Effect on Other Law section, which states as follows: This Act does not deal with criminal remedies for trade secret misappropriation and is not a comprehensive statement of civil remedies. It applies to a duty to protect competitively significant secret information that is imposed by law. It does not apply to a duty voluntarily assumed through an express or an implied-in-fact contract. The enforceability of covenants not to disclose trade secrets and covenants not to compete that are intended to protect trade secrets, for example, is governed by other law. The Act also does not apply to a duty imposed by law that is not dependent upon the existence of competitively significant secret information, like an agent's duty of loyalty to his or her principal. 14 U.L.A. § 7 at 651 (comment). BlueEarth claims that the comment is dispositive and that it indicat[es] the clear answer to the questions before the Court. For these reasons, BlueEarth encourages this court to apply the elements test to determine whether a claim is preempted by the HUTSA. That is, claims are only preempted if they have the same elements or same underlying duty as a misappropriation of trade secrets claim. Thus, BlueEarth argues, its non-contract claims are not preempted because they provide civil remedies for breaches of other duties and accordingly have qualitatively different elements describing a breach of those duties. BlueEarth further notes that, this is a legal test inquiring into the nature of rights, duties, and remedies, not a factual test inquiring into the details of a plaintiff's notice pleading.
In contrast, Aloha and the HECO defendants argue that a factual inquiry into the pleadings is necessary to determine whether the plaintiff's various non-contract claims seek remedy for misappropriation of a trade secret, regardless of how the plaintiff has labeled these claims. Aloha points to the preemption provision of the UTSA, which states: This Act does not affect: (1) contractual remedies, whether or not based upon misappropriation of a trade secret; (2) other civil remedies that are not based upon misappropriation of a trade secret; or (3) criminal remedies, whether or not based upon misappropriation of a trade secret. [7] 14 U.L.A. § 7 at 651 (brackets omitted). Given the conditional language that applies to [o]ther civil remedies, as opposed to the total exclusion of contractual and criminal remedies, Aloha argues that non-contract civil remedies which are based upon a misappropriation of a trade secret are preempted. In turn, the phrase based upon suggests a factual inquiry into the allegations underlying the claim. If those allegations reveal that the underlying injury is the misappropriation of a trade secret, then the claim should be preempted. Similarly, the HECO defendants argue for application of the same proof test as articulated in Hauck , in which the court concluded that perhaps a better formulation of the UTSA preemption standard would be a same proof standard under which a claim will be preempted when it necessarily rises or falls based on whether the defendant is found to have misappropriated a trade secret as those two terms are defined in the UTSA. Stated another way, if proof of a non-UTSA claim would also simultaneously establish a claim for misappropriation of trade secrets, it is preempted irrespective of whatever surplus elements or proof were necessary to establish it. The UTSA defines misappropriation broadly enough to cover a wide range of conduct, including the sort of conduct contemplated by the various claims which are often involved in preemption disputes. If a proven claim, whether in whole or in part, constitutes misappropriation of a trade secret, it is that and that alone ... The UTSA explicitly exempts from preemption only those claims not based upon misappropriation of a trade secret, implying the UTSA's preemptive force reaches more than just claims of or for misappropriation of a trade secret. Thus, Plaintiff's non-UTSA claims against [defendant] will be preempted if, as plead, they would succeed or fail dependent on proof [defendant] acquired, disclosed, or used Plaintiff's trade secrets or otherwise confidential information.... Hauck, 375 F.Supp.2d at 658 (footnote and internal citations omitted) (emphases in original).
The preemption provision of the HUTSA, like that of the UTSA, states that [t]his chapter does not affect ... [o]ther civil remedies that are not based upon the misappropriation of a trade secret[.] HRS § 482B-8(b)(2) (2008). We agree with the Hauck court's analysis that the phrase based upon implies that the UTSA's preemptive force reaches more than just claims of or for misappropriation of a trade secret. Hauck, 375 F.Supp.2d at 658 (emphases in original). Otherwise, a plaintiff could state multiple different claims, all stemming from the same misappropriation of trade secret injury. This would undermine the purpose of the UTSA, which was to resolve the uncertainty concerning the parameters of trade secret protection and create a uniform law to remedy trade secret misappropriation. See 14 U.L.A. at 531 (prefatory note); see also id. § 8 at 656; HRS § 1-24 (2009). The elements test advocated by BlueEarth faces precisely the problem stated above. It would allow a party to raise multiple different claims based on the same trade secret misappropriation injury. Only a minority of courts apply the elements test to determine preemption. See Nucor Corp. v. Bell, 482 F.Supp.2d 714, 725 (D.S.C.2007) (To determine whether a particular cause of action involves rights equivalent to those protected by the Trade Secrets Act, the elements of the causes of action should be compared, not the facts pled to prove them.); see also Powell Products, Inc. v. Marks, 948 F.Supp. 1469, 1474 (D.Colo.1996) ([H]ere, plaintiff alleges that defendants conspired to misappropriate its trade secrets, which requires an agreement, which is not an element of a misappropriation claim under the UTSA. This claim ... does not conflict with the UTSA and will not be preempted.). [8] The majority of courts, however, have rejected the elements test and have instead examined the factual allegations underlying each claim to determine whether a claim, whatever its label, is based upon misappropriation of a trade secret. [9] BlueEarth's arguments to the contrary are not supported by the comment to the UTSA's preemption provision. BlueEarth contends that the comment's statement that [t]his Act ... is not a comprehensive statement of civil remedies[,] means that [b]eyond displacing previously existing common law actions for trade secret misappropriation... the Act does not displace other civil remedies. However, it appears that the comment is merely restating the substance of the preemption provision. The UTSA is not a comprehensive statement of civil remedies because [i]t does not apply to a duty voluntarily assumed through an express or implied-in-fact contract. 14 U.L.A § 7 at 651 (comment); see also id. § 7(b) at 651 (This Act does not affect ... contractual remedies, whether or not based upon misappropriation of a trade secret[.]) (brackets omitted). The comment further states that [t]he Act also does not apply to a duty imposed by law that is not dependent upon the existence of competitively significant secret information, like an agent's duty of loyalty to his or her principal. Id. § 7 at 651 (comment) (emphasis added). BlueEarth argues that the comment's reference to duties implies a legal, rather than a factual, inquiry, and that the duty to refrain from misappropriating trade secrets is unrelated to and independent from, for example, the duty not to intentionally interfere with the contracts of others. Contrary to BlueEarth's argument, the language of the comment implies that the UTSA does apply to duties that are dependent upon the existence of competitively significant secret information, whatever their label. In analyzing whether a claim is preempted by the UTSA, the court is to look beyond the label to the facts being asserted in support of the claims. Weins, 605 N.W.2d at 491; see also Mortgage Specialists, 904 A.2d at 665 (The majority of courts that have examined this issue have not relied upon the label attached to the claim, but have examined the facts underlying the claim to determine whether it is preempted by the UTSA.). BlueEarth states that, [d]espite its obvious importance, no case reviewed by counsel for BlueEarth has discussed or even noted this comment to the UTSA's preemption provision. Respectfully, it is unlikely that this dispositive comment has been simply overlooked by every court to have considered the scope of the UTSA's preemption. Instead, it is more likely that these courts found that the comment did not support arguments similar to those made by BlueEarth. Though the majority of courts agree that an analysis of the plaintiff's allegations is necessary to determine whether a claim is based upon misappropriation of a trade secret, courts have differed on how the presence of facts relating to the improper acquisition, disclosure, or use of trade secrets within non-UTSA claims affects preemption. Some courts have imposed broad preemption, going so far as to wholly preempt claims that include trade secret misappropriation allegations. See Thomas & Betts Corp. v. Panduit Corp., 108 F.Supp.2d 968, 972-73 (N.D.Ill. 2000) (holding that claims for conversion and breach of fiduciary duty for theft of computers, disks and documents were preempted by the Illinois Trade Secrets Act because these physical items have little value apart from the information contained therein[.]); see also Learning Curve Toys, L.P. v. Playwood Toys, Inc., No. 94 C 6884, 1999 WL 529572,  (N.D.Ill. July 20, 1999) ([I]f the operative facts are arguably cognizable under the ITSA, any common law claim that might have been available on those facts in the past now no longer exists in Illinois.). Other courts suggest that the mere presence of facts in a claim that go beyond trade secret misappropriation prevents preemption. See Micro Display Sys., Inc. v. Axtel, Inc., 699 F.Supp. 202, 205 (D.Minn.1988) ([T]he court will allow plaintiff to go forward and maintain its separate causes of action to the extent that the causes of action have `more' to their factual allegations than the mere misuse or misappropriation of trade secrets ... If the facts at trial disclose that the whole of plaintiff's case involves the misappropriation of trade secrets, those counts will be dismissed which are merely duplicative of the MUTSA. (Emphasis added.)); see also LaFrance Corp. v. Werttemberger, No. C07-1932Z, 2008 WL 5068653,  (W.D.Wash. Nov. 24, 2008) (LaFrance alleges facts that are not necessary to the UTSA claim. Therefore, this common law claim is not dismissed. (Internal citation omitted.)). The UTSA's unitary definitions of trade secret and misappropriation, its statutory remedies and statute of limitations for misappropriation of a trade secret, and its uniformity provision all evince the goal of eliminating uncertainty and creating a single action for misappropriation of a trade secret. See Burbank Grease Servs., LLC v. Sokolowski, 278 Wis.2d 698, 693 N.W.2d 89, 98 (Wis. Ct.App.2005), rev'd in part by 294 Wis.2d 274, 717 N.W.2d 781 (2006) (hereinafter Burbank Grease I ) ([T]he purpose of the preemption provision is to preserve a single tort action under state law for misappropriation of a trade secret as defined in the statute[.]); see also Auto Channel, 144 F.Supp.2d at 789 (The UTSA arose to create a uniform business environment that created more certain standards for protection of commercially valuable information.). The HUTSA was adopted by the Hawai`i State Legislature in furtherance of these goals, as evidenced by the fact that the language of the HUTSA is virtually identical to the UTSA. See Kaho`ohanohano, 117 Hawai`i at 288, 178 P.3d at 564 (stating that this court must read statutory language in the context of the entire statute and construe it in a manner consistent with its purpose (brackets omitted)); see also Bateman Constr., Inc. v. Haitsuka Bros., Ltd., 77 Hawai`i 481, 485, 889 P.2d 58, 62 (1995) (finding that because the pertinent language of certain Hawai`i arbitration statutes was virtually identical to the language of the federal arbitration statute... we review federal authority for guidance.); HRS § 1-24 (2009). We find that the best approach to preemption, consistent with the goals of the UTSA and HUTSA, is the same proof standard articulated in Hauck . Under this standard, if proof of a non-UTSA claim would also simultaneously establish a claim for misappropriation of trade secrets, it is preempted irrespective of whatever surplus elements of proof were necessary to establish it. Hauck, 375 F.Supp.2d at 658. To the extent, however, that the claim is based upon wrongful conduct[,] independent of the misappropriation of trade secrets[,] it will not be preempted by the HUTSA. [10] Bliss Clearing, 270 F.Supp.2d at 950. In this way, the HUTSA will be the sole noncontractual civil remedy for misappropriation of a trade secret, while preserving tort, restitutionary, and other law[s,] HRS § 482B-8, that seek[] to remedy an injury caused not by the misappropriation of proprietary information, but by separate conduct[.] Diamond Power, 540 F.Supp.2d at 1345.

BlueEarth argues that the plain language of the preemption provision... refers only to trade secrets as defined by the Act. The preemption provision nowhere refers to other confidential information. It follows, then, that the statute only anticipates preemption of common law claims involving trade secrets. Since there is no statutory language regarding preemption of other confidential information not rising to the level of trade secrets, there is no reason to think such preemption was intended. For this reason, BlueEarth contends that determination of whether its claims are preempted by the HUTSA is not proper on a motion to dismiss. Rather, BlueEarth argues, the court should delay the preemption inquiry until sufficient discovery has occurred, after which the court may properly determine whether the information at issue rises to the level of a statutorily-defined trade secret.
Aloha argues that the relief provided by the HUTSA is the sole noncontractual remedy when the underlying injury is the improper acquisition, disclosure or use of commercially valuable information; if the information does not constitute a trade secret, there is no remedy. This is so because there is no property right in information [that] is already generally known, readily ascertainable or not the subject of reasonable efforts to maintain its secrecy. Defining the scope of the HUTSA's preemption in this manner is, according to Aloha, [t]he only way to accord the Uniform Act its intended scope, preserve uniformity and avoid duplicative results[.] Similarly, the HECO defendants argue that the `weight of authority' holds that the UTSA's preemption provision eliminates non-contract claims founded on the alleged misuse of confidential information, regardless of whether that information is a statutory trade secret. The HECO defendants contend that this is because the UTSA was intended to preserve a single tort action for allegations of misappropriation of information.
Courts holding that non-UTSA, non-contract claims based upon confidential or commercially valuable [11] information are not preempted have generally stated that their analysis is based on the plain language of the UTSA's preemption provision. See, e.g., Stone Castle Fin., Inc. v. Friedman, Billings, Ramsey & Co., 191 F.Supp.2d 652, 656-59 (E.D.Va.2002) (holding that the plain reading of the Virginia UTSA compelled a decision that claims based on information not determined to be a trade secret were not preempted); Combined Metals of Chicago Ltd. P'ship v. Airtek, Inc., 985 F.Supp. 827, 830 (N.D.Ill.1997) (By its plain language ... the [Illinois]TSA preemption provision applies only if the claim is based on the `misappropriation of a trade secret' ... Thus, if the Airtek die and specifications is not a trade secret or secrets, the ITSA preemption provision is inapplicable.); Nucor, 482 F.Supp.2d at 726 (The causes of action at issue [12] , unlike a cause of action under [South Carolina] TSA, are not dependant upon a finding that the misappropriated information constitutes `trade secrets.'). In Burbank Grease Services, LLC v. Sokolowski, 294 Wis.2d 274, 717 N.W.2d 781, 788 (2006) (hereinafter Burbank Grease II ), for example, the Wisconsin Supreme Court noted at the outset that the allegedly misappropriated information underlying the plaintiff's claims did not qualify as a trade secret under the WUTSA's definition. The preemption provision of the WUTSA, similar to that of the HUTSA, states that it does not affect [a]ny civil remedy not based upon misappropriation of a trade secret. Id. (quoting Wis. Stat. § 134.90(6)(b)2.). The Wisconsin Supreme Court held that the plain language of the WUTSA's preemption provision excepts from the class of unaffected remedies only those remedies based on the misappropriation of a statutorily-defined trade secret. It leaves available all other remaining civil remedies for the protection of confidential information. Id. at 789. The court added that in order to hold that the WUTSA preempts claims based on confidential information which does not rise to the level of a statutorily-defined trade secret, it would have to read the following underlined language into the statute: This section does not affect ... [a]ny civil remedy not based upon misappropriation of a trade secret and not based on confidential business information.  Id. at 790 (emphasis in original). The court declined to so interpret the statute. Id. The court acknowledged that uniformity with other jurisdictions was one of the goals of the WUTSA; however, the court found that its plain meaning interpretation of the preemption provision was more persuasive than jurisdictions which had determined that the UTSA preempted claims based on allegations of non-trade secret confidential information. Id. at 792-94. The purported plain language approach, exemplified in Burbank Grease II, has been criticized for disregarding the UTSA's uniformity directive. The dissent in Burbank Grease II described the majority's analysis as pay[ing] lip service to UTSA's uniformity goal and the corresponding legislative directive. It fails to engage in the necessary analysis to determine what is the uniform interpretation of the preemption provisions in UTSA or how cases decided by courts in other UTSA jurisdictions analyze the language in these provisions. Burbank Grease II, 717 N.W.2d at 799 (Bradley, J., dissenting); see also id. (quoting Wis. Stat. § 134.90(7), which provides: This section shall be applied and construed to make uniform the law relating to misappropriation of trade secrets among states enacting substantially identical laws.). The dissent found that, in contrast, the Wisconsin Court of Appeals analyzed the decisions of other jurisdictions to have considered the question and determined that the prevailing rule in most UTSA jurisdictions is that UTSA is meant to replace tort claims for unauthorized use of confidential information with a single statutory cause of action. Burbank Grease II, 717 N.W.2d at 800 (Bradley, J., dissenting) (citing Burbank Grease I, 693 N.W.2d at 101). In Mortgage Specialists , the court noted that although the Wisconsin Supreme Court overturned the Court of Appeals' decision in Burbank Grease I, it still found Burbank Grease I well-reasoned, particularly for its adherence to the principles of uniformity and clarity that motivated the creation of the UTSA, in light of the legislative directive that the UTSA be construed to make uniform the law among the jurisdictions enacting it. We find the opinion of the Wisconsin Court of Appeals persuasive. Mortgage Specialists, 904 A.2d at 664 (internal citations omitted). Commentators have also criticized the Burbank Grease II decision for failing to conduct a uniformity analysis. The view of the dissenting opinion in Burbank Grease Services and [similar opinions] may be regarded as the most restrictive approach to preemption. In spite of the majority's protestations to the contrary, it is also the most reasonable ... refusing to preempt claims for the misappropriation of confidential information effectively negate[s] the UTSA's goal of promoting uniformity and render[s] the statutory preemption provision effectively meaningless. Michael Ahrens, Wisconsin Confidential: The Mystery of the Wisconsin Supreme Court's Decision in Burbank Grease Services v. Sokolowski and Its Effect Upon the Uniform Trade Secrets Act, Litigation, and Employee Mobility, 2007 Wis. L. Rev. 1271, 1302 (2007) (footnotes omitted) (quoting Unikel, Bridging the Trade Secret Gap, 29 Loy. U. Chi. L.J. at 888); see also Sarah Gettings, Burbank Grease Services, LLC v. Sokolowski: Frustrating Uniformity in Trade Secret Law, 22 Berkeley Tech. L.J. 423, 438-39 (2007) (The Burbank majority is dangerously misguided ... Indeed, the plain language of the WUTSA's uniformity clause directs the court to conduct a uniformity analysis... The majority of courts interpreting the preemption provision have found that the UTSA must preempt some claims involving the protection of confidential, but not trade secret, information. (Footnotes omitted)). The majority of the courts to have considered the issue have held that the UTSA's preemption provision abolish[es] all free-standing alternative causes of action for theft or misuse of confidential, proprietary, or otherwise secret information falling short of trade secret status ( e.g. idea misappropriation, information piracy, theft of commercial information, etc. ). Hauck, 375 F.Supp.2d at 655. [13] The rationale for these decisions has been explained as follows: States adopting statutory provisions analogous to the UTSA's section 7 intend that at least some prior law relating to the protection of commercial information be displaced. Permitting litigants in UTSA states to assert common-law claims for the misappropriation or misuse of confidential data would reduce the UTSA to just another basis for recovery and leave prior law effectively untouched. Further, by expressly exempting contractual remedies, whether or not based upon misappropriation of a trade secret and other civil remedies that are not based upon misappropriation of a trade secret from its preemptive penumbra, the UTSA makes clear that only those claims addressing or arising out of wrongs distinct from pure information piracy survive passage of the trade secret statute. Indeed, contrary interpretations of the UTSA's Effect on Other Law provision ... effectively negate the UTSA's goal of promoting uniformity in trade secrets law. Additionally, these contrary interpretations render the statutory preemption provision effectively meaningless. Unikel, Bridging the Trade Secret Gap, 29 Loy. U. Chi. L.J. at 887-88 (footnotes omitted). The UTSA creates a two-tiered approach to protection of commercial knowledge, under which information is classified only as either a protected `trade secret' or unprotected `general skill and knowledge.' Id. at 867-68 (footnote omitted). Courts and commentators have recognized the argument that [b]y adopting this approach, courts would be leaving businesses without an effective remedy for the misappropriation of information they viewed as valuable but that did not rise to the level of a trade secret. Ahrens, Wisconsin Confidential, 2007 Wis. L.Rev. at 1302; see also Mortgage Specialists, 904 A.2d at 664 (noting that its holding that non-contract claims based on confidential information are preempted may seem harsh). However, the HUTSA does not preempt claims for the misappropriation of such information when it is protected by contract. See HRS § 482B-8(b)(1) (2008) (This chapter does not affect ... [c]ontractual remedies, whether or not based upon misappropriation of a trade secret[.]). Further, commentators have cautioned that information which is broader than the scope of information defined as a trade secret by the UTSA, and not the subject of reasonable efforts to maintain its secrecy does not deserve protection in the form of non-contract tort claims. The UTSA's definition of trade secret is more inclusive than the previous definitions of trade secret at common law. See 14 U.L.A. § 1 at 538 (comment) (noting that the UTSA's definition of trade secret is broader and more inclusive than the definition in the Restatement of Torts (First)); see also James Pooley, Trade Secrets, § 2.03[2][a] (2009) (The Uniform Act definition [of a trade secret] is thus considerably broader than that of Section 757 of the original Restatement of Torts ....). Professor Mark Lemley, in discussing how courts should treat the overlap between trade secret law and other torts such as breach of confidence, unfair competition, unjust enrichment and interference with contract, has stated that [t]rade secret law should preempt these torts when they are applied to protect information that would, if secret, have been protected by trade secret law. That is, a plaintiff who complains of the defendant's use of its information, but who cannot prove that the information is secret, should not be able to rely on one of these torts (or any other common law variants) to bypass the requirement that it prove secrecy. If trade secret law does not preempt these torts, the point of the secrecy requirement will be lost, and with it the benefits of dissemination of new inventions. Companies will be unable to rely on the presence of ideas in the public domain; any information might potentially be subject to one of these torts. As a result, companies will be less willing to compete vigorously on the merits. Departing employees will be less willing to rely on information in the public domain to start new companies, and as a result more reluctant at the margins to start those companies. As Jim Pooley notes, there is arguably little social utility in allowing state claims based on misappropriation of trade secrets to go forward if the plaintiff cannot prove the elements of a trade secret claim. Mark A. Lemley, The Surprising Virtues of Treating Trade Secrets as IP Rights, 61 Stanford L.Rev. 311, 345-46 (Nov. 2008) (footnotes omitted) (quoting Pooley, Trade Secrets, § 3.04[4], 3-43 to -44). Similar to the court in Burbank Grease II, BlueEarth argues that the plain language of the preemption provision... refers only to trade secrets as defined by the Act ... Since there is no statutory language regarding preemption of other confidential information not rising to the level of trade secrets, there is no reason to think such preemption was intended. However, the HUTSA's preemption provision should not be considered in a vacuum. Burbank Grease II, 717 N.W.2d at 798 (Bradley, J., dissenting). Rather, this court must read statutory language in the context of the entire statute and construe it in a manner consistent with its purpose. Kaho`ohanohano, 117 Hawai`i at 288, 178 P.3d at 564 (brackets omitted). Here, the Hawai`i State Legislature has directed that [a]ll provisions of uniform acts adopted by the State shall be so interpreted and construed as to effectuate their general purpose and to make uniform the laws of the states and territories which enact them. HRS § 1-24 (2009). As the foregoing analysis shows, courts in other jurisdictions have not been absolutely uniform in deciding whether non-contract claims based on information which does not rise to the level of a statutorily-defined trade secret are preempted under the UTSA. However, the conclusion that such claims are preempted, reached by the majority of courts to have considered the issue, comports with the HUTSA's goal of uniformity in the area of trade secret misappropriation. The UTSA Commissioners made clear that the general purpose of the UTSA was uniformity of trade secret law. 14 U.L.A § 8 at 656. A common law claim premised on information that fails to qualify as a trade secret would seemingly undercut the statute's primary goal of uniformity, potentially render parties liable for using information that is not secret when the UTSA would not impose liability, and potentially pose Supremacy Clause problems. Likewise, it is not clear if such alternative claims would permit different results on matters such as the statute of limitations, punitive damages, attorneys' fees, and the like. Pooley, Trade Secrets, § 2.03[6] (footnote omitted). The court in Mortgage Specialists noted that, along with the contribution of unitary definitions of trade secret and misappropriation [t]he UTSA also arose to create a uniform business environment that created more certain standards for protection of commercially valuable information. [ Auto Channel, 144 F.Supp.2d at 789.] [T]he purpose of the preemption provision is to preserve a single tort action under state law for misappropriation of a trade secret as defined in the statute and thus to eliminate other tort causes of action founded on allegations of misappropriation of information that may not meet the statutory standard for a trade secret. [ Burbank I, 693 N.W.2d at 98.] As such, the UTSA was meant to codify all the various common law remedies for theft of ideas. [ Thomas & Betts, 108 F.Supp.2d at 971 (quotation omitted)]; see also [ Bliss Clearing, 270 F.Supp.2d at 948]. With the enactment of the UTSA, confidential information not rising to the level of a statutory trade secret was left largely unprotected by the law. See [N.H.Rev.Stat. §] 350-B:7, I.... If a common law claim for unauthorized use of information that did not meet the statutory definition of a trade secret were permitted, the result `would undermine the uniformity and clarity that motivated the creation and passage of the [UTSA].' Burbank Grease I, 693 N.W.2d at 99 (quoting Auto Channel, 144 F.Supp.2d at 789). Mortgage Specialists, 904 A.2d at 663. The Mortgage Specialists court's analysis is persuasive and consistent with the Hawai`i State Legislature's goals in adopting the HUTSA. See HRS § 1-24 (2009); see also Kaho`ohanohano, 117 Hawai`i at 288, 178 P.3d at 564. Accordingly, we hold that the HUTSA preempts non-contract, civil claims based on the improper acquisition, disclosure or use of confidential and/or commercially valuable information that does not rise to the level of a statutorily-defined trade secret.
In BlueEarth's view, preemption is proper only when allegations are based upon trade secrets as that phrase is defined in the UTSA. Thus, BlueEarth argues that it is premature to consider preemption at the motion to dismiss stage because the court does not yet have sufficient information to determine whether the allegations in the complaint rise to the level of statutorily-defined trade secrets. However, as analyzed above, we hold that the HUTSA preempts claims when the alleged injury is based on the improper acquisition, disclosure, or use of confidential and/or commercially valuable information, whether or not that information rises to the level of a statutorily-defined trade secret. As the court in Hauck stated: Plaintiff argues, at least in part, certain of its non-UTSA claims against [defendant] are not preempted because they do not depend on the information at issue qualifying as a trade secret. While some courts have employed language seemingly indicating as much, a plaintiff surely cannot use general tort causes of action to revive claims which would otherwise not be cognizable in light of the UTSA ( i.e., claims alleging theft of non-trade secret information). It is a legal non sequitor to suggest general tort causes may be employed to protect legal rights which otherwise do not exist ... such an approach would be wholly inconsistent with the UTSA's goals of promoting uniformity and predictability... A claim cannot be preempted or not preempted based entirely upon whether or not the information at issue qualifies as a trade secret. If the information is a trade secret, the plaintiff's claim is preempted; if not, the plaintiff has no legal interest upon which to base his or her claim. Either way, the claim is not cognizable. Hauck, 375 F.Supp.2d at 656-57 (internal citations omitted). [14] Accordingly, we hold that a court need not wait to determine if the allegedly misappropriated confidential and/or commercially valuable information constitutes a trade secret, as that term is defined in the HUTSA, before considering preemption.