United States District Court, D. Nevada
JAMES C. MAHAN, District Judge.
Presently before the court is plaintiff/counter-defendant Brian Donoho's (hereinafter "plaintiff") motion to dismiss. (Doc. # 10). Defendant/counter-claimant Spacecraft Components Corp. (hereinafter "defendant") filed a response, (doc. # 18), and plaintiff filed a reply, (doc. # 19).
The instant case arises out of an employment dispute. Defendant designs, distributes, and manufactures environment connectors primarily for railway, military, and industrial use. (Doc. # 5). Plaintiff was employed as an at-will sales manager for defendant from approximately April 2010, through August 2013. (Doc. # 5). Plaintiff was terminated on or around July 19, 2013. (Doc. # 2).
Plaintiff alleges that throughout his term of employment he was subjected to a variety of discriminatory remarks and comments. (Doc. # 2). Plaintiff further asserts that he was terminated because he filed formal complaints about this discriminatory conduct. (Doc. # 2). In addition, plaintiff contends that defendant's proffered reason for dismissing him for "business needs" is mere pretext. (Doc. # 2).
Upon being hired, plaintiff agreed to defendant's technology policy, which included, among other provisions, that "company technology shall not be used to send (upload) or receive (download) copyrighted materials, trade secrets, proprietary financial information, or similar materials without prior authorization from Spacecraft Components management." (Doc. # 18).
On April 7, 2015, plaintiff filed a complaint alleging four causes of action: (1) national origin discrimination in violation of Title VII, 42 U.S.C. § 2000e-2 and NRS 613.330; (2) religious discrimination in violation of Title VII, 42 U.S.C. § 2000e-2 and NRS 613.330; (3) retaliation in violation of 42 U.S.C. § 2000e-3(a) and NRS 613.340; and (4) intentional infliction of emotional distress. (Doc. # 2). Defendant then filed a counterclaim against plaintiff for a violation of the Nevada Trade Secrets Act. (Doc. # 10).
Defendant's counterclaim alleges that, after plaintiff was terminated, plaintiff sent emails to his personal account containing confidential information including, but not limited to, pricing details, business plans, and client contact information. (Doc. #10). In particular, defendant alleges that plaintiff misappropriated this valuable corporate information by sending himself trade secrets from defendant's servers for the purpose of circumventing defendant's technology policy, security, and monitoring software. (Doc. #10).
Plaintiff now moves to dismiss defendant's counterclaim, arguing that the court lacks supplemental jurisdiction to rule on the counterclaim and that the counterclaim fails to state a claim upon which relief can be granted.
II. Legal standard
a. Supplemental jurisdiction
All counterclaims are either compulsory or permissive. Compulsory counterclaims are claims that "arise out of the transaction or occurrence that is the subject matter of the opposing party's claim" and "do not require adding another party over whom the court cannot acquire jurisdiction." Fed.R.Civ.P. 13(a). The Ninth Circuit has adopted the "logical relationship test" for determining whether a counterclaim is compulsory. In re Pegasus Gold Corp., 394 F.3d 1189, 1196 (9th Cir. 2005). The test provides:
A logical relationship exists when the counterclaim arises from the same aggregate set of operative facts as the initial claim, in that the same operative facts serve as the basis of both claims or the aggregate core of facts upon which the claim rests activates additional legal rights otherwise dormant in the defendant.
Id. (quoting In re Pinkstaff, 974 F.2d 113, 115 (9th Cir. 1992)); Sparrow v. Mazda Am. Credit, 385 F.Supp.2d 1063, 1066 (E.D. Cal. 2005) ("Under this test, the court analyzes whether the essential facts of the various claims are so logically connected that considerations of judicial economy and fairness dictate that all issues be resolved in one suit.") (internal citations, quotations, and alterations omitted).
All counterclaims that are not compulsory are permissive. Federal Rule of Civil Procedure 13(b) states that "[a] pleading may state as a counterclaim against an opposing party any claim that is not compulsory." Further, the advisory committee notes to the 2007 amendment of Rule 13 require "[b]oth as a matter of intended meaning and current practice, a party may state as a permissive counterclaim a claim that does grow out of the same transaction or occurrence as an ...