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K.F. Jacobsen & Co., Inc. v. Gaylor

United States District Court, Ninth Circuit

May 28, 2013

K. F. JACOBSEN & CO., INC., Plaintiff,
RYAN GAYLOR, Defendant.


JOHN V. ACOSTA, Magistrate Judge.


K.F. Jacoben & Co., ("Jacobsen") filed this action against its former employee, Ryan Gaylor ("Gaylor"), seeking damages resulting from Gaylor's taking, retaining, and disclosing numerous confidential documents from Jacobsen, and an injunction preventing Gaylor from engaging in such conduct in the future. Gaylor initially moved to dismiss all five claims asserted by Jacobsen, relying on numerous extrinsic documents. On March 19, 2013, the court advised the parties that it "will not consider extrinsic evidence regarding defendant's motion to dismiss" because the extrinsic evidence related to the merits of the parties' dispute and not to the plausibility of the claim pleaded in the complaint. Thereafter, Gaylor withdrew his motion to dismiss with regard to all but two claims: the Second Claim for Relief for violation of the Stored Wire and Electronic Communications and Transactional Records Access Act (18 U.S.C. §§ 2701-2712)(the "Stored Communications Act"); and the Fourth Claim for Relief for conversion. The motion to dismiss these two claims is currently before the court.

Gaylor asserts Jacobsen has failed to allege the involvement of the Internet or other electronic communications involving a third party and, therefore, has failed to state a claim under the Stored Communications Act. Gaylor also argues that Jacobsen's conversion claim is preempted by its claim for violation of the Uniform Trade Secrets Act (OR. REV. STAT. 646.461-646.475) (the "Trade Secrets Act"), and that a plaintiff may not base a conversion claim on copies of information. The court finds that Jacobsen's computers are not facilities through which "electronic communication services" are provided; that Jacobsen's conversion claim is not preempted by the Trade Secrets Act to the extent he seeks damages for the conversion of information other than trade secrets; and that Jacobsen has adequately alleged that Gaylor exercised control over the copied information in a manner inconsistent to Jacobsen's rights as owner of the information. Accordingly, Gaylor's motion to dismiss is granted with regard to Jacobsen's Second Claim for Relief for violation of the Stored Communications Act and is denied with regard to Jacobsen's Fourth Claim for Relief for conversion.[1]

Preliminary Procedural Matter

Jacobsen asks the court to take judicial notice of a court order, a transcript of court proceedings, and a declaration, all filed in Ryan Gaylor v. K.F. Jacobsen & Co., Inc., and Ross Island Sand & Gravel Co., Case No. 1207-09372, a case currently pending in the Circuit Court for the State of Oregon for the County of Multnomah (the "State Action"). Specifically, Jacobsen requests "that the court take judicial notice of Judge Wittmayer's findings that defendant accessed and removed KFJ's documents without authority, as those findings relate to defendant's challenges to the plausibility of KFJ's conversion and Electronic Privacy Act claims." (Pl.'s Supplemental Br. in Opp'n to Deft.'s Mot. to Dismiss at 1.) Gaylor does not object to the court taking judicial notice of the existence of these court documents or the content of those documents, but does object to the court taking judicial notice of the facts contained in the documents as true or legally established.

The parties are offering materials outside of the pleadings in support of, or in opposition to, a motion to dismiss. In general, material outside the pleadings may not be considered in ruling on a motion to dismiss unless the motion is treated as one for summary judgment and the parties are "given reasonable opportunity to present all materials made pertinent to such motion by Rule 56." Jacobson v. AEG Captial Corp., 50 F.3d 1493, 1496 (9th Cir. 1995). There are two exceptions to this rule. First, a court may consider "material which is properly submitted to the court as part of the complaint." Lee v. County of Los Angeles, 240 F.3d 754, 774 (9th Cir. 2001). A document is not "outside" the complaint if the complaint specifically refers to the document, its authenticity is not questioned, and the plaintiff's complaint necessarily relies on it. Id. at 774. When the plaintiff fails to introduce a pertinent document as part of his pleading, the defendant may introduce the exhibit as part of his motion attacking the pleading. Cooper v. Pickett, 137 F.3d 616 (9th Cir. 1998).

The second exception is that under Rule 201 of the Federal Rules of Evidence, the court may take judicial notice of "matters of public record." Lee, 240 F.3d at 774. Rule 201 allows judicial notice of a fact "not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." A court may take judicial notice of complaints and briefs filed in another case to determine what issues were before that court and were actually litigated. Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006). However, a court may not take judicial notice of facts presented in those documents or in court opinions for the purpose of considering those facts to be established in the case currently before them. Wyatt v. Terhune, 315 F.3d 1108, 1114 (9th Cir. 2003)(citing M/V American Queen v. San Diego Marine Constr. Corp., 708 F.2d 1483, 1491 (9th Cir. 1983)("As a general rule, a court may not take judicial notice of proceedings or records in another case so as to supply, without formal introduction of evidence, facts essential to support a contention in a cause before them.")).

The state court documents offered by K.F. Jacobsen are undeniably matters of public record appropriate for consideration by the court for the limited purpose of determining what issues are before the court in the State Action. Accordingly, it is appropriate for the court to take judicial notice of the documents offered, as evidence of the claims asserted and the arguments made by the parties in motion practice in the State Action. However, the court will not take judicial notice of the factual assertions contained therein, such as the findings with regard to Gaylor's accessing and removal of Jacobsen's confidential information.

The court grants Jacobsen's requests for judicial notice of the documents filed in the State Action and will consider the contents of such documents, where appropriate, in ruling on the pending motion to dismiss. Because Judge Wittmayer's findings with regard to Gaylor's actions in copying and retaining confidential information are consistent with Jacobsen's allegations in support of its claims for violation of the Stored Communications Act and conversion, and in light of the fact that the court must view those factual allegations as true and in a light most favorable to Jacobsen when considering Gaylor's motion to dismiss, this ruling is not outcome-determinative and does not adversely affect Jacobsen at this juncture.


The allegations of the amended complaint, filed on November 28, 2012 (the "Complaint"), establish that Jacobsen, a manufacturer and supplier of asphalt materials and an asphalt contractor, hired Gaylor on May 5, 2008, to work as a project estimator. (Compl. ¶¶ 5-7.) On December 1, 2009, Jacobsen assigned Gaylor to the position of quality control technician. (Compl. ¶ 8.) As a quality control technician, Gaylor had access to a company computer and authorization to access electronic files to the extent necessary to perform his job duties. (Compl. ¶ 9.) Jacobsen informed Gaylor of his "obligations to keep sensitive and proprietary information regarding quality control, quality control tests, and other business related information confidential." (Compl. ¶ 11.)

In July 2011, Jacobsen removed Gaylor from the quality control technician position and assigned Mike Rinne ("Rinne") to that position. (Compl. ¶¶ 12-13.) Gaylor continued to work for Jacobsen in other positions but no longer had authorization or consent to use company computer terminals to access electronically stored information. (Compl. ¶¶ 12, 14, 18.) In mid-November 2011, Gaylor requested that he be assigned a computer. (Compl. ¶ 19.) Jacobsen denied the request, specifically informing Gaylor that "he would not be given an computer or given access to the company's computer terminals to access electronic information of plaintiff and did not have the authorization or consent to access the company computer and the electronic data stored on those computers." (Compl. ¶ 19.)

On December 5, 2011, Gaylor was seen accessing the computer terminal assigned to Rinne while Rinne was out of the office. (Compl. ¶ 20.) Gaylor left his employment with Jacobsen on January 6, 2012, and began working for a competitor of Jacobsen's four months later. (Compl. ¶¶ 22-23.) On October 24, 2012, Jacobsen learned that Gaylor had "taken, retained, and disclosed to his attorney, Eric J. Fjelstad, numerous trade secret documents of plaintiff", some of which were stored electronically. (Compl. ¶¶ 24, 28.) The ...

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