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ASIROBICON, INC. v. ROLLS-ROYCE PLC

September 5, 2003

ASIROBICON, INC., F/K/A ROBICON CORPORATION, PLAINTIFF,
v.
ROLLS-ROYCE PLC AND ROLLS-ROYCE POWER ENGINEERING PLC, DEFENDANTS



The opinion of the court was delivered by: Francis Caiazza, Chief Magistrate Judge

MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION

I. RECOMMENDATION

For the reasons stated below, it is respectfully recommended that the Defendants' "Motion to Dismiss, Or, In the Alternative, For a More Definite Statement" (Doc. 5) be denied as consistent with the discussions below.

II. REPORT

BACKGROUND

The Plaintiff ASIRobican Inc., formerly known as Robicon Corporation ("the Plaintiff" or "Robicon"), is a Pennsylvania corporation in the business of "manufacturing power controllers and variable speed drives." See generally Compl. at ¶¶ 1, 5. It brings suit in diversity against the English limited liability companies Rolls-Royce plc and Rolls-Royce Power Engineering plc (collectively, "the Defendants" or "Rolls-Royce"). See generally Page 2 id. at ¶ 3; Defs.' Br. (Doc. 6) at 3. Certain other corporate entities, although not named as parties, also are identified in the Complaint: Robicon's "sister corporation," Anasaldo Sistemi Industriali SpA, headquartered in Milan, Italy (hereinafter "ASIRobicon Italy");*fn1 Hill Graham Controls ("Hill Graham"), a subsidiary of ASIRobicon Italy based in England and "principally overseen by Robicon"; Peter Rogers ("Mr. Rogers"), the former managing director of Hill Graham; and Alstom Power Controls ("Alstom"), an apparently unrelated company the Plaintiff and/or ASIRobicon Italy sought to acquire. See generally Compl. at ¶¶ 6, 7, 13, 27, 28.*fn2

Robicon's claims stem from a proposed partnership or "business cooperation" between the above-listed entities. See generally id. at ¶¶ 13, 15. The Complaint alleges that, in May 2001, Rolls Royce approached ASIRobicon Italy and Hill Graham regarding: their proposed "supply [of] complete electrical systems for Rolls-Royce's marine business"; a contemplated "partnership in the development of electronic equipment"; and Page 3 Rolls-Royce's "purchase of a portion of [the] power conversion business . . . ASIRobicon was seeking to acquire" from Alstom. See id. at ¶ 13.

As a result of Rolls-Royce's inquiry, representatives of the Defendants, Robicon, and ASIRobicon Italy met in May and June 2001 to discuss their potential business cooperation. See id. at ¶ 15. These meetings took place in London, England and in New Kensington, Pennsylvania, the Plaintiff's principal place of business. See id.; see also generally id. at ¶ 1.

The Complaint alleges that, "[a]fter the discussion progressed beyond initial inquiries," Rolls-Royce, ASIRobicon Italy and the Plaintiff entered into a written confidentiality agreement on March 19, 2002 ("the Confidentiality Agreement" or "the Agreement"). See id. at ¶ 17; see also Confid. Agreement (attached as Ex. A to Defs.' Br.).*fn3 The Agreement contemplated that the parties would disclose confidential information in Page 4 "evaluating and negotiating" their potential business cooperation, and they agreed that such information would be "used solely for [that] purpose." See Compl. at ¶ 18; see also Confid. Agreement at ¶ 1. The Agreement also forbade the parties from initiating discussions with each others' "director[s], officer[s] or employee[s]" for the purposes of soliciting their employment. See Compl. at ¶ 21; Confid. Agreement at ¶ 6.

The Plaintiff alleges that, between April and November 2002, ASIRobicon Italy, Hill Graham and Robicon disclosed to Rolls-Royce "confidential and unpublished information, proprietary information, and trade secrets regarding [their] business operation[s] and future plans." See Compl. at ¶ 22. The Complaint alleges that such information was disclosed, among other places, at Robicon's facility in New Kensington, Pennsylvania. See id. at ¶ 25.

As the parties' negotiations progressed, the Plaintiff's participation in the proposed business cooperation became more clear. Cf. generally id. at ¶ 27. Among other things, it was contemplated that Robicon "would become a regular supplier" of Rolls-Royce's "electric drive needs," the two companies would "cooperate in current and future product development," and Robicon would sell to Rolls-Royce a portion of Alstom's operations and/or stock if the company was acquired. See id. Page 5 Through the course of the negotiations, the Defendants became acquainted with Hill Graham's managing director Mr. Rogers. See id. at 28. The Plaintiff alleges that Mr. Rogers "was intimately involved with, had access to, and was exposed to" the confidential information of ASIRobicon Italy, Hill Graham and Robicon. See generally id. at ¶ 29; cf. also generally id. at ¶ 12 ("[b]eing part of the same group of companies, Robicon, ASIRobicon [Italy] and Hill Graham share[d] the same database of technical and commercial information").
The negotiations "proceed[ed] toward a conclusion," with the parties having "exchanged draft agreements outlining the cooperation" described above. See id. at ¶ 35. On November 8, 2002, however, Rolls-Royce "suddenly announced that it was withdrawing from the proposed cooperation." See id. at ¶ 36. Although the Defendants remained interested in "the total acquisition of Hill Graham," Robicon and ASIRobicon Italy declined said proposal. See id.

The Plaintiff alleges that, after the proposed business deal fell through, Rolls-Royce "decided that it would . . . ease its entry into [the marine electrical products and systems] market by improperly utilizing the [c]onfidential [i]nformation that was disclosed . . . during the prior confidential negotiations and by improperly soliciting" Mr. Rogers' employment. Page 6 See generally id. at ¶ 39. Mr. Rogers has since accepted employment with Rolls-Royce, and the Plaintiff "believe[s] and therefore aver[s]" that the Defendants have or will use his services "to trade upon Robicon's goodwill" and draw upon its confidential information. See generally id. at ¶¶ 44-48.

Based on these and other allegations, the Plaintiff asserts five causes of action against the Defendants: "Misappropriation of Trade Secrets and Confidential Information" (Count I); "Breach of Duty of Confidentiality" (Count II); "Civil Conspiracy" (Count III); "Unfair Competition" (Count IV); and "Tortious Interference with Prospective Economic Advantage" (Count V). In its Prayer for Relief, the Plaintiff requests an award of "actual and compensatory damages," a disgorging of wrongfully obtained profits, and interest and attorneys' fees. See id.

In their Motion to Dismiss, the Defendants argue: (a) the court lacks personal jurisdiction over Rolls-Royce; (b) venue does not lie in this judicial district; and (c) the Plaintiff's claims fail under Federal Rule 12(b)(6). See generally Defs.' Br. In the alternative, Defense counsel requests that the Plaintiff be ordered to make a more definite statement. See id.

The briefing on the Defendants' Motion has come to a close, and it is now ...


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