Removal to Federal Court

Cal. Super. - 6th Dist.December 28, 2017

AXuMH O VD 00 SEYFARTH SHAW LLP Robert B. Milligan (SBN 217348) rrnilligan@seyfarth. com E L E Joshua Salinas (SBN 282065) jsalinas@seyfarth. com 2029 Century Park East, Suite 3500 , Los Angeles, California 90067-3021 JAN. 2 6 20i8 Telephone: (310) 277-7200 Facsimile: (310) 201-5219 Clerk of the Co Clam Attorneys for Defendant Superior Coutt ‘KCi-fwa" UTY FUTUREWEI TECHNOLOGIES, INC. BY SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA YIREN HUANG, an individual, and CNEX Labs, Case No. 17cv321153 Inc., a Delaware corporation, DEFENDANT FUTUREWEI Plaintiff, TECHNOLOGIES, INC.'S NOTICE TO STATE COURT OF REMOVAL TO v. _ UNITED STATES DISTRICT COURT FUTUREWEI TECHNOLOGIES, INC., a Texas corporation; and DOES 1-10, inclusive, Complaint Filed: December 28, 2017 Defendant. ‘ TO THE CLERK OF THE SUPERIOR COURT OF THE STATE OF CALIFORNIA, COUNTY OF SANTA CLARA, AND TO PLAINTIFFS AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on January 24, 2018, Defendant FUTUREWEI TECHNOLOGIES, INC., filed a Notice of Removal with the Clerk of the United States District Court for the Northern District of California removing this action to that Court, pursuant to 28 U.S.C. sections 1332, 1441 and 1446. A true and correct copy of that Notice of Removal, without exhibits, is attached hereto as Exhibit A. PLEASE TAKE FURTHER NOTICE that, pursuant to 28 U.S.C. section 1446, the filing of the Notice of Removal in the United States District Court effectuates the removal of this action. NOTICE TO STATE COURT OF REMOVAL 44061655v.l t \OOOQOKII 10 ll 12 13 14 15 l6 I7 18 19 20 21 22 23 24 25 26 27 28 Accordingly, no further proceedings should take place in this Court unless and until the case has been remanded. DATED: January 26, 2018 SEYFARTH SHAW LLP nQek he Robert B. Milligm D. Joshua Salinas Attorneys for Defendant FUTUREWEI TECHNOLOGIES, INC. 2 NOTICE TO STATE COURT OF REMOVAL 4406l65$v.l O‘M&L~IN \l 10 ll 12 l3 14 16 17 18 19 20 21 22 23 24 25 26 27 28 Case Szlu-ev300534 Dowment '1 Filed 01/24/11, . age 1 of 8 SEYFARTl-I SHAW LLP Robert B. Milligan (SBN 217348) rmilligan@seyfar!h.com D. Joshua Salinas (SBN 282065) jsalinas@seyfarth.com 2029 Century Park East. Suite 3500 Los Angeles, California 90067-3021 Telephone: (310) 277-7200 Facsimile: (310) 201-5219 SEYFARTH SHAW LLP Michael D. Wexler (pro hac vice app. to be filed) Andrew C. Boutros (pro hac vice app. to be filed) 233 South Wacker Drive, Suite 8000 Chicago, Illinois 60606 Telephone: (312) 460-5000 Facsimile: (312) 460-7000 Attorneys for Defendant FUTUREWEI TECHNOLOGIES, INC. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA YIREN HUANG, an individual, and CNEX CascNo. 5:18-CV-534 Labs, Inc., Delaware corporation, Plaintiff DEFENDANT'S NOTICE OF ’ REMOVAL UNDER 28 U.S.C. V. §§ 1332(a), 1367, 1441(a) AND 1446 FUTUREWEI TECHNOLOGIES [NC a (Santa Clara Superior Court Case No. Texas corporation; and DOES 1-10, inclusive, Defendant. I7CV321153) Complaint Filed: Dec. 28, 2017 EXlHBlT A DEFENDANT‘S NOTICE OF REMOVAL ‘ under 28 U.S.C. § 1446(b). Case Sz1o-u9100534 Document" 1 Filed 01/24/10 Rage 2 of a TO THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA AND TO PLAINTIFFS AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that Defendant Futurewei Technologies, Inc. (“Futurewei" or “Defendant”) hereby removes the above-referenced action from the Superior Court of the State of California for the County of Santa Clara, to the United States District Court for the Northern District ofCaIifomia, pursuant to 28 U.S.C. §§ I441 and I446, asserting original federal jurisdiction under 28 U.S.C. § 1332(8), and states that the removal is proper for the following reasons. TIMELINESS OF REMOVAL I. On or about December 28, 20l7, Plaintiffs Yiren Huang (“Huang“) and CNEX Labs, Inc. (“CNEX”) (collectively ”Plaintiffs") filed a complaint against Futurewei and DOES I through ID in the Superior Court ofthe State of California, County of Santa Clara, Case No. 17CV321 153 (the “Complaint"). A true and correct copy of the Complaint and all other process, pleadings, and orders are collectively attached hereto as Exhibit A. 2. I While separated out into four causes of action, Plaintiffs' Complaint essentially purports to assert a single claim for declaratory reliefagainst Futurewei on the enforceability of Huang’s January I9, 20] I Employment Agreement with Futurewei, including the enforceability ofthe inventions assignment provisions in the Agreement. See Compl. 111] 32-48; see also Compl. Ex. A (“Employment, Confidentiality, Proprietary, Information and Inventions Agreement") (hereinafter referred to as the “Employment Agreement"). 3. To date, Plaintiffs have not served the Complaint or Summons on Futurewei‘s registered agent for service ofprocess. (Declaration of Paul C. Hashim in Support of Defendant‘s Notice ofRemoval (“Hashim Decl."),1[ 14. Thus, the filing ofthis Notice of Removal is timely 4. Futurewei has not yet answered the Complaint nor filed any otherwise responsive papers in the Superior Court matter. /// DEFENDANT’S NOTICE OF REMOVAL O‘DOONO‘M-AWN- NNNNNNNNN--~--~--~- OONQMbUN-‘OOWQGtN-d Case Szlu-c3-00534 Document 1 Filed 01/24/1u Rage 3 of 8 DIVERSITY JURISDICTION 5. This action is a civil action that the Court has original jurisdiction over under 28 U.S.C. § 1332, and is one that may be removed under 28 U.S.C. § 1441(b) because the amount in controversy is in excess of $75,000, exclusive of interest and costs, and is between citizens of different states. A. Complete Diversity of Citizenship Exists. 6. Upon information and belief, plaintiff Huang was at the time the action was filed, and still is, a citizen of California. See Compl. 1] 4. 7. Upon information and belief, plaintiffCNEX was at the time the action was filed, and still is, incorporated in the State of Delaware and authorized to do business in California. See 1d. 1] 5. 8. Defendant Futurewei is diverse to Plaintiffs. Futurewei was at the time the action was filed, and still is, incorporated in the State of Texas with its principal place of business in Plano, Texas.l See id. 116; Hashim Decl..1]1l4, 7. in particular, the principal place of business for the ownership and management ofthe intellectual property assets at issue in this dispute is in Plano, Texas. Hashim Dccl.,1| 4. Futurewei is authorized to do business in California. See id. at 1] 4; Compl.1] 9. ' Futurewei has recently identified in prior cases Plano, Texas, as its principal place ofbusiness. See, e.g., Huawei Technologies Co. Ltd. at al. v. Huang et al., Case No 4:2017cv00893 (ED. Tex., filed Dec. 28, 2017); Quintel Technology Ltd. v. Huawei Technologies USA, Inc. et al., Case No. 4:2015cv00307 (ED. Tex., filed May 5, 2015); SmartPhone Technologies LLC v. Huawei Technologies Co., Ltd. at al., Case No. 6:2014cv00146 (ED. Tex., filed Feb. 27, 2014); SPH America, LLC v. Huawei Technologies, Co., LTD. et al., Case No. 3:2013cv02323 (ED. Tex., filed Sept. 26, 2013); InterDigital Communications, Inc. et al v. Huawei Investment & Holding Co., Ltd. et al., Case No. 1:2015cv04485 (SD. N.Y. filed June 9, 2015). In other prior cases, under the facts, circumstances, and organization of the company at that time, F uturewei has identified a principal place of business in California. See Blue Spike, LLC v. DDM BRANDS, LLC, Case No. 2:2015cv01779 (ED. Tcx., filed Nov. 11,2015); FastVDO LLC v. Huawei Technologies Co., Ltd. et al., Case No. 2:20150v00922 (ED. Tex., filed June 2, 2015); NNPT. LLC v. Huawei Investment & Holding Co., Ltd. at al., Case No. 2:2014cv00677 (ED. Tex., filed June 9, 2014); DataQuill Limited v. Huawei Technologies Co LTD et al., Case No. 2:2013cv00633 (ED. Tex., filed Aug. 16, 2013); Memory Integrity LLC v. Huawei Device USA Inc. et al., Case No. 1:2013cv01803 (D. Del., filed Nov. 1,2013); Futurewei Technologies, Inc. et al. v. Acacia Research Corporation at al., Case No. SACV12-0511 AG (JPRx) (CD. Cal., filed April 4, 2012). 3 DEFENDANT’S NOTICE OF REMOVAL \OmflO‘Mw- NNNNNNNNN#-------_‘_ WQONUIAWN~OOOOHOKLIIbLfiN-O Case sz1a-cvloosa4 Document 1 Filed 01/24/16 Page 4 of a 9. Contrary to the Complaint’s allegations, Futurewei's headquarters are not located at 2220 Central Expressway, Santa Clara, Califomia 95050. Hashim Decl., 1| 7. Indeed, while Futurewei does identify a ”Futurewei (R&D) USA Headquarters" in California, this is not a legal entity of Futurewei and has no organizational relevance within Futurewei. 1d. Futurewei‘s principal place of business is located in Plano, Texas. Id. at 1111 4, 7. 10. Accordingly, for removal purposes, Futurewei is a citizen of the State of Texas. 1 1. Pursuant to 28 U.S.C. § l44l(b)(l), the residence offictitious and unknown defendants should be disregarded for purposes of establishing removal jurisdiction under 28 U.S.C. § 1332. Thus, the existence of DOE defendants 1 through l0, inclusive, does not deprive this Court ofjurisdiction. B. The Amount in Controversy Exceeds $75,000. 12. The amount in controversy exceeds the sum or value of $75,000 with respect to the allegations asserted by Plaintiffs, exclusive of interest and costs. l3. To determine whether the amount in controversy exceeds thejurisdictional minimum, the Court must look at the allegations contained in the complaint. See Horton v. Liberty Mutual Ins. Co., 367 US. 348, 353 (l96l). While Futurewei denies any liability as to Plaintit’fs‘ claims, the amount in controversy requirement is satisfied because “it is more likely than not” that the amount alleged exceeds thejurisdictional minimum of $75,000. See Sanchez v. Monumental Life Ins, 95 F.3d 856, 862 (9th Cir. 1996) (“defendant must provide evidence establishing that it is ‘more likely than not’ that the amount in controversy exceeds [the threshold] amount"). 14. “In actions seeking declaratory or injunctive relief, it is well established that the amount in controversy is measured by the value ofthe object ofthe litigation." Hunt v. Wash. State Apple Adver. Comm 'n, 432 US. 333, 347 (I 977). in non-class action cases, the amount in controversy may be met from the viewpoint of either the plaintiff or defendant, that is, “the value of the thing sought to be accomplished by the action may relate to either or any party to the action.” In re Ford Motor Co., 264 F.3d 952, 958 (9th Cir. 200i); Ridder Bros. v. Blethen, I42 F.2d 395, 399 (9th Cir. 1944). DEFENDANT’S NOTICE OF REMOVAL socouaxm AUN Case 5:1 iii-00534 Dedument‘l Filed 01/24/11. «r-age 5 of8 15. in addition, where the object ofthe litigation is an employment agreement designed to protect a company's confidential information, the value to the company of protecting that information is the amount in controversy. See Union Pacific R Co. v. Mower, 219 F. 3d 1069, l07l n.1 (9th Cir. 2000) (noting that the uvalue to [the employer] of protecting its confidential information from disclosure far exceeded the requisite jurisdictional amount [of $75,000].”); see also Davis v. Adi». Care Tee/13., Inc., No. ClV S 06-2449 DFL DAD, 2007 WL 1302736, at *2 (ED. Cal. May 2, 2007); Hartsrein v. Rembrandt 1P Solutions, LLC, 2012 WL 3075084, at *4 (ND. Cal. July 30, 2012) (denying motion to remand and finding that value of trade secrets and confidential information known to plaintiff satisfied the amount in controversy). 16. Plaintiffs do not specify an amount in controversy in their Complaint, except that “the amount in controversy exceeds the sum or value of $25,000.“ See Compl.1]2. While Futurewei denies any liability as to Plaintiffs‘ claims, the amount in controversy requirement is satisfied because it is more likely than not that the amount in controversy exceeds the jurisdictional minimum of $75,000 because the confidential, proprietary, and trade secret information underlying this dispute and sought to be protected by Futurewei exceeds $75,000. See Hashim Decl., 1H] 9-l 3. 17. In particular, Plaintiffs' Complaint alleges that on or about July 30, 2016, Huang received a letter from Futurewei's counsel demanding that he assign certain patents to Futurewei. See Compl. 1] 26. Plaintiffs’ Complaint further alleges that Futurewei contends that Huang‘s new employment with and assignment of certain patents to CNEX violates the Agremcent. Id. at {I 27. Plaintiffs have brought the present action seeking declaratory relief on the Agreement and its inventions assignment provision encompassing those patents at issue. See id. at in] 17-25. Accordingly, the object of this litigation is the value ofthose patents to Futurewei, including the underlying confidential, proprietary, and trade secret information alleged to have been misappropriated by Huang and CNEX. 18. Futurewei’s Agreement with Huang protects Futurewei’s valuable trade secret and confidential information. See Employee Agreement, Recitals and §§ l, 3. 8, 9, 10. The 5 DEFENDANT’S NOTICE OF REMOVAL \OmflO‘LfléwN- NNMMNNNMN----v---------- mummauN-oomuo‘mw-o Case Szto-eG-oosaza Document 1 Filed o1/24/1a-maage 6 of a valuation of trade secret and confidential information is necessarily “inexact," but courts have routinely found the amount in controversy satisfied based on an employer‘s reasonable valuation of its confidential information. Johnson v. ISCO Indus, No. 08-CV-485, 2008 WL 4999274, at *2 (ED. Wise. Nov. 21, 2008) (“A valuation of [the] misappropriation of customer goodwill and confidential information is difficult and inexact[.]"); see also Scaflv. Ralcorp Holdings, Inc, No. 06-CV-538-DRH, 2006 WL 3210337, at *2 (SD. lll. Nov. 6, 2006) (finding that a defendant employer‘s claims that a judgment rendering the plaintiff‘s employment agreement void and unenforceable is valued at more than $75,000 satisfies the amount in controversy requirement because “unless it appears to a ‘legal certainty' that the amount will not exceed $75,000, jurisdiction should not be denied"). 19. As a Principal Engineer and leading architect for Futurewei‘s SSD storage group, Huang directly participated in and assisted in developing Futurewei’s (and its parent company Huawei Technologies Co., LTD ("Huawei") Advanced Computing Network (“CAN"), Solid State Drive (“SSD"), and Non-Volatile Memory Express (“NVMe”) related technology, and in developing information necessary for Futurewei to conduct its business in a competitive market place. Hashim Decl. 111] 8. Huang was entrusted with and maintained regular and ongoing access to Futurewei’s and Huawei's confidential, proprietary, and trade secret information, which included, but was not limited to, the research and development oftheir ACN, SSD, and NVMe related technology. at Id. 1|9. 20. Futurewei has spent sums exceeding $75,000 and many years developing this confidential, proprietary, and trade secret information that is vital to its success. 1d. at1| I0. 2]. On June 26, 20l3, less than a month afier he departed Futurewei, Huang filed the first of at least eighteen patent applications that relate to work and research that Huang performed while employed at Futurewei. See id. atfil ll. 22. On July 29, 2016, Futurewei sent Huang and CNEX a letter demanding that they honor the terms of Huang’s contractual obligations and provide notice of all Subject Ideas or Inventions to Futurewei. See Compl.1]26. /// DEFENDANT’S NOTICE OF REMOVAL J} W'fl O\ KI! 00 12 13 14 IS 16 17 18 19 20 21 22 23 24 25 26 27 28 Case Snowy-00534 Document 1 Filed 01/24/10‘ Page 7 of 8 23. Futurewei is informed and believes that Huang has taken the confidential, proprietary, and trade secret information, along with the specialized training and the skills he , developed at Futurewei, and is now using them to develop and sell high-level products on behalf of his new employer, CNEX. Hashim Dec|., fil l2. Futurewei is further informed and believes that this use and disclosure is ongoing and continuing, as this information serves as part ofthe basis for some of Futurewei and Huawei’s products, and also patented designs oftheir ACN and SSD technology. 24. The value to Futurewei (and its competitors) of this confidential, proprietary, and trade secret information known to and allegedly misappropriated by Huang, as well as the value ofthe underlying patents and patent applications at issue, far exceed $75,000.1d. at 11 12. 25. Futurewei’s confidential, proprietary, and trade secret information is of great value to Futurewei and could give any competitor of Futurewei, including Huang‘s current employer-CNEX-an unfair competitive advantage. 1d. at 1] 13. 26. Accordingly, the amount in controversy exceeds $75,000. See, e.g., Davis v. Adv. Care Techs, Inc, 2007 WL 1302736, at *2 (“Given the undisputed nature and scale of defendants’ business, the value ofthe trade secrets and confidential information known to [plaintiff] surely exceeds $75,000."). 27. Accordingly, the amount in controversy requirement of 28 U.S.C. § 1332 has been met and this action is removable pursuant to 28 U.S.C. § 1441.m 28. Because diversityjurisdiction exists, the state court action commenced in the Superior Court ofthe State ofCalifomia, County of Santa Clara, may be removed to the United States District Court for the Northern District of California, which includes Santa Clara County within itsjurisdiction. See 28 U.S.C. §§ 1441(a), 1446(a), and 84(b). Futurewei believes the proper forum for any disputes between the parties is in the United States District Court for the Eastern District of Texas. M M DEFENDANT‘S NOTICE OF REMOVAL osoooxlo‘mAum- NNNNNMNNN___-_._._.___ m\IO\M&wN-O\OW\IO\U\#UN- Case‘suo-cv-oosaz: Document 1 Filed 01/24/10 Page 80f8 NOTICE TO STATE COURT 29. A true and correct copy of this Notice of Removal will be promptly served on Plaintiffs and filed with the Clerk ofthe Superior Court ofthe State of California, County of Santa Clara, as required by law. 30. WHEREFORE, Futurewei prays that the above action now pending before the Superior Court ofthe State ofCalifomia for the County ofSanta Clara be removed to this Court. 3 I. Futurewei reserves its right to amend or supplement this Notice of Removal. DATED: January 24, 2018 Respectfully submitted, SEYFARTH SHAW LLP By: /5/ Robert B. Milligan Robert B. Milligan D. Joshua Salinas Attorneys for Defendant FUTUREWEI TECHNOLOGIES, INC. DEFENDANT‘S NOTICE OF REMOVAL AWN Ln 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE STATE OF CALIFORNIA SS COUNTY OF SANTA CLARA EAIV‘E. LE JAN 26 2018 within action. My business address is 2029 Century Park East, Suite 3500, Los An 6 5, California 90067-3021. On January 26, 2018, I served the within document(s):;|erk of the I am a resident of the State of Califomia, over the age of eighteen years, and nEt a party to the Superior 00““? my CIBTE DEFENDANT FUTUREWEI TECHNOLOGIES, INC.’SWOIICE-'-F9~S¥A-'I‘-E-€Q§U‘RT OF REMOVAL TO UNITED STATES DISTRICT COURT by placing the docum'ent(s) listed above in a sealed envelope with postage thereon fully prepaid, E in the United States mail at Los Angeles, California, addressed as set forth below. by placing the document(s) listed above, together with an unsigned copy of this declaration, in a D sealed envelope or package provided by an overnight delivery carrier with postage paid on account and deposited for collection with the overnight carrier at Los Angeles, California, addressed as set forth below. E] by transmitting the document(s) listed above, electronically, via the e-mail addresses set forth below. D electronically by using the Court’s ECF/CM System. FENWICK & WEST LLP Attorneys for PlaintiffCNEX LABS, INC. Michael J. Sacksteder Guinevere Jobson Shannon Turner 555 California Street, 12th Floor San Francisco, California 94104 Telephone: (415) 875-2300 Facsimile: (415) 281-1350 FENWICK & WEST LLP Attorneys for PlaintiflCNEX LABS, INC. Daniel J. McCoy Silicon Valley Center 801 California Street Mountain View, California 94041 Telephone: (650) 988-8500 Facsimile: (650) 938-5200 PROOF OF SERVICE 44062053v.l A \OOONQLA 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LATHAM & WATKINS LLP Attorneys for PIainti/fYIREN HUANG Gabriel S. Gross Arman Zahoory 140 Scott Drive Menlo Park, California 94025 Telephone: (650) 328-4600 Facsimile: (650) 463-2600 I am readily familiar with the firm's practice of collection and processing correspondence for mailing. Under that practice it would be deposited with the US. Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business. I am aware that on motion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. I declare under penalty of perjury under the laws of the State of California that the above is true and correct. Executed on January 26, 2018, at Los Angeles, California. 2 PROOF OF SERVICE 44062053“