Bombardier Inc. v. Mitsubishi Aircraft Corp.

383 F.Supp.3d 1169

BOMBARDIER INC., Plaintiff,

v.MITSUBISHI AIRCRAFT CORPORATION, et al., Defendants.

CASE NO. C18-1543JLR

United States District Court, W.D. Washington, at Seattle.

Signed April 15, 2019

Brian Francis McMahon, Erin Lindsay Calkins, Jeffrey E. Danley, John D. Denkenberger, Christensen O'Connor Johnson & Kindness, Seattle, WA, for Plaintiff.

James Sanders, Jerry A. Riedinger, Mack Harrison Shultz, Jr., Mary Z. Gaston, Shylah Renee Alfonso, Perkins Coie, Daniel T. Hagen, Mark A. Bailey, Richard J. Omata, Karr Tuttle Campbell, Jacob P. Freeman, James P. Savitt, Savitt Bruce & Willey LLP, Seattle, WA, for Defendants.

ORDER ON MOTIONS TO DISMISS

JAMES L. ROBART, United States District Judge

I. INTRODUCTION

Before the court are: (1) Defendant Mitsubishi Aircraft Corporation America, Inc.'s ("MITAC America") motion to dismiss certain claims (MITACA MTD (Dkt. # 54)); and (2) Defendants Aerospace Testing Engineering & Certification, Inc. ("AeroTEC"), Michel Korwin-Szymanowski, Laurus Basson, and Cindy Dornéval's (collectively, "AeroTEC Defendants") motion to dismiss certain claims (AeroTEC MTD (Dkt. # 56)). Plaintiff Bombardier Inc. ("Bombardier") opposes both motions (Pl. MITACA Resp. (Dkt. # 91); Pl. AeroTEC Resp. (Dkt. # 92)), and MITAC America and AeroTEC Defendants filed replies (MITACA Reply (Dkt. # 96); AeroTEC Reply (Dkt. # 95)). The court has considered the motions, the parties' submissions concerning the motions, the relevant portions of the record, and the applicable law. Being fully advised,¹ the court GRANTS MITAC America's motion, GRANTS in part and DENIES in part AeroTEC Defendants' motion, and GRANTS Bombardier leave to file an amended complaint within 15 days of the date of this order.

II. BACKGROUND

This action concerns alleged trade secret misappropriation and related claims for breach of contract and tortious interference with business expectancies and/or contracts. (See generally Compl. (Dkt. # 1).)

A. The Parties and Aircraft Certification

Bombardier is a Canadian corporation and one of the world's leading plane manufacturers. (Id. ¶¶ 2, 21.) Bombardier employs more than 29,000 people in its Aerospace division. (Id. ¶ 22.) As part of its operations, Bombardier developed the C-Series, which is a "clean-sheet" aircraft in a family of "medium-range jet airliners that marks a dramatic improvement over older competing aircrafts in terms of efficiency and dependability." (Id. ¶ 23.) The C-Series can accommodate between 110 and 135 passengers over 3,200 nautical miles and does so "at measurably lower operating costs than existing aircraft of that class." (Id. )

Bombardier began investigating the feasibility of the C-Series in 2004, with efforts picking up "in earnest" in January 2007. (Id. ¶¶ 24-25.) Bombardier then committed "full-scale resources to the C-Series program over the next six-and-a-half years," at which point it received government approval for the first C-Series aircraft test flight. (Id. ¶ 26.) After another three years and further government approvals, the first C-Series entered service. (Id. )

A clean-sheet aircraft is difficult and costly to certify. (Id. ¶¶ 27-32.) Since 2000, only four companies worldwide have developed a commercial clean-sheet aircraft that meets the requirements of the Federal Aviation Administration ("FAA") and the FAA's counterparts in Canada and Europe. (Id. ) In addition to the many steps involved in certifying an aircraft, the certification processes have time limits. (Id. ¶ 30.) For example, one certification process—the "type certification"—must be completed within five years. (Id. ) If an applicant fails to achieve certification within this time limit, it must certify the aircraft to updated FAA standards, "thereby incurring significant and redundant costs in the process." (Id. ) Bombardier has certified 10 clean-sheet design and derivative programs since 2006. (Id. ¶ 33.) According to Bombardier, "[t]his whole process—design, certification, production—is the heart of each company's competitive advantage, its own special secret sauce." (Id. (quoting Denkenberger Decl. (Dkt. # 1-10) ¶ 15, Ex. 14 at 64² ).)

Around the same time that Bombardier began investigating the C-Series, "the Japanese government in conjunction with Mitsubishi Heavy Industries, Ltd. (‘MHI’) initiated its own investigation into the feasibility of a similar aircraft project—the Mitsubishi Regional Jet (‘MRJ’)." (Compl. ¶ 34.) MHI then established Defendant Mitsubishi Aircraft Corporation ("MITAC"), a Japanese corporation, to "conduct MRJ business." (Id. ¶¶ 3, 35.) The MRJ program was officially launched in 2008, with a 2013 target date for the MRJ to enter service. (Id. ¶ 35.) The MRJ, however, experienced numerous delays. (Id. ¶¶ 36-43.) As a result, on June 4, 2014, MITAC formed MITAC America to help with the MRJ's design, development, and certification. (Id. ¶ 41.) MITAC America is a subsidiary of MITAC. (Id. ¶ 4.) Further, by July 14, 2014, MITAC enlisted AeroTEC, "a small engineering company that provides flight-testing and aircraft certification services, [to] provide technical support for MITAC's MRJ project." (Id. (internal quotation marks omitted).) On August 3, 2015, MITAC, MITAC America, and AeroTEC created and jointly staffed the Seattle Engineering Center to manage the MRJ's flight testing, development, and certification in the United States. (Id. ¶ 42.)

Despite these efforts, the MRJ incurred further delays. (Id. ¶¶ 43-48.) In January 2017, MITAC announced the fifth delay, changing the delivery date to sometime around 2020. (Id. ¶ 47.) In explaining this fifth delay, MITAC stated that it made design changes to the MRJ's avionics bay and electrical wire routing in December 2016, which required additional certification. (Id. ¶ 48.) MITAC further explained that, because of this delay, it "would be forced to return to the first stages of preliminary design review for the design change area." (Id. ¶ 47 (internal quotations omitted).) In sum, MITAC claimed that the fifth delay was needed to mitigate the "risk of not meeting certification criteria, or having to make changes even further down the aircraft's development." (Id. ¶ 48.)

B. Bombardier Employee Recruitment

Shortly before MITAC announced the MRJ's fourth delay in December 2015, MITAC, MITAC America, and AeroTEC began to recruit Bombardier personnel. (Id. ¶ 49.) As part of this effort, MITAC and MITAC America organized a job fair in Montréal, Canada for July 15-16, 2016, at a venue located less than one kilometer from Bombardier's principal place of business. (Id. ) In promoting this job fair, MITAC and MITAC America advertised that they were "looking to hire over 200 Aircraft System Engineers who can work on Certification activities of MRJ aircraft." (Id. (quoting Denkenberger Decl. ¶ 29, Ex. 28 at 135).)

Bombardier claims that these recruitment efforts quickly paid off for MITAC and MITAC America. For example, on August 18, 2016, MITAC hired Keith Ayre to join the MRJ project. (Compl. ¶ 49.) Mr. Ayre had been a Design Approval Designee for Bombardier and "was critical to Bombardier's own certification efforts regarding the C-Series and Global 7000/8000 Aircraft." (Id. ) Bombardier asserts that, although Mr. Ayre did not terminate his Bombardier employment until August 26, 2016, "MITAC was actively soliciting, and Mr. Ayre was actively providing, MRJ certification guidance during Bombardier business hours." (Id. )

In addition to the Montréal job fair, AeroTEC organized a job fair for October 23-24, 2015, in Wichita, Kansas, which is the home of Bombardier's Flight Test Center in the United States. (Id. ¶ 50.) AeroTEC held this job fair "to interview candidates to work on MRJ flight testing in Seattle." (Id. ) AeroTEC arranged for billboards advertising the job fair to be displayed immediately outside Bombardier's Flight Test Center. (Id. (citing Denkenberger Decl. ¶ 30, Ex. 29 at 137-41).)

MITAC, MITAC America, and AeroTEC also retained a recruiting service, contacted Bombardier personnel via email, and used successfully-recruited former Bombardier personnel to entice former colleagues to join MITAC, MITAC America, and AeroTEC. (Id. ¶ 51.) For example, Mr. Korwin-Szymanowski of AeroTEC—who had worked at Bombardier for approximately 15 years—sent an email on October 20, 2015, to 247 Bombardier email accounts stating that positions were open immediately to work on "the development and certification" of the MRJ. (Id. ¶¶ 6, 51.)

Bombardier took numerous steps to stop AeroTEC's targeted recruitment of its employees, including: informing AeroTEC and Mr. Korwin-Szymanowski of the ongoing confidentiality duties Mr. Korwin-Szymanowski owed to Bombardier; explaining that the recruitment efforts were occurring at a critical time in Bombardier's development of the C-Series, as well as the Global 7000 and Global 8000 Aircraft, and therefore may harm Bombardier's affairs; and providing a copy of Bombardier's Code of Ethics that contained employees' confidentiality agreements. (Id. ¶¶ 52-53, Ex. D ("Code of Ethics") at 17-18.) Bombardier also repeatedly reached out to MHI and MITAC to address similar concerns with recruiting, specifically expressing that Bombardier has "reasons to believe that the employees recruited by MHI will use intellectual property owned by Bombardier to assist MHI in developing the MRJ aircraft which will compete against Bombardier aircraft." (Compl. ¶¶ 54-58, Ex. H at 2.) According to Bombardier, its attempts to stop the recruitment of its employees was unsuccessful: MITAC, MITAC America, and AeroTEC now employ "at least 92 former Bombardier personnel whose current job responsibilities relate directly to the development, certification, and/or commercialization of the MRJ." (Compl. ¶ 59.)

Bombardier further claims that many of the employees who left "absconded with highly sensitive Bombardier trade secret information." (Id. ) For example, on Mr. Basson's last day at Bombardier before joining AeroTEC to work on the...