United States District Court, W.D. Kentucky, Louisville Division
MEMORANDUM OPINION AND ORDER.
REBECCA GRADY JENNINGS, DISTRICT JUDGE
Phoenix Process Equipment Company (“Phoenix”)
brings this action against Defendants Capital Equipment &
Trading Corporation (“Trading Corporation”),
Trading Corporation foreign affiliate Coralina Engineering,
LLC (“Coralina”), and Trading Corporation CEO
Alexander Chudnovets alleging breach of contract (Count I),
unfair competition and “passing off” (Count II),
violation of the Uniform Trade Secrets Act, KRS §
365.880, et seq. (Count III), conspiracy (Count IV), and
fraud and fraud in the inducement (Count V). [DE 40, Amend.
Compl. at ¶¶ 32-51]. This matter is now before the
Court on Phoenix's Motion for Reconsideration [DE 126] of
the Court's Order denying Phoenix's Motion for Leave
to File its Second Amended Complaint [DE 110]. Briefing is
complete, and the Motion is ripe. [See DE 128, Response; DE
129, Reply]. For the reasons below, the Court DENIES
underlying facts are detailed in the Court's previous
opinions. At issue here is the Court's ruling on
Phoenix's Motion for Leave to File its Second Amended
Complaint. [DE 110]. In that Motion, Phoenix sought to revive
Counts II, IV, and V, which the Court had previously
dismissed for, among other things, being preempted by
Kentucky's version of the Uniform Trade Secrets Act (the
“UTSA”), the Kentucky Uniform Trade Secrets Act
(the “KUTSA”). See Phoenix Process Equip. Co. v.
Capital Equip. & Trading Corp., No. 3:16-CV-00024-JHM,
2017 WL 157834, at *1 (W.D. Ky. Jan. 13, 2017), on
reconsideration in part, 250 F.Supp.3d 296 (W.D. Ky. 2017).
The Court denied Phoenix's Motion on February 11, 2019,
and Phoenix now asks the Court to reconsider that ruling.
courts have inherent power to reconsider interlocutory orders
and reopen any part of a case before entry of a final
judgment.” In re Saffady, 524 F.3d 799, 803 (6th Cir.
2008). “A district court may modify, or even rescind,
such interlocutory orders.” Mallory v. Eyrich, 922 F.2d
1273, 1282 (6th Cir. 1991). Although the Federal Rules of
Civil Procedure do not expressly provide for “motions
for reconsideration, ” courts generally construe such
motions as motions to alter or amend a judgment under Rule
59(e). See Moody v. Pepsi-Cola Metro. Bottling Co., 915 F.2d
201, 206 (6th Cir. 1990).
Sixth Circuit has consistently held that a Rule 59 motion
should not be used either to reargue a case on the merits or
to reargue issues already presented, Whitehead v. Bowen, 301
Fed.Appx. 484, 489 (6th Cir. 2008) (citing Roger Miller
Music, Inc. v. Sony/ATV Publ'g, LLC, 477 F.3d 383, 395
(6th Cir. 2007); Sault Ste. Marie Tribe of Chippewa Indians
v. Engler, 146 F.3d 367, 374 (6th Cir. 1998)), or otherwise
to “merely restyle or rehash the initial issues,
” White v. Hitachi, Ltd., No. 3:04-CV-20, 2008 WL
782565, at *1 (E.D. Tenn. Mar. 20, 2008) (internal quotation
marks and citation omitted). “It is not the function of
a motion to reconsider arguments already considered and
rejected by the court.” White, 2008 WL 782565, at *1
(citation omitted). Where a party views the law in a light
contrary to that of this Court, its proper recourse is not by
way of a motion for reconsideration but appeal to the Sixth
Circuit. Helton v. ACS Group, 964 F.Supp. 1175, 1182 (E.D.
Tenn. 1997); Dana Corp. v. United States, 764 F.Supp. 482,
489 (N.D. Ohio 1991) (citations omitted).
the Sixth Circuit instructs that a motion for reconsideration
should only be granted in four situations: “(1) a clear
error of law; (2) newly discovered evidence; (3) an
intervening change in controlling law; or (4) a need to
prevent manifest injustice.” Leisure Caviar, LLC v.
U.S. Fish & Wildlife Serv., 616 F.3d 612, 615 (6th Cir.
2010) (internal quotation marks and citation omitted).
Because there is an interest in the finality of a decision,
motions for reconsideration “are extraordinary and
sparingly granted.” Marshall v. Johnson, No.
CIV.A.3:07-CV-171-H, 2007 WL 1175046, at *2 (W.D. Ky. Apr.
19, 2007) (citing Plaskon Elec. Materials, Inc. v.
Allied-Signal, Inc., 904 F.Supp. 644, 669 (N.D. Ohio 1995)).
does not allege newly discovered evidence that would impact
the outcome of the Court's prior ruling. Nor does Phoenix
argue that there has been a change in the law governing the
case in the three weeks between the Court's February 2019
Order and Phoenix's March 2019 Motion, or that the
Court's Order would lead to “manifest
injustice.” Instead, Phoenix asserts that the Court
made a clear error of law by ruling that that the KUTSA
preempts Phoenix's unfair competition, conspiracy, and
fraud claims. [DE 126 at 2302-04]. Before the Court's
February 2019 Order, the Court had previously held that the
KUTSA preempted Phoenix's unfair competition and
conspiracy claims, and that Phoenix failed to plead its fraud
claims with particularly, as required by Federal Rule of
Civil Procedure 9(b). [DE 57; DE 75]. The Court's February
2019 Order merely reaffirmed that the KUTSA preempts the
unfair competition and conspiracy claims,  and held that
even if Phoenix's proposed Amended Complaint cured the
Rule 9(b) pleading issue for the fraud claim, the KUTSA
preempts that claim as well.
Phoenix now argues for the third time that the KUTSA does not
preempt its unfair competition, conspiracy, and fraud
claims. As the Court indicated in its February
2019 Order, the Sixth Circuit has not directly addressed
KUTSA preemption. But because the UTSA is a uniform law,
decisions in other jurisdictions provide guidance for its
application and construction. Brake Parts, Inc. v. Lewis, 443
Fed.Appx. 27, 31 (6th Cir. 2011) (citing Auto Channel, Inc.
v. Speedvision Network, LLC, 144 F.Supp.2d 784, 789 (W.D. Ky.
disagree about the reach of the UTSA's preemption
provision. Some courts, including most in this Circuit, have
found that the UTSA preempts laws that protect commercially
valuable information, regardless of whether the information
qualifies as a trade secret. See, e.g., Composite Marine
Propellers, Inc. v. Van Der Woude, 962 F.2d 1263, 1265 (7th
Cir. 1992) (per curiam); Margae, Inc. v. Clear Link Techs.,
LLC, 620 F.Supp.2d 1284, 1285 (D. Utah 2009); Spectrum Scan,
LLC v. AGM California, 519 F.Supp.2d 655, 656 (W.D. Ky.
2007); Hauck Mfg. Co. v. Astec Indus., Inc., 375 F.Supp.2d
649, 655 (E.D. Tenn. 2004); Auto Channel, 144 F.Supp.2d at
789; Hutchison v. KFC Corp., 809 F.Supp. 68, 71 (D. Nev.
1992). Meanwhile, other courts have held that if a cause of
action requires pleading “more” than trade-secret
misappropriation, the UTSA is not preemptive. See, e.g.,
Weins v. Sporleder, 605 N.W.2d 488, 492 (S.D. 2000); Powell
Prod., Inc. v. Marks, 948 F.Supp. 1469, 1474 (D. Colo. 1996);
Micro Display Sys., Inc. v. Axtel, Inc., 699 F.Supp. 202, 205
(D. Minn. 1988). Courts in this Circuit have explicitly
rejected this same-elements test. See Stolle Mach. Co., LLC
v. RAM Precision Indus., 605 Fed.Appx. 473, 486 (6th Cir.
2015) (finding that Ohio's version of the UTSA preempted
Stolle's conspiracy claim because “[e]ven though
proof of conspiracy requires proving additional facts . . .
beyond the underlying unlawful act, the conspiracy claim is
dependent on proof of the underlying . . . misappropriation
of trade secrets.”); Hauck Mfg. Co., 375 F.Supp.2d at
655-58 (“[P]erhaps a better formulation of the UTSA
preemption standard would be a ‘same proof'
standard under which a claim will be preempted when it
necessarily rises or falls based on whether the defendant is
found to have ‘misappropriated' a ‘trade
secret' as those two terms are defined in the UTSA.
Stated another way, if proof of a non-UTSA claim would also
simultaneously establish a claim for misappropriation of
trade secrets, it is preempted irrespective of whatever
surplus elements or proof were necessary to establish
Court's ruling in Auto Channel is most instructive. In
that case, Judge Heyburn discussed the history of the UTSA,
which “establishes a statutory scheme governing the
definition, protection, and penalties for misappropriation of
trade secrets.” 144 F.Supp.2d at 788-89. He noted that
the KUTSA “replaces all conflicting civil state law
regarding misappropriation of trade secrets except for those
relating to contractual remedies.” Id. at 789
(citation omitted). He explicitly rejected the argument that
the KUTSA “only applies to information that meets the
statutory definition of trade secrets and that if
commercially valuable information, for whatever reason, does
not meet the statutory definition, then common law
misappropriation remedies remain” because
“[w]hile a selective reading of [the] KUTSA might seem
to support such an argument, the history, purpose, and
interpretation of the statute absolutely precludes it.”
Id. at 788-89. Specifically, the UTSA sought
“to create a uniform business environment that created
more certain standards for protection of commercially
valuable information, ” and a reading that ignores the
mandate that the UTSA “replaces conflicting remedies .
. . would undermine the uniformity and clarity that motivated
the creation and passage of [the UTSA].” Id.
(citing Reingold v. Swiftships Inc., 210 F.3d 320, 322 (5th
Cir. 2000)). Accordingly, the Court concluded that the KUTSA
“replaces other law relating to the misappropriation of
trade secrets, regardless of whether the Plaintiffs
demonstrate that the information at issue qualifies as a
trade secret.” Id. at 789.
case, Phoenix's proposed Second Amended Complaint removes
references to “trade secrets” and makes other
minor changes. [DE 110-2]. However, Phoenix's unfair
competition and “passing off” claim (Count II)
still centers on the notion that Defendants misused
Phoenix's “confidential information and
designs” to reverse-engineer and sell “knock
off” Phoenix machines and equipment. [Id. at
¶ 46]. The conspiracy claim (Count IV) likewise relies
on the idea that Defendants used Phoenix's
“confidential and proprietary equipment designs, and
training . . . to manufacture belt filter presses and parts
which they marketed and sold as Phoenix products to customers
in the exclusive sales territory covered by the Distributor
Agreements.” [Id. at ¶ 50]. And on the
fraud claim (Count V), Phoenix alleges that Defendants
misrepresented or fraudulently concealed their alleged
“alter ego” relationship and connection with
Elemet to induce Phoenix to disclose “confidential
designs, drawings, training, and other documents, ”
which were later used to manufacture and sell “knock
off” Phoenix products. [Id. at ¶¶