United States District Court, S.D. New York.
ORDER AND OPINION
PAUL A. CROTTY, District Judge.
Plaintiff The A Star Group, Inc. ("AStar") alleges 15 claims against Manitoba Hydro ("Hydro"), KPMG LLP (Canada), KPMG LLP (US) (collectively, "KMPG"), and the Manitoba Public Utilities Board ("PUB") (collectively, "Defendants"), inter alia, for breach of contract, misappropriation of trade secrets, unfair competition, copyright infringement, unjust enrichment, and tortious interference with contract. From 2004 to 2008, AStar worked as an independent consultant for Hydro, the electric power and natural gas utility for Manitoba, Canada, and purports to have uncovered series risk management issues at Hydro. When the arrangement with Hydro ended, AStar decided to switch sides to become a "whistleblower." It supplied various documents to PUB for use in its regulatory review of Hydro. Subsequently, PUB released the reports AStar had supplied to the public. At about the same time, Hydro retained KPMG to review AStar's findings and provided KPMG with AStar's reports. Plaintiff claims that its reports contained confidential information and therefore Defendants should be held liable for the disclosure and use of that information.
On November 22, 2013, Defendants moved to dismiss the Complaint. For the following reasons, Defendants' motions to dismiss are GRANTED with prejudice.
I. PUB's Oversight of Hydro
Hydro, whose principal business is the generation of hydro-electric power, is a Crown Corporation formed under the laws of Manitoba, Canada. Compl. ¶¶ 21-22; see Declaration of Kenneth E. Lee in Support of Defendant the Public Utilities Board of Manitoba's Motion to Dismiss and Strike the Demand for a Jury Trial ("Lee Decl."), ECF No. 29, Ex. A (The Manitoba Hydro Act). PUB has exclusive jurisdiction to review Hydro's proposed service rate charges. See id., Ex. B (The Crown Corporations Public Review and Accountability Act). When Hydro applies for a rate increase, PUB conducts a general rate application proceeding ("GRA") to determine whether the requested change is in accordance with Hydro's mandate and the public interest. See id., Ex. B.
GRA proceedings are public, and it is presumed that all documents filed with PUB will be placed "on the public record." See id., Ex. D, PUB Rules of Practice and Procedure § 13(1). Rule 13 also allows PUB to protect information it deems to be commercially sensitive information or trade secrets. See id., Ex. D, PUB Rule § 13(2). PUB has the discretion to place the documents in the public record, redact them, or withhold them entirely. See id., Ex. D, PUB Rule § 13(3). If the party who originally filed the document objects to its release, it may request that the document be withdrawn. See id., Ex. D, PUB Rule § 13(5). PUB's decision may be appealed to the Manitoba Court of Appeal. See id., Ex. C § 58(1).
II. AStar's Work for Hydo
In late 2004, Hydro engaged AStar to assist in addressing its growing risk management issues. Compl. ¶ 76. Hydro and AStar subsequently entered into the Master Service Agreement ("MSA") and Software License Agreement ("SLA"), which governed the terms of AStar's engagement. Id. ¶ 92; see Declaration of Michael R. Hepworth in Support of Manitoba Hydro's Motion to Dismiss ("Hepworth Decl."), ECF No. 23, Exs. G & L. Both agreements provide that Hydro will maintain the confidentiality of AStar's proprietary information and trade secrets; and not disclose the information to third parties. Compl. ¶¶ 94-106; see Hepworth Decl., Ex. G §§ 8, 10.1, 10.4, 10.6(b), Ex. L §§ 5.5-5.6, 8.1. Both agreements also contain a New York governing law clause and forum selection clause. See Hepworth Decl., Ex. G § 21.2, Ex. L § 12.3-12.4. The parties subsequently entered into letter agreements on August 21, 2007 and January 31, 2008 extending the terms of the MSA and SLA (the "letter agreements"). Compl. ¶¶ 107-11.
AStar alleges that it uncovered a number of management issues at Hydro, including (a) discrepancies, misalignments, and risks in the hydraulic water management system, id. ¶ 121, (b) operational risks, id. ¶ 122, and (c) serious flaws in the front office business approach, id. ¶ 123. On September 29, 2008, AStar prepared advanced findings of its Hydraulics report and provided them to Hydro CEO Bob Brennan. Id. ¶ 139. AStar concluded that Hydro operated far below optimum and would face the risk of forced blackouts, if the flaws were not corrected immediately. Id. ¶ 140. The next day, Hydro terminated its relationship with AStar. Id. ¶ 142.
III. KPMG's Work for Hydro
Subsequently, Hydro retained KPMG to analyze AStar's findings and ultimately prepare a report either validating or rebutting AStar's analysis. Id. ¶ 162-63. On December 21, 2009, Hydro filed an action with the Manitoba Court of Queen's Bench seeking approval to publically release KPMG's analysis. Id. ¶ 176. On January 22, and 29, 2010, the court ordered that "no person shall publish in any newspaper, radio, television, internet or other medium of mass communication any information from any document filed or evidence taken in this proceeding that discloses the identity of the respondent or of any principal of the respondent." See Hepworth Decl., Exs. J & K.
On February 18, 2010, David Cormie, a Hydro executive, filed an affidavit with the court in support of its application (the "Cormie Affidavit"), with AStar's name redacted. See Hepworth Decl., Ex. B. On the same day, Hydro published the Cormie Affidavit on its website. See Compl. ¶¶ 180, 182. On April 15, 2010, KPMG completed its external quality review of the risk management issues identified by AStar (the "KPMG report"). See Declaration of Daniel B. Goldman in Support of Motion to Dismiss of KPMG ...