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Field System MacHining, Inc. v. Vestas-American Wind Technology, Inc.

United States District Court, Seventh Circuit

May 9, 2013



JOHN W. DARRAH, District Judge.

Plaintiff, Field System Machining, Inc., filed suit against Defendant, Vestas-American Wind Technology, Inc., on January 15, 2013, alleging two counts: a violation of the Illinois Trade Secrets Act ("ITSA"), 765 ILCS 1065/1 et seq., and a claim of unjust enrichment. Defendant moves to dismiss the action, or, alternatively, to stay the action pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. § 206. For the reasons stated below, Defendant's Motion is granted.


Plaintiff is an Illinois corporation, with its principal place of business in South Elgin, Illinois. (Compl. §§ 1, 7.) Defendant is a California corporation with its principal place of business in Oregon. ( Id. § 3.) As the citizenship of the parties is diverse and the amount in controversy exceeds $75, 000.00, subject matter jurisdiction exists under 28 U.S.C. § 1332, and venue is proper pursuant to 28 U.S.C. § 1391(b).

Plaintiff is in the business of providing machining to plants and factories, as well as repairing machining. ( Id. §§ 7-8.) Defendant is a wind turbine manufacturer and has installed wind turbines throughout the United States and abroad. ( Id. § 9.)

In December 2010, Defendant contacted Plaintiff about a problem it had with its wind turbines. ( Id. § 11.) On December 9, 2010, Plaintiff's employees visited one of Defendant's wind farms in Illinois, and on January 21, 2011, Plaintiff's employees visited Defendant's headquarters in Oregon to discuss the problems regarding Defendant's wind turbines. ( Id. §§ 13-14.) Plaintiff paid the expenses and costs relating to these visits. ( Id. )

Defendant explained to Plaintiff its approach to repairing its wind turbines ("Crane-Required Repair Process") during these visits. ( Id. § 15.) Using this Crane-Required Repair Process cost Defendant $165, 000 to $200, 000 for each repair. ( Id. § 16.) Plaintiff then developed a confidential, proprietary method of repair ("FSM Solution") for Defendant; the FSM Solution contains trade secrets and confidential information. ( Id. §§ 18-20.) The FSM Solution creates a cost savings of as much as $170, 000 per repair. ( Id. § 22.)

Plaintiff took measures to protect the secrecy of the FSM Solution. ( Id. § 21.) By June 7, 2011, Defendant was prepared to move forward with the adoption of the FSM Solution, and Plaintiff sent the confidential and proprietary drawing of the FSM Solution to Defendant "with obligations of confidentiality including the execution of a non-disclosure agreement." ( Id. § 23.) Thereafter, Defendant began to internally study and examine the FSM Solution and, by November 2011, had confirmed the viability of the FSM Solution. ( Id. §§ 24-25.)

On November 18, 2011, an engineer for Defendant contacted Plaintiff and requested additional proprietary and confidential information regarding the FSM Solution. ( Id. § 26.) Plaintiff "provided all of the requested confidential and proprietary information relating to the FSM Solution to [Defendant] pursuant to its non-disclosure agreement...." ( Id. § 27.)

Defendant offered to buy the FSM Solution from Plaintiff on December 29, 2011, and Plaintiff declined this offer. ( Id. § 28.) After this ongoing exchange of information, communication between Defendant and Plaintiff ceased, until May 17, 2012, when Plaintiff contacted an engineer with Defendant and asked, "What ever happened to this project?" ( Id. §§ 29-30.) Defendant responded that it was pursuing a different solution, whereby Defendant planned to develop its own tool for repairs. ( Id. § 31.) Plaintiff responded, "If the basis for your tool resembles the proprietary, NDA-protected design we created and submitted to you, I think we have a problem." ( Id. § 32.) After hearing no further response from Defendant, Plaintiff emailed Defendant, requesting that Defendant "send us the drawing of your machine and your repair procedure (pursuant to the terms of our NDA) for the tool and procedure [Defendant] is developing...." ( Id. § 33.) Defendant refused to provide Plaintiff more information about the development of its own repair tool. ( Id. § 34.)

Plaintiff alleges Defendant misappropriated confidential and proprietary information provided to it by Plaintiff in order to create its own internal solution, thereby unjustly enriching Defendant. ( Id. § 40.) Plaintiff further alleges it provided Defendant "with proprietary and confidential information pursuant to a non-disclosure agreement, which [Defendant] unjustly retained to the detriment of [Plaintiff], and which [Defendant] is unjustly using to its advantage without compensating [Plaintiff]." ( Id. § 51.)

Defendant moves to dismiss the action with prejudice or, in the alternative, to stay the action, pursuant to the FAA, 9 U.S.C. § 206. The motion has been fully briefed.


The section of the FAA Defendant invokes specifically provides that a court with jurisdiction "may direct that arbitration be held in accordance with the agreement at any place therein provided for, whether that place is within or without the United States. Such court may also appoint arbitrators in accordance ...

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