Only About 10% Reduction Made by Superior Court Judge Charles Margines.
Hat Tip to Howard M. Fields, Senior Counsel with Miller, LLP in Los Angeles, who brought the next case to our attention. He obtained a great result for his firm’s clients in a recent trade secrets case that was voluntarily dismissed without prejudice. A substantial fee/costs award was the award for the work on this case.
In SASCO v. Rosendin Electric, Inc., Orange County Superior Court Case No. 30-2008-00110031-CU-BC-CJC, plaintiff SASCO sued defendant competitor Rosendin Electric and several individual defendants (who else but former employees of SASCO) primarily for trade secret misappropriation. The problem, if you lose, is that the Uniform Trade Secrets Act has an attorney’s fees shifting provision (Civ. Code, § 3426.4) which applies if a trade secret misappropriation claim is made in bad faith, requiring satisfaction of both objective and subjective prongs on this issue. (Gemini Aluminum Corp. v. California Custom Shapes, Inc., 95 Cal.App.4th 1249, 1261 (2002).)
The fee-shifting statute was satisfied in this case, because there was evidence showing that (1) SASCO never had any competent evidence of trade secret misappropriation (with even plaintiff’s CEO admitting this), simply relying on uncorroborated beliefs; (2) SASCO’s main injury--a lost bid--could not be sustained because it lost the bid due to a highly inflated bid rejected by the bid proponent; (3) plaintiff never opposed a defense summary judgment on the claim, waiting at the last minute to dismiss after trying for a last-gasp settlement; (4) plaintiff had attempted to deprive individual defendants of ERISA benefits in a federal court case, but met defeat in a manner that resulted in a $568,573.32 (1.5 multiplier) fee award against SASCO there; and (5) there was proof from which an anticompetitive motive could be tacked on plaintiff, which can satisfy the objective bad faith prong (FLIR Systems, Inc. v. Parrish, 174 Cal.App.4th 1270, 1276 (2009)).
In finding defendants were the prevailing parties, Orange County Superior Court Judge Charles Margines used a “practical” approach in finding that defendants prevailed. He applied the lodestar method for determining fee reasonableness, but discounted the requested amounts by 10% for work on non-trade secret claims (although most were intertwined) and excluded 15 hours for time spent on fee reply motion work. Even with that, the cumulative award to defendants was substantial--$474,336 in fees and $10,607.46 in costs, for a grand total of $484,943.46.
For those of you wanting to read the very detailed, scholarly April 27, 2011 minute order ruling in this case, here it is. We also have more cases in this substantive area under our “Trade Secrets” home page category.
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