Damages/Trade Secrets: Cal Sup. Ct. Holds Interim Adverse Judgment Rule Means Attorneys Not Exposed To Costs And Fee In Malicious Prosecution Action Even If Client Eventually Found Liable But Beat Underlying SJM Though Trial Ct Found Bad Faith

In Dicta, State Supreme Court Does Not Pass On Trade Secret Fee-Shifting Principle

            We believe that all attorneys might breathe a little easier after the recent decision of our California Supreme Court in Parrish v. Latham & Watkins, Case No. S228277 (Cal. Supreme Court Aug. 10, 2017) (published).

            In this one, plaintiff lost a trade secret misappropriation case, although they initially successfully fought back a defense summary judgment motion, but eventually lost after a trial with the trial judge granting the defense $1.6 million in costs and fees under the uniform trade secret fee-shifting statute based on the perception the case was brought/prosecuted in bad faith.  The defense was not done, suing plaintiff’s attorneys for malicious prosecution.  The California Supreme Court in Parrish ruled that the “interim adverse judgment rule” precluded the malicious prosecution suit with respect to the probable cause element.  After all, plaintiff did defeat a summary judgment motion and it was inconsequential that a later trial came to a different result.

            For our fee blog, the Parrish court expressly refused to pass on the propriety on the Gemini test applied to the California’s trade secret fee-shifting statute (see our category “Trade Secrets”), so this issue is still ripe to further litigation.

            BLOG COMMENTARY—We noticed that attorneys we know, Ben Shatz at Manatt Phelps and Jeff Scott of Greenberg Traurig, seemed to be involved on the winning side, amicus briefing considered.  Congratulations, gentlemen!