Trade Secrets: Significantly Reduced $272,325.05 Fee Award Affirmed On Appeal

Both Objective And Subjective Prongs Of Fee Entitlement Were Satisfied.

               In Reilly Financial Advisors, LLC v. Cariani, Case No. D081870 (4^th Dist., Div. 1 Mar. 19. 2024) (unpublished), the Court of Appeal faced confronting the propriety of a significantly reduced fee award of $272.325.05 in a trade secret misappropriation case after plaintiff former employer filed a dismissal against two defendant former employees in the face of a summary judgment motion which plaintiff did not oppose.  Their appeal of the fee award under Civil Code section 3426.4 was affirmed.

               This case, like many, is fact intensive.  That puts a deferential standard of review in play.  On the objective prong of section 3426.4, plaintiff only had suspicions of misappropriation, but not evidence of misappropriation—that was insufficient, especially where defendants only sent an announcement of relocating (which, if done correctly, is very proper in this area of the law).  With respect to the subjective bad faith prong, plaintiff failed to undertake an investigation to determine if there was misappropriation beyond suspicions, bolstered by bringing lawsuits against other former employees on the same grounds, all circumstantial evidence of animus which could be relied on by the lower court.   All said, fee award affirmed.