Defending the City of Oakland in Trade Secrets Act Case

We successfully defended the City of Oakland and a City employee against claims by the City's former software vendor.  The plaintiff claimed that the City wrongfully used its trade secrets and disclosed them to a competing software developer, and had engaged in numerous breaches of the governing software license agreement.  Plaintiff brought claims under the federal Defend Trade Secrets Act of 2016 and the California Uniform Trade Secrets Act, along with many other contractual and tort theories.  It sought approximately $2 million in damages, plus attorney's fees and costs.  Plaintiff had successfully buried the City Attorney's Office staff with a profusion of evolving claims and shifting legal theories so they turned to Nossaman for help.

We developed and implemented a strategy to force plaintiff to specifically define its alleged sprawling trade secrets, so that each could be individually attacked, and assessed vis-à-vis plaintiff's other claims (including breach of contractual confidentiality provisions).  Once plaintiff had been forced to clearly articulate its legal and factual theories, we then filed two sequential dispositive motions.  The first was for partial summary judgment, which sought to eliminate plaintiff's claims under the California Uniform Trade Secrets Act and all other state-law tort claims, on both procedural and legal grounds.  That motion was granted in its entirety, and successfully eliminated eight of plaintiff's eleven causes of action, thus streamlining the issues remaining for the second motion.

The second summary judgment motion targeted the legal and factual deficiencies in the core claims of plaintiff's case: the alleged breach of the software license agreement, and claims against the City and a City employee under the federal Defend Trade Secrets Act.  The motion was hard-fought, and included a mountain of highly technical evidence and cutting-edge legal arguments regarding the Defend Trade Secrets Act (as this statute went into effect in May 2016, and there is minimal precedent interpreting it).  Siding again with Nossaman, the court granted summary judgment in full, awarding Defendants a complete victory on the case.

Moreover, in light of Defendants' unqualified win they are the clear prevailing parties in the lawsuit, which allowed them to seek full recovery of their attorney's fees and costs under statutory and contractual authority.  We obtained an award of over $1 million in attorney's fees and costs for the City of Oakland and a former City employee.  In granting the fee award, the Northern District of California (Magistrate Judge Kim) ruled upon what appears to be an issue of first impression as to what constitutes "bad faith" litigation under the newly-enacted Defend Trade Secrets Act of 2016 ("DTSA").  Specifically, the Court determined that the plaintiff brought a DTSA claim against the former City employee in bad faith, because his alleged "misappropriation" of plaintiff's trade secrets took place before the DTSA's enactment in 2016, and plaintiff had no evidence to suggest that this defendant personally engaged in any additional acts of misappropriation within the DTSA's effective period.  The Court awarded the remainder of defendants' fees and costs on the grounds that defendants were prevailing parties entitled to fees until multiple contracts, and that the tort claims were inextricably intertwined with the contractual issues, necessitating that all of the fees and costs they incurred in defense of the action be included in the award.

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