1:17-cv-00087
D.N.M.Sep 30, 2020Background
- Array Technologies (ATI) developed a confidential NPV tool and O&M-focused sales pitch that it kept under NDA to demonstrate long‑term operating cost advantages of its centralized (linked‑row) tracker architecture.
- Colin Mitchell, ATI’s lead business‑development manager (signed NDA/noncompete), left ATI in July 2016 to join NEXTracker/Flex after recruitment discussions in which NEXTracker executives said hiring him would “cripple” ATI and help win specific 2017 projects.
- After joining NEXTracker, Mitchell communicated O&M critiques, benchmark pricing estimates, and customer/project insights (many drawn from ATI materials) to NEXTracker staff; NEXTracker then launched an O&M counter‑pitch, white paper, and marketing campaign relying on that material.
- NEXTracker later won several contested utility‑scale projects (e.g., Buckthorn, Mount Signal 3, Southampton, various RCR projects) where O&M and LCOE were important selection factors; ATI’s expert opined that use of ATI’s confidential information contributed to many of those wins.
- Procedural posture: Defendants moved for summary judgment. The court GRANTED summary judgment on ATI’s fraud (Count IX) and conversion (Count VII) claims, RESERVED ruling on disgorgement of Mitchell’s salary, and otherwise DENIED the motion so causation and most damages issues proceed to jury.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Tort causation (trade‑secret/misappropriation and related torts) | Mitchell’s disclosures and NEXTracker’s O&M campaign were a contributing/but‑for cause of specific project losses; Parkins’ expert links disclosures to wins. | Multiple decision factors exist; ATI cannot show that but‑for defendants’ misconduct NEXTracker would have lost the identified projects. | Denied summary judgment for defendants on causation for many projects — circumstantial evidence (timing, admissions, expert opinion) creates jury question; but court excluded some projects for which Parkins’ analysis was unreliable. |
| Contract consequential damages (Mitchell breaches) | Array seeks lost sales/profits it would have earned but‑for Mitchell’s contractual breaches; these were foreseeable. | Defendants dispute causation and foreseeability of project losses from Mitchell’s conduct. | Denied summary judgment on causation/foreseeability for consequential damages; factual questions remain for jury. |
| Disgorgement of Mitchell’s salary (equitable relief) | Nelson’s report treats Mitchell’s compensation as profits subject to disgorgement. | Defendants contend Array must show Mitchell would not have earned same salary elsewhere; causation is lacking. | Court RESERVED ruling and ordered simultaneous 7‑page briefs addressing legal standard and causation for disgorgement. |
| Fraud (affirmative misrep./omission; detrimental reliance) | ATI alleged Mitchell misled ATI about employment and omitted that he accepted NEXTracker position while still at ATI, enabling downloads. | Defendants say ATI cannot show detrimental reliance or harm from any affirmative misrep. | GRANTED summary judgment for defendants on fraud: ATI failed to produce admissible evidence of detrimental reliance tied to alleged misrepresentations/omissions. |
| Conversion (intangible trade secrets/electronic files) | ATI contends defendants exercised dominion over ATI’s confidential electronic documents (merged electronic files) constituting conversion. | Defendants argue conversion does not reach unmerged intangible IP; New Mexico law would not extend tort to trade secrets alone. | GRANTED summary judgment for defendants on conversion: court declines to extend conversion to intangible trade secrets not the kind of intangible rights customarily merged in a tangible document. |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard: disputes must be material to preclude judgment)
- Celotex Corp. v. Catrett, 477 U.S. 317 (burden on nonmoving party after movant meets initial showing on summary judgment)
- Wilcox v. Homestake Mining Co., 619 F.3d 1165 (Tenth Circuit interpretation of New Mexico causation standards and but‑for rule)
- June v. Union Carbide Corp., 577 F.3d 1234 (but‑for causation and Restatement §432(2) analysis in multi‑cause context)
- Storagecraft Tech. Corp. v. Kirby, 744 F.3d 1183 (discussion of trade‑secret damages remedies and reasonable‑royalty concepts)
- Nichols v. Anderson, 92 P.2d 781 (New Mexico precedent discussing loss from employee competition — examined for damages principles)
- Rael v. Cisneros, 487 P.2d 133 (New Mexico standard that fraud must be proved by clear and convincing evidence)