369 P.3d 452
Utah Ct. App.2016Background
- CDC Restoration performed concrete repair at a Kennecott refinery under a confidential Preferred Provider Agreement (PPA) that set labor, equipment, and pricing rates.
- Paul Carsey, a CDC foreman involved in preparing CDC’s bid for the E-Bay Project, knew the bid details and delivered confidential materials, but never signed a confidentiality agreement.
- Kenneth Allen, a Kennecott subcontractor with access to CDC’s invoices and PPA pricing, secretly formed Tradesmen and coordinated with Carsey while bids were prepared; Tradesmen submitted a lower bid and won the contract.
- CDC sued Tradesmen, Allen, and Carsey for misappropriation of bid information; the trial court denied Tradesmen’s motion for directed verdict and a jury found for CDC, awarding damages.
- On appeal, Tradesmen argued lack of evidence that (1) CDC’s bid information was a trade secret, (2) Tradesmen misappropriated it, (3) jury instructions were erroneous, and (4) admission of the PPA was improper; the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CDC’s bid info and labor/equipment estimates were trade secrets | Bid and estimates derived independent economic value, were job-specific, and CDC took reasonable efforts to keep them secret | Estimates reflected Carsey’s general expertise and thus were not trade secrets | Jury could reasonably find bid info and estimates were trade secrets; sufficient evidence to deny directed verdict |
| Whether Tradesmen misappropriated CDC’s bid information | Carsey and Allen improperly used CDC’s confidential estimates/pricing to underbid CDC | No direct evidence of use; mere opportunity is insufficient | Circumstantial evidence (Carsey’s concealment, Allen’s access to PPA, communications, lower bid) permitted inference of misappropriation |
| Jury instructions re: law of the case and trade-secret standard | Needed instruction emphasizing defendants’ knowledge/experience standard and earlier notice about law of the case | Court’s statutory-form instructions were sufficient; Instruction noting PPA/pricing not trade secrets was given | Instructions as a whole were proper; no reversible error |
| Admissibility of CDC’s PPA (relevance/prejudice) | PPA was relevant to show Tradesmen’s access to pricing; jury told PPA itself was not a trade secret | PPA was irrelevant/misleading and unfairly prejudicial | PPA had probative value and was not unfairly prejudicial given jury instruction clarifying it was not a trade secret |
Key Cases Cited
- USA Power, LLC v. PacifiCorp, 235 P.3d 749 (Utah 2010) (unique combination of known elements can be a trade secret)
- InnoSys, Inc. v. Mercer, 364 P.3d 1013 (Utah 2015) (elements required for prima facie UTSA misappropriation claim)
- Microbiological Research Corp. v. Muna, 625 P.2d 690 (Utah 1981) (distinguishing employee skill from employer’s trade secret and on ascertainability)
- Merino v. Albertsons, Inc., 975 P.2d 467 (Utah 1999) (directed-verdict standard)
- Diversified Holdings, LC v. Turner, 63 P.3d 686 (Utah 2002) (trial court discretion on relevance and prejudice)