Johnson Matthey Process Technologies, Inc v. Hovey, 603 F.Supp.3d 1374

Plaintiff Johnson Matthey Process Technologies, Inc. (JMPTI) sued former employee Katherine J.M. Hovey and competitor G.W. Aru, LLC under the DTSA and Georgia Trade Secrets Act, alleging Hovey downloaded JMPTI trade-secret files shortly before resigning and intended to use them at G.W. Aru.
JMPTI settled with Hovey and she was dismissed; G.W. Aru moved to dismiss JMPTI's claims and the Court granted dismissal for failure to plead that G.W. Aru acquired, used, disclosed, or threatened to use the files.
G.W. Aru then moved for attorney’s fees under 18 U.S.C. § 1836(b)(3)(D) (DTSA) and O.C.G.A. § 10-1-764 (GTSA), arguing JMPTI prosecuted the suit in bad faith.
The Court applied the two-part Stilwell test used in this circuit: (1) objective speciousness of the claim, and (2) plaintiff’s subjective bad faith in bringing/maintaining the suit.
The Court found JMPTI had some evidence that the stolen materials qualified as trade secrets (confidential nature, secrecy measures, Gordon declaration), so the claims were not objectively specious as to that element.
The Court also found no subjective bad faith: JMPTI engaged in remediation attempts, delayed suit until remediation failed (including destruction of a drive by a third party), and had legitimate concerns about possible disclosure — therefore attorney’s fees were denied and the case was closed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether G.W. Aru is entitled to attorney’s fees under DTSA/GTSA for bad-faith prosecution	JMPTI contends it had evidentiary support (Hovey admitted downloading files) and litigated in good faith after remediation failed	G.W. Aru argues JMPTI had no evidence G.W. Aru acquired/used/disclosed the secrets and sued to harass or punish	Denied — fees not warranted: claims not objectively specious and no subjective bad faith
Whether JMPTI plausibly alleged the stolen materials were trade secrets	JMPTI points to complaint allegations and managing director Gordon’s declaration describing the files, confidentiality, and secrecy measures	G.W. Aru argued JMPTI failed to plausibly show the documents were trade secrets	Held that JMPTI presented sufficient evidence to support the trade-secret element; thus claims were not objectively specious on that point
Whether JMPTI acted with subjective bad faith (knew or was reckless regarding lack of merit)	JMPTI argues it pursued remediation first, had concerns about third-party handling, and filed only after remediation efforts failed	G.W. Aru cites Hovey’s sworn assurances and destruction of a drive as evidence JMPTI knew claims lacked merit; points to prior hostile comments toward G.W. Aru’s founder	Court found no direct evidence of intent to harass or demonstrate recklessness; inferences do not establish subjective bad faith, so no fee award

MRO Communications, Inc. v. AT&T Co., 197 F.3d 1276 (9th Cir. 1999) (Rule 54(d)(2) governs procedure for fee motions but does not itself create a substantive right to fees)
CRST Van Expedited, Inc. v. Werner Enterprises, Inc., 479 F.3d 1099 (9th Cir. 2007) (discusses bad-faith standards in fee-shifting contexts and components of subjective bad faith)
Mar. Management, Inc. v. United States, 242 F.3d 1326 (11th Cir. 2001) (bad-faith inquiry focuses on party conduct and motive rather than solely on claim validity)
Gemini Aluminum Corp. v. Cal. Custom Shapes, Inc., 95 Cal. App. 4th 1249 (Cal. Ct. App. 2002) (illustrates circumstances where pursuing claims despite knowing lack of proof can support a bad-faith fee award)
Blanco GMBH+Co. KG v. Vlanco Industries, LLC, 992 F. Supp. 2d 1225 (S.D. Fla. 2014) (holding inherent-authority fee awards require a finding of bad-faith conduct)