SASCO v. Rosendin Electric, Inc.
207 Cal. App. 4th 837
| Cal. Ct. App. | 2012Background
- SASCO appeals a postjudgment order awarding defendants $484,943.46 in attorney fees and costs under Civil Code section 3426.4 (UTSA).
- The trial court held SASCO’s trade secret misappropriation claim was brought in bad faith and lacked evidence of misappropriation.
- Defendants Rosendin Electric, Inc. and individual defendants Fitzsimmons, Thompson, and Woodworth moved for fees and costs; SASCO claimed the trade secret was misused but discovery disputes and dismissed claims followed.
- SASCO’s complaint alleged misappropriation of trade secrets related to SASCO’s proprietary estimating and job cost systems; discovery produced conflicting or incomplete evidence.
- The court awarded fees reflecting a partial dismissal of non-trade-secret claims and found objective speciousness plus subjective bad faith; on appeal, SASCO challenges the standard and evidentiary reliance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standard for objective speciousness under §3426.4 | SASCO argues the court misapplied standard (should rely on CCP 128.7). | Rosendin contends the standard is objective speciousness with a subjective bad-faith component. | Court applied objective speciousness with subjective bad faith; no error. |
| Evidence supporting lack of misappropriation | SASCO claims cited evidence shows misappropriation; lack of forensics is irrelevant. | Defendants need show absence of misappropriation; evidence supports no misappropriation. | Court did not abuse discretion; lack of evidence supports objective speciousness. |
| Attorney fees on appeal proper | N/A (not challenged) | Prevailing parties on appeal are entitled to fees. | Fees on appeal affirmed; trial court should determine amount. |
Key Cases Cited
- Gemini Aluminum Corp. v. California Custom Shapes, Inc., 95 Cal.App.4th 1249 (Cal. Ct. App. 2002) (bad faith standard for §3426.4 includes objective and subjective elements)
- FLIR Systems, Inc. v. Parrish, 174 Cal.App.4th 1270 (Cal. Ct. App. 2009) (bad faith under §3426.4 requires both objective speciousness and subjective intent)
- Reeves v. Hanlon, 33 Cal.4th 1140 (Cal. 2004) (evidence standard in evaluating misappropriation claims; relevance of inference)
- King v. Pacific Vitamin Corp., 256 Cal.App.2d 841 (Cal. Ct. App. 1967) (economic competition context; not evidence of wrongful misappropriation by itself)
- Yield Dynamics, Inc. v. TEA Systems Corp., 154 Cal.App.4th 547 (Cal. Ct. App. 2007) (standard for appellate fee awards; abuse of discretion review)