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Wanke, Industrial, Commercial, Residential, Inc. v. Keck
209 Cal. App. 4th 1151
Cal. Ct. App.
2012
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Background

  • Wanke sued Keck, Bozarth, and WP Solutions for misappropriation of trade secrets and sought a broad injunction barring solicitation of Wanke’s customers.
  • The Settlement Agreement included a Stipulated Injunction and reserved jurisdiction under CCP §664.6 to enforce the settlement and injunction for five years.
  • The Stipulated Injunction prohibited contacting or soliciting Wanke’s customers for five years, with an 18-month carve-out for contacts initiated by the customer.
  • Wanke sought an OSC for contempt and also moved to enforce the Settlement Agreement; the court held a combined contempt and settlement-enforcement trial in August 2010.
  • The trial court found Wanke proved elements of knowledge, ability to comply, and willful disobedience, but concluded the injunction was invalid to the extent it protected a non-trade-secret mere identity of a customer, resulting in acquittal on all counts.
  • The court proceeded to limit the injunction’s application to jobs arising during Keck/Bozarth’s Wanke employment; it also denied liquidated damages but awarded attorney fees on the motion to enforce the Settlement Agreement.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
May appellate review occur after an acquittal in nonsummary criminal contempt? Wanke argues acquittal should be reviewable to correct error. Keck/WP Solutions contend double jeopardy bars review of an acquittal. Yes; double jeopardy bars review of the contempt acquittal.
May a party defend enforcement of an injunction on the ground it was issued beyond the trial court’s jurisdiction? Wanke may challenge enforceability to the extent the order was invalid on jurisdictional grounds. Keck/WP Solutions argue no, jurisdictional defects are needed for collateral attack. Only jurisdictional excess can defeat enforcement; not mere legal error in the injunction’s terms.
Did the trial court err in denying enforcement of the Settlement Agreement as to Con Am Management? The injunction is facially valid and enforceable to protect trade secrets. The injunction is overbroad/non-trade-secret protection; not enforceable. The trial court erred in denying enforcement; the Stipulated Injunction is enforceable to protect trade secrets.
Did the trial court’s ruling as to AV Builders: Saratoga West affect enforcement for Con Am Management? Enforcement should be consistent with the Con Am Management ruling. Different customer and job context could still warrant enforcement. The AV Builders ruling was affirmed; the court remanded for further enforcement consistent with this opinion.

Key Cases Cited

  • United States v. Dixon, 509 U.S. 688 (1993) (double jeopardy applies to nonsummary criminal contempt)
  • Smith v. Massachusetts, 543 U.S. 462 (2005) (double jeopardy bars reexamination of court-decreed acquittal)
  • Dixon (White, J., concurring in part and dissenting), 509 U.S. 688 (1993) (distinguishes summary vs nonsummary contempt)
  • Ogles v. United States ex rel. Wright, 440 F.3d 1095 (9th Cir. 2006) (acquittal on statutory interpretation can bar review)
  • Berry v. Superior Court, 68 Cal.2d 147 (1968) (void order cannot sustain contempt judgment)
  • Signal Oil & Gas Co. v. Ashland Oil & Refining Co., 49 Cal.2d 764 (1958) (an order issued with jurisdiction may be enforced even if later found erroneous)
  • Gonzalez v. Superior Court, 12 Cal.4th 804 (1996) (void order can be collaterally attacked only for excess of jurisdiction; otherwise, must obey)
  • Edwards v. Arthur Andersen LLP, 44 Cal.4th 937 (2008) (trade secret exception to section 16600; general invalidity of nonsolicitation clauses)
  • Morlife, Inc. v. Perry, 56 Cal.App.4th 1514 (1997) (customer lists may be trade secrets; injunctive scope to protect them)
  • Retirement Group v. Galante, 176 Cal.App.4th 1226 (2009) (trade secrets and antisolicitation protections considered)
  • Morlife, Inc. v. Perry (cited twice for principles), 56 Cal.App.4th 1514 (1997) (same as above)
  • In re Ivey, 85 Cal.App.4th 793 (2000) (civil contempt vs criminal contempt distinctions)
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Case Details

Case Name: Wanke, Industrial, Commercial, Residential, Inc. v. Keck
Court Name: California Court of Appeal
Date Published: Oct 4, 2012
Citation: 209 Cal. App. 4th 1151
Docket Number: No. D058669; No. D058825
Court Abbreviation: Cal. Ct. App.