USA Power v. PacificorpUSA Power v. Pacificorp
Having recused himself, JUSTICE HIMONAS does not participate herein; COURT OF APPEALS JUDGE KATE A. TOOMEY sat.
JUSTICE JOHN A. PEARCE became a member of the Court on December 17, 2015, after oral argument in this matter, and accordingly did not participate.
CHIEF JUSTICE DURRANT, opinion of the Court:
Introduction
¶ 1 This case concerns a dispute about proprietary plans to develop a power plant. USA Power, LLC engaged in extensive work to research and develop a power plant project in Mona, Utah—its Spring Canyon “vision.” It claims that this vision is a trade secret, that PacifiCorp misappropriated it, and that PacifiCorp also breached a confidentiality agreement between the parties. USA Power further claims that its water attorney, Jody L. Williams, and her law firm, Holme Roberts & Owen, LLC (HRO), (collectively, Ms. Williams) breached their fiduciary duties by working for PacifiCorp to acquire water rights on a competing power plant proposal.
¶ 2 USA Power‘s Spring Canyon vision took two years, thousands of work-hours, and close to $1 million to develop. To advance its proposed power plant project, it made several public disclosures to regulatory bodies. These disclosures included such information as the plant‘s proposed location, technological specifications, fuel type, water use, and generating capacity. Other information about the proposed plant, such as USA Power‘s economic and feasibility studies, was not publicly disclosed.
¶ 3 Meanwhile, PacifiCorp had identified a quickly approaching need for energy and was working to meet this demand. As part of its response to its upcoming power needs, PacifiCorp approached USA Power and entered into negotiations to purchase USA Power‘s Spring Canyon assets. As part of these negotiations, USA Power required PacifiCorp to sign a Confidentiality and Non-Disclosure Agreement before it would divulge its entire Spring Canyon vision, i.e., a compilation of both the already disclosed information and the portions of its vision that had not yet been publicly disclosed. PacifiCorp did so, and USA Power provided
¶ 4 Eventually PacifiCorp terminated the negotiations over the sale and decided to issue a Request for Proposal (RFP) to obtain bids for power sufficient to cover its needs. USA Power submitted its Spring Canyon project in response to PacifiCorp‘s RFP. PacifiCorp submitted its own competing proposal, however, to build a power plant in Mona—its Currant Creek project. PacifiCorp‘s project was very similar to the Spring Canyon project proposed by USA Power. PacifiCorp also retained Ms. Williams, USA Power‘s former attorney, to help it obtain water rights fоr its Currant Creek project. PacifiCorp selected its own bid over USA Power‘s bid and, soon after, began construction on its project.
¶ 5 USA Power then brought suit against Ms. Williams asserting malpractice claims based on an alleged breach of her fiduciary duties of confidentiality and loyalty. USA Power later amended its complaint to include PacifiCorp as a defendant, asserting that PacifiCorp had misappropriated USA Power‘s trade secrets—its “vision” for a plant in Mona, Utah and various components of this vision, which were themselves trade secrets. This case first came to the court in 2010, after the trial court granted summary judgment to both Defendants.1
¶ 6 In USA Power I, we reversed the grant of summary judgment, holding that issues of material fact existed and summary judgment was inappropriate.2 We also clarified that a compilation of publicly available information could, in some circumstances, constitute a trade secret. After USA Power I, a five-week jury trial was held. Both parties moved for a directed verdict on all of USA Power‘s claims. The court denied these motions except as to USA Power‘s claim against Ms. Williams for punitive damages. The jury returned a special verdict against PacifiCorp and Ms. Williams, both of whom filed a rule 50 judgment notwithstanding the verdict (JNOV) motion and a rule 59 motion for new trial. The trial court denied PacifiCorp‘s motions, except to reduce the unjust enrichment award against PacifiCorp, granted Ms. Williams‘s JNOV motion for lack of evidence related to causation, and determined that USA
¶ 7 We uphold the trial court on all claims. First, we uphold the trial court‘s denial of PacifiCorp‘s JNOV on the trade secret issue. As discussed below, under our deferential standard of review, there was a sufficient basis in the evidence from which the jury could reasonably conclude that certain components of USA Power‘s vision were not generally known or readily ascertainable. It is important to note that PacifiCorp appealed only the issue of whether a trade secret existed, conceding for purposes of appeal that if there was a trade secret, it was misappropriated. Second, as to USA Power‘s cross-appeal challenging various aspects of the damages award, we affirm the trial court‘s rulings, holding that the trial court applied the correct standards and did not abuse its discretion. Finally, regarding USA Power‘s direct appeal of the JNOV granted in favor of Ms. Williams, we affirm the trial court because there is no competent evidence demonstrating that Ms. Williams caused USA Power‘s damages or that USA Power would have benefitted if Ms. Williams had not breached her fiduciary duties. Accordingly, we affirm the trial court‘s ruling as to each issue presented on appeal.
Background
¶ 8 This dispute focuses on USA Power‘s preliminary design of a power plant in Mona, Utah—its Spring Canyon vision—and PacifiCorp‘s alleged use of that plan to build its own power plant project.3 The preliminary design phase for a power plant involves site specific economic and technological feasibility studies. These studies are necessary for the financing and permitting of the plant. Preliminary design generally costs one to two pеrcent of the plant‘s total cost and takes between eighteen and twenty-four months if the company starts from scratch.
¶ 9 USA Power claims that PacifiCorp misappropriated its trade secrets, which consisted of its Spring Canyon vision generally as well as the following:
(1) technical information about the size, location, configuration, economics, engineering, and assets of [the Spring Canyon project]; (2) business strategies, goals, and plans including proformas describing cost and profitability; and (3) [USA Power‘s] first-to-market advantage—i.e., the ability to obtain financing and get to the market first and block potential competitors.
USA Power claims it disclosed these trade secrets to PacifiCorp mainly through three volumes of confidential information it provided PacifiCorp pursuant to the Confidentiality and Non-Disclosure Agreement, though it also disclosed some information related to its vision in emails and other communications between the parties. USA Power expended significant resources conducting preliminary design work for Spring Canyon, including two years, thousands of work-hours, and close to $1 million.
¶ 10 USA Power publicly disclosed various pieces of information about its Spring Canyon proposal on three occasions. First, in February 2002, it filed a Notice of Intent (NOI) with the Utah Department of Air Quality (UDAQ). This document was public and included a description of “the fuels and their use,” the “equipment used in process,” “operation schedules,” “production rates,” and “raw materials used.” The project description also stated that “the use of dry type air-cooled condenser will . . . greatly reduce the plant‘s water usage” and that the plant was “projected to begin operation in September 2003.” From this public disclosure, it was clear that the Spring Canyon plant would be an air-cooled combined-cycle natural gas plant with two GE 7-FA turbines, two heat recovery steam generators, one steam turbine, air inlet chillers, duct firing, and specific emissions controls, and would be located in Mona, Utah.
¶ 11 The second public disclosure occurred in May 2002, when USA Power filed an “Application for Zone Change Permit” with Juab County. The rezoning application was a public document and described the Spring Canyon plant as a “base-load natural gas-fired combined cycle power generation facility.” It also described the plant‘s capacity, technology,4 and specific location, including a map
¶ 12 Although various details about the configuration and location of the plant were publicly disclosed, other information about USA Power‘s preliminary design of Spring Canyon remained private. This information included the economic and technical analysis that supported USA Power‘s publicly disclosed choices—the design and location selected for its plant. The parties refer to this information as the ”back-up studies.” And this non-public information included:
“order of magnitude” cost estimates, the cost of dry cooling versus wet cooling (including the 3% “energy penalty“), water usage, turbine performance analysis (i.e., heat rates), [USA Power‘s] land and water options pricing, the approximate rоute for a lateral from Questar‘s pipeline, business plans, and economic proformas for a power purchase agreement (“PPA“) with PacifiCorp.
Ultimately, USA Power invested significant time and resources in developing its Spring Canyon vision and going through the permitting process, which enabled it to present a fully developed proposal to PacifiCorp. USA Power argues that its entire vision for the Spring Canyon plant—including its publicly disclosed configuration and its private rationale for that configuration—constituted a trade secret. USA Power further claims that the individual pieces of non-disclosed information also constitute trade secrets.
¶ 13 The first meeting between USA Power and PacifiCorp took place in August 2002. At this meeting, USA Power would not discuss any confidential information about its Spring Canyon proposal without a signed confidentiality agreement. The parties signed a Confidentiality and Non-Disclosure Agreement on September 11, 2002. After signing the Agreement, USA Power gave PacifiCorp two volumes of confidential information regarding its Spring Canyon
¶ 14 The discussions between PacifiCorp and USA Power occurred in the broader setting of an impending energy shortage. As early as 2001, PacifiCorp knew that it would need additional “peaking” capacity to meet demand in the summer of 2005. PacifiCorp analyzed various strategies to address this shortage in its 2003 Integrated Resource Plan. These strategies were summarized in a January 9, 2003 memorandum to the Chief Executive Committee, which identified three options: (1) purchasing power through contract purchases, (2) acquiring existing plants, or (3) building new facilities.
¶ 15 The memorandum also discussed the difficulties with each option, stating that power purchases “must come from outside the Utah bubble” and “[t]he already full transmission paths into the bubble will limit if not prohibit purchases sufficient to meet the additional requirements.” It also noted the tight timeframe for building new facilities, stating that “physical project schedules (design, engineering, permitting and construction) are extremely tight even if the project approvals were given today.” And in considering building options, it noted that “[t]he only project that has any possibility of meeting heavy load hour peaking for 2005 or even a 2006 commercial date is the Spring Canyon project.”
¶ 16 A second February 5, 2003 memorandum to the Chief Executive Committee written by Rand Thurgood, Managing Director of Resource Development, and Mark Tallman, Director of Origination, further refined PacifiCorp‘s options and requested approval for several actions. In this memorandum, PacifiCorp sought internal authority to take several actions that would allow it to compile its own build proposal. For instance, it sought approval to purchase the Mona assets of both USA Powеr and another Mona power plant project being developed by Panda Energy. Specifically, the memorandum sought approval to (1) “purchase the Panda position in Mona for $1,006,989.81 and extend the associated land options,” (2) “negotiate and purchase USA Power‘s rights associated
¶ 17 The February 5, 2003 memorandum noted that CH2M HILL, a consulting firm hired by PacifiCorp, had conducted a “siting study for gas-fired generation along the Wasatch Front” and the study “strongly indicate[d] that the Mona area [was] one of the best areas (if not the best area) for the development of gas-fired generation to meet peaking and/or base load generation needs.” The memorandum also noted that purchasing power from a Nevada source was possible but expensive, costing more than $7.9 million for a two-year supply of power. Finally, it described the “optimal outcome” as the acquisition of both Panda‘s and USA Power‘s Mona assets. This would give PacifiCorp “the most flexible and cost effective build alternative” and allow it to “combine the projects and immediately begin engineering to secure a viable combined cycle build option for meeting the April 2005 target date for a peaking resource.”
¶ 18 PacifiCorp moved forward with negotiations to purchase USA Power‘s and Panda‘s Mona assets in order to prepare its own proposal to build a power plant project and then submit this proposal to its RFP. In February 2003, USA Power provided PacifiCorp additional confidential information on the viability of its Spring Canyon project contained in Volume III, which included economic proforma assumptions and projections. In March 2003, PacifiCorp agreed to purchase the Spring Canyon project for $3 million and also to enter into a “non-binding joint development agreement for other projects” for $2.29 million. But this agreement was never reduced to writing and eventually fell apart. PacifiCorp later informed USA Power that it would not purchase the Spring Canyon project, but encouraged it to bid in the upcoming RFP, stating that “[i]t was [USA Power‘s] RFP to lose because [it] had done so much work on the project that nobody stood a chance to beat [it].”
¶ 19 During this time frame, PacifiCorp retained Ms. Williams, a water law attorney based in Salt Lake City. Ms. Williams had worked for USA Power off and on since April 2001, helping it evaluate the feasibility of the Mona site and acquire options on the water rights needed for Spring Canyon. “By August 2002, [USA Power] had acquired options on sufficient water [through Ms. Williams‘s work] and was negotiating with PacifiCorp for sale of
¶ 20 During the same time period, PacifiCorp was also negotiating with Panda to acquire its Mona assets and contacting engineering firms. In February 2003, PacifiCorp purchased Panda‘s Mona assets for $969,003. These assets included valuable meteorological data, land-purchase options, and transmission interconnect studies. PacifiCorp also made initial contact with engineering firms, soliciting information on their experience with “combined cycle power plants, utilizing 1x1 and 2x1 configuration, GE 7FA gas turbines with inlet chillers, duct burners, [and] wet and dry cooling.”
¶ 21 PacifiCorp then focused on producing its own bid for the upcoming RFP. It met with Questar to discuss the siting of a lateral gas pipeline to the Mona site and sought internal approval to spend $16.2 million for up to 6,000 acre-feet of water that would be needed for a 1000MW water-cooled, combined-cycle plant in Mona. By mid-May, “Questar [had] agreed to obtain right-of-way for, construct, and own the gas lateral for PacifiCorp‘s Mona site at PacifiCorp‘s expense.”
¶ 22 PacifiCorp also hired an engineering firm, Shaw/Stone & Webster (SS&W), to provide engineering services for a possible Mona plant, capping SS&W‘s fees at $250,000. Instead of starting from scratch, PacifiCorp asked SS&W to focus on “combined cycle power plants, utilizing 1x1 and 2x1 configuration, GE 7FA gas turbines with inlet chillers, duct burners, [and] wet and dry cooling” located in Mona. After approximately seven weeks of work, SS&W delivered its initial report to PacifiCorp in June 2003. This report included “detailed cost estimates, analysis of wet versus dry cooling, including the energy penalty, water balances, and heat balances.” In its work for PacifiCorp, SS&W did not use any non-public information from USA Power and used a similarly designed power plant, Apex, as a reference for its work.
¶ 23 Also in June 2003, PacifiCorp issued its RFP to meet the identified need for power in 2005, with a deadline for bid submittals on July 22, 2003. In response, PacifiCorp received one hundred bids from thirty-seven companies, which “includ[ed] bids of different configurations for Mona, and various bids of configurations similar to” Spring Canyon. USA Power submitted four bids to supply power under a Power Purchase Agreement (PPA) from its Spring Canyon project. PacifiCorp submitted its own proposal on July 17, 2003. After reviewing the submissions, and receiving an evaluation by a neutral third party, PacifiCorp awarded itself the bid on September 22, 2003, deciding to build its own plant in Mona—Currant Creek.
¶ 24 After awarding itself the bid, PacifiCorp moved forward with permitting and detailed design for its Currant Creek plant. As part of this process, PacifiCorp needed to secure the water rights necessary for its project. Through Ms. Williams, it obtained water rights from WW Ranches by signing a water purchase agreement on September 3, 2003—after it had submitted its bid in the RFP process but prior to actually awarding itself the bid—conditioned on approval from the State Engineer and the Goshen Water Board. In order to obtain this approval, on November 3, 2003, PacifiCorp applied for a change application to divert the needed water to its project. Construction began on the Currant Creek plant in January 2004. The necessary water rights approvals were obtained in February 2004. PacifiCorp used a phased approach to construction—first phasing in single-cycle power production in the summer of 2005 and latеr phasing in combined-cycle facilities. PacifiCorp spent $341.2 million on construction of Currant Creek and used Panda‘s assets, including critical meteorological data, to expedite development of the plant by eighteen months.
¶ 25 USA Power filed its complaint on February 18, 2005, which, as amended, alleged in part that PacifiCorp breached the Confidentiality and Non-Disclosure Agreement and violated the Utah Uniform Trade Secrets Act (UUTSA). USA Power also brought a breach of fiduciary duty claim against its water attorney, Ms. Williams, and her law firm, HRO. The trial court granted summary judgment in favor of the Defendants on all of USA Power‘s claims, which we reversed in USA Power I in 2010, holding that, when appropriate legal standards were applied, issues of material fact precluded summary judgment. We remanded for further proceedings.
¶ 26 In May 2012, after a five-week trial, a jury found that PacifiCorp had willfully and maliciously misappropriated a trade secret from USA Power and breached the Confidentiality and Non-
¶ 27 PacifiCorp moved for JNOV, arguing that USA Power did not prove the existence of a trade secret as a matter of law. The trial court denied PacifiCorp‘s JNOV motion, and PacifiCorp appealed. PacifiCorp did not appeal the jury‘s finding of misappropriation.5 Ms. Williams also filed for a JNOV, arguing that USA Power had failed to prove that any breach of fiduciary duty caused the claimed damages. The trial court granted Ms. Williams‘s JNOV motion, finding that the causation element of the breach of fiduciary duty claim was lacking as a matter of law. USA Power appealed the grant of the JNOV in favor of Ms. Williams. PacifiCorp‘s appeal of the JNOV denial and USA Power‘s appeal of the grant of JNOV to Ms. Williams were consolidated. Further, USA Power cross-appeals on PacifiCorp‘s appeal, arguing that its damage award was inadequate in several ways. We have jurisdiction over these appeals pursuant to
Standard of Review
¶ 28 We address the applicable standards of review beginning with those relevant to PacifiCorp‘s direct appeal, then those relevant to USA Power‘s cross-appeal, and finally those relevant to USA Power‘s direct appeal.
PacifiCorp‘s Appeal
¶ 29 PacifiCorp raises four issues in its direct appeal. First, it argues that the trial court incorrectly denied its motion for JNOV because USA Power “did not define its trade secret with sufficient specificity.” Second, it argues that it was entitled to a JNOV because USA Power “failed to present sufficient evidence that its alleged compilation trade secret was not gеnerally known and not readily ascertainable.” Both of these arguments challenge the trial court‘s decision to deny a JNOV. While we review a trial court‘s ruling “on JNOV motions for correctness,” we will overturn its decision to deny a JNOV only if the appellant can demonstrate that there was no basis in the evidence, including reasonable inferences which could be drawn therefrom, to support the jury‘s verdict.6
¶ 30 Third, PacifiCorp argues that it is entitled to a new trial or remittitur because the trial court inappropriately awarded unjust enrichment damages that included “all of [its] profits from its Currant Creek plant over thirty years.” “We apply an abuse of discretion standard in reviewing a trial judge‘s decision to grant or deny a new trial or remittitur . . . .”7 Finally, PacifiCorp argues it was entitled to a jury instruction detailing the head-start limitation on unjust enrichment. “We review a district court‘s refusal to give a jury instruction for abuse of discretion.”8
USA Power‘s Cross-Appeal
¶ 31 USA Power raises five issues on its cross-appeal. First, it argues that the court erred by granting a remittitur and reducing its trade secret damages against PacifiCorp. When reviewing a
¶ 32 Fourth, USA Power argues that it was entitled to prejudgment interest from the time USA Power‘s loss was established or, alternatively, from the time of the verdict up until the time of the entry of judgment. Finally, USA Power argues that the ten percent interest rate in
USA Power‘s Direct Appeal
¶ 33 The final appeal focuses on whether Ms. Williams, by breach of her fiduciary duties,15 caused USA Power‘s losses. USA Power raises three issues in its direct appeal. First, it argues that the trial court erred in granting Ms. Williams‘s motion for judgment notwithstanding the verdict “on the grounds there was no evidence for the [j]ury to find the element of causation” as it related to USA Power‘s failed bid. Second, USA Power argues that the court also
¶ 34 The standard of review for these claims is the same16: “We review a trial court decision on . . . a motion for j.n.o.v. for correctness.”17 “A directed verdict and a judgment n.o.v. are justified only if, after looking at the evidence and all reasonable inferences in a light most favorable to the nonmoving party, ‘the trial court concludes that there is no competent evidence which would support a verdict in [the nonmoving party‘s] fаvor.‘”18
Analysis
¶ 35 Before discussing the merits of the appeals, we address the impact of our prior holding in USA Power I to decide whether our determination that issues of fact precluded summary judgment at that point should drive our review of the court‘s subsequent grant or denial of JNOV. After addressing this issue, we then proceed with (1) PacifiCorp‘s direct appeal of the trial court‘s denial of JNOV related to the trade secret issue, (2) USA Power‘s cross-appeal of various issues related to damages, and, finally, (3) USA Power‘s direct appeal of the trial court‘s grant of JNOV on Ms. Williams‘s breach of her fiduciary duties.
¶ 36 As an initial matter, USA Power has asked us to treat USA Power I, as the “law of the case” and therefore determinative of PacifiCorp‘s and USA Power‘s direct appeals. For the reasons discussed below, we decline to do so and take this opportunity to clarify the impact that an appellate court‘s denial of a summary judgment motion on factual grounds has upon a subsequent motion for directed verdict or JNOV. We conclude that the law of the case doctrine does not preclude a trial court from reexamining arguments made in a summary judgment motion if those arguments have been
¶ 37 “Under the law of the case doctrine, issues resolved by this court on appeal bind the trial court on remand, and generally bind this court should the case return on appeal after remand.”19 The issues that become the law of the case, however, are primarily questions of law, not of fact.20 Indeed, we have held that in certain circumstances “a decision[] as to a question of fact[] [does not] fall within the [law of the case] rule” at all.21 This is true because “there is no particular benefit in establishing settled appellate precedent on issues of fact.”22 Thus, although our pronouncements on legal issues are binding as the law of the case, our decisions on factual issues are less compulsory.
¶ 38 In order to provide guidance as to how a lower court should treat a decision on a factual matter by an appellate court, we adopt a standard used in another branch of the law of the case doctrine. When a trial court judge reviews another trial court judge‘s ruling, the doctrine prevents the second judge from overruling the first.23 There is an exception to this rule, however, that permits the
¶ 39 The “different light” standard is satisfied when the “factual and legal posture of the case has . . . changed” since the initial decision was rendered.26 Examples of such changes include situations where the parties conduct additional relevant discovery,27 an appellate decision clarifies the applicable law,28 a party changes the underlying theory of the case or motion,29 or the parties adduce
¶ 40 Applying this standard here, the questions of law decided in USA Power I became the law of the case and accordingly could not be relitigated before the trial court.33 The questions of fact, on the other hand, were necessarily based on the record as it then existed.34 Our determination that reasonable inferences could be made in USA Power‘s favor at the summary judgment stage did not mean that later developments in the case, such as the five-week trial, would not cast the evidence and Defendants’ arguments in a new light. Indeed, we see no need to detail the ways in which the evidence may have been developed after summary judgment;35 instead, it is sufficient to recognize that a trial, especially one lasting five weeks, casts the evidence and the case in a significantly different light than the cold record at summary judgment.36 Accordingly, the trial court was free
¶ 41 Having established that the lower court was free to revisit factual issues addressed by our previous decision, we turn now to the merits of the various appeals, beginning with PacifiCorp‘s appeal of the trial court‘s denial of its JNOV motion.
PacifiCorp‘s Direct Appeal
¶ 42 Because USA Power I does not dictate the result of this appeal, we now address the merits of PacifiCorp‘s direct appeal. We first discuss PacifiCorp‘s claim that we should reverse the trial court‘s decision to deny its JNOV motion. We uphold the trial court‘s denial of the JNOV on the trade secrets issue because, although USA Power‘s vision is somewhat nebulous, there is a basis in the evidence that would allow a reasonable juror to decide that at least some identifiable portion of USA Power‘s vision met the definition of a trade secret—i.e., that it derived independent value from not being generally known or readily ascertainable. Second, we discuss PacifiCorp‘s argument that it is entitled to a new trial or remittitur on its unjust enrichment award. We conclude that it is not because there was evidence in the record that, if read in support of the jury‘s decision, was consistent with the correct legal standard for unjust enrichment damages. Finally, we discuss PacifiCorp‘s argument that it is entitled to a new trial or remittitur because the trial court failed
I. We Uphold the Trial Court‘s Denial of PacifiCorp‘s JNOV Motion
¶ 43 PacifiCorp faces a difficult standard of review in asking us to overturn the trial court‘s denial of a JNOV and ultimately reverse the jury‘s verdict. We do not re-weigh the evidence and decide if we think the jury got it right. Instead, we review the record to see if there was at least some basis in the evidence from which a reasonable juror could determine that a trade secret did exist.37 We conclude that under this standard, there was at least some evidence to support the jury‘s verdict and thus uphold the denial of the JNOV.
¶ 44 “To establish a claim for misappropriation of trade secrets, USA Power must show ‘(1) the existence of a trade secret, (2) communication of the trade secret to [PacifiCorp] under an express or implied agreement limiting disclosure of the secret, and (3) [PacifiCorp‘s] use of the secret that injures [USA Power].‘”38 This appeal deals only with the threshold issue of “whether, in fact, there [was] a trade secret to be misappropriated,”39 because PacifiCorp did not appeal the jury‘s finding of misappropriation.40 Therefore, any argument that goes to PacifiCorp‘s use of USA Power‘s information is not relevant to our analysis. It is established for purposes of this appeal that if there was a trade secret, it was misappropriated.
¶ 45 Utah‘s Uniform Trade Secrets Act defines “trade secret” as
information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
(a) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other
(b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.41
The plaintiff bears the burden of proving the existence of a trade secret, and “there is no presumption in his or her favor.”42
¶ 46 The jury found that PacifiCorp “misappropriated a trade secret possessed by USA Power.” PacifiCorp moved for a JNOV, which the trial court denied. PacifiCorp now argues that the trial court wrongly denied its JNOV because (1) USA Power “failed to identify its trade secret with particularity” and because (2) USA Power “failed to prove the existence of a compilation trade secret when all of [USA Power‘s] vision was either ‘generally known’ or ‘readily ascertainable.‘” In order to reverse a denial of a JNOV, PacifiCorp must show that “there was no basis in the evidence to support the jury‘s verdict.”43
¶ 47 Below, we discuss each of these claims. First, we discuss PacifiCorp‘s particularity argument and conclude that, while USA Power was not required to identify its trade secret with particularity, it was required to articulate what about its vision was not “generally known” or “readily ascertainable“—and thus allow the fact-finder to properly apply the statute. Next, we address whether USA Power has met its burden of proving a trade secret existed under the UUTSA. We conclude that it has done so because there is a basis in the evidence to support a jury finding that identifiable portions of USA Power‘s vision were not generally known or readily ascertainable and derived value from this status. Therefore, we uphold the trial court‘s denial of PacifiCorp‘s JNOV motion.
A. USA Power Sufficiently Identified Its Trade Secrets
¶ 48 PacifiCorp argues that it is entitled to a JNOV because USA Power did not define its trade secret with the necessary specificity. In contrast, USA Power argues that the “UUTSA does not impose a ‘particularity’ standard at trial beyond the evidence necessary to meet the statutory trade secret definition.” USA Power
¶ 49 Further, we made it clear in USA Power I that the plaintiff asserting a compilation trade secret must do more than “point to broad areas of technology and assert that something there must have been secret and misappropriated.”47 Therefore, while USA Power
¶ 50 In this case, USA Power has defined its trade secrets as including both its full Spring Canyon vision and various components of this vision. Specifically, USA Power defined its trade secrets as
first, the combination of level-1 information validating a gas-fired power plant, sited in Mona, with [information showing that] the Spring Canyon project‘s . . . specific configuration would be economically viable (profitable), and could be designed and constructed to be on-line to meet the critical energy demand projected for summer 2005, when no other project could. The choices creating [the Spring Canyon project] compilation included engineering; economic, market, and financial analyses; and choosing the best options from multiple locations, fuel types, fuel sources, transmission options, air pollution considerations, community support, sizes of output, equipment configuration, water availability, cooling options, business plans, and investment options (the “Choices“).
Within this compilation, [USA Power] had additional trade secrets, described as: (1) technical information about the size, location, configuration, economics, engineering, and assets of [the Spring Canyon project]; (2) business strategies, goals, and plans, including proformas describing cost and profitability; and (3) [USA Power‘s] first-to-market advantage—i.e., the ability to obtain financing and get to market first and block potential competitors.
¶ 51 The trade secrets were contained in the NOI permits, the rezoning request, the three volumes of information USA Power gave
¶ 52 This definition of USA Power‘s trade secrets is sufficient to permit the jury to perform its task. And, as we discuss below, there was a basis in the evidence from which the jury could have found that information that was part of USA Power‘s vision, including its economic data and business plans, was not generally known or readily аscertainable. It is important to again note the procedural posture of this case. Where we are reviewing the trial court‘s denial of a JNOV on factual grounds, it is not our role to determine, in the first instance, whether we would conclude USA Power proved that the trade secrets existed; rather we only review the record before us to determine if there was an adequate basis in the evidence to support the jury‘s verdict.
B. USA Power Submitted Enough Evidence to Give the Jury Some Basis to Conclude a Trade Secret Existed
¶ 53 Having decided that we will not impose any particularity requirement beyond that called for by statute and that USA Power sufficiently defined its trade secrets, we now address whether the jury could have reasonably inferred from the evidence presented that a trade secret existed—i.e., that the information USA Power described as trade secrets actually met the statutory standard. For the reasons discussed below, we conclude that the jury could have reasonably done so and thus uphold the trial court‘s denial of PacifiCorp‘s JNOV motion.
¶ 54 Under the UUTSA, a trade secret must “derive[] independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its
¶ 55 Although we stated in USA Power I that a compilation trade secret may exist even if all of the components of the compilation are publicly disclosed, we need not apply that standard to the case as it comes before us. Based on the evidence that has been developed since summary judgment, it is clear that not all of the elements of USA Power‘s claimed compilation trade secret were, in fact, publicly disclosed. Therefore, we need not analyze whether USA Power‘s entire compilation, as a compilation, was generally known or readily ascertainable. Instead, we can look to those components that were not publicly disclosed and decide if the evidence, when viewed in favor of USA Power, would allow a jury to find that these elements of the vision were not generally known or readily ascertainable and thus protected trade secrets.
¶ 56 We conclude that USA Power has provided some basis for the jury to conclude that at least a portion of its overall vision was a trade secret because it “derive[d] independent economic value . . . from not being generally known” or “readily ascertainable” to the defendant.55 Below, we first discuss why a reasonable juror
1. Generally Known
¶ 57 In order to be a trade secret, information must not be generally known—that is “information must be secret from at least some interested parties” and “[f]ull disclosure of the matter at issue without limitations on further circulation of the information requires the legal conclusion that the matter is no longer a trade secret.”56 The party claiming trade secret protection may make partial or limited disclosure of the information without defeating its trade secret status. For instance, the party “may, without losing his protection, communicate it to employees involved in its use. . . . [or] likewise communicate it to others pledged to secrecy.”57 Further, other parties may also have knowledge of the information so long as they also keep it confidential.58 For instance, if a company claims trade secret status of certain information, a second company‘s independent development of that same information would not defeat the first company‘s trade secret claim if the second company also kept the information confidential.
¶ 58 The evidence in this case provided a sufficient basis for the jury to conclude that at least some components of USA Power‘s vision for its Spring Canyon plant were not generally known. While a significant amount of information had been made public,59 there is no dispute that some of the information had not been. The parties
2. Readily Ascertainable
¶ 59 The UUTSA requires that, in order to prove the existence of a trade secret, the plaintiff must show that the information “derives independent economic value” from not being “generally known” or “readily ascertainable.”61 “Readily ascertainable” is not a defined term in the UUTSA and does not import any specialized meaning,62 and we therefore give the term its ordinary meaning.63
¶ 60 PacifiCorp argues that its engineering firm, SS&W, permissibly reverse-engineered USA Power‘s confidential back-up studies from publicly available information. It further argues that the reverse-engineered back-up studies, which took seven weeks and cost $250,000 to develop, were “readily ascertаinable” as a matter of law. PacifiCorp also argues that because USA Power had the burden of showing that the reverse-engineered back-up studies were not “readily ascertainable,” it was required to submit expert testimony on this issue, which it failed to do.
¶ 61 In response, USA Power makes two arguments. First, it argues that SS&W did not, in fact, reverse-engineer all of the proprietary information in its back-up studies and that the jury had sufficient evidence to conclude that the information that was not reverse-engineered was also not “readily ascertainable.” Second, USA Power argues that to the extent SS&W did reverse-engineer its back-up studies, the jury could have permissibly concluded that this information was not “readily ascertainable” because SS&W spent seven weeks and a quarter million dollars to re-create it. Further, USA Power contends that it was not required to provide expert testimony on whether SS&W‘s efforts meant that the reverse-engineered back-up studies were “readily ascertainable” but instead
¶ 62 We conclude, first, that the jury could have reasonably found that PacifiCorp did not actually reverse-engineer all of USA Power‘s confidential back-up studies and, second, that the jury could have found that the information that was not reverse-engineered was also not readily ascertainable. We discuss each of these issues below. Also, because we conclude that the jury could have found that PacifiCorp did not reverse-engineer all of USA Power‘s confidential information, we do not address whether the seven week timeframe and $250,000 budget made the reverse-engineered information “readily ascertainable” as a matter of law.
¶ 63 First, we hold that the jury could have reasonably concluded from the evidence that PacifiCorp did not reverse-
¶ 64 But USA Power certainly provided additional confidential information that SS&W did not reverse-engineer. For instance, viewing the evidence in the light most favorable to the verdict we have to assume that all of the following information, which was claimed as a trade secret, was not publicly disclosed:
data on the plant cost; data regarding the cost of dry cooling versus wet cooling; data regarding the dry-cooling energy penalty, including any site-specific analyses; temperature- or altitude-specific calculations, including the heat rate; data regarding the dry-cooling parasitic load; data regarding watеr balances; data regarding water availability or price; data regarding required water use; a fatal flaw analysis; information regarding the interconnection queue with PacifiCorp Transmission; information regarding gas pipelines; market data; economic proformas or economic analyses showing the costs, demonstrating the plant would be profitable, the extent of profitability, the return on equity, and the ability to obtain financing; [and] information on [USA Power‘s] potential equity partners or business plan.
¶ 65 Although PacifiCorp may have been able to permissibly reverse-engineer certain pieces of the above information, it was reasonable for the jury to infer that it could not ascertain all of USA Power‘s private information through reverse-engineering. For instance, it would be reasonable for the jury to find that PacifiCorp did not reverse-engineer USA Power‘s confidential economic analyses, financing information, potential business partners, and specific business plan. This is especially true given that this
¶ 66 Second, given that it was reasonable to find that PacifiCorp did not reverse-engineer all of USA Power‘s confidential information, the issue becomes whether the information that was not reverse-engineered was also not readily ascertainable. We conclude that it was reasonable for the jury to find that it was not. USA Power presented evidence that the confidential information that was not reverse-engineered included, among other material, economic analyses showing the cost associated with the project, the extent of profitability, and the return on equity, as well as USA Power‘s potential equity partners and business plan. All of these analyses were done from the unique perspective of USA Power. It was reasonable to infer that this information was not “readily ascertainable.”69
¶ 67 As discussed above, something is “readily” ascertainable when it can be determined “without much difficulty” through proper means. It is doubtful that PacifiCorp could have obtained USA Power‘s proprietary economic analysis and business plans through proper methods—likely making this information not ascertainable at all. And it was certainly reasonable for the jury to conclude that PacifiCorp could not have ascertained such information without much difficulty. Further, we conclude that USA Power was not required to present expert testimony that this information was not readily ascertainable. Whether information is readily ascertainable is an issue for the jury, which requires them to apply the facts presented to the correct legal standard. Here, there was certainly enough evidence presented to determine that USA
3. Economic Value
¶ 68 Because we conclude that there was information within USA Power‘s vision that was not generally known or readily ascertainable, we now address whether this information had value as required by the UUTSA. In order to be a trade secret, information must “derive[] independent economic value, actual or potential, from not being generally known” or “readily ascertainable” to the defendant.71 USA Power argued, and it was reasonable for the jury to conclude, that its confidential economic information and business strategies were valuable to PacifiCorp in the RFP process. From this information, USA Power argued that PacifiCorp could infer USA Power‘s potential bid in the RFP, giving it a “price to beat.” Certainly, it is reasonable for the jury to find that this information had value to PacifiCorp when PacifiCorp and USA Power were submitting competing bids in the same competitive process and where there was evidence suggesting that this confidential information would provide PacifiCorp with a “price to beat.”
¶ 69 PacifiCorp‘s position is that knowing its competitors’ internal financial data had no actual or potential value. But while PacifiCorp certainly had access to its own internal financial calculations and assessments, having access to USA Power‘s internal financial assessments is another matter altogether. It can hardly be argued that, in a bidding contest, for one competitor to have access to another competitor‘s internal financial calculations—calculations that will certainly bear upon that competitor‘s ultimate bid—would have obvious value. Such financial information is a paradigmatic example of a trade secret.
¶ 70 We, therefore, conclude that there was sufficient evidence in the record from which the jury could infer that a trade secret existed. That is, the jury could have concluded that specific portions of USA Power‘s confidential information were not generally known or readily ascertainable and that they “derived independent economic value, actual or potential” from this status. Because there
II. The Trial Court Did Not Abuse Its Discretion in Denying PacifiCorp‘s Motion for a New Trial or Remittitur
¶ 71 Having concluded that the jury could have reasonably found that a trade secret existed, we now address PacifiCorp‘s argument that the jury‘s unjust enrichment award was unsupported. Under the UUTSA, “[d]amages can include both the actual loss caused by misappropriation and the unjust enrichment caused by the misappropriation that is not taken into account in computing actual loss.”72 But unjust enrichment damages are limited to the value added to the project by the misappropriated trade secret.73 PacifiCorp argues that while the jury was properly instructed,74 it improperly “awarded [USA Power] 100% of PacifiCorp‘s profits as unjust enrichment, despite indisputable evidence that PacifiCorp made substantial independent contributions” to the Currant Creek project. We have emphasized that “[j]uries are generally allowed wide discretion in the assessment of damages.”75 Further, our standard of review when considering a trial court‘s decision to deny a
¶ 72
¶ 73 The trial court concluded both that “the plaintiff‘s theory . . . that there was only one plant that could be built” was “not illogical,” and that “if there‘s only going to be one plant built, it‘s not illogical to assume that if misappropriation of the trade secrets allowed Currant Creek to be that plant, that all the profits associated with Currant Creek are attributable to the misappropriation.” Given that the jury could have believed that only one plant could have been built in Mona, its decision to award USA Power all of PacifiCorp‘s profits would not have been against the law set forth in the jury instructions.78 Thus it was not an abuse of discretion for the trial court to deny PacifiCorp‘s motion for a new trial.
III. The Trial Court Did Not Abuse Its Discretion in Refusing to Give the Head-Start Jury Instruction
¶ 74
¶ 75 We review a trial court‘s “refusal to give a jury instruction for abuse of discretion.”79 Abuse of discretion may be present when a trial court “relied on ‘an erroneous conclusion of law‘” or where there was “no evidentiary basis for the trial court‘s ruling.”80 We have held that in certain circumstances the court‘s discretion in declining to give jury instructions “will be strictly cabined.”81 These circumstances are not at issue in this case, as we discuss below.82 Further, when assessing the decision to decline to give jury instructions, “we look at the jury instructions ‘in their entirety and will affirm when the instructions taken as a whole fairly instruct the jury on the law applicable to the case.‘”83 And “a trial court does not
¶ 76 Here, PacifiCorp requested the following proposed instruction:
You may only award actual and unjust enrichment damages for a time period equal to the amount of time (1) you find that it would take, or did take, any competitor, including PacifiCorp, to develop the trade secret independently, plus (2) any additional period, if any, that you find that the trade secret afforded PacifiCorp a competitive advantage, such as providing PacifiCorp a head start in its business.
The jury instruction given by the court stated:
“Unjust enrichment” means the reasonable value of the benefit that the party who misappropriated the trade secret has gained from disclosing or using the trade secret. A defendant‘s profits may be an indication of unjust enrichment, but if you use PacifiCorp‘s profits to calсulate an amount of unjust enrichment, you must use the profits which are attributable to the misappropriation. You may not include as damages those profits that are attributable to PacifiCorp‘s own independent efforts, skill, expertise, knowledge, innovation, and investment.
¶ 77 We conclude that under the instruction that was given, PacifiCorp was free to argue its head-start theory—that after the initial head-start period, the remaining life of the plant was “attributable to PacifiCorp‘s own independent efforts, skill, expertise, knowledge, innovation, and investment.” While “head start” was not specifically mentioned in the actual jury instruction, this is insufficient to conclude that the instruction denied PacifiCorp the ability to present its theory to the jury.
¶ 78 Because PacifiCorp could have presented its theory to the jury, we review the trial court‘s decision under the general abuse of discretion standard instead of a “cabined” one. Under the abuse of discretion standard, we conclude that the trial court‘s decision to deny PacifiCorp‘s proposed instruction was not grounded in an
¶ 79 Further, in assessing the evidence, a jury could have concluded that the parties were competing over a single economic opportunity. PacifiCorp‘s head start essentially gave it entire control over that opportunity. Such control afforded PacifiCorp a perpetual competitive advantage as it precluded USA Power from constructing its own plant. Consequently, a reasonable jury could have determined that PacifiCorp‘s head start was the sole cause of the total amount of the unjust enrichment damages. Accordingly, we hold that the trial court did not abuse its discretion by refusing to give the head-start jury instruction.
¶ 80 In sum, on PacifiCorp‘s direct appeal, we uphold the trial court‘s denial of PacifiCorp‘s JNOV on the trade secret issue because the jury could have reasonably inferred from the evidence, viewed in favor of the verdict, that a trade secret existed. We deny PacifiCorp‘s request for a new trial or remittitur on the apportionment of unjust enrichment damages and on the trial court‘s decision not to give the jury its head-start jury instruction.
USA Power‘s Cross-Appeal
¶ 81 Having affirmed the trial court on each issue raised by PacifiCorp, we must now address the various issues related to damages raised by USA Power in its cross-appeal. USA Power asserts five claims: (1) the trial court improperly reduced the damages awarded to USA Power against PacifiCorp; (2) the trial court erred in denying exemplary damages; (3) the trial court erred by using the lodestar method to calculate the amount of attorney fees awarded to USA Power; (4) the trial court erred in denying prejudgment interest;86 and (5) the trial court erred by applying an incorrect interest rate to the contract damages. Although USA Power
I. The Trial Court Did Not Abuse Its Discretion in Granting a Remittitur
¶ 82 The first claim asserted by USA Power in its cross-appeal is that the trial court erred in granting a remittitur reducing the unjust enrichment damages awarded by the jury. The jury awarded USA Power both actual damages—$21,399,391—and unjust enrichment damages—$112,500,000. The trial court reduced the unjust enrichment award pursuant to a
¶ 83 The trial court apparently granted the remittitur based on
¶ 84 Although it is true that “[j]uries are generally allowed wide discretion in the assessment of damages,”94 we have also recognized that “[i]n the context of a . . . motion attacking the amount of a jury verdict under [
¶ 85 The trial court, after having been present for a five-week trial and having reviewed hundreds if not thousands of pages of evidence, determined that “the jury awarded to the penny the amount of the anticipated profits from Spring Canyon, and awarded to the penny the anticipated profits from Currant Creek” and found that “it‘s clear that both of those could not have been achieved simultaneously.” The court‘s logic is reasonable. If no misappropriation had occurred and USA Power had won the bid,
II. The Trial Court Did Not Abuse Its Discretion by Denying Exemplary Damages
¶ 86 USA Power‘s second argument is that the trial court erred by denying USA Power‘s request for exemplary damages. Under the UUTSA, “[i]f willful and malicious misappropriation exists, the court may award exemplary damages.”99 This statute is discretionary—it states that exemplary damages may be awarded upon a finding of willfulness, not that they must be.100 Thus, “[t]he law is clear that while willful [misappropriation] may allow enhanced damages, such a finding does not compel the district court to grant them. Instead, the decision to grant or deny enhanced damages remains firmly within the scope of the district court‘s reasoned discretion.”101 So long as the trial court applied the right legal standard to its decision,
¶ 87 USA Power claims that the trial court erred in not evaluating its request under the proper standard, the Read factors,103 and instead applied an unpermitted standard that overruled the jury‘s verdict.104 The first problem with USA Power‘s argument is that the law is well established that while the Read factors are helpful, the appropriate legal standard is a consideration of “the totality of the circumstances.”105 The second problem is that the trial court did analyze the case using the Read factors and did incorporate the jury‘s verdict into its analysis—facts that USA Power failed to address in its opening brief.106 Although the trial court did look to other relevant considerations, such as whether the jury verdict alone would fulfill the purpose of an award of exemplary damages, such considerations are entirely appropriate under the totality of the circumstances test. Because the court used the correct standard, we
¶ 88 In reviewing the trial court‘s decision, we begin with the Read factors, though we again emphasize that these factors are to be used only insofar as they are helpful to a trial court‘s analysis. There are nine factors: (1) the deliberateness of the defendant‘s actions; (2) the defendant‘s good-faith belief that it was not misappropriating a trade secret; (3) the defendant‘s behavior as a party in litigation; (4) the defendant‘s size and financial condition; (5) the closeness of the case; (6) the duration of the defendant‘s misconduct; (7) the presence of any remedial action by the defendant; (8) the defendant‘s motivation for harm; and (9) the defendant‘s attempts to conceal its misconduct.108
¶ 89 The court considered each of these factors as well as the purpose for exemplary damages in denying USA Pоwer‘s request. Further, the court did not “second guess[] the jury.”109 It properly considered the jury‘s verdict as dispositive of certain factors. The court determined that certain factors, including those it concluded were necessarily established by the jury‘s verdict,110 weighed in favor of an award of exemplary damages,111 while other factors
III. The Trial Court Correctly Employed the Lodestar Method to Calculate USA Power‘s Attorney Fees
¶ 90 Next, USA Power argues that the trial court erred in employing the “lodestar method” of calculating attorney fees rather than relying on the contingency fee percentage agreed to by USA Power. Under the UUTSA, “[i]f . . . willful and malicious misappropriation exists, the court may award reasonable attorneys’ fees to the prevailing party.”116 As with an award of exemplary damages, the permissive language of the statute allows a court to award fees in its discretion.117 The court may use its discretion to determine both whether an award of attorney fees should be made118 and, if so, what the amount should be.119 Thus, as with exemplary
¶ 91 The parties argue over the method that should be used to calculate attorney fees. USA Power argues for an award based entirely on its contingency fee arrangement, while PacifiCorp argues that the trial court‘s use of the lodestar method was appropriate. USA Power asserts that it should have been awarded the full amount of its contingency fee based on prior cases approving contingency fee awards and the policy that an award of attorney fees should “indemnify the prevailing party.”122 PacifiCorp counters that the lodestar method,123 which was the method actually used by the trial court, is the usual method used in calculating attorney fees.
¶ 92 PacifiCorp is correct. The lodestar method is the traditional approach to calculating attorney fees.124 And though, as USA Power has argued, we have occasionally permitted a contingency fee arrangement to form the basis of an award of attorney fees, such circumstances, as discussed below, are rare. Accordingly, the trial court did not err in employing the traditional lodestar method as its standard for awarding fees. And in light of USA Power‘s acknowledgment that “the only issue is whether the court applied the wrong legal standard“—and not whether the
¶ 93 We take this opportunity, however, to provide guidance as to when an award of attorney fees based solely on a contingency fee arrangement is proper, as our prior cases have not expressly addressed this issue. In general, a party may recover attorney fees only when provided for by statute or contract—the so-called American Rule.126 As noted аbove, the calculation of attorney fees pursuant to a fee-shifting contract or statute is generally performed through the lodestar method.127 But there are a limited number of exceptions to the American Rule, some of which permit a party to recover attorney fees as special or consequential damages.128 We
¶ 94 We have found, and the parties could point us to, only two cases where we have upheld a fee award based solely on a contingency fee arrangement: Campbell v. State Farm Mutual Automobile Insurance131 and Billings v. Union Bankers Insurance.132 Both involved claims against an insurer and thus fell within the exception to the American Rule permitting attorney fees as
¶ 95 USA Power points to two cases from our court of appeals, Kealamakia, Inc. v. Kealamakia140 and Staffing America v. Advanced Management Concepts, Inc.,141 as contrary to the principles just discussed.142 Neither case supports USA Power‘s argument that a contingency fee may serve as the sole basis of an award when the fees are not sought as damages, however, because in neither case was the issue before the court. In Kealamakia, the court of appeals stated that the trial court had not “simply used the contingency fee arrangement without evaluating the reasonableness for that amount.”143 Indeed, the court stated that the trial court had specifically found the fee amount to be reasonable and found that the record contained evidence supporting the trial court‘s determination under the traditional reasonableness analysis.144 And
¶ 96 We emphasize, however, that a contingency fee agreement is not irrelevant to the determination of what constitutes a reasonable attorney fee in cases where the fee award is not sought as damages. Indeed, the rubric we have provided to calculate a reasonable fee award under the lodestar method requires a trial court to determine whether there are “circumstances which require consideration of additional factors, including those listed in the [Rules of Professional Conduct],”148 such as “whether the fee is fixed or contingent.”149 Further, we have expressly recognized that the lodestar method permits a court to apply a “multiplier” to increase or decrease the total award in order to account for a number of factors, such as “the contingent nature of the case, . . . the risks assumed, and . . . the delay in payment.”150 Accordingly, it may have been appropriate for the trial court in this case to adjust the lodestar-based award in light of USA Power‘s contingency fee arrangement. The record is not clear as to whether the trial court made such an adjustment, however, because the parties stipulated to the amount of the attorney fees.151 Although USA Power suggests that the trial
¶ 97 USA Power‘s final argument as to why its contingency fee arrangement should serve as the basis for the award of attorney fees is that an increased award would ensure that USA Power was made whole—i.e., it would not have to pay its attorneys out of the amount awarded by the jury.153 As we have repeatedly stated, however, the contracted billing rate of a party‘s attorney is not determinative of a fee award.154 As such, there will likely often be cases where a party must pay its attorney more than the amount of reasonable attorney fees it was awarded. This case highlights the dangers of awarding fees based on the contract between the prevailing party and their counsel and emphasizes the importance of ensuring that a fee award does not “punish the losing party by allowing the winner a windfall
¶ 98 Because USA Power did not seek attorney fees as damages and did not prove that its contingency fee arrangement was foreseeable, its contingency fee cannot serve as the sole basis for its fee award. We accordingly affirm the trial court‘s determination of thе amount of fees pursuant to the lodestar method.
IV. USA Power Is Not Entitled to Prejudgment Interest
¶ 99 Next, USA Power claims that the trial court erred in denying any form of prejudgment interest. USA Power argues first that it was entitled to prejudgment interest beginning at some point prior to the verdict.160 It also argues in the alternative that, even if it is not awarded prejudgment interest prior to the verdict, it was entitled to post-verdict, prejudgment interest under
A. USA Power Is Not Entitled to General Prejudgment Interest
¶ 100 “Prejudgment interest may be recovered where the damage is complete, . . . ‘the loss ha[s] been fixed as of a definite time and the amount of the loss can be calculated with mathematical accuracy in accordance with well-established rules of damages.‘”161 “[L]osses that cannot be calculated with mathematical accuracy are those in which damage amounts are to be determined by the broad discretion of the trier of fact,”162 requiring the fact-finder to “be guided by their best judgment in assessing the amount to be allowed for past as well as for future injury.”163 Such losses include those stemming from personal injury, wrongful death, defamation, false imprisonment, malicious prosecution, and assault and battery.164 Although not per se excluded, we are generally “reluctan[t] to award prejudgment interest for unrealized profits.”165 This is so because “[d]amages in [lost profit] cases do not represent an actual, ascertainable loss; they represent the fact[-]finder‘s best
¶ 101 USA Power argues that the calculation of damages resulting from the failed RFP bid was sufficiently certain to allow for prejudgment interest under the standard just discussed. Its explanation for why it has satisfied this standard is telling, however: “USA Power‘s actual losses and unjust enrichment damages were not general tort damages, were the subject of admissible expert and lay testimony, and involved facts and figures based on fixed rules of evidence and known standards of value.”168 If this were the standard, nearly every claim would receive prejudgment interest. The evidence USA Power points to as establishing the “mathematical accuracy” of its loss shows that USA Power estimated its lost profits to be somewhere between $3 million and $24.09 million, requiring the jury to use its best judgment in estimating what sequence of events would have unfolded and the value of the contracts that USA Power might have entered into. The project “was not an established business with a long-term history of profits,”169 there was no contract specifying the amount of profit USA Power would have gotten if PacifiCorp had not breached,170 and it is uncertain whether USA
¶ 102 USA Power essentially argues that because its “claims c[ould] be reduced eventually to monetary value,” it should receive prejudgment interest.171 We have long rejected this proposition.172 Although USA Power was entitled to put on “the best evidence available” in support of its claim for lost profits,173 our requirement that “the amount of the loss . . . be calculated with mathematical accuracy in accordance with well-established rules of damages”174 means that evidence that is sufficient to permit a jury to consider whether to award damages for lost profits may still be insufficient to justify an award of prejudgment interest.175 As the Tenth Circuit stated, “[t]here is a difference between a loss that can be ‘measured by facts and figures,’ and using facts and figures to estimate a loss.”176 Accordingly, due to the amount of uncertainty inherent in USA Power‘s award for lost profits, we affirm the trial court‘s denial of USA Power‘s request for prejudgment interest.
B. USA Power Is Not Entitled to Post-Verdict Prejudgment Interest
¶ 103 USA Power argues that even if it is not entitled to full prejudgment interest, it is entitled to prejudgment, post-verdict interest and asserts that
¶ 104 This reading of the rule is supported by cases discussing prejudgment interest, which USA Power fails to address. For example, we have held that “‘[p]rejudgment interest’ represents an amount awarded as damages due to the opposing party‘s delay in tendering the amount owing under an obligation.”179 USA Power‘s interpretation of the rule would permit a clerk to add prejudgment interest as a matter of course, not as an award stemming from any delay of an overdue payment.180 Cases from our court of appeals and our own rules of appellate procedure further undermine USA Power‘s claim.181 Because USA Power failed to provide any
¶ 105 USA Power also argues that it is entitled to prejudgment, post-verdict interest under the common law because the verdict liquidated the amount owed. The cases USA Power cites for this argument affirm the “‘well[-]established rule’ of this jurisdiction that allows interest on overdue debts.”183 The question becomes when PacifiCorp‘s liability to USA Power, as established by the jury‘s verdict, became due. USA Power has provided no argument as to this point other than conclusory statements and no legal authority other than cases stating the common law rule permitting interest on overdue debts. Aside from being inadequately briefed, USA Power‘s argument fails to address our court of appeals’ reasoning in Bailey-Allen Co. v. Kurzet,184 where the court cited two cases for the proposition that the “entry of judgment and not oral ruling liquidates damages.”185 This is so because any order “may be
V. USA Power Is Not Entitled to the Ten Percent Interest Rate Under Section 15-1-1
¶ 106 The final issue in USA Power‘s cross-appeal is whether it was entitled to the ten percent interest rate provided for in
¶ 107 We recognize that we have suggested in prior cases that
¶ 108 In this case, the question of the scope of section 15-1-1 is squarely presented and our resolution of this question is necessary to our decision. The statute states that it applies to contracts “for the loan or forbearance of any money, goods, or chose in action.”198 Because “[w]e presume that the legislature used each word advisedly” and “that the expression of one [term] should be interpreted as the exclusion of another,”199 the description of certain kinds of contracts in the statute necessarily limits the statute‘s application to only those contracts described therein: contracts for the “loan . . . of any money [or] goods” or for the “forbearance of any . . . chose in action.” Because we cannot ignore the plain language of the statute, we must reject USA Power‘s
¶ 109 We accordingly hold that the statute applies only to contracts “for the loan or forbearance of any money, goods, or chose in action.” As the contract in this case was not one of the contracts described in section 15-1-1, the interest rate provided therein does not apply. Instead, section 15-1-4 provides the appropriate interest rate: “the federal postjudgment interest rate as of January 1 of each year, plus 2%.”201 We thus affirm the trial court‘s decision to not apply the interest rate found in section 15-1-1.
¶ 110 For the reasons discussed above, we affirm the trial court as to each issue addressed by USA Power in its cross-appeal. We turn now to the third appeal in this case, USA Power‘s direct appeal of the trial court‘s grant of JNOV in favor of Ms. Williams.
USA Power‘s Direct Appeal
¶ 111 After the jury found that Ms. Williams damaged USA Power by breaching her fiduciary duties, Ms. Williams moved for JNOV. The trial court granted the motion, finding for several reasons that no competent evidence supported USA Power‘s causation argument—i.e., that USA Power had failed to connect Ms. Williams‘s actions to its damages. USA Power appeals this ruling, arguing that there was sufficient evidence from which a reasonable jury could find that Ms. Williams caused PacifiCorp to select its own bid rather than USA Power‘s. USA Power alternatively argues that, even if there is no evidence that Ms. Williams caused USA Power to lose the RFP, there was sufficient evidence to prove that she caused PacifiCorp to break off negotiations and abandon a contract for the purchase of USA Power‘s Spring Canyon proposal. We address each of USA Power‘s theories in turn and affirm the trial court‘s grant of JNOV.
I. USA Power Has Not Shown that It Would Have Benefitted by Winning the RFP Absent Ms. Williams‘s Conduct
¶ 112 USA Power‘s central argument on appeal is that it presented sufficient evidence to support the jury‘s finding that Ms. Williams damaged USA Power by helping PacifiCorp obtain water rights that were critical to PacifiCorp‘s proposal winning out over USA Power‘s. Before addressing the issues related to the evidence, however, we first address the parties’ arguments regarding the appropriate causation analysis in legal malpractice cases. The parties argue over what USA Power‘s burden was and whether it was required to show that “no other lawyer” could have obtained the same results. Ms. Williams also contends that expert testimony is necessary to prove causation under her proposed standard—testimony that USA Power did not provide. We first address the parties’ arguments over the standard of causation applicable in legal malpractice suits. We then address whether USA Power presented sufficient evidence to support its theory of causation under this standard. Ultimately, we affirm the trial court‘s grant of JNOV, holding that USA Power failed to present sufficient evidence in support of its claim.
A. Clients in Legal Malpractice Cases Must Show that Absent the Attorney‘s Conduct, They Would Have Benefitted
¶ 113 Although there are different causes of action that a client can assert against its attorney, each action includes the element of causation. And “the same standard of causation applies whether the alleged wrong is a negligent act, a fiduciary breach, or even a contractual breach.”202 Because this causation requirement is a crucial and distinct element to any malpractice claim, an abundance of evidence as to breach of duty cannot make up for a deficiency of evidence as to causation.203 The question before us today is what must be shown to satisfy this element.
¶ 114 Although the causation element of a legal malpractice claim has sometimes been defined as two separate inquiries—actual or “but for” causation204 and proximate or legal causation205— it can be difficult in practice to separate an actual cause analysis from a proximate cause analysis as both require a counterfactual analysis. In other words, both requirе us to inquire as to “what would have occurred if the [attorney] had not engaged in the . . . conduct.”206 The reason for this is that proximate causation is not truly a separate
¶ 115 Because of the interrelatedness of these two causation analyses, we have “distilled the standard for causation in legal malpractice actions”208 to the following framework: “the client is required to show that absent the conduct complained of[,] . . . the client would have benefitted.”209 Causation requires us to “inquire as to what the [client‘s] position would have been [if the attorney had acted differently], as compared to [the client‘s] present position.”210 If the client‘s injury would have occurred regardless of the attorney‘s action, then there is no causation. This means that the client must prove not only that its attorney caused the client to lose the chance to litigate a case or negotiate certain terms in a business deal, but also that the client would have won the case if it was litigated211 or that
¶ 116 Although the parties generally agree as to this standard, they disagree as to whether it encompasses a requirement that USA Power demonstrate that a different attorney, with reasonable skill and diligence, would not have been able to duplicate Ms. Williams‘s work for PacifiCorp. But this “no other lawyer” requirement is simply the application of the “would have benefitted” standard discussed above to certain kinds of breach of fiduciary duty claims—such as the ones asserted by USA Power here. Where a client has asserted that its attorney breached the duties of loyalty or confidentiality by working for or sharing information with a third party—whether an opposing party in litigation or business—and that the breach ultimately disadvantaged the client in some way, the client still has the burden of showing that absent that attorney‘s breach, it would have benefitted. And if the third party or attorney provides evidence that the third party would have hired a different attorney in the stead of the breaching attorney, the client must accordingly show that this other attorney, with reasonable skill and diligence, would not have been able to do for the third party what
¶ 117 USA Power‘s only response to this conclusion is that we rejected it in USA Power I. In fact, however, we did just the opposite in that case. There, we noted that USA Power‘s causation аrgument hinged on its claim that “Ms. Williams was the only lawyer who could
¶ 118 Because USA Power‘s central theory of causation is that Ms. Williams caused USA Power to lose the RFP, which caused USA Power to lose the $21 million it would have earned from building and operating a power plant in Mona, USA Power must show not only that Ms. Williams disadvantaged it in the bidding process, but also that it would have benefitted in the specific way it claimed. To do this, USA Power was required to provide evidence that, had Ms. Williams declined to assist PacifiCorp, PacifiCorp would either have not hired another attorney or that a reasonably skilled and diligent attorney would not have been able to duplicate Ms. Williams‘s work in locating water, PacifiCorp‘s proposal would have accordingly failed for a lack of water rights, and USA Power would have won the RFP, negotiated a profitable power purchase agreement with PacifiCorp, and then built and operated the power plant for twenty years.217 We turn now to the evidence USA Power presented in support of this chain of causation.
B. There Is No Competent Evidence from Which a Reasonable Jury Could Infer that Absent Ms. Williams‘s Conduct, USA Power Would Have Benefitted by Winning the RFP
¶ 119 USA Power‘s main argument on appeal is that the trial court erred in granting Ms. Williams‘s motion for JNOV for lack of evidence of causation as it related to the failed RFP bid. We review the court‘s grant of JNOV for correctness, mindful that a JNOV can be granted “only if there is no ‘basis in the evidence, including reasonable inferences which could be drawn therefrom, to support the jury‘s determination.‘”218 And when the question is one of causation, we take the question from the jury only if “the facts are so clear that reasonable persons could not disagree about the underlying facts or about the application of a legal standard to the facts” or if “the proximate cause of an injury is left to speculation.”219
¶ 120 As it pertains to the lost RFP bid, USA Power‘s causation theory was as follows:
- “Only one power plant could be built in Mona; if PacifiCorp awarded itself the RFP, was granted the CC&N, and constructed [Currant Creek], the [Spring Canyon Project] would be rendered worthless.”
- PacifiCorp could not win the RFP without a firm water supply.
- PacifiCorp only had a limited time in which to acquire these rights.
- “Obtaining water in Mona was very difficult and required a long lead time.”
- Ms. Williams was able to obtain water rights for PacifiCorp in substantially less time than it took her to obtain water rights for USA Power because of her prior work for USA Power. That shortened time frame was necessary for PacifiCorp to win the RFP.
Ms. “Williams was instrumental in the engineer approving PacifiCorp‘s [change of use] application and rejecting Mona residents’ objections.” - “USA Power‘s Bid #135 came in second behind [PacifiCorp‘s bid]. Accordingly, if PacifiCorp would not have awarded itself the RFP, USA Power would have won, entered into a PPA with PacifiCorp, and been operating Spring Canyon today.”
¶ 121 After hearing USA Power‘s evidence on this chain of causation, the trial court granted JNOV after drawing two conclusions from the evidence presented: first, the trial court found that “[t]he undisputed expert testimony at trial demonstrated that [Ms.] Williams‘[s] efforts . . . were competent, but not materially different than could be achieved by any number of water lawyers in Utah.” And second, the court found that because “the undisputed evidence was that when PacifiCorp entered into the RFP process, it had not firmly secured water rights[,] . . . the jury could not reasonably infer that [Ms.] Williams‘[s] efforts in obtaining water were the linchpin that allowed [PacifiCorp‘s proposal] to be selected.”
¶ 122 After reviewing the evidence supporting USA Power‘s theory of causation, we agree with the trial court as to both of these conclusions. As we discuss below, USA Power has not shown that absent Ms. Williams‘s conduct, another attorney of reasonable skill and diligence could not have performed the same work for PacifiCorp. Further, even if we were to conclude that Ms. Williams‘s efforts were unique, the record shows that the acquisition of water rights was not critical to the RFP process. Accordingly, there is no evidence that, even without any water rights, PacifiCorp would have selected USA Power‘s bid over its own.
1. USA Power has not provided competent evidence that Ms. Williams was uniquely qualified and able to secure water for PacifiCorp
¶ 123 The first problem with USA Power‘s causation theory is that there is no credible evidence that Ms. Williams‘s “conduct did not cause [USA Power] any pecuniary loss or damage [USA Power] would not have also suffered had another attorney represented [PacifiCorp].”220 Because the undisputed evidence was that
¶ 124 The evidence that USA Power relies upon to argue that Ms. Williams was “uniquely positioned” to find water for PacifiCorp centers on its claim that obtaining water in Mona was difficult and required a long lead time. USA Power claims that because it took Ms. Williams five months to find water for PacifiCorp, whereas it took her fifteen months to do the same for USA Power, the jury could draw the reasonable inference that the difference in timing was due to the legal work performed and confidential information she obtained as USA Power‘s lawyer. Accordingly, another attorney could not have performed the same work within the same critical timeframe. As the trial court found, however, this comparison is inapt as “[t]he undisputed expert testimony at trial demonstrated that [Ms.] Williams‘[s] efforts . . . . were competent, but not materially different than could be achieved by any number of water lawyers in Utah.”
¶ 125 First, Ms. Williams was hirеd by USA Power to find options for water rights, but the undisputed evidence showed that “[n]one of the potential water sellers [was] interested in an option.” Further, the evidence showed that USA Power did not actually spend fifteen months looking for water, as USA Power hired Ms. Williams in April 2001 but did not “release” her to look for water options until September 2001. And the evidence tending to show that obtaining water rights in Mona was difficult relied on evidence showing the difficulty of obtaining rights to 10,000 acre-feet—the amount necessary for a wet-cooled plant. Although USA Power has clearly demonstrated that obtaining such a large amount of water in Mona is a difficult task, this evidence could not inform a jury about the difficulty of obtaining 400 acre-feet of water—the amount necessary for a dry-cooled plant such as the one that was actually built. Evidence showing the difficulty of obtaining twenty-five times the amount of water that was ultimately necessary is insufficient as a matter of law.
¶ 126 Ultimately, USA Power presented no competent evidence on the time it would have taken an attorney of reasonable skill and
2. USA Power has not provided competent evidence that PacifiCorp could not have won the RFP without a firm water supply
¶ 127 Even if we were to disregard USA Power‘s failure to present evidence related to whether another attorney could have performed the same work that Ms. Williams did, there remains a far more fundamental problem with USA Power‘s theory of causation. The most important link in USA Power‘s chain of causation is its assertion that “PacifiCorp could not win the RFP . . . without a firm water supply.” But the evidence, as adduced at trial, simply does not support USA Power‘s argument that water rights—and Ms. Williams‘s securing of the same—was critical to PacifiCorp‘s bid. For the reasons discussed below, we agree with the trial court that “the jury could not reasonably infer that [Ms.] Williams‘[s] efforts in obtaining water were the linchpin that allowed [PacifiCorp‘s proposal] to be selected.”
¶ 128 The only evidence that a firm water supply was essential to PacifiCorp‘s decision was a statement by Ms. Williams in a memorandum stating, “It is unlikely that PacifiCorp‘s proposal will succeed in the RFP process without a firm water supply.” But this assertion is belied by the undisputed evidence that PacifiCorp‘s proposal did in fact succeed in the RFP process without a firm water supply in place. It is undisputed that PacifiCorp had no water rights when it submitted its bid on July 17, 2003. Indeed, PacifiCorp‘s proposal stated only that water “would be supplied by local wells and pumped to the Plant.” It is also undisputed that PacifiCorp did not enter into an agreement to obtain water rights until September 3, 2003, well after the RFP deadline of July 22. USA Power asks us to infer that because PacifiCorp‘s board knew water was essential to operating a power plant, and was likely aware of the water rights contract entered into on September 3, that it relied on the presence of the contract in awarding the bid to itself on September 22. This inference, for the reasons discussed below, is unreasonable.
¶ 129 First, all evidence of the RFP process suggests that water was not a significant consideration in the bid process. Water is, of course, absolutely essential to the operation of a power plant. But
¶ 130 A second problem with USA Power‘s inference is that the purpose of the RFP, as described by USA Power‘s counsel, was to help PacifiCorp convince the Public Service Commission that whatever proposal it accepted was the most feasible. In order to accomplish this goal, PacifiCorp had the bids vetted by a neutral third party before making its decision. This third party ranked PacifiCorp‘s proposal above all others. Although PacifiCorp selected its own proposal on September 22, 2003—after PacifiCorp had secured a contingent water rights contract—USA Power has not provided any evidence that PacifiCorp amended its bid to ensure that the neutral third-party reviewer could use the updated information in its evaluation of PacifiCorp‘s proposal.223 As the
¶ 131 This is a case where “the facts are so clear that reasonable persons could not disagree about the underlying facts or about the application of a legal standard to the facts.”224 The evidence unmistakably demonstrates that, while PacifiCorp could not build and operate a power plant without water, it could and did select a bid without a firm water supply. Thus, USA Power has not shown that even absent Ms. Williams‘s work for PacifiCorp, PacifiCorp‘s bid would have failed and it would have selected USA Power‘s bid instead.
¶ 132 Each of the issues related to USA Power‘s theory of causation that we discussed above is fatal to its claim against Ms. Williams. In asserting its specific theory of causation, USA Power necessarily took on the burden of proving each link in the chain of causation linking Ms. Williams to USA Power‘s failed bid. Although the standard of review we employ when reviewing a grant of JNOV is highly deferential to the jury‘s verdict, we hold that USA Power failed to demonstrate that there is any competent evidence that absent Ms. Williams‘s conduct, it would have benefitted by having PacifiCorp‘s bid fail and its own bid succeed. Accordingly, we affirm the trial court‘s grant of JNOV as to this issue.
II. There Is No Competent Evidence from Which A Reasonable Jury Could Infer Ms. Williams Caused USA Power to Lose the Contract.
¶ 133 As an alternative to the lost RFP damages discussed above, USA Power also argues that “absent [Ms. Williams‘s] fiduciary duty breaches, USA Power would have benefitted by selling the project to PacifiCorp.” This refers to the earlier agreement, entered into March 14 and terminated on March 17, 2003, wherein PacifiCorp agreed to purchase the Spring Canyon project developed by USA Power and employ USA Power‘s principals to assist with other power
¶ 134 USA Power has provided no evidence from which a reasonable jury could infer that Ms. Williams caused the loss of the contract. As stated above, the relevant standard is whether there is any competent evidence that leads to reasonable inferences that “absent the conduct complained of . . . the client would have benefitted.”225 Here, this means that USA Power must present some competent, non-speculative evidence that absent Ms. Williams‘s work for PacifiCorp, PacifiCorp would have honored and not terminated the agreement entered into on March 14, 2003.
¶ 135 The only evidence USA Power provided to support its alternative theory of causation is a timeline: PacifiCorp decided to withdraw its offer to purchase the USA Power project about two weeks after PacifiCorp hired Ms. Williams. Specifically, USA Power provided evidence of both the project‘s viability and of PacifiCorp‘s recognition of the project‘s viability, details of some of the various offers and counteroffers that the parties exchanged between February and March of 2003, and that “on March 14, 2003, PacifiCorp agreed to purchase [the Spring Canyon project] for $3 million and a five-year [joint development agreement].” Three days later, March 17, 2003, PacifiCorp “reneged on the deal.” The only evidence of Ms. Williams‘s involvement in all of this, however, is that Ms. Williams “commenced representation and working for PacifiCorp on March 3, 2013.”226 And after being retained by PacifiCorp, the only evidence provided about Ms. Williams‘s work during that time was that she researched the possibility of securing water rights from Geneva Steel. Based on these facts, USA Power suggests that the jury “could infer that, without [HRO and Ms. Williams] commencing their conflicting representation of PacifiCorp, USA Power would have benefitted in the amount of $5.29 million.” This is insufficient evidence of causation.
¶ 137 The argument here is similar to that rejected in Breton: after Ms. Williams started working for PacifiCorp, PacifiCorp reneged on the deal; therefore, PacifiCorp reneged on the deal because Ms. Williams started working for PacifiCorp.231 The only evidence that sheds any light on what Ms. Williams actually did between March 3 and March 17 shows that she worked to acquire water rights from Geneva, an entity with no connection to either USA Power or the agreement. There is no evidentiary support for the inference that she advised anyone at PacifiCorp on any aspect of the contract for the sale of the Spring Canyon project. Further, there is
¶ 138 Having determined that the trial court was correct in granting JNOV against USA Power on each of its claims against Ms. Williams, we must also affirm the court‘s denial of punitive damages as USA Power has no other claims against her.234 Accordingly, we affirm the trial court‘s decision as to each issue addressed by USA Power in its direct appeal. USA Power failed to provide sufficient evidence that Ms. Williams was the cause of its losses, even under the generous JNOV standard.
Conclusion
¶ 139 For the reasons discussed above, we affirm the trial court‘s rulings on all issues. Regarding PacifiCorp‘s appeal, the trial court correctly concluded that there was sufficient evidence to support the jury‘s verdict that a trade secret existed. As to USA Power‘s cross-appeal, where the decisions of the trial court were to be made in the exercise of the trial court‘s discretion, USA Power has not demonstrated that the trial court abused that discretion either by applying an incorrect legal standard or by improperly reviewing the evidence. As to the other issues raised in the cross-appeal, USA Power has not shown that the trial court erred. Finally, as to USA Power‘s direct appeal of the trial court‘s grant of JNOV in favor of Ms. Williams, we hold that there was no competent evidence that absent Ms. Williams‘s actions, USA Power would have benefitted by having PacifiCorp‘s proposal fail and its own bid succeed. We
Notes
This argument seems to accept that the jury could reasonably infer from PacifiCorp‘s misuse of the information that this information must not have been generally known or readily ascertainable. Our court of appeals recognized the difficulty with this type of argument in CDC Restoration & Construction v. Tradesmen Contractors. 2012 UT App 60. In that case, the court found that accepting such an argument “would in effect create a presumption that trade secret status may be established by use alone.” Id. ¶ 22. The court concluded that “[d]oing so would collapse the first and third elements of the test—(1) existence of a trade secret and (3) injurious use—into a single element.” Id. We agree with this analysis and thus recognize that USA Power cannot establish the existence of its trade secret through evidence of misuse.