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July 2016

Gordon & Rees Dallas Attorneys Defeat Multi-Million Dollar Trade Secret Claims at Trial and on Appeal

Dallas partner Bob Bragalone and senior counsel Ryan Fellman represented an Ohio attorney and law firm as defendants in a Texas state court case in which the plaintiff, a company hoping to build a medical facility in the Austin area, claimed that the attorneys had disclosed its trade secrets.

The attorneys had acquired the alleged trade secrets during a due diligence investigation for a potential acquisition of the plaintiff contemplated by their client, a competing Austin-based medical facility. The attorneys’ medical facility client was also named as a defendant, and it was additionally accused of violating a nondisclosure agreement entered into in connection with the due diligence. (The attorneys’ medical facility client was separately represented in the case.) The plaintiff sought damages of at least $8 million for the alleged misappropriation.

After hard-fought discovery and dramatic deposition testimony – including the thorough discrediting of the plaintiff's trade secret expert – the trial court granted Gordon & Rees's motion for summary judgment on the trade secret claim. The case continued against the attorneys’ medical facility client on the breach-of-nondisclosure-agreement count, resulting in a $7,900,000 jury verdict against it.

Both sides appealed the trial court judgment, and the plaintiff additionally appealed the grant of summary judgment in favor of the firm’s attorney clients. Even though Gordon & Rees was representing the winner in the trial court, a successful appeal was far from assured; the summary judgment below had been granted in the face of the inherent subjectivity of the fact-intensive “trade secrets” inquiry, and the trial court decision did not clearly set forth its reasoning on the claim.

Fellman prepared the trial motion and appeal and conducted both oral arguments. Dallas partner Steve Lawson assisted on the appellate brief.

In a decision issued July 1, the Texas Third District Court of Appeals affirmed the summary judgment in favor of Gordon & Rees's clients, and reversed and rendered judgment in favor of the attorneys’ medical facility client. The final result was a complete victory for all defendants.

 

Robert A. Bragalone
B. Ryan Fellman
Steven Lawson



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