CDC Restoration & Construction v. Tradesmen Contractors , 274 P.3d 317 ( 2012 )

IN THE UTAH COURT OF APPEALS
‐‐‐‐ooOoo‐‐‐‐
CDC Restoration & Construction, LC, ) OPINION
)
Plaintiff and Appellant, ) Case No. 20100127‐CA
)
v. )
) FILED
Tradesmen Contractors, LLC; Kenneth ) (February 24, 2012)
Allen; Paul Carsey; Jay Lasater; Michael )
Lasater; Shauna Lasater; and Lindsey ) 2012 UT App 60Mounteer, )
)
Defendants and Appellees. )
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Third District, Salt Lake Department, 080908435
The Honorable Robert K. Hilder
Attorneys: Richard F. Ensor and Kari A. Tuft, Salt Lake City, for Appellant
Romaine C. Marshall, P. Bruce Badger, and Rachel S. Anderson, Salt
Lake City, for Appellees
‐‐‐‐‐
Before Judges McHugh, Voros, and Orme.
VOROS, Associate Presiding Judge:
¶1 CDC Restoration & Construction, LC (CDC) appeals from summary judgment in
favor of Tradesmen Contractors, LLC (Tradesmen), Kenneth Allen, Paul Carsey, Jay
Lasater, Michael Lasater, Shauna Lasater, and Lindsey Mounteer (collectively,
Defendants).1 CDC’s claims arise out of the Defendants’ creation of Tradesmen,
1
On appeal, the Lasaters submitted a separate brief from Tradesmen, Allen,
Carsey, and Mounteer. Where appropriate, we refer to the non‐Lasater defendants
(continued...)
competition against CDC for work projects, and alleged misappropriation of
confidential information and trade secrets. We affirm in part and reverse in part.
BACKGROUND
¶2 CDC is a contractor that primarily repairs concrete and installs protective and
decorative coatings in Utah and the surrounding states. From 2003 to 2005, CDC
performed concrete repair and restoration work for Kennecott Utah Copper
Corporation (Kennecott). Pursuant to Kennecott’s policy, CDC entered into a preferred
provider agreement (PPA) with Kennecott before performing the work. The PPA listed
pricing information to provide Kennecott some assurance of what a given project might
cost. Included in CDC’s PPA was pricing information for its hourly employees as well
as hourly, daily, weekly, and monthly rates for various pieces of industrial equipment.
The PPA stated that the information in it was confidential.
¶3 Defendant Carsey began working for CDC in the early 1990s and eventually
became a CDC foreman. He worked in that capacity from 2004 to 2005, during which
time CDC was performing work for Kennecott. Carsey never signed a confidentiality
agreement, but was told that CDC’s pricing information was confidential. Carsey
resigned in January 2006, informing CDC’s owner Ralph Midgley that he was “burned
out” and was going to “flip houses.” However, CDC alleges that before Carsey
resigned from CDC, he had begun speaking with the other defendants about starting
Tradesmen (a company that would compete directly with CDC for work at Kennecott),
had begun working for Tradesmen, and had been elected Tradesmen’s vice president
and project developer. Carsey testified that he did not begin working for Tradesmen
until after he had resigned from CDC.
¶4 Defendant Allen worked for an independent contractor hired by Kennecott to
supervise work performed at Kennecott’s refinery. Allen was a project manager and, in
that capacity, supervised CDC’s work and knew CDC’s confidential pricing
information. Before working at the refinery, Allen worked as a project manager,
coordinator, and director for Kennecott for twenty‐eight years. By December 2005,
1
(...continued)
collectively as the Tradesmen Defendants.
20100127‐CA 2
Allen had formalized his ownership interest in Tradesmen. CDC alleges that Allen and
Carsey frequently exchanged phone calls during the period when both CDC and
Tradesmen were formulating bids for a Kennecott job. CDC also alleges that Allen
went to great lengths to hide his involvement with Tradesmen during this time,
including sending an email to Kennecott management indicating that he was unfamiliar
with Tradesmen.
¶5 In late 2005, Kennecott put a contract up for bid for a project known as E‐Bay (the
Project) at its refinery. In January 2006, Kennecott conducted a pre‐bid walkthrough of
the refinery. Carsey participated in the walkthrough on behalf of CDC. Tradesmen
also participated in the walkthrough. Noticing Tradesmen’s presence, Midgley asked
Carsey if he knew anything about Tradesmen. Carsey said he did not. In the days
following the walkthrough, Carsey assisted CDC with every aspect of assembling its
bid for the Project. Meanwhile, Tradesmen also put together a bid for the Project. The
Tradesmen Defendants concede that they used the labor rates in CDC’s PPA as a
starting point for Tradesmen’s PPA. They claim that Allen, primarily, assembled
Tradesmen’s bid. CDC alleges that Carsey assisted in assembling Tradesmen’s bid even
while he was in the employ of CDC. Allen and Carsey deny that allegation. Both
testified that Carsey did not assist Allen in preparing Tradesmen’s bid. However,
defendant Michael Lasater, a Tradesmen manager, testified that Carsey was frequently
at the Tradesmen offices during the time that Tradesmen was formulating its bid.
¶6 CDC, Tradesmen, and a third company each submitted bids for the Project.
CDC’s bid was the highest, Tradesmen’s the second highest, and the third company’s
the lowest. On January 24, 2006, Kennecott awarded the Project to Tradesmen. In an
email, Dan Larsen, Kennecott’s then senior electrical engineer and supervisor of the
Project stated, “After reviewing the bids and talking this over . . . we felt that
Tradesm[e]n/Paul Carsey should do this work. Working in the tank house basement is
dangerous and [we] felt his experience and concern for safety were a good fit to have
the repairs completed in the [Project].” Dennis Woolley, Kennecott’s maintenance
superintendent, testified that price was also a factor in awarding the bid.
¶7 CDC sued. It alleged (1) misappropriation of trade secrets against Tradesmen,
Allen, and Carsey for improper use of its labor and equipment rates and bid
information; (2) breach of fiduciary duty against Carsey; (3) intentional interference
with prospective economic relations against Tradesmen, Allen, and Carsey; and (4) civil
conspiracy against all Defendants.
20100127‐CA 3
¶8 The trial court entered summary judgment in favor of Defendants on all claims.
It ruled that CDC failed to present sufficient evidence to demonstrate a genuine issue of
material fact as to whether its labor and equipment rates were trade secrets under the
Utah Uniform Trade Secrets Act (the UTSA or Utah UTSA), see Utah Code Ann. §§ 13‐
24‐1 to ‐9 (2009), whether Tradesmen, Allen, and Carsey used CDC’s labor and
equipment rates and bid information, and whether Carsey owed CDC a fiduciary duty.
The court also ruled that the UTSA preempted all remaining claims.
ISSUES AND STANDARD OF REVIEW
¶9 CDC first contends that it presented sufficient evidence to demonstrate a genuine
issue of material fact as to whether its labor and equipment rates and other bid
information are trade secrets and as to whether Tradesmen, Allen, and Carsey used
those trade secrets. CDC next contends that it presented sufficient evidence to
demonstrate a genuine issue of material fact as to whether Carsey owed it a fiduciary
duty. CDC then contends that its intentional interference with prospective economic
relations claim is not preempted by the UTSA. Finally, CDC contends that its civil
conspiracy claim is not preempted by the UTSA.
¶10 Summary judgment is appropriate when “there is no genuine issue as to any
material fact and . . . the moving party is entitled to a judgment as a matter of law.”
Utah R. Civ. P. 56(c). We “review[] a trial court’s legal conclusions and ultimate grant
or denial of summary judgment for correctness and view[] the facts and all reasonable
inferences drawn therefrom in the light most favorable to the nonmoving party.”
Bingham v. Roosevelt City Corp., 2010 UT 37, ¶ 10, 235 P.3d 730.
ANALYSIS
I. Trade Secrets
A. CDC’s Labor and Equipment Pricing
¶11 CDC first contends that the trial court erred when it ruled that CDC “failed to
present evidence that is sufficient to establish a genuine issue of material fact that its
labor and equipment rates derive independent economic value from not being generally
20100127‐CA 4
known to, and not being readily ascertainable by proper means by,” Tradesmen,
Carsey, and Allen.
¶12 Specifically, CDC alleges that Tradesmen misappropriated the specific labor and
equipment rates set forth in CDC’s PPA. CDC claims not only that each item on this list
is a trade secret, but also that the list itself is entitled to protection as a unique
compilation. CDC points out that “an alchemy of information may constitute a trade
secret when its separate parts are each generally known and readily ascertainable, but,
when analyzed together such parts derive independent economic value.” See USA
Power, LLC v. PacifiCorp, 2010 UT 31, ¶ 42, 235 P.3d 749. CDC also contends that the trial
court erred in ruling that CDC failed to establish that Tradesmen used CDC’s labor and
equipment rates.
¶13 “What constitutes a trade secret is a question of fact.” Envirotech Corp. v.
Callahan, 872 P.2d 487, 494 (Utah Ct. App. 1994) (citing Telex Corp. v. International Bus.
Corp., 510 F.2d 894, 928 (10th Cir. 1975); Kodekey Elecs. Inc. v. Mechanex Corp., 486 F.2d
449, 455 (10th Cir. 1973)). “The burden of demonstrating the existence of a trade secret
is on the plaintiff, and there is no presumption in his or her favor.” Id. (citing
Microbiological Research Corp. v. Muna, 625 P.2d 690, 696 (Utah 1981)).
¶14 Where, as here, the nonmoving party will bear the burden of proof at trial, the
movant “may satisfy its burden on summary judgment by showing, by reference to ‘the
pleadings, depositions, answers to interrogatories, and admissions on file, together with
the affidavits, if any,’ that there is no genuine issue of material fact.” Orvis v. Johnson,
2008 UT 2, ¶ 18, 177 P.3d 600 (quoting Utah R. Civ. P. 56(c)). Upon such a showing,
“the burden then shifts to the nonmoving party, who ‘may not rest upon the mere
allegations or denials of the pleadings,’ but ‘must set forth specific facts showing that
there is a genuine issue for trial.’” Id. (emphasis omitted) (quoting Utah R. Civ. P.
56(e)).
¶15 To establish a claim for misappropriation of a trade secret, the proponent of the
trade secret must show “(1) the existence of a trade secret, (2) communication of the
trade secret to [the defendant] under an express or implied agreement limiting
disclosure of the secret, and (3) [defendant]’s use of the secret that injures [the
proponent].” Water & Energy Sys. Tech., Inc. v. Keil, 1999 UT 16, ¶ 9, 974 P.2d 821.
Therefore, our first step in this analysis is determining “‘whether, in fact, there is a trade
20100127‐CA 5
secret to be misappropriated.’” USA Power, 2010 UT 31, ¶ 41 (quoting Microbiological
Research, 625 P.2d at 696).
¶16 The Utah UTSA defines “trade secret” to include a compilation that (1) derives
economic value from not being known or readily ascertainable by others, and (2) is the
subject of reasonable efforts to maintain its secrecy:
“Trade secret” means 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 persons who
can obtain economic value from its disclosure or use; and
(b) is the subject of efforts that are reasonable under
the circumstances to maintain its secrecy.
Utah Code Ann. § 13‐24‐2(4). A proponent of a trade secret must establish both prongs
of the test. See id.; Microbiological Research, 625 P.2d at 696.
¶17 In 1981, our supreme court held in Microbiological Research Corp. v. Muna, 625
P.2d 690 (Utah 1981), that a unique combination of generally known elements may
qualify as a trade secret:
“[A] unique combination of generally known elements or
steps can qualify as a trade secret, if it represents a valuable
contribution attributable to the independent efforts of the
one claiming to have conceived it. . . . The subject matter of
the trade secret must be unknown; it should not be in the
public domain nor within the knowledge of the trade . . . .”
Id. at 696 (quoting 2 Rudolf Callman, Unfair Competition, Trademarks & Monopolies § 53.3,
at 388 (3d ed.)). The court recently reaffirmed this holding in USA Power, LLC v.
PacifiCorp, 2010 UT 31, 235 P.3d 749. See id. ¶¶ 43–45. A compilation may qualify as a
trade secret “‘if extensive effort is required to pierce its veil by assembling the literature
concerning it and thereby uncover its parts’”; on the other hand, “‘[i]f this can be readily
done by one who is normally skilled in the field and has a reasonable familiarity with
20100127‐CA 6
its trade literature, the secret may no longer be entitled to protection.’” Microbiological
Research, 625 P.2d at 696 (quoting 2 Callman, Unfair Competition § 53.3, at 391–92).
¶18 The supreme court has also held that, in determining whether information
constitutes a trade secret, a court may consider the factors listed in the first Restatement
of Torts:
“(1) the extent to which the information is known outside of
the business; (2) the extent to which it is known by
employees and others involved in its business; (3) the extent
of measures taken by the business to guard the secrecy of its
information; (4) the value of the information to the business
and its competitors; (5) the amount of effort or money
expended by the business in developing the information; (6)
the ease or difficulty with which the information could be
properly acquired or duplicated by others.”
USA Power, 2010 UT 31, ¶ 45 & n.8 (quoting Restatement of Torts § 757 cmt. b (1939)).
¶19 Even viewing all of the facts and drawing all of the inferences therefrom in the
light most favorable to CDC, see Bingham v. Roosevelt City Corp., 2010 UT 37, ¶ 10, 235
P.3d 730, we agree with the trial court that CDC has not carried its burden of setting
forth sufficient facts to create a genuine issue of material fact as to the first prong of the
statutory definition—that the pricing information was not generally known and not
readily ascertainable by proper means.
¶20 CDC points to no record evidence of how its pricing information was in fact
developed. Nor does it cite to any record evidence indicating that its pricing
information or its method for obtaining pricing information is unique or especially
innovative, such that it could not be readily duplicated by others in the industry. See
USA Power, 2010 UT 31, ¶ 45 (listing “the ease or difficulty with which the information
could be properly acquired or duplicated by others” as a relevant factor in determining
whether information is a trade secret (citation and internal quotation marks omitted)).
Nor does CDC cite any record evidence that the pricing information required great time
or financial investment to develop. See id. (listing “the amount of effort or money
expended by the business in developing the information” as a relevant factor for
determining whether information is a trade secret (citation and internal quotation
20100127‐CA 7
marks omitted)); see also Microbiological Research Corp. v. Muna, 625 P.2d 690, 700 (Utah
1981) (holding that the plaintiff’s customer list was not a trade secret, in part, because
“there was no evidence that by the nature of [the] plaintiff’s business extraordinary
effort was involved in compiling [the] customer list”); Hammerton, Inc. v. Heisterman,
No. 2:06‐CV‐00806 TS, 2008 WL 2004327, at *8 (D. Utah May 9, 2008) (holding that the
plaintiff presented sufficient evidence to create a genuine issue of material fact that its
customer list was a trade secret because the plaintiff presented evidence that the list
took ten years and “great expense to the company” to develop); Delta Med. Sys., Inc. v.
Mid‐America Med. Sys., Inc., 772 N.E.2d 768, 780 (Ill. App. Ct. 2002) (stating that
information should be protected as a trade secret “[w]here an employer has invested
substantial time, money, and effort to obtain” it).
¶21 CDC does argue that Tradesmen could not have recreated the information:
“Tradesmen used CDC’s PPA as both a foundation and a verbatim copy because
Tradesmen could not have created one by itself.” However, this latter assertion is
unsupported by any “citations to . . . parts of the record relied on.” See Utah R. App. P.
24(a)(9). CDC then argues that “[e]ven if Tradesmen could have generated a PPA by
itself eventually, it could not have generated a PPA in the short period of time required
to submit a bid on the . . . Project.” But again, CDC provides no record support for this
assertion. See id. Accordingly, CDC has not demonstrated that on this point it “set forth
specific facts showing that there is a genuine issue for trial.” See Utah R. Civ. P. 56(e).
¶22 CDC’s core argument, made repeatedly in both its opening brief and its reply
brief, is this: “Simply put, if Defendants could have easily developed pricing for their
PPA without using CDC’s confidential information, why did they not do so?”
Accepting this argument would in effect create a presumption that trade secret status
may be established by use alone. Doing 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.
See generally, e.g., Water & Energy Sys. Tech., Inc. v. Keil, 1999 UT 16, ¶ 9, 974 P.2d 821(stating the three‐pronged test for the determination of a trade secret). The
presumption would also be inconsistent with Microbiological Research and USA Power,
which identify factors to be considered in determining trade secret status. See supra
¶¶ 17–18. Moreover, nothing in those cases identifies mere use of the information as
sufficient to sustain a finding of trade secret status, or even as a factor relevant to that
inquiry. On the contrary, a plaintiff bears the burden of proving the existence of a trade
secret, “and there is no presumption in [its] favor.” See Microbiological Research, 625 P.2d
at 696.
20100127‐CA 8
¶23 Midgely did testify that the pricing information took “years” of experience to
develop. However, this generality fails to demonstrate a genuine issue of material fact
for two reasons. First, Midgely did not elaborate on his statement that it took years to
develop the pricing information with evidence of how many years it took. Cf. id. at 700
(holding that the plaintiff failed to carry its burden of proving that its customer list was
a trade secret, in part, because “the sole evidence in regard to the customer[ list]
concerned the expenditures in an unidentified sum”). Second, Midgely testified in his
deposition that the PPA was developed with the input of CDC’s employees—including
Carsey—based on their years of experience. There is a difference between information
an employee obtains through years of experience and information an employee obtains
solely through an employer:
[Courts] recognize the distinction between the case of an
employee, who leaves one employer and uses his own
faculties, skill and experience in the establishment of an
independent business or in the service of another, and the
case of one who uses confidential information, secured
solely through his employment, to the harm of his previous
employer.
Id. at 697. Moreover, “[c]onfidential information of an employer . . . loses any protection
to which it may have been entitled after it has been merged into the employee’s own
faculties, skill and experience.” Id. (citation and internal quotation marks omitted); see
also Utah Med. Prods., Inc. v. Clinical Innovations Assocs., 79 F. Supp. 2d 1290, 1312–13 (D.
Utah 1999) (finding it “necessary” for a plaintiff to separate its trade secret “from the
general skill and knowledge possessed by [the defendants]”), aff’d, 251 F.3d 171 (Fed.
Cir. 2000). Thus, “[t]here must be a delineation between the general knowledge and
experience of the employee and the trade secrets of the employer.” Microbiological
Research, 625 P.2d at 697. CDC makes no attempt to delineate between the two here.
¶24 Further, the standard is not “‘whether the information is generally known and
readily ascertainable to the general public, but based on the defendant[’s] knowledge
and experience, whether the information was known or ascertainable to [the
defendant.]’” USA Power, LLC v. PacifiCorp, 2010 UT 31, ¶ 44, 235 P.3d 749 (alterations
in original) (quoting Utah Med. Prods., 79 F. Supp. 2d at 1312). The standard therefore
takes into account the relevant experience and knowledge of the specific defendants. In
20100127‐CA 9
regard to developing pricing information for a restoration bid, both Allen and Carsey
had substantial experience and knowledge. Allen worked as a project manager,
coordinator, and director at Kennecott for twenty‐eight years. As project manager,
Allen supervised Kennecott’s various contractors and had access to and knowledge of
their pricing information. As the trial court stated, Allen “lived and worked” this type
of pricing information. Carsey worked as a laborer and a foreman for CDC for almost
twenty years. In those capacities, Carsey obtained knowledge regarding how many
hours and how much equipment was necessary to perform restoration work at
Kennecott and the pricing information for both. He helped CDC’s estimators determine
the requisite hours and equipment necessary to formulate a pricing structure for CDC’s
bids. More specifically, he helped Midgely estimate the number of hours required to
perform the Project, and what equipment was needed. And Midgely testified that
Carsey “had good knowledge of what it took to do the project out [at Kennecott].”
¶25 Moreover, the equipment rates contained in the PPA were not just readily
ascertainable by Carsey and Allen, but were also readily ascertainable by the public.
Here, the testimony shows that the equipment rates could be ascertained simply by
calling equipment rental companies on the phone. Michael Lasater testified that he
obtained some of the equipment rates for Tradesmen’s PPA by doing just that. Midgely
confirmed that calling rental equipment companies is a good way to research
equipment pricing information.
¶26 Where information alleged to be a trade secret can be readily ascertained by
performing a basic research task, the information does not qualify as a trade secret. For
instance, in Microbiological Research, the court held that the plaintiff’s customer list was
not a trade secret, in part because “[m]ost of the customers[’] . . . location[s] and
identit[ies] . . . were readily accessible through public sources and trade journals.”
Microbiological Research Corp. v. Muna, 625 P.2d 690, 700 (Utah 1981). Similarly, in
Medspring Group, Inc. v. Feng, 368 F. Supp. 2d 1270 (D. Utah 2005), the court held that
the identities of the plaintiff’s customers were readily ascertainable within the public
domain and, thus, not trade secrets because a “simple internet search” for the product
that the plaintiff marketed yielded some of the plaintiff’s customers’ identities. See id. at
1278–79. The court also held that the plaintiff’s “method of classifying and defining” its
product to obtain FDA approval was not a trade secret because that process was readily
available on a public website. See id. at 1277. The method was therefore “a public
process” and not a trade secret. See id. Phoning rental equipment companies and
asking their rental rates is similar to performing an internet search or checking trade
20100127‐CA 10
journals or other public resources. Information obtained through such a process is
readily ascertainable by the public.
¶27 In sum, we conclude that the trial court correctly ruled that, even viewed in the
light most favorable to CDC, the evidence fell short of demonstrating a genuine issue of
material fact as to the first element of the statutory definition of a trade secret.
Accordingly, we affirm the trial court’s ruling that CDC’s labor and equipment pricing
information is not, as a matter of law, entitled to trade secret protection.
B. CDC’s Bid Information
¶28 CDC also contends that the trial court erred in ruling that CDC had produced no
evidence that Tradesmen, Carsey, and Allen used CDC’s bid information, including its
actual bid amount, in formulating Trademen’s own bid on the Project, and thus no
genuine issue of material fact existed.2 Analytically, this claim presents something of a
mirror image of the claim based on CDC’s pricing information.3 The question with
respect to CDC’s pricing information was not whether CDC presented evidence that
Tradesmen used CDC’s pricing information (it did), but whether CDC presented
evidence that its pricing information qualified as a trade secret. In contrast, the
question with respect to CDC’s bid information was not whether CDC presented
evidence that the bid information qualified as a trade secret (it did), but whether CDC
presented evidence that Tradesmen used the bid information in formulating its own
bid.
¶29 The trial court ruled that CDC had failed to adduce sufficient evidence to create a
genuine issue of material fact as to whether Tradesmen, Carsey, or Allen “ever saw or
made use of [CDC’s] bid for the project.” CDC challenges this ruling on appeal,
2
The pricing information contained in CDC’s PPA is not job‐specific, but is a list
containing, for example, hourly, daily, and weekly costs to rent certain pieces of
equipment. In contrast, we understand “bid information” to mean the contents of
CDC’s bid on the Project, including the total bid amount.
3
CDC presents distinct claims on appeal based on misappropriation of its pricing
information and misappropriation of its bid information. In fact, the claims appear in
different subsections of its brief.
20100127‐CA 11
arguing in particular that the trial court failed to draw all reasonable inferences of fact
in favor of CDC.
¶30 A jury can infer misappropriation of a trade secret from circumstantial evidence.
See USA Power, LLC v. PacifiCorp, 2010 UT 31, ¶ 50, 235 P.3d 749. Consequently,
“presentation of circumstantial evidence may create a genuine issue of material fact
foreclosing summary judgment.” Id. ¶ 65 (citing Regan‐Touhy v. Walgreen Co., 526 F.3d
641, 651 (10th Cir. 2008)); cf. id. (“[I]t may be difficult for a plaintiff to produce direct
evidence that his or her attorney disclosed or misused confidential information.”).
Furthermore, on summary judgment a non‐moving party may controvert the movant’s
statements of fact “by presenting to the court the contrary inferences to be made from
those facts.” Id. ¶ 38. The trial court is then required to determine whether the
inferences are reasonable. Id. ¶ 37.
¶31 CDC contends that the evidence shows that Carsey helped formulate both bids.
It points to Midgley’s deposition as evidence that Carsey was involved with “every
aspect of [CDC’s] bid.” Midgley, a managing member of CDC, testified in his
deposition that Carsey assisted him in “assembling estimated labor and manpower” for
the bid; helped him “estimate the amount of manpower and time needed to accomplish
the project and, in some instances, what equipment [CDC] would need”; and, at least
indirectly, “help[ed] with the totals.” At the same time, Michael Lasater, Allen’s partner
at Tradesmen, stated in his deposition that, the night before the bid was due, Carsey
and Allen were at Tradesmen’s offices working on Tradesmen’s bid.
¶32 In addition, CDC argued in the trial court that the facts support a reasonable
inference that Tradesmen, Carsey, and Allen actually knew the “exact numbers” on the
bid, “or very close.” The trial court seemed to agree that “the bid is, in fact, a trade
secret,” but saw “absolutely no evidence the bid information itself was used.” CDC
does not claim direct evidence that Tradesmen, Carsey, and Allen knew the amount of
CDC’s bid—“or very close”—but asserts that this proposition may reasonably be
inferred from the depositions on file. In addition to the evidence summarized above,
CDC relies on the fact that Tradesmen raised its bid on the Project by approximately
$10,000 at the last minute. CDC argues that this testimony supports the inference “that
Allen knew he could increase the bid approximately $10,000 because [he] knew the
revised Tradesmen[] bid would still be below CDC’s bid.”
20100127‐CA 12
¶33 In response, the Tradesmen Defendants rely on the conclusory statement of the
trial court that “there is no competent evidence that any of the defendants knew the
actual bid amount of CDC.” They also rely on a statement in Carsey’s own deposition
that Midgley “would hand me a package and say, ‘this is confidential’”; although
Carsey did not know what was in the packages because they were sealed, he believed
they were invoices. However, this statement may not be about pricing information or
bids on the Project at all; the line of questioning begins with counsel asking, “With the
exception of the E‐bay, do you remember any prebid walk‐throughs during the 2003 to
2005 time period at the Kennecott refinery?” (Emphasis added.) The Tradesmen
Defendants also note that Carsey and Lindsey Mounteer testified in their depositions
that Carsey had no involvement in Tradesmen’s bid on the Project.
¶34 Although factually distinguishable, this issue is similar in certain respects to the
one presented in USA Power. There, the trial court “granted summary judgment to [the
defendant] on [the plaintiff’s] misappropriation of trade secrets claim because it
determined that [the plaintiff] failed to provide sufficient evidence that [certain
information] was a trade secret or that [defendant] more likely than not
misappropriated any possible trade secrets.” USA Power, 2010 UT 31, ¶ 24. The
supreme court reversed on the ground that “a jury could reasonably infer that [the
defendant] misappropriated [the plaintiff’s] alleged trade secret . . . .” Id. ¶ 52. It was in
this context that the supreme court observed that circumstantial evidence may be
adequate to overcome summary judgment. See id. ¶ 50.
¶35 The evidence of use offered by CDC here is entirely circumstantial. Carsey
assisted Midgley in formulating CDC’s bid, including assembling labor estimates;
estimating the equipment and time needed to accomplish this particular project; and
helping with the bid totals. He then spent the night before the bid was due working
with Allen on Trademen’s bid. Especially in light of the principles stated by our
supreme court in USA Power, we conclude that this evidence is sufficient to establish a
genuine issue of material fact and thus to survive summary judgment. Cf. Anderson
Dev. Co. v. Tobias, 2005 UT 36, ¶ 33, 116 P.2d 323 (“Although the evidence in support of
this element is thin, we conclude that it is nevertheless sufficient to withstand summary
judgment.”).4
4
The Tradesmen Defendants advance another argument that would apply to
(continued...)
20100127‐CA 13
II. Preemption
¶36 CDC contends that the trial court erred in dismissing its claims for breach of
fiduciary duty, intentional interference with prospective economic relations, and civil
conspiracy. The trial court ruled that the claims for intentional interference and civil
conspiracy are preempted by the UTSA; the Tradesmen Defendants argue that the claim
for breach of fiduciary duty—which the court dismissed on its merits—is also
preempted.
¶37 With three delineated exceptions, the UTSA displaces, or preempts, conflicting
state remedies based on the misappropriation of a trade secret:
(1) Except as provided in Subsection (2), this chapter
displaces conflicting tort, restitutionary, and other law of
this state providing civil remedies for misappropriation of a
trade secret.
(2) This chapter does not affect:
(a) contractual remedies, whether or not
based upon misappropriation of a trade secret;
(b) other civil remedies that are not based upon
misappropriation of a trade secret; or
(c) criminal remedies, whether or not based
upon misappropriation of a trade secret.
Utah Code Ann. § 13‐24‐8 (2009).
4
(...continued)
CDC’s claims of misappropriation based both on pricing information and bid
information. The argument goes to causation. They argue that Tradesmen won the bid
primarily on the strength of Carsey’s “experience and concern for safety,” not on the
relative bid amounts of the parties. The Tradesmen Defendants’ cursory argument does
not convince us that summary judgment was appropriate on this claim. Indeed, the
issue of causation appears to present a genuine issue of material fact for trial.
20100127‐CA 14
¶38 This appeal asks whether CDC’s non‐UTSA remedies are “based upon
misappropriation of a trade secret.” See id. CDC contends that a state tort claim
conflicts with—and thus is preempted by—the UTSA only if it is based solely on
information actually ruled a “trade secret” under the UTSA. We must therefore
determine whether the UTSA preempts claims based on the misappropriation of
information that does not meet the UTSA’s definition of “trade secret.” This appears to
be an issue of first impression in this jurisdiction. See Russo v. Ballard Med. Prods., No.
2:05 CV 59, 2006 WL 2345868, at *9 (D. Utah Aug. 10, 2006) (stating that “[t]here are no
published cases in Utah that address the preemptive effect of the UTSA”).
¶39 “Under our rules of statutory construction, we look first to the statute’s plain
language to determine its meaning.” Sindt v. Retirement Bd., 2007 UT 16, ¶ 8, 157 P.3d
797 (citation and internal quotation marks omitted). In addition, “[w]e read the plain
language of the statute as a whole, and interpret its provisions in harmony with other
statutes in the same chapter and related chapters.” Li v. Enterprise Rent‐A‐Car Co. of
Utah, 2006 UT 80, ¶ 9, 150 P.3d 471 (alteration in original) (citation and internal
quotation marks omitted). Furthermore, “[o]ne of the cardinal principles of statutory
construction is that [we] will look to the reason, spirit, and sense of the legislation, as
indicated by the entire context and subject matter of the statute dealing with the
subject.” Miller v. State, 2010 UT App 25, ¶ 12, 226 P.3d 743 (alterations in original)
(citation and internal quotation marks omitted). In addition to these general rules of
interpretation, the Utah UTSA itself contains an interpretive mandate: “This chapter
shall be applied and construed to effectuate its general purpose to make uniform the
law with respect to the subject of the chapter among states enacting it.” Utah Code
Ann. § 13‐24‐9. Consistent with this mandate, we review how other adopting
jurisdictions have construed the UTSA’s preemption provision.5
¶40 The UTSA was promulgated to address concerns about the “‘uneven’”
development of trade secret law and to combat the resulting “‘undue uncertainty
concerning the parameters of trade secret protection, and the appropriate remedies for
misappropriation of a trade secret.’” BlueEarth Biofuels, LLC v. Hawaiian Elec. Co., 235
P.3d 310, 313 (Haw. 2010) (quoting Prefatory Note to Uniform Trade Secrets Act, 14
U.L.A. 531 (2005)). It accordingly sought to provide “‘unitary definitions of trade secret
5
Forty‐five states, the District of Columbia, and one territory have adopted the
UTSA. See Utah Code Ann. § 13‐24‐9 amend. notes (2009).
20100127‐CA 15
and trade secret misappropriation, and a single statute of limitations for the
various . . . theories of noncontractual liability utilized at common law.’” K.C.
Multimedia, Inc. v. Bank of Am. Tech. & Operations, Inc., 90 Cal. Rptr. 3d 247, 260 (Cal. Ct.
App. 2009) (quoting Prefatory Note to Uniform Trade Secrets Act, 14 U.L.A. 537–38
(1980)). The drafters wanted to “assure businesses that their efforts will be tested
against the same measure of care in every state.” Uniform Law Commission, Why States
Should Adopt UTSA, http://www.nccusl.org/Narrative.aspx?title=Why%20States
%20Should%20Adopt%20UTSA (last visited Feb. 21, 2012).
¶41 Courts interpreting the preemption provision have thus declared that its purpose
“is to preserve a single tort action under state law for misappropriation of a trade
secret.” Mortgage Specialists, Inc. v. Davey, 904 A.2d 652, 663 (N.H. 2006) (citation and
internal quotation marks omitted); see also Bliss Clearing Niagara, Inc. v. Midwest Brake
Bond Co., 270 F. Supp. 2d 943, 948 (W.D. Mich. 2003) (stating that “the purpose of the
UTSA was to ‘codify all the various common law remedies for theft of ideas’ and that
‘plaintiffs who believe their ideas were pilfered may resort only to the [U]TSA’”
(citation omitted)); Smithfield Ham & Prods. Co. v. Portion Pac, Inc., 905 F. Supp. 346, 348
(E.D. Va. 1995) (stating that the preemption provision’s purpose is “to prevent
inconsistent theories of relief for the same underlying harm by eliminating alternative
theories of common law recovery [that] are premised on the misappropriation of a trade
secret”); BlueEarth Biofuels, 235 P.3d at 322 (stating that the UTSA “evince[s] the goal of
eliminating uncertainty and creating a single action for misappropriation of a trade
secret”).
¶42 Because the UTSA sought to streamline trade secret law so that causes of action
based on misappropriation of information must be brought under the UTSA, permitting
a cause of action for the use of information that does not meet the statutory definition of
trade secret “would undermine the uniformity and clarity that motivated the creation
and passage of the [UTSA].” Auto Channel, Inc. v. Speedvision Network, LLC, 144 F. Supp.
2d 784, 789 (W.D. Ky. 2001). Accordingly, “the UTSA’s preemption provision has
generally been interpreted to abolish all free‐standing alternative causes of action for
theft or misuse of confidential, proprietary, or otherwise secret information falling short
of trade‐secret status (e.g., idea misappropriation, information piracy, theft of
commercial information, etc.).” Hauck Mfg. Co. v. Astec Indus., Inc., 375 F. Supp. 2d 649,
655 (E.D. Tenn. 2004) (collecting cases); see also Allied Erecting & Dismantling Co. v.
Genesis Equip. & Mfg., Inc., 649 F. Supp. 2d 702, 720–22 (N.D. Ohio 2009) (same);
Mortgage Specialists, 904 A.2d at 663–64 (collecting cases and noting that “the weight of
20100127‐CA 16
authority among courts that have considered the preemption provision” is that it
“preempts claims that are based upon the unauthorized use of information, regardless
of whether that information meets the statutory definition of a trade secret”); Mark A.
Lemley, The Surprising Virtues of Treating Trade Secrets as IP Rights, 61 Stanford L. Rev.
311, 345–46 (2008) (“[A] plaintiff who complains of the defendant’s use of its
information, but who cannot prove that the information is secret, should not be able to
rely on one of these torts (or any other common law variants) to bypass the requirement
that it prove secrecy.”).6
¶43 However, “a minority of courts . . . have held that common law and statutory
claims are not preempted by the UTSA if they involve information that does not meet
the statutory definition of a trade secret.” Mortgage Specialists, 904 A.2d at 663
(collecting cases but rejecting them as contrary to the history, purpose, and majority
view of the UTSA). Heretofore, rulings from the Utah federal district court have been
divided, but have favored this view of the Utah UTSA. Compare ClearOne Commc’ns,
Inc. v. Chiang, No. 2:07‐cv‐37 TC, 2007 WL 4376125, at *4 (D. Utah Dec. 13, 2007)
(following the minority view), and Russo v. Ballard Med. Prods., No. 2:05 CV 59, 2006 WL
2345868, at *9 (D. Utah Aug. 10, 2006) (same), with Iostar Corp. v. Stuart, No.
1:07‐CV‐133, 2009 WL 270037, at *6–7 (D. Utah Feb. 3, 2009) (apparently following the
majority view).
¶44 One criticism of the majority view is that it would permit a plaintiff’s claim to be
“preempted by a statute that grants him no cause of action.” Russo, 2006 WL 2345868, at
*9. That is, a plaintiff may be left unable to prove trade secret status under the UTSA,
yet barred by it from proceeding on any other theory. As we read the preemption
provision of the UTSA, this is precisely its intended result. A contrary approach would
“‘render the statutory preemption provision effectively meaningless,’” leaving prior law
untouched and converting an exclusive remedy into “‘just another basis for recovery.’”
BlueEarth Biofuels, 235 P.3d at 322 (quoting Robert Unikel, Bridging the “Trade Secret”
6
Moreover, a majority of jurisdictions considering the question have held that a
court “need not first determine whether the information that [the plaintiff] alleges was
misappropriated constitutes a trade secret before determining whether [the UTSA]
displaces [the plaintiff’s] common‐law claims.” Allied Erecting & Dismantling Co. v.
Genesis Equip. & Mfg., Inc., 649 F. Supp. 2d 702, 721–22 (N.D. Ohio 2009) (collecting
cases).
20100127‐CA 17
Gap, 29 Loy. U. Chi. L.J. 841, 888 (1998)); see also Hauck Mfg., 375 F. Supp. 2d at 655;
Mortgage Specialists, 904 A.2d at 663. “Although this result may seem harsh,” the
UTSA’s preemption provision does “permit individuals and corporate entities to
protect their valuable commercial information contractually, regardless of whether such
information meets the statutory definition of ‘trade secret.’” Mortgage Specialists, 904
A.2d at 664 (emphasis omitted); see also Utah Code Ann. § 13‐24‐8(1) (2009) (“This
chapter does not affect . . . contractual remedies, whether or not based upon
misappropriation of a trade secret . . . .”).
¶45 In light of the purpose of the UTSA and the statutory mandate, which dictates
that we construe it “to make uniform [trade secret] law . . . among states enacting it,” see
Utah Code Ann. § 13‐24‐9, we join the majority of courts that have addressed this issue
and hold that the UTSA preempts claims based on the unauthorized use of information,
irrespective of whether that information meets the statutory definition of a trade secret.
¶46 However, CDC maintains that its non‐UTSA claims survive even if claims based
on information that does not meet the statutory definition of trade secret are preempted,
because its claims are “not solely based on Defendants’ purported misappropriation of
trade secrets.” Defendants respond that CDC’s remaining claims are preempted
because the claims “are dependent on the same facts as [the] misappropriation of trade
secrets claim.” Accordingly, we must determine the appropriate scope of the
preemption provision.
¶47 Generally, courts addressing this issue have agreed that a preliminary
examination of the facts underlying the non‐UTSA claim is necessary to determine
whether a claim is preempted. See, e.g., Mortgage Specialists, Inc. v. Davey, 904 A.2d 652,
665 (N.H. 2006) (collecting cases); see also BlueEarth Biofuels, LLC v. Hawaiian Elec. Co.,
235 P.3d 310, 316–17 (Haw. 2010) (noting that a majority of courts conduct a preemption
analysis based on “the factual allegations underlying each claim” rather than the
elements of the claims). Beyond that general agreement, courts have differed as to how
those facts affect preemption. See, e.g., BlueEarth Biofuels, 235 P.3d at 317–19 (comparing
cases). But see Hauck Mfg. Co. v. Astec Indus., Inc., 375 F. Supp. 2d 649, 655–58 (E.D.
Tenn. 2004) (noting that although “courts have stated the law in divergent manners,”
they have “appl[ied] those seemingly contrary standards in similar, if not identical,
fashion”). For instance, some courts have held that all claims that are factually related
to the alleged misappropriation are preempted. See Powell Prods., Inc. v. Marks, 948 F.
Supp. 1469, 1474 (D. Colo. 1996) (collecting cases but ruling that preemption is only
20100127‐CA 18
appropriate where “other claims are no more than a restatement of the same operative
facts which would plainly and exclusively spell out only trade secret misappropriation”
(citation and internal quotation marks omitted)). Other courts have more narrowly held
that claims are preempted only where “proof of a non‐UTSA claim would also
simultaneously establish a claim for misappropriation of trade secrets.” See Hauck Mfg.,
375 F. Supp. 2d at 658.
¶48 In light of the preemption provision’s purpose “to preserve a single tort action
under state law for misappropriation of a trade secret,” see Mortgage Specialists, 904 A.2d
at 663, we conclude that a claim is preempted to the extent that it is based on factual
allegations supporting a misappropriation of trade secrets or otherwise confidential
information. See id. at 665. Under this standard, “if proof of a non‐UTSA claim would
also simultaneously establish a claim for misappropriation of trade secrets, it is
preempted irrespective o[f] whatever surplus elements of proof were necessary to
establish it.” Hauck Mfg., 375 F. Supp. 2d at 658. However, to whatever extent that a
claim is “based upon wrongful conduct independent of the misappropriation of trade
secrets” or otherwise confidential information, it is not preempted. See Bliss Clearing
Niagara, Inc. v. Midwest Brake Bond Co., 270 F. Supp. 2d 943, 950 (W.D. Mich. 2003). This
approach preserves the UTSA as the sole noncontractual civil remedy for
misappropriation of a trade secret, while preserving tort, restitutionary, and other
causes of action that “seek[ ] to remedy an injury caused not by the misappropriation of
proprietary information, but by separate conduct.” See Diamond Power Int’l, Inc. v.
Davidson, 540 F. Supp. 2d 1322, 1345 (N.D. Ga. 2007).
¶49 Thus, we must review the facts underlying each of CDC’s remaining claims to
determine the extent to which each claim is based on misappropriation of information.
A. Breach of Fiduciary Duty
¶50 The trial court rejected CDC’s breach of fiduciary duty claim on the ground that
CDC failed to demonstrate a genuine issue of material fact as to whether Carsey owed
CDC a fiduciary duty. The trial court did not address the issue of whether CDC’s
breach of fiduciary duty claim was preempted by the UTSA. However, Carsey argued
below, and continues to argue on appeal, that CDC’s breach of fiduciary claim is
preempted by the UTSA. “[A]n appellate court may affirm the judgment appealed
from if it is sustainable on any legal ground or theory apparent on the record.” Bailey v.
Bayles, 2002 UT 58, ¶ 13, 52 P.3d 1158 (emphases, citation, and internal quotation marks
omitted).
20100127‐CA 19
¶51 Whether an employee such as Carsey owed a fiduciary duty to his employer is
unclear under Utah law. See Prince, Yeates & Geldzahler v. Young, 2004 UT 26, ¶ 22 n.2,
94 P.3d 179 (“We need not, and do not, decide today whether all ‘mere employees’ owe
fiduciary duties to their employers to not compete with the employer’s legitimate
business interests.”). However, we need not grapple with this issue here, as we agree
with Carsey that CDC’s breach of fiduciary duty claim is preempted by the UTSA.
¶52 Examination of the factual allegations underlying CDC’s breach of fiduciary duty
claim shows that this claim is based solely on theories of misappropriation or misuse of
CDC’s confidential information. In support of its breach of fiduciary duty claim, CDC
avers that it provided Carsey “with access to [CDC’s] confidential business information
and Trade Secrets,” and that Carsey owed CDC several fiduciary duties, including “a
duty not to disclose CDC’s Trade Secrets and confidential business information, a duty
not to use CDC’s Trade Secrets and confidential business information to compete
unfairly with CDC, and a duty not to use CDC’s Trade Secrets and confidential business
information for the benefit of a new business.” Accordingly, this claim is preempted by
the UTSA in its entirety. See, e.g., Allied Erecting & Dismantling Co. v. Genesis Equip. &
Mfg., Inc., 649 F. Supp. 2d 702, 724 (N.D. Ohio 2009) (holding that UTSA preempted a
breach of fiduciary duty claim because it was “solely dependent upon
misappropriation‐of‐trade‐secret facts”); Frantz v. Johnson, 999 P.2d 351, 357–58 & n.3
(Nev. 2000) (holding that UTSA preempted a breach of fiduciary duty claim because it
was “completely dependent on the facts concerning misappropriation of trade secrets”);
Mortgage Specialists, Inc. v. Davey, 904 A.2d 652, 668 (N.H. 2006) (holding that UTSA
preempted a breach of fiduciary duty claim because the factual allegations supporting
that claim involved only “the misappropriation of . . . information”).
¶53 We therefore affirm the trial court’s dismissal of this claim.
B. Intentional Interference with Economic Relations
¶54 Next, CDC contends that the trial court erred in dismissing its cause of action
based on intentional interference with prospective economic relations. Looking at the
factual allegations relied upon to prove this claim, we conclude that it is preempted by
the UTSA. Under Leigh Furniture & Carpet Co. v. Isom, 657 P.2d 293 (Utah 1982), to
establish a claim for intentional interference with prospective economic relations, a
plaintiff must show “(1) that the defendant intentionally interfered with the plaintiff’s
20100127‐CA 20
existing or potential economic relations, (2) for an improper purpose or by improper
means, (3) causing injury to the plaintiff.” Id. at 304.
¶55 The trial court ruled that CDC failed to present evidence sufficient to establish a
genuine issue of material fact as to whether Tradesmen, Carsey, or Allen acted for the
predominant purpose of injuring CDC or acted by improper means not arising from “a
factual episode that necessarily relies on the information at issue being a trade secret.”
Accordingly, the court ruled that the claim was preempted by the UTSA. CDC
challenges only the court’s ruling on the improper means prong. Inasmuch as improper
purpose and improper means are alternative elements, CDC need not defeat both
rulings to prevail on appeal. Cf. id. at 307 (“The alternative of improper purpose (or
motive, intent, or objective) will support a cause of action for intentional interference
with prospective economic relations even where the defendant’s means were proper.”).
¶56 CDC argues that its Leigh Furniture claim “can withstand summary judgment
because it is not solely based on Defendants’ purported misappropriation of trade
secrets.” CDC points out that Carsey and Allen both “engaged in deceptive behavior
and misrepresented material facts.” For instance, CDC notes that during the pre‐bid
walkthrough of the project at Kennecott, “Midgley specifically asked Carsey if he knew
anything about Tradesmen,” to which Carsey replied that “he did not know who they
were,” despite the fact that, at the time, Carsey was already a part owner in Tradesmen
and had already been “elected as Tradesmen’s vice‐president and project developer.”
In addition, during the bidding process, Allen “hid[] his relationship with Tradesmen
from Kennecott,” “even [going] so far as to send an email to” a Kennecott manager
denying that he “kn[e]w anything about Tradesmen.” CDC also alleges that Carsey and
Allen’s actions raised conflict of interest issues. For instance, CDC notes that Carsey
helped prepare Tradesmen’s bid the day after he helped prepare CDC’s bid and that
Carsey was a part owner of Tradesmen while still working for CDC. CDC also notes
that “Allen’s association with Kennecott . . . during the competitive bidding process
raised serious conflict of interest issues.”
¶57 However, CDC’s burden at trial would be to show that the interference by
improper means caused CDC injury. See id. at 304. CDC does not allege this, much less
demonstrate a genuine issue of material fact concerning it. CDC cites evidence that,
had Kennecott’s supervisors known of Carsey and Allen’s involvement with
Tradesmen, that information “would have definitely brought some concerns,” “would
have created an issue,” and would have raised conflict of interest issues. But CDC
20100127‐CA 21
points to no evidence that such conduct alone caused CDC to lose the Project bid or
suffer any other material injury. Viewed in the light most favorable to CDC, the
evidence supports the allegation that Carsey and Allen did engage in deceptive and
deceitful acts. But all were done to facilitate Tradesmen’s preparation of the winning
bid using CDC’s pricing information. Accordingly, we agree with the trial court that,
without reliance on the misuse of confidential information, CDC’s claim for intentional
interference with economic relations fails as a matter of law and, consequently, is
preempted by the UTSA.
C. Civil Conspiracy
¶58 Finally, CDC contends that the trial court erred by ruling that its claim for civil
conspiracy was preempted due to CDC’s failure “to present evidence that is sufficient
to establish a genuine issue of material fact for any claim that may serve as a basis for
civil conspiracy that does not arise from a factual episode that necessarily relies on the
information at issue being a trade secret.”
¶59 “‘To prove civil conspiracy, five elements must be shown: (1) a combination of
two or more persons, (2) an object to be accomplished, (3) a meeting of the minds on the
object or course of action, (4) one or more unlawful, overt acts, and (5) damages as a
proximate result thereof.’” Peterson v. Delta Air Lines, Inc., 2002 UT App 56, ¶ 12, 42
P.3d 1253 (additional internal quotation marks omitted) (quoting Alta Indus. v. Hurst,
846 P.2d 1282, 1290 n.17 (Utah 1993)). To establish “one or more unlawful, overt acts,”
CDC relies on the individual claims addressed above. These are all based on the same
factual allegations as CDC’s misappropriation of trade secrets claim. Accordingly, for
reasons explained above, we conclude that CDC’s claim for civil conspiracy, like its
claims for breach of fiduciary duty and interference with economic relations, is
displaced by the UTSA. We therefore affirm the trial court’s ruling on this issue.
CONCLUSION
¶60 With respect to its claim for misappropriation of pricing information, CDC finds
itself boxed in by the UTSA. CDC lacks evidence that the pricing information it claims
Tradesmen, Allen, and Carsey misappropriated qualifies as a trade secret under the
UTSA. Yet that information is enough like a trade secret that CDC’s non‐UTSA claims
are preempted by the UTSA. The UTSA does not displace civil remedies not based
20100127‐CA 22
upon misappropriation of trade secrets, nor does it displace contractual remedies,
whether or not based upon misappropriation of trade secrets. However, CDC’s non‐
UTSA causes of action fit neither category. They are, accordingly, preempted.
¶61 However, CDC’s claim for misappropriation of bid information stands on
different footing. Summary judgment was granted not on the basis that this
information failed to qualify as a trade secret—the trial court opined that it probably
did—but that CDC failed to bring forth sufficient evidence to create a genuine issue of
material fact as to whether Tradesmen, Allen, and Carsey had misappropriated it.
While the evidence of use was circumstantial, we conclude that it was sufficient for this
claim to survive summary judgment. We therefore reverse on this issue.7
¶62 Affirmed in part, reversed in part, and remanded for further proceedings.
____________________________________
J. Frederic Voros Jr.,
Associate Presiding Judge
‐‐‐‐‐
¶63 WE CONCUR:
____________________________________
Carolyn B. McHugh,
Presiding Judge
____________________________________
7
Our ruling is not intended to prevent Defendants from contending at trial that
CDC’s bid information was not a trade secret, should they disagree with the trial court
on that point.
20100127‐CA 23
Gregory K. Orme, Judge
20100127‐CA 24