USA Power, LLC v PacifiCorp

PacifiCorp appealed the judgment against it for trade secret misappropriation and unjust enrichment and USA appealed the reduction in damages ordered by the district court and judgment notwithstanding the verdict to a former attorney it alleged breached fiduciary duties. The Court affirmed. It first held that a prior appeal in this case did not settle the legal issues raised in this appeal by PacifiCorp as the period appeal turned on factual issues and the Court adopted the rule that a trial court in Utah may revisit issues of fact after remand on appeal, and thus not follow law of the case doctrine, if the issues are viewed in a different light due to new discovery, change in theory of the parties or, as here, there is a jury trial. Applying the deferential basis in evidence standard, the court held a reasonable jury could find a trade secret existed here as USA did not publicly disclose its economic analysis, business partners and business plan, those items would have been difficult if not impossible to reverse engineer and thus were not “readily ascertainable’ under the ordinary meaning of done without much difficulty and the secret information had value as PacifiCorp was able to tailor its own bid to come under the bid of USA to build a power plant. The court affirmed the decision to not grant a new trial as there was only one power plant to be built and the misappropriation allowed PacifiCorp to win the contract to build it. The Court rejected PacifiCorp’s argument about the jury instructions as the instruction given allowed PacifiCorp to make the argument that the misappropriation only provided a head start to the jury. On USA’s cross appeal, the Court held the reduction in damages ordered by the district court was not an abuse of discretion as the jury appears to have awarded actual damages to the unjust enrichment damage amount and this double counting violated the trade secrets act. The court held that the decision to not award punitive damages was not an abuse of discretion as punitive damages are not mandatory under the trade secrets act, the district court applied the correct standard and made a reasonable termination that such damages were not necessary in this case given the nearly $100 million unjust enrichment award. The Court announced that for an attorney fee award to be based on contingency agreements instead of the normal loadstar approach, the fees must be sought as damages and the contingency fee must have been foreseeable. Applying here, it upheld the use of the loadstar approach as USA did not plead contingency fee as damages. The Court declined to set out which tort causes of action may have the contingent fee as an element of damages. The Court affirmed the denial of prejudgment interest as the lost profits were not readily calculated as some speculation is need to determine the amount, the rules of civil procedure do not allow automatic prejudgment interest as the applicable rule is best read in light of precedent to only allow interest when a party refuses to pay an overdue payment and the common law only allows interest form the time damages are liquidated which is when judgment is entered. Disavowing any language to the contrary in earlier cases, the Court held that the 10% rate of interest set out in Utah code 15-1-1 did not apply here as that statue only applies when there is contract of loan or forbearance for money goods or a chose in action and this trade secret claim is not such a contract or forbearance. On the appeal concerning the former attorney, the Court set out the rule that USA was required to show that the attorney was uniquely situated to obtain the water rights involved in the power station bid of PacifiCorp because if any other attorney with reasonable skill and diligence could have obtained the water rights there was no causal connection between the attorney’s actions and the damages claimed. It affirmed the JNOV beau se there was no evidence another attorney could not have obtained the alter rights and PacifiCorp did not require bidders to have water rights in place at the time bids were submitted. It finally held that USA provided no evidence to support its allegation that the attorney caused PacifiCorp to not pursue a contract to build with USA and open the process to bidding instead.