Two weeks ago, at a hearing in the United States Bankruptcy Court for the District of South Carolina, a lawyer on the other side referred to me – incredulously – as a lawyer who writes a blog on forum shopping. The backstory: Our clients were defendants in some long-running trade secret litigation in Florida state court. We took over the case after it had been in litigation for more than a year-and-a-half. My professional opinion: Our clients’ previous lawyer had no idea what he was doing. On the merits, the case against our clients was not particularly compelling. But add the wrong lawyer to the mix, and suddenly the case had legs.
One of the defendants – the corporate defendant – was in some financial distress, so it wound up declaring Chapter 11 reorganization in their home district of South Carolina. This triggered a right to remove the Florida state court litigation to federal court. At present, the other side is fighting to remand the case to state court and we are fighting to keep it in federal court. This is what gave rise to the, “Mr. Pollard writes a blog on forum shopping!” comment. Situations like this provide a great framework for some general advice about defending trade secret cases in particular (and litigation in general):
- Importance of Jurisdiction/Forum: If you have a legitimate right to get into a particular forum or court, then it’s not forum shopping. It’s called protecting your client’s interests. If you are defending a trade secret case and you have the opportunity to get the matter into federal court, then you better do it.
- Trade Secrets & Discovery: On either side, you win or lose trade secret cases in discovery. On the plaintiff side, that process is easier (i.e. searching for the allegedly misappropriated trade secrets). On the defense side, that process is harder: You’re not looking for evidence of the supposed misappropriation. You’re looking for evidence to establish a variety of defenses. Bottom line: Get aggressive.
- Discovery Part II: Don’t mess around in discovery. Get on it immediately and get it done. Follow the rules. If the other side had a right to it, hand it over. And if you’re defending a trade secret case, be particularly careful about objecting to various requests on the basis of confidential information/trade secrets. Don’t say “X” isn’t a trade secret when it belongs to plaintiff, but call X a trade secret when it belongs to you. Pot meet kettle.
- Consider All Options: When you’re in litigation that is potentially bet the company, then you have to consider all options. Nothing is off the table. Chapter 11. Removal to federal court based on a novel theory. Leverage based on other dirt (i.e. a strategy based on pressure points rather than purely legal merits of the case at issue). Strategy based on business-side pressure points (what pain can you legally inflict on the other side in the market via the litigation process that is within the rules).
- Preemptive Strategies: You can preemptively attack many of these situations. You can put in place pre-litigation strategies for situations/transactions/market place rivalries that you know will eventually end up in litigation. A small investment in some pre-litigation consulting/advising/strategic guidance can save you hundreds of thousands if not millions of dollars in legal fees later and damages latter.
Pollard PLLC is a litigation boutique based in Fort Lauderdale, Florida and focused on competition law. For more information call 954-332-2380.