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One Dollar Relief from Judgment

Posted by James Juo | Jul 12, 2023 | 0 Comments

A Rule 50(a) motion for judgment as a matter of law may be made before a case is submitted to a jury. See Fed. R. Civ. P. 50(a)(2). If the court does not grant the motion, a “renewed motion for judgment as a matter of law” may be filed after entry of judgment. See Fed. R. Civ. P. 50(b)(2).

Also, under Rule 60(a) of the Federal Rules of Civil Procedure, a district court is authorized to “correct a clerical mistake or a mistake arising from oversight or omission whenever one is found in a judgment, order, or other part of the record.” See Fed. R. Civ. P. 60(a). A clerical mistake under this rule includes a statement that does not accurately reflect the findings made by the trier of fact, such as an error in identifying which defendants are “jointly and severally liable for [an award of damages].” See Rebis v. Universal Cad Consultants, Inc., 1999 WL 1000435, at *2 (N.D. Cal. Oct. 27, 1999).

Relief from Judgment

In Proofpoint, Inc. v. Vade Secure Inc., No. 3:19-cv-04238 (N.D. Cal. July 10, 2023), the plaintiffs alleged violations of the Defend Trade Secrets Act (“DTSA”) and the Copyright Act against Vade Secure, and a breach of contract claim against Olivier Lemarié only, claims for breach of contract arising from his alleged violations of provisions in an Employee Proprietary Information and Inventions Agreement (“PIIA”).

On August 20, 2021, the jury rendered a verdict in favor of Proofpoint on the DTSA and copyright claims, and that Lemarié breached the PIIA. As to a monetary award, the jury found that the plaintiffs were entitled to $13,975,659 as “the total dollar amount of compensatory damages.” Specifically, $0 for “Actual Loss”; $13,975,659 for “Unjust Enrichment”; and $480,000 for “Breach of Contract.”

Lemarié filed a post-judgment motion contending that the judgment contained a clerical error in stating that “all defendants” are “jointly and severally” liable for the “unjust enrichment” award of $13,495,659; and that plaintiffs failed to offer evidence to support their claim that they are entitled to recover $480,000 from Lemarié as a remedy for “breach of contract.” The $480,000 award corresponds to two years of Lemarié's annual salary of $240,000.

Clerical Error

As to the alleged clerical error, Lemarié argued that the “unjust enrichment” was based on Vade Secure's sales of infringing products, and not on any amount realized by Lemarié. Consequently, the sum of $13,495,659 being awarded “jointly and severally against all defendants” constitutes a clerical mistake subject to correction under Rule 60(a).

          “The phrase ‘unjust enrichment' is used in law to characterize the result or effect of a failure to make restitution of or for property or benefits received under such circumstances as to give rise to a legal or equitable obligation to account therefor,” and, consequently, an unjust enrichment award that “does not represent property or benefits received by [a defendant]” is improper. See Ajaxo Inc. v. E*Trade Financial Corp., 187 Cal. App. 4th 1295, 1305 (2010); see also Restatement (Third) of Restitution and Unjust Enrichment § 42, cmt. a. (2011) (noting “[t]here is no unjust enrichment . . . unless the defendant has obtained a benefit in violation of the claimant's right to exclude others from the interest in question”); Acculmage Diagnostics Corp. v. Terarecon, Inc., 260 F. Supp. 2d 941, 958 (N.D. Cal. 2003) (dismissing claim for unjust enrichment where “plaintiff fail[ed] to allege any specific facts regarding the amount of benefit that [the defendant] received or any detail of the circumstances surrounding [defendant's] actual receipt of the benefit”).

The Court found that it would be improper to hold Lemarié liable, under a theory of unjust enrichment, for property or benefits realized by Vade Secure only. Although the jury's finding that Lemarié misappropriated trade secrets might have supported a joint and several award against both Lemarié and Vade Secure for an actual loss incurred by plaintiffs—the jury did not award the plaintiffs any actual loss.

Unjust Enrichment as a Matter of Law

As for judgment as a matter of law on plaintiffs' breach of contract claim, Lemarié argued that the plaintiffs had failed to offer evidence to support a finding that he was paid his salary as a result of his having breached the PIIA and that, even if such evidence existed, plaintiff had made no attempt to quantify the amount of any unjust enrichment.

The Court found that there was no evidence to support a finding that, for any year, the entirety of Lemarié's salary was attributable to his use of the misappropriated confidential information, nor is there any evidence from which an apportionment could be made. See O2 Micro Int'l Ltd. v. Monolithic Power Systems, Inc., 399 F. Supp. 2d 1064, 1076-77 (N.D. Cal. 2005) (finding defendant entitled to judgment as matter of law on claim for unjust enrichment, where plaintiff failed to offer evidence that could have “provide[d] a reasonable basis for the jury to apportion” amount of benefit attributable to misappropriation).

Under California law, however, “[n]ominal damages are properly awarded . . . [w]here there is no loss or injury to be compensated but where the law still recognizes a technical invasion of a plaintiff's rights or a breach of a defendant's duty.” See Avina v. Spurlock, 28 Cal. App. 3d 1086, 1088 (1972).

Indeed, where a former employee uses the former employer's confidential information during the course of subsequent employment—and the former employer is unable to establish any compensable loss—nominal damages not only proper but required. See Elation Systems, Inc. v. Fenn Bridge LLC, 71 Cal. App. 5th 958, 965-66 (2021) (holding, where insufficient evidence supported jury's finding that former employee's breach of non-disclosure agreement caused financial loss, “trial court should have awarded nominal damages”).

So, the Court redirected the clerk to amend the judgment in favor of plaintiffs and against Lemarié in the amount of $1.00.

The attorneys at Thomas P. Howard, LLC litigate cases nationwide including in Colorado.

About the Author

James Juo

James Juo is an experienced intellectual property attorney. He has successfully litigated various intellectual property disputes involving patents, trademarks, copyrights, and trade secrets. He also has counseled clients on the scope and validity of patent and trademark rights.


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