Articles Posted in Damages

The allegations in Autopartsource, LLC v. Bruton presented a fairly egregious case of stolen trade secrets. Due to a defendant’s failure to answer, those allegations were deemed true. As remedies, Autopartsource sought $1,131,801.55 in compensatory damages, $350,000 in punitive damages (the statutory maximum), $59,409.72 in attorneys’ fees and costs, a worldwide production injunction to last seven years, and a permanent injunction prohibiting the use of Autopartsource’s trade secrets. The court held an evidentiary hearing and ruled that while Autopartsource was entitled to an injunction and substantial damages, the scope of the requested injunction would be narrowed and the damages would be reduced.

Autopartsource designated employee Stephen Bruton to spearhead the company’s effort to develop business in China, where it sources its automobile parts. Bruton secretly developed his own competing business, BBH Source Group, and misappropriated Autopartsource’s trade secrets in doing so, using them to redirect prospective Autopartsource customers to BBH. After Autopartsource discovered Bruton’s actions and fired him, Bruton broke into an Autopartsource facility and deleted proprietary information from its database.

Autopartsource sued for violation of the Virginia Uniform Trade Secrets Act, tortious interference with business expectancy, and tortious interference with contract. The court found that Autopartsource had established liability on all three theories but that, under Virginia law, it could not recover damages under both VUTSA and its claim for tortious interference with business expectancy, as a party cannot receive damages for a common law tort if the underlying conduct involves an intentional misappropriation of a trade secret.

Federal laws protect whistleblowers from retaliation because the government wants people to report fraud in government contracts. When Weihua Huang, a principal investigator on a National Institutes of Health (NIH) research grant at the University of Virginia, discovered unauthorized changes that diverted grant money to unrelated salaries and expenses, he reported it to the head of UVa’s Department of Psychiatry and Neurobehavioral Sciences. Soon thereafter, he was told his employment contract wouldn’t be renewed. Huang sued for False Claims Act retaliation and won a jury verdict of $159,915 in lost wages plus $500,000 in compensatory emotional-distress damages. Not surprisingly, the defendants (Huang’s supervisor Dr. Ming D. Li, and Department Chair Dr. Bankole A. Johnson) asked the court to reduce the damages award as excessive.

Specifically, the defendants invoked a process known as remittitur, asking Judge Norman K. Moon to either reduce the emotional distress damages to $10,000, or order a new trial. They pointed out that the only evidence of emotional distress was Huang’s own unsupported testimony. There was no evidence, for example, of medical treatment or other corroborating evidence. They argued that where the injury consists of emotional distress, the Fourth Circuit usually finds six-figure damages awards excessive when not supported by medical evidence.

A jury’s compensatory damages award will be considered excessive if it is “against the clear weight of the evidence or based on evidence which is false.” Under Rule 59(a) of the Federal Rules of Civil Procedure, if a plaintiff won’t accept a trial court’s reduction of an excessive jury award, the court can order a new trial.

Contact Us
Virginia: (703) 722-0588
Washington, D.C.: (202) 449-8555
Contact Information