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Advanced Fluid Sys. v. Huber

United States Court of Appeals for the Third Circuit

January 15, 2020, Argued; April 30, 2020, Filed

Nos. 19-1722 and 19-1752

Opinion

 [*172]  OPINION OF THE COURT

JORDAN, Circuit Judge.

This sorry story of disloyalty and deception piled upon deception resulted in verdicts against the wrongdoers. They're not happy about that, but, when the tale is told, it's clear that the result is entirely justified. In brief summary, Kevin Huber stole confidential information from his employer Advanced Fluid Systems, Inc. ("AFS"), first for the benefit of an AFS competitor, Livingston & Haven, LLC ("Livingston"), with whom Huber wanted to ingratiate himself, and then, in another twist of deceit, for [**2]  a company he created, Integrated Systems and Machinery, LLC ("INSYSMA"; together with Huber, the "Huber Parties"), to compete against both AFS and Livingston. When the facts began to come to light, AFS brought suit against the Huber Parties and Livingston, as well as Livingston employees Clifton B. Vann IV and Thomas Aufiero (together with Livingston, the "Livingston Parties"), alleging various claims under federal and state law, including principally trade secret misappropriation claims under the Pennsylvania Uniform Trade Secrets Act (the "Trade Secrets Act" or the "Act"). There was one other defendant, Orbital Sciences Corporation ("Orbital"), the company from which AFS, Livingston, and INSYSMA were all trying to get business. AFS settled with Orbital before trial, and it is not one of the Appellants here. All of the other defendants are.

 [*173]  On summary judgment, the District Court held as a matter of law that the Huber Parties were liable under the Trade Secrets Act for misappropriating AFS's trade secrets. Then, following a bench trial, the Court held the Livingston Parties jointly and severally liable with the Huber Parties for that misappropriation, and it held all Appellants except [**3]  Aufiero and INSYSMA liable for breach of fiduciary duty or aiding and abetting that breach. As remedies for the tortious conduct, the Court awarded compensatory damages from all Appellants, exemplary damages under the Act from Huber, and, based on the breach of fiduciary duty, punitive damages from all Appellants except INSYSMA and Aufiero.1

Appellants bring a host of issues to us. Their central argument, however, is that AFS's claim for trade secrets misappropriation must fail because AFS does not "own" the purported trade secrets at issue. Beyond their core grievance, Appellants also attack the District Court's rulings that the claimed trade secrets are actually protectable under the Trade Secrets Act, that the Livingston Parties were not prejudiced by their counsel's conduct at and following the trial, and that the damages awards were warranted. In a thorough opinion, the District Court properly rejected Appellants' ownership argument on the ground that the Act only requires that a plaintiff lawfully possess the trade secrets it wishes to vindicate. In similarly persuasive decisions, the Court dismissed Appellants' various remaining challenges as inconsistent [**4]  with the record, untimely, legally deficient, or some combination thereof. We agree with all of those conclusions and will affirm the Court's rulings and judgment in their entirety.

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958 F.3d 168 *; 2020 U.S. App. LEXIS 13903 **; 170 Lab. Cas. (CCH) P62,039; 2020 U.S.P.Q.2D (BNA) 10452

ADVANCED FLUID SYSTEMS, INC. v. KEVIN HUBER; INSYSMA (Integrated Systems and Machinery, LLC); LIVINGSTON & HAVEN LLC; CLIFTON B. VANN, IV; THOMAS AUFIERO Livingston & Haven, LLC; Clifton B. Vann, IV; Thomas Aufiero, Appellants in No. 19-1722 Kevin Huber; INSYSMA, Appellants in No. 19-1752

Prior History:  [**1] On Appeal from the United States District Court for the Middle District of Pennsylvania. (D.C. No. 1-13-cv-03087). District Judge: Hon. Christopher C. Conner.

Advanced Fluid Sys. v. Huber, 295 F. Supp. 3d 467, 2018 U.S. Dist. LEXIS 36096 (M.D. Pa., Mar. 6, 2018)Advanced Fluid Sys. v. Huber, 2017 U.S. Dist. LEXIS 86145 (M.D. Pa., June 6, 2017)Advanced Fluid Sys. v. Huber, 381 F. Supp. 3d 362, 2019 U.S. Dist. LEXIS 34672 (M.D. Pa., Mar. 5, 2019)Advanced Fluid Sys. v. Huber, 28 F. Supp. 3d 306, 2014 U.S. Dist. LEXIS 82562 (M.D. Pa., June 18, 2014)

CORE TERMS

secrets, misappropriation, set-off, post-trial, hydraulic, ownership, punitive, confidential, settlement, Island, bid, joint-tortfeasor, installed, secrecy, compensatory, fiduciary, cylinder, lawfully, pretrial, gripper, notice, arms

Civil Procedure, Trials, Bench Trials, Appeals, Standards of Review, Clearly Erroneous Review, Summary Judgment Review, Standards of Review, Trade Secrets Law, Misappropriation Actions, Elements of Misappropriation, Existence & Ownership, Ownership Rights, Trade Secret Determination Factors, Definition Under Common Law, Definition Under Uniform Act, Abuse of Discretion, Judgments, Relief From Judgments, Motions for New Trials, Governments, Courts, Rule Application & Interpretation, Attorneys, Pro Hac Vice, Excusable Mistakes & Neglect, Excusable Neglect, Remedies, Damages, Questions of Fact & Law, Business & Corporate Law, Duties & Liabilities, Causes of Action & Remedies, Breach of Fiduciary Duty, Labor & Employment Law, Employment Relationships, Fiduciary Responsibilities, Damages, Punitive Damages, Defenses, Demurrers & Objections, Affirmative Defenses, Waiver, Setoffs, Torts, Multiple Defendants, Contribution, Uniform Contribution Among Tortfeasors Act, Pleadings, Amendment of Pleadings, Conforming Pleadings to Evidence