Payne and Fears Wins Case and Successfully Defends Nearly $300K Attorney’s Fees Award on Appeal

Payne & Fears recently obtained a major victory before the California Court of Appeal in favor of its clients, including CSI Electrical Contractors Inc. and three of its employees. The appellate court upheld an award of $299,647 in attorney’s fees that was issued as a sanction against Plaintiff SASCO for bringing its claim of trade secret misappropriation against our clients in bad faith. Our team had obtained the fee award by showing that the plaintiff’s misappropriation claim was objectively specious and was brought with subjective bad faith. This award was part of our successful defense of the case.

In SASCO v. CSI Electrical Contractors, Inc., et al., No. B322686 (Cal. Ct. App. Dec. 19, 2022), the Court of Appeal for the Second Appellate District agreed that there was sufficient evidence to support the trial court’s order finding SASCO had subjective bad faith in bringing its trade secret claim. The court of appeal found that “SASCO’s actions in [the] litigation and its own statements demonstrate subjective bad faith.” Pointing to evidence our clients had presented, the court noted that SASCO didn’t dispute that its chairman told one of the defendants that he attempts to outspend opponents in litigation to wear them down. The court said that SASCO had effectively conceded that it had pursued its misappropriation claim to thwart competition. The court also pointed to “SASCO’s repeated evasion [in giving information] and delay tactics.” All this (among other things) supported the trial court’s finding of subjective bad faith, and hence, the fee award.

We also were successful in convincing the Court of Appeal to reject SASCO’s other arguments challenging the fee order. The court agreed that the attorney’s fees awarded were not excessive, rejecting the plaintiff’s argument that our clients’ recovery should have been limited to only one of several claims in the case. In doing so, the Court found that SASCO’s argument relied on its “self-servingly fluid definition and redefinition of terms to suit the occasion.” This decision underscores that there may be substantial consequences to filing a bad faith trade secret claim.

CSI Electrical Contractors Inc. and our other clients were defended by Daniel Fears, Benjamin Nix, and Damon Rubin.