Cacique, Inc. v. Robert Reiser & Co.

This interlocutory appeal from a civil contempt order tests the ability of a plaintiff to discover a competitor’s financial data in an action against a third party for allegedly furnishing the plaintiffs trade secret to the competitor. This action is brought against only the party that allegedly disclosed the trade secret, not the competitor who has been held in contempt. The theory of the complaint apparently is that California’s version of the Uniform Trade Secrets Act (“UTSA”) authorizes a plaintiff to sue the party who leaked the trade secrets to an unauthorized user for a reasonable royalty based on the earnings of the unauthorized user. It is argued that the financial data is relevant to a determination of the reasonable royalty.

Under the plain language of the California statute and California case law, we hold that a trade secret plaintiff can recover a reasonable royalty only when both actual damages and unjust enrichment are unprovable. Because unjust enrichment is provable in this case, it was error to hold the non-party competitor in contempt for refusing to disclose its sales information to the plaintiff.

*621 I. Procedural Background

Cacique is a leading producer…