Hanger Prosthetics & Orthotics, Inc. v. Capstone Orthopedic, Inc. et al

Filing 225

ORDER RE: DRAFT CLOSING JURY INSTRUCTIONS AND TRIAL INFORMATION signed by Judge Garland E. Burrell, Jr. on 01/23/09 ORDERING that Jury Trial is RESET to 01:30 PM on 02/10/09 in Courtroom 10 (GEB) before Judge Garland E. Burrell, Jr. (Attachments: # 1 draft closing jury instructions)(Benson, A.)

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INSTRUCTION NO. 1 Members of the Jury: Now that you have heard all of the evidence and the arguments of the attorneys, it is my duty to instruct you as to the law of the case. A copy of these instructions will be sent with you to the jury room when you deliberate. You must not infer from these instructions or from anything I may say or do as indicating that I have an opinion regarding the evidence of what your verdict should be. It is your duty to find the facts from all the evidence in the case. To those facts you will apply the law as I give it to you. You must follow the law as I give it to you whether you agree with it or not. And you must not be influenced by any personal likes or dislikes, opinions, prejudices, or sympathy. That means that you must decide the case solely on the evidence before you. You will recall that you took an oath to do so. In following my instructions, you must follow all of them and not single out some and ignore others; they are all important. Page 1 of 44 INSTRUCTION NO. 2 All parties are equal before the law and a corporation is entitled to the same fair and conscientious consideration by you as any party. Page 2 of 44 INSTRUCTION NO. 3 Under the law, a corporation is considered to be a person. Capstone is a corporation that can only act through its employees, agents, directors, or officers. Therefore, Capstone as a corporation is responsible for the acts of its employees, agents, directors, and officers performed within the scope of authority. Page 3 of 44 INSTRUCTION NO. 4 An agent is a person who performs services for another person or corporation under an express or implied agreement and the agent is subject to the other's control or right to control the manner and means of performing the services. The other person or corporation is called a principal. Page 4 of 44 INSTRUCTION NO. 5 An agent is acting within the scope of authority of the principal if the agent is engaged in the performance of duties which were expressly or impliedly assigned to the agent by the principal. Page 5 of 44 INSTRUCTION NO. 6 Any act or omission of an agent within the scope of authority is same as if the act or omission was performed by the principal. Page 6 of 44 INSTRUCTION NO. 7 Some witnesses, because of education or experience, are permitted to state opinions and the reasons for those opinions. Opinion testimony should be judged just like any other testimony. You may accept it or reject it, and give it as much weight as you think it deserves, considering the witness' education and experience, the reasons given for the opinion, and all the other evidence in the case. Page 7 of 44 INSTRUCTION NO. 8 Hanger contends that Defendants Capstone, Ellis, Kimzey, and/or Fulton obtained Hanger's confidential information from a Hanger computer without authorization and/or in excess of authorization in violation of the federal Computer Fraud and Abuse Act. To prevail on this claim, Hanger must prove each of the following elements by a preponderance of the evidence: First, that Kimzey and/or Fulton individually and/or as agents for Capstone or Ellis accessed a Hanger computer without authorization or in excess of authorization; Second, that Kimzey and/or Fulton, individually and/or as agents for Capstone or Ellis, did so knowingly and with the intent to defraud; Third, that accessing the Hanger computer without authorization and/or in excess of authorization, Kimzey and Fulton furthered the intended fraud; Fourth, that Capstone, Ellis, Kimzey, and Fulton by accessing the Hanger computer without authorization and/or in excess of authorization obtained information or documents that have value; and Fifth, that Hanger suffered damages. Page 8 of 44 INSTRUCTION NO. 9 W h e n a party has the burden of proof on any claim or affirmative defense by a p re p o n d e ra n c e of the evidence, it means you must be persuaded by the evidence that the c la im or affirmative defense is more probably true than not true. Y o u should base your decision on all of the evidence, regardless of which party p re se n ted it. Page 9 of 44 INSTRUCTION NO. 10 "Intent to Defraud" means an intent to deceive or cheat. Page 10 of 44 INSTRUCTION NO. 11 Hanger claims Capstone, Ellis, Kimzey and/or Fulton violated California Penal Code sections 502(c)(1), 502(c)(2) and 502(c)(7). Page 11 of 44 INSTRUCTION NO. 12 T o prevail on its claim that Defendants violated California Penal Code Section 5 0 2 (c )(1 ), Hanger must prove each of the following elements by a preponderance of the e vi d e n c e : F irs t, that Kimzey and/or Fulton, individually and/or as agents of C a p sto n e and Ellis, knowingly accessed and altered, damaged, deleted, destroyed or o th e rw is e used data stored on Hanger's computers, computer systems and/or computer n etw o rk in a manner that was not authorized by Hanger; Se c o n d , that Defendant did so in order to wrongfully control or obtain data b e lo n gin g to Hanger or to deceive Hanger; and T h ird , that Hanger has been damaged by Defendant's unauthorized use of H a n ge r' s computers, computer systems and/or computer network. Page 12 of 44 INSTRUCTION NO. 13 T o prevail on its claim that Defendants violated California Penal Code Section 5 0 2 (c )(2 ), Hanger must prove each of the following elements by a preponderance of the e vi d e n c e : F irs t, that Kimzey and/or Fulton, individually and/or as agents of C a p sto n e and Ellis, knowingly accessed and without permission took, copied, or used any d a ta from a Hanger computer, computer system, or computer network and; Se c o n d , that Hanger has been damaged by Defendant's unauthorized use of H a n ge r' s computers, computer systems and/or computer network. Page 13 of 44 INSTRUCTION NO. 14 T o prevail on its claim that Defendants violated California Penal Code Section 5 0 2 (c )(7 ), Hanger must prove each of the following elements by a preponderance of the e vi d e n c e : F irs t, that Defendants Kimzey and/or Fulton, individually and/or as agents of C a p sto n e and Ellis, knowingly and without permission accessed or caused to be accessed H a n ge r's computers, computer systems and/or computer network; and Se c o n d , that Hanger has been damaged by Defendant's unauthorized access of H a n ge r' s computers, computer systems and/or computer network. Page 14 of 44 INSTRUCTION NO. 15 Hanger is the owner of confidential patient information including social security numbers, medical diagnoses, prescriptions, treatment records, insurance data, addresses, telephone numbers and other contact information. This information is referred to as Hanger's "Confidential Information." Hanger's Confidential Information constitutes trade secrets. Hanger claims that Defendants "misappropriated" its trade secrets. "Trade Secret" means information used by a business that is not generally known or easily discovered by its competitors and for which reasonable efforts have been made to maintain secrecy because it has competitive value. "Misappropriation" means improperly taking, using or disclosing a Trade Secret. Hanger also claims that Defendant's taking, using and/or disclosing of its Confidential Information caused it harm and caused Defendant to be unjustly enriched. Page 15 of 44 INSTRUCTION NO. 16 T o prevail on its claims that the defendant took, used or disclosed its Trade Se c re ts , Hanger must prove each of the following elements by a preponderance of the e vi d e n c e : F irs t, that Hanger owned the Confidential Information; Se c o n d , that the Confidential Information was a Trade Secret at the time it was ta ke n , used or disclosed; T h ird , that Defendant improperly took, used or disclosed one or more Trade S e c r e ts ; F o u r th , that Hanger was harmed or Defendant was unjustly enriched; and F if th , that Defendant's taking, using or disclosing Hanger Trade Secrets was a su b sta n tial factor in causing Hanger's harm or causing Defendant to be unjustly e n ric h e d . Page 16 of 44 INSTRUCTION NO. 17 H a n ge r has the burden of proving each of the following elements to establish that its Confidential Information was a Trade Secret: F irst, that the Confidential Information was secret; Se c o n d , that the Confidential Information was actually or potentially valuable, givin g Hanger an important business advantage over its competitors, and T h ird , that Hanger took steps to keep the Confidential Information secret. Page 17 of 44 INSTRUCTION NO. 18 T h e secrecy required to prove that something is a Trade Secret does not have to be a b so lu te in the sense that no one else in the world possesses the information. It may be d isclo sed to employees involved in Hanger's use of the Trade Secret as long as they are in stru c ted to keep the information secret. It may also be disclosed to non-employees if th e y are obligated to keep the information secret. However, it must not have been gen e ra lly known to the public or to people who could obtain value from knowing it. Page 18 of 44 INSTRUCTION NO. 19 A Defendant misappropriated Hanger's Trade Secrets by acquisition if Defendant a c q u ire d the Trade secret and knew or had reason to know that he or she used improper m e a n s to access and acquire the Trade Secrets. Page 19 of 44 INSTRUCTION NO. 20 A Defendant misappropriated Hanger's Trade Secret by use if Defendant: 1. 2. U s e d it without Hanger's consent; and D id any one of the following: a. b. A c q u ire d knowledge of the Trade Secret by improper means, or At the time of use, Defendant knew or had reason to know that the kn o w le d ge of Hanger's Trade Secret came from another Defendant a n d that Defendant had previously acquired the Trade Secret by or fo r improper means, or At the time of use, Defendant knew or had reason to know that the kn o w le d ge of Hanger's Trade Secret was acquired under circu m stan ce s requiring that Defendant to limit the use or disclosure o f the Confidential Information; or At the time of use, Defendant knew or had reason to know that the kn o w le d ge of Hanger's Trade Secret came from or through a D e fe n d a n t that a duty to Hanger to limit the use or disclosure of the C o n fid e n tia l Information. c. d. Page 20 of 44 INSTRUCTION NO. 21 Improper means of acquiring a trade secret or knowledge of a trade secret is the theft of, misrepresentation of, or breach of or inducing a breach of a duty to maintain secrecy. Page 21 of 44 INSTRUCTIONS NO. 22 If Hanger proves that one or more Defendants took, used or disclosed one or more o f its Trade Secrets, then Hanger is entitled to recover damages if Hanger suffered an a c tu a l loss or if the Defendant's acts caused Defendant to be unjustly enriched. Page 22 of 44 INSTRUCTION NO. 23 C a p sto n e , Ellis, Rosales, Kimzey and Fulton were unjustly enriched if th e ir taking, using and/or disclosing Hanger's Trade Secrets caused them to receive a b e n e fit that they otherwise would not have achieved. T o decide the amount of any unjust enrichment, first determine the value of the b e n e fit that Defendant received by taking, using and/or disclosing Trade Secrets. Then s u b t ra c t from that amount Defendant's reasonable expenses. Page 23 of 44 INSTRUCTION NO. 24 H a n ge r claims that Defendant wrongfully exercised control over its personal p ro p e rty . To establish this claim, Hanger must prove each of the following elements by a p re p o n d e ra n c e of the evidence: F irs t, that Hanger owned, possessed, or had a right to possess the Confidential In f o r m a tio n as defined in these instructions; Se c o n d , that Defendant intentionally took possession of the Confidential In f o r m a t i o n ; T h ird , that Hanger did not give its permission; F o u r th , that Hanger was harmed; and F ifth , that Defendant's conduct was a substantial factor in causing Hanger's harm. Page 24 of 44 INSTRUCTION NO. 25 H a n ger claims that Capstone, Ellis, Rosales, Kimzey and Fulton intentionally in te rfe re d with two relationships: the relationship between Hanger and its patients and the r e la tio n s h ip between Hanger and its employees. Hanger further contends that these re la tio n s h ip s provide an economic benefit to Hanger. To prevail on this claim Hanger m u s t prove each of the following elements beyond a preponderance of the evidence: F irst, that these relationships result in or provide an economic benefit to Hanger; Se c o n d , that Defendant knew of these relationships; T h i rd , that Defendant intended to disrupt these relationships; F o u rth , that Defendant engaged in wrongful acts by taking and using Hanger's C o n f id e n tia l Information to solicit Hanger's patients and employees; F ifth , that these relationships were disrupted; Six th , that Hanger was harmed; and Se ve n th , that Defendant's wrongful conduct was a substantial factor in causing H a n ge r's harm. Page 25 of 44 INSTRUCTION NO. 26 In deciding whether Defendant acted intentionally, you may consider whether Defendant knew that a disruption of such economic advantage would be substantially certain to result from Defendant's conduct. Page 26 of 44 INSTRUCTION NO. 27 A substantial factor in causing harm is a factor that a reasonable person would consider to have contributed to the harm. It must be more than a remote or trivial factor. It does not have to be the only cause of the harm. Conduct is not a substantial factor in causing harm if the same harm would have occurred without the conduct. Page 27 of 44 INSTRUCTION NO. 28 H a n ge r claims that it was harmed because Defendants misappropriated its trade se c re ts, accessed Hanger's computers without permission, used the trade secrets to u n fa irly compete with Hanger and took control of Hanger's property. Hanger also claims th a t Defendants are responsible for the harm because they were part of a conspiracy to c o m m it these acts. A conspiracy is an agreement by two or more persons to commit a w ro n gfu l act. Such an agreement may be made orally or in writing or may be determined b y the conduct of the parties. If you find that any Defendant misappropriated Hanger's trade secrets, a c c e ss e d Hanger's computers without permission, used trade secrets to unfairly compete w ith Hanger, and/or took control of Hanger's property in a manner that harmed Hanger, th e n you must decide whether any other Defendant is also responsible for the harm. To p re va il on this claim, Plaintiff must prove each of the following by a preponderance of the e vi d e n c e : F irst, that each defendant was aware that the other Defendants planned to m is a p p ro p ria te Hanger's trade secrets, access Hanger's computers without permission, u s e d Hanger's trade secrets to unfairly compete with Hanger, and/or took control of H a n ge r's property; and Se c o n d , that each defendant agreed with another one of the defendants and inten d ed that the misappropriating of Hanger's trade secrets, accessing of Hanger's c o m p u te rs without permission, competing unfairly with Hanger, and/or taking control of H a n ge r's property be committed. Mere knowledge of a wrongful act without cooperation or an agreement to cooperate is insufficient to make Defendants responsible for the harm. A conspiracy may be inferred from circumstances, including the nature of the acts done, the relationships between the parties, and the interests of the alleged co-conspirators. Hanger is not required to prove that a Defendant personally committed a wrongful act or that he, she or it knew all of the details of the agreement or the identities of all the other participants. Page 28 of 44 INSTRUCTION NO. 29 If you decide that Defendants Capstone, Ellis, Rosales, Kimzey and Fulton joined the conspiracy to commit misappropriation of Hanger's trade secrets, access Hanger's c o m p u te rs without permission, use trade secrets to unfairly compete with Hanger, and/or take control of Hanger's property then each defendant who joined the conspiracy is re sp o n s ib le for all acts done as part of the conspiracy, whether the acts occurred before or a fte r he or she joined the conspiracy. Page 29 of 44 INSTRUCTION NO. 30 H a n ge r claims that it and Rosales and Kimzey entered into an agreement titled "C o n fid e n tia lity Acknowledgment/Training Attestation." Hanger claims that Rosales and K imz ey each breached this contract by taking, using and/or disclosing Hanger's C o n fid e n tia l Information. H an ger also claims this breach caused harm to Hanger. Page 30 of 44 INSTRUCTION NO. 31 H a n ge r claims that it and Ellis entered into an agreement titled "Employment and N o n -So lic ita tio n Agreement" in which Ellis agreed to refrain from soliciting Hanger e m p lo y e e s for a two year period after leaving Hanger. Hanger claims that Ellis breached th is agreement by soliciting Hanger employees to work for Capstone within the two year tim e period after leaving Hanger. "So licitin g" means an attempt to obtain something by persuasion or enticement. H a n ger also claims that Ellis' breach of his agreement caused harm to H a n ge r . Page 31 of 44 INSTRUCTION NO. 32 T o prevail on its breach of contract claim against Ellis, Rosales and/or Kimzey, H a n ge r has the burden of proving each of the following elements by a preponderance of th e evidence: First, that Defendant agreed to the terms and provisions of the document; Se c o n d , that Hanger did all, or substantially all, of the significant things that the d o c u m e n t required it to do; T h ird , that Defendant failed to do something that the document required defendant to do; and F o u r th , that Hanger was harmed by that failure. Page 32 of 44 INSTRUCTION NO. 33 H an ger claims that it was harmed by Defendants Rosales', Kimzey's and Fulton's b re a ch of the duty of loyalty. An employee owes its employer undivided loyalty. The d u ty of loyalty binds even lower-level employees, such as sales clerks or laborers. To p re va il on this claim Hanger must prove each of the following elements by a p re p o n d e ra n c e of the evidence: F ir st, that Rosales, Kimzey and Fulton were Hanger's employees; Se c o n d , that Rosales, Kimzey and/or Fulton, individually and/or as agents fo r Capstone or Ellis, knowingly acted against Hanger's interests or acted on behalf of C a p s to n e ' s interests; T h ird , that Hanger did not give permission to Rosales', Kimzey's and/or F u lto n 's conduct; F o u r th , that Hanger was harmed; and F ifth , that Rosales', Kimzey's and/or Fulton's conduct was a substantial fa c to r in causing Hanger's harm. Page 33 of 44 INSTRUCTION NO. 34 H an ger claims that it was harmed by Rosales', Kimzey's and Fulton's b r e a c h of the fiduciary duty of confidentiality. To prevail on this claim, Hanger must p ro ve each of the following elements by a preponderance of the evidence: F ir st, that Rosales, Kimzey and Fulton were Hanger's employees; Se c o n d , that Rosales, Kimzey and/or Fulton, individually and/or as agents fo r Capstone or Ellis, had information relating to Hanger that they knew or should have kn o w n was confidential; T h ird , that Rosales, Kimzey and/or Fulton, individually and/or as agents fo r Capstone or Ellis, used Hanger's confidential information for their own benefit or c o m m u n i c a te d Hanger's confidential information to third parties; F o u r th , that Hanger did not give permission to Rosales', Kimzey's and/or F u lto n 's conduct; F ifth , that the confidential information was not a matter of general knowledge; Six th , that Hanger was harmed; and Se ve n th , that Rosales', Kimzey's and/or Fulton's conduct was a substantial fa c to r in causing Hanger's harm. Page 34 of 44 INSTRUCTION NO. 35 I am required to instruct you about the amount of damages. By instructing you on d a m a ge s, I do not mean to suggest for which party your verdict should be rendered. If you find for the plaintiff, you must determine the plaintiff's damages. The p la in tiff has the burden of proving damages by a preponderance of the evidence. D a m a ge s means the amount of money that will reasonably and fairly compensate the p lain tiff for any injury you find was caused by the defendant. In determining the measure of damages, you should consider: T h e nature and extent of Hanger's injuries; T h e reasonable value of the lost business opportunities; T h e reasonable value of business opportunities which with reasonable p ro b a b ility will be lost in the future; and T h e reasonable value of out-of-pocket costs expended by Hanger. Page 35 of 44 INSTRUCTION NO. 36 If you decide that Hanger has proved its claim against Ellis, Rosales, and Kimzey fo r breach of contract, you also must decide how much money will reasonably c o m p e n sa te Hanger for the harm caused by the breach. This compensation is called "d a m a ge s." The purpose of such damages is to put Hanger in as good a position as it would have been if Ellis, Rosales, and Kimzey had performed as they promised. T o award damages for any harm to Hanger, you must find: 1 . That the harm was likely to arise in the ordinary course of events from th e breach of the contract; or 2 . That when the contract was made, both parties could have reasonably fo re se e n the harm as the probable result of the breach. H a n ge r does not have to prove the exact amount of damages that resulted from the in d ivid u a l breach of contract, but you must not speculate or guess in awarding d a m a ge s . Page 36 of 44 INSTRUCTION NO. 37 T o recover damages for lost profits, Hanger must prove it is reasonably certain it w o u ld have earned profits but for Defendant's conduct. T o decide the amount of damages for lost profits, you must determine the total a m o u n t Hanger would have received but for Defendant's conduct and then subtract from th a t amount Hanger's expenses. The amount of the lost profits need not be calculated w ith mathematical precision, but there must be a reasonable basis for computing the loss. Page 37 of 44 INSTRUCTION NO. 38 Y o u may also award Hanger damages in the form of unjust enrichment. In order to receive unjust enrichment damages, you must find that Defendant received a direct b e n e fit from Hanger, and that the benefit was something of value for which the D e fe n d a n t did not pay. If you determine that Hanger is entitled to the remedy of unjust enrichment, then y o u must determine the amount. You may award Hanger both the amount equal to the H a n ger' s actual damages and the amount by which the Defendant was unjustly e n ric h e d . However, your award of unjust enrichment cannot be provided if that award is a lr e a d y taken into account in calculating the actual damages. Page 38 of 44 INSTRUCTION NO. 39 Hanger has a duty to use reasonable efforts to mitigate damages. To mitigate means to avoid or reduce damages. Defendant has the burden of proving by a preponderance of the evidence: 1. 2. Hanger failed to use reasonable efforts to mitigate damages; and The amount by which damages would have been mitigated. Page 39 of 44 INSTRUCTION NO. 40 If you decide that Defendant's acts caused Hanger harm, you must decide whether th a t conduct justifies an award of punitive damages. The purposes of punitive damages a re to punish a wrongdoer for the conduct that harmed Hanger and to discourage similar c o n d u c t in the future. In order to recover punitive damages, Hanger must prove by clear and convincing e vid e n c e that each Defendant who engaged in tortious conduct acted willfully and m a lic io u s ly . You must determine whether Defendant acted willfully and maliciously, b u t you will not be asked to determine the amount of any punitive damages. You will c a lc u la te the amount later if necessary. "W illfu lly " means that Defendant acted with a purpose or willingness to commit th e act or engage in the conduct in question, and the conduct was not reasonable under th e circumstances at the time and was not undertaken in good faith. "M a lic io u s ly " means that Defendant acted with an intent to cause injury, or that D e fe n d a n t's conduct was done with a willful and knowing disregard for the rights of o th e rs. Defendant acted with "knowing disregard" if defendant was aware of the probable c o n s e q u e n c e s of defendant's conduct and deliberately failed to avoid those consequences. Page 40 of 44 INSTRUCTION NO. 41 W h e n a party has the burden of proving any claim or defense by clear and c o n vin c in g evidence, it means you must be persuaded by the evidence that the claim or d e fe n se is highly probable. This is a higher standard of proof than proof by a p re p o n d e ra n c e of the evidence and should be used only in reference to an award of p u n i tive damages. Y o u should base your decision on all of the evidence, regardless of which party p re se n ted it. Page 41 of 44 INSTRUCTION NO. 42 W h e n you begin your deliberations, you should elect one member of the jury as y o u r presiding juror. That person will preside over the deliberations and speak for you h e re in court. Y o u will then discuss the case with your fellow jurors to reach agreement if you c a n do so. Your verdict must be unanimous. E a c h of you must decide the case for yourself, but you should do so only after you h a ve considered all of the evidence, discussed it fully with the other jurors, and listened to the views of your fellow jurors. D o not hesitate to change your opinion if the discussion persuades you that you sh o u ld . Do not come to a decision simply because other jurors think it is right. It is important that you attempt to reach a unanimous verdict but, of course, only if e a ch of you can do so after having made your own conscientious decisions. Do not c h a n ge an honest belief about the weight and effect of the evidence simply to reach a verd ict. Page 42 of 44 I N S T R U C T I O N NO. 43 If it becomes necessary during your deliberations to communicate with me, you m a y send a note through the marshal, signed by your presiding juror or by one o r more members of the jury. No member of the jury should ever attempt to c o m m u n ic a te with me except by a signed writing; I will communicate with any member o f the jury on anything concerning the case only in writing, or here in open court. If you se n d out a question, you may continue your deliberations while waiting for the answers to an y questions. Remember that you are not to tell anyone including me how the jury s ta n d s, numerically or otherwise, until after you have reached a unanimous verdict or h a ve been discharged. Do not disclose any vote count in any note to the Court. Page 43 of 44 INSTRUCTION NO. 44 A verdict form has been prepared for you. After you have reached a unanimous a gree m e n t on a verdict, your presiding juror will fill in the form that has been given to y o u , sign and date it, and advise the court that you are ready to return to the courtroom. Page 44 of 44

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