FCA US LLC v. Bullock
Filing
99
OPINION & ORDER Denying Plaintiff's Motion for Summary Judgment (Dkt. 82 ); Granting In Part and Denying In Part Defendant's Motion for Summary Judgment (Dkt. 80 ); and Denying Defendant's Motion to Strike Plaintiff's Claims for Monetary Damages (Dkt. 81 ). Signed by District Judge Mark A. Goldsmith. (Sandusky, K)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
FCA US LLC,
Plaintiff,
vs.
Case No. 17-13972
HON. MARK A. GOLDSMITH
PATREA R. BULLOCK,
Defendant.
_______________________________/
OPINION & ORDER
DENYING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT (Dkt. 82);
GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION FOR
SUMMARY JUDGMENT (Dkt. 80); AND DENYING DEFENDANT’S MOTION TO
STRIKE PLAINTIFF’S CLAIMS FOR MONETARY DAMAGES (Dkt. 81)
This matter is before the Court on Plaintiff FCA US, LLC’s (“FCA”) motion for summary
judgment (Dkt. 82), Defendant Patrea R. Bullock’s motion for summary judgment (Dkt. 80), and
Bullock’s motion to strike FCA’s claims for monetary damages (Dkt. 81). All motions have been
fully briefed. Because oral argument will not assist in the decisional process, the motions will be
decided based on the parties’ briefing. See E.D. Mich. LR 7.1(f)(2); Fed. R. Civ. P. 78(b).
The case arises from Bullock’s resignation from her employment serving as legal counsel
to FCA and subsequent representation of plaintiffs in litigation adverse to FCA. FCA alleges that
Bullock improperly retained and used its confidential information after her representation of the
company ended. For the reasons that follow, the Court denies FCA’s motion for summary
judgment, grants in part and denies in part Bullock’s motion for summary judgment, and denies
Bullock’s motion to strike FCA’s claims for monetary damages.
I.
BACKGROUND
Bullock is an attorney who previously worked for two law firms in California: Universal
& Shannon, LLP (“U&S”) (August 2016-May 2017) and Gates, O’Doherty, Gonter & Guy LLP
(“GOGG”) (June 2017-October 2017). 12/11/17 Bullock Decl., Ex. A to Def. Mot., ¶¶ 1, 5, 3334, 37 (Dkt. 80-2). FCA was a client of both U&S and GOGG, and during Bullock’s time at these
law firms, she represented FCA in numerous breach of warranty, or “lemon law,” cases. Bullock
Dep., Ex. 1 to Pl. Mot., at 39 (Dkt. 82-2). In her role at U&S and GOGG, Bullock developed
overall defense strategy based on the facts of individual cases, prepared motions and trial
preparation documents, evaluated and advised FCA regarding the merits of cases, and negotiated
settlements on behalf of FCA. 12/11/17 Bullock Decl. ¶¶ 10, 44, 63-64. Bullock admits that she
obtained privileged and confidential information in the course of her representation of FCA.
Answer ¶¶ 12-13, 16 (Dkt. 46).
In April 2017, while working at U&S, Bullock attended a training program conducted by
FCA, and signed the “FCA US California Warranty Litigation Trial School Confidentiality
Agreement” (the “Confidentiality Agreement”). 12/11/17 Bullock Decl. ¶¶ 17, 28; Confidentiality
Agreement, Ex. 2 to Pl. Mot. (Dkt. 82-3). Under the terms of the Confidentiality Agreement,
Bullock agreed “to maintain the confidentiality of all non-public documents and information
disseminated during trial school that relate to the defense of FCA US (‘Confidential
Information’).” The Confidentiality Agreement further provided that confidential information
could be “used solely for purposes of the defense of California warranty actions against FCA US.”
2
Bullock ended her employment with GOGG in October 2017 and opened her own law
practice representing plaintiffs with defective vehicles under the California lemon law.1 12/11/17
Bullock Decl. ¶¶ 37, 40. Just prior to and immediately after leaving GOGG, Bullock admittedly
transferred “every single file” from her work laptop, including FCA documents, to a number of
USB devices. Bullock Dep. at 33, 55-56, 58-60. Bullock explained that she copied the contents
of her work laptop in order to secure her personal files (e.g., records relating to her personal taxes
and her son’s college), and with the intention of later deleting GOGG’s and FCA’s files. Id. at 5960. Bullock further admitted that one of the USB devices to which she transferred FCA’s
documents became corrupted, and that she sent the device to an IT firm in Texas to recover the
data. Id. at 48-49, 54. However, when the firm informed Bullock that they were unable to recover
any of the data, Bullock directed the company to destroy the device. Id.
A forensic examination of Bullock’s work laptop confirmed that between October 17, 2017
and November 1, 2017, Bullock used four unique USB devices to store client data. Bandemer
Decl. ¶ 8b (Dkt. 82-4). Specifically, on October 31, 2017, a USB device remained connected to
Bullock’s work laptop for over eight hours, during which time folders labelled “Cases,” “Helpful
Info,” “Lemon Law Cases,” “My Business,” and “Releases” were created on the USB device. Id.
¶ 8f. Immediately after the USB device was removed, all personal and work files were deleted
from the laptop. Id. ¶ 8g.
On November 20, 2017, Bullock filed a lawsuit against FCA in the Superior Court of
California, Brown v. FCA US LLC, No. 34-2017-00222086, alleging breach of warranty on behalf
of an owner of an FCA-manufactured vehicle. Answer ¶ 31. On December 8, 2017, FCA filed
1
Bullock states that she informed her supervisor at GOGG of her decision to leave the firm on
October 26, 2017, and that he severed their relationship. Id. ¶¶ 40-42. However, an exact
termination date is not provided.
3
the instant complaint, alleging claims for breach of contract, misappropriation of trade secrets, and
breach of fiduciary duty. Bullock thereafter filed at least two other breach of warranty lawsuits
against FCA in California. See Bullock Dep. at 181; see also Pl. Supp. Br. (Dkt. 34) (noting Arias
v. FCA US, LLC, No. FCS050161 (Super Ct. of Cal., Fairfield)); Pl. Supp. Notice (Dkt. 37) (noting
Lewis v. FCA US LLC, No. CV-18-240 (Super. Ct. of Cal., Yolo)). However, Bullock obtained
substitute counsel and no longer retains any cases against FCA. Bullock Dep. at 167, 169-170;
7/25/18 Bullock Decl. ¶ 45.
FCA has filed a motion for summary judgment, arguing that Bullock has admitted to all
conduct necessary to prevail on its claims, and that Bullock’s counterclaim for attorney fees and
costs under 35 U.S.C. § 285 fails as a matter of law (Dkt. 82). In response, Bullock has voluntarily
withdrawn her counterclaim. Def. Resp. at 19 (Dkt. 92). However, Bullock also filed a motion
for summary judgment, arguing that FCA has failed to produce evidence supporting any of its
claims (Dkt. 80). Bullock also seeks to strike FCA’s claim for monetary damages on the ground
that FCA has failed to propound discovery regarding the amount of its claimed damages (Dkt. 81).
II.
STANDARD OF REVIEW
A motion for summary judgment under Federal Rule of Civil Procedure 56 shall be granted
“if the movant shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A genuine dispute of material fact
exists when there are “disputes over facts that might affect the outcome of the suit under the
governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “[F]acts must be
viewed in the light most favorable to the nonmoving party only if there is a ‘genuine’ dispute as
to those facts.” Scott v. Harris, 550 U.S. 372, 380 (2007). “Where the record taken as a whole
4
could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for
trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
Once the movant satisfies its initial burden of demonstrating the absence of any genuine
issue of material fact, the burden shifts to the nonmoving party to set forth specific facts showing
a triable issue of material fact. Scott, 550 U.S. at 380; Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986). The nonmoving party “must do more than simply show that there is some metaphysical
doubt as to the material facts,” Scott, 550 U.S. at 380 (quoting Matsushita, 475 U.S. at 586), as the
“mere existence of some alleged factual dispute between the parties will not defeat an otherwise
properly supported motion for summary judgment,” id. (quoting Anderson, 477 U.S. at 247-248)
(emphasis in original); see also Babcock & Wilcox Co. v. Cormetech, Inc., 848 F.3d 754, 758 (6th
Cir. 2017) (“A mere scintilla of evidence or some metaphysical doubt as to a material fact is
insufficient to forestall summary judgment.”).
III.
DISCUSSION
In its complaint, FCA advances claims for breach of contract (Count I), misappropriation
of trade secrets under both state and federal statutes (Counts II and III), and breach of fiduciary
duty (Count IV). See generally Compl. (Dkt. 1). FCA also advances Count V, which seeks
injunctive relief; however, this claim requests a remedy rather than an independent cause of action.
See, e.g., Chungag v. Wells Fargo Bank, N.A., 489 F. App’x 820, 826 (6th Cir. 2012); RileyJackson v. Ocwen Loan Servicing, LLC, No. 13–cv–12538, 2013 WL 5676827, at *5 (E.D. Mich.
Oct. 19, 2013). Both parties seek summary judgment on each of these claims.
A. Breach of Contract
In Count I of its complaint, FCA maintains that Bullock breached the Confidentiality
Agreement when, by her own admission, she took FCA’s confidential information after her legal
5
representation ended and subsequently disclosed and used the files. Pl. Mot. at 16. In response,
Bullock contends that FCA attempts to expand the scope of the Confidentiality Agreement beyond
its express terms, and that FCA is unable to establish that she disclosed or used any of FCA’s
confidential information. Def. Resp. at 9.
A party asserting a breach of contract must establish that “(1) there was a contract (2) which
the other party breached (3) thereby resulting in damages to the party claiming breach.” MillerDavis Co. v. Ahrens Constr., Inc., 848 N.W.2d 95, 104 (Mich. 2014).2 When construing a contract,
a court’s primary objective is to determine the parties’ intent. Quality Prod. & Concepts Co. v.
Nagel Precision, Inc., 666 N.W.2d 251, 259 (Mich. 2003).
When a contract is clear and
unambiguous, the provisions reflect the parties’ intent as a matter of law, and courts are to enforce
the language as written in accordance with its plain and ordinary meaning. Coates v. Bastian Bros.,
Inc., 741 N.W.2d 539, 543 (Mich. Ct. App. 2007).
The Confidentiality Agreement executed by Bullock during the FCA training program
provides as follows:
Documents and information shared with you at and before the meeting will include
FCA US client confidential information. . . . As an attendee, you agree to maintain
the confidentiality of all non-public documents and information disseminated
during trial school that relate to the defense of FCA US (“Confidential
Information”). Confidential Information shall be used solely for purposes of the
defense of California warranty actions against FCA US.
...
The undersigned attendee understands that they will be learning strategies and
tactics key to FCA’s defense of Warranty litigation in California and that a breach
of this Confidentiality Agreement will cause FCA US to suffer irreparable harm,
including harm for which damages would be an inadequate remedy.
2
The Confidentiality Agreement contains a choice-of-law provision designating Michigan law as
binding over “any dispute or claim arising out of or in connection with [the agreement] . . . .”
Confidentiality Agreement.
6
Confidentiality Agreement. Under its express terms, the Confidentiality Agreement may be
breached in two ways: (1) by a party’s disclosure of confidential information or (2) by a party’s
use of that confidential information for a purpose unrelated to defending FCA in breach of
warranty litigation.
As an initial matter, the parties dispute the scope of the Confidentiality Agreement. In
much of its briefing, FCA argues broadly that Bullock breached the Confidentiality Agreement by
copying, disclosing, and using FCA’s “confidential information,” without specifying the exact
documents or information at issue. See Pl. Mot. at 16; Pl. Resp. at 14 (Dkt. 91). By painting in
such broad strokes, FCA implicitly asserts that the Confidentiality Agreement likewise represents
a broad agreement protecting the entirety of FCA’s confidential data. However, as argued by
Bullock, the protections set forth in the Confidentiality Agreement are expressly limited to “all
non-public documents and information disseminated during trial school that relate to the defense
of FCA US.”
Confidentiality Agreement (emphasis added).
That is, the Confidentiality
Agreement protects from disclosure and use only those documents or information specifically
shared during the training program.
FCA has failed to specify whether any of the information Bullock copied from her work
laptop to USB devices, or allegedly disclosed or used thereafter, was disseminated during the
training program. Rather, FCA contends that because Bullock admits she copied “every single
file” from her work laptop onto USB drives, she necessarily copied training program documents.
Pl. Reply at 1 (Dkt. 96) (citing Bullock Dep. at 58). But FCA’s conclusion is sheer speculation,
as there is no evidence that Bullock maintained training program materials on her work laptop.
FCA, therefore, has not established that any of the confidential information Bullock retained after
her employment at GOGG ended was protected under the Confidentiality Agreement.
7
Further, FCA summarily contends that the Confidentiality Agreement protects information
not memorialized in writing but rather learned during the course of the training program. Pl. Reply
at 1. However, FCA has failed to identify what confidential information was discussed during the
training program. Thus, any breach claim based on orally transmitted confidential information is
unsupported for failure to specify what was protected under the agreement.
As to whether Bullock breached the Confidentiality Agreement, FCA asserts three theories
under which Bullock purportedly breached the Confidentiality Agreement by using or disclosing
FCA’s confidential information. First, FCA contends that Bullock disclosed its confidential
information by sending one of the USB devices containing FCA’s confidential files to an IT firm
in Texas. Pl. Resp. at 15. Second, FCA contends that Bullock used its confidential files by copying
them to USB devices after her representation of FCA ended—at which point the act of copying
the files could not have been for the purpose of defending FCA. Pl. Mot. at 16; Pl. Resp. at 14.
Finally, FCA contends that Bullock used certain of FCA’s confidential documents in furtherance
of her new law firm. Pl. Mot. at 16; Pl. Resp. at 14-15. The Court takes each of these arguments
in turn.
With respect to FCA’s first theory, Bullock admitted that she sent a corrupted USB device
containing FCA’s documents to an IT firm in Texas in an effort to recover the data. Bullock Dep.
at 48-49, 54. However, the firm informed Bullock that they were unable to recover any of the
data, and Bullock directed the company to destroy the device. Id. FCA has supplied no evidence
rebutting this testimony. Accordingly, because the data was inaccessible, FCA is unable to
establish that this information was actually disclosed or used.
With respect to FCA’s second theory, Bullock admitted to copying “every single file” on
her work laptop to USB devices just prior to and immediately after her departure from GOGG.
8
Bullock Dep. at 58. But FCA does not explain how merely copying confidential files, standing
alone, amounts to a “use” of those files. In the absence of an alternative definition set forth in the
Confidentiality Agreement, the word “use” may be ascribed its plain and ordinary meaning as set
forth in dictionaries. Cole v. Auto-Owners Ins. Co., 723 N.W.2d 922, 924 (Mich. Ct. App. 2006).
The Michigan court of appeals has noted that the word “use” is defined in the dictionary as “to
employ for some purpose,” and in Black’s Law Dictionary as “[t]he application or employment of
something[.]” Aroma Wines & Equip., Inc. v. Columbian Distribution Servs., Inc., 844 N.W.2d
727, 731 (Mich. Ct. App. 2013), aff’d, 871 N.W.2d 136 (Mich. 2015) (internal quotation marks
and citations omitted).
Construing the Confidentiality Agreement in accordance with this plain meaning, the word
“use” entails an application or employment of FCA’s confidential information for some purpose.
This interpretation is consistent with the express terms of the Confidentiality Agreement, which
authorizes the use of FCA’s confidential information “solely for purposes of the defense of
California warranty actions against FCA US.” Confidentiality Agreement (emphasis added).
Merely copying confidential files does not amount to a “use” because it does not involve
an “application” or “employment” of those files for any concrete purpose. FCA offers no argument
to the contrary, and it is not the role of the Court to craft an argument on a party’s behalf. See
McPherson v. Kelsey, 125 F.3d 989, 995-996 (6th Cir. 1997) (“[I]ssues adverted to in a perfunctory
manner, unaccompanied by some effort at developed argumentation, are deemed waived. It is not
sufficient for a party to mention a possible argument in the most skeletal way, leaving the court
to . . . put flesh on its bones.” (internal quotation marks and citation omitted)).
Nor has FCA cited authority—and the Court has uncovered none—supporting FCA’s
theory. In cases holding that a departing employee breached a confidentiality agreement by
9
copying or transferring the employer’s confidential files, the agreements at issue expressly
required employees to return the employer’s proprietary information or expressly prohibited
employees from copying the employer’s records. See, e.g., SKF USA, Inc. v. Zarwasch-Weiss,
No. 1:10-cv-1548, 2011 WL 13362617, at *26 (N.D. Ohio Feb. 3, 2011); Kurshat v. Gen. Bearing
Corp., No. 04-40281, 2007 WL 1018225, at *12 (E.D. Mich. Jan. 9, 2007), adopted in relevant
part, 2007 WL 1018224 (E.D. Mich. March 30, 2007). FCA, therefore, cannot establish that
Bullock breached the Confidentiality Agreement by copying its confidential files.
Turning to FCA’s final breach of contract theory, FCA contends that Bullock admitted
during her deposition that she accessed and used certain of FCA’s confidential information in
furtherance of her new law firm. Pl. Resp. at 14-15. During her deposition, Bullock stated that
she accessed the following documents after she left her employment at GOGG: complaints filed
against FCA, releases used to settle breach of warranty actions against FCA, “Module 9: LegalRelated Processes,” and FCA organizational charts. Bullock Dep. at 74-76, 93, 97. The Court
will address Bullock’s alleged use of each of these documents in turn.
During her deposition, Bullock admitted that after leaving her employment at GOGG, she
“might have” referred to complaints filed against FCA and that “sometimes lawyers use
phraseology from somebody else’s pleadings.” Id. at 74. However, these complaints were created
by plaintiffs’ attorneys and not by FCA, see id., and would have been publicly available on court
dockets. Further, FCA states that the complaints were contained in FCA’s case files on which
Bullock had actively worked—meaning they were not disseminated during the training program.
See Pl. Resp. at 3, 13. Because the complaints are neither “non-public” nor disseminated during
the training program, they are not protected under the Confidentiality Agreement. Therefore, any
alleged use of the complaints cannot sustain FCA’s breach of contract claim.
10
Bullock also admitted during her deposition that she “probably” reviewed releases, which
she stated were “interesting” and “helpful” to review. Bullock Dep. at 74-76, 81. However, she
stated that since starting her law firm, she has not created a release on behalf of any client and has
never negotiated a settlement against FCA. Id. at 75, 77-78. Bullock further maintained that she
never used FCA’s confidential information to assist in representing plaintiffs against FCA or for
any purpose unrelated to defending FCA. Id. at 77; see also 12/11/17 Bullock Decl. ¶ 55; 7/25/18
Bullock Decl. ¶¶ 8, 13. Thus, although Bullock may have reviewed the releases after her
representation of FCA ended, the record does not demonstrate that she disclosed or used this
information for any purpose. FCA has failed to come forward with evidence rebutting Bullock’s
testimony or demonstrating that she used the releases in the course of representing plaintiffs in
breach of warranty litigation. Consequently, FCA has not met its burden of raising a triable issue
of fact that Bullock breached the Confidentiality Agreement by using the releases in furtherance
of her law firm. See Cox v. Ky. Dep’t of Transp., 53 F.3d 146, 149 (6th Cir. 1995) (noting that at
the summary judgment stage, “the moving party . . . may merely rely upon the failure of the
nonmoving party to produce any evidence which would create a genuine dispute for the jury.”).
Finally, while Bullock stated it was possible that she accessed Module 9 and the
organizational charts following her departure from GOGG, it would have been for the purpose of
identifying the documents and determining whether they were her own personal files or GOGG or
FCA files that should be deleted.3 Id. at 93, 97. Merely accessing Module 9 and the organizational
3
FCA maintains that Module 9 and the organizational charts contain FCA’s confidential litigation
strategies and tactics. Pl. Mot. at 16-17. While Bullock testified during her deposition that Module
9 “probably” concerns FCA’s management of its legal processes, she was not questioned regarding
the contents of the organizational charts. See Bullock. Dep. at 89; 94-97. FCA has neither
produced these documents for the Court’s review nor described their contents in greater detail.
11
charts for the purpose of identifying the documents is not tantamount to employing the confidential
information such that it amounted to a “use.” As stated above, Bullock averred that she never used
FCA’s confidential information to assist in representing plaintiffs against FCA or for any purpose
unrelated to defending FCA. Id. at 77; see also 12/11/17 Bullock Decl. ¶ 55; 7/25/18 Bullock
Decl. ¶¶ 8, 13. FCA has failed to come forward with evidence raising a triable fact issue that
Bullock actually employed Module 9 or the organizational charts in connection with representing
plaintiffs in breach of warranty litigation.
FCA contends that it is unable to determine the full extent of Bullock’s use of its
confidential information without a forensic inspection of Bullock’s personal devices. Pl. Resp at
15-16.
The Court previously considered and denied FCA’s motion to compel a forensic
examination of Bullock’s personal devices. See generally FCA US LLC v. Bullock, 329 F.R.D.
563 (E.D. Mich. 2019).4 The Court reasoned that while Bullock stated she already produced all
documents in her possession relating to her representation of FCA, FCA produced no evidence
demonstrating Bullock was being untruthful or secretly withholding information. Id. at 568.
Likewise, FCA has produced no evidence suggesting that Bullock is currently being untruthful in
stating that she did not disclose or use FCA’s confidential information.
Moreover, the Court’s denial of FCA’s motion to compel a forensic examination of
Bullock’s devices in no way hindered its ability to obtain evidence of misappropriation, if such
evidence existed. For example, to demonstrate that Bullock used its confidential information in
connection with her representation of plaintiffs, FCA could have subpoenaed correspondence
4
On December 20, 2019, the Sixth Circuit denied FCA’s petition for a writ of mandamus seeking
to vacate this Court’s opinion denying FCA’s motion to compel and to require forensic imaging
of Bullock’s personal devices. Order Denying Mandamus Petition at 4 (Dkt. 98). After reviewing
the record, the Sixth Circuit concluded that this Court’s denial of FCA’s motion to compel did not
amount to an abuse of discretion warranting mandamus. Id.
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between Bullock and FCA’s own legal counsel relating to the cases Bullock initiated against FCA.
Additionally, FCA could have interviewed its legal counsel regarding Bullock’s litigation tactics
and possible use of FCA’s confidential information. FCA’s failure to submit any affidavit from
its own counsel only confirms that FCA was not impeded in in its ability to obtain evidence in
support of the present action—it simply chose not to pursue such alternate avenues. Accordingly,
this Court’s refusal to order inspection of Bullock’s computer hardly supplies any basis to award
summary judgment to FCA or deny it to Bullock.
Because FCA has failed to raise a triable issue of fact that Bullock disclosed or used its
confidential information disseminated during the training program, Bullock is entitled to summary
judgment with respect to FCA’s breach of contract claim.
B. Misappropriation
In Counts II and III of its complaint, FCA asserts claims of misappropriation of trade
secrets under the Michigan Uniform Trade Secrets Act (“MUTSA”), Mich. Comp. Laws
§ 445.1902, and under the federal Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § 1836. FCA
seeks monetary relief based on Bullock’s alleged actual misappropriation, and injunctive relief
based on her alleged threatened misappropriation.
In substance, the elements of a misappropriation claim under MUTSA and the DTSA are
largely identical. Radiant Global Logistics, Inc. v. Furstenau, 368 F. Supp. 3d 1112, 1124 n.2
(E.D. Mich. 2019) (citing Mich. Comp. Laws § 445.1902(b); 18 U.S.C. § 1839(5)). Both statutes
provide causes of action and remedies for the misappropriation of trade secrets. See Bliss Clearing
Niagara, Inc. v. Midwest Brake Bond Co., 270 F. Supp. 2d 943, 946 (W.D. Mich. 2003). MUTSA
defines a “trade secret” as information that (1) “[d]erives independent economic value . . . from
not being generally known to, and not being readily ascertainable by proper means by, other
13
persons who can obtain economic value from its disclosure or use,” and (2) “[i]s the subject of
efforts that are reasonable under the circumstances to maintain its secrecy.” Mich. Comp. Laws
§ 445.1902(d). As recognized by the Sixth Circuit, Michigan courts have required that an alleged
trade secret be identified “‘clearly, unambiguously, and with specificity.’” Utilase, Inc. v.
Williamson, 188 F.3d 510 (Table) (6th Cir. 1999) (quoting Shatterproof Glass Corp. v. Guardian,
Glass Co., 322 F. Supp. 854, 867 (E.D. Mich. 1970)).
The Court must determine whether the documents FCA alleges Bullock misappropriated
amount to trade secrets under this statutory definition. FCA asserts that Bullock misappropriated
the following documents allegedly reflecting FCA’s litigation strategies: complaints filed against
FCA, Module 9, FCA organizational charts, the “Corporate Process Guideline,” and FCA’s
releases. Pl. Mot. at 16-17; Pl. Reply at 2 (Dkt. 96). Bullock, in turn, contests FCA’s ability to
establish that any of these records constitute trade secrets. Def. Mot. at 18.
As discussed above, complaints contained in FCA’s case files would have been created by
plaintiffs’ attorneys and not by FCA. See Bullock Dep. at 74. Further, these documents would
have been filed on public court dockets and, therefore, would not have been confidential. “[C]ourts
typically focus on ownership as a required element of a claim for trade secrets misappropriation.”
DaimlerChrysler Servs. v. Summit Nat’l, No. 02-71871, 2006 WL 1420812, at *7 (E.D. Mich.
May 22, 2006) (citing 4 Roger M. Milgrim, Milgrim on Trade Secrets § 15.01[1], n.8.1).
Moreover, information that is publicly available cannot constitute a trade secret. Wysong Corp.
v. M.I. Indus., 412 F. Supp. 2d 612, 627 (E.D. Mich. 2005). Because the complaints were neither
owned by FCA nor kept confidential, they may not be considered trade secrets.
With respect to Module 9, the organizational charts, the Corporate Process Guideline, and
the releases, Bullock contends that FCA has failed to produce any evidence creating a genuine
14
dispute that the litigation strategies and tactics reflected in these documents derive value from not
being readily ascertainable. Def. Mot. at 18. “‘[M]atters of public knowledge or general
knowledge in [an] industry, or ideas which are well known or easily ascertainable, cannot be trade
secrets.’” PrimePay, LLC v. Barnes, No. 14–11838, 2015 WL 2405702, at *21 (E.D. Mich. May
20, 2015) (quoting Allis–Chalmers Mfg. Co. v. Continental Aviation & Eng’g Corp., 255 F. Supp.
645, 654 (E.D. Mich. 1966)). Conversely, “[k]nowledge developed by an employee about how to
address a particular customer’s peculiar needs, or having developed solutions to specialized needs,
can constitute a trade secret.” Id. at *21 (citing Hayes–Albion v. Kuberski, 364 N.W.2d 609
(1985)).
Bullock analogizes the present case to Raymond James & Assocs., Inc. v. Leonard & Co.,
411 F. Supp. 2d 689, 694 (E.D. Mich. 2006), in which the court held that customer lists maintained
by the defendant’s former employer were not trade secrets where the lists were readily
ascertainable from legitimate channels, including the defendant’s memory and own book of
business. Similarly, in Rockwell Med., Inc. v. Yocum, 76 F. Supp. 3d 636, 648 (E.D. Mich. 2014),
the court held that information concerning a pharmaceutical company’s clinical trial protocol was
not a trade secret because this information necessarily would have been disclosed to the patients
involved in the trials, to the physicians conducting the trials, and to the FDA. Id.
Likewise, Bullock maintains that the litigation strategies set forth in Module 9, the
organizational charts, the Corporate Process Guideline, and the releases would be readily
ascertainable through legitimate channels—namely, through the experience of attorneys opposing
FCA in breach of warranty litigation. Def. Mot. at 18. For example, Bullock contends that
information such as the advantages and disadvantages of California warranty law, difficulties FCA
has experienced with respect to experts, and FCA’s settlement strategies may be easily ascertained
15
by experienced plaintiffs’ attorneys. Id. Notably, FCA concedes that this statement “might be
true” with respect to some plaintiffs’ attorneys. Pl. Resp. at 17 n.5 (Dkt. 91).
In response to Bullock’s argument, FCA has come forward with no evidence establishing
the precise nature of the information reflected in Module 9, the organizational charts, the Corporate
Process Guideline, or the releases. FCA has not submitted these documents for the Court’s review.
While FCA previously sought to submit its confidential documents for an in camera review in
connection with its motion for a temporary restraining order, the Court denied the motion on the
ground that FCA’s privacy concerns were adequately protected under the stipulated protective
order. FCA v. Bullock, No. 17-cv-13972, 2018 WL 719179, at *2 (E.D. Mich. Feb. 6, 2018).
Under the protective order, FCA was authorized to seek the Court’s leave to file confidential
information under seal. Stipulated Protective Order at 8 (Dkt. 26). Yet it chose not to do so.
Despite the availability of a sealed filing process, FCA has failed to produce evidence
demonstrating that these documents contain particularized information regarding FCA’s peculiar
litigation strategies, as opposed to mere general knowledge. FCA, therefore, has not met its burden
“to ‘put up or shut up’ on [the] critical issue” of whether these documents constitute trade secrets.
See Cox, 53 F.3d at 149 (quoting Street v. J.C. Bradford & Co., 886 F.2d 1472, 1478 (6th Cir.
1989)).
Because FCA has failed to demonstrate a triable issue that the complaints, Module 9, the
organizational charts, the Corporate Process Guideline, or the releases amount to trade secrets, its
misappropriation claims fail as a matter of law. Summary judgment in favor of Bullock on Counts
II and III is warranted.
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C. Breach of Fiduciary Duty
Count IV of the complaint sets forth a claim for breach of fiduciary duty. FCA maintains
that Bullock breached her fiduciary duties in two ways: (1) by representing plaintiffs in litigation
against FCA almost immediately after her representation of FCA ended, and (2) by copying FCA’s
confidential information after her representation of FCA ended. Pl. Mot. at 21; Pl. Reply at 6.
Bullock, in turn, maintains that FCA has not produced sufficient evidence demonstrating that she
breached a fiduciary duty. Pl. Mot. at 21-22.
“The elements of a fiduciary duty claim are (1) the existence of a fiduciary duty, (2) a
breach of that duty, (3) proximately causing damages.” Delphi Auto. PLC v. Absmeier, 167 F.
Supp. 3d 868, 884 (E.D. Mich. 2016) (citation and intern quotations marks omitted). The existence
of an attorney-client relationship gives rise to fiduciary duties owed by the lawyer to the client,
Fassihi v. Sommers, Schwartz, Silver, Schwartz & Tyler, P.C., 309 N.W.2d 645, 648 (Mich. Ct.
App. 1981), and these fiduciary duties extend to both current and former clients, Alpha Capital
Mgmt., Inc. v. Rentenbach, 792 N.W.2d 344, 355 (Mich. Ct. App. 2010). “Damages may be
obtained for a breach of fiduciary duty when a position of influence has been acquired and abused,
or when confidence has been reposed and betrayed.” Prentis Family Foundation, Inc. v. Barbara
Ann Karmanos Cancer Institute, 698 N.W.2d 900, 908 (Mich. Ct. App. 2005).
The Court first addresses FCA’s claim that Bullock breached her fiduciary duties by
representing plaintiffs in litigation against FCA. An attorney’s representation of a client whose
interests are adverse and substantially related to work performed for a former client can give rise
to an action for breach of fiduciary duty. Alpha Capital, 792 N.W.2d at 355. In determining
whether adverse subsequent employment is substantially related to an attorney’s former
representation, courts typically evaluate three elements: (1) the nature and scope of the prior
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representation, (2) the nature of the present lawsuit against the former client, and (3) whether in
the course of the prior representation, the client might have disclosed confidences which could be
relevant and detrimental to the present action. Id. at 356.
Bullock contends she is entitled to summary judgment on this claim because FCA has
adduced no evidence demonstrating that she breached her fiduciary duties by disclosing or using
FCA’s confidential information in the course of her subsequent representation of plaintiffs against
FCA. Def. Mot. at 21. However, an attorney may breach her fiduciary duties to a client when she
engages in an impermissible conflict of interest by simply representing clients whose interests are
adverse and substantially related to work performed for a former client. See Airgas, Inc. v.
Cravath, Swaine & Moore LLP, No. 10-612, 2010 WL 3046586, at *4 (E.D. Pa. Aug. 3, 2010)
(citing Maritrans GP Inc. v. Pepper, Hamilton & Scheetz, 602 A.2d 1277, 1283-1285 (Pa. 1992)).
Establishing disclosure or use of a client’s confidential information constitutes a means of
demonstrating that an attorney’s breach caused a party to incur damages. See id. at *5, 7 (holding
that a former client plausibly pleaded damages resulting from counsel’s use of the former client’s
financing plans, as well as from costs incurred by the former client in enforcing its counsel’s ethical
obligations and obtaining replacement counsel). Consequently, Bullock is not entitled to summary
judgment with respect to this theory of FCA’s breach of fiduciary duty claim.
FCA, in turn, maintains that it has established all elements necessary to support its breach
of fiduciary duty claim as a matter of law, as Bullock’s representation of plaintiffs adverse to FCA
was substantially related to work she performed on behalf of FCA. Pl. Mot. at 21. In support of
this position, FCA relies on the Eastern District of California’s opinion disqualifying Bullock as
counsel in one of the breach of warranty claims she initiated against FCA. See Arias v. FCA US,
LLC, No. 18-cv-00392, 2018 WL 3419709, at *3 (E.D. Cal. July 11, 2018). In that opinion, the
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court credited FCA’s arguments that Bullock was privy to information necessary to evaluate,
defend, and settle cases on behalf of FCA and that little had changed about the way FCA managed
its cases in the few months that had elapsed since Bullock stopped representing FCA. Id. at *3.
Based on evidence submitted with the motion to disqualify, the court found that Bullock “was
personally involved in providing legal advice and services on a legal issue that is closely related
to the legal issue in the present representation.” Id.
But FCA has cited no authority supporting the notion that the Eastern District of
California’s decision regarding disqualification is binding on this Court with respect to FCA’s
breach of fiduciary duty claim. In any case, it is distinguishable. First, the analysis employed in
disqualification proceedings differs from that employed when evaluating the merits of a breach of
fiduciary claim. Specifically, disqualification proceedings are discretionary in nature and involve
a balancing of various factors including plaintiffs’ right to counsel of their choosing and
preservation of the public trust in the administration of justice. Id. at *2. Second, while the Eastern
District of California premised its finding that Bullock’s representation of FCA was “closely
related” to her representation of the plaintiffs on evidence submitted with the motion, the court did
not describe what evidence was presented. See id. at *3. This Court cannot tell whether the
evidence found by the district court in California supporting disqualification would suffice to
establish an actionable wrong here, potentially subjecting Bullock to significant damages and
possibly being enjoined for some indeterminate period from representing new clients against her
former one.
In connection with the present set of motions, FCA has not proffered evidence permitting
the Court to conclude as a matter of law that Bullock’s representation of plaintiffs against FCA
was substantially related to her prior representation of FCA. FCA has not established with any
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specificity the substance of Bullock’s representation of plaintiffs as compared with her
representation of FCA. Nor has FCA identified with any specificity what confidential information
Bullock supposedly learned in the course of her representation of FCA that could have been
relevant to her subsequent representation of plaintiffs. For example, FCA has not established that
during her representation of FCA, Bullock learned of a particular defect affecting a particular
model of vehicle, and that she subsequently represented a plaintiff in breach of warranty litigation
involving that same defect and the same model of vehicle. And, as discussed above, FCA has
failed to produce the documents reflecting its litigation strategies, thereby preventing the Court
from evaluating whether those alleged confidences may have been relevant to her subsequent
representation of plaintiffs.
Simply put, FCA has not presented evidence demonstrating in concrete terms the degree
of overlap between Bullock’s former representation of FCA and her subsequent representation of
plaintiffs against FCA. In the absence of more detailed information, the Court is unable to
determine as a matter of law that Bullock’s subsequent representation of plaintiffs against FCA is
substantially related to her previous representation of FCA. FCA, therefore, is not entitled to
summary judgment on this theory of its breach of fiduciary duty claim.
Next, the Court turns to FCA’s claim that Bullock breached her fiduciary duties by copying
its confidential files after her representation of FCA ended. FCA has failed to cite any authority
establishing that such conduct, standing alone, amounts to a breach of fiduciary duty.
Consequently, FCA is not entitled to summary judgment on this theory of its breach of fiduciary
duty claim. Bullock, in turn, contends this theory fails because she was permitted access to FCA’s
confidential information for the purpose of defending FCA, and neither FCA nor GOGG ever
requested that she return these materials prior to filing the present lawsuit. Def. Mot. at 21. Similar
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to FCA, however, Bullock fails to cite any authority establishing the legal significance of these
facts with respect to a breach of fiduciary duty claim. Accordingly, Bullock is not entitled to
summary judgment with respect to this theory of FCA’s claim.
D. Motion to Strike
Finally, Bullock seeks to strike FCA’s claims for monetary damages. Bullock maintains
that FCA has not provided computations for each category of damages claimed or produced
documents in support of its claim for monetary damages, in violation of its disclosure obligations
under Federal Rule of Civil Procedure 26(a)(1)(A)(iii). Def. Mot. to Strike at 6. FCA, in turn,
contends that it sufficiently responded that it sustained $317,000 in damages, the amount it
expended on developing its trial strategies. Pl. Resp. to Mot. to Strike at 9-10 (Dkt. 90).
Under Federal Rule of Civil Procedure 26(a)(1)(A)(iii), a party must provide in its initial
disclosures the following information:
[A] computation of each category of damages claimed by the disclosing party—
who must also make available for inspection and copying as under Rule 34 the
documents or other evidentiary material, unless privileged or protected from
disclosure, on which each computation is based, including materials bearing on the
nature and extent of injuries suffered . . . .
Initial disclosures must be based on the information then reasonably available to a party. Fed. R.
Civ. P. 26(a)(1)(E). If a party fails to comply with its obligations under Rule 26(a), Rule 37(c)(1)
provides that “the party is not allowed to use that information or witness to supply evidence . . .
unless the failure was substantially justified or is harmless.” However, Rule 37(c)(1) gives a court
discretion to impose alternative sanctions such as the payment of reasonable expenses including
attorney fees.
In the present action, FCA’s initial disclosures provide that it is “seeking damages in excess
of $317,000,” and referenced the declaration of Kris Krueger, FCA’s senior counsel. FCA Initial
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Disclosures, Ex. 1 to Def. Mot. to Strike, at 7-8 (Dkt. 81-2). In his declaration, Krueger explains
that in 2017 alone, FCA expended over $317,000 with respect to its California breach of warranty
litigation defense and settlement strategies. Krueger Decl., Ex. A to Pl. Resp. to Mot. to Dismiss,
¶ 2 (Dkt. 15-2). He stated this amount is comprised of “expenditures associated with defense
strategy development; meeting with outside California attorneys to implement FCA’s defense
strategies; development of a system to share defense strategies between FCA and California
counsel; and research related to plaintiffs’ network of fraud experts.” Id.
In its response to Bullock’s motion, FCA explains that $317,000 represents an exact figure
for the computation of its damages and that Krueger’s declaration provides the basis for this
amount. Pl. Resp. to Mot. to Strike at 9. Because FCA has provided an exact amount of damages
and a description of the types of costs forming the basis of this figure, it has met its burden under
Rule 26(a). The facts of this case stand in sharp contrast to caselaw cited by Bullock such as
Multimatic, Inc. v. Faurecia Interior Sys. USA, No. 05-60120, 2007 WL 627874, at *7-8 (E.D.
Mich. Feb. 26, 2007), in which the defendant utterly failed to provide an estimate or calculation
of its damages until it “blindsided [the plaintiff] by calculating its damages for the first time in
response to [the plaintiff’s] motion for summary judgment.”
Bullock also contends that FCA failed to produce evidence in response to her discovery
requests seeking documents relating to FCA’s calculation of damages. Bullock received FCA’s
responses objecting to the relevant discovery requests on April 27, 2018. Bullock Disc. Requests,
Ex. 2 to Def. Mot. to Strike, at 41 (Dkt. 81-2). Yet, Bullock did not file a motion to compel or a
motion challenging the sufficiency of FCA’s responses until she filed the present motion to strike
on March 18, 2019—nearly one year after she received FCA’s responses. Although Rule 37 does
not impose a time limitation by which a party must file a motion for sanctions for failure to comply
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with Rule 26, courts have recognized that an unreasonable delay in raising a discovery violation
to the court’s attention results in waiver of that issue. See United States v. Stinson, No. 6:14-cv1534, 2016 WL 8488241, at *5 (M.D. Fla. Nov. 22, 2016) (collecting cases); see also Case
Management & Scheduling Order at 2 (Dkt. 45) (“Any motion to compel discovery must be filed
promptly after the grounds for the motion become apparent and reasonable efforts to resolve
the dispute have been exhausted.”). Bullock offers no explanation for her failure to file a timely
motion to compel during the discovery phase. Because of Bullock’s unreasonable delay, the Court
declines to impose sanctions under Rule 37.
Because FCA did not fail to meet its disclosure obligations under Rule 26(a) and because
Bullock unreasonably delayed in pursuing relief in connection with FCA’s allegedly deficient
discovery responses, the Court denies Bullock’s motion to strike FCA’s claims for monetary
damages.
IV.
CONCLUSION
For the reasons stated above, FCA’s motion for summary judgment is denied (Dkt. 82) and
Bullock’s motion for summary judgment is granted in part and denied in part (Dkt. 80).
Specifically, the Court holds that Bullock is entitled to summary judgment with respect to Counts
I, II, and III of FCA’s complaint but not with respect to Count IV. Finally, Bullock’s pending
motion to strike is denied (Dkt. 81).
SO ORDERED.
Dated: March 13, 2020
Detroit, Michigan
s/Mark A. Goldsmith
MARK A. GOLDSMITH
United States District Judge
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