Readers looking for a short overview of the litigation process in state and federal courts in New York can consult the article linked here by Dewey Pegno & Kramarsky LLP. The article succinctly explains the structure of the civil court system, the roles of judges and juries, limitations, pre-action considerations, commencement of proceedings, evidence presentation, interim remedies, available remedies, enforcement mechanisms, class actions, appeals, and recognition and enforcement of foreign judgments, among other topics.

For information about how CASTAYBERT PLLC can assist you with commercial litigation and arbitration, click here and here.

July 20, 2023

This May in Syntel Sterling Best Shores Mauritius Ltd. v. TriZetto Grp., Inc., the U.S. Court of Appeals for the Second Circuit ruled on the availability of damages in cases involving trade secrets under the Defense Trade Secrets Act (the “DTSA”).

The dispute in Syntel involved the theft of a trade secret related to healthcare insurance software against a rival software company. The Second Circuit affirmed the lower court’s finding that Syntel stole trade secrets from TriZetto under the DTSA, but the Second Circuit vacated the jury’s $285 million award for compensatory damages for avoided development costs, i.e., the costs the trade secret holder spent which the thief of the secret saved.

Typically, under the DTSA, avoided costs are recoverable as damages for unjust enrichment. But in Syntel, the Second Circuit vacated the jury’s award of avoided costs, reasoning that such damages are only available when a party’s injury “is not adequately addressed by lost profits”.

The Restatement (Third) of Unfair Competition and most States have adopted a rule that allows avoided costs as a damages measure in trade secret cases. New York is the only state that has not passed a version of the Uniform Trade Secrets Act (“UTSA”) that explicitly allows avoided cost damages. As New York is a major hub of nearly every industry, many are urging New York to finally pass legislation following the USTA and ensure that parties have equal access to equitable remedies.

To read the full opinion in Syntel Sterling Best Shores Mauritius Ltd. v. TriZetto Grp., Inc., click here.

To read how Castaybert PLLC can assist you in employment and IP trade secret matters, click here and here.

March 28, 2023

A recent article from Proskauer highlights several “extraordinary verdicts” for plaintiffs in recent trade secret cases. The trend is being seen across industries:

  • Appian Corp. v. Pegasystems Inc., No. 2020-07216 (Va. Cir. Ct. Fairfax Cty. May 9, 2022) (Software);
  • Versata Software Inc. v. Ford Motor Co., No. 2:15-cv-10628 (E.D. Mich. Oct. 26, 2022) (Automobile Industry);
  • Coda Development SRO v. Goodyear Tire & Rubber Co., No. 5:15-cv-1572 (N.D. Ohio Sept. 19, 2022) (Manufacturing);
  • Comet Technologies USA Inc. XP Power LLC., No. 20-cv-86408 (N.D. Cal. Mar. 23, 2022) (Industrial Equipment);
  • Epic Systems Corp. v. Tata Consultancy Services, Ltd., No. 14-cv-748 (W.D. Wisc. July 1, 2022) (Aerospace).

These recent jury awards are notable because of their large scale, but also because they rely on a theory of unjust enrichment available under the Defend Trade Secrets Act (“DTSA”) and state statutes that focus on “avoided development costs.” Juries are awarding damages for sunk costs of time and money spent by the trade secret owner in the creation and development of their trade secrets.

18 U.S.C. §1836(b)(2) and The Uniform Trade Secrets Act (“UTSA”) allow for additional “damages for unjust enrichment caused by misappropriation of the trade secret that is not addressed in computing damages for actual loss.” When applying this theory of unjust enrichment, damages are often considered “avoided costs.” Parties found liable for misappropriation are liable for the development costs they avoided by misappropriating the trade secret.

The article encourages litigants to consider using expert testimony for the calculation of damages and stresses the impact this testimony can have on helping a jury understand what has been lost. Experts can help translate the minutia of differences between the benefit conferred to the misappropriating party and what might have occurred had they acquired the trade secret through lawful means, in a way that juries will be able to understand and assess.

The authors note that in pleading, the scope of the “trade secrets” the claim should not be unnecessarily narrow and must identify the alleged trade secrets with sufficient specificity to avoid early dismissal for ambiguity and vagueness.

To read Proskauer’s “Lessons Learned From 2022’s Trade Secret Verdicts,” click here.

To learn more about how Castaybert PLLC can assist you with disputes involving claims of trade secret misappropriation, click here.

March 28, 2023

JAMS ADR Blog recently proposed a new concept for dispute resolution, Mediated Evaluations. This new form of alternative dispute resolution (ADR) could offer parties more in-depth analysis on the merits of their arguments, and better position them to resolve their disputes while addressing all important issues.

As JAMS describes it, the structure of a Mediated Evaluation is divided into three parts: the case submission, the case evaluation, and the case mediation:

  • In phase one, parties would submit their initial written statements to the Mediation Evaluator (ME) and respond to the opposing party’s preliminary statement within 15-30 days. Then, the ME would read and begin to evaluate both parties’ positions, requesting any necessary supporting materials.
  • During the second phase, the ME provides either a joint or confidential determination based on the arguments of both sides. This second phase also involves the ME providing feedback to the parties and advising them of which points in their initial arguments require further work or clarification.
  • The final, third phase of the Mediated Evaluation involves the parties choosing whether to meet with the ME ex parte or jointly for the ultimate evaluation, designed to assist them in negotiating their dispute.

The ME remains available to the parties until a resolution or settlement is met.

Mediated Evaluations are an option for parties to consider when they require more input on the issues than a mediator can provide during the course of a more typical mediation.

For further insight into this new JAMS offering, read the full blog post by John W. Hinchey here.

To learn how Castaybert PLLC can assist you with mediation, click here.

 

 

January 20, 2023 –

André Castaybert, principal attorney at Castaybert PLLC, has received a “Preeminent” AV rating in ethical standards and legal ability from the 2023 Martindale-Hubbell peer review.  This is the highest possible honor that Martindale-Hubbell can bestow upon an attorney.  This marks 10 consecutive years that André has received this award.

August 3, 2022 —

On July 19, the Delaware Supreme Court contributed to a wave of recent jurisprudence that grants stockholders greater access to corporate records under Section 220 of Delaware General Corporation Law (DGCL). In NVIDIA Corp. v. City of Westmoreland Policy and Fire Retirement System, Del. Supr., No. 259, 2021 (July 19, 2022), a divided bench held that the “credible basis” standard of evidence to obtain corporate records for a “proper purpose” under Section 220 may be satisfied by “reliable hearsay.”

For more information about the decision, click here.

To read about how Castaybert PLLC can assist in navigating commercial litigation and arbitration, click here.

  • New York offers a great number of arbitrators and advocates with extensive experience in complex commercial matters in both domestic and international settings.
  • New York attorneys are familiar with cross-cultural perspectives and industry practices and customs.
  • Many attorneys, such as André Castaybert of Castaybert PLLC, are bilingual or multilingual. (Mr. Castaybert is fluent in French.)
  • Most influential ADR institutions, such as the International Court of Arbitration, the International Centre for Dispute Resolution, and the CPR International Institute for Conflict Prevention and Resolution, are located in New York.

 

To learn more about international arbitrations in New York, check out the NYIAC website here.

To learn more about Castaybert PLLC’s arbitration practice, click here.

  • New York offers a well-established body of law providing a reliable platform for adjudicating and resolving disputes.
  • In New York, the arbitrators have authority to determine whether there is arbitral jurisdiction, so long as parties showed an intention to resolve matters in arbitration.
  • New York arbitrators have authority to decide on defenses to arbitrability without court interference.
  • Arbitrations in New York are not subject to United States discovery practices, which may be burdensome and time-consuming.
  • The New York State Bar Association (NYSBA) has adopted a policy to conduct international arbitrations in accordance with internationally accepted practices.
  • New York offers many experienced arbitrators of diverse backgrounds, minimizing potential conflicts of interest.
  • New York has state and US federal statutory and common law that favor arbitration as a matter of public policy, eliminating hurdles in enforcing arbitration agreements.

To learn more about international arbitrations in New York, check out the NYIAC website here.

To learn more about Castaybert PLLC’s arbitration practice, click here.

A HIGHLY REGARDED BODY OF CONTRACT LAW

  • New York offers a well-established body of law providing a reliable platform for commercial transactions and adjudicating business disputes.
  • The parties have few limits on structuring their contractual relationships and allocating risks.
  • There is a strong public policy in favor of arbitration, favored by both federal and state courts, eliminating hurdles in enforcing arbitration agreements.
  • Commercial parties may agree to waive certain procedural laws and practices such as a right to a jury trial.
  • New York law has an established principle of a duty of good faith and fair dealing in contractual relationships. The parties’ expectation is an element considered by the courts in making a decision.

 

EXPERIENCED COURTS AND ARBITRATORS

  • New York Judges and arbitrators frequently decide cross-border disputes and have gained broad experience applying New York law in different commercial contexts. The New York State’s Commercial Division and arbitrators are well equipped to handle international and domestic commercial cases.
  • New York also has a wide selection of attorneys and law firms that specialize in resolving commercial disputes that are familiar with cross-cultural perspectives and industry practices and customs.

 

INTERNATIONAL AND INTERSTATE DISPUTES

  • The United States is a party to major international treaties and free trade agreements. New York courts apply widely accepted international arbitration standards in cross-border arbitrations.
  • New York’s courts permit consideration of international customs and practices in cross-border disputes, and legislations tend to implement international trade customs.
  • New York’s public policy and judicial decisions articulate and establish commercial principles and specialized jurisprudence in fields such as banking and finance, cross-border transactions, and long-term exclusive dealings contracts.
  • Foreign corporations have few limits on commencing legal proceedings in New York’s courts, so long as the forum is not considered to be inconvenient for the parties. In cases where the parties have agreed to the application of New York law and where the amount in controversy meets the threshold, New York will provide a forum to the foreign party.

 

REALIABLE AND PROMPT ENFORCEMENT 

  • In accordance with various international conventions to which the United States is a party, commercial arbitral awards issued in any of the countries that ratified the agreement may be enforced in the United States. New York courts enforce foreign arbitral awards under conventions that bind the United States as a party.
  • New York has enacted laws such as a version of the Uniform Foreign Country Money-Judgments Recognition Act requiring New York courts to recognize and enforce monetary judgments of foreign courts with certain exceptions, thereby facilitating the enforcement of foreign judgments.
  • New York arbitral awards and court judgments granting declaratory, injunctive, or compensatory relief are widely enforceable outside the United States. 

 

DAMAGES AND REMEDIES

  • Parties may provide for allocation of attorneys’ fees in connection with the litigation or arbitration of contractual disputes.
  • Court-ordered provisional remedies such as attachment, preliminary injunction, and receivership are available when warranted. New York law provides for attachment and injunction in domestic and international arbitrations.
  • New York courts generally uphold contractual provisions limiting damages or excluding indirect damages.

 

PROTECTION OF COMMERCIAL INTERESTS

  • New York law protects security interests by upholding security agreements against collateral purchasers and creditors.
  • New York recognizes and protects third-party beneficiary rights by allowing third-party claims under specified circumstances.

 

To learn more about how CASTAYBERT PLLC can assist you in arbitrations, click here. 

June 21, 2022 — André Castaybert, principal attorney at Castaybert PLLC, has become a member of the American Foreign Law Association (AFLA). The AFLA is an organization dedicated to “promot[ing] the understanding and application of foreign, comparative and international law.”

“For more than eighty years, AFLA has addressed current issues of importance to those in the legal profession. With the recent globalization of business, trade and finance, an understanding of international law is more critical for more attorneys than at any other time in AFLA’s history. Many AFLA members have studied or practiced law in more than one country and many are fluent in multiple languages. AFLA members include practitioners, judges, legal scholars and legal officers of international organizations including the United Nations.”

You can read more about the AFLA’s history and mission here.

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