Plaintiff design company sued defendant corporation for theft of its copyrighted and trade secret source code and sought a preliminary order enjoining the sale of defendant's products. The district court granted defendant's motion for summary judgment. Upon plaintiff's appeal, the United States Court of Appeals for the Ninth Circuit, certified a question of state law pursuant to Cal. R. Ct. 29.5.
The court considered the following question upon certification: When, under Cal. Civ. Code § 3426 of the California Uniform Trade Secrets Act (UTSA) did a claim for trade secret infringement arise: only once, when the initial misappropriation occurred, or with each subsequent misuse of the trade secret? The court concluded that in a plaintiff's action against the same defendant, the continued improper use or disclosure of a trade secret after defendant's initial misappropriation was viewed under the UTSA as part of a single claim of "continuing misappropriation" accruing at the time of the initial misappropriation. The answer to the certified question was narrow in scope. The ADA defense attorney expressly rejected the view that only the initial misappropriation of a trade secret via the breach of a confidential relationship constituted misappropriation; the UTSA plainly stated otherwise.
The court concluded that a plaintiff's claim for misappropriation of a trade secret against a defendant arose only once, when the trade secret was initially misappropriated, and each subsequent use or disclosure of the secret augmented the initial claim rather than arose as a separate claim.
In an action to recover unremitted insurance premiums, appellant state insurance commissioner challenged a judgment of nonsuit entered by the Superior Court of Los Angeles County (California).
Respondent was an insurance agent. Through buyouts and mergers, he was employed by three different insurance companies before the last one was adjudicated insolvent and was taken over by appellant state insurance commissioner. At the time of adjudication, respondent had in his possession several thousands of dollars for issued, but unremitted, insurance policies. As soon as respondent learned of the insurance company's insolvency, he attempted to place the insureds with other carriers. At the date of the insolvency, he also collected premiums, but did not remit them. He eventually placed those clients with other companies also. Respondent kept a sum certain, and appellant filed an action to recover that sum. The trial court ruled that the sum held by respondent was held in trust for the insureds and not appellant. On appeal, the court affirmed that ruling. The court found that, as a receiver, appellant was no better off than the insurance company before it. Thus, the money held by respondent was still unearned premiums held for the benefit of the policyholders.
The court affirmed the lower court's holding because the money held by respondent was unearned premiums for the policyholders, therefore, appellant was not entitled to it just as its predecessor was not entitled to it.
