Gordon Rees Scully Mansukhani Partner Michael Heyden and Senior Counsel Joseph Brenner obtained a complete dismissal of all claims against GRSM’s client in a dispute between two competing companies that operate in the non-profit fundraising space.
GRSM’s client was sued in the Delaware Court of Chancery in relation to its hiring of three California-based employees who had previously worked for its competitor. The client was accused of utilizing these employees to gain access to the competitor’s trade secret and confidential information and interfere with the competitor’s business expectancies. The competitor also named the client’s CEO as an individual defendant, alleging that the CEO had participated in these acts.
The GRSM team entered into extended briefing arguing that (a) there were no plausible allegations in the competitor’s complaint that the client obtained or utilized the competitor’s confidential information; (b) the client’s CEO was not subject to personal jurisdiction in Delaware because the state’s officers and directors’ consent statute does not apply to causes of action that do not involve a company’s internal affairs; and (c) Delaware was an inconvenient forum for a suit that rested on California law and dealt with California evidence.
The Court of Chancery agreed on all counts, finding that the competitor’s complaint did not plausibly allege either a misappropriation of trade secrets or confidential information or a tortious interference with business expectancies. Moreover, the court found that the CEO was not subject to personal jurisdiction for this particular type of suit and that proceeding in Delaware constituted an overwhelming hardship. This result represents a significant victory for a long-term client of GRSM, which has been litigating with the competitor in multiple jurisdictions for several years.
Learn more about GRSM’s Commercial Litigation practice.