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U.S. Court of Appeals Orders New Trial in Trade Secrets Case
The U.S. Court of Appeals for the Eleventh Circuit issued its opinion in Peat v. Vanguard Research, a trade secrets case arising out of a marketing and license agreement between the parties to create plasma energy systems. After a two week trial, the jury found that Vanguard Research, Inc. breached its contract with PEAT, Inc. and appropriated PEAT's trade secrets in violation of the Alabama Trade Secrets Act, Ala. Code §8-27-1 etseq. The jury awarded PEAT $325,981.01 in compensatory damages on the breach of contract claim, as well as $1,819,334.00 in compensatory damages and $8,890,000.00 in punitive damages on the trade secrets claim. The U.S. District Court for the Northern District of Alabama, D.C., denied Vanguard's motions for judgment as a matter of law and for a new trial, but reduced the punitive damages award to $78,000.00.
Vanguard appealed the judgment on the trade secrets claim, but not the verdict or award on the breach of contract claim. The critical issue was whether PEAT Exhibit 145, a compilation of documents purporting to list PEAT's trade secrets, had been improperly admitted as a Rule 1006 summary exhibit entitling Vanguard to a new trial. Vanguard argued that Exhibit 145 was not admissible as a business record under Rule 803(6) because it was not prepared in the ordinary course of business and was based on inadmissible hearsay. PEAT sought to introduce Exhibit 145 by relying on Rule 1006 which provides, in part, that "the contents of voluminous writings, records, or photographs which cannot conveniently be examined in court may be presented in the form of a chart, summary, or calculation [.]"
The U.S. Court of Appeals for the Eleventh Circuit reluctantly concluded that the District Court erred in admitting Exhibit 145, and that the error was sufficiently prejudicial to require a new trial.
For a copy of the opinion, visit: