Texas Supreme Court docket Confirms that HouseCanary Should Fly Towards a $201 Million Judgment or a Retrial | Seyfarth Shaw

texasOn June 17, 2022, the Texas Supreme Court docket affirmed a decrease appellate court docket’s determination, (which we beforehand wrote about right here), which nixed the plaintiff’s $740 million commerce secret win at trial and required the plaintiff to both settle for a $201 million breach of contract win (which the defendant decried as “jackpot justice”) or return to trial on all claims.

Briefly, actual property startup HouseCanary introduced swimsuit towards Title Supply, Inc., now often known as Amrock, alleging misappropriation of commerce secrets and techniques below the Texas Uniform Commerce Secrets and techniques Act (TUTSA), fraud, and breach of contract. At trial, the jury awarded HouseCanary $740 million on its TUTSA and fraud claims and $201 million on its breach of contract declare. HouseCanary might elect to get well one or the opposite, and it elected to get well the $740 million. On attraction, the decrease appellate court docket reversed the trial court docket determination relating to TUTSA and fraud primarily based on deficiencies within the jury cost. The appellate court docket then discovered that the TUTSA, fraud, and breach of contract claims have been inseparable, leaving HouseCanary with two choices: to retry all of its claims or get well solely the $201 million awarded on the breach of contract declare.

HouseCanary sought evaluate from the Texas Supreme Court docket. In its petition for evaluate, HouseCanary argued that the decrease appellate court docket misconstrued TUTSA by holding that the statute precludes claims primarily based upon alleged contractual breaches that occurred after Title Supply had already acquired HouseCanary’s commerce secrets and techniques. HouseCanary argued that Title Supply’s conduct constituted “reverse engineering,” which it described “as an iconic instance of ‘improper means’” below TUTSA. HouseCanary additionally argued that the decrease appellate court docket “misinterpret the evidentiary document” in reaching its conclusion as a result of the “acquisition of secrets and techniques adopted from (somewhat than preceded) [Title Source’s alleged] breach.” HouseCanary additional challenged the decrease court docket’s ruling on fraud, arguing that the decrease appellate court docket’s discovering that the fraud declare was preempted by TUTSA was faulty and by no means raised by Title Supply under.

Title Supply’s successor, Amrock, filed a cross-petition, reviewed that if the Texas Supreme Court docket the decrease appellate court docket’s determination, it ought to go additional and wipe out the $201 million breach of contract award as properly. Amrock criticized the judgment as “a return of ‘jackpot justice’ in Texas” and characterised HouseCanary’s damages proof at trial as “hypothesis and wishful considering.”

In orders issued on June 17, the Texas Supreme Court docket denied each HouseCanary’s petition and Amrock’s cross-petition, with out rationalization. Accordingly, the decrease appellate court docket’s determination will stand and HouseCanary will presumably weigh whether or not to proceed with a $201 million judgment or take a shot at retrying the complete case.

Leave a Comment