Winning on appeal can sometimes spawn further litigation, including the launching of a malicious prosecution action. Indeed, if your client has prevailed in defeating a Uniform Trade Secrets Act (“UTSA”) case, been awarded attorney fees because the trial court found that action was brought in bad faith by the former employer, and the trial court’s decision upheld on appeal, malicious prosecution jumps out as the next logical step, right?
Maybe not. According to the California Supreme Court’s recent decision in Parrish v. Latham & Watkins, 2017 DJDAR 7724 (8/10/17), it all depends on whether your client (the former employee) brought a motion for summary judgment (or other ruling on the merits but not on technical or procedural grounds) which the former employer defeated on the merits (made a minimal showing of issues of fact requiring trial). In Parrish, a former employer sued former employees for misappropriation of trade secrets under the UTSA. After defeating the employees’ motion for summary judgment on flimsy evidence but albeit arguably meritorious, the employer lost a full evidentiary trial because the employer was shown to have no factual basis for bringing the action and did so for anti-competitive reasons. The former employees obtained substantial attorney’s fees on the grounds of bad faith as defined in the UTSA. Then, of course, they filed a malicious prosecution action against the employer’s lawyers. But that action was dismissed by way of an anti-SLAPP motion.