Defend Trade Secrets Act Gets Early Test In Florida Suit

By Mark Romeo on May 17, 2016Posted in U.S. Litigation

In M.C. Dean Inc. v. City of Miami Beach Florida et al., Case No. 1:16-cv-21731, in the U.S. District Court for the Southern District of Florida, a subcontractor for the Miami Beach Convention Center renovation project, sued the City of Miami Beach, accusing the city of improperly giving the International Brotherhood of Electrical Workers, Local 349 union confidential M.C. Dean employee records regarding their technical qualifications, which the company claims are valuable trade secrets not normally given out to unions.   

Significantly, the plaintiff sued under the recently enacted Defendant Trade Secrets Act of 2016, in addition to a claim under the Florida Uniform Trade Secrets Act.  There were no other state law tort claims asserted in the complaint filed on May 16, 2016.

In its complaint, M.C. Dean alleged that on March 21, 2016, a city clerk improperly disclosed certain information to the Union, and that M.C. Dean learned of the alleged wrongful disclosure on the morning on March 22, 2016, yet the Union refused to return the information to the City.  According to M.C. Dean, these acts constitute a misappropriation of its trade secrets.

While it is uncertain whether the information allegedly misappropriated rises to the level of a trade secret, under either the DTSA or federal state law, unless the allegations of misappropriation occurred after May 11, 2016, the DTSA claims should be dismissed.  This is because under 18 U.S.C. Section 1836, the DTSA provides: “(e) Effective date.—The amendments made by this section shall apply with respect to any misappropriation of a trade secret (as defined in section 1839 of title 18, United States Code, as amended by this section) for which any act occurs on or after the date of the enactment of this Act.”  (Italics and underlining added for emphasis.)  And, as noted in our ealier post , President Barack Obama signed into law the DTSA on May 11, 2016.

Thus, it is likely that M.C. Dean’s DTSA claim will be short-lived, although since the plaintiff asserted jurisdiction under both the DTSA and diversity of citizenship, the dismissal of the DTSA claim would not likely result in the federal court being divested of jurisdiction over the otherwise purely state law claims.

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