Damages Category Archives — Page 2 of 2 — The Virginia Business Litigation Blog Published by Virginia and Washington, D.C. Litigation & Appeals Attorney

August 15, 2013

Damages Must Be Proven With Reasonable Certainty

A plaintiff must prove his damages claim with reasonable certainty by providing sufficient facts and circumstances to allow the fact finder to make an intelligent and probable estimate of the damages sustained. In Crum v. Anonymizer, the Fairfax Circuit Court refused to modify a jury verdict awarding the plaintiff less than he contended he was owed when the court found he failed to present sufficient evidence of his damages.

In Crum, the jury found that Anonymizer, Inc. had breached its Sales Incentive Plan when it capped Daniel Crum’s total commissions and cut his commission percentage from 6% to 3%. The jury awarded Crum $139,458.17 in damages, but it determined that Crum had not proven his breach of contract claim with regard to post-termination commissions.

Crum made a Motion for Judgment Notwithstanding the Verdict, asserting that the Sales Incentive Plan contained the only conditions he had to satisfy to earn commissions and that no evidence had been presented that he had failed to satisfy those conditions. Crum contended that the only evidence shown was that Anonymizer stopped payments once it no longer employed Crum. Anonymizer produced evidence that corporate practice was to stop paying sales commissions after termination, but there was no evidence that continued employment was a condition of the Sales Incentive Plan. Accordingly, Crum argued that the jury had no basis to conclude that continued employment was a condition and should have awarded him damages on his post-termination claim.

August 5, 2013

Remedies Scrutinized in Trade Secrets Case Even After Default

by Lee E. Berlik

The allegations in Autopartsource, LLC v. Bruton presented a fairly egregious case of stolen trade secrets. Due to a defendant’s failure to answer, those allegations were deemed true. As remedies, Autopartsource sought $1,131,801.55 in compensatory damages, $350,000 in punitive damages (the statutory maximum), $59,409.72 in attorneys’ fees and costs, a worldwide production injunction to last seven years, and a permanent injunction prohibiting the use of Autopartsource’s trade secrets. The court held an evidentiary hearing and ruled that while Autopartsource was entitled to an injunction and substantial damages, the scope of the requested injunction would be narrowed and the damages would be reduced.

Autopartsource designated employee Stephen Bruton to spearhead the company’s effort to develop business in China, where it sources its automobile parts. Bruton secretly developed his own competing business, BBH Source Group, and misappropriated Autopartsource’s trade secrets in doing so, using them to redirect prospective Autopartsource customers to BBH. After Autopartsource discovered Bruton’s actions and fired him, Bruton broke into an Autopartsource facility and deleted proprietary information from its database.

Autopartsource sued for violation of the Virginia Uniform Trade Secrets Act, tortious interference with business expectancy, and tortious interference with contract. The court found that Autopartsource had established liability on all three theories but that, under Virginia law, it could not recover damages under both VUTSA and its claim for tortious interference with business expectancy, as a party cannot receive damages for a common law tort if the underlying conduct involves an intentional misappropriation of a trade secret.

March 19, 2013

How Much Is Your Emotional Distress Worth?

by Lee E. Berlik

Federal laws protect whistleblowers from retaliation because the government wants people to report fraud in government contracts. When Weihua Huang, a principal investigator on a National Institutes of Health (NIH) research grant at the University of Virginia, discovered unauthorized changes that diverted grant money to unrelated salaries and expenses, he reported it to the head of UVa’s Department of Psychiatry and Neurobehavioral Sciences. Soon thereafter, he was told his employment contract wouldn’t be renewed. Huang sued for False Claims Act retaliation and won a jury verdict of $159,915 in lost wages plus $500,000 in compensatory emotional-distress damages. Not surprisingly, the defendants (Huang’s supervisor Dr. Ming D. Li, and Department Chair Dr. Bankole A. Johnson) asked the court to reduce the damages award as excessive.

Specifically, the defendants invoked a process known as remittitur, asking Judge Norman K. Moon to either reduce the emotional distress damages to $10,000, or order a new trial. They pointed out that the only evidence of emotional distress was Huang’s own unsupported testimony. There was no evidence, for example, of medical treatment or other corroborating evidence. They argued that where the injury consists of emotional distress, the Fourth Circuit usually finds six-figure damages awards excessive when not supported by medical evidence.

A jury’s compensatory damages award will be considered excessive if it is “against the clear weight of the evidence or based on evidence which is false.” Under Rule 59(a) of the Federal Rules of Civil Procedure, if a plaintiff won’t accept a trial court’s reduction of an excessive jury award, the court can order a new trial.