Interesting new case in California

Hooked Media Group, Inc. v Apple, Inc. (May 2020) 55 Cal.App.5th 323

2.  Who is the plaintiff or movant?  Who is the defendant or respondent?

            Plaintiff is Hooked Media “a startup company.”

            Defendant is Apple, Inc.   

3.  Exactly what relief has the plaintiff requested?

            Damages.    

4.  What is the legal basis for the request?

            “fraud; misappropriation of trade secrets; interference with contract and prospective economic advantage; aiding and abetting breach of fiduciary duty; unfair business practices; and unjust enrichment.”

5.   What facts does the plaintiff provide that support the request?

            Hooked Media approached Apple to see if Apple would acquire it.  Apple expressed interest.  After a few meetings in which Hooked Media disclosed trade secrets, Apple said it wasn’t interested in acquisition but was interested in certain employees.  Shortly thereafter Apple hired the company’s Chief Technical Officer and two other key engineers.  Apparently that was the guts of the company.                     

6.   How did the case end at the trial court level?

            The trial court granted summary judgment for Apple.  Court of Appeals affirmed. 


7.  What standard did the court use to resolve the issue?

            No material facts at issue.  Apple has a right to judgment as a matter of law.          

8.   What is the defendant’s opposition? 

            Apple said it refused to sign a non-disclosure agreement at the outset.  It did not lie about anything especially about its intent to buy Hooked.  The employees it hired were “at will” so it did not interfere with anything.   The people it hired did not owe fiduciary duties to Hooked.  Hooked voluntarily disclosed what it disclosed.  Apple did not actually use the “secrets” and the employees did not actually take anything from Hooked.                   

9.   Who won and Why?  What is the court’s reasoning for giving the plaintiff what she requested or denying the request. 

            The trial court said that the statements made alleged to be false were about things to happen in the future so Hooked must show evidence that Apple did not intend to perform from the outset.  The court commented that California has many laws about employees being able to freely move from one employer to another.  Covenants not to compete are generally unenforceable.  It said much of Hooked’s arguments were really trying to create a covenant not to compete.   As to aiding and abetting and unfair business practices, there were no “bad acts,” therefore those causes of action failed.  Unjust enrichment is not a cause of action; it’s a remedy.    

            Note, there may still be claims against the individuals who left.

            Note 2, the California Supreme Court has agreed to review this (I think).

            Note 3, the parties apparently did a ton of discovery before the summary judgment motion.  Apple alleged it spent $360,000 just in costs during discovery, i.e., not including attys fees.    

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