In NuCar v. Doyle, the Chancery Court considered the application for attorneys’ fees in connection with a prior finding in April 2005 that the defendants were liable for misappropriation of trade secrets based on conduct that was willful and malicious, although the court did not award legal fees on the other claims that were made. See NuCar Consulting, Inc. v. Doyle, 2005 WL 20706 (Del. Ch., April 5, 2005). The original action was filed in 2002 on July 18th and a TRO hearing was held on July 31, 2002 but the request for a TRO was denied. A trial was held on June 2004 after which the court held that the “form contract and potential client list” were trade secrets under the Delaware Uniform Trade Secrets Act under Section 2004 of Title 6 of the Delaware Code. Because the court found that the defendants willfully and maliciously misappropriated the trade secrets, they were entitled under that statute to reimbursement of reasonable attorneys’ fees in prosecuting the misappropriation of trade secrets claimed. Although the court granted a permanent injunction with regard to the “form contract” it did not grant any injunctive relief as to the potential client list, although it did award damages for misappropriation in the amount of $69,750 related to that client list.
The court observed that there are four general circumstances in which the court has discretion to award attorneys’ fees: (1) Where authorized by statute; (2) Where the applicant creates a common fund or nonmonetary benefit for the benefit of others; (3) Cases where the underlying (pre-litigation) conduct of the losing party was so egregious as to justify an award of attorneys’ fees as an element of damages; and (4) Cases where the court finds that the litigation was brought in bad faith and a party’s bad faith conduct during the litigation increased the costs of litigation.
In this case, fees are authorized by statute; specifically Section 2004 of Title 6 of the Delaware Code, the Delaware Trade Secrets Act. This provision allows the prevailing party to recover reasonable attorneys’ fees if the opposing party willfully or maliciously misappropriates trade secrets. The court also addressed arguments regarding its award of costs. It determined that it needed to review three statutory sections to determine whether costs could be awarded; namely Sections 5101, 5102 and 5106 of Title 10 of the Delaware Code, as well as Chancery Court Rule 56(d). The court found that reading all of those statutory sections together, it had the discretion to award costs in an appropriate case. But, the court found that Section 5102 bars a party from recovering costs if the plaintiff files the action in a county other than where the defendant resides. Although the court still had discretion to award costs under Section 5106, it found that it would not do so in this case.
The court spent considerable care and attention in parsing the various time charges of the attorneys seeking fees, and tried to apportion those charges to the limited claims in which fees were awarded, as opposed to all the various claims and defenses that were litigated throughout the proceedings. Based on a total amount of fees requested of over $132,000, the court awarded just over $60,000 in fees and no costs.