Affirming dismissal of an unjust enrichment claim, the U.S.
Court of Appeals for the Second Circuit upheld a summary judgment
for the defendant concluding that plaintiffs-appellants had failed
to state a claim for misappropriation of a trade secret when they
pleaded a claim for relief for unjust enrichment based on the
alleged misappropriation. The 2d Circuit agreed with the district
court that a basic element of an unjust enrichment claim indicates
a showing of a relationship between the parties, not merely a claim
"predicated on misappropriation of a trade secret."
Grynberg v. Eni S.p.A., Case No. 11-3846 (2d Cir., Nov.
20, 2012) (summary order).
Jack J. Grynberg and his family-owned companies sued Eni S.pA.
in the United States District Court for the Southern District of
New York for unjust enrichment alleging Eni used Grynberg's
estimate of oil reserves in a Kazakhstan oil field to successfully
bid (jointly with British Gas, in 1992) for the development of the
oil field. Earlier, Grynberg had told British Gas that they
estimated the recoverable oil in the field to be about 12 billion
barrels, while Eni had estimated the oil reserves at around 2
billion barrels. Eni and British Gas used an estimate of more than
15 billion barrels in their winning bid. Grynberg did not make a
bid for the oil field. Grynberg had sued British Gas on the same
issue in 1992 and reached a settlement in 1995, but then filed this
suit against Eni in 2006.
The district court concluded that Grynberg had to prove the
basic elements of an unjust enrichment claim under New York law,
i.e., that "(1) defendant was enriched, (2) at
plaintiff's expense, and (3) equity and good conscience
militate against permitting defendant to retain what
plaintiff is seeking to recover." Also as a threshold matter,
Grynberg was required to show that an actual or substantive
relationship existed between the parties. Given the quasi contract
nature of an unjust enrichment claim, direct contractual privity is
not required, but the connection between the parties cannot be too
attenuated. The district court found that there had been no
communication between Grynberg and Eni, and that Grynberg had
failed to provide any evidence that Eni had received the
contentious information from British Gas. Therefore, since Grynberg
had not met the threshold for an unjust enrichment claim, the
district court dismissed his claim. Grynberg appealed.
The 2d Circuit agreed with the district court that Grynberg had
failed to claim misappropriation of a trade secret. Moreover, the
court found that the defendant Eni would have still prevailed on
summary judgment even had the district court considered the merits
of the alleged trade secret claim, because Grynberg had failed to
show that Eni had any notice that the information it purportedly
received from the joint venture with British Gas was in breach of a
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On May 5, 2016, the White House issued a report largely piggybacking on a recent U.S. Treasury Department study, on which we previously posted, with a primary focus on the purported misuse and negative impacts of non-compete agreements.
On May 11, President Obama signed the Defend Trade Secrets Act [S.1890], which for the first time creates powerful federal civil equitable and monetary remedies for trade secret misappropriation involving interstate commerce.
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