9-5 JOINT AND SEVERAL LIABILITY FOR MULTIPLE TRADE SECRET DEFENDANTS

• Jurisdiction: United States

9-5 Joint and Several Liability for Multiple Trade Secret Defendants

Texas follows a modified joint and several liability approach under which a defendant whose responsibility is determined to be greater than 50 percent can be held jointly and severally liable to the claimant for damages with respect to that cause of action.⁸⁹ However, if there are multiple defendants allocated 50 percent or less of the responsibility, then those defendants are only liable up to the percent of damages attributed to them.⁹⁰ In Sharyland Water Supply Corp. v. City of Alton, for instance, the Texas Supreme Court overturned a finding of joint and several liability where three defendants held responsibility of 40 percent, 40 percent, and 20 percent.⁹¹ These rules have expressly been held to apply in the context of trade secret misappropriation.⁹²

In one unique Texas case, the jury awarded the corporate co-defendant $4.4 million in damages for its misappropriation of the plaintiff's trade secrets.⁹³ The jury also found that the two individual co-defendants (who were former employees of the plaintiff) had also misappropriated trade secrets, but attributed zero percent of the proportionate responsibility for the plaintiff's harm to them.⁹⁴ The trial court nevertheless granted the plaintiff's request to hold the individual defendants jointly and severally liable for the entire $4.4 million along with the corporate defendant.⁹⁵ The court of appeals, however, reversed the trial court's determination of joint and several liability for the individual defendants, holding that the $4.4 million in damages against the corporate defendant could not be attributed to the individual defendants because the jury's damage award was solely based on misappropriation by the corporate defendant.⁹⁶

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Notes:

^[89] Tex. Civ. Prac. & Rem. Code Ann. § 33.013(b).

^[90] Tex. Civ. Prac. & Rem. Code Ann. § 33.013(a).

^[91] Sharyland Water Supply Corp. v. City of Alton, 354 S.W.3d 407, 424 (Tex. 2011).

^[92] Hunter Bldgs. & Mfg., L.P. v. MBI Glob., L.L.C., 436 S.W.3d 9, 15 (Tex. App.-Houston [14th Dist.] 2014, pet. denied) (Texas proportionate responsibility laws apply in actions for trade secret misappropriation).

^[93] Hunter Bldgs. & Mfg., L.P. v. MBI Glob., L.L.C., 436 S.W.3d 9, 13 (Tex. App.-Houston [14th Dist.] 2014, pet. denied).

^[94] Hunter Bldgs. & Mfg., L.P. v. MBI Glob., L.L.C., 436 S.W.3d 9, 15 (Tex. App.-Houston [14th Dist.] 2014, pet. denied).

^[95] Hunter Bldgs. & Mfg., L.P. v. MBI Glob.,...