Blawgletter likes Associate Justice David Souter.  Lots of people do.  Today he gave us further reason.  

He wrote for his former court of appeals:

 SOUTER, Associate Justice. Three principals organized the appellant, Take It Away, Inc., to act as a broker in a contemplated business of supplying dumpsters that do-it-yourselfers could rent from the appellee, The Home Depot, Inc., and like retailers. In a document called a “teaser,” mailed to a Home Depot official in 1997, Take It Away hopefully described itself as a “Nationwide Association” of waste haulers and others, with a “Retail Distribution Channel for renting Construction & Demolition Debris Removal Containers” (i.e., dumpsters), which was prepared to form “Strategic Partnerships” with building material supplies dealers like Home Depot. Take it Away would “provid[e] all the tools,” apparently dumpsters, “for [Home Depot] to capture [its] share of this immense untapped market,” presumably by renting the dumpsters to its customers. The statement described itself as confidential, and when the recipient at Home Depot agreed to have discussions he signed a “non-disclosure agreement” prepared by Take It Away, pledging that Home Depot would “utilize the Confidential Proprietary Information” to be disclosed “for the sole purpose of evaluating the business of [Take It Away] and [would] make no other use” of it without permission.

 

The information actually disclosed was a proposal that the association, Take It Away, would supply dumpsters (obtained, one supposes, from its associated trash haulers) that Home Depot would rent directly to its customers, pocketing ten percent of the charge and remitting the balance to Take It Away. Home Depot was not interested in becoming a dumpster lessor, and remained of that mind despite at least four more of Take It Away’s pitches to other company officers and employees over the next five years. Beginning in 2003, however, Home Depot signed agreements allowing four suppliers in the United States and Canada to use space in Home Depot stores to offer dumpster rentals directly as lessors to Home Depot customers.

 

Take It Away brought this suit in a Massachusetts state court. Count 1 accused Home Depot of violating the non-disclosure agreement; count 2 charged appropriation of trade secrets contrary to Massachusetts General Laws Chapter 93, § 42; count 3 alleged common law conversion of trade secrets; and count 4 claimed violation of Chapter 93A, § 11 of the Massachusetts statutes, forbidding unfair trade practices. Home Depot removed the case to federal court, where the district judge granted summary judgment to Home Depot on all counts. On appeal for de novo review, Klaucke v. Daly, 595 F.3d 20, 24 (1st Cir. 2010), we affirm.

 

The principal difficulty in this case is understanding what the confidentiality agreement was supposed to protect. “Confidential Proprietary Information” is undefined, and the district court not unnaturally took it at a fairly general level to cover “the concept of renting dumpsters from national home improvement retail centers.” At first, some of us also thought that was what the fight was about, but a careful rereading of Take It Away’s reply brief shows that its claim is a degree more particular, focused on brokerage. It says that its “dumpster-brokerage concept and business plan” were the intended subjects of protection; “the essence of its concept is national retail distribution dumpster brokerage” combined with a “separate business plan for putting its concept into practice” (emphasis in original). The stress in the reply brief is repeatedly on its “dumpster-brokerage concept” or “container-brokerage concept,” which is more specific than “rental of dumpsters.” 

 

The clarification at least saves Take It Away from the obvious response that all it disclosed was that Home Depot, like ever so many others, could rent out dumpsters. But even as clarified, the claim seems to boil down to this: the agreement was intended to protect a “brokerage” concept to the effect that Take It Away would deal with third parties to obtain dumpsters that Home Depot could rent to customers. The concept is not merely, “you can do it, too,” but no more than “you can do it, too, and we will broker your supplies.”

 

With the subject of the claimed protection so understood, we think the summary judgment order was correct on all counts. Although much of the briefing and argument addresses the potential breadth of “Confidential Proprietary Information” along with its relation to the notion of a trade secret and the criteria for concluding that information amounts to a trade secret, the anterior issue is whether the concept actually meant to be protected here can reasonably be seen as having enough value, beyond what was commonly known or obvious, to amount to consideration for Home Depot’s promise to limit its use of that concept as Take It Away subsequently disclosed it. The first reason for answering no is simply that before the Home Depot official signed the agreement he had already seen the teaser, which is fairly read as disclosing the concept of a network of businesses organized by Take It Away to supply dumpsters to be rented out by retail suppliers to their customers. That is, the teaser described an association in the role of a broker of rental goods. While the details of the business plan were not set out there, the basic business structure was apparent: Home Depot would “capture” the market, while Take It Away would work behind the scene of the retailer’s direct transaction with the customer. The concept was out in the open before Home Depot agreed to talk.

 

The detailed provisions of the business plan were not disclosed by the relatively short teaser statement, but this is irrelevant for two independent reasons. First, it does not appear that the plan adds anything to the concept that was not obvious from the concept as described by the teaser. And, second, Home Depot did not implement the details of Take It Away’s plan; its four contractors deal directly with the customers.

 

But even if the claimed secret had not already been revealed before the agreement was signed, one searches in vain for anything of value not readily imaginable that might be protected. It is undisputed that Home Depot rented tools and even trucks to its customers, that dumpsters were commonly rented out, and that retailers need manufacturers or suppliers. While it might have been information of some commercial (though not necessarily protectable) value that a previously unknown broker network was ready for business and could give Home Depot an immediate entree to the dumpster supply market, that could not have been protectable information here, if for no other reason than the undisputed fact that Take it Away’s “Nationwide Association” did not actually exist; the references to an association were expressions of hope, nothing more. In sum, it is hard to see what concept or plan Home Depot gained from the disclosure that it could not have thought up readily for itself if it had found any reason to expand its rental activity: a dumpster is a big tool for removing debris, and renting tools and establishing reliable supply networks are not the stuff of novel concepts. This is not to say, of course, that a proposal like Take It Away’s could not have led to lucrative business if accepted, but any such value would have come from efficient execution, not conceptual inventiveness, and disclosing the concept did not provide the value necessary for consideration supporting a contractual claim.

 

This view of the nature and worth of Take It Away’s disclosure answers its argument that “Confidential Proprietary Information” may be the subject of a confidentiality agreement covering more than trade secrets and may be protected by contract under Massachusetts law. We will assume this to be so, for it makes no difference. Whatever the state law of contract may protect, there must be a contract to protect it, and without valuable consideration on one side there is none.

 

As might be expected, the state doctrine of protectable trade secrets, the subject of counts 2 and 3, fails to improve Take It Away’s position. Under Massachusetts common law, a trade secret is “‘any formula, pattern, device or compilation of information . . . used in one’s business . . . which gives him an opportunity to obtain an advantage over competitors who do not know or use it,” J.T. Healy & Son, Inc. v. James A. Murphy & Son, Inc., 357 Mass. 728, 736, 260 N.E.2d 723, 729 (1970) (quoting Restatement of Torts § 757 cmt. b (1939)).

if( bInlineFloats )
{
document.write( '<span id="WPFootnote3" class="WPFloatStyle">' );
document.write( WPFootnote3 );
document.write( '<br><a href="javascript:WPHide('WPFootnote3')">Close</a>' );
document.write( '</span>' );
}

While Take It Away brought claims under both Massachusetts common law and statutory law, it does not distinguish between them on appeal because it views them as “doctrinally equivalent.” This may well be true. See Incase Inc. v. Timex Corp., 488 F.3d 46, 52n.10 (1st Cir. 2007); Burten v. Milton Bradley Co., 763 F.2d 461,462 (1st Cir. 1985) (“Mass. Gen. Laws Ann. ch. 93, § 42 . . .essentially codifies the common law.”). Regardless, because Take It Away makes no argument that its statutory claim calls for a separate analysis, we analyze counts 2 and 3 together.

The definition is spacious to be sure, but a protectable secret must still be described aptly as a secret after considering six criteria, see Jet Spray Cooler, Inc. v. Crampton, 361 Mass. 835, 840, 282 N.E.2d 921, 925 (1972), which are not much help to Take It Away.

 

The first and last criteria look to the extent that information was known outside Take It Away and the ease with which it could be acquired independently. As noted, the teaser revealed what a true teaser would have left for later, and for that matter anyone interested in domestic building construction could readily have thought of supplying dumpsters for rent by a lumber dealer; in fact, the idea struck one of Take It Away’s principals in a flash as he was driving by a Home Depot store. While it should not count against a small corporation that everyone working for it knows the supposed secret (under the second criterion), it does count against Take It Away (under the third) that the move it made to protect itself (getting a non-disclosure agreement) was outflanked by the teaser and was insisted upon in dealing with only one of at least seven Home Depot officers or employees to whom Take It Away revealed the concept. The others variously refused, declined, or were never asked to sign the non-disclosure form. See Healy, 357 Mass. at 738, 260 N.E.2d at 731 (he who wishes to preserve a trade secret “must exercise eternal vigilance”).

 

 The amount of effort and money devoted to developing the supposed secret (criterion five) does not enhance Take It Away’s case appreciably, for the 1700 hours of work claimed, and the thousands said to have been spent, include the extended and wholly unsuccessful marketing efforts. Finally, with respect to the fourth criterion (the value of the idea), while Take It Away’s expert envisioned millions in profits, nothing in his report suggests that a trade secret was the reason; he simply estimates the value of the business opportunity assuming vigorous marketing by Home Depot. Cf. Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1011 n.15 (1984) (“[T]he value of a trade secret lies in the competitive advantage it gives its owner over competitors.”).

 

 It is not apparent that consideration of these six factors could support a conclusion of protectable trade secret. So summary judgment on counts 2 and 3 was proper. See Rodi v. S. New Eng. Sch. of Law, 532 F.3d 11, 15 (1st Cir. 2008) (explaining that summary judgment is appropriate if no reasonable jury could find for the non-movant, even on an issue that is “ordinarily a question of fact for the jury” under state law).

 

Take It Away’s final claim alleges violation of Massachusetts General Laws Chapter 93-A. As Take It Away succinctly put it in the reply brief, this claim “is premised on a number of unfair and deceptive acts . . . namely, Home Depot’s breach of the Agreement and misappropriation of trade secrets.” Absent an enforceable agreement and, specifically, a trade secret, count 4 fails as well.

 

Affirmed.

Take It Away, Inc. v. The Home Depot, Inc., No. 09-1336 (1st Cir. Apr. 15, 2010).

Print:
Email this postShare this post on LinkedIn
Photo of Barry Barnett Barry Barnett

Clients and colleagues call Barry Barnett an “incredibly gifted lawyer” (Chambers and Partners) who is “magic in the courtroom” (Who’s Who Legal), “the top antitrust lawyer in Texas” (Chambers and Partners), and “a person of unquestioned integrity” (David J. Beck, founder of Beck…

Clients and colleagues call Barry Barnett an “incredibly gifted lawyer” (Chambers and Partners) who is “magic in the courtroom” (Who’s Who Legal), “the top antitrust lawyer in Texas” (Chambers and Partners), and “a person of unquestioned integrity” (David J. Beck, founder of Beck Redden).

Barnett is a Fellow in the American College of Trial Lawyers, and Lawdragon has named him one of the top 500 lawyers in the United States three years in a row. Best Lawyers in America has honored him as “Lawyer of the Year” for Bet-the-Company Litigation (2019 and 2017) and Patent Litigation (2020) in Houston. Based in Texas and New York, Barnett has tried complex business disputes across the United States.

TRIAL COUNSEL
Barnett’s background, training, and experience make him indispensable to his clients. The small-town son of a Texas roughneck and grandson of a Texas sharecropper, Barnett “developed an unusual common sense about people, their motivations, and their dilemmas,” according to former client Michael Lewis.

Barnett has been historically recognized for his effectiveness and judgment. His peers chose him, for example, to the American College of Trial Lawyers and American Law Institute. His decades of trial and appellate work representing both plaintiffs and defendants have made him a master strategist and nimble tactician in complex disputes.

Barnett focuses on enforcement of antitrust laws, the “Magna Carta of free enterprise,” in Supreme Court Justice Thurgood Marshall’s memorable phrase. “Barry is one of the nation’s outstanding antitrust lawyers,” according to Joseph Goldberg, a member of the Private Antitrust Enforcement Hall of Fame. Named among Texas’s top ten antitrust lawyers of 2023, Business Today calls Barnett a “trailblazer” among the “distinguished legal minds” who “dedicate their skill and expertise to the maintenance of healthy competition in various sectors” of the Lone Star State’s booming economy. Barnett is also adept in energy and intellectual property matters and has battled for clients against a Who’s Who list of corporate behemoths, including Abbott Labs, Alcoa, Apple, AT&T, BlackBerry, Broadcom, Comcast, Dow, JPMorgan Chase, Samsung, and Visa.

Barnett commands a courtroom with calm and credibility and “is the perfect lawyer for bet the company litigation,” said Scott Regan, General Counsel of former client Whiting Petroleum. His performance before the Supreme Court in Comcast Corp. v. Behrend prompted the Court to withdraw the question on which it had granted review. The judge in a trial involving mobile phone technology called Barnett “one of the best” and that his opening statement the finest he had ever seen. Another trial judge told Barnett minutes after a jury returned a favorable verdict against the county’s biggest employer that he was one of the two best trial lawyers he’d ever come across—adding that the other one was dead.

COMPLETE PACKAGE
A versatile trial lawyer, Barnett knows how to handle a case all the way from strategic pre-suit planning to affirmance on appeal. He’s tried cases to verdict and then briefed and argued them when they went before appellate courts, including the Second, Third, Fifth, and Tenth Circuits, the Supreme Court of Louisiana, and (in the case of Comcast Corp. v. Behrend) the Supreme Court of the United States.

Barnett is a sought-after public speaker, often serving on panels and talking about topics like the trials of antitrust class actions and techniques for streamlining complex litigation. He also comments on trends in commercial litigation and the implications of major rulings for outlets such as NPR, Reuters, Law360, Corporate Counsel, and The Dallas Morning News. He’s even appeared in a Frontline program about underfunding of state pensions, authored chapters on “Fee Arrangements” and “Techniques for Expediting and Streamlining Litigation” (the latter with Steve Susman) in the ABA’s definitive treatise on Business and Commercial Litigation in Federal Courts, 5th, and commented on How Antitrust Enforcers Might Think Like Plaintiffs’ Lawyers.

HARD GRADERS
Clients and other hard graders have praised Barnett for his courtroom skills and legal acumen.

A client in a $100 million oil and gas case, which Barnett’s team won at trial and held on appeal, said Barnett and his team “presented a rare combination of strong legal intellect, common sense about right and wrong, and credibility in the courtroom.” David McCombs at Haynes and Boone said Barnett “has a natural presence that goes over well with juries and judges.”

Even former adversaries give Barnett high marks. Lead opposing counsel in a decade-long antitrust slugfest said “Barry is a highly skilled advocate. He understands what really matters in telling a narrative and does so in a very compelling manner.”

CIVIC ENGAGEMENT
Barnett relishes opportunities to collaborate with all kinds of people. At the Center for American and International Law (CAIL), founded by a former prosecutor at Nuremberg in 1947 and headquartered in the Dallas area, he has served on the Executive Committee, co-chaired the committee that produced CAIL’s first-ever strategic plan, supported CAIL’s Institute for Law Enforcement Administration and other development efforts, and proposed formation of a new Institute for Social Justice Law. CAIL’s former President David Beck said “Barry is extremely bright” and is “very well prepared in every lawsuit or professional task he undertakes.”

Barnett is also a Trustee of the New-York Historical Society, a Sterling Fellow at Yale, a member of the Yale University Art Gallery’s Governing Board, a winner of the Class Award for his work on behalf of his college class, and a proud contributor to the Yellow Ribbon Program at Harvard Law. Barnett’s pro bono work includes leading the trial team representing people who are at greatest risk of severe illness and death as a result of being exposed to the novel coronavirus SARS-CoV-2 while being detained in the Dallas County jail—work for which he received the NGAN Legal Advocacy Fund RBG Award.

At Susman Godfrey, Barnett has served on the firm’s Executive Committee, Employment Committee, and ad hoc committees on partner compensation, succession of leadership, and revision of the firm’s partnership agreement. He also twice chaired the Practice Development Committee.

KEEPING PERSPECTIVE
Barnett understands that clients face many pressures. Managing the stress is important, especially in matters that take years to resolve. He encourages clients to call him whenever they have a question or concern and to keep the inevitable ups and downs in perspective. He wants them to know that he will do his level best to help them achieve their goals. He also strives to foster trust and to make working with him a pleasure.

Cyrus “Skip” Marter, the General Counsel of Bonanza Creek in Denver and a former Susman Godfrey partner and client, said Barnett is “excellent about communicating with clients in a full and honest manner” and can “negotiate for his clients from a position of strength, because he is not afraid to take a case through a full trial on the merits.” Stacey Doré, the President of Hunt Utility Services and a former client, said that Barnett is “an excellent trial lawyer and the person you want to hire for your bet-the-company cases. He is client focused, responsive, and uniquely savvy about trial and settlement strategy.” A New York colleague said, “Barry is a joy to work with as co-counsel. He tackles complex procedural and factual hurdles capably, efficiently, and without drama.”

PERSONAL
Barnett’s wide-ranging experience and calm, down-to-earth approach enable him to connect with clients, judges, jurors, witnesses, and even opposing counsel. He grew up in Nacogdoches, Texas. He co-captained his high school varsity football team as an All-East Texas middle linebacker while also serving as the Editor of Key Club’s Texas-Oklahoma District, won the Best Typist award, took the History Team to glory, and sang in the East Texas All Region Choir. As Dan Kelly of client Vistra Corp. put it, Barnett is “a great person to be around.”

Barnett is steady and loyal. He has practiced at Susman Godfrey his entire career. He and his wife Nancy live in Dallas and enjoy spending time in Houston and New York. Their daughter works for H-E-B in Houston, and their son is a Haynes and Boone transactions lawyer in Dallas.

As a member of Ivy League championship football teams in his junior and senior years at Yale and a parent of two Yalies, Barnett has no trouble choosing sides for “The Game” in November. And he knows how important fighting all the way to the end is. On his last play from scrimmage, in the waning minutes of The Game on Nov. 22, 1980, he recovered a Crimson fumble.

Yale won, 14-0.