{"id":614,"date":"2011-09-23T16:18:42","date_gmt":"2011-09-23T16:18:42","guid":{"rendered":"https:\/\/www.bfvlaw.com\/recent-georgia-court-of-appeals-case-finds-that-investor-lists-of-limited-partners-do-not-constitute-trade-secrets-and-reverses-summary-judgment-for-plaintiff\/"},"modified":"2011-09-23T16:18:42","modified_gmt":"2011-09-23T16:18:42","slug":"recent-georgia-court-of-appeals-case-finds-that-investor-lists-of-limited-partners-do-not-constitute-trade-secrets-and-reverses-summary-judgment-for-plaintiff","status":"publish","type":"post","link":"https:\/\/www.bfvlaw.com\/recent-georgia-court-of-appeals-case-finds-that-investor-lists-of-limited-partners-do-not-constitute-trade-secrets-and-reverses-summary-judgment-for-plaintiff\/","title":{"rendered":"Recent Georgia Court of Appeals Case Finds that Investor Lists of Limited Partners Do Not Constitute Trade Secrets and Reverses Summary Judgment for Plaintiff"},"content":{"rendered":"

The Georgia Court of Appeals\u2019 recent decision in Sutter Capital Management, LLC v. Wells Capital, Inc.<\/em>, \u2014 S.E.2d \u2013, 2011 WL 2697058, (Ga. App. July 13, 2011), offers an interesting analysis of the Georgia Trade Secrets Act\u2019s requirement that a trade secret derive economic value as a result of<\/em> its trade secret status.<\/p>\n

At the heart of the case is Ira Gaines.\u00a0 Mr. Gaines was a limited partner in approximately 800 different limited partnerships, including Wells Real Estate Funds I through XII, the limited partnerships at issue in the case.\u00a0 The general partner of these partnerships maintained a list of information regarding each of the investors in the Wells partnerships, including their addresses.\u00a0 When Mr. Gaines became a Wells limited partner, he executed partnership agreements which provided that the list of Wells\u2019 limited partners would be available for inspection by any limited partner.\u00a0 However, Mr. Gaines also executed an addendum in which he agreed to only request a copy of the list for purposes reasonably related to his interest as a partner in the limited partnership and not to request the names and addresses of the limited partners for the purpose of making a tender offer to the limited partners.<\/p>\n

Separately, Mr. Gaines was an investor in Sutter Opportunity Fund 3, LLC.\u00a0 The president of a related Sutter entity told Mr. Gaines that Sutter wanted to obtain the list of Wells\u2019 investors so that Sutter could mail mini-tender offers to purchase Wells\u2019 partnership units to Wells\u2019 limited partners.\u00a0 Mr. Gaines sought and obtained this information from the IRS.\u00a0 Sutter than provided this information to an entity which mailed mini-tender offers on Sutter\u2019s behalf to Wells\u2019 limited partners.\u00a0 In response to these mailings, multiple Wells investors sold their partnership units to Sutter.<\/p>\n

Wells sued Sutter alleging Sutter misappropriated its lists of Wells\u2019 investors and that these lists constituted Wells\u2019 trade secrets.\u00a0 The trial court granted summary judgment in favor of Wells and awarded damages in the amount of $667,304.51.\u00a0 This amount represented the cost incurred by Wells in fulfilling its requirement under the Securities and Exchange Act to provide each of its approximately 30,000 limited partners with a statement disclosing the partnership\u2019s position and recommendation regarding any tender offer.<\/p>\n

On appeal, Sutter argued that this ruling should be reversed because the Wells\u2019 lists do not constitute trade secrets.\u00a0 The Court of Appeals agreed, finding that Wells failed to demonstrate that the list \u201cderived economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use.\u201d\u00a0 The Court of Appeals noted that Wells\u2019 position statement that it sent to its limited partners, while recommending that the partners reject Sutter\u2019s tender offer, specifically stated that the decision to transfer units would not have any direct financial impact on the general partners or their affiliates.\u00a0 Wells\u2019 witnesses also admitted that the transfers to Sutter did not have any direct financial impact on the general partners or their affiliates.<\/p>\n

Accordingly, the Court of Appeals found that Wells did not derive economic value from maintaining the secrecy of the lists.\u00a0 Because the lists do not derive economic value as a result of their secrecy, they do not constitute trade secrets.\u00a0 As such, Wells\u2019 claim failed as a matter of law, and the Court of Appeals found that the trial court erred in granting Wells\u2019 motion for summary judgment and in denying Sutter\u2019s motion for summary judgment.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Georgia Court of Appeals\u2019 recent decision in Sutter Capital Management, LLC v. Wells Capital, Inc., \u2014 S.E.2d \u2013, 2011 WL 2697058, (Ga. App. July 13, 2011), offers an interesting analysis of the Georgia Trade Secrets Act\u2019s requirement that a trade secret derive economic value as a result of its trade secret status. At the […]<\/p>\n","protected":false},"author":18,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_mo_disable_npp":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[4,9],"tags":[29],"acf":[],"yoast_head":"\nRecent Georgia Court of Appeals Case Finds that Investor Lists of Limited Partners Do Not Constitute Trade Secrets and Reverses Summary Judgment for Plaintiff - Berman Fink Van Horn P.C.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bfvlaw.com\/recent-georgia-court-of-appeals-case-finds-that-investor-lists-of-limited-partners-do-not-constitute-trade-secrets-and-reverses-summary-judgment-for-plaintiff\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Recent Georgia Court of Appeals Case Finds that Investor Lists of Limited Partners Do Not Constitute Trade Secrets and Reverses Summary Judgment for Plaintiff - Berman Fink Van Horn P.C.\" \/>\n<meta property=\"og:description\" content=\"The Georgia Court of Appeals\u2019 recent decision in Sutter Capital Management, LLC v. 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