{"id":797,"date":"2012-09-20T20:16:07","date_gmt":"2012-09-20T20:16:07","guid":{"rendered":"https:\/\/www.bfvlaw.com\/georgia-supreme-court-opines-on-preemption-under-the-georgia-trade-secrets-act\/"},"modified":"2012-09-20T20:16:07","modified_gmt":"2012-09-20T20:16:07","slug":"georgia-supreme-court-opines-on-preemption-under-the-georgia-trade-secrets-act","status":"publish","type":"post","link":"https:\/\/www.bfvlaw.com\/georgia-supreme-court-opines-on-preemption-under-the-georgia-trade-secrets-act\/","title":{"rendered":"Georgia Supreme Court Opines on Preemption Under the Georgia Trade Secrets Act"},"content":{"rendered":"

In Robbins v. Supermarket Equipment Sales, LLC, <\/em>290 Ga. 462, 722 S.E.2d 55 (2012), the Georgia Supreme Court addressed preemption under the Georgia Trade Secrets Act (\u201cGTSA\u201d).\u00a0 Preemption is an issue that arises with some frequency in cases where a party asserts claims under the GTSA and also asserts common-law claims and\/or seeks other remedies.\u00a0 Under O.C.G.A. section 10-1-767(a), the GTSA \u201csupersede[s] conflicting tort, restitutionary, and other laws of this state providing civil remedies for misappropriation of a trade secret.\u201d\u00a0 Defendants in trade secrets cases frequently argue that this statute bars common-law claims which a plaintiff has asserted in addition to a claim under the GTSA.<\/p>\n

The alleged trade secret at issue in Robbins<\/em> was \u201cskins\u201d for grocery store refrigeration units.\u00a0 The plaintiff and its predecessor, Supermarket Equipment Resale, Inc. (\u201cSER\u201d), made and supplied these skins.\u00a0 One of SER\u2019s employees was Daniel Robbins.\u00a0 Mr. Robbins left SER in February of 2009 to start his own refrigeration skin business, TCD Squared d\/b\/a Supermarket Specialty Products (\u201cSSP\u201d).\u00a0 Two other former employees of SER were employed by or involved with SSP.<\/p>\n

In October of 2009, SER was foreclosed upon by its bank.\u00a0 At that time, the plaintiff, Supermarket Equipment Sales, LLC (\u201cSES\u201d) was formed to succeed SER.\u00a0 The foreclosing bank and SER\u2019s owner structured the deal such that SES leased SER\u2019s real estate from the foreclosing bank and SES took out a loan to buy SER\u2019s assets, with the original owner of SER being personally obligated for SES\u2019 note to the bank.\u00a0 Prior to the foreclosure, SER assigned its trade secrets and its proprietary information to SES, including a library of drawings of refrigeration skins that the company had accumulated in the course of eight years conducting its business.<\/p>\n

SES bought suit against SSP, Mr. Robbins and the two other former employees alleging that the drawings which SSP was using in the course of its business were SES\u2019 trade secrets and proprietary information which had been misappropriated by the Defendants.\u00a0 SES sought injunctive relief under the GTSA.\u00a0\u00a0 Based on the Supreme Court\u2019s opinion, it appears SES did not assert any other claims against the Defendants.<\/p>\n

Following an injunction hearing, the trial court found that the skins were SES\u2019 proprietary and confidential information and that SES had standing to pursue its claims because it had purchased SER\u2019s assets.\u00a0 The trial court further found that the drawings had been misappropriated.\u00a0 However, the trial court also found that they were not trade secrets because SES had failed to take reasonable efforts to maintain their secrecy.\u00a0 While the trial court thus found that it could not award injunctive relief under the GTSA, it found that SES was entitled to general equitable relief under O.C.G.A. section 9-5-1, given that SES had suffered an irreparable injury and was without inadequate remedy at law.\u00a0 The trial court therefore entered an injunction barring Mr. Robbins\u2019 company from using these skins in its business and ordered that the drawings be submitted to the Court.\u00a0 The trial court expressly rejected the Defendants\u2019 argument that the O.C.G.A. section 10-1-767(a) precluded any other grant of equitable relief if the court found that the skins did not constitute trade secrets.<\/p>\n

On appeal, the Georgia Supreme Court reversed the trial court on the preemption issue.\u00a0 The Supreme Court found that the only exceptions to the exclusivity of the GTSA are found in O.C.G.A. section 10-767(b).\u00a0 Equitable relief under O.C.G.A. Section 9-5-1 to remedy the misappropriation of proprietary or confidential information is not an enumerated exception.\u00a0 The Georgia Supreme Court found that given the finding that the skins were not trade secrets under the GTSA, there were no grounds to provide any injunctive relief: \u201cBy using O.C.G.A. section 9-5-1 to provide SES the same relief based on the same allegations it would have received had the drawings qualified as trade secrets, the trial court undermined the exclusivity of the GTSA \u2026. [t]he fact that the drawings were not ultimately found to be trade secrets under the act did not make the preemption clause inapplicable.\u00a0 Rather the key inquiry is whether the same factual allegations of misappropriation are being used to obtain relief outside the GTSA.\u00a0 Since the trial court\u2019s award of general equitable relief under O.C.G.A. section 9-5-1 was based on the same conduct as the Georgia Trade Secrets Act claim, i.e., the misappropriation of the drawings, such relief was preempted by O.C.G.A. section 10-1-767(a).\u201d<\/p>\n

Accordingly, the Georgia Supreme Court reversed the trial court\u2019s injunction.\u00a0 The Supreme Court\u2019s decision in this case, while perhaps leaving open questions such as whether it is appropriate to address the preemption issue on a record that is not fully developed, is still instructive for trial courts who frequently must decide in these types of cases whether common-law claims or remedies are preempted by the GTSA.<\/p>\n","protected":false},"excerpt":{"rendered":"

In Robbins v. Supermarket Equipment Sales, LLC, 290 Ga. 462, 722 S.E.2d 55 (2012), the Georgia Supreme Court addressed preemption under the Georgia Trade Secrets Act (\u201cGTSA\u201d).\u00a0 Preemption is an issue that arises with some frequency in cases where a party asserts claims under the GTSA and also asserts common-law claims and\/or seeks other remedies.\u00a0 […]<\/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":"\nGeorgia Supreme Court Opines on Preemption Under the Georgia Trade Secrets Act - 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\/georgia-supreme-court-opines-on-preemption-under-the-georgia-trade-secrets-act\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Georgia Supreme Court Opines on Preemption Under the Georgia Trade Secrets Act - Berman Fink Van Horn P.C.\" \/>\n<meta property=\"og:description\" content=\"In Robbins v. 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