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Trade Secret Cases Becoming Federal

Earlier this week, Congress passed the Defend Trade Secrets Act. The Senate has already approved the DTSA. It’s now headed to President Obama’s desk, where he will almost certainly sign the Act into law. The law will create a federal cause of action for anyone injured by theft of trade secrets.   Here’s why this is big news, particularly for anyone in Florida:

Let’s be blunt: If you litigate in Florida, you know there is a world of difference between litigating a complicated trade secret case in federal court and attempting to litigate that same case in state court. I don’t care what side of the case you are on. If you are in a trade secret case and you have legitimate claims or defenses, you want to be in federal court. On the whole, the bench is better. The process is more orderly. There are actual rules and judges insist the parties follow those rules. Screwing around in discovery has consequences. The federal courts don’t give out injunctions like candy. The list goes on and on. Bottom line: You don’t want to litigate a complex trade secret case in Florida state court.

But up until now, much of the time you did not have a choice. If there was diversity jurisdiction, then great. You could file in federal court. If there were other federal causes of action (suppose, maybe, securities fraud or RICO) you could file in federal court and bring a pendant trade secret claim. But often, that is not the case. Instead, you are dealing with a Florida plaintiff, a Florida defendant and only state law causes of action. In that scenario, you are stuck in state court. That’s all about to change.

Florida practitioners who are accustomed to litigating in state court, as opposed to federal court, are in for a rude awakening. It may seem ridiculous to suggest that there are purely state court practitioners, but indeed there are. There are hundreds if not thousands of lawyers in the state of Florida who litigate solely in state court and never venture into federal court. There are many lawyers in Florida who have litigated trade secret cases in state court but never in federal court. Again, that’s all going to change.

The fact that trade secret claims are now subject to federal jurisdiction is going to make sure that these complicated, serious cases get the type of serious, thoughtful, principled treatment they deserve. This is a good thing.

Pollard PLLC is a Fort Lauderdale, Florida based litigation boutique that focuses on competition cases.  The firm and its members have extensive experience litigating complex non-compete, trade secret and antitrust cases in state and federal courts throughout Florida and beyond.  For reach their office, please call 954-332-2380. 

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