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Parrish v. Latham & Watkins

Filed 8/10/17 IN THE SUPREME COURT OF CALIFORNIA WILLIAM PARRISH et al., ) ) Plaintiffs and Appellants, ) ) S228277 v. ) ) Ct.App. 2/3 B244841 LATHAM & WATKINS et al., ) ) Los Angeles County Defendants and Respondents. ) Super. Ct. No. BC482394 ____________________________________) To establish liability for the tort of malicious prosecution, a plaintiff must demonstrate, among other things, that the defendant previously caused the commencement or continuation of an action against the plaintiff that was not supported by probable cause. We have held that if an action succeeds after a hearing on the merits, that success ordinarily establishes the existence of probable cause (and thus forecloses a later malicious prosecution suit), even if the result is overturned on appeal or by later ruling of the trial court. (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 818 (Wilson).) This principle has come to be known as the ―interim adverse judgment rule.‖ In this case we are asked to decide whether the interim adverse judgment rule applies when a trial court had initially denied summary judgment, finding that a lawsuit had sufficient potential merit to proceed to trial, but concluded after trial that the suit had been brought in ―bad faith‖ because the claim, even if 1 superficially meritorious, in fact lacked evidentiary support. The Court of Appeal answered that question in the affirmative. We agree and affirm. I. A. This case arises from a trade secrets dispute over the manufacture of microbolometers, devices used in thermal imaging systems to detect infrared radiation. Plaintiffs William Parrish and E. Timothy Fitzgibbons served as officers of Indigo Systems Corporation (Indigo), a company in the microbolometer business. When FLIR Systems, Inc. (FLIR) acquired Indigo, both Parrish and Fitzgibbons joined the FLIR team. Approximately two years later, Parrish and Fitzgibbons left FLIR to start a new, competing venture. FLIR and Indigo sued Parrish and Fitzgibbons for misappropriation of trade secrets. Among other things, they alleged that Parrish and Fitzgibbons had solicited venture capital for their new business by presenting a business plan that Fitzgibbons had developed while still employed by FLIR. Parrish and Fitzgibbons each moved for summary judgment. Among other things, they argued that Fitzgibbons had developed the business plan for the new venture before he joined Indigo, and that no trade secrets would be misappropriated in the plan‘s implementation. In their opposition to the summary judgment motions, FLIR and Indigo relied on the declarations of two experts who opined that the business plan could not be implemented ―without using FLIR‘s and Indigo‘s proprietary trade secrets on the design and bulk manufacture of [certain] microbolometers.‖ The trial court denied the summary judgment motions. The court concluded that although Parrish and Fitzgibbons had ―made a compelling argument that they [were] entitled to judgment,‖ in light of the ―highly technical‖ nature of the case, they had ―failed to sustain their burden‖ of showing that their planned new business was not based on FLIR‘s and Indigo‘s intellectual property. 2 The court pointed in …
Original document
Source: California Supreme Court