C/w 2021-c-01207
Also decided on this docket: La., May 4, 2023; La., December 21, 2021
C/w 2021-c-01207, No. 2021-C-01196 (La. Feb. 15, 2023).
Opinion text
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FOR IMMEDIATE NEWS RELEASE NEWS RELEASE #009
FROM: CLERK OF SUPREME COURT OF LOUISIANA
The Opinions handed down on the 15th day of February, 2023 are as follows:
BY Crichton, J.:
2021-C-01196
C/W
2021-C-01207
VESTA HALAY JOHNSTON, ET AL. VS. SUSAN HALAY VINCENT,
ET AL. (Parish of Calcasieu)
REVERSED IN PART. AFFIRMED IN PART. REMANDED FOR
FURTHER PROCEEDINGS IN ACCORDANCE HERE WITH. SEE
OPINION.
Weimer, C.J., dissents in part, concurs in part and assigns reasons
and concurs in the dissent in part by Crain, J.
Hughes, J., dissents in part and assigns reasons.
Crain, J., dissents in part and assigns reasons.
SUPREME COURT OF LOUISIANA
No. 2021-C-01196
VESTA HALAY JOHNSTON, ET AL.
vs.
SUSAN HALAY VINCENT, ET AL.
On Writ of Certiorari to the Court of Appeal, Third Circuit, Parish of Calcasieu
CRICHTON, J.
In this consolidated matter, Lake Charles Rubber and Gasket Co., L.L.C.
("Lake") and its sole owner, Vesta Balay Johnston (together with Lake, the
"Plaintiffs"), and Gulf Coast Rubber and Gasket, L.L.C. ("Gulf') and Bryan Vincent
(together with Gulf, the "Defendants"), both appeal certain rulings of the court of
appeal. Specifically, Defendants assert that the court of appeal failed to correctly
apply the manifest error standard of review in reversing the district court's findings
that certain Lake information in Gulf's possession did not constitute "trade secrets"
or that their misappropriation was not otherwise a violation of the Louisiana Unfair
Trade Secrets Act, La. R.S. 51:1431, et seq. ("LUTSA"). They further argue that
the court of appeal erred in increasing the damages award from $700,000 to
$19,574,884, i.e., a multiple of nearly 28, where ample evidence in the record
supports the district court's judgment as to damages. For their part, Plaintiffs argue
the court of appeal erred on rehearing by eliminating the treble damages applied to
its award for unjust enrichment and dismissing Vesta Johnston's claim for
diminution in value of her ownership interest in Lake.
For the reasons set forth herein, we reverse the court of appeal in part as to its
finding that Lake's parts numbering system and descriptions constituted a trade
secret under LUTSA. We further reverse the court of appeal as to the increase in the
SUPREME COURT OF LOUISIANA
No. 2021-C-01196
VESTA HALAY JOHNSTON, ET AL.
VS.
SUSAN HALAY VINCENT, ET AL.
On Writ of Certiorari to the Court of Appeal, Third Circuit,
Parish of Calcasieu
WEIMER, C.J., dissenting in part.
For the following reasons, I find that the district court did not manifestly err
in implicitly finding that Lake’s customer lists did not constitute a trade secret under
the Louisiana Unfair Trade Secrets Act. Because of Lake’s loss of “key personnel
(the majority of its outside and inside sales force) ,”1 many of whom joined Gulf’s
workforce, I believe that the record contains reasonable support for the district
court’s apparent finding that the customer lists were confined to information that
was readily ascertainable due to the limited Lake Charles market via the collective
memories of the majority of the sales force and/or outside resources such as a
telephone book, the internet, and social media. The record shows that over the years,
Bryan Vincent and his team gained:
considerable knowledge about the rubber and gasket business – that
Bryan Vincent himself was one of the leading experts in the industry
nationally. The Gulf personnel had strong relationships with key
customers who were loyal to Gulf’s team and had the requisite skills to
open and operate a competitive business in short time.
Johnston v. Vincent, 21-1196 (La. 1/--/23), slip op. p. 31. Accordingly, I would
reverse the court of appeal ’s finding that Lake’s customer lists were trade secrets
under LUTSA.2
1 Johnston v. Vincent, 21-1196 (La. 1/--/23), slip op. p. 30.
2 I also concur in the dissent in part by Justice Crain.
SUPREME COURT OF LOillSIANA
No. 2021-C-01196
VESTA BALAY JOHNSTON, ET AL.
vs.
SUSAN BALAY VINCENT, ET AL.
On Writ of Certiorari to the Court of Appeal, Third Circuit, Parish of Calcasieu
Hughes, J., dissents in part.
I dissent in part for the reasons assigned by Weimer, C.J., and Crain, J.
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SUPREME COURT OF LOUISIANA
No. 2021-C-01196
VESTA HALAY JOHNSTON, ET AL.
VS.
SUSAN HALAY VINCENT, ET AL.
On Writ of Certiorari to the Court of Appeal, Third Circuit, Parish of Calcasieu
Crain, J., dissents in part and assigns reasons:
I would reinstate the trial court ’s decision as I believe no manifest error
occurred. I agree that the numbering system was not a trade secret under LUTSA.
However, I disagree that the customer list was a trade secret. Lake’s profits were
largely from a few large customers as testified to by Vincent. That means that the
largest number of customers on the customer list did not generate the largest profits
for Lake. Additionally, nearly all of Lake’s outside and inside sales team left to
work for Gulf. They knew their customers, and it is not unreasonable that they also
knew the volume of sales to their customers. It was not manifestly erroneous for the
trial court to decline to find a LUTSA violation relating to the customer list. I dissent
on this issue.
Regarding damages, I would reinstate the trial court’s lost profits award. The
trial court rejected the opinions of plaintiffs’ forensic accountant and relied more on
defendants’ economic expert. There was no manifest error in that choice.
I also would not make an independent award for unjust enrichment, and would
not require treble damages on the amount awarded for lost profits. I agree with the
trial court, any violation after notice from the Attorney General was attributable to
the preservation order agreed to by both the plaintiffs and the defendants . Gulf
February 14, 2023
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should not suffer punitive damages for not asking the court for relief from the order
the plaintiffs agreed to. I dissent in part.