TransPerfect Global, Inc. v. Lionbridge Technologies, Inc.
- Denise Cote
- 1:19-cv-03283
- U.S. District Court · Southern District of New York
- 8
In TransPerfect v. Lionbridge, Judge Cote denied defendants’ motion for attorneys’ fees and costs after their summary-judgment victory.
TransPerfect did not have to pay the attorneys’ fees and costs requested by Lionbridge Technologies and H.I.G. Middle Market. The defendants remained the parties that had prevailed on summary judgment, but their fee motion was denied.
What happened
TransPerfect Global sued Lionbridge Technologies and H.I.G. Middle Market, claiming they misused TransPerfect’s confidential pricing and revenue information obtained during an auction process. The court had previously granted the defendants summary judgment.
The defendants asked TransPerfect to pay their attorneys’ fees, costs, and expenses under the Defend Trade Secrets Act and the court’s authority to address bad-faith litigation. They argued that TransPerfect lacked factual support for its claims and sued for improper reasons. TransPerfect argued that it had reasonably refined its claims during the case.
Judge Denise Cote denied the defendants’ motion. She found that the defendants made a strong showing, but they did not prove TransPerfect’s bad faith to the degree required by law.
The detailed version
- TransPerfect Global, Inc. v. Lionbridge Technologies, Inc. · No. 1:19-cv-03283
- Denise Cote
- May 31, 2022
Background
TransPerfect brought state-law claims and a claim under the Defend Trade Secrets Act, alleging that Lionbridge Technologies, Inc. and H.I.G. Middle Market, LLC improperly obtained and used TransPerfect’s confidential pricing methodologies and customer-revenue information. The information had been made available during a court-supervised auction involving the sale of TransPerfect. TransPerfect eventually focused on alleged use of information concerning freelance linguist rates and customer revenues in competition for business from IQVIA and Merck.
The court had previously granted summary judgment to the defendants. In that ruling, TransPerfect failed to provide evidence that the defendants used the information for a purpose not allowed by their agreement governing access to the auction materials, disclosed the information to unauthorized Lionbridge personnel, or caused damages through alleged trade-secret misappropriation. TransPerfect also abandoned a claim that H.I.G. failed to return or destroy the auction materials.
The Fee Request
After prevailing on summary judgment, the defendants moved for attorneys’ fees, costs, and expenses. The Defend Trade Secrets Act permits a court to award reasonable attorneys’ fees to a prevailing party when a misappropriation claim was made in bad faith. The court also explained that it has inherent authority to award fees for bad-faith litigation.
For an award under that inherent authority, the defendants had to show both that TransPerfect’s claim had no legal or factual basis and that it was brought for an improper purpose, such as harassment or delay. The court stated that both findings must be supported by highly specific factual findings. The defendants argued that TransPerfect filed and pursued the case without factual support and that Philip R. Shawe, and therefore TransPerfect, acted out of anger about the auction and a desire to harm Lionbridge.
TransPerfect argued that narrowing its claims during discovery showed refinement and caution rather than bad faith. It relied on its attorneys’ investigation before filing, reports that sales staff believed Lionbridge was competing unfairly, and an interview with a former Lionbridge employee. The court stated that those circumstances could justify investigating a claim but did not provide a good-faith basis for filing the action. The court also observed that TransPerfect appeared to continue searching for a viable claim after filing, including after it became clear that it could not prove damages.
Ruling
The court agreed that the defendants were the prevailing parties and found that they had made a strong showing concerning TransPerfect’s conduct. It nevertheless concluded that they had not met the legal standard required to establish bad faith. The defendants’ February 18, 2022 motion for an award of attorneys’ fees and costs was therefore denied.
The opinion also states that, under a February 2, 2022 order, the deadline to file a notice of appeal begins 30 days from May 31, 2022. Judge Denise Cote signed the opinion and order.
Read the full 8-page opinion on CourtListener, the free public archive maintained by the Free Law Project.