This opinion is subject to revision before final
publication in the Pacific Reporter
2016 UT 20
IN THE
SUPREME COURT OF THE STATE OF UTAH
USA POWER, LLC, USA POWER PARTNERS, LLC, and
SPRING CANYON ENERGY, LLC,
Appellees and Cross-Appellants,
v.
PACIFICORP,
Appellant and Cross-Appellee.
USA POWER, LLC, USA POWER PARTNERS, LLC, and
SPRING CANYON ENERGY, LLC,
Appellants,
v.
JODY L. WILLIAMS and
HOLME ROBERTS & OWEN, LLP,
Appellees.
No. 20130442
Filed May 16, 2016
On Direct Appeal
Third District, Salt Lake
The Honorable Anthony B. Quinn
No. 050903412
Attorneys:
Peggy A. Tomsic, James E. Magleby, Eric K. Schnibbe, Salt Lake City,
for USA Power, LLC, USA Power Partners, LLC, and
Spring Canyon Energy, LLC
Peter Watson Billings Jr., James S. Jardine, Michael G. Jenkins,
P. Bruce Badger, Samuel C. Straight, Timothy K. Clark,
Salt Lake City, for PacifiCorp
Michael D. Zimmerman, Thomas R. Karrenberg, Stephen P. Horvat,
Troy L. Booher, Clemens A. Landau, Salt Lake City, for
Jody L. Williams and Holme Roberts & Owen, LLP
USA POWER v. PACIFICORP
Opinion of the Court
CHIEF JUSTICE DURRANT authored the opinion of the Court, in which
ASSOCIATE CHIEF JUSTICE LEE, JUSTICE DURHAM,
and JUDGE TOOMEY joined.
Having recused himself, JUSTICE HIMONAS does not participate
herein; COURT OF APPEALS JUDGE KATE A. TOOMEY sat.
JUSTICE JOHN A. PEARCE became a member of the Court on
December 17, 2015, after oral argument in this matter, and
accordingly did not participate.
CHIEF JUSTICE DURRANT, opinion of the Court:
Introduction
¶1 This case concerns a dispute about proprietary plans to
develop a power plant. USA Power, LLC engaged in extensive work
to research and develop a power plant project in Mona, Utah—its
Spring Canyon ―vision.‖ It claims that this vision is a trade secret,
that PacifiCorp misappropriated it, and that PacifiCorp also
breached a confidentiality agreement between the parties. USA
Power further claims that its water attorney, Jody L. Williams, and
her law firm, Holme Roberts & Owen, LLC (HRO), (collectively,
Ms. Williams) breached their fiduciary duties by working for
PacifiCorp to acquire water rights on a competing power plant
proposal.
¶2 USA Power‘s Spring Canyon vision took two years,
thousands of work-hours, and close to $1 million to develop. To
advance its proposed power plant project, it made several public
disclosures to regulatory bodies. These disclosures included such
information as the plant‘s proposed location, technological
specifications, fuel type, water use, and generating capacity. Other
information about the proposed plant, such as USA Power‘s
economic and feasibility studies, was not publicly disclosed.
¶3 Meanwhile, PacifiCorp had identified a quickly
approaching need for energy and was working to meet this demand.
As part of its response to its upcoming power needs, PacifiCorp
approached USA Power and entered into negotiations to purchase
USA Power‘s Spring Canyon assets. As part of these negotiations,
USA Power required PacifiCorp to sign a Confidentiality and Non-
Disclosure Agreement before it would divulge its entire Spring
Canyon vision, i.e., a compilation of both the already disclosed
information and the portions of its vision that had not yet been
publicly disclosed. PacifiCorp did so, and USA Power provided
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Opinion of the Court
PacifiCorp details on its entire project, including the non-public
backup studies that validated its public disclosures.
¶4 Eventually PacifiCorp terminated the negotiations over the
sale and decided to issue a Request for Proposal (RFP) to obtain bids
for power sufficient to cover its needs. USA Power submitted its
Spring Canyon project in response to PacifiCorp‘s RFP. PacifiCorp
submitted its own competing proposal, however, to build a power
plant in Mona—its Currant Creek project. PacifiCorp‘s project was
very similar to the Spring Canyon project proposed by USA Power.
PacifiCorp also retained Ms. Williams, USA Power‘s former
attorney, to help it obtain water rights for its Currant Creek project.
PacifiCorp selected its own bid over USA Power‘s bid and, soon
after, began construction on its project.
¶5 USA Power then brought suit against Ms. Williams
asserting malpractice claims based on an alleged breach of her
fiduciary duties of confidentiality and loyalty. USA Power later
amended its complaint to include PacifiCorp as a defendant,
asserting that PacifiCorp had misappropriated USA Power‘s trade
secrets—its ―vision‖ for a plant in Mona, Utah and various
components of this vision, which were themselves trade secrets. This
case first came to the court in 2010, after the trial court granted
summary judgment to both Defendants.1
¶6 In USA Power I, we reversed the grant of summary
judgment, holding that issues of material fact existed and summary
judgment was inappropriate.2 We also clarified that a compilation of
publicly available information could, in some circumstances,
constitute a trade secret. After USA Power I, a five-week jury trial
was held. Both parties moved for a directed verdict on all of USA
Power‘s claims. The court denied these motions except as to USA
Power‘s claim against Ms. Williams for punitive damages. The jury
returned a special verdict against PacifiCorp and Ms. Williams, both
of whom filed a rule 50 judgment notwithstanding the verdict
(JNOV) motion and a rule 59 motion for new trial. The trial court
denied PacifiCorp‘s motions, except to reduce the unjust enrichment
award against PacifiCorp, granted Ms. Williams‘s JNOV motion for
lack of evidence related to causation, and determined that USA
_____________________________________________________________
1 USA Power, LLC v. PacifiCorp, 2010 UT 31, 235 P.3d 749
[hereinafter USA Power I].
2 Id. ¶¶ 59, 71.
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Opinion of the Court
Power was entitled to attorney fees. The court also denied USA
Power‘s request for exemplary damages and prejudgment interest.
The parties appealed all adverse rulings.
¶7 We uphold the trial court on all claims. First, we uphold
the trial court‘s denial of PacifiCorp‘s JNOV on the trade secret issue.
As discussed below, under our deferential standard of review, there
was a sufficient basis in the evidence from which the jury could
reasonably conclude that certain components of USA Power‘s vision
were not generally known or readily ascertainable. It is important to
note that PacifiCorp appealed only the issue of whether a trade
secret existed, conceding for purposes of appeal that if there was a
trade secret, it was misappropriated. Second, as to USA Power‘s
cross-appeal challenging various aspects of the damages award, we
affirm the trial court‘s rulings, holding that the trial court applied the
correct standards and did not abuse its discretion. Finally, regarding
USA Power‘s direct appeal of the JNOV granted in favor of
Ms. Williams, we affirm the trial court because there is no competent
evidence demonstrating that Ms. Williams caused USA Power‘s
damages or that USA Power would have benefitted if Ms. Williams
had not breached her fiduciary duties. Accordingly, we affirm the
trial court‘s ruling as to each issue presented on appeal.
Background
¶8 This dispute focuses on USA Power‘s preliminary design
of a power plant in Mona, Utah—its Spring Canyon vision—and
PacifiCorp‘s alleged use of that plan to build its own power plant
project.3 The preliminary design phase for a power plant involves
site specific economic and technological feasibility studies. These
studies are necessary for the financing and permitting of the plant.
Preliminary design generally costs one to two percent of the plant‘s
total cost and takes between eighteen and twenty-four months if the
company starts from scratch.
¶9 USA Power claims that PacifiCorp misappropriated its
trade secrets, which consisted of its Spring Canyon vision generally
as well as the following:
_____________________________________________________________
3 ―‗On appeal, we review the record facts in a light most favorable
to the jury‘s verdict and recite the facts accordingly.‘ We present
conflicting evidence only as necessary to understand issues raised on
appeal.‖ State v. Holgate, 2000 UT 74, ¶ 2, 10 P.3d 346 (citations
omitted).
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(1) technical information about the size, location,
configuration, economics, engineering, and assets of
[the Spring Canyon project]; (2) business strategies,
goals, and plans including proformas describing cost
and profitability; and (3) [USA Power‘s] first-to-market
advantage—i.e., the ability to obtain financing and get
to the market first and block potential competitors.
USA Power claims it disclosed these trade secrets to PacifiCorp
mainly through three volumes of confidential information it
provided PacifiCorp pursuant to the Confidentiality and Non-
Disclosure Agreement, though it also disclosed some information
related to its vision in emails and other communications between the
parties. USA Power expended significant resources conducting
preliminary design work for Spring Canyon, including two years,
thousands of work-hours, and close to $1 million.
¶ 10 USA Power publicly disclosed various pieces of
information about its Spring Canyon proposal on three occasions.
First, in February 2002, it filed a Notice of Intent (NOI) with the Utah
Department of Air Quality (UDAQ). This document was public and
included a description of ―the fuels and their use,‖ the ―equipment
used in process,‖ ―operation schedules,‖ ―production rates,‖ and
―raw materials used.‖ The project description also stated that ―the
use of dry type air-cooled condenser will . . . greatly reduce the
plant‘s water usage‖ and that the plant was ―projected to begin
operation in September 2003.‖ From this public disclosure, it was
clear that the Spring Canyon plant would be an air-cooled
combined-cycle natural gas plant with two GE 7-FA turbines, two
heat recovery steam generators, one steam turbine, air inlet chillers,
duct firing, and specific emissions controls, and would be located in
Mona, Utah.
¶ 11 The second public disclosure occurred in May 2002, when
USA Power filed an ―Application for Zone Change Permit‖ with
Juab County. The rezoning application was a public document and
described the Spring Canyon plant as a ―base-load natural gas-fired
combined cycle power generation facility.‖ It also described the
plant‘s capacity, technology,4 and specific location, including a map
_____________________________________________________________
4The zoning change permit described the plant capacity as 530
MW and its technology as including two General Electric Frame 7-
FA gas turbines with air inlet chillers, ―two heat recovery steam
generators to create additional ‗combined cycle‘ power,‖ an air-
(Continued)
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Opinion of the Court
and site plan. The final disclosure took place after notice from the
State that USA Power lacked the emission credits for a two gas
turbine configuration. USA Power subsequently resubmitted a NOI
for a 1x1 configuration. This application was for the same plant
configuration as that filed in February 2002, except for the
elimination of one gas turbine.
¶ 12 Although various details about the configuration and
location of the plant were publicly disclosed, other information
about USA Power‘s preliminary design of Spring Canyon remained
private. This information included the economic and technical
analysis that supported USA Power‘s publicly disclosed choices—
the design and location selected for its plant. The parties refer to this
information as the ―back-up studies.‖ And this non-public
information included:
―order of magnitude‖ cost estimates, the cost of dry
cooling versus wet cooling (including the 3% ―energy
penalty‖), water usage, turbine performance analysis
(i.e., heat rates), [USA Power‘s] land and water options
pricing, the approximate route for a lateral from
Questar‘s pipeline, business plans, and economic
proformas for a power purchase agreement (―PPA‖)
with PacifiCorp.
Ultimately, USA Power invested significant time and resources in
developing its Spring Canyon vision and going through the
permitting process, which enabled it to present a fully developed
proposal to PacifiCorp. USA Power argues that its entire vision for
the Spring Canyon plant—including its publicly disclosed
configuration and its private rationale for that configuration—
constituted a trade secret. USA Power further claims that the
individual pieces of non-disclosed information also constitute trade
secrets.
¶ 13 The first meeting between USA Power and PacifiCorp took
place in August 2002. At this meeting, USA Power would not discuss
any confidential information about its Spring Canyon proposal
without a signed confidentiality agreement. The parties signed a
Confidentiality and Non-Disclosure Agreement on September 11,
2002. After signing the Agreement, USA Power gave PacifiCorp two
volumes of confidential information regarding its Spring Canyon
cooled condenser, and the ―Lowest Achievable Emission Rate
technology,‖ utilizing ―Selective Catalytic Reduction.‖
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project (Volumes I and II). PacifiCorp expressed various concerns
about the Spring Canyon project, including the viability of dry
cooling, but ―indicated that [Spring Canyon] was the only project in
line to meet the 2005 [energy] demand.‖ Further, Rand Thurgood,
PacifiCorp‘s Managing Director of Resource Development, indicated
that if PacifiCorp ―were to try to do this it would take them two to
three years . . . [and] millions of dollars to accomplish.‖ USA Power
continued to provide information to address PacifiCorp‘s concerns,
including the calculation of the energy penalty for the dry cooling
process.
¶ 14 The discussions between PacifiCorp and USA Power
occurred in the broader setting of an impending energy shortage. As
early as 2001, PacifiCorp knew that it would need additional
―peaking‖ capacity to meet demand in the summer of 2005.
PacifiCorp analyzed various strategies to address this shortage in its
2003 Integrated Resource Plan. These strategies were summarized in
a January 9, 2003 memorandum to the Chief Executive Committee,
which identified three options: (1) purchasing power through
contract purchases, (2) acquiring existing plants, or (3) building new
facilities.
¶ 15 The memorandum also discussed the difficulties with each
option, stating that power purchases ―must come from outside the
Utah bubble‖ and ―[t]he already full transmission paths into the
bubble will limit if not prohibit purchases sufficient to meet the
additional requirements.‖ It also noted the tight timeframe for
building new facilities, stating that ―physical project schedules
(design, engineering, permitting and construction) are extremely
tight even if the project approvals were given today.‖ And in
considering building options, it noted that ―[t]he only project that
has any possibility of meeting heavy load hour peaking for 2005 or
even a 2006 commercial date is the Spring Canyon project.‖
¶ 16 A second February 5, 2003 memorandum to the Chief
Executive Committee written by Rand Thurgood, Managing Director
of Resource Development, and Mark Tallman, Director of
Origination, further refined PacifiCorp‘s options and requested
approval for several actions. In this memorandum, PacifiCorp
sought internal authority to take several actions that would allow it
to compile its own build proposal. For instance, it sought approval to
purchase the Mona assets of both USA Power and another Mona
power plant project being developed by Panda Energy. Specifically,
the memorandum sought approval to (1) ―purchase the Panda
position in Mona for $1,006,989.81 and extend the associated land
options,‖ (2) ―negotiate and purchase USA Power‘s rights associated
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Opinion of the Court
with their Mona site,‖ (3) ―spend up to $500,000 (during FY 2004) for
engineering design‖ for either the USA Power site and/or the Panda
site pending their acquisition, and (4) ―issue an asset-based RFP in
March or April 2003 to meet the April 2005 IRP peaking need for the
Utah Bubble.‖
¶ 17 The February 5, 2003 memorandum noted that CH2M
HILL, a consulting firm hired by PacifiCorp, had conducted a ―siting
study for gas-fired generation along the Wasatch Front‖ and the
study ―strongly indicate[d] that the Mona area [was] one of the best
areas (if not the best area) for the development of gas-fired
generation to meet peaking and/or base load generation needs.‖ The
memorandum also noted that purchasing power from a Nevada
source was possible but expensive, costing more than $7.9 million for
a two-year supply of power. Finally, it described the ―optimal
outcome‖ as the acquisition of both Panda‘s and USA Power‘s Mona
assets. This would give PacifiCorp ―the most flexible and cost
effective build alternative‖ and allow it to ―combine the projects and
immediately begin engineering to secure a viable combined cycle
build option for meeting the April 2005 target date for a peaking
resource.‖
¶ 18 PacifiCorp moved forward with negotiations to purchase
USA Power‘s and Panda‘s Mona assets in order to prepare its own
proposal to build a power plant project and then submit this
proposal to its RFP. In February 2003, USA Power provided
PacifiCorp additional confidential information on the viability of its
Spring Canyon project contained in Volume III, which included
economic proforma assumptions and projections. In March 2003,
PacifiCorp agreed to purchase the Spring Canyon project for $3
million and also to enter into a ―non-binding joint development
agreement for other projects‖ for $2.29 million. But this agreement
was never reduced to writing and eventually fell apart. PacifiCorp
later informed USA Power that it would not purchase the Spring
Canyon project, but encouraged it to bid in the upcoming RFP,
stating that ―[i]t was [USA Power‘s] RFP to lose because [it] had
done so much work on the project that nobody stood a chance to
beat [it].‖
¶ 19 During this time frame, PacifiCorp retained Ms. Williams,
a water law attorney based in Salt Lake City. Ms. Williams had
worked for USA Power off and on since April 2001, helping it
evaluate the feasibility of the Mona site and acquire options on the
water rights needed for Spring Canyon. ―By August 2002, [USA
Power] had acquired options on sufficient water [through
Ms. Williams‘s work] and was negotiating with PacifiCorp for sale of
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its power plant project.‖ USA Power claims that Ms. Williams‘s work
for PacifiCorp caused the March 2003 purchase agreement to fall
through, pointing mainly to the sequence of events in support of its
causation theory. On March 3, 2003, PacifiCorp retained Ms.
Williams to assist it in obtaining water rights. On March 14,
PacifiCorp entered into an agreement with USA Power to purchase
Spring Canyon. On March 17, PacifiCorp backed out of that
agreement and decided to develop its RFP bid without purchasing
USA Power‘s assets. While negotiations were ongoing, Ms. Williams
worked to acquire water rights from Geneva Steel for PacifiCorp,
which efforts were ultimately unnecessary as PacifiCorp obtained
water from another source.
¶ 20 During the same time period, PacifiCorp was also
negotiating with Panda to acquire its Mona assets and contacting
engineering firms. In February 2003, PacifiCorp purchased Panda‘s
Mona assets for $969,003. These assets included valuable
meteorological data, land-purchase options, and transmission
interconnect studies. PacifiCorp also made initial contact with
engineering firms, soliciting information on their experience with
―combined cycle power plants, utilizing 1x1 and 2x1 configuration,
GE 7FA gas turbines with inlet chillers, duct burners, [and] wet and
dry cooling.‖
¶ 21 PacifiCorp then focused on producing its own bid for the
upcoming RFP. It met with Questar to discuss the siting of a lateral
gas pipeline to the Mona site and sought internal approval to spend
$16.2 million for up to 6,000 acre-feet of water that would be needed
for a 1000MW water-cooled, combined-cycle plant in Mona. By mid-
May, ―Questar [had] agreed to obtain right-of-way for, construct,
and own the gas lateral for PacifiCorp‘s Mona site at PacifiCorp‘s
expense.‖
¶ 22 PacifiCorp also hired an engineering firm, Shaw/Stone &
Webster (SS&W), to provide engineering services for a possible
Mona plant, capping SS&W‘s fees at $250,000. Instead of starting
from scratch, PacifiCorp asked SS&W to focus on ―combined cycle
power plants, utilizing 1x1 and 2x1 configuration, GE 7FA gas
turbines with inlet chillers, duct burners, [and] wet and dry cooling‖
located in Mona. After approximately seven weeks of work, SS&W
delivered its initial report to PacifiCorp in June 2003. This report
included ―detailed cost estimates, analysis of wet versus dry cooling,
including the energy penalty, water balances, and heat balances.‖ In
its work for PacifiCorp, SS&W did not use any non-public
information from USA Power and used a similarly designed power
plant, Apex, as a reference for its work.
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Opinion of the Court
¶ 23 Also in June 2003, PacifiCorp issued its RFP to meet the
identified need for power in 2005, with a deadline for bid submittals
on July 22, 2003. In response, PacifiCorp received one hundred bids
from thirty-seven companies, which ―includ[ed] bids of different
configurations for Mona, and various bids of configurations similar
to‖ Spring Canyon. USA Power submitted four bids to supply power
under a Power Purchase Agreement (PPA) from its Spring Canyon
project. PacifiCorp submitted its own proposal on July 17, 2003.
After reviewing the submissions, and receiving an evaluation by a
neutral third party, PacifiCorp awarded itself the bid on September
22, 2003, deciding to build its own plant in Mona—Currant Creek.
¶ 24 After awarding itself the bid, PacifiCorp moved forward
with permitting and detailed design for its Currant Creek plant. As
part of this process, PacifiCorp needed to secure the water rights
necessary for its project. Through Ms. Williams, it obtained water
rights from WW Ranches by signing a water purchase agreement on
September 3, 2003—after it had submitted its bid in the RFP process
but prior to actually awarding itself the bid—conditioned on
approval from the State Engineer and the Goshen Water Board. In
order to obtain this approval, on November 3, 2003, PacifiCorp
applied for a change application to divert the needed water to its
project. Construction began on the Currant Creek plant in January
2004. The necessary water rights approvals were obtained in
February 2004. PacifiCorp used a phased approach to construction—
first phasing in single-cycle power production in the summer of 2005
and later phasing in combined-cycle facilities. PacifiCorp spent
$341.2 million on construction of Currant Creek and used Panda‘s
assets, including critical meteorological data, to expedite
development of the plant by eighteen months.
¶ 25 USA Power filed its complaint on February 18, 2005,
which, as amended, alleged in part that PacifiCorp breached the
Confidentiality and Non-Disclosure Agreement and violated the
Utah Uniform Trade Secrets Act (UUTSA). USA Power also brought
a breach of fiduciary duty claim against its water attorney,
Ms. Williams, and her law firm, HRO. The trial court granted
summary judgment in favor of the Defendants on all of USA Power‘s
claims, which we reversed in USA Power I in 2010, holding that,
when appropriate legal standards were applied, issues of material
fact precluded summary judgment. We remanded for further
proceedings.
¶ 26 In May 2012, after a five-week trial, a jury found that
PacifiCorp had willfully and maliciously misappropriated a trade
secret from USA Power and breached the Confidentiality and Non-
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Disclosure Agreement. The jury awarded USA Power more than
$133 million in damages—composed of actual losses ($21,399,391)
and unjust enrichment damages ($112,500,000) caused by
PacifiCorp‘s misappropriation. The jury also found that
Ms. Williams and her law firm had breached their fiduciary duty to
USA Power because Ms. Williams had worked for both USA Power
and PacifiCorp to secure water rights. The jury found that this
breach had also caused USA Power‘s actual damages, the
$21,399,391, and allocated $18,189,489.35 of those damages to
PacifiCorp (85%) and $3,209,908.65 to Ms. Williams and her law firm
(15%). The trial court later reduced the unjust enrichment award to
$91,110,609, finding that the damages for actual loss and for unjust
enrichment were duplicative. The court also awarded attorney fees
and costs for USA Power‘s claims against PacifiCorp based on a
stipulation of the parties as to the amount ($2,322,468.11), making
the total final judgment $114,822,468.11.
¶ 27 PacifiCorp moved for JNOV, arguing that USA Power did
not prove the existence of a trade secret as a matter of law. The trial
court denied PacifiCorp‘s JNOV motion, and PacifiCorp appealed.
PacifiCorp did not appeal the jury‘s finding of misappropriation.5
Ms. Williams also filed for a JNOV, arguing that USA Power had
failed to prove that any breach of fiduciary duty caused the claimed
damages. The trial court granted Ms. Williams‘s JNOV motion,
finding that the causation element of the breach of fiduciary duty
claim was lacking as a matter of law. USA Power appealed the grant
of the JNOV in favor of Ms. Williams. PacifiCorp‘s appeal of the
JNOV denial and USA Power‘s appeal of the grant of JNOV to
Ms. Williams were consolidated. Further, USA Power cross-appeals
on PacifiCorp‘s appeal, arguing that its damage award was
inadequate in several ways. We have jurisdiction over these appeals
pursuant to Utah Code section 78A-3-102(3)(j).
Standard of Review
¶ 28 We address the applicable standards of review beginning
with those relevant to PacifiCorp‘s direct appeal, then those relevant
to USA Power‘s cross-appeal, and finally those relevant to USA
Power‘s direct appeal.
_____________________________________________________________
5 In its brief PacifiCorp states that it did not appeal the
misappropriation finding ―because of space constraints‖ but does
not concede this issue. But since PacifiCorp chose not to appeal this
issue, we consider it conceded for the purposes of this appeal.
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Opinion of the Court
PacifiCorp’s Appeal
¶ 29 PacifiCorp raises four issues in its direct appeal. First, it
argues that the trial court incorrectly denied its motion for JNOV
because USA Power ―did not define its trade secret with sufficient
specificity.‖ Second, it argues that it was entitled to a JNOV because
USA Power ―failed to present sufficient evidence that its alleged
compilation trade secret was not generally known and not readily
ascertainable.‖ Both of these arguments challenge the trial court‘s
decision to deny a JNOV. While we review a trial court‘s ruling ―on
JNOV motions for correctness,‖ we will overturn its decision to deny
a JNOV only if the appellant can demonstrate that there was no basis
in the evidence, including reasonable inferences which could be
drawn therefrom, to support the jury‘s verdict.6
¶ 30 Third, PacifiCorp argues that it is entitled to a new trial or
remittitur because the trial court inappropriately awarded unjust
enrichment damages that included ―all of [its] profits from its
Currant Creek plant over thirty years.‖ ―We apply an abuse of
discretion standard in reviewing a trial judge‘s decision to grant or
deny a new trial or remittitur . . . .‖7 Finally, PacifiCorp argues it was
entitled to a jury instruction detailing the head-start limitation on
unjust enrichment. ―We review a district court‘s refusal to give a jury
instruction for abuse of discretion.‖8
USA Power’s Cross-Appeal
¶ 31 USA Power raises five issues on its cross-appeal. First, it
argues that the court erred by granting a remittitur and reducing its
trade secret damages against PacifiCorp. When reviewing a rule
59(a)(6) motion, ―the trial judge is in the best position to ascertain if
the jury has ‗exceeded its proper bounds,‘ and we will reverse ‗only
if there is no reasonable basis for the decision.‘‖9 Thus, we review for
abuse of discretion.10 Second, USA Power argues that the trial court
_____________________________________________________________
6 ASC Utah, Inc. v. Wolf Mountain Resorts, L.C., 2013 UT 24, ¶¶ 18–
19, 309 P.3d 201.
7 Smith v. Fairfax Realty, Inc., 2003 UT 41, ¶ 25, 82 P.3d 1064.
8 Miller v. Utah Dep’t of Transp., 2012 UT 54, ¶ 13, 285 P.3d 1208.
9 Diversified Holdings, L.C. v. Turner, 2002 UT 129, ¶ 4, 63 P.3d 686
(citation omitted).
10 See Crookston v. Fire Ins. Exch., 817 P.2d 789, 8004 (Utah 1991)
(stating that ―[u]nder our rule 59, it is well settled that, as a general
matter, the trial court has broad discretion to grant or deny a motion
(Continued)
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erred by denying exemplary damages under the UUTSA. We review
the standard applied by the trial court in determining whether to
grant exemplary damages for correctness,11 but, so long as the
correct standard is used, ―the decision to grant or deny enhanced
damages remains firmly within the scope of the district court‘s
reasoned discretion.‖12 Third, USA Power argues that the trial court
erred in the standard used to determine attorney fees, which we
review for correctness. 13
¶ 32 Fourth, USA Power argues that it was entitled to
prejudgment interest from the time USA Power‘s loss was
established or, alternatively, from the time of the verdict up until the
time of the entry of judgment. Finally, USA Power argues that the
ten percent interest rate in Utah Code section 15-1-1 is the
appropriate interest rate for any prejudgment interest as well as
post-judgment interest. Each of these issues is a question of law that
we review for correctness.14
USA Power’s Direct Appeal
¶ 33 The final appeal focuses on whether Ms. Williams, by
breach of her fiduciary duties,15 caused USA Power‘s losses. USA
Power raises three issues in its direct appeal. First, it argues that the
trial court erred in granting Ms. Williams‘s motion for judgment
notwithstanding the verdict ―on the grounds there was no evidence
for the [j]ury to find the element of causation‖ as it related to USA
Power‘s failed bid. Second, USA Power argues that the court also
for a new trial‖ before discussing ―[t]he precise nature of that
discretion and what constitutes an abuse‖).
11See Schroeder v. Utah Attorney Gen.’s Office, 2015 UT 77, ¶ 17, 358
P.3d 1075.
12Odetics, Inc. v. Storage Tech. Corp., 185 F.3d 1259, 1274 (Fed. Cir.
1999).
13See Campbell v. State Farm Mut. Auto. Ins. Co., 2001 UT 89, ¶ 13,
65 P.3d 1134, rev’d on other grounds, 538 U.S. 408 (2003); Schroeder,
2015 UT 77, ¶ 17.
14See Encon Utah, LLC v. Fluor Ames Kraemer, LLC, 2009 UT 7, ¶ 11,
210 P.3d 263.
15 The trial court granted JNOV in favor of Ms. Williams only on
the element of causation. Accordingly, we assume for purposes of
this appeal that Ms. Williams did breach her fiduciary duties.
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Opinion of the Court
erred in granting Ms. Williams‘s motion for lack of evidence of
causation as it related to the lost contract between USA Power and
PacifiCorp to purchase USA Power‘s project. Both of these issues
challenge the trial court‘s grant of JNOV, though they differ as to the
damages alleged to have been caused by Ms. Williams. Finally USA
Power contends that the trial court erred in granting Ms. Williams‘s
motion for a directed verdict on USA Power‘s punitive damages
claim.
¶ 34 The standard of review for these claims is the same16: ―We
review a trial court decision on . . . a motion for j.n.o.v. for
correctness.‖17 ―A directed verdict and a judgment n.o.v. are justified
only if, after looking at the evidence and all reasonable inferences in
a light most favorable to the nonmoving party, ‗the trial court
concludes that there is no competent evidence which would support
a verdict in [the nonmoving party‘s] favor.‘‖18
Analysis
¶ 35 Before discussing the merits of the appeals, we address the
impact of our prior holding in USA Power I to decide whether our
determination that issues of fact precluded summary judgment at
that point should drive our review of the court‘s subsequent grant or
denial of JNOV. After addressing this issue, we then proceed with
(1) PacifiCorp‘s direct appeal of the trial court‘s denial of JNOV
related to the trade secret issue, (2) USA Power‘s cross-appeal of
various issues related to damages, and, finally, (3) USA Power‘s
direct appeal of the trial court‘s grant of JNOV on Ms. Williams‘s
breach of her fiduciary duties.
¶ 36 As an initial matter, USA Power has asked us to treat USA
Power I, as the ―law of the case‖ and therefore determinative of
PacifiCorp‘s and USA Power‘s direct appeals. For the reasons
discussed below, we decline to do so and take this opportunity to
clarify the impact that an appellate court‘s denial of a summary
judgment motion on factual grounds has upon a subsequent motion
for directed verdict or JNOV. We conclude that the law of the case
doctrine does not preclude a trial court from reexamining arguments
made in a summary judgment motion if those arguments have been
_____________________________________________________________
16See DeBry v. Cascade Enters., 879 P.2d 1353, 1359 (Utah 1994)
(applying the same standard to both a directed verdict and a JNOV).
17 Lyon v. Burton, 2000 UT 19, ¶ 11, 5 P.3d 616.
18 DeBry, 879 P.2d at 1359 (citations omitted).
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Opinion of the Court
cast in a different light, such as when a motion is brought after the
evidence has been adduced at trial.
¶ 37 ―Under the law of the case doctrine, issues resolved by this
court on appeal bind the trial court on remand, and generally bind
this court should the case return on appeal after remand.‖19 The
issues that become the law of the case, however, are primarily
questions of law, not of fact.20 Indeed, we have held that in certain
circumstances ―a decision[] as to a question of fact[] [does not] fall
within the [law of the case] rule‖ at all.21 This is true because ―there
is no particular benefit in establishing settled appellate precedent on
issues of fact.‖22 Thus, although our pronouncements on legal issues
are binding as the law of the case, our decisions on factual issues are
less compulsory.
¶ 38 In order to provide guidance as to how a lower court
should treat a decision on a factual matter by an appellate court, we
adopt a standard used in another branch of the law of the case
doctrine. When a trial court judge reviews another trial court judge‘s
ruling, the doctrine prevents the second judge from overruling the
first.23 There is an exception to this rule, however, that permits the
_____________________________________________________________
19 Gildea v. Guardian Title Co. of Utah, 2001 UT 75, ¶ 9, 31 P.3d 543.
20 See Utah Dep’t of Transp. v. Ivers, 2009 UT 56, ¶ 12, 218 P.3d 583
(―The mandate rule ‗dictates that pronouncements of an appellate
court on legal issues in a case become the law of the case and must be
followed in subsequent proceedings of that case.‘‖ (emphasis added)
(citation omitted)); Francis v. State, Utah Div. of Wildlife Res., 2013 UT
65, ¶ 21, 321 P.3d 1089 (―[A] decision of an appellate court
constitutes the law of the case only as to such questions of law as were
involved in the judgment . . . .‖ (first alteration in original) (emphasis
added) (citation omitted)).
21 Herriman Irrigation Co. v. Keel, 69 P. 719, 720 (Utah 1902)
(refusing to apply the law of the case doctrine when in an earlier
appeal ―the judgment [was] reversed and remanded for a new trial
because material findings of fact [were] not supported by the proof,
and when at the second trial additional evidence [was] offered and
admitted‖).
22 Manzanares v. Byington (In re Adoption of Baby B.), 2012 UT 35,
¶ 40, 308 P.3d 382.
23 See AMS Salt Indus., Inc. v. Magnesium Corp. of Am., 942 P.2d
315, 319 (Utah 1997).
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USA POWER v. PACIFICORP
Opinion of the Court
second judge to review ―the issues decided by the first judge [when
they] are presented to the second judge in a ‗different light.‘‖24 We
find this standard to also be appropriate in the context of a trial
court‘s review of factual issues decided by an appellate court
because it recognizes the comparative advantage trial courts have
over appellate courts in ruling on fact-dependent issues.25 We
accordingly adopt this standard here and hold that the factual issues
decided by an appellate court may be revisited by a lower court
when they are presented to the lower court in a ―different light.‖
¶ 39 The ―different light‖ standard is satisfied when the
―factual and legal posture of the case has . . . changed‖ since the
initial decision was rendered.26 Examples of such changes include
situations where the parties conduct additional relevant discovery,27
an appellate decision clarifies the applicable law,28 a party changes
the underlying theory of the case or motion,29 or the parties adduce
_____________________________________________________________
24 Id. (citation omitted).
25 See Manzanares, 2012 UT 35, ¶ 40.
26 Red Flame, Inc. v. Martinez, 2000 UT 22, ¶¶ 4–5, 996 P.2d 540.
27See, e.g., AMS, 942 P.2d at 319 (holding that the second judge in
the case properly granted the defendant‘s second summary
judgment motion because there had been two years of extensive
discovery and a full hearing between motions); Hammer v. Gibbons &
Reed Co., 510 P.2d 1104, 1105 (Utah 1973) (―Although the making of
repeated motions for the same relief under the same circumstances
might be considered a contempt of court, the circumstances in this
case were not the same when the second motion was
made . . . [because] [t]here had been further discovery and, in
addition, a pretrial conference.‖ (footnote omitted)).
28 See, e.g., Braddock ex rel. Smith v. Pac. Woodmen Life Ass’n, 58 P.2d
765, 765 (Utah 1936) (denying petition for rehearing and modifying
original decision) [hereinafter Braddock II].
29 Cf. Bd. of Educ. of Granite Sch. Dist. v. Salt Lake County, 659 P.2d
1030, 1033 (Utah 1983) (holding that it was error for the second judge
in a case to revisit a factual issue because an amendment to the
complaint ―had no significant effect upon the issue . . . since that
issue depended solely upon an interpretation of the statutes in
question regardless of the basis of recovery‖); Sittner v. Big Horn Tar
Sands & Oil, Inc., 692 P.2d 735, 736 (Utah 1984) (―[M]ere citation of
additional authority is insufficient to warrant [revisiting a decided
(Continued)
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Opinion of the Court
their evidence at trial.30 We recognize that this standard will
frequently be satisfied but caution that a lower court cannot ignore
or deviate from an appellate court‘s decision on a factual issue
simply because it ―believe[s] that the issue could have been better
decided in another fashion.‖31 Thus, as we stated in Braddock ex rel
Smith v. Pacific Woodmen Life Ass’n, a decision on appeal that ―there
[is] such conflict in the evidence that the [trial] court should have
submitted the case to the jury‖ still ―leave[s] the trial court
untrammeled at the []trial in passing on motions for nonsuit,
directed verdict, or dismissal,‖ so long as the case is presented to the
trial court in a different light.32
issue], at least where the cited authority does not modify the
fundamental theory of the motion.‖ (citation omitted)).
30 See, e.g., Richardson v. Grand Cent. Corp., 572 P.2d 395, 397–98
(Utah 1977) (holding that, although one trial judge had denied the
defendant‘s summary judgment motion, the second judge properly
granted a directed verdict motion in favor of the defendant after the
plaintiff had an opportunity to present his evidence at trial).
31 Thurston v. Box Elder County, 892 P.2d 1034, 1038 (Utah 1995).
32 Braddock II, 58 P.2d at 765. In the original Braddock case, we had
reversed judgment entered in favor of the plaintiff after a jury trial
because the trial court applied the wrong legal theory. 54 P.2d 1189,
1191–93 (Utah 1936), reh’g denied and decision modified by Braddock II,
58 P.2d 765 [hereinafter Braddock I]. After clarifying the applicable
law, we ―decline[d] to direct a dismissal of the action on the present
record,‖ holding that ―there was such conflict in the evidence that
the court should have submitted the case to the jury‖ under the
correct theory. Braddock II, 58 P.2d at 765. The defendant petitioned
for rehearing, arguing that ―[u]nder the rule of the law of the case[,] .
. . the language used by us will require the trial court to submit the
case to the jury on a retrail in the event the evidence is substantially
the same as in this record.‖ Id. We denied the petition but clarified
the impact of Braddock I, stating that the case ―should now be retried
and an opportunity afforded the parties to present their evidence
under the correct theory as announced in our decision. . . . [I]t was
and is our intention to leave the trial court untrammeled at the retrial
in passing on motions for nonsuit, directed verdict, or dismissal.‖ Id.
Thus, our determination of a factual issue—whether a dispute of fact
existed—did not limit the trial court‘s ability to decide whether to
grant a subsequent motion for directed verdict on the same facts
(Continued)
17
USA POWER v. PACIFICORP
Opinion of the Court
¶ 40 Applying this standard here, the questions of law decided
in USA Power I became the law of the case and accordingly could not
be relitigated before the trial court.33 The questions of fact, on the
other hand, were necessarily based on the record as it then existed.34
Our determination that reasonable inferences could be made in USA
Power‘s favor at the summary judgment stage did not mean that
later developments in the case, such as the five-week trial, would not
cast the evidence and Defendants‘ arguments in a new light. Indeed,
we see no need to detail the ways in which the evidence may have
been developed after summary judgment;35 instead, it is sufficient to
recognize that a trial, especially one lasting five weeks, casts the
evidence and the case in a significantly different light than the cold
record at summary judgment.36 Accordingly, the trial court was free
because the court would be looking at those facts under a different
light—the appropriate legal theory.
33The law of the case doctrine obviously does not prohibit a
request to overturn prior precedent, but such a request must be
made to the same appellate court that issued the prior decision or to
a superior court.
34 See Standard Oil Co. of Cal. v. United States, 429 U.S. 17, 18 (1976)
(―Like the original district court judgment, the appellate mandate
relates to the record and issues then before the court, and does not
purport to deal with possible later events.‖).
35 We acknowledge but reject the parties‘ suggestion that a denial
of a summary judgment motion becomes the law of the case so long
as the evidence introduced at trial is not ―substantially different‖
from that presented in the summary judgment record, a test adopted
in other jurisdictions. See, e.g., Piesco v. Koch, 12 F.3d 332, 341–42 (2d
Cir. 1993) (―[W]hen we have reversed the granting of summary
judgment, the district court cannot properly grant judgment as a
matter of law on the basis of trial evidence that is not substantially
different.‖ (emphasis added)). This test does not comport with our
approach in Braddock and would in effect require parties to argue
over the degree the evidence has changed since summary judgment
and whether or not that change is sufficiently substantial. Such a
requirement does not serve the purpose for the law of the case
doctrine—to increase ―economy and efficiency‖ and decrease
―delays and difficulties‖ in litigation. Thurston, 892 P.2d at 1037.
36 See State v. Pena, 869 P.2d 932, 936 (Utah 1994) (stating that a
trial judge is ―in the best position to assess the credibility of
witnesses and to derive a sense of the proceedings as a whole,
(Continued)
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Opinion of the Court
to rule on Defendants‘ motions, even though they may have relied
on arguments we addressed and rejected on factual grounds in USA
Power I. By the same token, we review the trial court‘s rulings on
those motions unfettered by our prior decision.
¶ 41 Having established that the lower court was free to revisit
factual issues addressed by our previous decision, we turn now to
the merits of the various appeals, beginning with PacifiCorp‘s appeal
of the trial court‘s denial of its JNOV motion.
PacifiCorp’s Direct Appeal
¶ 42 Because USA Power I does not dictate the result of this
appeal, we now address the merits of PacifiCorp‘s direct appeal. We
first discuss PacifiCorp‘s claim that we should reverse the trial
court‘s decision to deny its JNOV motion. We uphold the trial court‘s
denial of the JNOV on the trade secrets issue because, although USA
Power‘s vision is somewhat nebulous, there is a basis in the evidence
that would allow a reasonable juror to decide that at least some
identifiable portion of USA Power‘s vision met the definition of a
trade secret—i.e., that it derived independent value from not being
generally known or readily ascertainable. Second, we discuss
PacifiCorp‘s argument that it is entitled to a new trial or remittitur
on its unjust enrichment award. We conclude that it is not because
there was evidence in the record that, if read in support of the jury‘s
decision, was consistent with the correct legal standard for unjust
enrichment damages. Finally, we discuss PacifiCorp‘s argument that
it is entitled to a new trial or remittitur because the trial court failed
something an appellate court cannot hope to garner from a cold
record‖), abrogated on other grounds by Campbell v. State Farm Mut.
Auto. Ins. Co., 2001 UT 89, 65 P.3d 1134; see also Armco Steel Corp. v.
Realty Inv. Co., 273 F.2d 483, 484–85 (8th Cir. 1960) (holding that
summary judgment should be denied ―whenever there is the
slightest doubt as to the facts,‖ but rejecting the argument that ―if it
was error to grant summary judgment [on an earlier appeal] then it
would likewise be error to direct a verdict or grant a motion for
judgment notwithstanding the verdict [on this appeal]‖ because
when ―both parties have had an opportunity to adduce all relevant,
available evidence so that the trial court is no longer uncertain as to
the circumstances of the case, then slight doubt as to the facts is
insufficient to avert a directed verdict or a judgment
notwithstanding the verdict‖).
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USA POWER v. PACIFICORP
Opinion of the Court
to give the head-start limitation on unjust enrichment. We conclude
that the trial court did not abuse its discretion in so refusing.
I. We Uphold the Trial Court‘s Denial of PacifiCorp‘s JNOV Motion
¶ 43 PacifiCorp faces a difficult standard of review in asking us
to overturn the trial court‘s denial of a JNOV and ultimately reverse
the jury‘s verdict. We do not re-weigh the evidence and decide if we
think the jury got it right. Instead, we review the record to see if
there was at least some basis in the evidence from which a
reasonable juror could determine that a trade secret did exist.37 We
conclude that under this standard, there was at least some evidence
to support the jury‘s verdict and thus uphold the denial of the JNOV.
¶ 44 ―To establish a claim for misappropriation of trade secrets,
USA Power must show ‗(1) the existence of a trade secret, (2)
communication of the trade secret to [PacifiCorp] under an express
or implied agreement limiting disclosure of the secret, and (3)
[PacifiCorp‘s] use of the secret that injures [USA Power].‘‖38 This
appeal deals only with the threshold issue of ―whether, in fact, there
[was] a trade secret to be misappropriated,‖39 because PacifiCorp did
not appeal the jury‘s finding of misappropriation.40 Therefore, any
argument that goes to PacifiCorp‘s use of USA Power‘s information
is not relevant to our analysis. It is established for purposes of this
appeal that if there was a trade secret, it was misappropriated.
¶ 45 Utah‘s Uniform Trade Secrets Act defines ―trade secret‖
as
information, including a formula, pattern, compilation,
program, device, method, technique, or process, that:
(a) derives independent economic value, actual or
potential, from not being generally known to, and not
being readily ascertainable by proper means by, other
_____________________________________________________________
See ASC Utah, Inc. v. Wolf Mountain Resorts, L.C., 2013 UT 24,
37
¶¶ 18–19, 309 P.3d 201.
USA Power I, 2010 UT 31, ¶ 39, 235 P.3d 749 (alterations in
38
original) (citation omitted).
39 Id. ¶ 41 (citation omitted).
While PacifiCorp ―does not concede that it misappropriated
40
anything,‖ it chose not to appeal the misappropriation finding
―because of space constraints.‖
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Opinion of the Court
persons who can obtain economic value from its
disclosure or use; and
(b) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.41
The plaintiff bears the burden of proving the existence of a trade
secret, and ―there is no presumption in his or her favor.‖42
¶ 46 The jury found that PacifiCorp ―misappropriated a trade
secret possessed by USA Power.‖ PacifiCorp moved for a JNOV,
which the trial court denied. PacifiCorp now argues that the trial
court wrongly denied its JNOV because (1) USA Power ―failed to
identify its trade secret with particularity‖ and because (2) USA
Power ―failed to prove the existence of a compilation trade secret
when all of [USA Power‘s] vision was either ‗generally known‘ or
‗readily ascertainable.‘‖ In order to reverse a denial of a JNOV,
PacifiCorp must show that ―there was no basis in the evidence to
support the jury‘s verdict.‖43
¶ 47 Below, we discuss each of these claims. First, we discuss
PacifiCorp‘s particularity argument and conclude that, while USA
Power was not required to identify its trade secret with particularity,
it was required to articulate what about its vision was not ―generally
known‖ or ―readily ascertainable‖—and thus allow the fact-finder to
properly apply the statute. Next, we address whether USA Power
has met its burden of proving a trade secret existed under the
UUTSA. We conclude that it has done so because there is a basis in
the evidence to support a jury finding that identifiable portions of
USA Power‘s vision were not generally known or readily
ascertainable and derived value from this status. Therefore, we
uphold the trial court‘s denial of PacifiCorp‘s JNOV motion.
A. USA Power Sufficiently Identified Its Trade Secrets
¶ 48 PacifiCorp argues that it is entitled to a JNOV because
USA Power did not define its trade secret with the necessary
specificity. In contrast, USA Power argues that the ―UUTSA does not
impose a ‗particularity‘ standard at trial beyond the evidence
necessary to meet the statutory trade secret definition.‖ USA Power
_____________________________________________________________
41 UTAH CODE § 13-24-2(4).
42CDC Restoration & Constr., LC v. Tradesmen Contractors, LLC,
2012 UT App 60, ¶ 13, 274 P.3d 317 (citation omitted).
43 ASC Utah, 2013 UT 24, ¶19.
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Opinion of the Court
is correct that there is no ―particularity‖ requirement in the
UUTSA.44 The trade secret at issue, however, must be defined in a
manner that allows the fact-finder to determine if a trade secret
exists under the statute.45 Under the UUTSA, the fact-finder must
determine if information claimed as a trade secret ―derives
independent economic value‖ ―from not being generally known to‖
or ―readily ascertainable by‖ those who could ―obtain economic
value from its disclosure or use.‖46 In order to make such a
determination, it is necessary for the fact-finder to know what it is
that the plaintiff claims is not generally known or readily
ascertainable.
¶ 49 Further, we made it clear in USA Power I that the plaintiff
asserting a compilation trade secret must do more than ―point to
broad areas of technology and assert that something there must have
been secret and misappropriated.‖47 Therefore, while USA Power
_____________________________________________________________
44 Some states have written a ―particularity‖ requirement into
their Trade Secret Acts. In California, for instance, ―before
commencing discovery related to the trade secret, the party alleging
the misappropriation shall identify the trade secret with reasonable
particularity.‖ CAL. CIV. PROC. CODE § 2019.210 (West 2016). Indeed,
scholars have discussed the potential practical problems that may
arise in trade secret cases where particularity is not required,
especially in the context of combination or compilation trade secrets.
See, e.g., Charles Tait Graves & Brian D. Range, Identification of Trade
Secret Claims in Litigation: Solutions for a Ubiquitous Dispute, 5 NW. J.
TECH. & INTELL. PROP. 68, 77–78, 91–93 (2006); Tait Graves &
Alexander Macgillivray, Combination Trade Secrets and the Logic of
Intellectual Property, 20 SANTA CLARA COMPUTER & HIGH TECH. L.J.
261, 275 (2004). But if a ―particularity‖ requirement beyond what is
present in the statute is to be required in trade secret cases, it is for
the legislature to implement. See Associated Gen. Contractors v. Bd. of
Oil, Gas & Mining, 2001 UT 112, ¶ 30, 38 P.3d 291 (―[W]e will not
‗infer substantive terms into the text that are not already there.‘‖
(citation omitted)).
45 See Healthcare Servs. of the Ozarks, Inc. v. Copeland, 198 S.W.3d
604, 611 (Mo. 2006) (―Evidence of purported ‗trade secrets‘ must be
more than general assertions, but must be sufficiently specific to
allow a determination by the court.‖).
46 UTAH CODE § 13-24-2(4)(a).
47 2010 UT 31, ¶ 44 (citation omitted).
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did not have to meet a defined ―particularity‖ requirement, it did
bear the burden of defining its purported trade secret in a manner
that would allow the fact-finder to determine if it met the statutory
requirements of the UUTSA.48
¶ 50 In this case, USA Power has defined its trade secrets as
including both its full Spring Canyon vision and various
components of this vision. Specifically, USA Power defined its trade
secrets as
first, the combination of level-1 information validating
a gas-fired power plant, sited in Mona, with
[information showing that] the Spring Canyon
project‘s . . . specific configuration would be
economically viable (profitable), and could be
designed and constructed to be on-line to meet the
critical energy demand projected for summer 2005,
when no other project could. The choices creating [the
Spring Canyon project] compilation included
engineering; economic, market, and financial analyses;
and choosing the best options from multiple locations,
fuel types, fuel sources, transmission options, air
pollution considerations, community support, sizes of
output, equipment configuration, water availability,
cooling options, business plans, and investment
options (the ―Choices‖).
Within this compilation, [USA Power] had additional
trade secrets, described as: (1) technical information
about the size, location, configuration, economics,
engineering, and assets of [the Spring Canyon project];
(2) business strategies, goals, and plans, including
proformas describing cost and profitability; and (3)
[USA Power‘s] first-to-market advantage—i.e., the
ability to obtain financing and get to market first and
block potential competitors.
¶ 51 The trade secrets were contained in the NOI permits, the
rezoning request, the three volumes of information USA Power gave
_____________________________________________________________
48See Utah Med. Prods., Inc. v. Clinical Innovations Assocs., Inc., 79 F.
Supp. 2d 1290, 1313 (D. Utah 1999) (requiring, in the summary
judgment posture, that the plaintiff define the claimed secret in a
way that allowed the statute to be meaningfully applied).
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USA POWER v. PACIFICORP
Opinion of the Court
to PacifiCorp concerning the project, and in communications
between the parties—including written communications, meetings,
and phone calls. While some of this information was publicly
disclosed, some of it was not. USA Power accordingly argued that its
trade secrets consisted of both a compilation trade secret—a trade
secret consisting of a compilation of publicly available
information49—as well as trade secrets consisting of undisclosed
information.
¶ 52 This definition of USA Power‘s trade secrets is sufficient to
permit the jury to perform its task. And, as we discuss below, there
was a basis in the evidence from which the jury could have found
that information that was part of USA Power‘s vision, including its
economic data and business plans, was not generally known or
readily ascertainable. It is important to again note the procedural
posture of this case. Where we are reviewing the trial court‘s denial
of a JNOV on factual grounds, it is not our role to determine, in the
first instance, whether we would conclude USA Power proved that
the trade secrets existed; rather we only review the record before us
to determine if there was an adequate basis in the evidence to
support the jury‘s verdict.
B. USA Power Submitted Enough Evidence to Give the Jury Some
Basis to Conclude a Trade Secret Existed
¶ 53 Having decided that we will not impose any particularity
requirement beyond that called for by statute and that USA Power
sufficiently defined its trade secrets, we now address whether the
jury could have reasonably inferred from the evidence presented
that a trade secret existed—i.e., that the information USA Power
described as trade secrets actually met the statutory standard. For
the reasons discussed below, we conclude that the jury could have
reasonably done so and thus uphold the trial court‘s denial of
PacifiCorp‘s JNOV motion.
¶ 54 Under the UUTSA, a trade secret must ―derive[]
independent economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its
_____________________________________________________________
49 Although, as we discuss below, public disclosure of a trade
secret generally destroys its status as a trade secret, we recognized in
USA Power I that a compilation of publicly available information
could qualify as a trade secret. See infra Part I.B.1.
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disclosure or use.‖50 In USA Power I, we analyzed ―whether an
alchemy of information may constitute a trade secret when its
separate parts are each generally known and readily ascertainable,
but, when analyzed together such parts derive independent economic
value.‖51 We held that, yes, ―a compilation of information within the
public domain may constitute a trade secret.‖52 We also clarified that
―[t]he compilation of information already within the public domain,
however, must not itself be generally known or readily
ascertainable.‖53 Also, we stated that the ―‗generally known or
readily ascertainable‘ standard ‗cannot be viewed as whether the
information is generally known and readily ascertainable to the
general public, but, based on the defendant[‘s] knowledge and
experience, whether the information was known or ascertainable to
[the defendant].‘‖54
¶ 55 Although we stated in USA Power I that a compilation
trade secret may exist even if all of the components of the
compilation are publicly disclosed, we need not apply that standard
to the case as it comes before us. Based on the evidence that has been
developed since summary judgment, it is clear that not all of the
elements of USA Power‘s claimed compilation trade secret were, in
fact, publicly disclosed. Therefore, we need not analyze whether
USA Power‘s entire compilation, as a compilation, was generally
known or readily ascertainable. Instead, we can look to those
components that were not publicly disclosed and decide if the
evidence, when viewed in favor of USA Power, would allow a jury
to find that these elements of the vision were not generally known or
readily ascertainable and thus protected trade secrets.
¶ 56 We conclude that USA Power has provided some basis for
the jury to conclude that at least a portion of its overall vision was a
trade secret because it ―derive[d] independent economic
value . . . from not being generally known‖ or ―readily ascertainable‖
to the defendant.55 Below, we first discuss why a reasonable juror
_____________________________________________________________
50 UTAH CODE § 13-24-2(4)(a).
51 2010 UT 31, ¶ 42 (emphasis added).
52 Id. ¶ 45
53 Id. ¶ 44.
54 Id. (alterations in original) (citation omitted).
55 UTAH CODE § 13-24-2(4)(a).
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Opinion of the Court
could have found that at least some portion of USA Power‘s vision
was not generally known; and next discuss why a reasonable juror
could also have found that this confidential information was not
readily ascertainable. Finally, we briefly discuss why the jury could
have found that this information had value because it was not
generally known or readily ascertainable.
1. Generally Known
¶ 57 In order to be a trade secret, information must not be
generally known—that is ―information must be secret from at least
some interested parties‖ and ―[f]ull disclosure of the matter at issue
without limitations on further circulation of the information requires
the legal conclusion that the matter is no longer a trade secret.‖56 The
party claiming trade secret protection may make partial or limited
disclosure of the information without defeating its trade secret
status. For instance, the party ―may, without losing his protection,
communicate it to employees involved in its use. . . . [or] likewise
communicate it to others pledged to secrecy.‖57 Further, other parties
may also have knowledge of the information so long as they also
keep it confidential.58 For instance, if a company claims trade secret
status of certain information, a second company‘s independent
development of that same information would not defeat the first
company‘s trade secret claim if the second company also kept the
information confidential.
¶ 58 The evidence in this case provided a sufficient basis for the
jury to conclude that at least some components of USA Power‘s
vision for its Spring Canyon plant were not generally known. While
a significant amount of information had been made public,59 there is
no dispute that some of the information had not been. The parties
_____________________________________________________________
56 Litigating Misappropriation of Trade Secret, 127 AM. JUR. TRIALS
283, §§ 18–19 (2012).
57 RESTATEMENT (FIRST) OF TORTS § 757 cmt. b (AM. LAW INST.
1939).
58 Id.
59 The publicly disclosed information was contained in the two
NOIs and the rezoning request. This information included the
following plant configuration on a specific site in Mona, Utah:
―Natural Gas Fired, 2 GE-7-FA Turbines, 2 HRSGS, 1 Steam Turbine,
Combined Cycle, Air Cooled, Air Inlet Chillers, Duct Firing,
LAER/SCR, . . . Gas Pipeline, [and] Site Plan.‖
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agree that USA Power gave confidential, non-public information to
PacifiCorp, including USA Power‘s back-up studies validating its
publicly disclosed choices and information related to the economic
feasibility of its project.60 The jury could certainly have found that
this confidential information was not generally known. Because the
jury could have reasonably concluded that the proprietary
information that was never publicly disclosed and was the subject of
the Confidentiality and Non-Disclosure Agreement between the
parties was not generally known, we must now consider whether
any of this information was also not readily ascertainable by
PacifiCorp.
2. Readily Ascertainable
¶ 59 The UUTSA requires that, in order to prove the existence
of a trade secret, the plaintiff must show that the information
―derives independent economic value‖ from not being ―generally
known‖ or ―readily ascertainable.‖61 ―Readily ascertainable‖ is not a
defined term in the UUTSA and does not import any specialized
meaning,62 and we therefore give the term its ordinary meaning.63
_____________________________________________________________
60 The following specific information was not released to the
public: ―data on the plant cost; data regarding the cost of dry cooling
versus wet cooling; data regarding the dry-cooling energy penalty,
including any site-specific analyses; temperature- or altitude-specific
calculations, including the heat rate; data regarding the dry-cooling
parasitic load; data regarding water balances; data regarding water
availability or price; data regarding required water use; a fatal flaw
analysis; information regarding interconnection queue with
PacifiCorp Transmission; information regarding gas pipelines;
market data; economic proformas or economic analyses showing the
costs, demonstrating the plant would be profitable, the extent of
profitability, the return on equity, and the ability to obtain financing;
or information on [USA Power‘s] potential equity partners or
business plan, all of which remained confidential and valuable.‖
61 UTAH CODE § 13-24-2(4)(a).
62 See State v. Canton, 2013 UT 44, ¶ 28, 308 P.3d 517 (―The
legislature is entitled to invoke specialized legal terms that carry an
extra-ordinary meaning. And when it does so we credit the legal
term of art, not the common understanding of the words. Thus,
‗when a word or phrase is ―transplanted from another legal source,
whether the common law or other legislation, it brings the old soil
with it.‖‘‖ (citations omitted)).
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Opinion of the Court
The Merriam-Webster Dictionary defines ―readily‖ as ―without
much difficulty.‖64 In USA Power I, we articulated factors that a court
may consider when deciding if a trade secret exists.65 These factors,
which we drew from the comments to the Restatement of Torts
§ 757, included ―the ease or difficulty with which the information
could be properly acquired or duplicated by others.‖66
¶ 60 PacifiCorp argues that its engineering firm, SS&W,
permissibly reverse-engineered USA Power‘s confidential back-up
studies from publicly available information. It further argues that the
reverse-engineered back-up studies, which took seven weeks and
cost $250,000 to develop, were ―readily ascertainable‖ as a matter of
law. PacifiCorp also argues that because USA Power had the burden
of showing that the reverse-engineered back-up studies were not
―readily ascertainable,‖ it was required to submit expert testimony
on this issue, which it failed to do.
¶ 61 In response, USA Power makes two arguments. First, it
argues that SS&W did not, in fact, reverse-engineer all of the
proprietary information in its back-up studies and that the jury had
sufficient evidence to conclude that the information that was not
reverse-engineered was also not ―readily ascertainable.‖ Second,
USA Power argues that to the extent SS&W did reverse-engineer its
back-up studies, the jury could have permissibly concluded that this
information was not ―readily ascertainable‖ because SS&W spent
seven weeks and a quarter million dollars to re-create it. Further,
USA Power contends that it was not required to provide expert
testimony on whether SS&W‘s efforts meant that the reverse-
engineered back-up studies were ―readily ascertainable‖ but instead
63 See Marion Energy, Inc. v. KFJ Ranch P’ship, 2011 UT 50, ¶ 14, 267
P.3d 863 (―It is well settled that when faced with a question of
statutory interpretation, ‗our primary goal is to evince the true intent
and purpose of the Legislature.‘ ‗The best evidence of the
legislature‘s intent is ―the plain language of the statute itself.‖‘ Thus,
‗[w]hen interpreting a statute, we assume, absent a contrary
indication, that the legislature used each term advisedly according to
its ordinary and usually accepted meaning.‘‖ (alteration in original)
(citations omitted)).
64 Readily, MERRIAM-WEBSTER DICTIONARY (10th ed. 1998).
65 See 2010 UT 31, ¶ 45.
66 Id. (citation omitted).
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was required to provide—and did provide—evidence from which
the jury could make this determination.67
¶ 62 We conclude, first, that the jury could have reasonably
found that PacifiCorp did not actually reverse-engineer all of USA
Power‘s confidential back-up studies and, second, that the jury could
have found that the information that was not reverse-engineered
was also not readily ascertainable. We discuss each of these issues
below. Also, because we conclude that the jury could have found
that PacifiCorp did not reverse-engineer all of USA Power‘s
confidential information, we do not address whether the seven week
timeframe and $250,000 budget made the reverse-engineered
information ―readily ascertainable‖ as a matter of law.
¶ 63 First, we hold that the jury could have reasonably
concluded from the evidence that PacifiCorp did not reverse-
_____________________________________________________________
67 We also note that in its brief USA Power suggests that use or
misappropriation proves the existence of a trade secret, which is not
the case. USA Power argues, in part, that the tight time frame to
develop an energy source to meet the 2005 energy demand proves
that ―PacifiCorp used [USA Power‘s] trade secret as a roadmap‖
when developing its Currant Creek proposal. This argument focuses
largely on PacifiCorp‘s ability to use USA Power‘s publicly disclosed
configuration and studies validating Spring Canyon‘s economic
viability to short cut the level-1 preliminary design phase. Instead of
investing millions and spending years determining the configuration
and economic viability of the project, USA Power argues that
PacifiCorp was able to ―steal‖ its vision and thus create a winning
bid for the RFP in a very limited timeframe.
This argument seems to accept that the jury could reasonably
infer from PacifiCorp‘s misuse of the information that this
information must not have been generally known or readily
ascertainable. Our court of appeals recognized the difficulty with
this type of argument in CDC Restoration & Construction v. Tradesmen
Contractors. 2012 UT App 60. In that case, the court found that
accepting such an argument ―would in effect create a presumption
that trade secret status may be established by use alone.‖ Id. ¶ 22.
The court concluded that ―[d]oing so would collapse the first and
third elements of the test—(1) existence of a trade secret and
(3) injurious use—into a single element.‖ Id. We agree with this
analysis and thus recognize that USA Power cannot establish the
existence of its trade secret through evidence of misuse.
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Opinion of the Court
engineer all of USA Power‘s confidential information. PacifiCorp
argues that USA Power‘s confidential information, including its
back-up studies, were readily ascertainable because it reverse-
engineered these studies in a short time period on a relatively small
budget. But we conclude that there was a basis in the evidence for
the jury to reasonably infer that PacifiCorp did not, in fact, reverse-
engineer all of USA Power‘s confidential back-up studies. In
discussing its consultant‘s efforts to reverse-engineer USA Power‘s
information, PacifiCorp said SS&W provided ―engineering services‖
such as ―detailed cost estimates, analysis of wet versus dry cooling,
including the energy penalty, water balances, and heat balances.‖
Essentially, PacifiCorp argued that SS&W provided the missing
back-up engineering that PacifiCorp would need to place a bid in the
RFP.
¶ 64 But USA Power certainly provided additional confidential
information that SS&W did not reverse-engineer. For instance,
viewing the evidence in the light most favorable to the verdict we
have to assume that all of the following information, which was
claimed as a trade secret, was not publicly disclosed:
data on the plant cost; data regarding the cost of dry
cooling versus wet cooling; data regarding the dry-
cooling energy penalty, including any site-specific
analyses; temperature- or altitude-specific calculations,
including the heat rate; data regarding the dry-cooling
parasitic load; data regarding water balances; data
regarding water availability or price; data regarding
required water use; a fatal flaw analysis; information
regarding the interconnection queue with PacifiCorp
Transmission; information regarding gas pipelines;
market data; economic proformas or economic analyses
showing the costs, demonstrating the plant would be
profitable, the extent of profitability, the return on
equity, and the ability to obtain financing; [and]
information on [USA Power‘s] potential equity
partners or business plan.
¶ 65 Although PacifiCorp may have been able to permissibly
reverse-engineer certain pieces of the above information, it was
reasonable for the jury to infer that it could not ascertain all of USA
Power‘s private information through reverse-engineering. For
instance, it would be reasonable for the jury to find that PacifiCorp
did not reverse-engineer USA Power‘s confidential economic
analyses, financing information, potential business partners, and
specific business plan. This is especially true given that this
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information included economic data prepared by USA Power from
its own unique perspective. 68
¶ 66 Second, given that it was reasonable to find that
PacifiCorp did not reverse-engineer all of USA Power‘s confidential
information, the issue becomes whether the information that was not
reverse-engineered was also not readily ascertainable. We conclude
that it was reasonable for the jury to find that it was not. USA Power
presented evidence that the confidential information that was not
reverse-engineered included, among other material, economic
analyses showing the cost associated with the project, the extent of
profitability, and the return on equity, as well as USA Power‘s
potential equity partners and business plan. All of these analyses
were done from the unique perspective of USA Power. It was
reasonable to infer that this information was not ―readily
ascertainable.‖69
¶ 67 As discussed above, something is ―readily‖ ascertainable
when it can be determined ―without much difficulty‖ through
proper means. It is doubtful that PacifiCorp could have obtained
USA Power‘s proprietary economic analysis and business plans
through proper methods—likely making this information not
ascertainable at all. And it was certainly reasonable for the jury to
conclude that PacifiCorp could not have ascertained such
information without much difficulty. Further, we conclude that USA
Power was not required to present expert testimony that this
information was not readily ascertainable. Whether information is
readily ascertainable is an issue for the jury, which requires them to
apply the facts presented to the correct legal standard. Here, there
was certainly enough evidence presented to determine that USA
_____________________________________________________________
68Further, whether PacifiCorp actually used USA Power‘s private
data to compile its own bid is irrelevant to the threshold issue we are
asked to address—whether a trade secret existed. It would be
relevant to the element of misappropriation, but that issue has not
been appealed. Therefore, it is immaterial that USA Power‘s
―customized proformas for [Spring Canyon] as a merchant plant
were irrelevant to PacifiCorp‘s different economic analysis for
[Currant Creek] as a public utility.‖
69 See UTAH CODE § 13-24-2(4)(a).
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Opinion of the Court
Power‘s proprietary business information was not readily
ascertainable.70
3. Economic Value
¶ 68 Because we conclude that there was information within
USA Power‘s vision that was not generally known or readily
ascertainable, we now address whether this information had value
as required by the UUTSA. In order to be a trade secret, information
must ―derive[] independent economic value, actual or potential, from
not being generally known‖ or ―readily ascertainable‖ to the
defendant.71 USA Power argued, and it was reasonable for the jury
to conclude, that its confidential economic information and business
strategies were valuable to PacifiCorp in the RFP process. From this
information, USA Power argued that PacifiCorp could infer USA
Power‘s potential bid in the RFP, giving it a ―price to beat.‖
Certainly, it is reasonable for the jury to find that this information
had value to PacifiCorp when PacifiCorp and USA Power were
submitting competing bids in the same competitive process and
where there was evidence suggesting that this confidential
information would provide PacifiCorp with a ―price to beat.‖
¶ 69 PacifiCorp‘s position is that knowing its competitors‘
internal financial data had no actual or potential value. But while
PacifiCorp certainly had access to its own internal financial
calculations and assessments, having access to USA Power‘s internal
financial assessments is another matter altogether. It can hardly be
argued that, in a bidding contest, for one competitor to have access
to another competitor‘s internal financial calculations—calculations
that will certainly bear upon that competitor‘s ultimate bid—would
have obvious value. Such financial information is a paradigmatic
example of a trade secret.
¶ 70 We, therefore, conclude that there was sufficient evidence
in the record from which the jury could infer that a trade secret
existed. That is, the jury could have concluded that specific portions
of USA Power‘s confidential information were not generally known
or readily ascertainable and that they ―derived independent
economic value, actual or potential‖ from this status. Because there
_____________________________________________________________
70 Because we decide this issue on alternative grounds, we do not
directly address PacifiCorp‘s claim that USA Power was required to
present expert testimony on whether the information it did reverse-
engineer was readily ascertainable.
71 UTAH CODE § 13-24-2(4)(a) (emphasis added).
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was a basis in the evidence to support the verdict, we uphold the
trial court‘s denial of PacifiCorp‘s JNOV motion on the trade secret
issue.
II. The Trial Court Did Not Abuse Its Discretion in Denying
PacifiCorp‘s Motion for a New Trial or Remittitur
¶ 71 Having concluded that the jury could have reasonably
found that a trade secret existed, we now address PacifiCorp‘s
argument that the jury‘s unjust enrichment award was unsupported.
Under the UUTSA, ―[d]amages can include both the actual loss
caused by misappropriation and the unjust enrichment caused by
the misappropriation that is not taken into account in computing
actual loss.‖72 But unjust enrichment damages are limited to the
value added to the project by the misappropriated trade secret.73
PacifiCorp argues that while the jury was properly instructed, 74 it
improperly ―awarded [USA Power] 100% of PacifiCorp‘s profits as
unjust enrichment, despite indisputable evidence that PacifiCorp
made substantial independent contributions‖ to the Currant Creek
project. We have emphasized that ―[j]uries are generally allowed
wide discretion in the assessment of damages.‖75 Further, our
standard of review when considering a trial court‘s decision to deny
a rule 59 request for a new trial is deferential—we will reverse only if
there ―is no reasonable basis for the decision.‖76
_____________________________________________________________
72 UTAH CODE § 13-24-4(1).
73 See Russo v. Ballard Med. Prods., 550 F.3d 1004, 1018 (10th Cir.
2008) (recognizing the ability of the plaintiff ―to recover the full
incremental value added by [the defendant‘s] misappropriated trade
secret‖ under the UUTSA).
74The jury was instructed that unjust enrichment was limited to
―the reasonable value of the benefit that [PacifiCorp] gained
from . . . using the trade secret‖ and that the unjust enrichment
award must exclude profits attributable to PacifiCorp‘s ―own
independent efforts, skills, expertise, knowledge, innovation, and
investment.‖
75 Judd v. Drezga, 2004 UT 91, ¶ 62, 103 P.3d 135 (alteration in
original) (citation omitted).
76Crookston v. Fire Ins. Exch., 817 P.2d 789, 805 (Utah 1991) (―In
reviewing the judge‘s ultimate decision to grant or deny a new trial,
we will reverse only if there is no reasonable basis for the decision.
For example, even if the jury‘s award appears supported by
(Continued)
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Opinion of the Court
¶ 72 We conclude that PacifiCorp‘s argument is unavailing
because the jury could have reasonably inferred from the evidence
USA Power presented that only one plant was possible in Mona, that
misappropriation caused this plant to be Currant Creek instead of
Spring Canyon, and, therefore, that all of PacifiCorp‘s profits were
the result of misappropriation. As discussed above, the jury could
have found that by misappropriating USA Power‘s confidential
financial information—by knowing the ―price to beat‖—PacifiCorp
gained a critical competitive advantage in the RFP process. If we
view the evidence in the light most favorable to the jury verdict, we
conclude it was reasonable for the jury to infer that this
misappropriation caused USA Power to lose the RFP.77
¶ 73 The trial court concluded both that ―the plaintiff‘s
theory . . . that there was only one plant that could be built‖ was ―not
illogical,‖ and that ―if there‘s only going to be one plant built, it‘s not
illogical to assume that if misappropriation of the trade secrets
allowed Currant Creek to be that plant, that all the profits associated
with Currant Creek are attributable to the misappropriation.‖ Given
that the jury could have believed that only one plant could have
been built in Mona, its decision to award USA Power all of
PacifiCorp‘s profits would not have been against the law set forth in
the jury instructions.78 Thus it was not an abuse of discretion for the
trial court to deny PacifiCorp‘s motion for a new trial.
substantial evidence on appeal, if the trial court could reasonably
conclude that the jury had acted in a manner covered by the grounds
stated in rule 59(a)(5) or (6), an order granting a new trial will be
upheld on appeal. Similarly, a trial court‘s decision to deny a new
trial will be upheld if there is a reasonable basis to support the
decision.‖ (footnote and citations omitted).)
77 PacifiCorp‘s arguments on appeal related to causation are
limited to its claim that there was insufficient evidence for the jury to
find that any misappropriation by PacifiCorp rendered ―100% of
PacifiCorp‘s profits as unjust enrichment‖—i.e., that the evidence
supported finding only some, not all, of PacifiCorp‘s profits to be
unjust. It has not appealed the jury‘s finding of misappropriation,
the finding that such misappropriation caused USA Power to lose
the RFP (its actual damages), or the finding that such
misappropriation caused PacifiCorp to be unjustly enriched in some
amount.
78See UTAH R. CIV. P. 59; Child v. Gonda, 972 P.2d 425, 433 (Utah
1998).
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III. The Trial Court Did Not Abuse Its Discretion in Refusing to Give
the Head-Start Jury Instruction
¶ 74 The final issue PacifiCorp presents on appeal is a challenge
to the trial court‘s decision not to give the head start jury instruction.
The trial court refused to give PacifiCorp‘s proposed instruction to
the jury and also denied PacifiCorp‘s ―motion for a new trial for
excessive damages on that ground.‖ We conclude that it was not an
abuse of discretion for the trial court to decline to give the proposed
head-start jury instruction because the instruction that was given
correctly articulated the law and because the jury could have
concluded that the parties were competing over a single economic
opportunity—thus finding that PacifiCorp‘s head start gave it entire
control over that opportunity.
¶ 75 We review a trial court‘s ―refusal to give a jury instruction
for abuse of discretion.‖79 Abuse of discretion may be present when
a trial court ―relied on ‗an erroneous conclusion of law‘‖ or where
there was ―no evidentiary basis for the trial court‘s ruling.‖80 We
have held that in certain circumstances the court‘s discretion in
declining to give jury instructions ―will be strictly cabined.‖81 These
circumstances are not at issue in this case, as we discuss below.82
Further, when assessing the decision to decline to give jury
instructions, ―we look at the jury instructions ‗in their entirety and
will affirm when the instructions taken as a whole fairly instruct the
jury on the law applicable to the case.‘‖83 And ―a trial court does not
_____________________________________________________________
79 Miller v. Utah Dep’t of Transp., 2012 UT 54, ¶ 13, 285 P.3d 1208.
80Daniels v. Gamma W. Brachytherapy, LLC, 2009 UT 66, ¶ 32, 221
P.3d 256 (citation omitted).
81 Miller, 2012 UT 54, ¶ 13.
82 Generally, discretion is cabined under two circumstances. First,
when a criminal defendant‘s ability to have the charged offense
defined for the jury is at issue; and second when a party‘s ability to
present its theory of the case to the jury is at issue. Id. Here, the first
circumstance is clearly not applicable, and we conclude that the
second also does not apply. As we discuss, PacifiCorp had the ability
to argue for limiting damages under the instruction presented to the
jury.
83 State v. Maestas, 2012 UT 46, ¶ 148, 299 P.3d 892 (citation
omitted).
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Opinion of the Court
err by refusing a proposed instruction ‗if the point is properly
covered in other instructions.‘‖84
¶ 76 Here, PacifiCorp requested the following proposed
instruction:
You may only award actual and unjust enrichment
damages for a time period equal to the amount of time
(1) you find that it would take, or did take, any
competitor, including PacifiCorp, to develop the trade
secret independently, plus (2) any additional period, if
any, that you find that the trade secret afforded
PacifiCorp a competitive advantage, such as providing
PacifiCorp a head start in its business.
The jury instruction given by the court stated:
―Unjust enrichment‖ means the reasonable value of the
benefit that the party who misappropriated the trade
secret has gained from disclosing or using the trade
secret. A defendant‘s profits may be an indication of
unjust enrichment, but if you use PacifiCorp‘s profits to
calculate an amount of unjust enrichment, you must
use the profits which are attributable to the
misappropriation. You may not include as damages
those profits that are attributable to PacifiCorp‘s own
independent efforts, skill, expertise, knowledge,
innovation, and investment.
¶ 77 We conclude that under the instruction that was given,
PacifiCorp was free to argue its head-start theory—that after the
initial head-start period, the remaining life of the plant was
―attributable to PacifiCorp‘s own independent efforts, skill,
expertise, knowledge, innovation, and investment.‖ While ―head
start‖ was not specifically mentioned in the actual jury instruction,
this is insufficient to conclude that the instruction denied PacifiCorp
the ability to present its theory to the jury.
¶ 78 Because PacifiCorp could have presented its theory to the
jury, we review the trial court‘s decision under the general abuse of
discretion standard instead of a ―cabined‖ one. Under the abuse of
discretion standard, we conclude that the trial court‘s decision to
deny PacifiCorp‘s proposed instruction was not grounded in an
_____________________________________________________________
84 Id. (citation omitted).
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erroneous understanding of the law nor did it lack an evidentiary
basis.85
¶ 79 Further, in assessing the evidence, a jury could have
concluded that the parties were competing over a single economic
opportunity. PacifiCorp‘s head start essentially gave it entire control
over that opportunity. Such control afforded PacifiCorp a perpetual
competitive advantage as it precluded USA Power from constructing
its own plant. Consequently, a reasonable jury could have
determined that PacifiCorp‘s head start was the sole cause of the
total amount of the unjust enrichment damages. Accordingly, we
hold that the trial court did not abuse its discretion by refusing to
give the head-start jury instruction.
¶ 80 In sum, on PacifiCorp‘s direct appeal, we uphold the trial
court‘s denial of PacifiCorp‘s JNOV on the trade secret issue because
the jury could have reasonably inferred from the evidence, viewed in
favor of the verdict, that a trade secret existed. We deny PacifiCorp‘s
request for a new trial or remittitur on the apportionment of unjust
enrichment damages and on the trial court‘s decision not to give the
jury its head-start jury instruction.
USA Power’s Cross-Appeal
¶ 81 Having affirmed the trial court on each issue raised by
PacifiCorp, we must now address the various issues related to
damages raised by USA Power in its cross-appeal. USA Power
asserts five claims: (1) the trial court improperly reduced the
damages awarded to USA Power against PacifiCorp; (2) the trial
court erred in denying exemplary damages; (3) the trial court erred
by using the lodestar method to calculate the amount of attorney fees
awarded to USA Power; (4) the trial court erred in denying
prejudgment interest;86 and (5) the trial court erred by applying an
incorrect interest rate to the contract damages. Although USA Power
_____________________________________________________________
85 We also note that the trial court concluded that PacifiCorp had
failed to adequately present a head-start theory during trial, stating
that ―I just didn‘t have the chance to address it at the trial level.‖
86 USA Power presents two alternative arguments in relation to
prejudgment interest: first, that it was due prejudgment interest
beginning at some point prior to the verdict—though it does not
specify the date—or, second, that it was due prejudgment interest
from the date of the verdict. These arguments will be addressed
together.
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Opinion of the Court
has provided scant legal authority for the majority of its arguments
in this cross-appeal, and often fails to provide any analysis of the
issues other than conclusory statements, we address the issues to the
extent necessary to provide clarification. Ultimately, we affirm the
trial court on all points.
I. The Trial Court Did Not Abuse Its Discretion in
Granting a Remittitur
¶ 82 The first claim asserted by USA Power in its cross-appeal
is that the trial court erred in granting a remittitur reducing the
unjust enrichment damages awarded by the jury. The jury awarded
USA Power both actual damages—$21,399,391—and unjust
enrichment damages—$112,500,000. The trial court reduced the
unjust enrichment award pursuant to a rule 59 motion for new trial,
finding that the jury had awarded overlapping damages. The
UUTSA allows a plaintiff to recover ―both the actual loss caused by
misappropriation and the unjust enrichment caused by
misappropriation.‖87 The unjust enrichment award cannot, however,
take ―into account [damages awarded] in computing actual loss.‖88
As a comment to the model Uniform Trade Secrets Act describes,
there is ―an express prohibition upon the counting of the same item
as both a loss to a complainant and an unjust benefit to a
misappropriator.‖89 USA Power argues that because the jury was
instructed that unjust enrichment damages could not overlap actual
damages—and there was evidence that PacifiCorp‘s profit was far
greater than what was awarded—we must presume that the jury
properly calculated damages and conclude that the trial court
abused its discretion in granting a remittitur. We disagree.
¶ 83 The trial court apparently granted the remittitur based on
rule 59(a)(6), which permits a new trial or a remittitur to be granted
when the verdict is ―against law,‖90 including ―the law set forth in
the jury instructions.‖91 The parties agree that the jury was properly
_____________________________________________________________
87 UTAH CODE § 13-24-4(1).
88 Id.
89 UNIF. TRADE SECRETS ACT § 3 cmt (UNIF. LAW COMM‘N 1985).
90 UTAH R. CIV. P. 59(a)(6) (2015).
91Child v. Gonda, 972 P.2d 425, 433 (Utah 1998). Although we note
that the trial court did not expressly base its decision to grant a
remittitur on one of the grounds listed in rule 59, this omission is not
necessarily fatal to its decision so long as the basis for the decision is
(Continued)
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instructed that an award of damages for unjust enrichment cannot
take into account damages awarded in computing actual loss. Thus,
the issue is not a question of whether the jury instruction was correct
or whether the trial court applied an incorrect interpretation of the
law to the evidence,92 which would involve legal questions reviewed
for correctness,93 but whether the evidence presented could support
the award of damages in a way that did not violate the law given in
the jury instructions. Because this is an evidentiary question, we
review for abuse of discretion, as discussed below.
¶ 84 Although it is true that ―[j]uries are generally allowed
wide discretion in the assessment of damages,‖94 we have also
recognized that ―[i]n the context of a . . . motion attacking the
amount of a jury verdict under [rule 59(a)(6)], it is the responsibility
of the trial court to review the amount of the award to ensure that
apparent from the record, as in this case. See Braithwaite v. W. Valley
City Corp., 921 P.2d 997, 1001 (Utah 1996).
92 USA Power argues that the trial court applied the wrong legal
standard to determine whether the jury had improperly awarded
overlapping damages, claiming that USA Power‘s ―actual loss was
not the ‗same item‘ as the unjust enrichment.‖ But USA Power‘s
argument is not supported with any analysis or legal authority
explaining how we should interpret the phrase ―same item‖ and is,
therefore, inadequately briefed. USA Power also fails to address the
cases cited by PacifiCorp suggesting that a double recovery occurs
when a plaintiff recovers both actual damages and unjust profits
from the same lost opportunity without a reduction. See, e.g., Taylor
v. Meirick, 712 F.2d 1112, 1120 (7th Cir. 1983). We accordingly do not
address this issue further. See Hess v. Canberra Dev. Co., 2011 UT 22, ¶
25, 254 P.3d 161 (stating that we do not address issues where the
briefing lacks ―meaningful legal analysis,‖ such as a lack of citation
and development of legal authority (citation omitted)).
93See Harvey v. Cedar Hills City, 2010 UT 12, ¶ 10, 227 P.3d 256.
Although we review fact-like mixed determinations under a
deferential standard of review, see Murray v. Utah Labor Comm’n,
2013 UT 38, ¶¶ 37–38, 308 P.3d 461, ―[a]n abuse of discretion may be
demonstrated by showing that the district court relied on ‗an
erroneous conclusion of law,‘‖ Kilpatrick v. Bullough Abatement, Inc.,
2008 UT 82, ¶ 23, 199 P.3d 957 (citation omitted).
94 Hess, 2011 UT 22, ¶ 41 (alteration in original) (citation omitted).
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Opinion of the Court
the jury has acted within its proper bounds.‖95 ―Having been present
for all phases of the trial, the trial judge is in the best position to
ascertain if the jury has ‗exceeded its proper bounds,‘ and we will
reverse ‗only if there is no reasonable basis for the decision.‘‖96
Accordingly, we review the trial court‘s determination that the
verdict was ―against law‖ under an abuse of discretion standard.97
And ―[i]n case of doubt, the deliberate action of the trial court should
prevail.‖98
¶ 85 The trial court, after having been present for a five-week
trial and having reviewed hundreds if not thousands of pages of
evidence, determined that ―the jury awarded to the penny the
amount of the anticipated profits from Spring Canyon, and awarded
to the penny the anticipated profits from Currant Creek‖ and found
that ―it‘s clear that both of those could not have been achieved
simultaneously.‖ The court‘s logic is reasonable. If no
misappropriation had occurred and USA Power had won the bid,
_____________________________________________________________
95 Crookston v. Fire Ins. Exch., 817 P.2d 789, 804 (Utah 1991).
96 Diversified Holdings, L.C. v. Turner, 2002 UT 129, ¶ 4, 63 P.3d 686
(citations omitted); see also Crookston, 817 P.2d at 804 (―The reason
that any determination as to whether the jury exceeded its proper
bounds is best made in the first instance by the trial court is that the
trial judge is present during all aspects of the trial and listens to and
views all witnesses. Therefore, he or she can best determine if the
jury has acted with ‗passion or prejudice‘ and whether the award
was too small or too large in light of the evidence. The trial judge is
free to grant or deny a motion for a new trial if it is reasonable to
conclude that the jury erred.‖).
97 See ASC Utah, Inc. v. Wolf Mountain Resorts, L.C., 2013 UT 24,
¶¶ 21–22, 309 P.3d 201 (―A motion for a new trial [or remittitur]
‗invokes the sound discretion of the trial court, and appellate review
of its ruling is quite limited.‘ . . . The district judge who presided
over a trial is in a far better position than an appellate court to
determine, for example, whether the evidence was sufficient to
justify the verdict or whether the jury awarded damages ‗under the
influence of passion or prejudice[]‘ [pursuant to rules 59(a)(5) and
(6).] This is particularly true in the present case, where the record is
thousands of pages long, the trial transcripts cover seven weeks of
testimony and presentation of evidence, and the pre-trial litigation
spanned several years.‖ (citations omitted)).
98 Crookston, 817 P.2d at 806 (citation omitted).
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the amount it would have been paid under its various contracts—the
actual damages of $21 million that it was awarded—would have
surely come from the completed project‘s profits. Thus, USA Power‘s
actual damages may account for some of the unjust profits
PacifiCorp retained, as those profits would have been due to USA
Power under the contracts that would have been executed. The trial
judge was in the best position to determine whether ―the jury ha[d]
exceeded its proper bounds,‖ and the judge‘s determination that the
jury had indeed done so by awarding overlapping damages that
were impermissible under the given jury instructions was based on a
reasonable evaluation of the evidence presented to the jury. As there
is a reasoned basis for the trial court‘s deliberate action, we see no
abuse of discretion and accordingly affirm the trial court‘s grant of
remittitur.
II. The Trial Court Did Not Abuse Its Discretion by
Denying Exemplary Damages
¶ 86 USA Power‘s second argument is that the trial court erred
by denying USA Power‘s request for exemplary damages. Under the
UUTSA, ―[i]f willful and malicious misappropriation exists, the court
may award exemplary damages.‖99 This statute is discretionary—it
states that exemplary damages may be awarded upon a finding of
willfulness, not that they must be.100 Thus, ―[t]he law is clear that
while willful [misappropriation] may allow enhanced damages, such
a finding does not compel the district court to grant them. Instead,
the decision to grant or deny enhanced damages remains firmly
within the scope of the district court‘s reasoned discretion.‖101 So
long as the trial court applied the right legal standard to its decision,
_____________________________________________________________
99 UTAH CODE § 13-24-4(2).
100 Cf. Bilanzich v. Lonetti, 2007 UT 26, ¶ 17, 160 P.2d 1041 (―We
note, however, that the language of the statute is not mandatory but
allows courts to exercise discretion in awarding attorney fees and
costs.‖).
101Odetics, Inc. v. Storage Tech. Corp., 185 F.3d 1259, 1274 (Fed. Cir.
1999) (citation omitted); see also Cybor Corp. v. FAS Tech., Inc., 138
F.3d 1448, 1461 (Fed. Cir. 1998) (―[T]here is no merit to the argument
that a finding of willfulness but a denial of enhanced damages is
necessarily an abuse of discretion.‖).
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we review its decision to deny exemplary damages for abuse of
discretion.102
¶ 87 USA Power claims that the trial court erred in not
evaluating its request under the proper standard, the Read factors,103
and instead applied an unpermitted standard that overruled the
jury‘s verdict.104 The first problem with USA Power‘s argument is
that the law is well established that while the Read factors are
helpful, the appropriate legal standard is a consideration of ―the
totality of the circumstances.‖105 The second problem is that the trial
court did analyze the case using the Read factors and did incorporate
the jury‘s verdict into its analysis—facts that USA Power failed to
address in its opening brief.106 Although the trial court did look to
other relevant considerations, such as whether the jury verdict alone
would fulfill the purpose of an award of exemplary damages, such
considerations are entirely appropriate under the totality of the
circumstances test. Because the court used the correct standard, we
review its decision to deny exemplary damages for abuse of
_____________________________________________________________
102 See Crookston v. Fire Ins. Exch., 860 P.2d 937, 939–40 (Utah 1993).
103 See Read Corp. v. Portec, Inc., 970 F.2d 816, 827–28 (Fed. Cir.
1992).
104 USA Power criticizes the trial court for stating that ―[t]o me,
discretion, if it means anything, means that I have to, in my heart,
feel good about the result, feel like I‘ve done the right thing.‖
Although basing a decision on whether the judge ―feel[s] good about
the result‖ would be an inappropriate way to approach this issue,
this statement does not encompass the trial court‘s full approach to
this issue. The trial court clearly addressed the Read factors in light of
the totality of the circumstances of the case.
105 In re Seagate Tech., LLC, 497 F.3d 1360, 1369 (Fed. Cir. 2007)
(citing Read, 970 F.2d at 826–27); Odetics, 185 F.3d at 1274 (Fed. Cir.
1999) (―Our review of the district court's reasoning is mindful that, in
this context, a ‗broad range of discretion is reposed in the trial court,
founded on [the] need to weigh and balance multiple factors in
determining a just remedy.‘‖ (alteration in original) (citation
omitted)); Cybor Corp., 138 F.3d at 1461 (stating that an award of
exemplary damages is determined ―based on all the facts and
circumstances‖ (quoting Read, 970 F.2d at 826)).
106The trial court said, ―I find [the Read factors] not to be a really
helpful fit with the facts of this case, but I think that we need to go
through them, in any event.‖
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discretion, ―mindful that, in this context, a ‗broad range of discretion
is reposed in the trial court, founded on [the] need to weigh and
balance multiple factors in determining a just remedy.‘‖107
¶ 88 In reviewing the trial court‘s decision, we begin with the
Read factors, though we again emphasize that these factors are to be
used only insofar as they are helpful to a trial court‘s analysis. There
are nine factors: (1) the deliberateness of the defendant‘s actions;
(2) the defendant‘s good-faith belief that it was not misappropriating
a trade secret; (3) the defendant‘s behavior as a party in litigation;
(4) the defendant‘s size and financial condition; (5) the closeness of
the case; (6) the duration of the defendant‘s misconduct; (7) the
presence of any remedial action by the defendant; (8) the defendant‘s
motivation for harm; and (9) the defendant‘s attempts to conceal its
misconduct.108
¶ 89 The court considered each of these factors as well as the
purpose for exemplary damages in denying USA Power‘s request.
Further, the court did not ―second guess[] the jury.‖109 It properly
considered the jury‘s verdict as dispositive of certain factors. The
court determined that certain factors, including those it concluded
were necessarily established by the jury‘s verdict,110 weighed in
favor of an award of exemplary damages,111 while other factors
_____________________________________________________________
107Odetics, Inc., 185 F.3d at 1274 (alteration in original) (citation
omitted).
108 See Read, 970 F.2d at 827–28.
109 Jurgens v. CBK, Ltd., 80 F.3d 1566, 1572 (Fed. Cir. 1996).
110 The court appropriately concluded that the first and second
factors—deliberateness and good faith—were necessarily
determined to weigh in favor of exemplary damages by the jury‘s
verdict. See Jurgens, 80 F.3d at 1572 (―In returning its verdict of
willfulness, the jury necessarily decided that CBK had acted in bad
faith . . . .‖). USA Power seems to argue that the jury‘s finding of
willful misconduct almost creates a presumption that exemplary
damages are appropriate. As we noted above, although a finding of
willful and malicious action is a necessary element of an award of
exemplary damages, it is not necessarily a sufficient one.
111 The parties agree that the fourth factor, the size and financial
position of PacifiCorp, weighs in favor of exemplary damages.
Further, as to the seventh factor—remedial action—the trial court
(Continued)
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Opinion of the Court
either cut against such an award112 or were less relevant to the
case.113 In addition to these factors, and in accordance with its duty
to determine whether exemplary damages should be awarded in
light of the totality of the circumstances, the trial court also
considered the policy behind an award of exemplary damages—
deterrence of future misappropriation.114 The trial court reasoned
concluded there was ―[e]ssentially none.‖ A lack of remedial action
favors an award of exemplary damages.
112 These included the third, fifth, and sixth factors—litigation
conduct, the closeness of the case, and duration of misconduct. As to
PacifiCorp‘s litigation behavior, the trial court stated that it ―ha[d]
nothing to criticize about PacifiCorp‘s conduct at the litigation.‖ The
trial court was in the best position to determine this issue and
deference to this finding is warranted. See Cybor Corp., 138 F.3d at
1461 (―Finally, nothing in the record supports FAS‘s arguments that
Cybor litigated in an inappropriate fashion; the district court actually
found the contrary to be true.‖). As to the closeness of the case, the
court stated that it ―th[ought] that this [was] a very close case on the
question of the existence of a trade secret,‖ a key element of USA
Power‘s case. We agree that, though USA Power may have been
successful on each of its claims, ―this result does not mean that the
case was not close,‖ because PacifiCorp‘s arguments ―were not
meritless, and resolution of those issues in [USA Power‘s] favor was
far from a foregone conclusion.‖ Id. And as to duration of
misconduct, the trial court noted that ―[t]he duration of the
defendants‘ conduct . . . was really focused on a very brief period,‖
and seemed to consider this factor to cut against exemplary
damages. Because USA Power failed to address the court‘s
consideration of this factor in its opening brief, we defer to the
court‘s analysis.
113 The trial court determined that the eighth and ninth factors—
motivation for harm and concealment of misconduct—were not
particularly relevant to the case. USA Power fails to provide any
legal authority for how these factors should be considered or why
they are relevant to the case. Accordingly, we defer to the trial
court‘s consideration of these factors.
114 See Terry v. Zions Coop. Mercantile Inst., 605 P.2d 314, 328 (Utah
1979), overruled on other grounds by McFarland v. Skaggs Cos., 678 P.2d
298 (Utah 1984) (―The purpose of a punitive or exemplary damage
award is not to compensate the party harmed but rather to punish
the wrongdoer, to deter him from similar acts in the future, and to
(Continued)
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that the jury award of over $100 million, including unjust
enrichment, would be sufficient to satisfy the policy. 115 The
countervailing factors present in this case do not persuade us that
the trial court abused its discretion in denying USA Power‘s request
for exemplary damages, and we accordingly affirm its decision.
III. The Trial Court Correctly Employed the Lodestar Method
to Calculate USA Power‘s Attorney Fees
¶ 90 Next, USA Power argues that the trial court erred in
employing the ―lodestar method‖ of calculating attorney fees rather
than relying on the contingency fee percentage agreed to by USA
Power. Under the UUTSA, ―[i]f . . . willful and malicious
misappropriation exists, the court may award reasonable attorneys‘
fees to the prevailing party.‖116 As with an award of exemplary
damages, the permissive language of the statute allows a court to
award fees in its discretion.117 The court may use its discretion to
determine both whether an award of attorney fees should be made118
and, if so, what the amount should be.119 Thus, as with exemplary
provide fair warning to others similarly situated that such conduct is
not tolerated.‖).
115See S.E.C. v. First Jersey Sec., Inc., 101 F.3d 1450, 1475 (2nd Cir.
1996) (―[T]he primary purpose of disgorgement . . . is deterrence,
through prevention of unjust enrichment on the part of the
violator.‖).
116 UTAH CODE § 13-24-5 (emphasis added).
117 Bilanzich v. Lonetti, 2007 UT 26, ¶ 17, 160 P.3d 1041 (―We note,
however, that the language of the statute is not mandatory but
allows courts to exercise discretion in awarding attorney fees and
costs.‖).
118 Id. (―Under the plain language of Utah Code section
78–27–56.5, ‗[a] court may award costs and attorney‘s fees,‘ but is not
required to do so. In interpreting the Utah Arbitration Act, which
contains a similarly worded attorney fees provision, we have held
that the use of the word ‗may‘ indicates that the court has discretion
in awarding fees.‖ (alteration in original) (second emphasis added)
(citations omitted)).
119 Id. ¶ 21 (―Section 78–27–56.5‘s use of the word ‗may‘ also
indicates that courts have broad discretion in applying equitable
principles in fixing the amount of any award of fees under the
statute.‖).
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Opinion of the Court
damages, ―[a] trial court‘s conclusion as to what constitutes a
reasonable attorney fee award is reviewed for an abuse of
discretion‖120 so long as the trial court has employed the proper
standard.121
¶ 91 The parties argue over the method that should be used to
calculate attorney fees. USA Power argues for an award based
entirely on its contingency fee arrangement, while PacifiCorp argues
that the trial court‘s use of the lodestar method was appropriate.
USA Power asserts that it should have been awarded the full amount
of its contingency fee based on prior cases approving contingency
fee awards and the policy that an award of attorney fees should
―indemnify the prevailing party.‖122 PacifiCorp counters that the
lodestar method,123 which was the method actually used by the trial
court, is the usual method used in calculating attorney fees.
¶ 92 PacifiCorp is correct. The lodestar method is the
traditional approach to calculating attorney fees.124 And though, as
USA Power has argued, we have occasionally permitted a
contingency fee arrangement to form the basis of an award of
attorney fees, such circumstances, as discussed below, are rare.
Accordingly, the trial court did not err in employing the traditional
lodestar method as its standard for awarding fees. And in light of
USA Power‘s acknowledgment that ―the only issue is whether the
court applied the wrong legal standard‖—and not whether the
_____________________________________________________________
120Campbell v. State Farm Mut. Auto. Ins. Co., 2001 UT 89, ¶ 125, 65
P.3d 1134, rev’d on other grounds, 538 U.S. 408 (2003).
121 See Crookston v. Fire Ins. Exch., 860 P.2d 937, 939–40 (Utah 1993).
122Softsolutions, Inc. v. Brigham Young Univ., 2000 UT 46, ¶ 51, 1
P.3d 1095.
123 See Barker v. Utah Pub. Serv. Comm’n, 970 P.2d 702, 708 (Utah
1998) (―The lodestar method requires a determination of the hours
reasonably expended on the case as well as a reasonable hourly rate
for the services. These two amounts are multiplied, and the total is
increased or decreased to account for the level of the risk involved in
the case and the quality of the work.‖ (citation omitted)).
124See id. (―As courts often do, we will use the lodestar method in
considering the attorney fees in this case.‖).
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Opinion of the Court
award itself was unreasonable125—we affirm the trial court‘s award
of attorney fees.
¶ 93 We take this opportunity, however, to provide guidance as
to when an award of attorney fees based solely on a contingency fee
arrangement is proper, as our prior cases have not expressly
addressed this issue. In general, a party may recover attorney fees
only when provided for by statute or contract—the so-called
American Rule.126 As noted above, the calculation of attorney fees
pursuant to a fee-shifting contract or statute is generally performed
through the lodestar method.127 But there are a limited number of
exceptions to the American Rule, some of which permit a party to
recover attorney fees as special or consequential damages. 128 We
_____________________________________________________________
125USA Power focuses mainly on the method of calculation used
by the trial court, though it also suggests that the award was
unreasonable even under the lodestar method because the trial court
failed to account for the contingent nature of the case—such as
through an adjustment of the hourly rate or the inclusion of a
multiplier. This argument is inadequately briefed, however, as well
as unpreserved. We accordingly decline to address it.
126See Turtle Mgmt., Inc. v. Haggis Mgmt., Inc., 645 P.2d 667, 671
(Utah 1982).
127 See Dixie State Bank v. Bracken, 764 P.2d 985, 988–90 (Utah
1988); Canyon Country Store v. Bracey, 781 P.2d 414, 420 (Utah 1989)
(―‗Reasonableness‘ is generally the standard when the basis for
recovery is a statute or a contract.‖); Kealamakia, Inc. v. Kealamakia,
2009 UT App 148, ¶ 22, 213 P.3d 13 (―Our jurisprudence has mapped
out a rather pristine formula for calculating [fees based on statutes or
contracts].‖ (Orme, J., concurring)).
128 Special damages and consequential damages are two ways of
naming the damages that ―occur as a natural consequence of the
harm done.‖ Cohn v. J.C. Penney Co., 537 P.2d 306, 307 (Utah 1975).
―Special damages‖ is generally the term used in tort law, while
―consequential damages‖ is typically used with contracts, though
they are essentially synonymous. See State v. Corbitt, 2003 UT App
417, ¶ 21 & n.1, 82 P.3d 211 (Orme, J., concurring). Cases permitting
attorney fees to be sought as consequential damages include claims
for slander of title, Neff v. Neff, 2011 UT 6, ¶¶ 80, 86, 247 P.3d 380, the
third-party litigation exception, Collier v. Heinz, 827 P.2d 982, 983–84
(Utah Ct. App. 1992), certain employment contracts, Heslop v. Bank of
Utah, 839 P.2d 828, 840–41 (Utah 1992), and insurance contracts,
(Continued)
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Opinion of the Court
have noted that ―[t]he award of attorney fees as special damages is
separate and distinct‖ from fees awarded pursuant to a fee-shifting
rule, statute, or contract.129 And the question at issue in cases where
attorney fees are sought as consequential damages pursuant to some
exception to the American Rule is not whether the fee awards are
reasonable, but whether they are foreseeable.130 As we discuss
below, it is this foreseeability requirement that justifies an award
based solely on a contingency fee.
¶ 94 We have found, and the parties could point us to, only two
cases where we have upheld a fee award based solely on a
contingency fee arrangement: Campbell v. State Farm Mutual
Automobile Insurance131 and Billings v. Union Bankers Insurance.132
Both involved claims against an insurer and thus fell within the
exception to the American Rule permitting attorney fees as
Billings v. Union Bankers Ins., 918 P.2d 461, 468 (Utah 1996). Not all
exceptions to the American Rule, however, permit or require
attorney fees to be sought directly as damages. See, e.g., Stewart v.
Utah Pub. Serv. Comm’n, 885 P.2d 759, 783 (Utah 1994) (private
attorney general exception); Cafferty v. Hughes, 2002 UT App 105, ¶
23, 46 P.3d 233 (violation of trust exception).
129 Neff, 2011 UT 6, ¶ 86 n.68; see also Canyon Country, 781 P.2d at
420 (affirming an award of fees as consequential damages and
stating that ―‗[r]easonableness‘ is generally the standard when the
basis for recovery is a statute or contract. As pointed out earlier,
however, Canyon Country‘s claim was based on neither. We hold,
therefore, that Canyon Country was not entitled to ‗reasonable‘ fees,
but [to fees calculated based on its contingency fee arrangement]‖).
130 See Beck v. Farmers Ins. Exch., 701 P.2d 795, 801 (Utah 1985)
(explaining that consequential damages are damages ―reasonably
within the contemplation of, or reasonably foreseeable by, the parties
at the time the contract was made‖).
131 2001 UT 89, ¶¶ 118–25.
132918 P.2d at 468. A third case, Canyon Country Store v. Bracey,
addressed an award of attorney fees based on a contingency fee to
hold that a party may not be awarded more attorney fees than ―the
same amount it was legally obligated to pay counsel.‖ 781 P.2d at
420.
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consequential damages.133 As such, we held that the awards must be
foreseeable. We noted that there were two elements to foreseeability
when dealing with an award based on a contingency fee. First, as is
usual in other fees qua damages cases,134 we required evidence
showing that it was foreseeable that the insured party would incur
attorney fees if the insurer breached.135 The second element, unique
to cases where the fee sought is based solely on a contingency fee
arrangement, required proof that the specific contingency fee
arrangement entered into by the insured party was foreseeable.136 In
both cases, we addressed each of these requirements and found them
to both be satisfied.137 Accordingly, because the attorney fees were
sought as consequential damages, and both the incurring of fees and
the contingency fee arrangements themselves were foreseeable, we
approved the purely contingency fee-based awards of attorney
fees.138 This two-part foreseeability requirement applicable to
_____________________________________________________________
133Campbell, 2001 UT 89, ¶¶ 120–21; Billings, 918 P.2d at 468. The
attorney fee award in Canyon Country was likewise obtained as
consequential damages. 781 P.2d at 420.
134See Pac. Coast Title Ins. v. Hartford Accident & Indem. Co., 325
P.2d 906, 908 (Utah 1958); Heslop, 839 P.2d at 840–41.
135 Campbell, 2001 UT 89, ¶ 123 (―Thus, the issue becomes
whether, at the time State Farm issued the policy to the Campbells,
State Farm could reasonably foresee that if a claim arose against it
the Campbells would incur attorney fees in pursuing that claim.‖);
Billings, 918 P.2d at 468 (noting the district court had found that ―it
was foreseeable at the time the parties entered into the insurance
contract that Billings would incur attorney fees if Union Bankers
breached‖).
136Campbell, 2001 UT 89, ¶ 124 (―In other words, could State Farm
reasonably foresee that the Campbells would agree to a contingency
attorney fee of 40% . . . ?‖); Billings, 918 P.2d at 468 (―Billings now
argues that the district court‘s finding that Billings‘ contingency fee
arrangement was not foreseeable was not supported by the
evidence.‖).
137 Campbell, 2001 UT 89, ¶¶ 123, 125; Billings, 918 P.2d at 468.
138 We note that not every case seeking attorney fees as
consequential damages will seek a fee award based on a contingency
fee arrangement. In these circumstances, the foreseeability
requirement is satisfied if the opposing party could foresee that the
(Continued)
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Opinion of the Court
contingency fees sought as consequential damages has been referred
to as the Campbell rule.139
¶ 95 USA Power points to two cases from our court of appeals,
Kealamakia, Inc. v. Kealamakia140 and Staffing America v. Advanced
Management Concepts, Inc.,141 as contrary to the principles just
discussed.142 Neither case supports USA Power‘s argument that a
contingency fee may serve as the sole basis of an award when the
fees are not sought as damages, however, because in neither case
was the issue before the court. In Kealamakia, the court of appeals
stated that the trial court had not ―simply used the contingency fee
arrangement without evaluating the reasonableness for that
amount.‖143 Indeed, the court stated that the trial court had
specifically found the fee amount to be reasonable and found that
the record contained evidence supporting the trial court‘s
determination under the traditional reasonableness analysis. 144 And
party would need to incur legal fees to rectify whatever wrong has
occurred. See Pacific Coast Title, 325 P.2d at 908; Heslop, 839 P.2d at
840–41. There is no need to conduct a separate analysis of whether
the amount of the award was foreseeable unless the party being
awarded fees seeks more than the usual ―reasonable‖ attorney fee.
See Staffing Am., Inc. v. Advanced Mgmt. Concepts, Inc., 2005 UT
139
App 437, para. 7 n.3 (unpublished opinion).
140 2009 UT App 148, ¶¶ 5–14.
141 2005 UT App 437, paras. 5–8 (unpublished opinion).
142 Both cases permitted an award of attorney fees in reliance on
our acknowledgement in Campbell that ―breach of a fiduciary
obligation is a well-established exception to the American rule
precluding attorney fees in tort cases generally.‖ Campbell, 2001 UT
89, ¶ 122. We have not stated whether this exception to the American
Rule requires attorney fees to be sought as damages or if it permits a
party to seek a separate award. Kealamakia and Staffing America
suggest that our court of appeals has employed both methods.
Compare Kealamakia, 2009 UT App 148, ¶ 8 (attorney fees obtained ―in
the form of a separate award‖) with Staffing Am., 2005 UT App 437,
para. 7 (attorney fees awarded ―as a component of foreseeable
damages‖). This issue is not before us today, though we note that
Campbell suggests that attorney fees in breach of fiduciary actions
should be sought as damages. See Neff, 2011 UT 6, ¶ 88.
143 2009 UT App 148, ¶ 9.
144 Id.
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in Staffing America, an unpublished case, the fees were awarded ―as a
component of foreseeable damages,‖ and the paying party had
―inadequately briefed any argument that [the] case somehow [fell]
outside of the Campbell rule‖ discussed above.145 Thus, neither case
conflicts with the rule we clarify today.146 We accordingly hold,
based on our precedent, that a trial court may award attorney fees
based solely on a contingency fee arrangement only when the award
is sought as damages147 and the contingency fee arrangement was
foreseeable.
¶ 96 We emphasize, however, that a contingency fee agreement
is not irrelevant to the determination of what constitutes a
reasonable attorney fee in cases where the fee award is not sought as
damages. Indeed, the rubric we have provided to calculate a
reasonable fee award under the lodestar method requires a trial
court to determine whether there are ―circumstances which require
consideration of additional factors, including those listed in the
[Rules of Professional Conduct],‖148 such as ―whether the fee is fixed
or contingent.‖149 Further, we have expressly recognized that the
lodestar method permits a court to apply a ―multiplier‖ to increase
or decrease the total award in order to account for a number of
factors, such as ―the contingent nature of the case, . . . the risks
assumed, and . . . the delay in payment.‖150 Accordingly, it may have
been appropriate for the trial court in this case to adjust the lodestar-
based award in light of USA Power‘s contingency fee arrangement.
The record is not clear as to whether the trial court made such an
adjustment, however, because the parties stipulated to the amount of
the attorney fees.151 Although USA Power suggests that the trial
_____________________________________________________________
2005 UT App 437, para. 7 & n.3 (unpublished opinion)
145
(emphasis added).
146 To the extent that the cases contain language suggesting that a
different rule would apply, such language is disaffirmed.
147We express no opinion today on the types of cases that permit
parties to seek attorney fees as damages.
148 Dixie State Bank, 764 P.2d at 990.
149 UTAH R. PROF. CONDUCT 1.5(a)(8).
150 Barker, 970 P.2d at 708–09.
151The trial court‘s order granting attorney fees was based on the
stipulation of both USA Power and PacifiCorp and awarded USA
(Continued)
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Opinion of the Court
court failed to appropriately adjust the award, this argument has
been inadequately briefed, is unpreserved,152 and we do not address
it further.
¶ 97 USA Power‘s final argument as to why its contingency fee
arrangement should serve as the basis for the award of attorney fees
is that an increased award would ensure that USA Power was made
whole—i.e., it would not have to pay its attorneys out of the amount
awarded by the jury.153 As we have repeatedly stated, however, the
contracted billing rate of a party‘s attorney is not determinative of a
fee award.154 As such, there will likely often be cases where a party
must pay its attorney more than the amount of reasonable attorney
fees it was awarded. This case highlights the dangers of awarding
fees based on the contract between the prevailing party and their
counsel and emphasizes the importance of ensuring that a fee award
does not ―punish the losing party by allowing the winner a windfall
Power ―$2,000,000 . . . based on the reasonable number of hours
spent by Plaintiffs‘ counsel on the trade secrets misappropriation
claim against PacifiCorp multiplied by a reasonable hourly rate (i.e.,
lodestar method including possible multiplier).‖
152 Although USA Power argues that its stipulation to the amount
of attorney fees did not waive its right to argue that the trial court
should have considered the contingency fee agreement in awarding
attorney fees, the only place in the record it points us to is an
argument made prior to the stipulation of the amount of attorney
fees, where USA Power claimed that PacifiCorp‘s originally
proposed award did not adequately take the contingency fee
arrangement into consideration. There is no indication, however,
that USA Power objected to the determination of the hourly rate or
the trial court‘s alleged failure to properly include a multiplier in
connection with the stipulated order. Thus, because the trial court
had no opportunity to rule on the issue, the issue is unpreserved. See
Patterson v. Patterson, 2011 UT 68, ¶ 12, 266 P.3d 828.
153See Softsolutions, 2000 UT 46, ¶ 51 (―[T]he basic purpose of
attorney fees is to indemnify the prevailing party . . . .‖).
154 See Dixie State Bank, 764 P.2d at 990 (―It is important to note
that with this [reasonableness] analysis, what an attorney bills or the
number of hours spent on a case is not determinative.‖); Cabrera v.
Cottrell, 694 P.2d 622, 624 (Utah 1985) (―Reasonable attorneys fees are
not measured by what an attorney actually bills, nor is the number of
hours spent on the case determinative in computing fees.‖).
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profit.‖155 USA Power‘s total award, not including the attorney fee
award, was $112,510,000, though only $21,399,391 was for actual
damages.156 The rest, $91,110,609, was an award against PacifiCorp
for unjust enrichment. Although USA Power may be obligated to
pay its attorneys out of the unjust enrichment damages, such
damages ―do[] not aim to compensate the victims of the wrongful
acts, as restitution does.‖157 Instead, they are ―meant to prevent the
wrongdoer from enriching himself by his wrongs.‖158 As no part of
the unjust enrichment award compensates USA Power for its actual
losses, ensuring that USA Power can retain the full unjust
enrichment award by requiring PacifiCorp to pay more than a
reasonable attorney fee would do nothing to make USA Power
whole. Instead, it would only punish PacifiCorp, a result antithetical
to the purpose of a fee award.159
¶ 98 Because USA Power did not seek attorney fees as damages
and did not prove that its contingency fee arrangement was
foreseeable, its contingency fee cannot serve as the sole basis for its
fee award. We accordingly affirm the trial court‘s determination of
the amount of fees pursuant to the lodestar method.
_____________________________________________________________
155 Softsolutions, 2000 UT 46, ¶ 51.
156 USA Power was also awarded costs and fees totaling
$2,322,468.11.
157 S.E.C. v. Huffman, 996 F.2d 800, 802 (5th Cir. 1993).
158 Id.
159 USA Power‘s argument that ―the unique circumstances‖
present in this case of willful and malicious misappropriation justify
an increased fee award only serves to further highlight that an
increased fee award would be purely punitive in nature. USA
Power‘s argument ignores that attorney fees can only be awarded in
trade secret cases where there has been willful and malicious
misappropriation, meaning every case where fees are awarded will
involve willful and malicious misappropriation—hardly a unique set
of circumstances. And USA Power‘s argument improperly suggests
that a party‘s misconduct should justify higher fee awards,
impermissibly turning an award of attorney fees into exemplary or
punitive damages.
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USA POWER v. PACIFICORP
Opinion of the Court
IV. USA Power Is Not Entitled to Prejudgment Interest
¶ 99 Next, USA Power claims that the trial court erred in
denying any form of prejudgment interest. USA Power argues first
that it was entitled to prejudgment interest beginning at some point
prior to the verdict.160 It also argues in the alternative that, even if it
is not awarded prejudgment interest prior to the verdict, it was
entitled to post-verdict, prejudgment interest under rule 54(e) of the
Utah Rules of Civil Procedure and under the common law. We
address these issues in turn and affirm the trial court‘s denial of any
form of prejudgment interest.
A. USA Power Is Not Entitled to General Prejudgment Interest
¶ 100 ―Prejudgment interest may be recovered where the
damage is complete, . . . ‗the loss ha[s] been fixed as of a definite time
and the amount of the loss can be calculated with mathematical
accuracy in accordance with well-established rules of damages.‘‖161
―[L]osses that cannot be calculated with mathematical accuracy are
those in which damage amounts are to be determined by the broad
discretion of the trier of fact,‖162 requiring the fact-finder to ―be
guided by their best judgment in assessing the amount to be allowed
for past as well as for future injury.‖163 Such losses include those
stemming from personal injury, wrongful death, defamation, false
imprisonment, malicious prosecution, and assault and battery.164
Although not per se excluded, we are generally ―reluctan[t] to award
prejudgment interest for unrealized profits.‖165 This is so because
―[d]amages in [lost profit] cases do not represent an actual,
ascertainable loss; they represent the fact[-]finder‘s best
_____________________________________________________________
160 USA Power fails to specify when the prejudgment interest
should begin. Indeed, the whole sum of its argument in its opening
brief is a paraphrased quote from Encon Utah, LLC v. Fluor Ames
Kreamer, LLC, 2009 UT 7, ¶ 51, 210 P.3d 263. Although this is clearly
inadequate briefing, we address the issue briefly to clarify the
application of prejudgment interest in lost profit cases.
161 Id. ¶ 51 (second alteration in original) (citations omitted).
162 Id. ¶ 53 (emphasis omitted) (citation omitted).
163 Fell v. Union Pac. Ry. Co., 88 P. 1003, 1007 (Utah 1907).
164 Id. at 1006.
165 Encon, 2009 UT 7, ¶ 59 (citation omitted).
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approximation of that loss.‖166 ―[T]he very nature of lost future
profits injects an air of uncertainty and speculation into the
calculation of damages.‖167
¶ 101 USA Power argues that the calculation of damages
resulting from the failed RFP bid was sufficiently certain to allow for
prejudgment interest under the standard just discussed. Its
explanation for why it has satisfied this standard is telling, however:
―USA Power‘s actual losses and unjust enrichment damages were
not general tort damages, were the subject of admissible expert and
lay testimony, and involved facts and figures based on fixed rules of
evidence and known standards of value.‖168 If this were the
standard, nearly every claim would receive prejudgment interest.
The evidence USA Power points to as establishing the ―mathematical
accuracy‖ of its loss shows that USA Power estimated its lost profits
to be somewhere between $3 million and $24.09 million, requiring
the jury to use its best judgment in estimating what sequence of
events would have unfolded and the value of the contracts that USA
Power might have entered into. The project ―was not an established
business with a long-term history of profits,‖169 there was no contract
specifying the amount of profit USA Power would have gotten if
PacifiCorp had not breached,170 and it is uncertain whether USA
_____________________________________________________________
166 ClearOne Commc’ns, Inc. v. Chiang, 432 F. App‘x 770, 774 (10th
Cir. 2011); see also Penelko, Inc. v. John Price Assocs., Inc., 642 P.2d 1229,
1233 (Utah 1982) (―To recover damages for lost profits, the evidence
submitted must provide the jury with a sufficient basis for estimating
damages with reasonable certainty.‖ (emphasis added)).
167Anesthesiologists Assocs. of Ogden v. St. Benedict’s Hosp., 852 P.2d
1030, 1042 (Utah Ct. App. 1993), vacated on other grounds, 884 P.2d
1236 (Utah 1994).
168Although USA Power attempts to argue it was entitled to
prejudgment interest on both the actual loss—lost profits—and the
unjust enrichment awards, it fails to provide any meaningful
analysis of prejudgment interest in the context of an unjust
enrichment award. Accordingly, we decline to address the issue.
169 Cf. Canyon Country Store v. Bracey, 781 P.2d 414, 422 (Utah
1989).
170 Cf. Encon, 2009 UT 7, ¶¶ 59–61 (permitting prejudgment
interest on lost profits based on ―a completed percentage of work on
(Continued)
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Opinion of the Court
Power would have actually obtained each of the contracts—with the
requisite specified terms—that it needed to obtain a profit of
$21,399,391—the ultimate award.
¶ 102 USA Power essentially argues that because its ―claims
c[ould] be reduced eventually to monetary value,‖ it should receive
prejudgment interest.171 We have long rejected this proposition.172
Although USA Power was entitled to put on ―the best evidence
available‖ in support of its claim for lost profits,173 our requirement
that ―the amount of the loss . . . be calculated with mathematical
accuracy in accordance with well-established rules of damages‖174
means that evidence that is sufficient to permit a jury to consider
whether to award damages for lost profits may still be insufficient to
justify an award of prejudgment interest.175 As the Tenth Circuit
stated, ―[t]here is a difference between a loss that can be ‗measured
by facts and figures,‘ and using facts and figures to estimate a
loss.‖176 Accordingly, due to the amount of uncertainty inherent in
USA Power‘s award for lost profits, we affirm the trial court‘s denial
of USA Power‘s request for prejudgment interest.
B. USA Power Is Not Entitled to Post-Verdict Prejudgment Interest
¶ 103 USA Power argues that even if it is not entitled to full
prejudgment interest, it is entitled to prejudgment, post-verdict
interest and asserts that rule 54(e) of the Utah Rules of Civil
a fixed-price contract,‖ where the parties had agreed that a 10%
profit margin was reasonable).
171 Canyon Country, 781 P.2d at 422.
172 See id. (―It is, of course, axiomatic that all claims can be
reduced eventually to monetary value. All claims would therefore at
some point become liquidated and theoretically subject to
prejudgment interest claims. Common sense precludes such an
interpretation, however.‖).
173 Penelko, 642 P.2d at 1233 .
174 Encon, 2009 UT 7, ¶ 51.
175See Canyon Country, 781 P.2d at 422 (―While the basis of the
‗formula‘ used to determine Canyon Country‘s lost profits may have
been sufficient for the jury to render a verdict in favor of Canyon
Country, it is too speculative to allow for the addition of
prejudgment interest.‖).
176 ClearOne, 432 F. App‘x at 775 (citation omitted).
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Opinion of the Court
Procedure provided a basis for this claim.177 The rule stated that
―[t]he clerk must include in any judgment signed by him any interest
on the verdict or decision from the time it was rendered, and the
costs, if the same have been taxed or ascertained.‖ USA Power
argues that this rule conferred an automatic right to pre-judgment,
post-verdict interest. Although ―the rule [was] no model of clarity,‖
the text of the rule suggests that only interest that has been ―taxed or
ascertained‖ should be added to the verdict.178
¶ 104 This reading of the rule is supported by cases discussing
prejudgment interest, which USA Power fails to address. For
example, we have held that ―‗[p]rejudgment interest‘ represents an
amount awarded as damages due to the opposing party‘s delay in
tendering the amount owing under an obligation.‖179 USA Power‘s
interpretation of the rule would permit a clerk to add prejudgment
interest as a matter of course, not as an award stemming from any
delay of an overdue payment.180 Cases from our court of appeals and
our own rules of appellate procedure further undermine USA
Power‘s claim.181 Because USA Power failed to provide any
_____________________________________________________________
177 Rule 54(e) was removed from the rules of procedure in 2011.
178 See Russo v. Ballard Med. Prods., 550 F.3d 1004, 1023 (10th Cir.
2008) (discussing how relevant cases and rule 32 of the Utah Rules of
Appellate Procedure, which adds to an affirmed judgment
―whatever interest is allowed by law . . . from the date the judgment
was entered [in the trial court],‖ suggest that post-verdict, pre-
judgment interest is not permitted under rule 54(e) (emphasis
added) (citation omitted)). To paraphrase the Tenth Circuit‘s
statement addressing this exact claim, ―[t]he difficulty with [USA
Power‘s] reading of the Rule . . . is that, if it were correct, post-
verdict, pre-judgment interest would be an everyday matter in Utah.
Yet, [USA Power] cites to us not a single Utah case adopting [its]
view of Rule 54(e).‖ Id.
179L & A Drywall, Inc. v. Whitmore Constr. Co., 608 P.2d 626, 629
(Utah 1980) (emphasis added).
180As discussed below, a judgment is necessary to render due a
debt created by a successful lawsuit.
See Mason v. W. Mortg. Loan Corp., 754 P.2d 984, 986–87 (Utah
181
Ct. App. 1988) (holding ―that when a judgment is reversed on
appeal, the new judgment subsequently entered by the trial court
may bear interest only from the date of entry of that new judgment,‖
(Continued)
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USA POWER v. PACIFICORP
Opinion of the Court
justification for adopting its interpretation of rule 54(e), we affirm
the trial court‘s denial of post-verdict, prejudgment interest.182
¶ 105 USA Power also argues that it is entitled to prejudgment,
post-verdict interest under the common law because the verdict
liquidated the amount owed. The cases USA Power cites for this
argument affirm the ―‗well[-]established rule‘ of this jurisdiction that
allows interest on overdue debts.‖183 The question becomes when
PacifiCorp‘s liability to USA Power, as established by the jury‘s
verdict, became due. USA Power has provided no argument as to
this point other than conclusory statements and no legal authority
other than cases stating the common law rule permitting interest on
overdue debts. Aside from being inadequately briefed, USA Power‘s
argument fails to address our court of appeals‘ reasoning in Bailey-
Allen Co. v. Kurzet,184 where the court cited two cases for the
proposition that the ―entry of judgment and not oral ruling
liquidates damages.‖185 This is so because any order ―may be
as this approach was ―in line with‖ rule 54(e)); UTAH R. APP. P. 32
(adding to an affirmed judgment ―whatever interest is allowed by
law . . . from the date the judgment was entered in the trial court‖
(emphasis added)).
182We also note that because subsection (e) of rule 54 has been
eliminated completely by a recent amendment—and because USA
Power failed to adequately brief the issue—we see no need to further
discuss whether USA Power‘s interpretation should be adopted.
183 Bds. of Educ. of the Granite, Murray City, Jordan, & Salt Lake City
Sch. Dists. v. Salt Lake Cty. Comm’n, 749 P.2d 1264, 1267 (Utah 1988)
(citation omitted); see also Vali Convalescent & Care Insts. v. Div. of
Health Care Fin., 797 P.2d 438, 445 (Utah Ct. App. 1990) (―The law in
Utah, including where the debt is owed by a governmental entity, is
to allow ‗interest on overdue debts even where no statute so
provides.‘‖ (citation omitted)).
184876 P.2d 421, 427 & n.4 (Utah Ct. App. 1994) (citing Nat’l Steel
Constr. Co. v. Nat’l Union Fire Ins., 543 P.2d 642, 644–45 (Wash. Ct.
App. 1975); Pure Gas & Chem. Co. v. Cook, 526 P.2d 986, 993 (Wyo.
1974)).
185 Id. at 427 n.4 (describing Nat’l Steel Constr. Co., 543 P.2d at 644–
45). USA Power also failed to address the cases cited by PacifiCorp
in its briefing. See, e.g., Kiessling v. Nw. Greyhound Lines, Inc., 229 P.2d
335, 340 (Wash. 1951) (stating that the ―verdict of a jury or a
pronouncement by the court determines and fixes a definite amount
(Continued)
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Opinion of the Court
changed at any time before the entry of judgment.‖186 Accordingly,
we affirm the trial court‘s denial of common law interest. Having
affirmed the trial court‘s decision to not award any prejudgment
interest, we turn now to the final issue in USA Power‘s cross-appeal.
V. USA Power Is Not Entitled to the Ten Percent Interest Rate
Under Section 15-1-1
¶ 106 The final issue in USA Power‘s cross-appeal is whether it
was entitled to the ten percent interest rate provided for in section
15-1-1 of the Utah Code.187 Section 15-1-1 permits parties to agree on
any interest rate in a contract and provides that, if no interest rate is
agreed upon, a ten percent interest rate applies. 188 USA Power
argues that because the contract entered into by the parties did not
provide for an interest rate, the interest rate found in the statute
should apply. The question, then, is whether the contract between
USA Power and PacifiCorp falls within the categories of contracts
that receive the ten percent interest rate provided by the statute.
Section 15-1-1(2) states that ―the legal rate of interest for the loan or
forbearance of any money, goods, or chose in action shall be 10% per
annum.‖ USA Power argues that the statute permits any ―chose in
action‖189 based on a contract to receive the ten percent interest rate,
of recovery, but the demand is not fully liquidated until the entry of
judgment‖).
186 UTAH R. CIV. P. 54(b).
187 It appears that USA Power has argued that it is entitled to this
interest rate for both prejudgment and post-judgment interest.
Because we have affirmed the trial court‘s denial of prejudgment
interest, we address this issue only in terms of USA Power‘s
entitlement to post-judgment interest, though our interpretation of
the statute is equally applicable to a request for prejudgment
interest.
188 See UTAH CODE § 15-1-1(1) (―The parties to a lawful contract
may agree upon any rate of interest . . . .‖); id. § 15-1-1(2) (―Unless
parties to a lawful contract specify a different rate of interest, the
legal rate of interest . . . shall be 10% per annum.‖).
189A ―chose in action‖ is defined as ―a claim or debt upon which
a recovery may be made in a lawsuit.‖ Snow, Nuffer, Engstrom &
Drake v. Tanasse, 1999 UT 49, ¶ 9, 980 P.2d 208 (citation omitted).
Essentially, the phrase is another way of describing a right to sue or
cause of action. Id.
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Opinion of the Court
citing cases that have interpreted section 15-1-1 in that manner.
PacifiCorp argues that such an interpretation is contrary to the plain
language of the statute and asks us to clarify its meaning.
¶ 107 We recognize that we have suggested in prior cases that
section 15-1-1 applies to all cases involving a contract. This
interpretation has been proffered, however, either in dicta190 or
without any analysis of the potentially limiting ―loan or forbearance‖
language in the statute.191 Further, we have on at least two occasions
expressed concern with the apparent acceptance of this
interpretation of the statute. In Consolidation Coal Co. v. Utah Division
of State Lands and Forestry,192 Chief Justice Zimmerman added a
footnote expressing ―serious reservations about the initial
_____________________________________________________________
190 See, e.g., Utah Res. Int’l, Inc. v. Mark Techs. Corp., 2014 UT 60,
¶ 19 & n.14, 342 P.3d 779 (noting that ―the applicable interest rate
was set by statute at ten percent, compounded annually,‖ in a
discussion of whether a trial court could reduce the amount of
security required to be deposited during an appeal); Whitney v.
Faulkner, 2004 UT 52, ¶ 17, 95 P.3d 270 (stating that ―[s]ection 15-1-1
of the Utah Code provides that . . . the absence of a contractually
defined rate will result in imposition of the statutory rate of ten
percent,‖ though not applying the statute because the parties did not
have a contract); Nielsen v. O’Reilly, 848 P.2d 664, 669–70 (Utah 1992)
(stating that ―[s]ection 15-1-1[] establishes the legal rate of
prejudgment interest in a breach of contract as 10 percent per
annum‖ but refusing to ―address the issue of whether an insurer
who breaches a contract . . . is liable for prejudgment interest‖
because the plaintiff ―failed to pursue a claim for breach of
contract‖), superseded by statute; Lignell v. Berg, 593 P.2d 800, 809
(Utah 1979) (describing the interest rate as set by section 15-1-1, but
not interpreting the statute because the only argument was ―about
the due date used by the court in its computation‖ of interest).
191 See, e.g., Young v. Young, 1999 UT 38, ¶ 36, 979 P.2d 338
(quoting the statute and applying the interest rate provided therein
to a breach of lease without discussing the limiting language); SCM
Land Co. v. Watkins & Faber, 732 P.2d 105, 109 (Utah 1986) (same);
Piacitelli v. S. Utah State Coll., 636 P.2d 1063, 1069 (Utah 1981)
(describing the appropriate measure of damages for an employee
dismissed without compliance with an employment contract and
stating simply that ―[t]he employee is also entitled to interest at the
statutory rate as specified in [section] 15-1-1‖).
192 886 P.2d 514 (Utah 1994).
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correctness and therefore the continued vitality‖ of cases
―purport[ing] to tie prejudgment interest rates in all contract cases to
the section 15-1-1 rate,‖ noting that those cases failed to ―discuss[]
the limiting language of that section.‖193 He suggested that ―[t]he
plain language of section 15-1-1 seems to indicate that the section
was intended to apply only to a ‗loan or forbearance‘ of ‗money,
goods or chose in action.‘‖194 We later echoed these concerns in
Wilcox v. Anchor Wate, Co.,195 suggesting that ―the default rate
specified in section 15-1-1(2) does not automatically extend to all
judgments obtained in contract cases.‖196 In neither of these cases,
however, was the issue necessary to our decision.197
¶ 108 In this case, the question of the scope of section 15-1-1 is
squarely presented and our resolution of this question is necessary to
our decision. The statute states that it applies to contracts ―for the
loan or forbearance of any money, goods, or chose in action.‖198
Because ―[w]e presume that the legislature used each word
advisedly‖ and ―that the expression of one [term] should be
interpreted as the exclusion of another,‖199 the description of certain
kinds of contracts in the statute necessarily limits the statute‘s
application to only those contracts described therein: contracts for
the ―loan . . . of any money [or] goods‖ or for the ―forbearance of
any . . . chose in action.‖ Because we cannot ignore the plain
language of the statute, we must reject USA Power‘s
_____________________________________________________________
193 Id. at 524 n.13 (Utah 1994), abrogated on other grounds by State ex
rel. Sch. & Inst. Trust Land Admin. v. Mathis, 2009 UT 85, 223 P.3d
1119.
194 Id. (citation omitted).
195 2007 UT 39, 164 P.3d 353.
196 Id. ¶ 46.
197 See Consolidation Coal, 886 P.2d at 524 n.13 (―Nevertheless,
because the state has failed to raise this issue and its resolution is not
necessary for a disposition of this case, we decline to address it.‖);
Wilcox, 2007 UT 39, ¶ 46 (stating that section 15-1-1 did not apply to
the case and applying another statutory prejudgment interest rate).
198 UTAH CODE § 15-1-1(2).
199 Penunuri v. Sundance Partners, Ltd., 2013 UT 22, ¶ 15, 301 P.3d
984 (citation omitted) (second alteration in original).
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Opinion of the Court
interpretation.200 In so doing, we disavow any prior statements
suggesting the statute provides a default interest rate applicable in
any breach of contract case.
¶ 109 We accordingly hold that the statute applies only to
contracts ―for the loan or forbearance of any money, goods, or chose
in action.‖ As the contract in this case was not one of the contracts
described in section 15-1-1, the interest rate provided therein does
not apply. Instead, section 15-1-4 provides the appropriate interest
rate: ―the federal postjudgment interest rate as of January 1 of each
year, plus 2%.‖201 We thus affirm the trial court‘s decision to not
apply the interest rate found in section 15-1-1.
¶ 110 For the reasons discussed above, we affirm the trial court
as to each issue addressed by USA Power in its cross-appeal. We
turn now to the third appeal in this case, USA Power‘s direct appeal
of the trial court‘s grant of JNOV in favor of Ms. Williams.
USA Power’s Direct Appeal
¶ 111 After the jury found that Ms. Williams damaged USA
Power by breaching her fiduciary duties, Ms. Williams moved for
JNOV. The trial court granted the motion, finding for several reasons
that no competent evidence supported USA Power‘s causation
argument—i.e., that USA Power had failed to connect Ms. Williams‘s
actions to its damages. USA Power appeals this ruling, arguing that
there was sufficient evidence from which a reasonable jury could
find that Ms. Williams caused PacifiCorp to select its own bid rather
than USA Power‘s. USA Power alternatively argues that, even if
there is no evidence that Ms. Williams caused USA Power to lose the
RFP, there was sufficient evidence to prove that she caused
PacifiCorp to break off negotiations and abandon a contract for the
purchase of USA Power‘s Spring Canyon proposal. We address each
of USA Power‘s theories in turn and affirm the trial court‘s grant of
JNOV.
_____________________________________________________________
200 Turner v. Staker & Parson Cos., 2012 UT 30, ¶ 12, 284 P.3d 600
(―Wherever possible, we give effect to every word of a statute,
avoiding ‗[a]ny interpretation which renders parts or words in a
statute inoperative or superfluous.‘‖ (alteration in original) (citation
omitted)).
201 UTAH CODE § 15-1-4(3)(a).
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I. USA Power Has Not Shown that It Would Have Benefitted by
Winning the RFP Absent Ms. Williams‘s Conduct
¶ 112 USA Power‘s central argument on appeal is that it
presented sufficient evidence to support the jury‘s finding that
Ms. Williams damaged USA Power by helping PacifiCorp obtain
water rights that were critical to PacifiCorp‘s proposal winning out
over USA Power‘s. Before addressing the issues related to the
evidence, however, we first address the parties‘ arguments
regarding the appropriate causation analysis in legal malpractice
cases. The parties argue over what USA Power‘s burden was and
whether it was required to show that ―no other lawyer‖ could have
obtained the same results. Ms. Williams also contends that expert
testimony is necessary to prove causation under her proposed
standard—testimony that USA Power did not provide. We first
address the parties‘ arguments over the standard of causation
applicable in legal malpractice suits. We then address whether USA
Power presented sufficient evidence to support its theory of
causation under this standard. Ultimately, we affirm the trial court‘s
grant of JNOV, holding that USA Power failed to present sufficient
evidence in support of its claim.
A. Clients in Legal Malpractice Cases Must Show that Absent the
Attorney’s Conduct, They Would Have Benefitted
¶ 113 Although there are different causes of action that a client
can assert against its attorney, each action includes the element of
causation. And ―the same standard of causation applies whether the
alleged wrong is a negligent act, a fiduciary breach, or even a
contractual breach.‖202 Because this causation requirement is a
crucial and distinct element to any malpractice claim, an abundance
of evidence as to breach of duty cannot make up for a deficiency of
evidence as to causation.203 The question before us today is what
must be shown to satisfy this element.
_____________________________________________________________
202Christensen & Jensen, P.C. v. Barret & Daines, 2008 UT 64, ¶ 25,
194 P.3d 931 (citation omitted).
203 See Alexander v. Turtur & Assocs., 146 S.W.3d 113, 119 (Tex.
2004) (―Breach of the standard of care and causation are separate
inquiries, . . . an abundance of evidence as to one cannot substitute
for a deficiency of evidence as to the other.‖); accord Williams v.
Barber, 765 P.2d 887, 889 (Utah 1988) (―When an attorney breaches
such duty, he is liable for all damages directly and proximately
(Continued)
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¶ 114 Although the causation element of a legal malpractice
claim has sometimes been defined as two separate inquiries—actual
or ―but for‖ causation204 and proximate or legal causation205— it can
be difficult in practice to separate an actual cause analysis from a
proximate cause analysis as both require a counterfactual analysis. In
other words, both require us to inquire as to ―what would have
occurred if the [attorney] had not engaged in the . . . conduct.‖206 The
reason for this is that proximate causation is not truly a separate
caused by his act or failure to act. Generally speaking, incurring
liability through a breach of duty does not necessarily result in
damages.‖ (citation omitted)). For this reason, in making a causation
assessment we disregard evidence that goes only to whether or not
Ms. Williams breached her fiduciary duties, including evidence that
Ms. Williams had acquired confidential information while working
for USA Power, that she shared that information with PacifiCorp,
and that both PacifiCorp and Ms. Williams were aware of a potential
conflict of interest.
204 In the legal malpractice context, actual or ―but for‖ cause
requires the client to prove that ―but for the attorney‘s wrong[,] [the
client‘s] loss would not have occurred.‖ Kilpatrick v. Wiley, Rein &
Fielding, 909 P.2d 1283, 1291 (Utah Ct. App. 1996).
205 Proximate or legal cause in legal malpractice cases looks to
whether the attorney‘s conduct ―is the efficient cause—the one that
necessarily sets in operation the factors that accomplish the injury.‖
Harline v. Barker, 912 P.2d 433, 439 (Utah 1996) (citation omitted).
There are several aspects to a proximate cause analysis, including
whether the harm was foreseeable, whether there was an intervening
cause, and whether the harm would have occurred regardless of the
actor‘s wrongful act. See Steffensen v. Smith’s Mgmt. Corp., 862 P.2d
1342, 1346 (Utah 1993); Kilpatrick, 909 P.2d at 1293; Proctor v. Costco
Wholesale Corp., 2013 UT App 226, ¶ 11, 311 P.3d 564; Harline, 912
P.2d at 439 (―To prove proximate cause in legal malpractice
cases . . . , the plaintiff must show that absent the attorney‘s
negligence, the underlying suit would have been successful.‖).
Because of this last factor, which is usually determinative of the
causation theory, the proximate cause analysis in legal malpractice
cases has sometimes been defined as simply an analysis of whether
―a reasonable likelihood exists that [the client] would have
ultimately benefitted.‖ Kilpatrick, 909 P.2d at 1291.
206RESTATEMENT (THIRD) OF TORTS: LIAB. FOR PHYSICAL &
EMOTIONAL HARM § 26 cmt. e (AM. LAW INST. 2010).
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causation analysis, but it is rather an analysis of whether the
causation that exists is sufficient to warrant liability.207 Ultimately, a
proximate cause analysis looks to whether an individual who is a
but-for cause of the harm should nevertheless be excused from
liability.
¶ 115 Because of the interrelatedness of these two causation
analyses, we have ―distilled the standard for causation in legal
malpractice actions‖208 to the following framework: ―the client is
required to show that absent the conduct complained of[,] . . . the
client would have benefitted.‖209 Causation requires us to ―inquire as
to what the [client‘s] position would have been [if the attorney had
acted differently], as compared to [the client‘s] present position.‖210
If the client‘s injury would have occurred regardless of the attorney‘s
action, then there is no causation. This means that the client must
prove not only that its attorney caused the client to lose the chance to
litigate a case or negotiate certain terms in a business deal, but also
that the client would have won the case if it was litigated211 or that
_____________________________________________________________
207 See Proctor, 2013 UT App 226, ¶¶ 10–11 (―In other words,
‗[p]roximate cause refers to the basic requirement that before
recovery is allowed in tort, there must be some direct relation
between the injury asserted and the injurious conduct alleged,‘ i.e.,
‗it limits liability at some point before the want of a nail leads to the
loss of the kingdom.‘‖ (citation omitted) (alteration in original)); Raab
v. Utah Ry. Co., 2009 UT 61, ¶ 23, 221 P.3d 219 (―For a particular
negligent act to be the legal cause of a plaintiff‘s injuries, there must
be some greater level of connection between the act and the injury
than mere ‗but for‘ causation.‖); see also RESTATEMENT (THIRD) OF
TORTS: LIAB. FOR PHYSICAL AND EMOTIONAL HARM § 29 (AM. LAW
INST. 2010).
208 Kilpatrick, 909 P.2d at 1291.
209 Christensen & Jensen, 2008 UT 64, ¶ 26.
210 Dunn v. McKay, Burton, McMurray & Thurman, 584 P.2d 894,
895 (Utah 1978); see also Williams, 765 P.2d at 889 (―[P]roximate cause
embraces an assessment of the merits of the underlying cause of
action.‖).
211See Harline, 912 P.2d at 439 (―To prove proximate cause in legal
malpractice cases . . . , the plaintiff must show that absent the
attorney‘s negligence, the underlying suit would have been
successful.‖); Williams, 765 P.2d at 890 (holding that the client had
(Continued)
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the other parties to the deal would have accepted the client‘s desired
terms.212 Although the parties discuss various ways both we and our
court of appeals have articulated and applied this standard, in each
case we were focusing on the same basic concept: a plaintiff, to prove
the element of causation in a legal malpractice suit, must show that
he or she would have been better off if the attorney‘s alleged
malpractice had never occurred.
¶ 116 Although the parties generally agree as to this standard,
they disagree as to whether it encompasses a requirement that USA
Power demonstrate that a different attorney, with reasonable skill
and diligence, would not have been able to duplicate Ms. Williams‘s
work for PacifiCorp. But this ―no other lawyer‖ requirement is
simply the application of the ―would have benefitted‖ standard
discussed above to certain kinds of breach of fiduciary duty claims—
such as the ones asserted by USA Power here. Where a client has
asserted that its attorney breached the duties of loyalty or
confidentiality by working for or sharing information with a third
party—whether an opposing party in litigation or business—and
that the breach ultimately disadvantaged the client in some way, the
client still has the burden of showing that absent that attorney‘s
breach, it would have benefitted. And if the third party or attorney
provides evidence that the third party would have hired a different
attorney in the stead of the breaching attorney, the client must
accordingly show that this other attorney, with reasonable skill and
diligence, would not have been able to do for the third party what
the burden of proof of establishing both that he would have had a
meritorious defense to the underlying case and that there was a
reasonable likelihood that he could have prevailed in order to hold
his attorney liable for damages for failing to respond to a summary
judgment motion).
212 See Christensen & Jensen, 2008 UT 64, ¶ 35 (stating that a client‘s
attorneys could not be held liable for the loss of a settlement from
State Farm because there was no possibility of negotiating a
settlement as the client desired); George S. Mahaffey Jr., Cause-in-Fact
and the Plaintiff’s Burden of Proof with Regard to Causation and Damages
in Transactional Legal Malpractice Matters: The Necessity of
Demonstrating the Better Deal, 37 SUFFOLK U. L. REV. 393, 436–37 (2004)
(―[T]he plaintiff will have to demonstrate that the non-party in the
underlying deal or transaction would have given the plaintiff a
better deal or a better set of terms, for example.‖).
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the breaching attorney did.213 As the Colorado Court of Appeals
stated, there can be no causation where the ―attorney‘s conduct did
not cause [the client] any pecuniary loss or damage [the client]
would not have also suffered had another attorney represented [the
other party].‖214
¶ 117 USA Power‘s only response to this conclusion is that we
rejected it in USA Power I. In fact, however, we did just the opposite
in that case. There, we noted that USA Power‘s causation argument
hinged on its claim that ―Ms. Williams was the only lawyer who could
_____________________________________________________________
213 This discussion shows one way in which a malpractice claim
based on negligence may differ from a malpractice claim based on
the breach of a fiduciary duty. In a traditional malpractice suit, the
client is directly and negatively impacted by the attorney‘s actions.
In certain types of fiduciary duty cases, like the one before us today,
the client may not be able to show that the attorney‘s actions directly
compromised its position. Instead, the client can show that the
breaching attorney‘s conduct gave another party a comparative
advantage over the client, leaving the client in a worse position
overall. For example, in this case, nothing Ms. Williams did
negatively impacted USA Power‘s ability to submit the best proposal
in response to the RFP that it could. USA Power has instead argued
that Ms. Williams negatively impacted USA Power‘s bid as compared
to PacifiCorp‘s proposal. In other words, USA Power is arguing that
Ms. Williams improved PacifiCorp‘s proposal by locating the
necessary water rights and, as a result, USA Power‘s bid was
disadvantaged when it came time to select a bid.
214 Aller v. Law Office of Carole C. Schriefer, PC, 140 P.3d 23, 26
(Colo. Ct. App. 2005). In Aller, a client ―disclosed personal and
confidential information to attorney when attorney represented her
in a matter involving the termination of a business.‖ Id. at 25. After
that matter ended, ―attorney represented plaintiff‘s business
associate, [Ms.] Gale, in a lawsuit brought by [Ms.] Gale against the
plaintiff.‖ Id. The client filed a malpractice suit against the attorney
for breach of the attorney‘s fiduciary duties. Id. The court affirmed
the trial court‘s grant of summary judgment for lack of evidence of
causation based on the trial court‘s conclusion that had the attorney
not been involved in the case between Ms. Gale and the client, ―some
other, conflict free lawyer would have represented Ms. Gale against
[plaintiff] and taken the same actions as counsel.‖ Id. at 26 (alteration
in original).
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have successfully secured the necessary water rights,‖ a claim that
PacifiCorp had countered by arguing that ―any other water attorney
in Utah could have duplicated her services.‖215 We concluded that
there was a factual dispute concerning this issue. 216 Thus, far from
rejecting this causation standard, we recognized that USA Power
had the burden of showing that ―Ms. Williams was the only lawyer‖
who could have done the work. Indeed, despite its contentions
otherwise, USA Power acknowledges this requirement in its briefing
by arguing that Ms. ―Williams was uniquely situated[] and
indispensable‖ to PacifiCorp. If Ms. Williams was truly uniquely
situated, then her work could not have been duplicated by another
attorney of reasonable skill and diligence within the RFP time
constraints.
¶ 118 Because USA Power‘s central theory of causation is that
Ms. Williams caused USA Power to lose the RFP, which caused USA
Power to lose the $21 million it would have earned from building
and operating a power plant in Mona, USA Power must show not
only that Ms. Williams disadvantaged it in the bidding process, but
also that it would have benefitted in the specific way it claimed. To
do this, USA Power was required to provide evidence that, had
Ms. Williams declined to assist PacifiCorp, PacifiCorp would either
have not hired another attorney or that a reasonably skilled and
diligent attorney would not have been able to duplicate
Ms. Williams‘s work in locating water, PacifiCorp‘s proposal would
have accordingly failed for a lack of water rights, and USA Power
would have won the RFP, negotiated a profitable power purchase
agreement with PacifiCorp, and then built and operated the power
plant for twenty years.217 We turn now to the evidence USA Power
presented in support of this chain of causation.
_____________________________________________________________
215 USA Power I, 2010 UT 31, ¶ 69, 235 P.3d 749 (emphasis added).
216 Id. ¶ 70.
217Ms. Williams has also argued that USA Power failed to present
expert testimony as to whether another attorney could have
duplicated Ms. Williams‘s efforts. Although we agree that expert
testimony is generally required to establish complex questions of
causation, we note that USA Power has presented some expert
testimony as to its theory of causation, as Ms. Williams
acknowledged in her motion for a new trial. And because we
conclude that this testimony is insufficient to support a verdict
(Continued)
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B. There Is No Competent Evidence from Which a Reasonable Jury Could
Infer that Absent Ms. Williams’s Conduct, USA Power Would Have
Benefitted by Winning the RFP
¶ 119 USA Power‘s main argument on appeal is that the trial
court erred in granting Ms. Williams‘s motion for JNOV for lack of
evidence of causation as it related to the failed RFP bid. We review
the court‘s grant of JNOV for correctness, mindful that a JNOV can
be granted ―only if there is no ‗basis in the evidence, including
reasonable inferences which could be drawn therefrom, to support
the jury‘s determination.‘‖218 And when the question is one of
causation, we take the question from the jury only if ―the facts are so
clear that reasonable persons could not disagree about the
underlying facts or about the application of a legal standard to the
facts‖ or if ―the proximate cause of an injury is left to speculation.‖219
¶ 120 As it pertains to the lost RFP bid, USA Power‘s causation
theory was as follows:
―Only one power plant could be built in Mona; if
PacifiCorp awarded itself the RFP, was granted the
CC&N, and constructed [Currant Creek], the [Spring
Canyon Project] would be rendered worthless.‖
PacifiCorp could not win the RFP without a firm water
supply.
PacifiCorp only had a limited time in which to acquire
these rights.
―Obtaining water in Mona was very difficult and required
a long lead time.‖
Ms. Williams was able to obtain water rights for
PacifiCorp in substantially less time than it took her to
obtain water rights for USA Power because of her prior
work for USA Power. That shortened time frame was
necessary for PacifiCorp to win the RFP.
against Ms. Williams, we see no need to inquire further into what
additional expert testimony may have been necessary.
218ASC Utah, Inc. v. Wolf Mountain Resorts, L.C., 2013 UT 24, ¶ 18,
309 P.3d 201 (citation omitted).
219 Harline, 912 P.2d at 439.
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Ms. ―Williams was instrumental in the engineer approving
PacifiCorp‘s [change of use] application and rejecting
Mona residents‘ objections.‖
―USA Power‘s Bid #135 came in second behind
[PacifiCorp‘s bid]. Accordingly, if PacifiCorp would not
have awarded itself the RFP, USA Power would have won,
entered into a PPA with PacifiCorp, and been operating
Spring Canyon today.‖
¶ 121 After hearing USA Power‘s evidence on this chain of
causation, the trial court granted JNOV after drawing two
conclusions from the evidence presented: first, the trial court found
that ―[t]he undisputed expert testimony at trial demonstrated that
[Ms.] Williams‘[s] efforts . . . were competent, but not materially
different than could be achieved by any number of water lawyers in
Utah.‖ And second, the court found that because ―the undisputed
evidence was that when PacifiCorp entered into the RFP process, it
had not firmly secured water rights[,] . . . the jury could not
reasonably infer that [Ms.] Williams‘[s] efforts in obtaining water
were the linchpin that allowed [PacifiCorp‘s proposal] to be
selected.‖
¶ 122 After reviewing the evidence supporting USA Power‘s
theory of causation, we agree with the trial court as to both of these
conclusions. As we discuss below, USA Power has not shown that
absent Ms. Williams‘s conduct, another attorney of reasonable skill
and diligence could not have performed the same work for
PacifiCorp. Further, even if we were to conclude that Ms. Williams‘s
efforts were unique, the record shows that the acquisition of water
rights was not critical to the RFP process. Accordingly, there is no
evidence that, even without any water rights, PacifiCorp would have
selected USA Power‘s bid over its own.
1. USA Power has not provided competent evidence that
Ms. Williams was uniquely qualified and able to secure water for
PacifiCorp
¶ 123 The first problem with USA Power‘s causation theory is
that there is no credible evidence that Ms. Williams‘s ―conduct did
not cause [USA Power] any pecuniary loss or damage [USA Power]
would not have also suffered had another attorney represented
[PacifiCorp].‖220 Because the undisputed evidence was that
_____________________________________________________________
220 Aller, 140 P.3d at 26.
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PacifiCorp would have hired a different lawyer in the absence of
Ms. Williams, we must determine whether USA Power presented
evidence that its bid would have succeeded regardless of this
hypothetical attorney looking for water for PacifiCorp‘s proposal.
And if a different attorney of reasonable skill and diligence could
have found water for PacifiCorp within the RFP time constraints,
then PacifiCorp would still have not selected USA Power‘s proposal,
USA Power would not have benefitted absent Ms. Williams‘s
conduct, and she could not be the cause of USA Power‘s damages.
¶ 124 The evidence that USA Power relies upon to argue that
Ms. Williams was ―uniquely positioned‖ to find water for PacifiCorp
centers on its claim that obtaining water in Mona was difficult and
required a long lead time. USA Power claims that because it took
Ms. Williams five months to find water for PacifiCorp, whereas it
took her fifteen months to do the same for USA Power, the jury
could draw the reasonable inference that the difference in timing
was due to the legal work performed and confidential information
she obtained as USA Power‘s lawyer. Accordingly, another attorney
could not have performed the same work within the same critical
timeframe. As the trial court found, however, this comparison is
inapt as ―[t]he undisputed expert testimony at trial demonstrated
that [Ms.] Williams‘[s] efforts . . . . were competent, but not
materially different than could be achieved by any number of water
lawyers in Utah.‖
¶ 125 First, Ms. Williams was hired by USA Power to find
options for water rights, but the undisputed evidence showed that
―[n]one of the potential water sellers [was] interested in an option.‖
Further, the evidence showed that USA Power did not actually
spend fifteen months looking for water, as USA Power hired
Ms. Williams in April 2001 but did not ―release‖ her to look for
water options until September 2001. And the evidence tending to
show that obtaining water rights in Mona was difficult relied on
evidence showing the difficulty of obtaining rights to 10,000 acre-
feet—the amount necessary for a wet-cooled plant. Although USA
Power has clearly demonstrated that obtaining such a large amount
of water in Mona is a difficult task, this evidence could not inform a
jury about the difficulty of obtaining 400 acre-feet of water—the
amount necessary for a dry-cooled plant such as the one that was
actually built. Evidence showing the difficulty of obtaining twenty-
five times the amount of water that was ultimately necessary is
insufficient as a matter of law.
¶ 126 Ultimately, USA Power presented no competent evidence
on the time it would have taken an attorney of reasonable skill and
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Opinion of the Court
diligence to locate potential sellers of water in the amount that was
needed. Further, USA Power did not contradict the evidence that
showed that other attorneys were able to locate potential sellers of
water in the Mona area within a short period of time. Because USA
Power has not shown that Ms. Williams was uniquely positioned
and that another attorney could not have performed the same work
for PacifiCorp within the same relevant timeframe, the trial court
was correct in granting JNOV.
2. USA Power has not provided competent evidence that PacifiCorp
could not have won the RFP without a firm water supply
¶ 127 Even if we were to disregard USA Power‘s failure to
present evidence related to whether another attorney could have
performed the same work that Ms. Williams did, there remains a far
more fundamental problem with USA Power‘s theory of causation.
The most important link in USA Power‘s chain of causation is its
assertion that ―PacifiCorp could not win the RFP . . . without a firm
water supply.‖ But the evidence, as adduced at trial, simply does not
support USA Power‘s argument that water rights—and
Ms. Williams‘s securing of the same—was critical to PacifiCorp‘s
bid. For the reasons discussed below, we agree with the trial court
that ―the jury could not reasonably infer that [Ms.] Williams‘[s]
efforts in obtaining water were the linchpin that allowed
[PacifiCorp‘s proposal] to be selected.‖
¶ 128 The only evidence that a firm water supply was essential
to PacifiCorp‘s decision was a statement by Ms. Williams in a
memorandum stating, ―It is unlikely that PacifiCorp‘s proposal will
succeed in the RFP process without a firm water supply.‖ But this
assertion is belied by the undisputed evidence that PacifiCorp‘s
proposal did in fact succeed in the RFP process without a firm water
supply in place. It is undisputed that PacifiCorp had no water rights
when it submitted its bid on July 17, 2003. Indeed, PacifiCorp‘s
proposal stated only that water ―would be supplied by local wells
and pumped to the Plant.‖ It is also undisputed that PacifiCorp did
not enter into an agreement to obtain water rights until September 3,
2003, well after the RFP deadline of July 22. USA Power asks us to
infer that because PacifiCorp‘s board knew water was essential to
operating a power plant, and was likely aware of the water rights
contract entered into on September 3, that it relied on the presence of
the contract in awarding the bid to itself on September 22. This
inference, for the reasons discussed below, is unreasonable.
¶ 129 First, all evidence of the RFP process suggests that water
was not a significant consideration in the bid process. Water is, of
course, absolutely essential to the operation of a power plant. But
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this fact alone is not enough to reach the inference that a firm water
supply was essential to this specific bid process. As both parties‘
counsel agreed at oral argument, it would be an unreasonable
inference to assume that every one of the dozens of bids proposing
the construction of a new power plant submitted in response to
PacifiCorp‘s RFP had contracts for water already established.
Indeed, the RFP did not require a bidder to identify whether it had
any such contracts in place, and PacifiCorp did not actually identify
its source of water in its bid.221 It is accordingly unreasonable to infer
that having a water contract in place was an essential element of any
bid, including PacifiCorp‘s. Further the evidence is clear that the
water rights that PacifiCorp did obtain were conditioned on
approval from the State Engineer, which was not obtained until
February 3, 2004—after construction had already begun on the
project.222 Accordingly, PacifiCorp was not required to have a firm
water supply in place in order to award itself the bid, because its
water supply was not ―firm‖ during the relevant timeframe.
¶ 130 A second problem with USA Power‘s inference is that the
purpose of the RFP, as described by USA Power‘s counsel, was to
help PacifiCorp convince the Public Service Commission that
whatever proposal it accepted was the most feasible. In order to
accomplish this goal, PacifiCorp had the bids vetted by a neutral
third party before making its decision. This third party ranked
PacifiCorp‘s proposal above all others. Although PacifiCorp selected
its own proposal on September 22, 2003—after PacifiCorp had
secured a contingent water rights contract—USA Power has not
provided any evidence that PacifiCorp amended its bid to ensure
that the neutral third-party reviewer could use the updated
information in its evaluation of PacifiCorp‘s proposal.223 As the
_____________________________________________________________
221 The RFP only requested that a bidder ―include a description
of . . . [the] [s]ource of process and/or cooling water.‖ PacifiCorp‘s
proposal satisfied this requirement by simply stating that water
―would be supplied by local wells.‖
222The water purchase contract was subject to approval of the
State Engineer and the Goshen Irrigation Board—which was not
obtained until February 3, 2004.
223 The RFP states that PacifiCorp would retain a neutral
consultant ―to serve as a clearing house for the receipt of ‗pre-
blinded‘ responses, bidder financial information and to oversee and
validate the consistent application of evaluation techniques.‖
(Continued)
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purpose of the RFP was to confirm that PacifiCorp‘s bid was the best
option, and this confirmation came regardless of the PacifiCorp
board‘s knowledge of the contingent water contract, it is
unreasonable to infer that the water contract was outcome
determinative of either the neutral review or the bid process as a
whole.
¶ 131 This is a case where ―the facts are so clear that reasonable
persons could not disagree about the underlying facts or about the
application of a legal standard to the facts.‖224 The evidence
unmistakably demonstrates that, while PacifiCorp could not build
and operate a power plant without water, it could and did select a
bid without a firm water supply. Thus, USA Power has not shown
that even absent Ms. Williams‘s work for PacifiCorp, PacifiCorp‘s
bid would have failed and it would have selected USA Power‘s bid
instead.
¶ 132 Each of the issues related to USA Power‘s theory of
causation that we discussed above is fatal to its claim against
Ms. Williams. In asserting its specific theory of causation, USA
Power necessarily took on the burden of proving each link in the
chain of causation linking Ms. Williams to USA Power‘s failed bid.
Although the standard of review we employ when reviewing a grant
of JNOV is highly deferential to the jury‘s verdict, we hold that USA
Power failed to demonstrate that there is any competent evidence
that absent Ms. Williams‘s conduct, it would have benefitted by
having PacifiCorp‘s bid fail and its own bid succeed. Accordingly,
we affirm the trial court‘s grant of JNOV as to this issue.
II. There Is No Competent Evidence from Which A Reasonable Jury
Could Infer Ms. Williams Caused USA Power to Lose the Contract.
¶ 133 As an alternative to the lost RFP damages discussed above,
USA Power also argues that ―absent [Ms. Williams‘s] fiduciary duty
breaches, USA Power would have benefitted by selling the project to
PacifiCorp.‖ This refers to the earlier agreement, entered into March
14 and terminated on March 17, 2003, wherein PacifiCorp agreed to
purchase the Spring Canyon project developed by USA Power and
employ USA Power‘s principals to assist with other power
Consideration of information outside of a bid in order to rank
options, something USA Power has not argued occurred, would
seem to invalidate this purpose and would cast the entire bid process
into suspicion.
224 Harline, 912 P.2d at 439.
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generation projects. Ms. Williams argues that USA Power failed to
provide sufficient evidence to prove that she caused the loss of the
agreement. For the reasons discussed below, we agree.
¶ 134 USA Power has provided no evidence from which a
reasonable jury could infer that Ms. Williams caused the loss of the
contract. As stated above, the relevant standard is whether there is
any competent evidence that leads to reasonable inferences that
―absent the conduct complained of . . . the client would have
benefitted.‖225 Here, this means that USA Power must present some
competent, non-speculative evidence that absent Ms. Williams‘s
work for PacifiCorp, PacifiCorp would have honored and not
terminated the agreement entered into on March 14, 2003.
¶ 135 The only evidence USA Power provided to support its
alternative theory of causation is a timeline: PacifiCorp decided to
withdraw its offer to purchase the USA Power project about two
weeks after PacifiCorp hired Ms. Williams. Specifically, USA Power
provided evidence of both the project‘s viability and of PacifiCorp‘s
recognition of the project‘s viability, details of some of the various
offers and counteroffers that the parties exchanged between
February and March of 2003, and that ―on March 14, 2003,
PacifiCorp agreed to purchase [the Spring Canyon project] for $3
million and a five-year [joint development agreement].‖ Three days
later, March 17, 2003, PacifiCorp ―reneged on the deal.‖ The only
evidence of Ms. Williams‘s involvement in all of this, however, is
that Ms. Williams ―commenced representation and working for
PacifiCorp on March 3, 2013.‖226 And after being retained by
PacifiCorp, the only evidence provided about Ms. Williams‘s work
during that time was that she researched the possibility of securing
water rights from Geneva Steel. Based on these facts, USA Power
suggests that the jury ―could infer that, without [HRO and
Ms. Williams] commencing their conflicting representation of
PacifiCorp, USA Power would have benefitted in the amount of
$5.29 million.‖ This is insufficient evidence of causation.
_____________________________________________________________
225Christensen & Jensen, P.C. v. Barrett & Daines, 2008 UT 64, ¶ 26,
194 P.3d 931.
226 Although USA Power points out that this representation
occurred ―while [Ms. Williams was] still counsel to [USA Power] on
[Spring Canyon],‖ this is evidence only of breach of [Ms.] Williams‘s
fiduciary duties, not of causation.
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¶ 136 Evidence that relies exclusively on the post hoc ergo propter
hoc fallacy—―after this and therefore because of this‖—is not
competent.227 In Breton v. Clyde Snow & Sessions, the court of appeals
rejected an argument that an attorney caused a client‘s damages
when the only evidence was that ―after [the attorney] was negligent,
the Slater Brothers sued [the client]; therefore, the Slater Brothers
sued [the client] because [the attorney] was negligent.‖228 The court
stated that this type of ―circular reasoning‖229 was insufficient
because courts do not ―assum[e] a causal connection between two
events merely because one follows the other.‖230 We agree with this
analysis.
¶ 137 The argument here is similar to that rejected in Breton:
after Ms. Williams started working for PacifiCorp, PacifiCorp
reneged on the deal; therefore, PacifiCorp reneged on the deal
because Ms. Williams started working for PacifiCorp.231 The only
evidence that sheds any light on what Ms. Williams actually did
between March 3 and March 17 shows that she worked to acquire
water rights from Geneva, an entity with no connection to either
USA Power or the agreement. There is no evidentiary support for the
inference that she advised anyone at PacifiCorp on any aspect of the
contract for the sale of the Spring Canyon project. Further, there is
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227See Breton v. Clyde Snow & Sessions, 2013 UT App 65, ¶ 12, 299
P.3d 13.
228 Id.
229 Id.
230 Sunward Corp. v. Dun & Bradstreet, Inc., 811 F.2d 511, 521–122
(10th Cir. 1987). The court of appeals in Breton cited and quoted this
case as support for rejecting the client‘s arguments. In the federal
case, dealing with defamation, ―[t]he only evidence offered was a
chronological rendition of events‖ which placed the alleged
defamatory statement prior to a company‘s financial downturn.
Sunward Corp., 811 F.2d at 521. The Tenth Circuit rejected the
company‘s argument, as it consisted solely of ―reasoning from
sequence to consequence, that is, assuming a causal connection
between two events merely because one follows the other.‖ Id.
(citation omitted).
231 Breton, 2013 UT App 65, ¶ 12 (―In other words, after Clyde
Snow was negligent, the Slater Brothers sued Breton; therefore, the
Slater Brothers sued Breton because Clyde Snow was negligent. We
decline to adopt this circular reasoning.‖).
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Opinion of the Court
evidence that PacifiCorp was considering an RFP instead of an
outright purchase of Spring Canyon in February 2003—before
PacifiCorp entered into the deal. With no competent evidence tying
Ms. Williams to the termination of the contract, the inference that
USA Power wishes us to draw is ―wholly speculative,‖232 and cannot
support a verdict, even under the generous JNOV standard.233
¶ 138 Having determined that the trial court was correct in
granting JNOV against USA Power on each of its claims against
Ms. Williams, we must also affirm the court‘s denial of punitive
damages as USA Power has no other claims against her.234
Accordingly, we affirm the trial court‘s decision as to each issue
addressed by USA Power in its direct appeal. USA Power failed to
provide sufficient evidence that Ms. Williams was the cause of its
losses, even under the generous JNOV standard.
Conclusion
¶ 139 For the reasons discussed above, we affirm the trial court‘s
rulings on all issues. Regarding PacifiCorp‘s appeal, the trial court
correctly concluded that there was sufficient evidence to support the
jury‘s verdict that a trade secret existed. As to USA Power‘s cross-
appeal, where the decisions of the trial court were to be made in the
exercise of the trial court‘s discretion, USA Power has not
demonstrated that the trial court abused that discretion either by
applying an incorrect legal standard or by improperly reviewing the
evidence. As to the other issues raised in the cross-appeal, USA
Power has not shown that the trial court erred. Finally, as to USA
Power‘s direct appeal of the trial court‘s grant of JNOV in favor of
Ms. Williams, we hold that there was no competent evidence that
absent Ms. Williams‘s actions, USA Power would have benefitted by
having PacifiCorp‘s proposal fail and its own bid succeed. We
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232 Id. ¶ 14.
233Although ―presentation of circumstantial evidence may create
a genuine issue of material fact,‖ the inferences to be drawn from
such evidence must be more than pure speculation. USA Power I,
2010 UT 31, ¶ 65, 235 P.3d 749.
234 See Kilpatrick v. Wiley, Rein & Fielding, 2001 UT 107, ¶ 84, 37
P.3d 1130 (―Under Utah law, if there are no actual damages, an
award of punitive damages is improper.‖); UTAH CODE § 78B-8-
201(1)(a) (―[P]unitive damages may be awarded only if
compensatory or general damages are awarded . . . .‖).
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Opinion of the Court
accordingly affirm the trial court as to each issue raised in the
various appeals.
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