UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 99-30031
SALLY REINGOLD, as Executrix for the Estate of Irving Reingold,
Plaintiff - Appellant,
VERSUS
SWIFTSHIPS INCORPORATED,
Defendant - Appellee.
Appeal from the United States District Court
for the Western District of Louisiana
April 14, 2000
Before JONES, BARKSDALE and DENNIS, Circuit Judges.
DENNIS, Circuit Judge:
This is an interlocutory appeal under 28 U.S.C. § 1292(b) by
Reingold from the district court’s in limine order excluding
Reingold’s evidence of profits that Swiftships allegedly derived
from the alleged misappropriation of a Reingold trade secret. See
Reingold v. Swiftships, Inc., 126 F.3d 645 (5th Cir. 1997) for more
of the gist of this case.
I. STANDARD OF REVIEW
This court reviews questions of law de novo. See Hassan v.
Lubbock Indep. Sch. Dist., 55 F.3d 1075, 1079 (5th Cir. 1995)
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(citing Moore v. Eli Lilly & Co., 990 F.2d 812, 815 (5th Cir.)
(citations omitted), cert. denied, 510 U.S. 976 (1993)).
II. ANALYSIS
Section 1433 of the Louisiana Uniform Trade Secrets Act
(“LUTSA”), Louisiana Revised Statute § 51:1431, et seq. (1981),
provides that “a complainant may recover damages for the actual
loss caused by [a trade secret] misappropriation [and] also may
recover for the unjust enrichment caused by [the] misappropriation
that is not taken into account in computing damages for actual
loss.” 27B LA. REV. STAT. ANN. § 51:1433 (West 1987). The district
court’s order excluding evidence of the defendant’s profits raises
the question of whether LUTSA section 1433 has been modified or
displaced by Louisiana Civil Code article 2298, which, in pertinent
part, provides that: “A person who has been enriched without cause
at the expense of another person is bound to compensate that
person....The remedy declared here is subsidiary and shall not be
available if the law provides another remedy for the impoverishment
or declares a contrary rule....The amount of compensation due is
measured by the extent to which one has been enriched or the other
has been impoverished, whichever is less.” 8A LA. CIV. CODE ANN.
art. 2298 (West 1997).1
1
The specific question that the district court posed is
whether “the amount of recovery for unjust enrichment damages under
R.S. 51:1433 is measured by the standard for recovery for unjust
enrichment damages set forth in Article 2298[.]” Our appellate
jurisdiction under 28 U.S.C. § 1292(b), however, applies to the
order certified to us, and is not tied to the particular question
formulated by the district court. See Yamaha Motor Corp. v.
Calhoun, 516 U.S. 199, 205 (1996) (“The court of appeals may not
reach beyond the certified order to address other orders made in
2
“No” is the answer. The remedy provided by Louisiana Civil
Code article 2298 is subsidiary and does not apply if the law
provides another remedy or declares a contrary rule. The LUTSA
plainly provides another remedy and declares a contrary rule.
Consequently, a complainant’s remedy under LUTSA is not affected by
Louisiana Civil Code article 2298.
Prior to Louisiana’s enactment of the LUTSA in 1981, the
Louisiana courts, on the basis of articles 21, 1965, and 2301-2314
of the Louisiana Civil Code of 1870, had developed a general action
for enrichment without cause, the actio de in rem verso, with the
guidance of French jurisprudence and doctrine. See 8A LA. CIV. CODE,
Exposé des Motifs, Title V. Obligations Arising Without Agreement,
Chapters 1 and 2 (Articles 2292-2305) at 5 (West 1997) [hereinafter
Exposé]; see generally ALAIN A. LEVASSEUR, LOUISIANA LAW OF UNJUST
ENRICHMENT IN QUASI-CONTRACTS 333-437 (1991) [hereinafter LEVASSEUR];
Albert Tate, Jr., The Louisiana Action for Unjustified Enrichment,
50 TUL. L. REV. 883 (1976); Albert Tate, Jr., The Louisiana Action
for Unjustified Enrichment: A Study in Judicial Process, 51 TUL. L.
REV. 446 (1977). The judicial recognition of de in rem verso in
Louisiana began in Payne & Harrison v. Scott, 14 La. Ann. 760
(1859) and Garland v. Estate of W.S. Scott, 15 La. Ann. 143 (1860)
and fully emerged in Minyard v. Curtis Products, Inc., 205 So.2d
422 (La. 1967). See LEVASSEUR at 349; see also Edmonston v. A-Second
the case. But the appellate court may address any issue fairly
included within the certified order because it is the order that is
appealable, and not the controlling question identified by the
district court.”) (citations, internal quotations, and emphasis
omitted).
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Mortgage Co. of Slidell, Inc., 289 So.2d 116, 120 (1974).
According to the Louisiana jurisprudence, as well as French
doctrine and jurisprudence, recovery for “enrichment without cause”
is a subsidiary remedy, unavailable if the law provides another
remedy or declares a contrary rule, under which recovery is the
lesser of two amounts, the enrichment or the impoverishment. See
Exposé at 5 (citing Minyard v. Curtis Products, Inc., 205 So.2d 422
(La. 1967)); Bruce V. Schewe & Vanessa Richelle, Ruminations on the
Law: 1995-1996 A Symposium: Obligations, 56 LA. L. REV. 663, 664
(1996); 6 Aubry et Rau, Droit civil français 488 (7th ed. Posnard
et Noel Dejean de la Batie 1975); Barry Nicholas, Unjustified
Enrichment in the Civil Law and Louisiana Law, 36 TUL. L. REV. 605,
641 (1962).
Louisiana Civil Code article 2298 (Acts 1995, No. 1041, § 1,
eff. Jan 1, 1996) simply codifies the jurisprudential and doctrinal
“enrichment without cause” principles. See Exposé at 4-6.
Explicitly, under article 2298, recovery for “enrichment without
cause” is still a subsidiary remedy. Id. at 5. Accordingly,
nothing in article 2298 modifies or displaces the different rules
and remedies provided by LUTSA.
The LUTSA, on the contrary, “displaces conflicting tort,
restitutionary, and other laws of this state pertaining to civil
liability for misappropriation of a trade secret.” 27B LA. REV.
STAT. ANN. § 51:1437(A); see also Sheets v. Yamaha Motors Corp., 849
F.2d 179, 184 n.3 (5th Cir. 1988). However, LUTSA does not affect
“contractual or other civil liability or relief that is not based
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upon misappropriation of a trade secret, or criminal liability for
misappropriation of a trade secret.” 27B LA. REV. STAT. ANN. §
51:1437(B)(1) and (2).
The LUTSA remedy and displacement provisions are corollaries
of the common law tradition upon which the Act draws and the
general purpose to make trade secrets law uniform among the states.
See 27B LA. REV. STAT. ANN. §§ 51:1433 and 51:1438. Recognizing the
importance of state trade secrets law to interstate business, as
well as its uneven and unsatisfactory development, the National
Conference of Commissioners on Uniform State Laws approved the
Uniform Trade Secrets Act in 1979. See 14 UNIFORM LAWS ANNOTATED MASTER
EDITION 433-34 (West 1990). The Uniform Act codifies the basic
principles of common law trade secret protection, including the
results of the better reasoned cases concerning the remedies for
trade secret misappropriation. See id. at 434-35. “The
contribution of the Uniform Act is substitution of unitary
definitions of trade secret and trade secret misappropriation, and
a single statute of limitations for the various property, quasi-
contractual, and violation of fiduciary relationship theories of
noncontractual liability utilized at common law.” Id. at 435.
Louisiana, by Act No. 462 of 1981, adopted the Uniform Trade
Secrets Act, without any substantive change pertinent to the
present case. See 27B LA. REV. STAT. ANN. §§ 51:1431-1439. By 1999,
42 states and the District of Columbia had adopted trade secrets
laws modeled on and similar to the Uniform Trade Secrets Act. See
14 UNIFORM LAWS ANNOTATED MASTER EDITION 157 (West Supp. 1999).
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The LUTSA damages remedy provision section 1433 is a replica
of the original 1979 Uniform Trade Secrets Law § 3, except that
Louisiana deleted the second paragraph providing for exemplary
damages in cases of willful and malicious misappropriation. Both
the Uniform Trade Secrets Act and the LUTSA adopt the principle of
cases that allow recovery of both a complainant’s actual losses and
a misappropriator’s unjust benefit resulting from misappropriation.
See 14 UNIFORM LAWS ANNOTATED MASTER EDITION 456 (citing Tri-Tron Int’l
v. Velto, 525 F.2d 432 (9th Cir. 1975)); 27B LA. REV. STAT. ANN. §
51:1433 comment (b) (also citing Tri-Tron Int’l v. Velto).
Likewise, both the Uniform Act and the LUTSA adopt an express
prohibition upon the counting of the same item as both a loss to a
complainant and an unjust benefit to a misappropriator. See 14
UNIFORM LAWS ANNOTATED MASTER EDITION 456; 27B LA. REV. STAT. ANN. §
51:1433; 27B LA. REV. STAT. ANN. § 51:1433 comment (b).
Consequently, the LUTSA section 1433 provision that a trade
secrets complainant may “recover damages for the actual loss caused
by misappropriation” and, in addition, may “recover for the unjust
enrichment caused by misappropriation that is not taken into
account in computing damages for actual loss” means what it says.
It does not refer to or incorporate the Louisiana or civil law
principle of enrichment without cause, codified by Louisiana Civil
Code article 2298 as a subsidiary remedy with a “double ceiling” on
recovery. See LEVASSEUR at 430. Under the common law the principle
of unjust enrichment is the basis of restitution claims, whose
purpose is “to prevent the defendant’s unjust enrichment by
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recapturing the gains the defendant secured in a transaction.” 1
DAN B. DOBBS, LAW OF REMEDIES § 4.1(1), at 552 (2d ed. 1993)(citing
RESTATEMENT OF RESTITUTION § 1 (1937)).2
Swiftships’ motion to certify a question or proposition of
state law to the Supreme Court of Louisiana is denied. Adequate
Louisiana resources are available to enable us to decide the simple
question presented without adding to the state Supreme Court’s
workload or incurring additional delay and expenditure of judicial
resources in the disposition of this federal court case. See
Williamson v. Elf Aquitaine, Inc., 138 F.3d 546, 549 (5th Cir.
1998); Lavespere v. Niagara Mach. & Tool Works, Inc., 920 F.2d 259,
262 (5th Cir. 1990).
We set to one side, without deciding, the issue of whether the
district court’s bifurcation order should be modified or set aside.
Although we find some merit in Swiftships’ argument that the
bifurcation issue may not have been fairly included within the
certified order, the prior panel’s order granting Reingold’s leave
to appeal from the interlocutory order also provided that
Reingold’s motion “to consolidate liability and damages is
GRANTED.” In the interest of expediting the district court’s
handling of this case, we allow that order to stand but reserve to
the district court the option of reconsidering the bifurcation
issue in light of our decision herein.
III. CONCLUSION
2
See also 2 DAN B. DOBBS, LAW OF REMEDIES § 10.5(3), at 686-97 for
a discussion of the calculation of the defendant’s profits and the
plaintiff’s damages in trade secrets misappropriation cases.
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For the reasons assigned, the certified order appealed from is
REVERSED and our stay of further proceedings in this case is
VACATED.
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