California's Uniform Trade Secrets Act Preempts State Common Law Claims

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The California Court of Appeal for the Sixth Appellate District recently issued an important decision confirming the preemptive effect of California’s Uniform Trade Secrets Act (“CUTSA”) on common law claims. In K.C. Multimedia, Inc. v. Bank of America Technology & Operations, Inc., 09 C.D.O.S. 2624 (Cal. Ct. App. Mar. 3, 2009), the Court of Appeal unanimously held that the CUTSA preempted plaintiff’s state law claims for breach of confidence, interference with contract and unfair competition

because they were “based on the same nucleus of facts as the misappropriation of trade secrets claim.” The case is noteworthy because it is the first published decision by a California court squarely addressing the CUTSA preemption issue. The California Appellate Court adopted the approach followed in prior federal decisions applying California law. By giving a broader and more preclusive effect to CUTSA Section 3426.7, this decision should help narrow the focus of pending and future trade secret litigations.

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Published In: Business Torts Updates, General Business Updates, Conflict of Laws Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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