Their Customer List Was Stolen. Why They Had to Let it Go
Yesterday, I was approached about a case where the potential client's customer list had been brazenly stolen from them by a fellow, competing company that they were in merger talks with (which may, or may not have created a fiduciary relationship). At first blush, they had a rather strong case; after all, there was no scenario where the other side could have thought it was acceptable for them to download my client's customer list that was built over time, and directly solicit those customers for its competing business.
Yet, after a fairly lengthy conversation, it was apparent that my client had to let it go, and that ramping up litigation was not the right answer for them.
The First Steps When Your Customer List Has Been Stolen
Ordinarily, the first steps in litigation that need to be taken when your client's customer list has been stolen is to file a summons and complaint, and an accompanying order to show cause with supporting papers with the court seeking emergent injunctive relief, essentially saying to the court, if you don't stop the defendants in their tracks and force them to return our client's confidential, proprietary client list in an expedited fashion, their business stands to be ruined.
As you can probably imagine, since you're asking the court to act aggressively against another party that it doesn't know, there's a heavy amount of lifting involved, both procedurally and from an evidentiary perspective; a court is obliged to deny injunctive relief unless the plaintiff can demonstrate clear and convincing evidence (which is much higher than the ordinary preponderance of the evidence evidentiary standard) that they are substantially likely to succeed on the merits of their action.
In short, the plaintiff seeking injunctive relief in the form of a temporary restraining order has to come to court "loaded for bear."
Why This Client Had to Let it Go
This particular client had two huge problems with ramping up litigation:
First, there was a huge disconnect between what they "knew" happened (i.e., that the other party had used some of the client's former employees to download, and then use, the client's customer list), and their documentary proof of that theft; and,
Second, and perhaps more importantly, the client did not have a clear-cut path to demonstrating the damages they had sustained - or were reasonably likely to sustain - as a direct result of the theft of its customer list.
On the other hand, their up-front legal expenses to pursue the matter were rather clear-cut - and they were not insubstantial.
Faced with that stark reality, the advice to the client was obvious: it made no sense for them to pursue litigation.
And while they were disappointed at this bitter pill they had to swallow, they were extremely appreciative of the advice, because it saved them from throwing a lot more money at a problem that would not yield a positive result for them.
Post a comment
Post a Comment to "Their Customer List Was Stolen. Why They Had to Let it Go"To reply to this message, enter your reply in the box labeled "Message", hit "Post Message."