Directors’ Ability to Disclose Information to Nominating Stockholders

Delaware law provides that corporate directors have virtually unlimited access to corporate information, including information protected by the attorney-client privilege.  In re Aerojet Rocketdyne Holdings, Inc., No. CV 2022-0127-LWW, 2022 WL 1446782 (Del. Ch. May 5, 2022); Kalisman v. Friedman, No. CIV.A. 8447-VCL, 2013 WL 1668205 (Del. Ch. Apr. 17, 2013).  Of course, directors’ fiduciary duties limit what they may do with that information; just because directors themselves may receive and use corporate information to benefit the corporation, does not mean they have unfettered rights to disclose that information to others.  The question often arises:  May a director disclose confidential corporation information to the stockholder or class of stockholders who appointed him or her to the board?  Generally, such disclosure is prohibited under Delaware law.  But the Delaware courts have carved out important exceptions.

No Special Duty to the Stockholders Who Voted for You . . .

As a threshold matter, Delaware law does not recognize a special duty on the part of directors to the class of stockholders who elected them, at least not by virtue of said election. Phillips v. Insituform of N. Am., Inc., No. CIV.A. 9173, 1987 WL 16285 (Del. Ch. Aug. 27, 1987) (“law does not recognize special duty by directors to class of stockholders who elected them”);  Holdgreiwe v. Nostalgia Network, Inc., No. CIV. A. 12914, 1993 WL 144604 (Del. Ch. Apr. 29, 1993) (designated director’s disclosure of confidential corporate information to affiliate of designating stockholder violated director’s fiduciary duties). Indeed, in Schoon v. Troy Corp., No. CIV.A. 1677-N, 2006 WL 1851481 (Del. Ch. June 27, 2006), the Chancery Court took the unusual step of denying a director’s request to inspect the books and records of a corporation on the ground that the request was made at the behest of a designating stockholder in order to assist the attempted sale of the corporation’s stock.

. . . Unless You Have a Special Duty to the Stockholder Who Voted for You

But what if the director has a pre-existing fiduciary duty to the stockholder that elected them?  In Kortum v. Webasto Sunroofs Inc., 769 A.2d 113 (Del. Ch. 2000), a director designated by one 50% owner of a corporation filed an action pursuant to Section 220 of the Delaware General Corporation Law seeking to inspect the company’s books and records. The other 50% owner sought to condition the inspection on the director’s agreement not to disclose confidential information to the designating stockholder, which was viewed as a potential competitor.  The Chancery Court held that such a condition was unreasonable, presumably because the director owed fiduciary duties to both the joint venture corporation and the designating stockholder.

These issues were explored in greater detail in Icahn Partners L.P. v. DeSouza, No. 2023-1045-PAF, 2024 WL 180952 (Del. Ch. Jan. 16, 2024).  In that case, Plaintiffs Icahn Partners L.P. and other entities, all controlled by Carl Icahn, held approximately 1.4% of the stock of Illumina, Inc.  Plaintiffs proposed a three-candidate slate to challenge the company’s nominees at a stockholder meeting.  The stockholders chose one of the candidates -- an employee of another Icahn-controlled entity --  to the board.  Plaintiffs subsequently filed a complaint alleging direct and derivative claims against Illumina’s officers and directors, and it was undisputed that the complaint contained attorney-client privileged information from Illumina provided by the designated director. The company and the defendants moved to strike the privileged information from the complaint.

Plaintiffs argued that their nomination of a director and public disclosure of his employment rendered unreasonable any expectation that he would not share with Plaintiffs the privileged information that he acquired as a director. Plaintiffs cited cases holding that a director who has been designated as a director may share corporate information with the designating stockholder. But as the court pointed out, these cases held that a director may provide confidential information to a stockholder in only limited circumstances: 1) where the stockholder had a right to designate a director, either by contract or voting power; or 2) the director serves as a controller or fiduciary of the stockholder (such as in Kortum).

The Contractual Right to Designate a Director Generally Encompass the Right to Receive the Same Information as the Director

In Kalisman, a director was the co-founder of a major stockholder that brought an action challenging a recapitalization. The Chancery Court held the director was entitled to corporate documents that predated the formation of a special committee that excluded the director.  When the company objected that the director would share the information with the investor that designated him, the court explained: “When a director serves as the designee of a stockholder on the board, and when it is understood that the director acts as the stockholder's representative, then the stockholder is generally entitled to the same information as the director.”  

Other cases have held similarly.  For instance, in In re CBS Corp. Litig., No. CV 2018-0342-AGB, 2018 WL 3414163 (Del. Ch. July 13, 2018), the court held that directors affiliated with a controlling stockholder and the controller itself were entitled to privileged communications other than those provided exclusively to a special committee.  In Hyde Park Venture Partners Fund III, L.P. v. FairXchange, LLC, 292 A.3d 178 (Del. Ch. 2023), two funds with a contractual right to designate a director had the right to obtain confidential information provided to the director. 

By contrast, in Icahn Partners, the Plaintiffs did not have a contractual right or the voting power to designate a director and the director was not a controller or fiduciary of the stockholders.  Thus, the court held that Plaintiffs did not have the right to access privileged information provided to the designated director -- a decision that was affirmed by the Delaware Supreme Court.

Conclusion

An entity considering investing in a Delaware corporation where it will designate a director should analyze whether the facts support allowing the director to provide confidential and privileged corporate information to the entity.  Does the entity have a contractual right to designate a director or sufficient voting power?  Is the director a controller or a fiduciary of the stockholder?  If these conditions are not satisfied, the director may be prohibited from providing confidential information to the investor.

For more information regarding Alto Litigation’s litigation practice, please contact one of Alto Litigation’s partners: Bahram Seyedin-Noor, Bryan Ketroser, or Joshua Korr.

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Disclaimer: Materials on this website are for informational purposes only and do not constitute legal advice. Transmission of materials and information on this website is not intended to create, and their receipt does not constitute, an attorney-client relationship. Although you may send us email or call us, we cannot represent you until we have determined that doing so will not create a conflict of interests. Accordingly, if you choose to communicate with us in connection with a matter in which we do not already represent you, you should not send us confidential or sensitive information, because such communication will not be treated as privileged or confidential. We can only serve as your attorney if both you and we agree, in writing, that we will do so.

The materials on this website are not intended to constitute advertising or solicitation. However, portions of this website may be considered attorney advertising in some states.

Unless otherwise specified, the attorneys listed on this website are admitted to practice in the State of California.

Benchmark Litigation 2026 Rankings Recognize Alto Litigation and Three of its Attorneys Among the Top in California and Nationwide

Benchmark Litigation, described as “the definitive guide to the market’s leading firms and lawyers,” recently released its 2026 rankings, and Alto Litigation and its attorneys received several prestigious honors, including Bahram Seyedin-Noor being recognized as a “National Practice Area Star” in securities and commercial litigation.

Alto Litigation was ranked a Recommended Firm in California. In addition to receiving National Practice Area Star recognition, Bahram, as well as Bryan Ketroser, were designated as a “Litigation Star,” and partner Joshua Korr as a “Future Star.” 

Rankings are based on extensive interviews with clients and peers. Benchmark’s 2026 analysis noted that Alto Litigation “is known for its trial-tested ability to dynamically punch well above its weight class against the nation’s largest top firms in several litigation niches, representing prominent companies and entrepreneurs, as well as other individual clients, in both defense and plaintiff roles” 

Bahram, a graduate of Harvard Law School, has tried cases before judges and juries in California and Delaware, and was a law clerk to Judge James Ware in the U.S. District Court for the Northern District of California. Over the last twenty-five years, Bahram has achieved dozens of victories in securities class actions, derivative lawsuits, arbitrations, trade secrets, and fiduciary duty disputes. In 2021 and 2019, Benchmark Litigation named Bahram the “San Francisco Attorney of the Year” and nominated him for “California Securities Litigation Attorney of the Year” alongside only three other attorneys in the State in multiple years. Chambers & Partners ranks Bahram among California’s top securities litigation practitioners. During Benchmark’s evaluation, a client noted that Bahram is “astute, experienced, and able to generate creative options and navigate through them.”

Bryan, a graduate of Yale Law School, concentrates his practice on securities litigation, complex commercial litigation, and SEC investigations. He represents technology companies, entrepreneurs, officers, directors, employees and shareholders in high-stakes matters in California, Delaware, and other courts throughout the United States. Benchmark Litigation has recognized Bryan as a Litigation Star since 2021 and, before that, repeatedly included him in its “40 & Under Hot List.” A client shared the following feedback with Benchmark: “Bryan is easy to talk to and personable, and he provides extremely smart and thoughtful advice. He is good at seeing through complex situations and distilling them. Any client would be lucky to have him in their corner.”

Josh is an experienced attorney, well-practiced in litigating a broad range of business disputes in California state and federal courts, and in arbitrations with JAMS and AAA. His areas of expertise include securities litigation, general business disputes, internal and government investigations, trade secrets, high-net-worth family law and Marvin actions, and appellate litigation. He graduated in the top of his class at the University of California, Hastings College of the Law. 

Benchmark’s full analysis of Alto Litigation can be found here.

Motions to Strike: When Is It the Right Tool for the Job?

Defendants faced with a complaint chock-full of aggressive claims often respond with a demurrer, hoping to chop the complaint down to size.  Far less common is the motion to strike, but it, too, can be a powerful tool. Cal. Code Civ. Proc. § 436 allows litigants to move to strike irrelevant, false, or improper matter from pleadings.  This may include anything from sensitive personal matters intended to embarrass rather than support a legal claim, to specific requests for relief unsupported by the claims and allegations.  In some situations, a motion to strike may be the better tool to carve away allegations, especially when a demurrer is unlikely to be granted, or unable to eliminate the troublesome statements in a complaint.  

A scalpel for when a cleaver won’t do

One limitation of demurrers is that they must target entire causes of action.  A motion to strike, however, may be used to challenge a portion of a cause of action that is defective on its face. “Although a defendant may not demur to that portion, in such cases, the defendant should not have to suffer discovery and navigate the often dense thicket of proceedings in summary adjudication.”  Moran v. Prime Healthcare Mgmt., Inc., 94 Cal. App. 5th 166, 174 (2023), review dismissed, cause remanded sub nom. Moran v. Prime Healthcare Mgmt., 329 Cal. 3d 815 (2025).  For example, in Moran, the plaintiff had combined two theories of liability into a single Unfair Competition Law, and therefore a demurrer could not be used to excise the facially deficient theory.  Id.  The Court of Appeal affirmed the use of a motion to strike to achieve this purpose.  Id.  Savvy plaintiffs often plead multiple theories in support of a single cause of action; in such circumstances, a motion to strike may be the only practical way to separate the wheat from the chaff.

A lasso for reigning in relief

A motion to strike may also be useful when a complaint seeks relief that is not supported by its claims.  Plaintiffs will often lard their prayer for relief with requests that a court can never grant.  In such cases, a motion to strike may be the only way to eliminate a factually unsupported threat of punitive or exemplary damages or other extraordinary relief.  See Los Angeles Unified School Dist. v. Sup. Ct., 14 Cal. 5th 758, 764 (2023) (affirming the lower court’s order striking a claim for treble damages when such damages were unavailable per statute.)  

A shield against embarrassment or abuse

Finally, a defendant may wish to strike information from a complaint that is sensitive, private, or embarrassing to the defendant.  For instance, in Overstock.com, Inc. v. Goldman Sachs Group, Inc., the court noted that documents disclosing a party’s private financial information were irrelevant and should have been ordered struck from the record.  231 Cal. App. 4th 471, 508 (2014).  The court explained that this was necessary both because the information was irrelevant to the proceeding, and because the California Constitution protects the right of privacy.  Id.  Courts also recognize that striking irrelevant, sensitive material from a complaint can save the parties and the court the burden of preparing and deciding motions to seal.  See Mercury Interactive Corp. v. Klein, 158 Cal. App. 4th 60, n.35. (2007).

Beyond guarding the right to privacy, motions to strike may be appropriate where a pleading employs irrelevant attacks on a person’s character or dignity in an effort to embarrass or harm them.  Courts have the authority to strike such scandalous and abusive statements from pleadings.  Oiye v. Fox, 211 Cal. App. 4th 1036, 1070 (2012).  In doing so, the court may prevent prying and harassing discovery aimed at bullying a defendant rather than resolving any bona fide dispute.

Conclusion

Of course, not every motion is worth the cost, even if it succeeds.  Indeed, if the target of a motion to strike is “irrelevant” allegations included only to embarrass, it is possible that motion practice itself will serve only to exacerbate the issue—particularly if there is likely to be publicity surrounding the case.  On the other hand, a motion to strike may foreclose costly discovery into irrelevant matters, or stem ongoing battles over what information will be public and what will remain under seal.  

Significantly, the parties must meet and confer in advance of filing a motion to strike (Cal. Code Civ. Proc. § 435.5), so there may be an opportunity to stipulate to the removal of facially-defective legal theories or irrelevant allegations without prolonged (and public) motion practice.  Parties should take this opportunity seriously, as it may save everyone time, money, and/or “face” in the long run.

For more information regarding Alto Litigation’s litigation practice, please contact one of Alto Litigation’s partners: Bahram Seyedin-Noor, Bryan Ketroser, Joshua Korr, or Kevin O’Brien.

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Disclaimer: Materials on this website are for informational purposes only and do not constitute legal advice. Transmission of materials and information on this website is not intended to create, and their receipt does not constitute, an attorney-client relationship. Although you may send us email or call us, we cannot represent you until we have determined that doing so will not create a conflict of interests. Accordingly, if you choose to communicate with us in connection with a matter in which we do not already represent you, you should not send us confidential or sensitive information, because such communication will not be treated as privileged or confidential. We can only serve as your attorney if both you and we agree, in writing, that we will do so.

The materials on this website are not intended to constitute advertising or solicitation. However, portions of this website may be considered attorney advertising in some states.

Unless otherwise specified, the attorneys listed on this website are admitted to practice in the State of California.

Founder and Executive Compensation in the Context of Major Transactions

Major corporate transactions such as asset sales, mergers, and acquisitions are complex undertakings that require a high degree of skill and attention from the corporation’s managers.  As a result, directors properly may structure officers’ compensation to reward their extraordinary efforts in connection with such transactions.  At the same time, managers who realize they soon may be out of a job have a tendency to begin lining up their next act, in ways that may be contrary to the best interests of the shareholders they currently serve.  

When do compensation plans run afoul of managers’ fiduciary duties to stockholders?  While the analysis in a given case can be complex, two considerations are paramount: (1) whether the plans leave stockholders in at least as good a position after a transaction as they were in before the transaction; and (2) whether independent decisionmakers acted in good faith on the basis of material information. 

“Entire Fairness” Review of Interested Transactions and the Safe Harbor of DGCL Section 144

Section 141 of the Delaware General Corporation Law (“DGCL”) sets forth the foundation of corporate governance: “The business and affairs of every corporation organized under this chapter shall be managed by or under the direction of a board of directors … .”  8 Del. C. § 141(a).  Because boards ultimately are responsible for corporate governance, courts typically begin their analysis of board decisions by recounting the “business judgment rule”: “It is a presumption that in making a business decision the directors of a corporation acted on an informed basis in good faith and in the honest belief that the action taken was in the best interests of the company … Absent an abuse of discretion, that judgment will be respected by the courts.”  Aronson v. Lewis, 473 A.2d 805, 812 (Del. 1984), overruled on other grounds by Brehm v. Eisner, 746 A.2d 244 (Del. 2000).

But where officers or directors have a financial interest in a transaction, Delaware courts may impose the “entire fairness” standard of review, which shifts to directors and managers the burden of proving that the challenged transaction was the product of fair dealing, and resulted in a fair price.  Weinberger v. UOP, Inc., 457 A.2d 701, 710-11 (Del. 1983).  At the same time, Section 144 of the DGCL provides means by which liability may be avoided in a conflicted transaction.  For example, liability may be precluded if the transaction is approved by a majority of disinterested directors or by a committee of at least two directors (each of whom is disinterested), or if the transaction is approved by an informed, uncoerced majority vote of disinterested stockholders.  

There are cases, however, in which a company argued that the business judgment rule applied but the courts rejected this assertion and concluded that the entire fairness standard controlled. These cases are instructive regarding what the Delaware courts look for in analyzing compensation plans amidst shareholder allegations of fiduciary duty breach.

Trados 

In re Trados Inc. Shareholder Litigation, 73 A.3d 17 (Del. 2013), concerned a company that developed proprietary desktop software for translating documents.  The company’s cap table included preferred stockholders – including VC investors – who were entitled to a liquidation preference in the form of accumulating dividends, and who appointed two directors to the board. The company was barely profitable, and the VC investors decided to exit the investment.  The board fired the CEO, hired a new CEO with experience readying a company for sale, and incentivized the new management team with a management incentive plan (“MIP”) that would reward management with a significant portion of the proceeds from a future merger.  Id. at 26-29.  The Board eventually approved a merger for $60 million in cash and stock, with those earnings allocated among the MIP participants and dividends to preferred stockholders.  Id at 33.  Common stockholders, meanwhile, received nothing, and brought suit.  Id. at 34.  

The court held that directors owed fiduciary duties to common stockholders, and not to preferred stockholders who hold mere contractual rights.  Because the directors who approved the transaction were conflicted, the court applied the entire fairness standard of review.  The court found that the merger process was not fair to common stockholders, with the MIP pitting management’s self-interest against the interests of the common stockholders.  Id. at 58-62.  Nonetheless, the Court ultimately held that the price was fair because the common stockholders’ shares were effectively worthless both before and after the transaction: “The common stock had no economic value before the Merger, and the common stockholders received in the Merger the substantial equivalent in value of what they had before.”  Id. at 78.

Lesson: Trados established the principle that directors owe their fiduciary duties to common stockholders, not preferred stockholders.  But although the sale process was unfair, and the common stockholders received nothing, the price was still fair.  Notably, the use of a special committee comprised of disinterested directors may have avoided the application of the entire fairness standard and saved both the company and the individual defendants a great deal of litigation expense and heartburn.

Approval of Executive Compensation Plans

As shown by the Trados case, the very managers tasked with negotiating a corporate transaction may structure the transaction for their own personal gain.  City of Fort Myers General Employees’ Pension Fund v. Haley, 235 A.3d 702, 704-05 (Del. 2020), is another example.  In that matter, Towers Watson & Co. was faced with shareholder and market opposition to a potential acquisition.  The acquirer then offered Towers’ CEO (Haley), a five-fold increase in his compensation if the deal went through and he took control of the post-merger company.  Haley did not disclose this offer to the Towers Board.  Plaintiff stockholders alleged this offer warped Haley’s incentives and caused him to seek the bare minimum deal that would gain shareholder approval.   

The Delaware Supreme Court held that plaintiffs adequately alleged that Haley had breached his fiduciary duty by failing to disclose his compensation arrangement to the Board.  “Plaintiffs have adequately alleged that the Board would have found it material that its lead negotiator had been presented with a compensation proposal having a potential upside of nearly five times his compensation at Towers, and that he was presented with this Proposal during an atmosphere of deal uncertainty and before they authorized him to renegotiate the merger consideration.”  Id. at 719.  

In Valeant Pharmaceuticals International v. Jerney, a corporation’s board and its president paid themselves large cash bonuses in connection with a corporate restructuring.  921 A.2d 732 (Del. Ch. 2007).  The plan to award bonuses to the directors was referred to a compensation committee comprised of three directors who themselves stood to receive bonuses under the proposal.  All defendants except one—former president Jerney—settled with the special litigation committee that took over the former stockholder derivative action. Id. at 735-36.  

Jerney conceded that the entire fairness review standard applied because no independent committee of disinterested directors had approved the conflicted bonuses.  Id. at 745-46.  The Chancery Court held that Jerney failed to prove the fairness of either the process for awarding the bonuses or the price terms.  Although Jerney was not the sole decisionmaker in negotiating the restructuring bonuses, he breached his fiduciary duties by participating in a process that lacked fairness.  The bonuses were not supported by any relevant market evidence, and his reliance on expert advice was unavailing because the entire process was tainted by self-interest. The court ordered Jerney to disgorge the full amount of his $3 million bonus, plus interest, and to pay his share of the special litigation committee expenses and defense costs incurred by the company.  Id. at 754-55.

Conclusion

Directors and officers of Delaware corporations are tasked with fiduciary duties of care and loyalty to their companies and shareholders.  These duties are ignored or violated when compensation plans for directors or officers create conflicts of interest.  Although Delaware law creates mechanisms to cleanse conflicted transactions, those tools only work when independent directors or stockholders approve a conflicted transaction with the benefit of all material information.  

For more information regarding Alto Litigation’s litigation practice, please contact one of Alto Litigation’s partners: Bahram Seyedin-Noor, Bryan Ketroser, Joshua Korr, or Kevin O’Brien.

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Disclaimer: Materials on this website are for informational purposes only and do not constitute legal advice. Transmission of materials and information on this website is not intended to create, and their receipt does not constitute, an attorney-client relationship. Although you may send us email or call us, we cannot represent you until we have determined that doing so will not create a conflict of interests. Accordingly, if you choose to communicate with us in connection with a matter in which we do not already represent you, you should not send us confidential or sensitive information, because such communication will not be treated as privileged or confidential. We can only serve as your attorney if both you and we agree, in writing, that we will do so.

The materials on this website are not intended to constitute advertising or solicitation. However, portions of this website may be considered attorney advertising in some states.

Unless otherwise specified, the attorneys listed on this website are admitted to practice in the State of California.

Ninth Circuit Supports SEC in Disgorgement Action

On September 3, the Ninth Circuit issued an opinion in SEC v. Sripetch, 2025 WL 2525848, (9th Circ. Sept. 3, 2025), holding that the SEC may seek disgorgement from a defendant even if it cannot show that any individual investor suffered a pecuniary injury.  The Ninth Circuit thus aligned itself with the First and Fifth Circuits and against the Second Circuit, in a circuit split that the Supreme Court might decide to resolve.  

Prior Supreme Court Decision on Disgorgement Leaves an Open Question 

The issue revolves around the proper interpretation of Liu v. SEC, 591 U.S. 71 (2020).  In Liu, the Supreme Court held that disgorgement was permitted under Section 21(d)(5) of the Exchange Act, which enables courts to grant equitable relief in SEC actions.  The Court found that equitable practices routinely served to deprive wrongdoers of their ill-gotten gains.  However, Liu also held that courts could not order disgorgement to be paid to the government; instead, funds must be returned to defrauded investors whenever possible.  

Some courts (like the Second Circuit) read Liu to require the SEC to show pecuniary harm to specific investors in order to support disgorgement.  SEC v. Govil, 86 F. 4th 89 (2d Cir. 2023).  Other courts (like the First Circuit) have held that no such showing is necessary.  SEC v. Navellier & Assoc., Inc., 108 F. 4th 19 (1st Cir. 2024). Further, following Liu, Congress amended the Exchange Act by adding Section 21(d)(7), which expressly permits courts to grant disgorgement in SEC actions.  The Second Circuit in Govil held that disgorgement under Section 21(d)(7) must conform to the equitable limitations recognized in Liu, while the Fifth Circuit has held that the amendment authorized the kind of disgorgement that courts had ordered before Liu. See SEC v. Hallam, 42 F. 4th 316 (5th Cir. 2022).

The Ninth Circuit Weighs in on the Issue 

The Ninth Circuit has now weighed in on the split, siding with the First and Fifth Circuits, and against the Second Circuit.

In Stripetch, the SEC alleged that Ongkaruck Sripetch and other defendants engaged in numerous fraudulent schemes involving the sale of stock in at least 20 penny stock companies. Some of the schemes involved alleged stock scalping, in which Sripetch or third parties promoted stocks without disclosing that the actual funder of the promotions was planning to sell the stocks. Other violations involved “pump-and-dump” schemes in which the defendants allegedly used fraudulent means to inflate stock prices before selling stock and the sale of unregistered securities.  Sripetch entered into a consent decree with the SEC but the amount of disgorgement was left to the courts. The district court imposed $2,251,923.16 in disgorgement along with prejudgment interest.  SEC v. Sripetch, 2024 WL 1546917 (S.D. Cal. Apr. 8, 2024).

On appeal, Sripetch argued that the district court abused its discretion in ordering disgorgement because the SEC failed to show that any individual investor suffered pecuniary harm, relying on Liu. The Ninth Circuit disagreed, holding that there is no need to show loss causation as in private securities litigation, as the Second Circuit held in Govil.

The Ninth Circuit also rejected the Second Circuit's reasoning that disgorgement requires one or more identified victims. First, disgorgement, as Liu held, is governed by common-law principles and traditional equity practice, which only requires showing “an actionable interference by the defendant with the claimant’s legally protected interests.” The claimant need not show any loss, much less a pecuniary loss.

Second, in defining a victim as one who has suffered pecuniary harm, the Second Circuit did not properly interpret Liu’s observation that disgorgement “restores the status quo.”  The Second Circuit ignored the distinction between compensatory damages, which are designed to compensate the victim for his losses, and restitution, which is designed to deprive the wrongdoer of ill-gotten gains. Similarly, the Second Circuit wrongly reasoned that Liu’s statement that the SEC must return a defendant’s gains to wronged investors meant that funds cannot be returned if there was no deprivation in the first place. Rather, Liu simply held that disgorged profits must be disbursed to victims rather than routinely deposited with the government.

What’s Next?

How would the Supreme Court rule?  While difficult to predict, it seems likely that the Court would side with the First and Ninth Circuits in holding that disgorgement in SEC actions does not require a showing that individual investors suffered pecuniary harm.  Disgorgement traditionally has been viewed as a mechanism for depriving wrongdoers of unjust gains—a mechanism that would be defeated if the SEC in some cases could not show a specific financial injury to investors as a result of a fraudulent scheme. In enacting Section 21(d)(7), Congress expressly enabled disgorgement in SEC actions without any requirement that the SEC demonstrate that investors suffered a specific financial injury.  The Court also could find that the Second Circuit in Govil stretched certain observations and dicta in Liu into iron-clad principles of law that the Supreme Court never intended.

For more information regarding Alto Litigation’s litigation practice, please contact one of Alto Litigation’s partners: Bahram Seyedin-Noor, Bryan Ketroser, Joshua Korr, or Kevin O’Brien.

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Disclaimer: Materials on this website are for informational purposes only and do not constitute legal advice. Transmission of materials and information on this website is not intended to create, and their receipt does not constitute, an attorney-client relationship. Although you may send us email or call us, we cannot represent you until we have determined that doing so will not create a conflict of interests. Accordingly, if you choose to communicate with us in connection with a matter in which we do not already represent you, you should not send us confidential or sensitive information, because such communication will not be treated as privileged or confidential. We can only serve as your attorney if both you and we agree, in writing, that we will do so.

The materials on this website are not intended to constitute advertising or solicitation. However, portions of this website may be considered attorney advertising in some states.

Unless otherwise specified, the attorneys listed on this website are admitted to practice in the State of California.

SEC Withdraws Objection to Requiring Investors to Arbitrate Securities Claims

Companies that submit a registration statement to sell securities to the public face a mandatory waiting period.  Acceleration of the registration statement’s effective date shortens the period, and is considered an essential predicate for a successful offering.  Until recently, however, the Securities and Exchange Commission refused acceleration to companies whose bylaws or certificate of incorporation mandated arbitration for investor claims under the federal securities laws.  No more:  On September 17, 2025, the SEC issued a Policy Statement, adopted by a 3-1 vote of the SEC Commissioners, providing that requiring arbitration for securities claims will not affect a decision whether to accelerate the effectiveness of a registration statement for public offering.

The Waiting Period and the SEC’s Discretion to Accelerate It

The Securities Act of 1933 and the SEC regulations thereunder set forth the requirements for a company to offer and sell securities to the public.  Section 5 of the Securities Act states that a registration statement must be in effect as to a particular security before it can be sold.  Section 8(a) provides that a registration statement becomes effective automatically 20 calendar days after it is filed. However, a company may submit a request under SEC Rule 461 specifying the date when it wants the registration statement to become effective, and the SEC Staff in the Division of Corporation Finance may accelerate the effective date if it believes that the registration statement provides adequate disclosure.  Acceleration of the effective date is essential for the company and its investment bankers to know the precise date on which the securities may be sold.

A Change in SEC Opinion on Whether Mandatory Arbitration of Investor Claims Is Against the “Public Interest” 

The Section 8(a) criteria for an accelerated effective date are primarily focused on ensuring complete and adequate disclosure of material information, as well as “the public interest and the protection of investors.”  The SEC’s Division of Corporation Finance previously held the position that companies that required mandatory arbitration provisions for securities claims were not eligible for an accelerated effective date because such provisions were contrary to the public interest and barred by the anti-waiver provisions of Section 14 of the Securities Act. But in the late 1980s, the Supreme Court issued decisions favoring the arbitration of claims pursuant to the Federal Arbitration Act (FAA), including securities claims.  See Shearson/American Express, Inc. v. McMahon, 482 U.S. 220 (1987) (claims under Section 10(b) of the Securities Exchange Act of 1934 were subject to mandatory arbitration claims in broker agreement); Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477 (1989) (mandatory arbitration provisions did not violate Section 14 of the Securities Act).

Although these decisions concerned broker-customer agreements, the SEC stated that there is no reason to believe that a different result would apply to issuer-investor agreements. Further, the Supreme Court more recently held that in any federal statute enacted after the FAA, which include the securities laws, there must be a “clearly expressed Congressional intention” to override the FAA and if not, there is a “strong presumption” that the FAA applies exclusively to the enforceability of an arbitration provision.  Epic Sys. Corp. v. Lewis, 584 U.S. 497 (2018).  While plaintiffs may assert that issuer-investor mandatory arbitration provisions may impede the ability of investors to enforce the securities laws through class-wide proceedings, an identical argument was rejected with respect to the antitrust laws. American Express Co. v. Italian Colors Restaurant, 570 U.S. 228 (2013).  Accordingly, the economic incentive for some investors to bring private claims under the securities acts does not support overriding the FAA.

More Mandatory Arbitration of Investor Claims in the Future?

There is no guarantee that companies will rush to institute mandatory arbitration of investor claims.  Companies may prefer to address one class-wide action rather than have to confront numerous separate arbitration claims. Federal securities actions are subject to well-established procedures and legal authority, while arbitration claims may be subject to the vicissitudes of arbitrators. The settlement of a class-wide claim in a single proceeding provides greater certainty than endless arbitration claims. Adverse results in a lower court may be appealed, while arbitration rulings are rarely overturned.

Further, Delaware law permits forum selection provisions so long as there is jurisdiction in at least one Delaware court, which may be construed as barring mandatory arbitration provisions in Delaware-chartered companies.  However, the SEC’s Policy Statement noted that such statutes may be challenged on the grounds that they are preempted by federal law. 

For more information regarding Alto Litigation’s litigation practice, please contact one of Alto Litigation’s partners: Bahram Seyedin-Noor, Bryan Ketroser, Joshua Korr, or Kevin O’Brien.

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Disclaimer: Materials on this website are for informational purposes only and do not constitute legal advice. Transmission of materials and information on this website is not intended to create, and their receipt does not constitute, an attorney-client relationship. Although you may send us email or call us, we cannot represent you until we have determined that doing so will not create a conflict of interests. Accordingly, if you choose to communicate with us in connection with a matter in which we do not already represent you, you should not send us confidential or sensitive information, because such communication will not be treated as privileged or confidential. We can only serve as your attorney if both you and we agree, in writing, that we will do so.

The materials on this website are not intended to constitute advertising or solicitation. However, portions of this website may be considered attorney advertising in some states.

Unless otherwise specified, the attorneys listed on this website are admitted to practice in the State of California.

California Supreme Court Upholds Forum Selection Clause

In a significant decision, the California Supreme Court has upheld a corporation’s forum selection clause requiring stockholder lawsuits to be tried in Delaware Chancery Court despite the unavailability of jury trials in that court, unanimously reversing the decisions of lower courts invalidating such clauses on the grounds that they violated California’s public policy favoring jury trials.  The Court, however, held open the possibility that a forum selection clause may still be challenged based on its manner of adoption.

In EpicentRX, Inc. v. Superior Court, 18 Cal. 5th 58 (July 21, 2025), the plaintiff invested $5 million in EpicentRX, and later filed an action against the corporation, its controlling stockholder and certain individuals for fraudulent concealment, breach of fiduciary duty, breach of contract and other claims.  Defendants moved to dismiss on the grounds that the corporation’s certificate and bylaws required stockholder actions to be brought in Delaware Chancery Court.  The trial court denied the motion and the Court of Appeal affirmed, holding that California’s public policy guaranteeing the right to a jury trial would be violated by moving the action to Chancery Court, which sits as a court in equity without juries. The Court of Appeal relied on Handoush v. Lease Finance Group, LLC, 41 Cal.App. 5th 729 (2019), which invalidated a forum selection clause because it impaired the right to a jury trial.

The Supreme Court reversed.  The Court explained that forum selection clauses generally are enforceable, and that while courts may refuse to enforce them on public policy grounds, those policy grounds generally are expressly set forth in statutes, such as prohibitions of forum selection clauses in franchise agreements; consumer personal property lease agreements; or where an employee residing and working in California is required to adjudicate a claim outside the State. 

According to the EpicentRX court, “California’s strong public policy protects the jury trial right in California Courts, not elsewhere.  It does not speak to the availability of the jury trial right in other forums.”  Id. at 67.  The Court thus declined to analogize the forum selection clause at issue to a predispute jury trial waiver, which is unenforceable. “The former reflects where a dispute will be litigated, while the latter reflects how it will be litigated.”  Id. at 79 (emphasis in original). The Court also effectively overruled Handoush, stating that its reasoning was “unpersuasive.”  While California has a strong public policy favoring a right to a jury trial, California does not have a strong public policy against forum selection clauses requiring litigation in a jurisdiction that lacks the same right.  The Court also recognized that a contrary ruling could have a chilling effect on interstate commerce:  “under the framework adopted by the courts below, any forum selection clause designating the foreign forum would essentially be unenforceable” and “[a] foreign business may be reluctant to enter into a transaction with a California business without an enforceable forum selection clause, and the California business would be deprived of the benefit of the transaction[.]”  Id. at 67.

That said, the Court noted that the plaintiff had also challenged enforcement of the forum selection clause based on its manner of adoption as part of the Certificate of Incorporation and bylaws because it was not freely and voluntarily negotiated at arms-length.  Because the lower courts did not consider this issue, the Supreme Court remanded the matter for further proceedings.

For more information regarding Alto Litigation’s litigation practice, please contact one of Alto Litigation’s partners: Bahram Seyedin-Noor, Bryan Ketroser, Joshua Korr, or Kevin O’Brien.

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Disclaimer: Materials on this website are for informational purposes only and do not constitute legal advice. Transmission of materials and information on this website is not intended to create, and their receipt does not constitute, an attorney-client relationship. Although you may send us email or call us, we cannot represent you until we have determined that doing so will not create a conflict of interests. Accordingly, if you choose to communicate with us in connection with a matter in which we do not already represent you, you should not send us confidential or sensitive information, because such communication will not be treated as privileged or confidential. We can only serve as your attorney if both you and we agree, in writing, that we will do so.

The materials on this website are not intended to constitute advertising or solicitation. However, portions of this website may be considered attorney advertising in some states.

Unless otherwise specified, the attorneys listed on this website are admitted to practice in the State of California.

Subpoenaing California Witnesses in Non-California Actions

It’s a big, interconnected world out there.  Disputes filed in one state regularly involve witnesses and documents located in other states.  Fortunately, the Uniform Interstate Depositions and Discovery Act – adopted in 49 states and territories and introduced in two others – provides a mechanism for parties to “domesticate” foreign subpoenas in the “discovery state” where desired evidence is located.  

Under California’s version of the Uniform Depositions and Discovery Act (California Code of Civil Procedure (“CCP”) §§ 2029.100 et seq.), either a clerk of court or a licensed California attorney can issue subpoenas for testimony, the production or inspection of documents or things, or the inspection of premises found in California.  The subpoena must otherwise comply with the California Civil Discovery Act (CCP §§ 2016.010 et seq.) and will be enforced, if necessary, by California courts.  

This article will briefly summarize the process for out-of-state litigants to obtain a California subpoena; unique considerations in serving said subpoena; and how to enforce a subpoena in California courts, if necessary.  

Obtaining the Subpoena

Parties to non-California litigation seeking to serve a subpoena on a California resident have options.  The first option is to ask a clerk of the superior court in the California county in which the discovery is to be conducted to issue a subpoena.  CCP § 2029.300.  The party must submit to the clerk the original and one copy of the foreign subpoena, along with the required application and payment of the required fee.  Id.  Alternatively, a party to a foreign action may hire a California attorney to issue a subpoena for discovery in California.  CCP § 2029.350.  

Whether issued by a clerk of court or a California attorney, the California subpoena must incorporate the terms of the foreign subpoena, and must be on a form prescribed by the Judicial Council.  CCP §§ 2029.300(d)(1), (5); 2029.350(d)(1), (5).  

Once the clerk or attorney issues the subpoena, it must be served in compliance with California law, which usually means personal service unless the witness agrees to accept service in some other fashion.  CCP §. 2029.400.  The conduct of the ensuing non-party witness deposition, production of documents or things, or inspection of premises must comply with California law.  CCP § 2029.500.  If a dispute arises relating to such discovery, a party or witness may file a “petition” in the applicable California superior court for a protective order or to enforce, quash, or modify a subpoena.  CCP § 2029.600.  

Attempts to enforce the California subpoena in a non-California court are likely to be challenged.  For instance, in Quinn v. Eighth Judicial District Court in and for County of Clark, the Nevada Supreme Court vacated a lower court’s attempt to enforce subpoenas issued to California witnesses, holding that California courts had jurisdiction over the discovery dispute.  134 Nev. 25 (2018).  As the court wrote:  “[T]he discovery state has a significant interest in protecting its residents who become non-party witnesses in an action pending in a foreign jurisdiction from any unreasonable or unduly burdensome discovery requests.”  134 Nev. at 30.  

Considerations for California Subpoenas 

Since a California subpoena for a foreign action must comply with California law, it is important for foreign parties to keep California’s subpoena requirements in mind.  For instance, the deposition of a natural person must take place within 75 miles of the deponent’s residence (or, technically, within the county where the action is pending and within 150 miles of the deponent’s residence, though this is irrelevant in the case of a foreign action).  CCP § 2025.250(a).  If the subpoena seeks the records of a “consumer” (CCP § 1985.3(a)(2)) or “employment records” (CCP § 1985.6(a)(3)), then the affected consumer or employee must also be given notice and an opportunity to object to production of the records sought.  

Foreign parties also should be aware of the deadline to seek the court’s intervention if the witness has not complied with the subpoena.  Code of Civil Procedure section 2025.480(b) states that a party may move to compel answers or production of documents “no later than 60 days after the completion of the record of the deposition.”  In Board of Registered Nursing v. Superior Court, the California Court of Appeal confirmed that the 60-day deadline starts to run on the compliance date stated on the subpoena, and is not extended if the party and witness meet and confer over the scope of the subpoena, or if the witness makes a rolling or piecemeal production of documents.  59 Cal.App.5th 1011, 1034-35 (2021).  

Conclusion

The Uniform Interstate Depositions and Discovery Act provides a mechanism for foreign parties to obtain evidence in California.  However, the foreign party must play by California’s rules, including due consideration for the rights of non-party witnesses and firm deadlines to ask courts to intervene, if required.  To navigate these requirements, it may be best to hire local California counsel who can issue the subpoena and guide the way through service and enforcement.  

For more information regarding Alto Litigation’s litigation practice, please contact one of Alto Litigation’s partners: Bahram Seyedin-Noor, Bryan Ketroser, Joshua Korr, or Kevin O’Brien.

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Disclaimer: Materials on this website are for informational purposes only and do not constitute legal advice. Transmission of materials and information on this website is not intended to create, and their receipt does not constitute, an attorney-client relationship. Although you may send us email or call us, we cannot represent you until we have determined that doing so will not create a conflict of interests. Accordingly, if you choose to communicate with us in connection with a matter in which we do not already represent you, you should not send us confidential or sensitive information, because such communication will not be treated as privileged or confidential. We can only serve as your attorney if both you and we agree, in writing, that we will do so.

The materials on this website are not intended to constitute advertising or solicitation. However, portions of this website may be considered attorney advertising in some states.

Unless otherwise specified, the attorneys listed on this website are admitted to practice in the State of California.

Measuring Damages in Trade Secret Misappropriation Cases

Once a defendant’s theft of trade secrets has been proven, courts and juries must decide how to compensate the plaintiff.  The California Uniform Trade Secrets Act (CUTSA) provides successful plaintiffs with a few options.  First, a plaintiff may seek the actual losses it suffered as a result of defendant’s misappropriation.  Cal. Civ. Code § 3426.3(a).  In the alternative, a plaintiff can measure their damages in terms of the defendant’s unjust enrichment, i.e. the benefits it acquired from plaintiff’s trade secret.  Id.  The first approach measures damages in terms of plaintiff’s losses; the second approach measures damages in terms of defendant’s ill-gotten gains.  

Sometimes, however, neither method will be sufficient.  Indeed, there are many cases in which a defendant has either not utilized the stolen secret commercially or has not benefitted from its use of the trade secret in any way that can be measured in monetary terms.  In those cases, the plaintiff would be unable to present any sufficient evidence to support a monetary award measured by the defendant’s unjust enrichment.  Likewise, a plaintiff's actual losses may be speculative or nonexistent.  See Ajaxo Inc. v. E*Trade Fin. Corp., 187 Cal. App. 4th 1295, 1310 (2010).  In these types of cases, whether the parties stipulate to the lack of proof or a court rules that the evidence is insufficient, the first two measures of damages provided by CUTSA would not be “provable,” and a third option becomes available: a reasonable royalty.  Id.  

Significantly, a reasonable royalty is only available if damages or unjust enrichment are not provable.  California law differs on this point from both the Uniform Act and Federal patent law, neither of which requires actual damages and unjust enrichment to be unprovable before a reasonable royalty may be imposed.  Cacique, Inc. v. Robert Reiser & Co., Inc., 169 F.3d 619, 623 (9th Cir. 1999); Morlife, Inc. v. Perry, 56 Cal. App. 4th 1514, 1529 (1997).  

Calculating a Reasonable Royalty: It’s All Hypothetical

The calculation of a reasonable royalty begins with a hypothetical negotiation between the trade secret owner and the infringer at the time the misappropriation occurred.  It approximates the price that would be set by a willing buyer and a willing seller for the use of the trade secret. When calculating a reasonable royalty, Courts consider factors such as similar license agreements in the industry, anticipated profits, the trade secret’s contribution to the product, the nature of the market, the parties’ competitive positions, and development costs of similar trade secrets.  Ajaxo, Inc. v. E*Trade Fin. Corp., 48 Cal. App. 5th 129, 166 (2020).  In total there are fifteen factors courts may consider in determining the proper royalty, which were first identified in Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116, 1120 (S.D.N.Y. 1970), modified sub nom. Georgia-Pac. Corp. v. U.S. Plywood-Champion Papers, Inc., 446 F.2d 295 (2d Cir. 1971), commonly referred to as the “Georgia-Pacific factors.”  Id. at 161.  “As with any hypothetical inquiry informed by a range of evidentiary factors, the reasonable royalty offers no promise of mathematical precision.  It is a purely theoretical measure, appropriate where no established royalty can be proved.  Id. at 162 (cleaned up). 

No Profits, No Problem

California courts have explicitly recognized that reasonable royalties can be awarded even when the misappropriator does not make any profit.  See Ajaxo Inc. v. E*Trade Fin. Corp., 187 Cal. App. 4th at 1311.  This approach ensures that the trade secret owner is compensated for the value of the misappropriated information, regardless of the infringer’s financial condition.

For example, in Ajaxo Inc. v. E*Trade Financial Corp., the court explained that evidence of negotiations between the parties and comparable licensing agreements could serve as a basis for determining a reasonable royalty, even if the infringer did not generate profits from the misappropriation.  Ajaxo Inc., 187 Cal. App. 4th at 1313.  Similarly, in Altavion, Inc. v. Konica Minolta Systems Laboratory, Inc., the court upheld a reasonable royalty award based on the “equitable” value of the misappropriated trade secrets, even though the technology was never commercialized.  Altavion, Inc. v. Konica Minolta Systems Laboratory, Inc., 226 Cal. App. 4th 26, 68 (2014).  This equitable value was what the license price should have been, had the parties negotiated a fair license at the time of the beginning of the infringement.  Id. 

This approach is consistent with courts’ calculation of reasonable royalties in other cases of intellectual property misappropriation or misuse.  For example, in patent cases, “a reasonable royalty rate . . . is based not on the infringer’s profit, but on the royalty to which a willing licensor and a willing licensee would have agreed at the time of infringement.”  Radio Steel & Mfg. Co. v. MTD Products, Inc., 788 F.2d 1554, 1557 (Fed. Cir. 1986).  Optimistic business projections may be taken into account when determining the likely outcome of a hypothetical negotiation, even if reality never meets expectations and the infringer loses money on the product.  Interactive Pictures Corp. v. Infinite Pictures, Inc., 274 F.3d 1371, 1384-85 (Fed. Cir. 2001).

Also, while reasonable royalties are often calculated by determining the royalty that would have been paid for each infringing unit sold by the defendant during the time the trade secret was being used—which may be difficult when the infringing product has not yet gone to market—the royalty may also be the hypothetical lump-sum payment a licensee would pay up-front for the continuing right to use the plaintiff’s intellectual property.  Pelican International, Inc. v. Hobie Cat Co., 655 F. Supp. 3d 1002, 1042 (S.D. Cal. 2003).  For example, in, the 02 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., the plaintiff was unable to prove unjust enrichment or damages, but the court affirmed an award of a reasonable royalty based on an estimated one-time “paid-up royalty” of $900,0000.  399 F. Supp. 2d 1064, 1078 (N.D. Cal. 2005), amended sub nom. O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., 420 F. Supp. 2d 1070 (N.D. Cal. 2006), aff’d, 221 F. App’x 996 (Fed. Cir. 2007), and aff'd, 221 F. App’x 996 (Fed. Cir. 2007).  In that case, plaintiff’s expert opined that the parties would have negotiated a lump-sum payment with the belief that the trade secret would remain valuable for two years.  Defendant balked, arguing that the secret was made public a mere six months after the misappropriation, and therefore the reasonable royalty should be reduced by seventy-five percent.  The court disagreed, explaining “parties often enter into an agreement not knowing when the trade secret will become public; it is something the parties consider, and sometimes risk, during their negotiations.”  Id.  This is a good reminder that a hypothetical negotiation over a royalty need not take into consideration the ultimate real-world success or failure of the hypothetical licensee. 

Takeaways

If the plaintiff in a trade secret misappropriation case cannot prove either actual losses, or unjust enrichment, a reasonable royalty is available.  A reasonable royalty can be calculated regardless of whether the defendant was able to successfully commercialize the trade secret.

• Plaintiffs should be prepared to show the value of a hypothetical license for their trade secret.

• Defendants should not rely on a lack of profits to argue a royalty is unreasonable. 

For more information regarding Alto Litigation’s litigation practice, please contact one of Alto Litigation’s partners: Bahram Seyedin-Noor, Bryan Ketroser, Joshua Korr, or Kevin O’Brien.

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Disclaimer: Materials on this website are for informational purposes only and do not constitute legal advice. Transmission of materials and information on this website is not intended to create, and their receipt does not constitute, an attorney-client relationship. Although you may send us email or call us, we cannot represent you until we have determined that doing so will not create a conflict of interests. Accordingly, if you choose to communicate with us in connection with a matter in which we do not already represent you, you should not send us confidential or sensitive information, because such communication will not be treated as privileged or confidential. We can only serve as your attorney if both you and we agree, in writing, that we will do so.

The materials on this website are not intended to constitute advertising or solicitation. However, portions of this website may be considered attorney advertising in some states.

Unless otherwise specified, the attorneys listed on this website are admitted to practice in the State of California.

Will Courts Still Presume that Plaintiffs in Trade Secret Cases are Likely to Suffer Irreparable Harm?

It is black-letter law that a party seeking preliminary injunctive relief must show (1) it is likely to succeed on the merits, and (2) that it will suffer irreparable harm without an injunction.  For years, plaintiffs in intellectual property cases in the Ninth Circuit could count on courts presuming irreparable harm if they could show a likelihood of success on the merits. See e.g. Brookfield Commc'ns, Inc. v. W. Coast Ent. Corp., 174 F.3d 1036, 1066 (9th Cir. 1999) (trademark infringement); Rosen Entm't Sys, LP v. Icon Enters, Inc., 359 F. Supp. 2d 902, 910 (C.D. Cal. 2005) (patent infringement); Ticketmaster L.L.C. v. RMG Techs., Inc., 507 F. Supp. 2d 1096, 1113 (C.D. Cal. 2007) (copyright infringement); W. Directories, Inc. v. Golden Guide Directories, Inc., No. C 09-1625 CW, 2009 WL 1625945, at *6 (N.D. Cal. Jun. 8, 2009) (trade secrets). 

All of that changed when the Supreme Court eliminated the presumption of irreparable harm in the context of patent cases.  No longer can a plaintiff rely on the basic fact of infringement to secure an injunction.  But does this holding extend to a trade secret injunction?  This question has been left for the lower courts to sort out.  The result is a split of opinion between courts that believe they may still presume irreparable harm, and those that believe only a showing that irreparable harm is likely will support a preliminary injunction.  

Supreme Court Precedent: eBay and Winter 

The Supreme Court expressly rejected any automatic presumption of irreparable harm upon a finding of patent infringement in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006).  The Court emphasized that the decision to grant or deny permanent injunctive relief rests within the equitable discretion of the district courts, consistent with traditional principles of equity. Similarly, in Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008), the Court clarified that plaintiffs seeking preliminary injunctions must demonstrate that irreparable harm is likely, not merely possible, further reinforcing the requirement for evidence-based findings rather than reliance on presumptions. 

Ninth Circuit Authority: The Presumption of Irreparable Harm Fades Away 

There is an animating principle behind the decision to eliminate the presumption for patent cases.  It rests on the fact that many patent plaintiffs are non-practicing entities, colloquially referred to as “patent trolls.”  By their very nature, non-practicing entities do not commercialize the patented product, so they are less likely to suffer classic forms of irreparable harm—lost market share or customer relationships—due to infringement.  They instead primarily exist primarily to secure licensing fees.  This typically makes money damages adequate compensation.  EBay, 547 U.S. at 396 (J. Kennedy, concurring); Evolutionary Intel. LLC v. Yelp Inc, No. C-13-03587 DMR, 2013 WL 6672451, at *8 (N.D. Cal. Dec. 18, 2013). 

Despite the fact that other forms of intellectual property rights generally do not deal with non-practicing entities, the Ninth Circuit has extended the eBay and Winter reasoning to other areas of intellectual property law: 

For example, in Flexible Lifeline Systems, Inc. v. Precision Lift, Inc., 654 F.3d 989 (9th Cir. 2011), the court held that the logic of eBay and Winter ruled out applying the presumption of irreparable harm in copyright infringement cases.  Likewise, in Herb Reed Enterprises, LLC v. Florida Entertainment Management, Inc., 736 F.3d 1239 (9th Cir. 2013), the Ninth Circuit rejected the presumption of irreparable harm in trademark cases.  Irreparable harm must be proven with evidence and factual findings, not merely conclusory statements or reliance on other cases. 

Application to Trade Secret Cases: The Split 

Post-eBay and Winter, the Ninth Circuit has not issued a definitive, published opinion squarely addressing the presumption of irreparable harm in trade secret misappropriation cases.  This uncertainty has left district courts within the Circuit divided:  

Some district courts, following the logic of eBay, Winter, Flexible Lifeline, and Herb Reed, have held that there is no automatic presumption of irreparable harm in trade secret cases. See Cutera, Inc. v. Lutronic Aesthetics, Inc., 444 F. Supp. 3d 1198, 1208 (E.D. Cal. 2020). 

These courts require plaintiffs to present evidence demonstrating that irreparable harm is likely if an injunction is not granted. This approach is supported by the trend in Ninth Circuit jurisprudence, which rejects presumptions in favor of evidence-based findings. 

Other district courts, however, have continued to apply a presumption of irreparable harm in trade secret cases, relying on authority predating Flexible Lifeline Systems to hold that a district court may presume irreparable harm when proprietary information is misappropriated. See Comet Techs. United States of Am. Inc. v. Beuerman, No. 18-CV-01441-LHK, 2018 WL 1990226, at *5 (N.D. Cal. Mar. 15, 2018).  

And other courts have tried to have it both ways, finding a presumption of irreparable harm when proprietary information is misappropriated, but that a plaintiff must still demonstrate immediate threatened injury as a prerequisite to preliminary injunctive relief. See Sitrus Tech. Corp. v. Le, 600 F. Supp. 3d 1106, 1110 (C.D. Cal. 2022). 

Do Not Presume a Presumption 

In an unpublished—and therefore not precedential—decision the Ninth Circuit rejected the argument that trade secret misappropriation always leads to at least a presumption of future irreparable harm, and explained permanent injunctive relief does not “automatically flow[]” from a successful trade secret misappropriation claim. Citcon USA, LLC v. RiverPay Inc., No. 20-16929, 2022 WL 287563, at *2 (9th Cir. Jan. 31, 2022). While this decision does not fully dispatch with the presumption, it comes awfully close, and there is little reason to believe that the Ninth Circuit will treat trade secret cases differently than other IP cases. 

Takeaways 

The trend to apply the same injunction standard to trade secrets as other forms of intellectual property may ultimately do a disservice to protecting trade secrets.  A trade secret is a unique property right in an important way: mere disclosure may destroy it.  This makes it a more fragile property right than a patent, trademark, or copyright.  And without a protective injunction, there is nothing stopping a defendant from disclosing—and thus destroying—the property right on a whim.   

A trade secret litigant will thus be well-served to emphasize this risk when seeking injunctive relief, regardless of whether the presumption formally applies.     

For more information regarding Alto Litigation’s litigation practice, please contact one of Alto Litigation’s partners: Bahram Seyedin-Noor, Bryan Ketroser, Joshua Korr, or Kevin O’Brien.

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Disclaimer: Materials on this website are for informational purposes only and do not constitute legal advice. Transmission of materials and information on this website is not intended to create, and their receipt does not constitute, an attorney-client relationship. Although you may send us email or call us, we cannot represent you until we have determined that doing so will not create a conflict of interests. Accordingly, if you choose to communicate with us in connection with a matter in which we do not already represent you, you should not send us confidential or sensitive information, because such communication will not be treated as privileged or confidential. We can only serve as your attorney if both you and we agree, in writing, that we will do so.

The materials on this website are not intended to constitute advertising or solicitation. However, portions of this website may be considered attorney advertising in some states.

Unless otherwise specified, the attorneys listed on this website are admitted to practice in the State of California.

Delaware Creates Safe Harbors for Corporate Transactions

On March 25, 2025, Delaware Governor Matt Meyer signed into law legislation creating significant revisions to the Delaware General Corporation Law (DGCL).  In a previous post, we discussed how the revisions significantly narrow the scope of an allowable stockholder's demands to inspect Delaware corporations’ books and records.  This post discusses certain other revisions, which significantly relax corporate requirements for approving conflicted transactions.

Under prior Delaware law, the Business Judgment Rule—in which a board of directors is presumed to act in good faith, on an informed basis and in the best interests of the company—applied to conflicted transactions involving fiduciaries, including a control group, only if two hurdles were cleared.  First, the transaction had to be approved by a Special Committee consisting entirely of members who were independent and disinterested.  And then the transaction had to be approved by a majority of uncoerced, fully informed and unaffiliated stockholders.  If the transaction did not clear both of these hurdles, it would be evaluated under the much tougher Entire Fairness standard, requiring a showing that the transaction was fair to the company and its stockholders. See In re Match Group, Inc. Deriv. Litig., 315 A. 3d 446 (Del. 2024). This process was often described as the MFW framework, after Kahn v. M&F Worldwide Corp., 88 A. 3d 635 (Del. 2014), in which the Delaware Supreme Court approved this standard of review.  

Business leaders and corporate lawyers alike attacked the standard as expensive, complicated, and unpredictable, and several corporations left Delaware to reincorporate in other states.

The Delaware legislature heard these concerns loud and clear.  The amended DGCL creates safe harbors under § 144 (a-c) in which conflicted transactions, with one major exception, will not be subject to claims for equitable relief and damages if either 1) the transaction is approved by a majority of disinterested directors, or if a majority of the directors are not disinterested, by a properly formed and functioning special committee consisting of at least two disinterested directors or 2) the transaction is approved by a majority vote of informed, uncoerced, and disinterested stockholders.  Critically, the test is now disjunctive:  Corporations no longer are required to use both procedures, just one of them. (The company also may still rely on demonstrating that the transaction is fair to the corporation and its stockholders).  

The one exception is for a controlling stockholder transaction that constitutes a “going private” transaction, which is defined as either an SEC Rule 13e-3 transaction for a public company, or specified transactions for a private company in which all of the stock held by disinterested stockholders is cancelled, converted, purchased, acquired or is otherwise no longer outstanding.  For such a transaction, approval by a disinterested special committee and by a majority of informed, uncoerced and disinterested stockholders is still required to avoid claims for equitable relief and damages.

The amendments also provide important definitional clarifications.  A “disinterested director” is now defined as one who is not a party to or has a material interest in the act or transaction at issue and does not have a material relationship with a person who has a material interest in the act or transaction.  Further, a director of a public company is presumed to be disinterested if the director satisfies the independence standards for any exchange on which the company is listed. A “material interest” is defined as an actual or potential benefit, including the avoidance of a detriment, other than one which would apply to the corporation or all stockholders generally, that would reasonably be expected to impair the objectivity of the director.  A “material relationship” is defined as a familial, financial, professional, employment or other relationship that also would be reasonably expected to impair the director’s object.  The mere fact that a director was nominated by a stockholder does not mean that the director is not disinterested with respect to a transaction involving the stockholder.  The goal of these definitions is to make clear that a director is not disinterested simply because of a tangential relationship with a stockholder and/or another director.

“Controlling stockholder” got a definition as well:  a person who, together with affiliates and associates, owns or controls either a majority of the voting power of a company’s stock; has the contractual right to elect a majority of directors; or owns or controls at least one-third of the voting power of the outstanding stock and has the power to exercise managerial authority over the company’s business.  This definition was intended to overturn decisions in which stockholders with only 20% or less of the company’s stock were deemed to be controlling.

Further, the amendments eliminate liability for monetary damages for a controlling stockholder or member of a control group for a breach of fiduciary duty other than for a breach of the duty of loyalty or intentional misconduct.  This provision is similar to the ability of corporations to exculpate directors and officers for mere negligent conduct.

On top of the obvious, material changes to various aspects of Delaware corporate law, the recent DGCL amendments highlight Delaware’s clear desire to remain one of, if not the, preeminent jurisdictions for incorporators (and re-incorporators) looking for a well-reasoned and predictable body of statutory and common law to govern their entity. 

For more information regarding Alto Litigation’s litigation practice, please contact one of Alto Litigation’s partners: Bahram Seyedin-Noor, Bryan Ketroser, Joshua Korr, or Kevin O’Brien.

****

Disclaimer: Materials on this website are for informational purposes only and do not constitute legal advice. Transmission of materials and information on this website is not intended to create, and their receipt does not constitute, an attorney-client relationship. Although you may send us email or call us, we cannot represent you until we have determined that doing so will not create a conflict of interests. Accordingly, if you choose to communicate with us in connection with a matter in which we do not already represent you, you should not send us confidential or sensitive information, because such communication will not be treated as privileged or confidential. We can only serve as your attorney if both you and we agree, in writing, that we will do so.

The materials on this website are not intended to constitute advertising or solicitation. However, portions of this website may be considered attorney advertising in some states.

Unless otherwise specified, the attorneys listed on this website are admitted to practice in the State of California.

Is it SAFE? A New-ish Investment Tool Triggers Old Concerns

Startup businesses need access to quick, easy cash.  

Investors want an easy way to get early access to the next breakout company. 

In 2013, technology startup accelerator Y Combinator released its solution to these challenges: the Simple Agreement for Future Equity, or SAFE.  With a SAFE, an investor pays for a promise: in exchange for payment of cash, the company promises that it will give the investor a return upon the happening of possible future events.  The investor’s return may be a grant of stock, or a payment of cash.  

While SAFEs address some of the needs of investors and startups, other issues remain.  As has been noted elsewhere, a startup does not owe a SAFE investor the same fiduciary duties that corporations owe to their stockholders.  If something goes wrong, the investor may be limited to remedies for breach of contract.  

The government has also noticed the risks investors face in SAFEs, and the U.S. Securities and Exchange Commission (“SEC”) has used its time-honored tools to address them: public education and enforcement actions.  Private lawsuits vindicate private rights, but also serve to educate the public. 

Stockholders Are Owed Fiduciary Duties; Parties to Contracts Are Not

It is all but axiomatic that corporate directors owe fiduciary duties to the corporation and its stockholders.  Guth v. Loft, Inc., 5 A.2d 503 (Del. 1939).  But that benefit of stock ownership has not been extended to persons who hold a potential or future interest in owning stock of the corporation.  See, e.g., Simons v. Cogan, 549 A.2d 300, 303 (Del. 1988) (“[A] convertible debenture represents a contractual entitlement to the repayment of a debt and does not represent an equitable interest in the issuing corporation necessary for the imposition of a trust relationship with concomitant fiduciary duties.”).  Similarly, the Delaware Court of Chancery has held that preferred stockholders are not owed fiduciary duties beyond those enjoyed by common stockholders, because the rights and preferences of preferred stock are contractual in nature.  In re Trados Inc. Shareholder Litigation, 73 A.3d 17, 38-39 (Del.Ch. 2013).  And while creditors may have standing to maintain derivative claims against directors for breaches of fiduciary duties if the corporation is insolvent, fiduciary duties only apply to stockholders while the corporation is solvent.  North Am. Cath. Educ. Programming Found., Inc. v. Gheewalla, 930 A.2d 92, 101-03 (Del. 2007).

We have found no court cases holding that SAFE investors are owed fiduciary duties or have rights beyond those found in their contract.  Parties to a SAFE do not own equity in the corporation unless and until a triggering event occurs.  In this way, SAFE investors are akin to parties to a traditional convertible debenture.  

SEC Public Service Announcements

Although Y Combinator’s SAFE template includes an investor representation that they are an accredited investor for purposes of Rule 501 of Regulation D under the Securities Act (allowing investors to purchase unregistered securities), the advent of SAFEs coincided with the rise of crowdfunding, an exception to securities laws that allows relatively inexperienced investors to make small investments in companies at an early stage.  With many new investors off to the races, the SEC published an Investor Bulletin warning the public that SAFEs are not quite an “investment” in the traditional sense because the investor does not immediately receive equity in return.  The Bulletin warns the public to carefully consider the terms of the proposed SAFE, including in particular the triggering events that may convert the SAFE investment to equity or a payout.  The Bulletin also points out that, if the company never again needs to raise capital and never gets acquired, the conversion of the SAFE may never be triggered, leaving the investor with nothing.

SEC Enforcement Actions

Devoted readers of this page will recall that we first mentioned the legal perils of AI washing (that is, the making of exaggerated or untrue statements about a company's AI capabilities to attract investors and customers) in July 2024, and revisited the topic earlier this year.  A recent SEC enforcement action highlights the convergence of AI washing and SAFEs on an unsuspecting public. 

On October 10, 2024, the SEC announced charges against Rimar Capital USA, Inc. (“Rimar USA”), Rimar Capital, LLC (“Rimar LLC”), Itai Liptz, and Clifford Boro for making false and misleading statements about Rimar LLC’s purported use of AI to perform automated investment trades for client accounts.  The parties settled the SEC charges and agreed to pay $310,000 in total civil penalties. 

The SEC’s order details the conduct leading up to the charges.  The charged parties used SAFEs to lure their victims into making “investments” in Rimar USA, assuring the investors they would get equity in Rimar USA in the event of any equity financing.  Rimar USA raised $3.725 million from 45 investors with this scheme.  The charged parties made numerous false and misleading statements to investors during this round, including false statements about Rimar LLC having an artificial intelligence platform for trading stock and crypto assets.  In truth, no such platform existed.  Some of the investors were even deceived into becoming advisory clients of Rimar LLC.  

The Rimar USA case underscores that, despite the novelty of SAFEs as a way for investors to get in on the ground floor of an exciting new venture, this new tool can be abused for garden variety securities fraud.

Private Actions Interpreting SAFE Terms

The good news: that “space propulsion company” you invested millions in with a SAFE is going public!  The bad news: did you fill out the paperwork for your shares?  Worse news: actually, the SEC has issued a cease-and-desist against the company for making false statements about its space tech, and the shares you should have gotten are now worth substantially less than they were as of the triggering event.

These are the basic facts of Larian as Trustee of Larian Living Trust v. Momentus Inc., an unpublished January 2024 order on a motion for partial summary judgment before the Superior Court of Delaware.  No. N22C-07-133 EMD CCLD, 2024 WL 386964 (Del. Jan. 31, 2024).  The Trust sued for breach of contract (the SAFE) and fraudulent inducement.  Defendant Momentus moved to dismiss the breach of contract claim.  

The Trust argued that the October 2020 Momentus IPO was a Liquidity Event as defined in the SAFE, and that the Trust should have received equity upon the company going public.  Presumably, the Trust could have sold those shares for a handsome profit long before the SEC’s July 2021 cease and desist order caused the shares to fall well below the value of the Trust’s original $4 million investment.  

Momentus countered that it went public by merging with a SPAC, and that SAFE investors were required to execute a Letter of Transmittal to receive their equity (the Trust argued said letter allegedly contained release language that would cover potential claims relating to the SEC’s cease and desist order a few months earlier).  Momentus argued the Trust failed to satisfy this condition precedent to receiving its shares, so it was entitled to nothing.  

The Trust replied that it was not bound by the terms of the merger agreement, and that the SAFE did not include the clear, unambiguous language that would be required to effect the forfeiture that Momentus was advocating.  

The trial court ultimately denied Momentus’s motion, reasoning that there were genuine disputes over the merger agreement’s impact, if any, on the SAFE; whether the Trust forfeited its interest by failing to timely execute the Letter of Transmittal; and whether Momentus prevented the Trust from complying with a possible condition precedent by failing to answer straightforward (but no doubt awkward) questions about the looming SEC cease and desist order while insisting that the Trust sign the Letter of Transmittal.  

Conclusion

While SAFEs are a relatively new and novel investment tool, they remain subject to many classic risks.  Investors should carefully review the terms of the SAFE to ensure they understand the nature of their investment, and what conditions must be satisfied in order for their payment to convert into equity.  And if the new SAFE instrument is paired with outlandish promises about new technologies, the very old adage may apply: caveat emptor (“let the buyer beware”).

For more information regarding Alto Litigation’s litigation practice, please contact one of Alto Litigation’s partners: Bahram Seyedin-Noor, Bryan Ketroser, Joshua Korr, or Kevin O’Brien.

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Disclaimer: Materials on this website are for informational purposes only and do not constitute legal advice. Transmission of materials and information on this website is not intended to create, and their receipt does not constitute, an attorney-client relationship. Although you may send us email or call us, we cannot represent you until we have determined that doing so will not create a conflict of interests. Accordingly, if you choose to communicate with us in connection with a matter in which we do not already represent you, you should not send us confidential or sensitive information, because such communication will not be treated as privileged or confidential. We can only serve as your attorney if both you and we agree, in writing, that we will do so.

The materials on this website are not intended to constitute advertising or solicitation. However, portions of this website may be considered attorney advertising in some states.

Unless otherwise specified, the attorneys listed on this website are admitted to practice in the State of California.

Beyond Fee-Shifting: Leveraging California’s “Tort of Another” Doctrine to Recover Attorney Fees as Compensatory Damages

When clients ask whether they can recover attorney’s fees in litigation, most lawyers instinctively think about statutory or contractual fee-shifting. But California law recognizes a different, often-overlooked avenue to recovering fees: compensatory damages. In short, where a defendant’s tortious conduct forced the plaintiff into litigation against yet another party, the plaintiff may be able to seek their fees in litigating against that other party, from the former defendant.

Known as the “tort of another” doctrine, this principle opens the door to recovering substantial litigation expenses—not as costs, but as damages.

What Is the Tort of Another Doctrine?

The elements of a “tort of another” doctrine are straightforward enough: a plaintiff may recover attorney’s fees incurred in third-party litigation as damages if:

1. The defendant committed a legal wrong (typically a tort); and

2. That wrong made it reasonably necessary for the plaintiff to protect its interests by suing or defending against a third party.

The doctrine emerged from the seminal case of Prentice v. North American Title Guaranty Corp. (1963) 59 Cal.2d 618.  There, a paid escrow holder’s negligence forced the plaintiff to file a quiet title action against another party.  This satellite lawsuit was considered the “natural and proximate consequence” of the escrow holder’s misconduct.  The court consequently allowed the plaintiff to recover its attorney’s fees incurred pursuing the satellite claim from the escrow holder. Id.; see also Priority Pharmacy, Inc. v. Serono, Inc., No. 09CV1867 BTM POR, 2010 WL 2011514, at *5 (S.D. Cal. May 20, 2010).  

The doctrine also extends to cases where the “tort of another” claimant was forced to defend a suit that was the direct result of the tortfeasor’s negligence or other wrongdoing toward the claimant. See, e.g., Sindell v. Gibson, Dunn & Crutcher, 54 Cal.App.4th 1457, 63 Cal.Rptr.2d 594 (1997) (defendant attorneys, who prepared decedent’s estate plan, were liable to decedent’s children under the “tort of another” doctrine because the children were sued by decedent’s second wife over what property was included in the decedent’s estate solely as a result of the attorneys’ failure to obtain a written consent from the second wife regarding certain gift and sale transfers).

How Does the Law Limit Tort of Another Damages?

The sweep of “tort of another” damages is not without limits.  The law makes sure that the remedy does not apply in “every multiple tortfeasor case[.]” For example, in Vacco Indus., Inc. v. Van Den Berg, 5 Cal. App. 4th 34, 57 (1992), the Court clarified that if two tortfeasors are equally at fault, a plaintiff cannot pursue attorney’s fees against one of them for the legal costs incurred in pursuing the other.  This ensures that the “tort of another” doctrine does not undermine the “American Rule” that each side bears its own attorney’s fees.  

What’s the lesson? Think cause-and-effect. If you represent a plaintiff, develop facts showing how a particular defendant sparked a chain reaction that led to other lawsuits or claims. If you represent a defendant, demonstrate why your client and the “other” party in the plaintiff’s crosshairs are, at most, alleged joint tortfeasors.

Intellectual Property Applications?

The seminal Prentice case involved disputes over real property transactions.  Can the logic extend to intellectual property disputes?  Yes, according to the matter of Vanguard Recording Soc'y, Inc. v. Fantasy Recs., Inc., 24 Cal. App. 3d 410, 419 (Ct. App. 1972).  

Joan Baez and her record label filed a lawsuit against a rival record company that distributed an unauthorized recording of a Baez concert. Baez not only sued the rival record distributors but also sought to enjoin third parties from distributing and selling the bootleg record. The Court of Appeal, applying the tort of another doctrine, permitted Baez to recover her legal fees incurred in pursuing the third parties, directly from the rival record company.

The logic of the Vanguard Recording case can apply to other intellectual property scenarios. For instance, if someone steals trade secrets and uses them for a new employer, the case suggests seeking damages against the original misappropriator for legal fees spent pursuing the employer. This is because the original misappropriator’s wrongful conduct necessitated legal action against the employer in order to protect the plaintiff’s rights and prevent further harm.

Conclusion

The “tort of another” doctrine offers a powerful tool for plaintiffs navigating complex litigation landscapes.  The ideal fact pattern “tort of another” pattern has a “cause and effect” logic to it.  Search for a single tortfeasor who set into motion a chain reaction that led to litigation with third-parties.  By pinpointing the original wrongful act that necessitated additional legal battles, the doctrine—in the right circumstances—appropriately recognizes attorney’s fees as compensatory damages, and bridges gaps where traditional fee-shifting mechanisms fall short. It’s a strategic avenue that not only amplifies recovery but also serves as a potent deterrent against cascading misconduct.

For more information regarding Alto Litigation’s litigation practice, please contact one of Alto Litigation’s partners: Bahram Seyedin-Noor, Bryan Ketroser, Joshua Korr, or Kevin O’Brien.

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Disclaimer: Materials on this website are for informational purposes only and do not constitute legal advice. Transmission of materials and information on this website is not intended to create, and their receipt does not constitute, an attorney-client relationship. Although you may send us email or call us, we cannot represent you until we have determined that doing so will not create a conflict of interests. Accordingly, if you choose to communicate with us in connection with a matter in which we do not already represent you, you should not send us confidential or sensitive information, because such communication will not be treated as privileged or confidential. We can only serve as your attorney if both you and we agree, in writing, that we will do so.

The materials on this website are not intended to constitute advertising or solicitation. However, portions of this website may be considered attorney advertising in some states.

Unless otherwise specified, the attorneys listed on this website are admitted to practice in the State of California.

Making a Difference Through Pro Bono Legal Service

At Alto Litigation, we pride ourselves on delivering exceptional legal counsel to our clients. But our commitment to justice doesn’t end there. We believe that lawyers have a responsibility to use their skills and expertise to serve those who might otherwise face the legal system alone. 

Over the last two years, Alto has deepened its investment in pro bono legal service. Spearheaded by attorney Monica Mucchetti Eno, with assistance from paralegal Silvia Kuhn, the firm has taken on a range of matters that have made a real difference in people’s lives—especially those navigating vulnerable circumstances without the means to access representation. 

Through partnerships with the Legal Aid Society of San Mateo County and the Lawyers’ Committee for Civil Rights of San Francisco, Alto has provided critical support in areas such as: 

• Limited conservatorship petitions for families seeking to care for adult children or siblings with developmental and physical disabilities. These are complex, sensitive matters that require not only legal acumen but deep empathy and an understanding of the court’s processes. Monica has prepared petitions, shepherded families through hearings, and ensured the proper filing of post-hearing documents to protect her clients’ rights and obligations. 

• Federal habeas corpus petitions for immigrant detainees, including a recent case involving an individual granted asylum but still held in detention pending appellate review. Working closely with LCCR-SF, Monica prepared filings aimed at securing a bond hearing so that the client could await the next phase of his case outside of custody. 

These matters rarely generate headlines—but they change lives. And they represent the best of what our profession can offer. 

We’re incredibly proud of Monica’s leadership, compassion, and tenacity in managing these cases and ensuring that Alto’s pro bono work remains a vibrant and ongoing part of the firm’s mission. 

Motion to Compel GRANTED, Fees Request DENIED: A Disappointing but Avoidable Outcome

In theory, the prevailing party on a motion to compel in California usually should recover their reasonable attorney’s fees.  In reality, attorneys who win the discovery war often lose the fee battle, seeing their requests either denied entirely or dramatically reduced. Why does this happen?

Here are some of the most common reasons:

Inadequate Meet and Confer Efforts—or the Appearance Thereof

Most attorneys understand that parties are required to meet and confer in good faith in an effort to resolve their discovery disputes before bringing it to the court.  But many underestimate courts’ ability to sniff out superficial meet and confer efforts.  Moreover, numerous courts have implemented local rules mandating the parties undertake specific meet and confer efforts before a motion to compel may be filed.  Separately, even extensive and good-faith meet and confer efforts may not be enough if the well-meaning attorney does a poor job documenting their reasonable efforts.  

Failure to Submit Proper Evidence with the Motion

Another common reason why fees requests are reduced or denied is because they are not adequately or timely evidenced.  Courts are unlikely to award fees unless they have evidence showing how much was billed and for what. In federal court, counsel bear the burden of submitting detailed time records justifying the hours claimed to have been expended. Chalmers v. City of Los Angeles, 796 F.2d 1205, 1210 (9th Cir. 1986).  Similarly, in state court, a motion to compel must be accompanied by a declaration setting forth facts supporting the amount of the monetary sanction sought. Cal. Code Civ. Proc. § 2023.040.  Vague or otherwise-thin evidence supporting a fee request may be rejected. See, e.g. Weinstein v. Blumberg, 25 Cal. App. 5th 316, 321 (2018); Hernandez v. Welcome Sacramento, LLC, No. 2:20-CV-02061-KJM-JDP, 2024 WL 4520145, at *7 (E.D. Cal. Oct. 17, 2024).  Counsel should provide clear and accurate records of the time spent preparing the motion to compel and supporting documents, and the amount billed for that time.

Timing matters, too.  It is tempting to tell the court in an opening brief that you will submit evidence with your reply brief, when you know the full amount of hours expended (at least before oral argument).  But counsel who waits until their reply brief to in evidence of fees may be out of luck, as the court may find that such delay improperly deprives the non-moving party of their ability to contest the amount.  

Overreaching or Inflated Requests

Courts considering fee requests typically evaluate them for reasonableness.  Actual fees incurred by a party often are an important part of determining their reasonableness, but not the only part.  Was the number of hours spent reasonable?  The number of attorneys working on the matter?  Courts are not shy about giving haircuts for any perceived duplicative work, excessive hours, or overstaffing.  See, e.g., Cash v. County of Los Angeles, 111 Cal. App. 5th 741 (2025).  Courts also pay attention to billing rates; are they reasonable given the experience of the attorneys, their practice area, the expertise needed for the case, and the local market?  Parties who submit comprehensive evidence supporting the reasonableness of their request have a leg up.

Be careful, too, in deciding which hours of work to represent to the court were necessary for the motion at issue.  For example, courts may be loathe to award fees for time spent reviewing discovery responses, since that work would have been done regardless of whether a motion to compel was filed.  See Doe v. Cnty of Sacramento, 2024 WL 2022871, at *2 (E.D. Cal. May 7, 2024).  Likewise, time spent on the meet and confer process will typically not be included in a fee award.  Id.  

Takeaways for Winning the Battle and the War 

Fee-shifting in discovery motions is not automatic. To maximize your chances of recovering fees on a motion to compel, counsel should:

• Engage in a thorough and well-documented meet and confer process

• Submit detailed and timely evidence of fees, and their reasonableness, with their first brief

• Only ask for fees to which they are entitled

For more information regarding Alto Litigation’s litigation practice, please contact one of Alto Litigation’s partners: Bahram Seyedin-Noor, Bryan Ketroser, Joshua Korr, or Kevin O’Brien.

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Disclaimer: Materials on this website are for informational purposes only and do not constitute legal advice. Transmission of materials and information on this website is not intended to create, and their receipt does not constitute, an attorney-client relationship. Although you may send us email or call us, we cannot represent you until we have determined that doing so will not create a conflict of interests. Accordingly, if you choose to communicate with us in connection with a matter in which we do not already represent you, you should not send us confidential or sensitive information, because such communication will not be treated as privileged or confidential. We can only serve as your attorney if both you and we agree, in writing, that we will do so.

The materials on this website are not intended to constitute advertising or solicitation. However, portions of this website may be considered attorney advertising in some states.

Unless otherwise specified, the attorneys listed on this website are admitted to practice in the State of California.

Reasonable Attorneys’ Fees: Getting What’s Deserved, Not What Was Paid

Statutes and contracts often permit a prevailing party to recover “reasonable” attorneys’ fees.  But what is “reasonable”?  

Many attorneys in the enviable position of filing fee-shifting motions believe their own fees to be reasonable, and thus reflexively ask the court or arbitrator to award the amount their client actually paid them.  Alas, this often results in an award of less than what the attorney charged because courts and arbitrators often apply a “haircut” to such requests.

As it turns out, “reasonable” fees can be—and often are—higher than the amount paid by the client. 

Under California law, the “reasonableness” of attorneys’ fees in a given situation is driven not so much by the specific terms of the fee arrangement between the attorney and client, but rather, by the fair market value of the legal services rendered in that case.  See Syers Props. III, Inc. v. Rankin, 226 Cal. App. 4th 691, 701 (2014). “There is no requirement that the reasonable market rate mirror that actual rate billed.” Id. Consequently, courts will consider the complexity of the case, the skill and experience of the attorneys, and the prevailing market rates in deciding what a reasonable fee should be. “This standard applies regardless of whether the attorneys claiming fees charge nothing for their services, charge at below-market or discounted rates, represent the client on a straight contingent fee basis, or are in-house counsel.” Charon v. Litke, 181 Cal. App. 4th 1234, 1260 (2010). 

Reasonable Fees are Set by the Market—Not by Clients

This focus on market value of services rather than specific arrangement makes good sense.  Attorneys have all kinds of arrangements with clients, including many that don’t involve any express, hourly fees at all.  Consider contingency arrangements, pro bono arrangements, and even cases litigated by in-house counsel; attorneys perform valuable services in such cases, and awards of attorneys’ fees are available in them even if no money at all changes hands between client and attorney.  See, e.g. Nemecek & Cole v. Horn, 208 Cal. App. 4th 641, 652 (2012).  Indeed, even in cases litigated by outside counsel charging by the hour, attorneys can and do often provide discounts to clients for all sorts of reasons, including the client’s ability to pay, the attorney’s prior relationship with the client, demands by the client’s insurance carrier, and more.  None of these reasons suggest that the attorney’s work is somehow rendered less valuable than it would have been if they had charged full price. 

The Prevailing Party Should Benefit from a Discount on Attorneys’ Fees, Not the Losing Party

Of course, the reader may be thinking:  That’s not fair!  Why should the prevailing party get more money in a fee award than they paid their attorneys in the first place?  The answer is that the alternative—reducing a fee award simply because the prevailing party paid their attorney less than market—would be a windfall to the non-prevailing party.  After all, if legal services have a determinable value independent of what someone pays for them in one instance, why should the party who loses the case be the party that reaps the benefit of the discount?

Takeaways

Attorneys seeking fee-shifting should seriously consider whether, under the unique circumstances of their case, “reasonable fees” means something more than what they charged their client in that case.  Even if the tribunal disagrees, such a request, if supported by evidence, may result in an award of actual fees paid, without any further “haircut” that the Tribunal might otherwise have been inclined to impose.  

Simply put:  Don’t sell yourselves (or your clients) short.

For more information regarding Alto Litigation’s litigation practice, please contact one of Alto Litigation’s partners: Bahram Seyedin-Noor, Bryan Ketroser, Joshua Korr, or Kevin O’Brien.

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Disclaimer: Materials on this website are for informational purposes only and do not constitute legal advice. Transmission of materials and information on this website is not intended to create, and their receipt does not constitute, an attorney-client relationship. Although you may send us email or call us, we cannot represent you until we have determined that doing so will not create a conflict of interests. Accordingly, if you choose to communicate with us in connection with a matter in which we do not already represent you, you should not send us confidential or sensitive information, because such communication will not be treated as privileged or confidential. We can only serve as your attorney if both you and we agree, in writing, that we will do so.

The materials on this website are not intended to constitute advertising or solicitation. However, portions of this website may be considered attorney advertising in some states.

Unless otherwise specified, the attorneys listed on this website are admitted to practice in the State of California.

No NDA, No Trade Secret? Not Always.

Imagine this: an employee shared your company’s secret sauce in a pitch meeting or during the course of an exploratory partnership, and the idea is stolen. There’s no NDA in sight. Are you out of luck? Not necessarily. Even without a signed agreement, the law still may protect your trade secret under an implied duty of confidentiality.

Express vs. Implied: What's the Difference?

To win a trade secret case, a plaintiff must prove that the defendant had a duty of confidentiality. These come in two varieties:

· Express Duty: This is the straightforward kind—clearly stated in a written contract or NDA. It’s enforceable and predictable.

· Implied Duty: This arises from the nature of the relationship or the context in which the information was shared. Courts find an implied duty of confidentiality when “the other party has reason to know that the information was in fact confidential.” Valmarc Corp. v. Nike, Inc., No. 3:21-CV-01556-IM, 2024 WL 5056960, at *10 (D. Or. Dec. 10, 2024) (citing Carr v. AutoNation, Inc., 798 F.App’x 129, 130 (9th Cir. 2020); see also Tele-Count Eng’rs, Inc. v. Pac. Tel. & Tel. Co., 168 Cal. App. 3d 455, 466 (1985) (“The basis of the breach of confidence action is an obligation created by law for reasons of justice where no contract otherwise exists.”)

In short, even when nothing is signed, the law can and will read between the lines and recognize a confidentiality expectation based on how and why the information was shared. Both the federal Defend Trade Secrets Act (DTSA) and California’s Uniform Trade Secrets Act (UTSA) acknowledge this implied duty under the right circumstances.

When the Law Implies a Secret:

Cases involving arguments about implied duties unsurprisingly turn on their facts, but certain circumstances make a court more likely to find an implied duty.

· Oral and Written Reminders: Even absent a formal agreement, oral and written reminders to employees or vendors to keep information confidential may be enough to create an implied duty. Starship, LLC v. Ghacham, Inc, 2023 WL 5670788, at *19 (C.D. Cal. July 17, 2023); VBS Distribution, Inc. v. Nutrivita Lab’ys, Inc., 811 F. App’x 1005, 1009 (9th Cir. 2020).

· Deceptive Solicitation: Courts may impose an implied duty when a party deceptively solicits confidential information—such as a buyer coaxing a supplier into revealing product details only to steal the design. Pachmayr Gun Works, Inc. v. Olin Mathieson Chem. Corp., Winchester W. Div., 502 F.2d 802, 807 (9th Cir. 1974); Gunther-Wahl Prods., Inc. v. Mattel, Inc., 104 Cal. App. 4th 27, 36 (2002).

· Joint Venturers: Sharing confidential information to evaluate a business’s value for investment or acquisition can create an implied duty of confidentiality. Thompson v. California Brewing Co., 150 Cal. App. 2d 469, 476 (1957).

· Notice from Affiliate: If a defendant knows that the plaintiff has an NDA with the defendant’s affiliate, then that knowledge may impute a duty of confidentiality—even if the defendant wasn’t directly bound by that NDA. Valmarc Corp. v. Nike, Inc., No. 3:21-CV-01556-IM, 2024 WL 5056960, at *10 (D. Or. Dec. 10, 2024).

When Nothing Secret Is Implied:

However, courts are cautious. They won’t imply a duty of confidentiality in every situation. Here are some where they typically won’t:

· Unsolicited Disclosure: If you submit an idea to a potential business partner without any opportunity for them to reject confidentiality obligations, courts may not find a confidential relationship, even if recipient then shares the idea with a competitor. Faris v. Enberg, 97 Cal. App. 3d 309, 324 (1979).

· NDA Declined: If a recipient expressly declines to sign an NDA—but you share it with them anyway—an implied duty argument becomes a tough sell. Hooked Media Grp., Inc. v. Apple Inc., 55 Cal. App. 5th 323, 333 (2020).

· Failure to Follow NDA Strictures: If you have an NDA but don’t follow its terms (e.g., requirements to mark confidential information as such), the law will not step in to create an implied duty. Convolve, Inc. v. Compaq Computer Corp., 527 F. App’x 910, 925 (Fed. Cir. 2013).

Don't Rely on Hopes and Hunches

Courts don’t imply duties lightly. If you want to protect your secrets, the gold standard is still a well-drafted NDA. But if you forgot—or strategically skipped—an NDA, all is not lost.

To strengthen your case, show that:

· The relationship involved trust;

· The context clearly signaled confidentiality; and

· The recipient knew or should have known that the information was confidential.

And, of course, hire counsel who has experience litigating and winning such issues.

For more information regarding Alto Litigation’s litigation practice, please contact one of Alto Litigation’s partners: Bahram Seyedin-Noor, Bryan Ketroser, Joshua Korr, or Kevin O’Brien.

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Disclaimer: Materials on this website are for informational purposes only and do not constitute legal advice. Transmission of materials and information on this website is not intended to create, and their receipt does not constitute, an attorney-client relationship. Although you may send us email or call us, we cannot represent you until we have determined that doing so will not create a conflict of interests. Accordingly, if you choose to communicate with us in connection with a matter in which we do not already represent you, you should not send us confidential or sensitive information, because such communication will not be treated as privileged or confidential. We can only serve as your attorney if both you and we agree, in writing, that we will do so.

The materials on this website are not intended to constitute advertising or solicitation. However, portions of this website may be considered attorney advertising in some states.

Unless otherwise specified, the attorneys listed on this website are admitted to practice in the State of California.

Bahram Seyedin-Noor is Ranked by Chambers and Partners for Fifth Year in a Row

Alto Litigation Founder and CEO Bahram Seyedin-Noor has been recognized as a top securities litigator in California in the 2025 edition of Chambers USA. This is the fifth straight year he has been included in the rankings, a remarkable achievement given that Alto is a boutique firm and Chambers rankings are dominated by lawyers at much larger firms. 

Chambers and Partners’ annual rankings are a well-respected publication that recognizes firms and lawyers for excellence in their chosen practice areas. Chambers rankings are thoroughly vetted by hundreds of researcher analysis, and includes interviews of thousands of lawyers and clients each year. Individuals and firms demonstrate sustained excellence to be considered for the publication. 

Among the feedback provided in support of Bahram’s recognition is that, “Clients are lucky to get to work with him” and “I can't say enough positive things about working with Bahram.”

Responding to the recognition, Bahram stated, “It’s an honor to be recognized again by Chambers USA. Litigation is a team sport, and this reflects the talent, commitment, and creativity of the entire Alto team. We’re proud to stand shoulder to shoulder with our clients in high-stakes matters—and to consistently deliver results that earn their trust.”

AI Washing Revisited – Trying to Predict the Future

Yogi Berra famously observed: “It’s tough to make predictions, especially about the future.”

Predictions are having a moment, in the form of the predictive language models fueled by artificial intelligence (“AI”) which form the backbone of countless disruptive products and services. Last year we shared our thoughts on the practice of “AI washing,” or the misuse of exaggerated or untrue statements about a company’s AI capabilities to attract investors and customers. The Securities and Exchange Commission (“SEC”) and Federal Trade Commission (“FTC”) continue their enforcement efforts under the new administration, with resolutions to existing cases and new actions underway. Although Congress is on the verge of passing a 10-year moratorium on state-level regulations of AI, that ban does not appear to limit the ability of federal agencies to enforce existing laws against deceptive practices – or the rights of private actors to pursue traditional civil remedies for fraud or breaches of fiduciary duties.

Ecommerce Empire Builders

In September 2024 the FTC charged Empire Holdings Group and its principal, Peter Prusinowski, with falsely claiming that the “Ecommerce Empire Builders” tool could help consumers make up to millions of dollars in e-commerce. The civil complaint alleged that defendants promoted their program though social media channels such as Facebook, Instagram, TikTok, and YouTube, claiming that the tools they built for customers were “powered by artificial intelligence to make your life easier” and could get people “on the road to replacing your full-time income.” The Complaint went on to allege, however, that the program took many hours for clients to review, required significant time and effort to implement, and income, if any, was far from certain. The Complaint alleged five counts against defendants under the FTC Act and Consumer Review Fairness Act.

On May 9, 2025, the FTC and defendants entered a stipulated order banning Empire and Prusinowski from offering this purported business opportunity to the public and requiring the defendants to surrender assets to the FTC in order to refund consumers.

Nate, Inc.

In April 2025 the Acting U.S. Attorney for the Southern District of New York charged Albert Saniger, the former Chief Executive Officer of Nate, Inc. (“nate”), with engaging in a scheme to defraud investors by making false and misleading statements about nate’s use of proprietary AI technology. The indictment alleges that Saniger and nate brought in over $40 million in investments by representing to investors that nate’s shopping app used AI “to intelligently and autonomously complete customers’ merchandise orders across e-commerce websites.” The indictment further alleges that the nate app was not powered by unique AI capabilities, and at times, customer transactions were manually completed by contractors in the Philippines and Romania (the company eventually managed to develop “bots” to assist with some transactions). The indictment charges Saniger with securities fraud and wire fraud. The SEC filed a parallel civil complaint against Saniger, seeking civil money penalties, disgorgement of ill-gotten gains, and injunctive relief.

Possible Moratorium on State-level Regulation of A.I.

Meanwhile, the House of Representatives recently passed H.R. 1, the One Big Beautiful Bill Act (yes, that is the official short title of the bill). Section 43201(c) of the Act requires, subject to modest limitations, that “no State or political subdivision thereof may enforce any law or regulation regulating artificial intelligence models, artificial intelligence systems, or automated decision systems during the 10-year period beginning on the date of the enactment of this Act.” While this is a broad prohibition, two things are clear. First, the moratorium does not tie the hands of federal regulators, who have shown a willingness across administrations to apply time-tested civil and criminal tools against companies and their principals who are engaging in AI washing. Second, private plaintiffs continue to have at their disposal civil claims for false or misleading statements, from federal securities claims under the Securities Act of 1933 and Securities Exchange Act, to state law claims for breaches of fiduciary duties and state claims for false advertising and other consumer protections.

It's Like Déjà vu All Over Again

Despite a change in administrations and a likely state-level ban on A.I. regulation, federal agencies continue to take enforcement action against those who make false or misleading statements about their AI capabilities. Surely private plaintiffs will follow suit.

While AI is cutting-edge technology, companies should continue to apply traditional safeguards to claims about its capabilities. This includes truthful and precise communication, robust internal controls and oversight, and staying informed about regulatory developments and best practices.

For more information regarding Alto Litigation’s litigation practice, please contact one of Alto Litigation’s partners: Bahram Seyedin-Noor, Bryan Ketroser, Joshua Korr, or Kevin O’Brien.

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Disclaimer: Materials on this website are for informational purposes only and do not constitute legal advice. Transmission of materials and information on this website is not intended to create, and their receipt does not constitute, an attorney-client relationship. Although you may send us email or call us, we cannot represent you until we have determined that doing so will not create a conflict of interests. Accordingly, if you choose to communicate with us in connection with a matter in which we do not already represent you, you should not send us confidential or sensitive information, because such communication will not be treated as privileged or confidential. We can only serve as your attorney if both you and we agree, in writing, that we will do so.

The materials on this website are not intended to constitute advertising or solicitation. However, portions of this website may be considered attorney advertising in some states.

Unless otherwise specified, the attorneys listed on this website are admitted to practice in the State of California.

Ninth Circuit Holds that Bankruptcy Trustee Need Not Establish Injury to Creditors to Void Actual Fraudulent Transfer by Debtor

Creditors who find themselves fighting for a piece of bankruptcy pie just got a boost.  In a precedential ruling, the Ninth Circuit recently recognized in In re O’Gorman that the trustee in bankruptcy proceedings can void a pre-bankruptcy fraudulent transfer even without establishing creditor injury.  115 F.4th 1047 (2024).   

Fraudulent Transfers Under the Bankruptcy Code 

Codified at 11 U.S.C. § 548, the Bankruptcy Code’s fraudulent transfer provision in many ways parallels the Uniform Voidable Transactions Act.  Section 548(a)(1) provides that a bankruptcy trustee:  

“may avoid any transfer … of an interest of the debtor in property … that was made or incurred on or within 2 years before the date of the filing of the [bankruptcy] petition, if the debtor voluntarily or involuntarily …  

[(A)] made such transfer … with actual intent to hinder, delay or defraud any entity to which the debtor was or became, on or after the date that such transfer was made …, indebted; …” 

O’Gorman 

In O’Gorman, the bankruptcy trustee sought to set aside the debtor’s alleged fraudulent transfer of her home to an irrevocable land trust that was established by several trustees (the “Land Trustees”) to make improvements to the home and then sell it.  Id. at 1052.  The Land Trustees—who stood to profit handsomely from the sale of the home—maintained that the bankruptcy trustee lacked standing to bring a Section 548 claim because no creditors had been injured as a result of the debtor’s transfer to the land trust.  Id.   

The bankruptcy court granted summary judgment on the bankruptcy trustee’s actual fraudulent transfer claim, and the Bankruptcy Appellate Panel affirmed.   

On review, the Ninth Circuit explained that in order to have standing in bankruptcy court, the plaintiff must satisfy Article III constitutional requirements by showing that:  (i) he suffered an injury in fact that is concrete, particularized, and actual or imminent; (ii) the injury was likely caused by the defendant; and (iii) the injury would likely be redressed by judicial relief.  Id. at 1054-55.  But in O’Gorman, the only (potentially) secured creditor purportedly injured by the transfer did not have a valid claim to the property, and the unsecured creditors could be paid from the anticipated distribution of funds to the debtor.  Id.  Hence, the Land Trustees argued, the bankruptcy trustee could not meet the “injury” showing needed for Article III standing.  Id. at 1055. 

The court rejected the Land Trustees’ argument as reading too much into Article III’s injury requirement.  Id. at 1055.  According to the Ninth Circuit, the bankruptcy trustee need not demonstrate injury to a creditor, just that they have a “judicially cognizable interest” in avoiding the transfer on behalf of the estate.  Id.  To have such a judicially cognizable interest, the bankruptcy trustee was required to establish an injury to the estate—not to other creditors.  Id. at 1056.  And that showing, the court held, was easily satisfied in O’Gorman because the debtor’s transfer of her home to the Land Trustees’ trust depleted the assets in the estate.  Id.   

In reaching its decision, the Ninth Circuit looked to Fourth Circuit and Eighth Circuit holdings for guidance, including case law focusing on the debtor’s intent:  “for if a debtor enters into a transaction with the express purpose of defrauding his creditors, his behavior should not be excused simply because, despite the debtor’s best efforts, the transaction failed to harm any creditor.”  Id. at 1057 (citing Tavenner v. Smoot, 257 F.3d 401, 407 (4th Cir. 2001).   

Takeaways 

In removing “creditor injury” as a hurdle that must be cleared for a bankruptcy trustee to set aside an actual fraudulent transfer by the debtor, the Ninth Circuit has made life more uncertain for even well-meaning creditors who happen to have done business with a party within two years of that party subsequently filing for bankruptcy.  At the same time, the O’Gorman decision could be a boon to many other creditors as bankruptcy trustees increasingly void fraudulent transfers in an effort to increase overall payouts. 

For more information regarding Alto Litigation’s litigation practice, please contact one of Alto Litigation’s partners: Bahram Seyedin-Noor, Bryan Ketroser, Joshua Korr, or Kevin O’Brien.

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Disclaimer: Materials on this website are for informational purposes only and do not constitute legal advice. Transmission of materials and information on this website is not intended to create, and their receipt does not constitute, an attorney-client relationship. Although you may send us email or call us, we cannot represent you until we have determined that doing so will not create a conflict of interests. Accordingly, if you choose to communicate with us in connection with a matter in which we do not already represent you, you should not send us confidential or sensitive information, because such communication will not be treated as privileged or confidential. We can only serve as your attorney if both you and we agree, in writing, that we will do so.

The materials on this website are not intended to constitute advertising or solicitation. However, portions of this website may be considered attorney advertising in some states.

Unless otherwise specified, the attorneys listed on this website are admitted to practice in the State of California.