Justia U.S. 11th Circuit Court of Appeals Opinion Summaries

Pemco and Boeing entered into a contractual "teaming arrangement" to bid for a 2008 Air Force contract, which included a master agreement, a work share agreement, and a non-disclosure agreement. The relationship soured, leading Pemco to sue Boeing for breach of contract and trade secret misappropriation under the Missouri Trade Secrets Act. The district court initially dismissed the trade secrets claim as time-barred but allowed the breach of contract claims to proceed, resulting in a jury awarding Pemco $2,132,038 in direct damages.On appeal, the Eleventh Circuit reversed the dismissal of the trade secrets claim, holding that the Missouri statute of limitations applied, not Alabama's. After remand, Pemco filed a new complaint asserting only the trade secrets claim. The district court dismissed this claim, concluding that the contractual limitation of liability provision barred all additional damages since Pemco had already recovered the maximum amount allowed for breach of contract.The Eleventh Circuit reviewed the case de novo and held that the limitation of liability provision in the master agreement applies to Pemco’s trade secrets claim, barring most categories of damages, including incidental, punitive, and consequential damages. However, the court found that the provision does not bar recovery for unjust enrichment, which Pemco had alleged. The court noted that unjust enrichment damages are distinct from the direct, out-of-pocket damages Pemco had already recovered and are not categorically barred by the limitation provision.The court reversed the district court’s dismissal of Pemco’s trade secrets claim and remanded the case for further proceedings, allowing Pemco to pursue recovery based on Boeing’s alleged unjust enrichment. The court denied Pemco’s request to reassign the case to a different district judge. View "Alabama Aircraft Industries Inc. v. Boeing Company, The" on Justia Law

Yorktown Systems Group Inc. and Threat Tec LLC, both defense contractors, entered into a mentor-protégé relationship under the Small Business Administration’s program to jointly pursue government contracts. They formed a joint venture (JV) and were awarded a $165 million contract with the U.S. Army. The JV agreement allocated specific work shares to each company. However, the relationship soured, and Threat Tec attempted to terminate Yorktown’s subcontract, effectively cutting Yorktown out of its share of the contract.The United States District Court for the Northern District of Alabama granted Yorktown a preliminary injunction, preventing Threat Tec from terminating the subcontract and depriving Yorktown of its rights under the JV agreement. The court found that Yorktown had shown a substantial likelihood of success on its breach of contract and breach of fiduciary duty claims and faced irreparable harm. The court noted that Threat Tec’s CEO had made false statements and lacked candor, leading to the belief that Threat Tec’s motives were unethical.The United States Court of Appeals for the Eleventh Circuit reviewed the case and affirmed the district court’s decision. The appellate court found no clear error in the district court’s factfindings and concluded that the district court acted within its discretion. The court held that Threat Tec, as the managing member of the JV, owed fiduciary duties of loyalty and care to Yorktown and likely breached those duties by attempting to cut Yorktown out of its contractually specified workshare. The court also agreed that Yorktown faced irreparable harm, including potential damage to its business reputation and the loss of highly skilled employees, which could not be remedied by monetary damages alone. View "Yorktown Systems Group Inc. v. Threat TEC LLC" on Justia Law