Trial & Appellate Lawyers’ Teamwork Produces Fourth Circuit Victory

May 29, 2019

Congratulations to Chris Shiplett of Randolph Law PLLC in Falls Church, Virginia. On May 8, Chris won a favorable judgment from the U.S. Court of Appeals for the Fourth Circuit on behalf of his client, Akira Technologies, Inc., in an appeal involving the “bad faith” standard for obtaining attorney fees under the federal Defend Trade Secrets Act, 18 U.S.C. § 1836(b)(3)(D),and its Virginia statutory and common law counterparts. The Fourth Circuit’s unpublished opinion in Akira Technologies, Inc. v. Conceptant, Inc., No. 18-1655, can be accessed here. The court of appeals affirmed a Virginia federal district court’s denial of an attorney fee motion that had been filed by the Plaintiff-Appellants against Defendant-Appellee Akira Technologies.

Chris answered some questions about his firm, the case the Fourth Circuit’s decision, and his interaction with Capital Appellate Advocacy PLLC and me, whom he engaged as an appellate consultant in connection with his Fourth Circuit brief and oral argument.

Larry Ebner:  Chris, how long have you been practicing law, and what is your educational and professional background?

Chris Shiplett:  I’ve been practicing law since 2007. I attended George Mason University School of Law. Prior to that I worked for 9 years as a computer programmer for a number of defense contractors. I got my undergraduate degree in English from Mary Washington College in 1998

Larry Ebner:  You, like I, practice in a small boutique law firm.  What is your firm’s focus?

Chris Shiplett: We focus on assisting government contractors, in particular small to medium-sized government contractors. Our goal is to be a “full-service” firm for those small to medium business where their primary focus is selling to the Federal Government.

Larry Ebner:  What are the principal legal issues that the court of appeals addressed in the Akira Technologies case?

Chris Shiplett: The court of appeals primarily addressed whether a plaintiff (my client) pursued a lawsuit in “bad faith” under the federal Defend Trade Secrets Act and the Virginia Uniform Trade Secrets Act, where after the close of discovery, the plaintiff withdrew its trade secrets claims.

Larry Ebner: Can you elaborate a bit on what issues were in front of the Court of Appeals?

Chris Shiplett: Sure. My client had sued a group of defendants under the federal Defend Trade Secrets Act (“DTSA”), and alleged additional state-law tort and contract claims, in the U.S. District Court for the Eastern District of Virginia. After the end of discovery, my client moved to amend the complaint to remove the DTSA claim and dismiss the state-law claims for lack of supplemental jurisdiction. The defendants opposed the motion, and the District Court ruled for my client, allowed the complaint to be amended and dismissed the whole thing.

Later, the defendants moved for attorneys fees under the DTSA, and under Rule 11, 28 U.S.C. § 1927, and the court’s “inherent power” to sanction conduct. As its factual basis for the motion, the defendants claimed that the client and law firm both knew that no trade secrets existed when the law suit was filed, but filed the law suit anyway. In opposition to the motion, we argued that the plaintiff believed that trade secrets existed when it filed the case, and continued to believe that trade secrets existed even through and beyond seeking to withdraw the case, but that some of those trade secrets did not support continued litigation.

The district court agreed, and on the facts before it, ruled that because the plaintiff had not acted in “bad faith” in filing the case, attorney’s fees for the defendants would be inappropriate.  In fact, the  district court ruled that the plaintiff acted in “good faith” in filing and pursuing the case.

The defendants appealed to the U.S. Court of Appeals for the Fourth Circuit, arguing that the district court erred in that it abused its discretion by not finding that the plaintiff had acted in bad faith. The defendants further argued that the district court improperly applied a heightened “clear and convincing” evidentiary standard to the defendants’ motion for attorneys fees when the proper standard is “preponderance of the evidence.” We argued that the district court properly ruled on the evidence before it and that any incorrect application of a heightened evidentiary burden was harmless error because the same result would have been correct under the lower evidentiary standard.

In its unpublished opinion, the Court of Appeals ruled that the district court properly considered the evidence before it, and properly ruled on that evidence, and therefore did not abuse its discretion in finding that the plaintiff acted in good faith, and not in bad faith. The Court of Appeals further declined to address the question of whether the district court applied an erroneous standard of proof, because the Court of Appeals found that the evidence would have satisfied the lower of the two standards of proof. On those bases, the Court of Appeals affirmed the district court decision.

Larry Ebner:  You called upon me to advise you in connection with framing the issues and arguments in your Appellee’s brief, and also in commenting on the final draft.  What aspects of my advice did you find most beneficial?

Chris Shiplett: I found many things about your advice beneficial. If I had to pick the single most beneficial aspect of your advice, I would have to say it was the way you brought to bear your experience with the appellate process and appellate thinking to help me focus our brief and our oral argument on those issues that were most likely to be persuasive. Meaning there were a thousand different approaches we could have taken to what we focused on in the brief and in the oral argument, and the most difficult thing to do was to remove all but one or two of those approaches, and be comfortable with what we left out of the brief and the oral argument. Your advice and your experience was indispensable in helping us understand how to approach that process.

Larry Ebner:  I also was pleased to help you prepare for your oral argument. Was our preparatory interaction helpful when the time arrived for you to stand before the appellate panel?

Chris Shiplett: Absolutely! Just like in assisting with the briefs there were a number of ways you assisted with preparing for oral argument. If I had to choose the single most helpful aspect of your assistance, it would be the informal “moot-like” session we held, where you questioned me on the briefs, on the spot, in a way that mirrored very, very closely the way in which the panel approached the oral argument. I found that extremely helpful. Not just because many of your questions mirrored questions the judges on the panel asked at oral argument, but also the way in which having a practiced appellate practitioner asking me questions focused me on how the process would work at oral argument, and how I needed to prepare for it.

Larry Ebner: How did the hearing go?

Chris Shiplett: I thought it went very well.  As Appellee, I went second. Although I had created a “presentation style” argument, I was able to change my opening while listening to the Appellant’s argument thanks to the preparation that you and I had done.  I started my argument by answering several questions that the judges presented to the Appellant. and then moved back to what I thought was the central point I needed to make: I argued that the district court judge had made his decision based on a voluminous record. By pinpoint cite to the appellate record, I was able to help the Court of Appeals panel find the facts that the district court judge pointed to in his opinion.

Larry Ebner: How did the Court of Appeals rule?

Chris Shiplett: They issued an unpublished per curiam opinion affirming the district court’s decision, and issued a memorandum explaining their reasoning. The memorandum tracked the arguments we had made in our brief, supplemented with the facts I had pointed out at oral argument (that we had not highlighted in our brief).

Larry Ebner:  Do you have any further thoughts on how trial court counsel and appellate specialists can  most effectively work together when a case goes on appeal?

Chris Shiplett: I think that trial counsel is often not familiar with the manner in which appellate judges think. The way in which appellate judges approach a particular case and a particular set of facts is very different than how a trial judge approaches that same case and set of facts.  Having an experienced appellate specialist pointing out to me the way the appellate judges would approach a particular point of law or a particular set of facts was extremely effective in helping me to alter my focus from the trial level to the appellate level.