J.P. STADTMUELLER, District Judge.
The court commented in its September 3, 2010 order that this case was the "quintessential example" of how litigation can be "the story of regret," as the parties and attorneys on both sides in this matter had made several "questionable" decisions before this litigation began that ultimately harmed each sides' respective strategic positions. (Docket #195 at 1). The course of this litigation over the past month has made abundantly clear that the parties' counsel's "questionable" decisions did not cease upon the filing of the complaint in this case and extended well to the eve of trial. Indeed, even to the most casual observer, the docket entries in this case portray all too well contentious litigation conduct that might be best described as a cross between a kabuki dance and musical chairs. However, as reflected in the balance of this order, the extended musical interlude has now come to an end leaving the parties and their counsel standing with no place to go—except home. Whether it be in the plaintiff's failure to disclose its members in its initial complaint, or in the parties' multiple requests for a mediation when the parties' actions suggest virtually no movement in their respective positions, or in the threadbare initial expert reports regarding damages provided by the plaintiff, Fail-Safe, LLC ("FS"), or in the "supplements" to those reports that attempted to repair gaping holes in the initial reports, or in motions, provided by both sides, that rightfully should have been before the court years ago, the docket in this case reflects countless examples of serious inattention to detail on the front end of this ligation, followed by numerous attempts to try to play "catch up" after the case had been scheduled for trial.
To prevail on an unjust enrichment claim, a plaintiff must prove that: (1) a benefit was "conferred upon the defendant by the plaintiff"; (2) there was an "appreciation by the defendant of the fact of such benefit"; and (3) "acceptance and retention" of the benefit by the defendant, under circumstances such that it would be "inequitable to retain the benefit without payment of the value thereof." Seegers v. Sprague, 70 Wis.2d 997, 1004, 236 N.W.2d 227 (1975). In its summary judgment motion,
The "circumstances" that AOS references in its briefs to the court are simple. Accepting FS's allegations as true and keeping in mind the law of the case,
Fed.R.Civ.P. 12(c) allows for a judgment on the pleadings. Midwest Gas Servs., Inc. v. Ind. Gas Co., 317 F.3d 703,
The central legal issue is not very difficult for this court to resolve, however, as the case law is explicit: under Wisconsin's law of unjust enrichment it is not inequitable for one to benefit from the willful disclosure of information or an idea when such an idea or invention is not protected by some sort of intellectual property right. Abbott Laboratories v. Norse Chemical Corp., 33 Wis.2d 445, 468, 147 N.W.2d 529 (1967) ("In view of the fact that no trade secrets were appropriated by the defendants, there was no unjust enrichment and plaintiff is not entitled to restitution."). In interpreting Abbott Laboratories, the Seventh Circuit was even more clear, stating that "Wisconsin law denies recovery for unjust enrichment if all the defendant has done is use (to his profit) an idea that is not a trade secret." ConFold Pac., Inc. v. Polaris Indus., 433 F.3d 952, 957 (7th Cir.2006). Here, as the court stated in its earlier order, the "benefits" that AOS received—the crux of FS's entire remaining claim—is simply information consisting of, at best for FS: (1) a list of features of a proposed motor; (2) general tips or know-how provided by FS; (3) testing data on a publically available motor; and (4) a copy of an unpatented motor.
The court's holding is consistent with the policies underlying trade secret law, which is intended to "encourage innovation and development" without "stifl[ing] legitimate competition by prohibiting competitors from using their own independent discoveries, public information, and reverse engineering." American Can Co. v. Mansukhani, 742 F.2d 314, 329 (7th Cir. 1984) (applying Wisconsin law); see also Gary Van Zeeland Talent v. Sandas, 84 Wis.2d 202, 217, 267 N.W.2d 242 (1978) (stating that Wisconsin law gives special protection to trade secrets compared to confidential, non-trade secret information "for the same reason that patents and copyrights are afforded special protection, because it is the public policy assumption that, by giving special protection to inventors, authors and composers, an incentive will be afforded to creativity and that the benefits will inure to the general public."). To ensure that trade secret law does not reach so far as to stifle competition, "one who claims a trade secret must exercise eternal vigilance in protecting its confidentiality." RTE Corp. v. Coatings, Inc., 84 Wis.2d 105,
There is another reason, related but separate from the above analysis, as to why the third prong of an unjust enrichment claim cannot be met in this case: AOS's retention of the information in question is not viewed as inequitable under Wisconsin's law of unjust enrichment because FS "shared" that information when the parties were merely contemplating working together. In FS's complaint, with respect to the unjust enrichment claim, the plaintiff states that it provided AOS with information that is the basis for the "benefit" that the plaintiff alleges the defendant received. (Compl. ¶¶ 16, 31). However, as the plaintiff has readily acknowledged, and as the court has already ruled, there was no contractual relationship between the parties, such that AOS was committed to compensating FS for any information that AOS received from the plaintiff. (Docket #195 at 56). As this court noted in the summary judgment order, and as the complaint indicates, before even formally meeting in person with AOS, FS willingly disclosed information to AOS without any request for that information by the defendant when the parties were exchanging letters with regard to whether they wanted to have a business relationship. Id. at 54-55. The issue is whether the AOS's retention of information provided to the defendant outside of any sort of formal business relationship is inequitable. The law is clear: when one party, without any request, willfully provides its property to another, it is not unjust for the latter party to retain that property. See Ludyjan v. Cont'l Cas. Co., 2008 WI App 41, ¶ 11, 308 Wis.2d 398, 747 N.W.2d 745 (Ct.App.2008) ("We suppose one could say that the [defendants] `retained' the [property "dumped" on them by the plaintiffs], at least for a while, but they certainly did not do so under circumstances that made it unjust for them not to pay, as the third element of unjust enrichment requires"); see also Ind. Lumbermens Mut. Ins. Co. v. Reinsurance Results, Inc., 513 F.3d 652, 656 (7th Cir.2008) (Indiana law) ("One who voluntarily confers a benefit on another, which is to say in the absence of a contractual obligation to do so, ordinarily has no legal claim to be compensated"); Restatement (First) of Restitution § 2 cmt. a (1937) ("[A] person should not be required to become an obligor unless he so desires... [w]here a person has officiously conferred a benefit upon another, the other is enriched but is not considered to be unjust enriched."). Here, FS opted to confer technical information to AOS without any request from the defendant and outside of any sort of formalization of the business relationship. FS could have contracted with AOS for payment in turn for the information it provided, but did not. As
FS makes two arguments in response to AOS's motion, neither of which is remotely persuasive. First, FS argues that "unjust enrichment requires only that a benefit be conferred on the defendant." (Pl's Resp. Br. at 2). Even at first glance, the plaintiff's argument lacks credibility, as FS contradicts its own first argument a mere four lines from its argument heading in the response brief by citing the three elements of an unjust enrichment claim, which include beyond a benefit being "conferred" on the defendant by the plaintiff, an "appreciation or knowledge by the defendant of the benefit" and an "acceptance or retention by the defendant of the benefit under circumstances making it inequitable for the defendant to retain that benefit." Id. The plaintiff's initial argument then changes, in that FS argues that "it is not necessary to prove fault or wrongdoing by the defendant to establish unjust enrichment." Id. The court agrees in part with FS's variation on its initial argument: fault indeed does not need to exist in order for a plaintiff to assert an unjust enrichment claim. However, a defendant being at fault is not the equivalent as an enrichment being "wrongful." See BLACK'S LAW DICTIONARY (6th Ed.1990) (defining wrongful as "injurious, heedless, unjust, reckless, unfair; it implies the infringement of some right, and may result from disobedience to lawful authority"); see also WEBSTER'S INTERNATIONAL UNABRIDGED DICTIONARY (3d Ed. 1971) (defining wrongful to include "injurious, unjust, unfair ... not rightful... having no legal sanction ... unlawful.") The word "wrongful" as used in the context of Abbott Laboratories,
Given the lack of support within the case law for its first argument, FS does what desperate parties do: attempt to distinguish away every case cited by the opponent. FS argues that Abbott Laboratories is inapplicable because that was a case where "no benefit was conferred," instead of a case where there was "no inequity" in allowing the defendant to retain the benefit. (Pl.'s Resp. Br. at 5). This is nonsense. In Abbott Laboratories, the plaintiff brought suit against its former employees and their new employer alleging, in relevant part, that its former employees received the benefit of learning about "cyclamate technology" and the plaintiff's "marketing program," including the plaintiff's "customer list." Abbott Laboratories, 33 Wis.2d at 452-53, 147 N.W.2d 529. The Wisconsin Supreme Court, without mentioning the benefit prong of an unjust enrichment claim, held that the plaintiff did not have a viable unjust enrichment claim, as no "wrongful taking or appropriation" occurred when the defendants obtained information that was not protected by Wisconsin's trade secret laws.
FS argues that Major Mat is inapposite because that is a "case where no benefit was conferred." (Pl.'s Resp. Br. at 6). The Major Mat case, which this court is well acquainted with (see Case No. 87-CV-0595), had perhaps the weakest of all unjust enrichment claims, in that the plaintiff argued that it "conferred a benefit on Monsanto" by informing the defendant about an existing market for golf tee mats. 969 F.2d at 585. The Seventh Circuit found that "exploiting an already existing market" was as unobjectionable under Wisconsin's unjust enrichment law as was the defendant's use of "customer lists and marketing knowledge" in Abbott Laboratories. Id. The Major Mat court did not state that the plaintiff lacked any evidence to support its claim on the benefit prong of an unjust enrichment claim; rather, the Seventh Circuit found that an unjust enrichment claim's requirement of a "wrongful taking or appropriation" was not met in that case. Id.
FS does not attempt to discuss any of the other cases cited by AOS, including, most notably, Studio & Partners, 2008 WL 426496, at *14-15, 2008 U.S. Dist. LEXIS 11321, at *45. The Studio & Partners case, which is controlling, is remarkably similar to the facts in this case, as well.
FS's second argument is equally unavailing. The plaintiff argues that the "parties' summary judgment briefing and the Court's order denying [AOS's] Motion for Summary Judgment as to [FS's] unjust enrichment claim highlight numerous disputed issues of material fact concerning the appropriation of [FS's] proprietary knowledge and contribution to" AOS's product. (Pl.'s Resp. Br. at 7). However, as discussed above, there is no dispute with respect to the third prong of the unjust enrichment claim, as Wisconsin's law of unjust enrichment dictates that equity allows AOS to retain the benefit of the information FS provided. FS argues that it "could persuade the jury that it would be unjust for [AOS] to retain the benefit conferred by [FS]" (Pl.'s Resp. Br. at 6), but Wisconsin courts, weighing the equities of this situation, have already determined as a matter of law that a claim of unjust enrichment cannot survive under circumstances such as these, and it is not for the jury to decide. FS asserts that it was "wrongful" for AOS to accept the benefit the plaintiff conferred, as FS "believed it was operating in a `working' relationship to develop concepts for suction entrapment with" the defendant. Id. at 7. The plaintiff cites to Watts, 137 Wis.2d at 530, 405 N.W.2d 303, for the contention that the "expectations of the parties are relevant to [FS's] unjust enrichment, particularly whether `under the circumstances' it would be inequitable to allow [AOS] to retain the benefit without paying value." Id. at 7 n. 4. The portion of the Watts case that FS cites to in no way makes the bold claim that as long as a plaintiff expects to be compensated it can be. 137 Wis.2d at 530, 405 N.W.2d 303. Rather, an unjust enrichment claim is based on moral principles that restitution must occur when justice requires. Id. As stated above, Wisconsin courts have already weighed the equities at play in this case, and a party's unreasonable expectations, such as the expectation to be compensated for providing information given during an initial conversation with another party regarding a potential business operation, does not warrant restitution.
Accordingly,
The clerk is directed to enter judgment accordingly.