11th Circ. Gives New Life To DynCorp Trade Secrets Case

11th Circ. Gives New Life To DynCorp Trade Secrets Case

Law360, Washington (November 22, 2016, 4:15 PM EST) — The Eleventh Circuit revived allegations Monday that a unit of security contractor AAR Corp. stole information from rival DynCorp to gain an edge in its bid for a multibillion-dollar State Department contract, finding a lower court erred in deciding DynCorp failed to identify a claim.
An Eleventh Circuit panel, in an unpublished opinion, overturned a Florida federal district court’s ruling that DynCorp International LLC’s suit did not contain specific allegations that AAR Airlift Group Inc. misused insider information in an effort to snatch a counter-narcotics contract long held by DynCorp. DynCorp had claimed that AAR obtained a profit margin analysis along with other proprietary information after an effort to hire away employees from the former company, in order to gain an advantage in a State Department Worldwide Aviation Support Services contract solicitation.

“The amended complaint did not just identify broad categories of information, such as financial and technical data, but specifically identified financial and technical data related to DynCorp’s pre-existing WASS contract, including personnel lists,” the panel said in its ruling.

The Eleventh Circuit agreed with the lower court’s January decision that DynCorp did not allege AAR solicited a profit margin analysis report sent to it from a DynCorp contractor.

However, the district court wrongly ignored a whistleblower’s allegations that former DynCorp employees James Christian Thomas and Angela Pilkington furnished confidential information from their former employer after they joined AAR in 2012. Claims filed by DynCorp against AAR in September 2015 describe the stolen trade secrets as comprising technical data, lists of personnel, salaries and pay differentials related to a WASS contract AAR allegedly hoped to wrest away from DynCorp, according to the opinion.

DynCorp has contracted with the State Department’s Bureau of International Narcotics and Law Enforcement Affairs since 1992 on WASS contracts involving counter-narcotics and illegal-drug eradication operations, according to court documents.

The company claimed rival AAR hired three of its former employees in 2012 in the hopes of obtaining confidential information about DynCorp’s WASS contracts, in anticipation of a 2014 solicitation under the program.

An AAR whistleblower claims two of those employees, Thomas and Pilkington, cooperated with the company’s request for confidential information on their former employer, supplying trade secrets protected by confidentiality agreements within days of joining AAR.

Raoul Cantero, who represented DynCorp for White & Case LLP, praised the decision, telling Law360 the reversal of a district court decision without oral argument is very unusual.

“The favorable verdict gives [DynCorp] the opportunity to protect its trade secrets and other confidential information, which it has developed to successfully meet the government’s bid requirements and specifications,” Cantero said.

DynCorp had also claimed a contractor it employed sent a confidential profit margin analysis report on its WASS contract to a colleague at AAR. However, members of the company’s management team instructed employees not to look at the documents and brought them to the attention of the State Department’s contracting officer, according to the opinion.

The Eleventh Circuit upheld the district court’s ruling that DynCorp failed to argue that AAR had misappropriated the profit margin analysis.

Representatives for AAR did not immediately respond to requests for comment.

DynCorp is represented by Raoul G. Cantero and David P. Draigh of White & Case LLP, Keith J. Hesse and Nicole R. Turcotte of Shuffield Lowman & Wilson PA, and A. Scott Bolden, Lawrence P. Block, Tracy Zurzolo Quinn and Matthew P. Frederick of Reed Smith LLP.

AAR is represented by Thomas A. Zehnder, Frederick S. Wermuth and Taylor F. Ford of King Blackwell Zehnder & Wermuth PA, and Robert J. Conlan, Joel Singer and Eric G. Hoffman of Sidley Austin LLP.

The case is DynCorp International v. AAR Airlift Group Inc., case number 6:15-cv-01454-GAP-GJK, in the U.S. Court of Appeals for the Eleventh Circuit.

–Editing by Aaron Pelc.

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