USA – MINNESOTA Trends and Developments Contributed by: Barry Landy, Jacob Siegel and Patrick “Gus” Cochran, Ciresi Conlin LLP
secrets”. Id. The district court affirmed the magistrate judge’s order under a clear error review. Id. The Plus One decision underscores that Minnesota courts expect early trade secret disclosures to be both stable and precise, and they will hold plaintiffs to the positions they take with the court. For in-house counsel, the case is a reminder that over-inclusive or shifting trade secret definitions can lead not just to discovery disputes, but to outright preclusion of core claims. The Extent to Which the MUTSA Pre-Empts Common Law Causes of Action Remains Unclear As is standard, the MUTSA contains a pre-emption clause displacing “conflicting tort, restitutionary, and other law of this state providing civil remedies for mis - appropriation of a trade secret”, with the expected carve-outs for contract claims and civil remedies “not based upon misappropriation of a trade secret”. Minn. Stat. § 325C.07. For decades, courts have followed a baseline rule that to avoid MUTSA displacement, separate causes of action must have “more to their factual allegations than the mere misuse or misap - propriation of trade secrets”. Micro Display Sys., Inc. v Axtel, Inc. , 699 F.Supp. 202, 205 (D. Minn. 1988). Like in many other jurisdictions, however, courts have grappled with the application of MUTSA displacement to commonly asserted non-contract claims sounding in misappropriation – ie, claims like tortious inter - ference, conversion, unfair competition, or unjust enrichment that also centre on the misuse or wrongful possession of confidential information for which the plaintiff may also be seeking trade secret relief. Under the “majority” approach to this dilemma, courts else - where typically hold that non-contract claims stem - ming from the same acts as the alleged trade secret misappropriation are pre-empted – notwithstanding any disputes over whether the information is defini - tionally a trade secret. Firetrace USA, LLC v Jesclard , 800 F.Supp.2d 1042, 1047-49 (D. Ariz. 2010). Although there remains an absence of binding authori - ty from state and federal appellate courts, most judges interpreting the MUTSA have employed a more leni - ent standard that departs from the majority approach. Specifically, courts have determined that either: (i)
companion claims are not pre-empted so long as they implicate material that the plaintiff has not also claimed as a trade secret; or (ii) following liberal plead - ing rules, plaintiffs may pursue non-contract claims in the alternative to their trade secret claims – even when they are predicated on the same information – until the court has decided whether the plaintiff’s informa - tion qualifies for trade secret protection. See, eg, R. L. Mlazgar Assocs., Inc. v Focal Point, L.L.C. , 2024 WL 4544097, at *6 (D. Minn. June 14, 2024); Polaris Indus., Inc. v Mangum , 690 F. Supp. 3d 966, 972-75 (D. Minn. 2023). Given these trends in displacement, MUTSA plaintiffs may confidently assert common law claims grounded on the misuses of proprietary information, including as a fallback to the possibility of the court finding the information does not qualify for trade secret protec - tion. Still, plaintiffs should be mindful to plead their claims in the alternative, consider any non-trade secret material at issue that will bolster their com - panion claims, and plead any factual allegations going beyond the mere acts of misappropriation. Meanwhile, MUTSA defendants should be prepared to defend companion tort claims beyond the pleading stage. In light of the majority approach on displace - ment and the absence of binding authority on this issue, MUTSA defendants can still argue for a more robust displacement at the motion-to-dismiss stage, with the goal of narrowing plaintiff’s potential avenues of recovery where trade secret protection cannot be established. Minnesota Applies a Multifactorial Approach to Assessing Reasonable Methods to Maintain Secrecy The MUTSA follows the model act closely, though one notable difference lies in the definition of a “trade secret”. See Minn. Stat. § 325C.01, subd. 5. The MUTSA contains the same baseline definitional requirements as the model act: a trade secret is (i) not generally known or readily ascertainable; (ii) has value as a result of its secrecy; and (iii) is the subject of rea - sonable efforts under the circumstances to maintain secrecy. Id. However, the MUTSA adds the following clarification to the statutory definition:
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