21st Century Systems, Inc., et. al. v. Perot Systems Government Services, Inc.

In 2009, Perot Government Services, Inc (“Perot”) brought suit against 21st Century Systems, Inc. et al. (“Century”). Perot’s claim included several causes of action (including trade secret misappropriation) stemming from the alleged theft of Perot’s confidential information by ex-employees, who went to work for Century. Prior to trial, Dell purchased Perot; Perot’s statement of damages thus included the effect that the alleged theft had on Perot’s valuation (i.e. “lost goodwill damages”).

Although the jury returned a verdict in favor of Perot, the Circuit Court of Fairfax County overturned a large percentage of the damages award – specifically approximately $11 million in damages related to Perot’s diminution in value. The trial court had allowed Perot’s expert to testify to the effect of Century’s actions on Perot’s valuation, over Century’s objection. However, the Virginian appeals court held that the trial court should not have denied Century’s motion to strike the “speculative” testimony, and further ruled that Perot had failed to actually demonstrate that Century’s conduct in any way decreased Perot’s valuation. However, the Court upheld the jury’s verdict in regards to punitive and treble damages, as well as the extensive computer forensics work Perot incurred as a result of Century’s theft.

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