CACI 4411 Punitive Damages for Willful and Malicious Misappropriation
California Civil Jury Instructions CACI
4411 Punitive Damages for Willful and Malicious Misappropriation
If you decide that [name of defendant]’s misappropriation caused [name of plaintiff] harm, you must decide whether that conduct justifies an award of punitive damages. The purposes of punitive damages are to punish a wrongdoer for the conduct that harmed [name of plaintiff] and to discourage similar conduct in the future.
In order to recover punitive damages, [name of plaintiff] must prove [by clear and convincing evidence] that [name of defendant] acted willfully and maliciously. You must determine whether [name of defendant] acted willfully and maliciously, but you will not be asked to determine the amount of any punitive damages. I will calculate the amount later.
“Willfully” means that [name of defendant] acted with a purpose or willingness to commit the act or engage in the conduct in question, and the conduct was not reasonable under the circumstances at the time and was not undertaken in good faith.
“Maliciously” means that [name of defendant] acted with an intent to cause injury, or that [name of defendant]’s conduct was despicable and was done with a willful and knowing disregard for the rights of others. “Despicable conduct” is conduct so vile, base, or wretched that it would be looked down on and despised by ordinary decent people. [Name of defendant] acted with knowing disregard if [he/she/nonbinary pronoun/it] was aware of the probable consequences of [his/her/nonbinary pronoun/its] conduct and deliberately failed to avoid those consequences.
Directions for Use
Give this instruction if there is evidence that the defendant acted willfully and maliciously, so as to support an award of punitive damages. (See Civ. Code, § 3426.3(c).)
No reported California state court case has addressed whether the jury or the court should decide whether any misappropriation was “willful and malicious,” and if so, whether the finding must be made by clear and convincing evidence rather than a preponderance of the evidence. In Ajaxo Inc. v. E*Trade Group Inc. (2005) 135 Cal.App.4th 21, 66 [37 Cal.Rptr.3d 221], the court affirmed a jury’s finding by clear and convincing evidence that the defendant’s misappropriation was willful and malicious. If the court decides to require the “clear and convincing” standard, include the bracketed language in the first paragraph and also give CACI No. 201, Highly Probable—Clear and Convincing Proof.
Once the jury finds “willful and malicious” conduct, it appears that the court should decide the amount of punitive damages. (See Robert L. Cloud & Assocs. v. Mikesell (1999) 69 Cal.App.4th 1141, 1151, fn. 8 [82 Cal.Rptr.2d 143].). This would be consistent with the Uniform Trade Secrets Act, on which the California Uniform Trade Secrets Act is based. (See Uniform Trade Secrets Act § 3, 2005 com. [“This provision follows federal patent law in leaving discretionary trebling to the judge even though there may be a jury, compare 35 U.S.C. Section 284 (1976)”].)
Sources and Authority
•Exemplary Damages for Willful and Malicious Misappropriation. Civil Code section 3426.3(c).
•Attorney Fees and Costs. Civil Code section 3426.4.
•“The court instructed the jury that ‘willful’ means ‘a purpose or willingness to commit the act or engage in the conduct in question, and the conduct was not reasonable under the circumstances then present and was not undertaken in good faith.’ Further, the court instructed the jury that ‘malice’ means ‘conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard for the rights of others when the defendant is aware [of] the probable consequences of its conduct and willfully and deliberately fails to avoid those consequences. Despicable conduct is conduct which is so vile and wretched that it would be looked down upon and despised by ordinary decent people.’ In addition, the court instructed the jury that a finding of willful and malicious misappropriation must be supported by clear and convincing evidence. [¶] Our Supreme Court has recognized that malice may be proven either expressly by direct evidence probative of the existence of hatred or ill will, or by implication from indirect evidence from which the jury may draw inferences.” (Ajaxo Inc., supra, 135 Cal.App.4th at pp. 66–67, internal citations and footnote omitted.)
•“The limitation on punitive damages under the UTSA to twice the compensatory damages does not create an equivalency between an award of punitive damages under the UTSA and an award of treble damages under another statutory scheme. … While an award of treble damages is equally punitive in its effect, the computation of the penalty is strictly mechanical. In contrast, an award of punitive damages under the UTSA is subject to no fixed standard; the statute merely sets a cap on the amount of the award. The trial court retains wide discretion to set the amount anywhere between zero and two times the actual loss. (§ 3426.3, subd. (c).) Thus, evidence of the defendant’s financial condition remains essential for evaluating whether the amount of punitive damages actually awarded is appropriate.” (Robert L. Cloud & Assocs. supra, 69 Cal.App.4th at p. 1151, fn. 8.)
•“In order to justify [attorney] fees under Civil Code section 3426.4, the court must find that a ‘willful and malicious misappropriation’ occurred. That requirement is satisfied, in our view, by the jury’s determination, upon clear and convincing evidence, that defendants’ acts of misappropriation were done with malice. This finding was necessary to the award of punitive damages which was made by the jury.” (Vacco Industries, Inc. v. Van Den Berg (1992) 5 Cal.App.4th 34, 54 [6 Cal.Rptr.2d 602].)