Michael P. McCloskey

Christopher Yvars (Partner, Denver, CO) Kimberly Viergever (Of Counsel-Denver, CO), and Michael McCloskey (Senior Counsel-San Diego, CA)  secured a complete defense victory for a national health care client in a commercial arbitration where the claimant sought more than $50 million in damages. The dispute centered on long-term services and nondisclosure agreements involving an alleged proprietary software platform, which claimant developed to streamline and enhance health care outcomes management for large-scale providers. The claimant alleged breach of contract and theft of trade secrets, asserting that the firm’s client had improperly used and disclosed confidential processes, data integration methods, and reporting functionalities unique to the claimant’s product. After a multi-day evidentiary hearing featuring testimony from technical experts and company executives, as well as extensive written submissions, the AAA Arbitration, Denver, Colorado, issued a final award denying all claims and dismissing the case in its entirety.

​After securing a defense verdict in 2024 in a 16-day bench trial in San Mateo Superior Court's Complex Division, Marty Ready (Partner-San Diego, CA) and Michael McCloskey (Senior Counsel-San Diego, CA) convinced the presiding Judge to limit a statutory attorney fee award to $35,800 of the over $2 million requested by the California Attorney General (AG). The underlying case was an enforcement action by the California AG's office against our clients a nonprofit and one of its five directors alleging various breaches of fiduciary duties primarily arising from an alleged series of self-dealing transactions and diversion of charitable assets. The case was initiated as an investigative audit of the nonprofit, which ultimately led to the litigation. The case was contentious and heavily litigated by the parties for five years. At the conclusion of trial, the court only assessed $14,000 in fines and penalties against the nonprofit and two of its directors related to minor deficiencies in the its tax returns. Although this was an exceptional result, the real risk to our clients was a statutory attorney fee award that was mandatory in an enforcement action brought by the California AG's Charitable Trust Section. As expected, the California AG moved for an award of more than $2 million in attorney's fees and expert costs spanning the investigation and litigation. After extensive briefing and two days of oral arguments on the California AG's fee motion, the court awarded the AG $35,800 based on its lack of success at trial and representative of the amount of time related to obtaining a nominal amount at trial for errors on a nonprofit's tax returns. The California AG has appealed the judgment and is expected to appeal the fee award.​

Sean Monks (Partner-San Diego, CA), Michael McCloskey (Senior Counsel-San Diego, CA), and Anne Potiker (Associate-San Diego, CA) prevailed in a recent Order on a Motion for Summary Judgment in a sticky and highly personal trade secret case in the 3D printing industry – a publicly traded $3 billion cap company against five individuals and their small startup. Also participating in the defense were outside co-counsel. Initially, there were seven causes of action. Four were jettisoned by virtue of 12(b)(6) litigation. What remained was a breach of contract claim and claims under DTSA and CUTSA. The plaintiff sought about $30 million in damages and attorneys’ fees. 

In discerning their remaining claims, our team focused hard on pushing for proper identification of the trade secret and pigeon-holed the plaintiff into a definition of their 12 trade secrets supposedly misappropriated, which they refused to amend. Almost three years ago we got the magistrate judge to hold them to these disclosures and ROG responses, and he indicated their refusal to provide further detail would preclude them from amending and could be used against them in summary judgment. Fast forward to the present, and we have an Order finding it was more than past time for the plaintiff to “put up or shut up” at summary judgment. Having been stuck with their meagre disclosures, the judge latched onto the deficiencies and summarily dismissed all trade secret claims. 

The breach of contract claim required a bit of creative analysis. Our clients were supposedly precluded from using their skills in future work that could overlap in the 3D printing industry. We assessed the provision at issue and determined it violated section 16600 of the CCP. In California, “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” Cal. Bus. & Prof. Code § 16600(a). In fact, we filed an amended counterclaim alleging this issue, among other violations by the plaintiff related to our clients’ trade secrets. The U.S. District Court for the Southern District of California specifically found, “The defense has the better argument.” Heading into summary judgment, the plaintiffs were expecting to recoup up to $40 million in a windfall through damages and fees, or at the very least, grind their competition into the dust. Instead, their entire case is gone and they are facing the pointy end of the spear of our own counterclaims and potential motion for fees related to bad faith. 
 

Sean Monks (Of Counsel-San Diego), Drew Bruff (Associate-San Diego) and Michael McCloskey (Partner-San Diego) have represented three brothers (brothers) for several years in a contentious dispute against their sister. The brothers originally were represented by counsel who filed an arbitration against the sister arising out of a dispute involving commercial real estate. The sister filed a counter demand arising out of her perceived interest in a series of biotech entities spearheaded by one brother. In the first phase of that arbitration, the brothers’ claims against their sister were ruled time-barred by way of statute of limitations, and they dismissed their original counsel and hired Sean and Drew to defend them against the sister’s counter demand. The sister’s counsel engaged in substantial overreach by way of 14 causes of action alleging a variety of contract and tort claims, including defamation and RICO, seeking more than $45 million and attorneys’ fees for the sister’s claimed equity in one of the brother’s businesses and other damages. Those claims were the subject of the next arbitration phase resulting in five weeks of testimony with 23 witnesses. Sean, Drew and Mike were fortunate to have exceptional paralegal support provided daily by San Diego paralegal Kirstie Castillo, and the product of their collective effort was a complete defense victory: the 14 claims resulted in a complete defense verdict and zero dollars in recovery. The victory was the result of years of preparation handicapped by the poor presentation and worse outcome due to the performance of the brothers’ first counsel.