Opinion
H049586 H049869
11-03-2023
ELI ATTIA et al., Plaintiffs and Appellants, v. GOOGLE LLC, Defendant and Appellant.
NOT TO BE PUBLISHED
(Santa Clara County Super. Ct. No. 2014-1-CV-274103)
LIE, ACTING P.J.
Eli Attia and Eli Attia Architect PC (collectively and individually, Attia) unsuccessfully sued Google LLC for misappropriation of trade secrets and breaches of various contractual obligations. After entry of judgment, Google unsuccessfully moved under Civil Code section 3426.4 for the attorneys' fees it incurred in defending the misappropriation of trade secrets claim.
Attia also sued other defendants. This appeal implicates only Attia's claims against Google.
Undesignated statutory references are to the Civil Code.
Appealing from the judgment, Attia challenges only the trial court's order sustaining Google's demurrer to his claim for breach of the implied covenant of good faith and fair dealing. The court had sustained the demurrer on the ground that the implied covenant claim was duplicative of a breach of contract claim that survived the demurrer. Because Attia has not identified a viable non-duplicative theory of breach of the implied covenant, we affirm the judgment.
Appealing from the denial of its fee motion, Google contends that the trial court erred in finding that Attia subjectively believed in the merit of his misappropriation claim. Finding no error, we affirm the denial of fees.
I. BACKGROUND
Attia, an architect, presented to Google his ideas for making building design more efficient and effective. For a time, Attia worked with Google to develop a software system implementing his ideas. During that time, Attia assigned his ideas to Google so that Google could, and did, secure patents. Attia professed a belief that those assignments would only be effective insofar as he was later paid reasonable compensation for a license to use his ideas. The relationship between Attia and Google broke down by the end of 2011. Google did not pay Attia for a license for its subsequent use of his ideas. Accordingly, Attia believed that Google had both misappropriated his trade secrets and breached certain contractual obligations.
Attia sued Google in December 2014, alleging causes of action including misappropriation of trade secrets, breach of contract, and breach of the implied covenant of good faith and fair dealing, among others.
During 2015, the parties litigated Google's demurrer to the complaint alongside its efforts to secure a reasonably particular statement of the trade secrets in issue pursuant to Code of Civil Procedure section 2019.210. At the time, as summarized in the trial court's tentative ruling, Attia took the position that seven discrete trade secrets were in issue and "Google ha[d] filed several patent applications containing numerous claims reciting the same trade secrets as patentable inventions, and containing elements identical or virtually identical to the elements of the seven trade secrets identified in [their] disclosures."
Code of Civil Procedure section 2019.210 provides: "In any action alleging the misappropriation of a trade secret under the Uniform Trade Secrets Act . . ., before commencing discovery relating to the trade secret, the party alleging the misappropriation shall identify the trade secret with reasonable particularity subject to any orders that may be appropriate under Section 3426.5 of the Civil Code."
In July 2015, the court ordered Attia to provide a supplemental Code of Civil Procedure section 2019.210 statement. Attia provided the statement, designated "HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY," the following month.
Attia filed his first amended complaint in November 2015, alleging causes of action against Google for misappropriation of trade secrets, breaches of multiple contracts, breach of the implied covenant of good faith and fair dealing, and declaratory relief. On Google's ensuing demurrer, the trial court ruled that Attia adequately alleged a claim for breach of contract but that the implied covenant claim was superfluous in that it duplicated the express contract claim. On that ground, the court sustained the demurrer to the implied covenant claim with leave to amend.
In February 2016, Attia filed a second amended complaint, alleging only claims for misappropriation of trade secrets, breach of contract, and declaratory relief.
In May 2017, Google propounded special interrogatories on Attia seeking, among other things, a clearer definition of the allegedly misappropriated trade secrets. Following a discovery conference that summer, Google secured a stipulated order compelling Attia to provide a numbered list of trade secrets with as much detail as possible on, and an explanation for how Google obtained or received, each trade secret.
Google maintains on appeal that by October 2017, it was poised to file a motion for summary judgment "based on the fact that Attia had assigned his alleged trade secrets to Google." At that time, the trial court allowed Attia to amend the complaint to add federal Racketeer Influenced Corrupt Organizations Act (RICO) claims. Although Attia offered to defer prosecution of the RICO claims until the preexisting claims were resolved, Google responded by removing the case to federal court.
In federal court, Google secured a further order requiring Attia to either add detail explaining "the metes and bounds of the trade secrets" and "the particulars of how its parts would be created and made to work" or to admit that he could not do so and stand on his responses. (Attia v. Google LLC (N.D. Cal. May 18, 2018) 2018 U.S. Dist. LEXIS 84196 at pp. *4-*5.)
In August 2018, Attia stipulated to the dismissal of his federal claims. Following the stipulated dismissal, the remaining claims were remanded to state court. (See Attia v. Google LLC (N.D. Cal. Mar. 19, 2019) 2019 WL 1259162 at p. *6; Attia v. Google LLC (9th Cir. 2020) 983 F.3d 420, 424-427.)
In December 2019, the trial court granted Google's motion for summary adjudication of Attia's trade secret claim, finding that Attia transferred title to the trade secrets to Google before the alleged misappropriation occurred.
In September 2020, the trial court granted Google's motion for summary judgment, which addressed Attia's sole remaining claim for breach of contract. The trial court ruled that even if Google entered a binding contract to make reasonable efforts to negotiate a license for some or all of Attia's relevant intellectual property and breached that obligation, the claims could not proceed because Attia had no evidence of reliance damages flowing from the alleged failure to negotiate and because Attia had agreed to an enforceable limitation of liability provision. In September 2021, the trial court entered judgment in favor of Google and against Attia. Attia timely appealed.
Shortly before the entry of judgment, Google dismissed its own contractual cross-claims without prejudice.
Google moved to recover about $500,000 of attorneys' fees it spent defending the trade secret claims pursuant to section 3426.4. The trial court denied the motion in January 2022. Google timely appealed from the post-judgment order.
We consider both appeals together.
II. DISCUSSION
A. Attia's Appeal-Implied Covenant Claim
Attia concedes that a trial court may properly dismiss as superfluous an implied covenant claim that duplicates a claim for a breach of an express contractual provision. He contends, however, that his implied covenant claim pressed a unique theory of breach based on Google's formation of a third-party company to which it subsequently transferred Attia's intellectual property. In our independent judgment, the formation of the company was not of itself a breach of the implied covenant but a step in the broader course of conduct by which Google allegedly breached its express contractual obligation to negotiate a license with Attia in good faith. Accordingly, we find no error in the trial court's determination that the implied covenant claim was superfluous.
1. Standard of Review
"In reviewing an order sustaining a demurrer, we examine the operative complaint de novo to determine whether it alleges facts sufficient to state a cause of action under any legal theory." (T.H. v. Novartis Pharmaceuticals Corp. (2017) 4 Cal.5th 145, 162.) In the exercise of our independent judgment, "we accept the truth of material facts properly pleaded in the operative complaint, but not contentions, deductions, or conclusions of fact or law. We may also consider matters subject to judicial notice." (Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 924.)
2. The Implied Covenant of Good Faith and Fair Dealing
Under California law, every contract includes an implied covenant of good faith and fair dealing. (Carma Developers (Cal.), Inc. v. Marathon Development California, Inc. (1992) 2 Cal.4th 342, 371.) The covenant "exists merely to prevent one contracting party from unfairly frustrating the other party's right to receive the benefits of the agreement actually made." (Guz v. Bechtel Nat. Inc. (2000) 24 Cal.4th 317, 349, italics omitted (Guz).) "The implied covenant 'finds particular application in situations where one party is invested with a discretionary power affecting the rights of another. Such power must be exercised in good faith.' [Citation.] The implied covenant cannot, however, 'impose substantive duties or limits on the contracting parties beyond those incorporated in the specific terms of their agreement.'" (Hewlett-Packard Co. v. Oracle Corp. (2021) 65 Cal.App.5th 506, 554.) An implied covenant claim that "seeks simply to invoke" the express terms of the parties' contract "is superfluous." (Guz, supra, 24 Cal.4th at p. 352.) The parties agree that a trial court may properly dismiss a superfluous implied covenant cause of action. (See id. at pp. 352-353.)
3. The Contractual Claims in Attia's First Amended Complaint
In August 2010, Attia and Google entered a Non-Disclosure Agreement (NDA). Under the NDA, Google was permitted to use confidential information received from Attia only to facilitate technical discussions concerning the parties' product development efforts.
In January 2011, Attia and Google entered an Inbound Services Agreement (ISA), which included Statement of Work No. 1 (SOW). The parties entered these agreements to govern their pursuit of "Project Genie"-an effort to develop software based on Attia's confidential building design methods.
Under the ISA, Attia provided Google a non-commercial non-exclusive license to use his proprietary information until the end of June 2011. Under the SOW, if Project Genie's" 'proof of concept'" was successful and Attia's pre-existing proprietary information was used for its development, Google agreed to exercise" 'its sole discretion'" to" 'consider seeking an exclusive license and will make reasonable efforts to negotiate'" one.
In his first amended complaint, Attia asserted claims for breach of the NDA, ISA, and SOW, alleging that Google used Attia's proprietary information for purposes that were not permitted by the NDA. In addition, Attia alleged that the Project Genie proof of concept was successful and used Attia's intellectual property, but Google breached the ISA and SOW by failing to make reasonable efforts to negotiate a license for that intellectual property. Further, Attia alleged that Google violated the ISA and SOW by failing to negotiate terms and conditions for a second statement of work pursuant to which Attia would continue to consult in the development of Project Genie. Finally, Attia alleged that Google violated the ISA and SOW by using Attia's intellectual property for commercial purposes after the termination dates in those agreements.
Attia separately alleged that Google breached the covenant of good faith and fair dealing implied in the NDA, ISA, and SOW. Attia alleged that all the contracts were intended to protect his intellectual property rights and that Google frustrated the purpose of the contracts by obtaining Attia's confidential information in a scheme to "squeeze[] [him] out" of the business while continuing to use that information. Attia elaborated that Google falsely told him that it was terminating Project Genie and denied that it was using any of his trade secrets but in actuality formed a new company to carry out its scheme to use his trade secrets without his permission or knowledge.
4. The Demurrer Ruling
Finding that the ISA superseded the NDA, the trial court sustained Google's demurrer to the NDA-based contractual claims without leave to amend. However, the trial court overruled Google's demurrer to Attia's claim that Google "breached the ISA/SOW by failing to negotiate for a license of the Pre-existing Property and failing to negotiate in good faith new terms and conditions in a separate SOW under the ISA pursuant to which Attia would provide consulting services as to the development of Genie" to go forward under Attia's third cause of action. In addition, reasoning that Attia's implied covenant claim "essentially just alleges a bad faith breach of the same contracts," the trial court sustained Google's demurrer to that claim with leave to amend.
5. Analysis
Having conceded that the trial court may properly dismiss his implied covenant claim to the extent it was subsumed within his express contract claims, Attia contends that the first amended complaint included a unique theory that Google breached the implied covenant by forming a third-party company.
Preliminarily, the trial court construed the express terms of the contract to require Google to negotiate with Attia in good faith, a construction Attia does not dispute. This undisputed construction of the contract renders the implied covenant inessential-there is no need to imply an obligation to act in good faith where the contract's express terms require Google to act in good faith. Accordingly, Attia's implied covenant claim adds no new legal dimension to Attia's theories of liability.
We observe that the trial court in its subsequent adjudication of Attia's express contract claim continued to assume the contract obligated Google to make reasonable efforts to negotiate a license.
Rather, Attia relies on a fact-intensive theory to differentiate between his claims. Attia asserts that Google's very act of setting up a new company "had 'the effect of destroying or injuring the right of [Attia] to receive the fruits of the [SOW]', which had given Attia the right to negotiate compensation for Google's successful development of Genie, but not for the successful exploitation of Attia's work by a new company established by Google." Attia contends that this theory of breach is unique to the implied covenant cause of action, because the act of setting up a new company is mentioned only in the subset of Attia's allegations setting forth that cause of action.
We see no theory by which Google's formation of a new company, irrespective of Google's intent, "ha[d] the effect of destroying or injuring [Attia's] right . . . to receive the fruits of the contract." (Universal Sales Corp. v. California Press Mfg. Co. (1942) 20 Cal.2d 751, 771, italics added.) Attia has not demonstrated that this was a non-duplicative theory of breach unique to the implied covenant claim. As such, consistent with Attia's concession that a duplicative implied covenant claim may be dismissed, the trial court could properly dismiss the implied covenant claim as it was subsumed by the express breach claim.
The act of setting up a new company is not itself a breach of the implied covenant because it did not frustrate Attia's right to receive the benefits of the contract (see Guz, supra, 24 Cal.4th at p. 349)-that is, his right to protection of his intellectual property or to negotiate a reasonable fee for a license. Whatever Google's intention may have been in forming a new company, that act alone had no impact on Attia or his contractual rights. Any breach lay in what allegedly ensued-sharing the intellectual party with the third-party company without in good faith negotiating a license with Attia. That was the gravamen of the express contractual claim. The invocation of the implied covenant was superfluous because, as the trial court assumed, the alleged express contractual provision already required Google to negotiate a license with Attia in good faith. The creation of a new company was merely a step in furtherance of what Attia alleged was Google's broad scheme to breach the express terms of the contract.
For the first time in the appellate reply brief, Attia contends that his implied covenant claim is non-duplicative because it opened the door to "recovery of tort remedies and/or expansion of the damages remedy for breach of the implied covenant of good faith and fair dealing." This line of argument is forfeited. (Cornell v. Berkeley Tennis Club (2017) 18 Cal.App.5th 908, 944 [" 'A party may not for the first time on appeal change its theory of relief.' "]; Hernandez v. First Student, Inc.(2019) 37 Cal.App.5th 270, 277 [" '[w]e will not ordinarily consider issues raised for the first time in a reply brief' "].)
Moreover, even as belatedly presented, the only authority Attia offers in support of his new theory of tort damages is Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654 (Foley). In Foley, the Supreme Court explained that the implied covenant generally gives rise to contract damages, acknowledged an exception to that general rule in the insurance context, but refused to extend that exception to the employment context. (Id. at pp. 684, 693.) Foley is among several cases that "contains language that strongly suggests courts should limit tort recovery in contract breach situations to the insurance area, at least in the absence of violation of an independent duty arising from principles of tort law other than denial of the existence of, or liability under, the breached contract." (Freeman &Mills, Inc. v. Belcher Oil Co. (1995) 11 Cal.4th 85, 95.) Thus, in the years since Foley was decided, the California Supreme Court has "established a 'general rule precluding tort recovery for noninsurance contract breach,' except to the extent the claim is simply a fraud claim by another name." (Rand Resources, LLC v. City of Carson (2019) 6 Cal.5th 610, 622, fn. 2; see also Erlich v. Menezes (1999) 21 Cal.4th 543, 551 ["conduct amounting to a breach of contract becomes tortious only when it also violates a duty independent of the contract arising from principles of tort law"].) To the extent Attia may be implicitly asking us to carve out a new exception to this general rule, he has articulated no basis for us to do so. Thus, independent of the untimeliness, the perfunctory approach to raising the prospect of tort damages-without citation to applicable legal authority or reasoned argument-amounts to forfeiture of the issue. (See United Grand Corp. v. Malibu Hillbillies, LLC (2019) 36 Cal.App.5th 142, 153 [" 'In order to demonstrate error, an appellant must supply the reviewing court with some cogent argument supported by legal analysis and citation to the record.' "].)
B. Google's Appeal-Attorneys' Fees
"If a claim of misappropriation is made in bad faith, . . . the [trial] court may award reasonable attorney's fees and costs to the prevailing party." (§ 3426.4.) In assessing whether a claim was made in bad faith, "our courts have developed a two-prong standard: (1) objective speciousness of the claim, and (2) subjective bad faith in bringing or maintaining the action, i.e., for an improper purpose. [Citation.] Section 3426.4 authorizes the trial court to award attorney fees as a deterrent to specious trade secret claims. [Citation.] Because the award is a sanction, a trial court has broad discretion in awarding fees." (FLIR Systems, Inc. v. Parrish (2009) 174 Cal.App.4th 1270, 1275 (FLIR); see also Cypress Semiconductor Corp. v. Maxim Integrated Prods., Inc. (2015) 236 Cal.App.4th 243, 260 (Cypress); SASCO v. Rosendin Electric, Inc. (2012) 207 Cal.App.4th 837, 845.) Because the exercise of this broad discretion typically turns on the trial court's resolution of disputed facts, an appellant challenging an order on a fee motion "must overcome both the 'sufficiency of evidence' rule and the 'abuse of discretion rule.'" (FLIR, supra, 174 Cal.App.4th at p. 1275.) The sufficiency of the evidence to support a given finding is tested by assessing whether, on the entire record, there is substantial evidence to support it. (Cypress, supra, 236 Cal.App.4th at p. 260.)" '[W]hen two or more inferences can reasonably be deduced from the facts, a reviewing court is without power to substitute its deductions for those of the trial court.'" (Ibid.)
The trial court found that Attia did not act with subjective bad faith in bringing or maintaining a claim for misappropriation of trade secrets against Google. That threshold finding is supported by substantial evidence, and once the trial court made the finding, it had no occasion to exercise its statutory discretion to award Google attorneys' fees.
1. Adjudication of Attia's Misappropriation Claim and Google's Fee Motion
Google moved for summary adjudication of Attia's misappropriation claim on the ground that his putative trade secrets were neither his nor secret, Attia having assigned them to Google for publication in patent applications. Resisting summary adjudication, Attia argued that the assignments were "subject to a condition subsequent: '[P]ursuant to the SOW, Google expressly agreed that it would reasonably compensate Attia for its use of [his] trade secrets as a condition for its use of [the] trade secrets in the patent applications assigned to Google pursuant to the patent assignments.'" Attia declared that he executed the patent assignments" 'on the condition that Google honor its obligation in the SOW to reasonably compensate [him] for its use of [his] Engineered Architecture inventions in those patent applications.' "
Construing the assignments as a matter of law, the trial court found: (1) Attia thereby unambiguously transferred title to the inventions; (2) the assignments did not incorporate Google's obligations under the SOW; and (3) even assuming that the assignments and SOW should be read together as one contract, "any requirement of reasonable compensation in the SOW" did not conflict with the unqualified assignments. Moreover, the trial court found no dispute that Attia received independent consideration for the assignments, such that they were enforceable. Acknowledging that Attia in his declaration had espoused a different subjective understanding of the assignments, the trial court rejected Attia's unexpressed subjective understanding as both irrelevant to the misappropriation claim and unsupported by any other evidence. Because Attia had transferred title to the trade secrets before bringing suit, without contingency, the trial court granted summary adjudication of Attia's misappropriation claim.
Google moved for attorney's fees under section 3526.4. In opposition, Attia submitted a declaration stating that he executed the assignments with the understanding that they were conditioned on Google paying him reasonable compensation for its use of his trade secrets under the SOW. Attia stated that although he acknowledged receipt of valuable consideration in the assignments, he understood that to mean he acknowledged Google's agreement to pay him in the future. Google secured patents and licensed another party to use and disclose some of them but did not pay Attia any compensation under the SOW, so Attia believed he had a viable claim for misappropriation of trade secrets. Attia assured the court that he "did not commence or continue [his] trade-secret claim for the purpose of causing unnecessary delay. As an octogenarian, the sooner the claim was decided, the better."
Finding that "Mr. Attia did not act with subjective bad faith in prosecuting his trade secret claim," the trial court denied Google's fee motion. In so doing, the trial court expressly credited Attia's declaration and found that Attia "believed in the merits of his claim and was not motivated by an improper purpose in filing or prosecuting this action, and did not intend to cause unnecessary delay." The court further rejected the inference of bad faith Google urged it to draw from Attia's litigation tactics: "Having re-reviewed the materials associated with the parties' 2017 discovery disputes, the Court does not find evidence that Plaintiffs were attempting to hide their asserted trade secrets were encompassed by Google's patents (and it does not appear that Google specifically asked whether the trade secrets were completely encompassed by the patents). While the Court does not condone every aspect of Plaintiffs' and their counsel's approach to litigating this case, it does not find subjective bad faith was present here."
2. Subjective Bad Faith
Google contends that the trial court abused its discretion in finding that Attia "did not act with subjective bad faith in prosecuting his trade secret claim." In Google's view, Attia knew from the start that he had assigned all the relevant trade secrets to Google but refused to delineate the trade secrets at issue to delay Google's efforts to defeat the claim based on the assignments. Thus, Google contends that the trial court was required to discredit Attia's declaration in opposition to the fee motion, in which he set forth his belief that the assignments were ineffective. Google contends that the trial court acted arbitrarily in failing to do so, having previously disregarded Attia's professed understanding of the assignments. As explained below, we reject Google's contentions. The trial court's divergent treatment of Attia's subjective views was dictated by the divergent contexts in which those views were presented. Moreover, the trial court's finding is supported by substantial evidence-the record does not compel a contrary conclusion. It is the trial court's exclusive province, not ours, to weigh Attia's credibility.
First, we decline Google's invitation to announce a new rule that a party cannot defend against a section 3426.4 fee motion "by submitting self-serving declarations that contradict written agreements." Google's effort to analogize summary judgment cases is inapt, conflating as it does matters of law (the objective interpretation of contract) with matters of fact (the subjective belief of a party, whether reasonable or not). We accordingly reject Google's suggestion that there is an irreconcilable conflict between the trial court's treatment of Attia's declaration opposing summary adjudication and its treatment of Attia's declaration opposing the fee motion. In granting summary judgment, the trial court ruled in Google's favor as a matter of law, deeming Attia's subjective beliefs immaterial to the terms of unambiguous contracts. (See Archer v. Coinbase, Inc. (2020) 53 Cal.App.5th 266, 275; Kerkeles v. City of San Jose (2015) 243 Cal.App.4th 88, 99; see also Wolf v. Superior Court (2004) 114 Cal.App.4th 1343, 1351.) In evaluating whether Attia prosecuted his trade secret claim in subjective bad faith, the trial court was assessing Attia's subjective beliefs as a matter of fact. (See FLIR, supra, 174 Cal.App.4th at p. 1275 [distinguishing subjective bad faith from the objective speciousness of a claim].) Attia's subjective understanding of the contract's meaning is plainly relevant to the bad faith inquiry. There is nothing arbitrary in the trial court's determination that Attia's testimony was material to its factual analysis under section 3426.4 and not to its legal interpretation of a written contract.
In that regard, we note that the possibility that a trial court may in some cases credit a false declaration is not a compelling reason to effectively deny unsuccessful plaintiffs the right to present their own written testimony in defending against a fee motion. (See Cal. Rules of Court, rules 3.1103(a), 3.1306(a) [unless the court orders otherwise for good cause shown, a party's evidence at a law and motion hearing must be by declaration or judicial notice without the presentation of oral testimony].)
To the extent Google asks us to infer that Attia did not believe his own interpretation of the contract because Attia's interpretation of the contract was inconsistent with its plain language and unsupported by any extrinsic evidence Attia could muster at summary adjudication, Google would in effect have us collapse the two analytical steps-objective speciousness would be determinative of subjective bad faith regardless of the explanation offered by the unsuccessful plaintiff. (Cf. FLIR, supra, 174 Cal.App.4th at p. 1275.) We decline to do so.
Second, mindful of our deferential standard of review, we are not persuaded the procedural history in this case required the trial court to reject Attia's testimony and find that he prosecuted the action in bad faith. (See Cypress, supra, 236 Cal.App.4th at p. 260.)
We begin, as we must, with the premise that Attia subjectively believed the assignments were ineffective because Google never paid him reasonable compensation for his trade secrets under the SOW. That premise was credited by the trial court based on substantial evidence in the form of Attia's declaration in opposition to the fee motion, which the trial court expressly found credible. It was also consistent with Attia's declaration in opposition to summary judgment.
Asking us to reject the trial court's credibility determination, Google argues that several case-specific facts, read together, compel the conclusion that Attia knew his misappropriation claim was meritless but prolonged the litigation: (1) Attia did not identify the specific trade secrets Google allegedly misappropriated in his publicly filed complaints; (2) Attia did not fully identify those trade secrets in response to a 2015 court order granting in part Google's demand for pre-discovery identification of his trade secret claims under Code of Civil Procedure section 2019.210; (3) Attia did not identify those trade secrets until compelled to do so in response to special interrogatories in the summer of 2017, and at that time only conceded that some of them appeared to be covered by Google's patent applications; (4) instead of pursuing a motion for summary judgment Google had "teed up" in state court in 2017, Attia added unmeritorious RICO claims to the lawsuit, in response to which Google removed the case to federal court where it remained for two years under the federal claims were resolved and the action was remanded to state court; (5) in February 2018, Attia refused Google's request for clarification on the scope and extent of the trade secrets; (6) in May 2018, the federal district court criticized Attia's trade secret disclosure and found that Attia failed to comply with a discovery order; and (7) in August 2018, Attia admitted that the alleged trade secrets were all encompassed by Google's patent applications.
August 2018 is when the parties stipulated to dismissal of Attia's federal claims. Google contends that in stipulating to dismissal Attia conceded by implication that all of his trade secret claims were encompassed in patent applications that Google filed with his consent, such that all of the trade secrets had been assigned to Google.
The trial court, of course, reviewed the same discovery record and was not persuaded that Attia was attempting to hide that his asserted trade secrets were encompassed by Google's patents. In part, the trial court found significant Attia's declaration that his advanced age made delay undesirable and Attia's willingness to stipulate to defer litigation on the RICO claim added in 2017 to avoid unnecessary delay in resolving the trade secret claim.
The trial court's assessment of these facts is consistent with the record and is further supported by the limited span of time between May 2017, when Google prepared special interrogatories asking Attia to describe the trade secrets, and October 2017, by which time Google has represented that it had a summary judgment motion "teed up." On the record before it, the trial court could reasonably infer that Attia merely found it challenging to articulate the "metes and bounds" of the alleged trade secrets, even though he desired prompt vindication for what he believed was Google's misappropriation. (See Attia v. Google LLC, supra, 2018 U.S. Dist. LEXIS 84196, at pp. *4-*5 ["What [the court] understands here is that Attia may have had a good idea, but his description of the means for executing the idea is so fraught with vagueness and uncertainty and lack of precision (and, maybe, wishful thinking) that it does not yet look like a workable idea.... This court's job is to require Attia to use his best efforts to fully describe what he claims are viable trade secrets....The court is not looking for a more wordy narrative. There are already words aplenty. Rather, the court is interested in a fuller explanation of the metes and bounds of the trade secrets and a better fleshing out of the particulars of how its parts would be created and made to work. [¶] . . . [The] court feels detail is lacking. If Attia does not have more detail to offer, then he should say so, and stand on his description"].) Although one could reasonably infer from the facts favorable to Google that Attia acted in subjective bad faith, the trial court was not required to adopt that inference. (See Cypress, supra, 236 Cal.App.4th at p. 260.) The trial court's finding that Attia did not act with subjective bad faith is supported by substantial evidence. Nothing more is required, notwithstanding Google's unsupported insistence that the trial court was in some manner obliged to "offer[] [an] explanation for relying on" the evidence it chose to credit.
Ultimately, Google asks us to craft a new rule devaluing Attia's declaration, arguing that if "self-serving declaration[s] like Attia's [can] be credited in these circumstances, sham declarations [will] immunize parties from an award of attorneys' fees for bad faith litigation." We reject this contention: we know trial judges to disbelieve self-serving declarations with great frequency, and we fail to see how "immunity" is conferred by our correctly deferential review (see, e.g., FLIR, supra, 174 Cal.App.4th at pp. 1275-1276)-a standard which exerts no precedential pressure on a trial court persuaded that a declarant has misrepresented their subjective intent in a "sham" declaration. Particularly where the trial court's finding amounts to a determination that Google failed to meet its burden as the moving party, we have no reason to fear that our affirmance on substantial evidence review will operate to divest trial judges of their discernment and render them indiscriminately credulous.
We defer to settled law and the trial court's exercise of its responsibilities as the finder of fact. (See FLIR, supra, 174 Cal.App.4th at pp. 1275-1276.)
III. DISPOSITION
The judgment and the order denying Google's motion for attorneys' fees are affirmed. In the interests of justice, the parties shall bear their own costs on both appeals. (See Cal. Rules of Court, rule 8.278(a)(5).)
WE CONCUR WILSON, J., BROMBERG, J.