The Court of Appeals of Virginia overturned a $2.03 billion trade-secrets case judgment, the largest jury verdict in Virginia history. In a landmark ruling that defines contours of the Virginia Uniform Trade Secrets Act ("VUTSA"), the Court held that a "series of errors" required reversal. The unanimous decision issued on July 30, 2024, awarded Pegasystems Inc. ("Pega"), a Massachusetts-based software company, a new trial on all VUTSA issues—both liability and damages. Monica T. Monday and Michael J. Finney led the appellate team from Gentry Locke that assisted in securing this result.
The case was brought by Appian Corporation, a competitor in the business process management software industry. After a seven-week trial in Fairfax County Circuit Court, the jury rendered the unprecedented verdict. The Court of Appeals held that this verdict could not stand. It found that the trial court improperly instructed the jury that Appian's only causation burden was to show Pega's total sales over an eight-year period. That flawed instruction, according to the Court, "relieved Appian of its proper burden to prove causation between the alleged misappropriation and any damages." And that error was compounded when the trial court prevented Pega from presenting evidence that many of its total sales were in areas in which the parties did not compete.
In addition to these prejudicial errors concerning causation and damages, the Court also found that Pega should have been permitted to demonstrate its software to the jury and to introduce the number of people with access to Appian's platform. These were critical facts to liability issues—namely Pega's defenses that it did not copy Appian's software and that Appian did not take reasonable measures to protect its alleged trade secrets. These multiple errors deprived Pega of a fair trial.
Monday and Finney served as embedded appellate counsel for Pega at trial, assisting the trial team from Choate Hall and Offit Kurman with evidentiary issues, preservation-of-error, jury instructions, critical legal issues, and post-trial motions. On appeal before the Court of Appeals of Virginia, Gentry Locke worked alongside an outstanding appellate team from Orrick, including Josh Rosenkranz, Eric Shumsky, and Chris Cariello. Gentry Locke's appellate team also included partners David R. Berry and Noah P. Sullivan.
The case is Pegasystems Inc. v. Appian Corporation, Record No. 1399-22-4 (Va. Ct. App., July 30, 2024).
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