Opinion ID: 796337
Heading Depth: 3
Heading Rank: 1

Heading: Joint-and-Several Liability

Text: 41 Based on the jury's verdict, the district court awarded MTH $25,773,405 for past and future lost profits, to be imposed jointly and severally against Lionel, KB and Yang. The district court held that because this is a trade-secrets case, the Michigan Tort Reform Act (MTRA), M.C.L § 600.2956, which prohibits joint liability in tort actions, does not apply. 4 Because the Supreme Court of Michigan has not conclusively ruled whether the MTRA applies to the misappropriation of trade secrets, we must determine how that court would respond if confronted with the issue. See Stratienko v. Cordis Corp., 429 F.3d 592, 600 (6th Cir.2005). In order to determine how the state supreme court would rule, we look to the decisions of the state's intermediate courts unless we are convinced that the state supreme court would decide the issue differently. Melson v. Prime Ins. Syndicate, Inc., 429 F.3d 633, 636 (6th Cir.2005). We review de novo a district court's interpretation of state law. Salve Regina College v. Russell, 499 U.S. 225, 231, 111 S.Ct. 1217, 113 L.Ed.2d 190 (1991). 42 Michigan courts have repeatedly held that the misappropriation of trade secrets is a tort. See Bliss Clearing Niagara, Inc. v. Midwest Brake Bond Co., 270 F.Supp.2d 943, 948-49 (W.D.Mich.2003); Vic's Quality Fruit Market, III, Inc. v. Busch's, Inc., No. 231176, 2002 WL 1374174, at  (Mich. Ct.App. Jun.25, 2002). Thus, the only question before us is whether the Supreme Court of Michigan would extend the MTRA to torts beyond those involving personal injury, property damage, and wrongful death. 43 Several Michigan Court of Appeals holdings espouse this broader reading. See Holton v. A+ Ins. Assoc., Inc., 255 Mich. App. 318, 661 N.W.2d 248, 252 (2003) ([T]he rule, by its language, appears to limit its application to three types of actions, arguably excluding plaintiffs' action for lost insurance proceeds. However, we conclude that the rule's applicability is not strictly limited to those three actions.); AAA Mortgage Corp. v. Legghio, No. 239016, 2003 WL 22439665, at  (Mich. Ct.App. Oct.28, 2003) (noting that M.C.L. § 600.2956 applies to all torts, and not only to those seeking damages for personal injury, property damage, or wrongful death); K-Mart Corp. v. Logan, No. 232393, 2003 WL 21583385, at -3 (Mich. Ct.App. July 10, 2003) (the phrase, `personal injury, property damage, or wrongful death' modifies only the phrase `or another legal theory seeking damages') (citing Holton, 661 N.W.2d at 252). Although MTH points to a series of Michigan Court of Appeals opinions that read M.C.L. § 600.2956 narrowly, these cases are not persuasive. In each such case, the Michigan Court of Appeals was asked to apply M.C.L. § 600.2956 to cases involving personal injury, property damage, or wrongful death, and was thus not squarely confronted with whether the statute applies outside those particular contexts. See also Gerling Konzern Allgemeine Versicherungs AG v. Lawson, 472 Mich. 44, 693 N.W.2d 149, 151 (2005) (noting that M.C.L. § 600.2925a-d eliminated joint-and-several liability in certain tort actions in the context of a personal-injury action); Lamp v. Reynolds, 249 Mich.App. 591, 645 N.W.2d 311, 315 (2002) (applying M.C.L § 600.2956 to a claim for damages arising out of personal injury). 44 Alternatively, MTH argues that the Michigan Uniform Trade Secrets Act (MUTSA) sets forth its own method of allocating damages among defendants, and thus M.C.L. § 600.2956 should not apply in this cise. MTH cites M.C.L. § 445.1904, which sets forth the recovery of damages for misappropriation. 5 Citing John Hancock Financial Services v. Old Kent Bank, 346 F.3d 727, 731-33 (6th Cir.2003), in which this Court held that the MTRA did not apply when an applicable provision of the UCC explicitly allocated damage liability, MTH argues that the MUTSA should similarly preclude the application of the MTRA to claims governed by the MUTSA. Old Kent Bank does not govern the outcome of this claim, however; the provision of the MUTSA that generally allows the recovery of damages in misappropriation cases is not in tension with M.C.L. § 600.2956, because that statute concerns the allocation of liability, as opposed to the kinds of damages a misappropriation plaintiff can recover. The MTRA and the MUTSA do not conflict, and thus both can and should be applied here. It was therefore error to impose the $25,773,405 award for lost profits jointly and severally against all the defendants. On remand, any award for lost profits should be assessed severally only.