Opinion ID: 222490
Heading Depth: 2
Heading Rank: 4

Heading: Breach of Confidentiality Agreement Counterclaim

Text: In 1997, Dynegy expressed an interest in acquiring Multiut. Multiut was keen on the deal but insisted that Dynegy sign a confidentiality agreement before it would divulge any sensitive information. The confidentiality agreement prohibited Dynegy from disclosing any confidential or proprietary information provided by Multiut without first obtaining Multiut's written consent. The confidentiality agreement further restricted Dynegy's use of the information to evaluating a Proposed Transaction between Multiut and [Dynegy]. Dynegy signed the agreement and gained access to Multiut's confidential information, including contracts, pricing, volumes, and terms in addition to customer information. Dynegy copied much of the information and pursued the acquisition for a time, but ultimately decided not to pull the trigger. It opted instead to enter into a joint venture with one of Multiut's competitors, Nicor Inc., a possibility it had been considering while courting Multiut. A handful of high-level executives at Dynegy had at least some involvement with both the Multiut due diligence and the Nicor joint venture. Citing the overlap in staffing, and cases from this court, PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir.1995), and the Pennsylvania Superior Court, Den-Tal-Ez, Inc. v. Siemens Capital Corp., 389 Pa.Super. 219, 566 A.2d 1214 (1989), Multiut contends in one of its many counterclaims that its confidential information was inevitably disclosed to Dynegy's Nicor Energy subsidiary. This alleged breach of the confidentiality agreement further resulted in Nicor Energy gaining a significant though unquantified competitive advantage over Multiut and wooing its customers away. The district court did not evaluate Multiut's inevitable disclosure arguments, concluding that Multiut could not survive summary judgment even if the doctrine applied because Multiut failed to present any evidence of its damages. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (noting that summary judgment must be entered against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial). Multiut contends this decision was erroneous because the district court placed too high a burden on it; in its view, [a]ll Multiut need establish is factual support for the proposition that it suffered an injury in fact. We review the district court's grant of summary judgment de novo, drawing all reasonable inferences in Multiut's favor. E.g., Davis, F.3d at ___. There is no need to delve into the murky waters of the inevitable disclosure doctrine here. Like most of Multiut's other counterclaims, this claim against Dynegy is a standard breach of contract claim. Under Illinois law, plaintiffs alleging breaches of contract bear[ ] the burden of proving that [they] sustained damages resulting from the breach and establishing both the correct measurement of damages and the final computation of damages based on that measurement. Ollivier, 199 Ill.Dec. 579, 634 N.E.2d at 422; see also Perfection Corp. v. Lochinvar Corp., 349 Ill.App.3d 738, 285 Ill.Dec. 645, 812 N.E.2d 465, 470-71 (2004) (The party who seeks damages has the burden not only to establish that he sustained damages, but also to establish a reasonable basis for computation of those damages.). Assuming there was a breachMultiut has not presented any evidence beyond its assertion that Dynegy inevitably disclosed information it obtained pursuant to the confidentiality agreementMultiut has not carried this burden. It is a bedrock principle that [d]amages may not be awarded on the basis of speculation and conjecture. Perfection Corp., 285 Ill.Dec. 645, 812 N.E.2d at 471. Yet the only evidence Multiut has that it was damaged, let alone how much or by whom, is unspecified indications from the market or from its customers that Nicor Energy always seemed to know what Multiut could offer and then undercut that price. No admissible evidence puts even a ballpark figure on the damages Multiut endured. And even if we assume Multiut lost profits as a result of a breach of the confidentiality agreement, Draiman testified that he did not know how many customers left Multiut to do business with Nicor Energy. He further acknowledged that numerous other factors, including his brother, Yehuda; customer relations issues; and changes in customer ownership contributed to Multiut's weakened presence in the Chicago natural gas market. Without something linking Multiut's downfall to Dynegy's divulgence or inappropriate use of information in violation of the confidentiality agreement, there is no issue warranting trial on this claim.