Court Opinion

ID: 9890070
Source: CourtListenerOpinion
Date Created: 2023-10-12 13:07:21.808068+00
Date Added: 2024-06-11T13:03:06.000994
License: Public Domain

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as
Hanneman Family Funeral Home & Crematorium v. Orians, Slip Opinion No. 2023-Ohio-
3687.]

                                        NOTICE
     This slip opinion is subject to formal revision before it is published in an
     advance sheet of the Ohio Official Reports. Readers are requested to
     promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65
     South Front Street, Columbus, Ohio 43215, of any typographical or other
     formal errors in the opinion, in order that corrections may be made before
     the opinion is published.

                         SLIP OPINION NO. 2023-OHIO-3687
  HANNEMAN FAMILY FUNERAL HOME AND CREMATORIUM, APPELLANT AND
  CROSS-APPELLEE, v. ORIANS ET AL., APPELLEES AND CROSS-APPELLANTS.
  [Until this opinion appears in the Ohio Official Reports advance sheets, it
 may be cited as Hanneman Family Funeral Home & Crematorium v. Orians,
                         Slip Opinion No. 2023-Ohio-3687.]
Trade secrets—Ohio Uniform Trade Secrets Act, R.C. 1333.61 through 1333.69—
        Preemption—Information is a trade secret protected by Ohio Uniform
        Trade Secrets Act only if it has independent value because it is not generally
        known to and readily ascertainable by others and the owner has taken
        reasonable efforts to maintain its secrecy—Customer information was not
        kept secret because it was accessible to a number of employees, was
        provided to third parties, and was available as a public record—Tort claims
        for tortious interference with business contracts, tortious interference with
        business relationships, and conversion that were based on alleged
        misappropriation of trade secrets were preempted—Court of appeals’
        judgment affirmed.
                             SUPREME COURT OF OHIO

   (No. 2022-0573—Submitted March 22, 2023—Decided October 12, 2023.)
               APPEAL from the Court of Appeals for Allen County,
                            No. 1-21-05, 2022-Ohio-984.
                               __________________
       KENNEDY, C.J.
       {¶ 1} In this discretionary appeal from a judgment of the Third District
Court of Appeals, we consider whether information about a funeral home’s
customers who have preneed funeral contracts with the funeral home is a trade
secret protected by the Ohio Uniform Trade Secrets Act, R.C. 1333.61 through
1333.69. We also consider whether related claims for tortious interference with
business contracts, tortious interference with business relationships, and conversion
are preempted by the Act.
       {¶ 2} In this case, appellant and cross-appellee, Hanneman Family Funeral
Home and Crematorium (“Hanneman Family”), purchased a funeral home but did
not retain the funeral home’s director, appellee and cross-appellant Patrick Orians.
Orians copied the funeral home’s customer information before accepting
employment at another funeral home, appellee and cross-appellant T.R. Chiles &
Sons-Laman, Inc., d.b.a. Chiles-Laman Funeral & Cremation Services (“Chiles-
Laman”). Orians then used this customer information to solicit business for Chiles-
Laman. Hanneman Family sued Orians and Chiles-Laman in the Allen County
Court of Common Pleas, alleging misappropriation of trade secrets, tortious
interference with business contracts, tortious interference with business
relationships, and conversion. The trial court entered summary judgment in favor
of Orians and Chiles-Laman on those claims, and the Third District Court of
Appeals affirmed, 2022-Ohio-984, ¶ 4-9, 69.
       {¶ 3} Information is a protected trade secret when (1) it has economic value
because it is not generally known to and readily ascertainable by proper means by
others who could obtain economic value from its disclosure or use and (2) the

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owner has taken reasonable efforts to maintain its secrecy. R.C. 1333.61(D). But
here, the customer information at issue had been provided to a third party, was
accessible by a number of the funeral home’s employees, and was available as a
public record upon request. Therefore, the information was not protected by the
Ohio Uniform Trade Secrets Act as a trade secret.
       {¶ 4} Hanneman Family’s tort claims for tortious interference with business
contracts, tortious interference with business relationships, and conversion are also
premised on Orians and Chiles-Laman’s alleged misappropriation of Hanneman
Family’s trade secrets. However, the Ohio Uniform Trade Secrets Act expressly
supersedes other civil remedies sounding in tort that are based on the
misappropriation of a trade secret. Consequently, Hanneman Family’s tort claims
are preempted by the Act.
       {¶ 5} The Third District properly affirmed the trial court’s grant of
summary judgment in favor of Orians and Chiles-Laman on the claims at issue here.
We therefore affirm the judgment of the court of appeals.
                        I. Facts and Procedural History
       {¶ 6} Hanneman Family purchased several funeral homes from Service
Corporation International, Inc., including Siferd-Orians Funeral Home in Lima.
Orians, who was the funeral director for Siferd-Orians at the time of the purchase,
learned that he would not be retained as an employee after Hanneman Family took
over Siferd-Orians. Before his employment with Siferd-Orians ended, Orians
copied files containing the names and addresses of Siferd-Orians’s customers who
had contracts prearranging their funeral services with the funeral home, which are
called “preneed funeral contracts,” R.C. 4717.31 et seq. After he started working
for Chiles-Laman, Orians contacted approximately 100 of Siferd-Orians’s
customers with preneed funeral contracts and solicited them to take their business
to Chiles-Laman. A large number of these customers transferred their preneed
funeral contracts to Chiles-Laman.

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       {¶ 7} Hanneman      Family    sued    Orians    and    Chiles-Laman      for
misappropriation of trade secrets, tortious interference with business contracts,
tortious interference with business relationships, and conversion, among other
claims. The trial court granted summary judgment in Orians and Chiles-Laman’s
favor, concluding that “the preneed funeral contracts and the information that
Orians obtained” were not trade secrets, because the information “was not secret
and was readily ascertainable by proper means by other persons.” The court
reasoned that the preneed-funeral-contract information was a public record that had
been released by the Ohio Board of Embalmers and Funeral Directors. Further, the
court determined that the related tort claims failed because Hanneman Family had
not pointed to any evidence of damages that could be established to a reasonable
degree of certainty.
       {¶ 8} The Third District affirmed. It explained that summary judgment was
proper on the misappropriation-of-trade-secrets claim because Siferd-Orians’s
(now Hanneman Family’s) customer information had been disclosed to the Board
of Embalmers and Funeral Directors in a report generated by a third party, which
was available as a public record. 2022-Ohio-984 at ¶ 39-40. And because it
determined that the customer information was not a trade secret, the court of
appeals rejected Orians and Chiles-Laman’s argument that the related claims for
tortious interference with business contracts, tortious interference with business
relationships, and conversion were preempted by the Ohio Uniform Trade Secrets
Act. Id. at ¶ 42. The appellate court held that the tort claims failed because
Hanneman Family had not satisfied the damages element of those torts, noting that
Hanneman Family had not presented any evidence of lost profits and that any future
lost profits were speculative. Id. at ¶ 49-52. The court explained that “any damage
calculation is purely theoretical until the preneed funeral contract is actually
realized when a preneed customer dies.” Id. at ¶ 49.

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          {¶ 9} We accepted Hanneman Family’s discretionary appeal on the
following propositions of law:

                 1. Appellant’s preneed contracts constitute trade secret
          information as the information contained in preneed contracts [is]
          not public information.
                 2. Appellant’s preneed contracts do not have speculative
          damages and satisfy tortious interference with business relations and
          tortious interference with business contracts.

See 167 Ohio St.3d 1470, 2022-Ohio-2633, 191 N.E.3d 446.
          {¶ 10} Orians and Chiles-Laman filed a cross-appeal, and we agreed to
consider their sole proposition of law:

                 A trade secret claim pursuant to R.C. 1331.61, et seq.
          displaces all common-law tort claims arising from the theft, misuse,
          and misappropriation of any confidential information, even when
          the information does not arise to the level of a “trade secret.”

See id.
          {¶ 11} Because deciding the issues under Hanneman Family’s first
proposition of law and Orians and Chiles-Laman’s proposition of law suffices to
resolve this case, we decline to address Hanneman Family’s second proposition of
law.
                                 II. Law and Analysis
                                 A. Standard of Review
          {¶ 12} Analyzing the parties’ propositions of law returns us to a familiar
place: statutory interpretation. Statutory interpretation is a question of law that we

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review de novo. State ex rel. Natl. Lime & Stone Co. v. Marion Cty. Bd. of
Commrs., 152 Ohio St.3d 393, 2017-Ohio-8348, 97 N.E.3d 404, ¶ 14. As we
explained long ago, “[t]he question is not what did the general assembly intend to
enact, but what is the meaning of that which it did enact.” Slingluff v. Weaver, 66
Ohio St. 621, 64 N.E. 574 (1902), paragraph two of the syllabus. “When the
statutory language is plain and unambiguous, and conveys a clear and definite
meaning, we must rely on what the General Assembly has said.” Jones v. Action
Coupling & Equip., Inc., 98 Ohio St.3d 330, 2003-Ohio-1099, 784 N.E.2d 1172,
¶ 12. For this reason, “[a]n unambiguous statute is to be applied, not interpreted.”
Sears v. Weimer, 143 Ohio St. 312, 55 N.E.2d 413 (1944), paragraph five of the
syllabus.
       {¶ 13} This case was decided on summary judgment, and “[t]his court
conducts a de novo review of a summary-judgment ruling,” Bohlen v. Anadarko E
& P Onshore, L.L.C., 150 Ohio St.3d 197, 2017-Ohio-4025, 80 N.E.3d 468, ¶ 10.
Summary judgment may be granted “when no genuine issues of material fact
remain to be litigated, the moving party is entitled to judgment as a matter of law,
and, viewing the evidence in the light most favorable to the nonmoving party,
reasonable minds can reach a conclusion only in favor of the moving party.” Id.
                     B. The Ohio Uniform Trade Secrets Act
       {¶ 14} Although Ohio’s protection of trade secrets arose at common law, Al
Minor & Assocs., Inc. v. Martin, 117 Ohio St.3d 58, 2008-Ohio-292, 881 N.E.2d
850, ¶ 10, in 1994, the General Assembly adopted the Uniform Trade Secrets Act
drafted by the National Conference of Commissioners on Uniform State Laws, see
Am.Sub.H.B. No. 320, 145 Ohio Laws, Part III, 5403, 5403-5407; see also
BlueEarth Biofuels, L.L.C. v. Hawaiian Elec. Co., Inc., 123 Haw. 314, 317, 235
P.3d 310 (2010). The Ohio Uniform Trade Secrets Act defines the term “trade
secret” as

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                               January Term, 2023

       information, including * * * any business information or plans,
       financial information, or listing of names, addresses, or telephone
       numbers, that satisfies both of the following:
               (1) It derives independent economic value, actual or
       potential, from not being generally known to, and not being readily
       ascertainable by proper means by, other persons who can obtain
       economic value from its disclosure or use.
               (2) It is the subject of efforts that are reasonable under the
       circumstances to maintain its secrecy.

R.C. 1333.61(D).
       {¶ 15} This court has established a six-factor test for determining whether
information constitutes a trade secret under R.C. 1333.61(D), requiring a court to
consider:

       “(1) [t]he extent to which the information is known outside the
       business; (2) the extent to which it is known to those inside the
       business, i.e., by the employees; (3) the precautions taken by the
       holder of the trade secret to guard the secrecy of the information;
       (4) the savings effected and the value to the holder in having the
       information as against competitors; (5) the amount of effort or
       money expended in obtaining and developing the information; and
       (6) the amount of time and expense it would take for others to
       acquire and duplicate the information.”

Al Minor & Assocs. at ¶ 16, quoting State ex rel. The Plain Dealer v. Ohio Dept. of
Ins., 80 Ohio St.3d 513, 524-525, 687 N.E.2d 661 (1997), superseded by statute on
other grounds as stated in State ex rel. Besser v. Ohio State Univ., 89 Ohio St.3d

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396, 732 N.E.2d 373 (2000). “An entity claiming trade secret status bears the
burden to identify and demonstrate that the material is included in categories of
protected information under the statute and additionally must take some active steps
to maintain its secrecy.” Besser at 400.
       {¶ 16} The customer information at issue in this case was available outside
the funeral home. A seller of preneed funeral contracts is required to file with the
Board of Embalmers and Directors an annual report regarding existing funded
preneed funeral contracts. Ohio Adm.Code 4717-10-01(A). The report is required
to disclose the name of each beneficiary of the preneed funeral contract, among
other information. See Ohio Adm.Code 4717-10-01(A)(1). When Siferd-Orians
was still owned by Service Corporation International, Orians prepared this report
by contacting a third party—the insurance company underwriting the preneed
funeral contracts—and requesting a list of all the preneed funeral contracts that had
been sold through Siferd-Orians. And when Hanneman Family purchased Siferd-
Orians, it also provided to the board the names of customers in Hanneman Family’s
application to transfer Siferd-Orians’s funeral-home license. Prior to the enactment
of 2021 Am.Sub.H.B. No. 110, effective September 30, 2021, which amended
Ohio’s Public Records Act, R.C. 149.43, information about a funeral home’s
preneed funeral contracts was available from the board as a public record. Much
of the information in the preneed funeral contracts was therefore readily
ascertainable by the public prior to Orians’s taking it.
       {¶ 17} After viewing the evidence presented in the light most favorable to
Hanneman Family, we conclude that there is no genuine issue of material fact
regarding whether its preneed-funeral-contract information was a protected trade
secret and that Orians and Chiles-Laman are entitled to judgment as a matter of
law. See Bohlen, 150 Ohio St.3d 197, 2017-Ohio-4025, 80 N.E.3d 468, at ¶ 10.
Hanneman Family failed to carry its burden to submit evidence showing that the
information was valuable because it was not known to or ascertainable by others.

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See R.C. 1333.61(D). Consequently, the trial court did not err in granting summary
judgment in favor of Orians and Chiles-Laman on Hanneman Family’s
misappropriation-of-trade-secrets claim.
                                   C. Preemption
       {¶ 18} R.C. 1333.67 preempts tort claims that are based on the
misappropriation of a trade secret. That statute provides:

               (A) Except as provided in division (B) of this section,
       sections 1333.61 to 1333.69 of the Revised Code displace
       conflicting tort, restitutionary, and other laws of this state providing
       civil remedies for misappropriation of a trade secret.
               (B) Sections 1333.61 to 1333.69 of the Revised Code do not
       affect any of the following:
               (1) Contractual remedies, whether or not based on
       misappropriation of a trade secret;
               (2) Other   civil   remedies    that   are    not   based    on
       misappropriation of a trade secret;
               (3) Criminal remedies, including those in other sections of
       [R.C. Chapter 1333], whether or not based on misappropriation of a
       trade secret.

       {¶ 19} There is a split of authority regarding whether statutory language
similar to that used in R.C. 1333.67 preempts all claims based on the unauthorized
use of information, even when the information is not a trade secret as defined by
the Uniform Trade Secrets Act. Compare Mtge. Specialists, Inc. v. Davey, 153
N.H. 764, 777, 904 A.2d 652 (2006) (“the [New Hampshire Uniform Trade Secrets
Act] preempts claims that are based upon the unauthorized use of information,
regardless of whether that information meets the statutory definition of a trade

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secret”) with Am. Biomedical Group, Inc. v. Techtrol, Inc., 2016 OK 55, 374 P.3d
820, ¶ 23, quoting Okla.Stat.Ann. 78-92(A) (“the [Oklahoma Uniform Trade
Secrets Act] displaces conflicting tort claims only for ‘misappropriation of a trade
secret.’     It does not displace tort claims for information not meeting this
definition”).
           {¶ 20} It is not necessary to decide this question here. Statutory language
like that in R.C. 1333.67 “prevents a plaintiff from merely restating their trade
secret claims as separate tort claims, ” Weins v. Sporleder, 2000 S.D. 10, 605
N.W.2d 488, ¶ 13. Hanneman family’s complaint alleged that Orians and Chiles-
Laman had tortiously interfered with Hanneman Family’s business contracts and
business relationships by stealing “[Hanneman Family’s preneed funeral] contracts
including clientele names, contact information and other trade secret information”
and by “contacting these individuals and working to obtain transfers of [the]
contracts.” (Emphasis added.) As for its conversion claim, Hanneman Family
alleged that it owned “[preneed funeral contracts] including the trade secret
information associated with them” and that Orians and Chiles-Laman “stole these
contracts/property including clientele names, contact information and other trade
secret information.” (Emphasis added.)
           {¶ 21} These tort claims are based on the same factual allegations that make
up Hanneman Family’s misappropriation-of-trade-secrets claim. According to
Hanneman Family’s complaint, Orians and Chiles-Laman’s actions were tortious
because Orians and Chiles-Laman stole trade secrets. The fact that the preneed-
funeral-contract information is “not ultimately found to be [a] trade secret[] under
the [Uniform Trade Secrets Act does] not make the preemption clause inapplicable.
Rather, the key inquiry is whether the same factual allegations of misappropriation
are being used to obtain relief outside the [Uniform Trade Secrets Act],” Robbins
v. Supermarket Equip. Sales, L.L.C., 290 Ga. 462, 466-467, 722 S.E.2d 55 (2012).
Because Hanneman Family’s tort claims at issue here are premised on allegations

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of misappropriated trade secrets, they are preempted by the Ohio Uniform Trade
Secrets Act. The trial court’s entry of summary judgment in favor of Orians and
Chiles-Laman on these tort claims was proper, albeit for reasons different from
those stated by the trial court and the appellate court.
                                  III. Conclusion
       {¶ 22} The Ohio Uniform Trade Secrets Act provides a civil remedy to
protect trade secrets and preempts other tort-law remedies that are based on the
misappropriation of a trade secret. However, information is a trade secret and
protected by the Act only if the information has independent value because it is not
generally known to and readily ascertainable by others and the owner has taken
reasonable efforts to maintain its secrecy. R.C. 1333.61(D).
       {¶ 23} The customer information of Hanneman Family at issue here was
not kept secret. Rather, this information was accessible to a number of employees
and was provided to third parties, and it was available as a public record to anyone
who requested it from the state. Therefore, the customer information was not a
trade secret protected by the Ohio Uniform Trade Secrets Act. And because
Hanneman Family’s tort claims for tortious interference with business contracts,
tortious interference with business relationships, and conversion were based on the
alleged misappropriation of a trade secret, they are preempted by the Act.
       {¶ 24} We therefore affirm the judgment of the Third District Court of
Appeals.
                                                                Judgment affirmed.
       DEWINE, BRUNNER, and DETERS, JJ., concur.
       FISCHER, J., concurs in part and concurs in the judgment, with an opinion
joined by DONNELLY and STEWART, JJ.
                                _________________
       FISCHER, J., concurring in part and concurring in the judgment.

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                             SUPREME COURT OF OHIO

       {¶ 25} In this case, we accepted the discretionary appeal of appellant and
cross-appellee, Hanneman Family Funeral Home and Crematorium (“Hanneman
Family”), and the cross-appeal of appellees and cross-appellants, Patrick Orians
and T.R. Chiles & Sons-Laman, Inc., d.b.a. Chiles-Laman Funeral & Cremation
Services (“Chiles-Laman”).      I agree with the majority’s decisions to resolve
Hanneman Family’s first proposition of law and to hold that Hanneman Family
cannot prevail under the Ohio Uniform Trade Secrets Act (or “the Act”),
R.C. 1333.61 through 1333.69, because the customer information at issue is not a
trade secret. Thus, I join that part of the majority opinion.
       {¶ 26} I write separately to address the issue of preemption under the Act.
The majority opinion concludes that it is not necessary for this court to determine
whether Ohio will join the majority of other jurisdictions and hold that claims based
on the unauthorized use of information are preempted by the Act, but the majority
goes on to find that Hanneman Family’s tort claims are preempted because they
are premised on allegations of misappropriation of trade secrets. This implicit
acceptance of one approach to the preemption analysis without expressly stating
which approach this court has adopted is confusing. Additionally, we must answer
the question whether claims based on the unauthorized use of information are
preempted by the Act because the answer necessarily determines whether
Hanneman Family’s tort claims are preempted, since Hanneman Family does not
have a successful trade-secrets claim under the Act.
       {¶ 27} This court should join the majority of other jurisdictions and hold
that in Ohio, unauthorized-use-of-information claims that are not otherwise
preserved by state law are preempted by the Ohio Uniform Trade Secrets Act. And
we should conclude that Hanneman Family’s tort claims are preempted because
they are based solely on the unauthorized use of its information as alleged in its

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misappropriation-of-trade-secrets claim. Because the majority opinion reaches the
right result, I also concur in the judgment.
This court may address the cross-appeal issue before addressing Hanneman
                        Family’s second proposition of law
       {¶ 28} Hanneman Family’s second proposition of law involves the issue of
damages in relation to its tort claims, which allege tortious interference with
business relationships, tortious interference with business contracts, and
conversion. Hanneman Family maintains that the preneed contracts that were
transferred to Chiles-Laman “do not have speculative damages” and thus the trial
court erred in dismissing its tort claims.
       {¶ 29} Orians and Chiles-Laman disagree with Hanneman Family on the
damages issue and maintain that Hanneman Family’s tort claims fail because they
are preempted by the Ohio Uniform Trade Secrets Act. We accepted the cross-
appeal filed by Orians and Chiles-Laman, in which they argue that tort claims
arising from the theft, misuse, and misappropriation of any confidential information
are preempted by the Act, even when such information does not constitute a trade
secret under the Act.
       {¶ 30} The majority opinion chooses to address the cross-appeal issue,
because “deciding the issues under Hanneman Family’s first proposition of law and
[the cross-appeal issue] suffices to resolve this case,” and the majority opinion
“decline[s] to address Hanneman Family’s second proposition of law.” Majority
opinion, ¶ 11. Generally, we will not consider the appeal of a party who has not
been aggrieved by the final order, because that party lacks standing. See State v.
Bates, 167 Ohio St.3d 197, 2022-Ohio-475, 190 N.E.3d 610, ¶ 20 (“[a] party that
benefits from an error cannot be the party aggrieved”); Ohio Contract Carriers
Assn. v. Pub. Util. Comm., 140 Ohio St. 160, 161, 42 N.E.2d 758 (1942). In this
case, the appellate court adjudicated Hanneman Family’s tort claims in favor of
Orians and Chiles-Laman. 2022-Ohio-984, ¶ 44-53. Thus, under our general rule,

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Orians and Chiles-Laman have no standing to appeal the decision on the
preemption issue.
       {¶ 31} However, for us to reach Hanneman Family’s second proposition of
law concerning damages related to its tort claims, we need to determine whether
the tort claims were preempted—a threshold issue that has been briefed by the
parties. We have permitted parties to assert by cross-appeal alternative grounds for
affirmance of the lower court’s decision. See, e.g., Dana Corp. v. Testa, 145 Ohio
St.3d 1441, 2016-Ohio-1596, 48 N.E.3d 581. Therefore, I agree with the majority
opinion that it is appropriate to first determine whether Hanneman Family’s tort
claims are preempted by the Ohio Uniform Trade Secrets Act. We need only reach
Hanneman Family’s second proposition of law if its torts claims are not preempted
by the Act.
              Hanneman Family’s tort claims are preempted by the
                        Ohio Uniform Trade Secrets Act
       {¶ 32} The General Assembly adopted the Uniform Trade Secrets Act when
it enacted R.C. 1333.61 through 1333.69, the Ohio Uniform Trade Secrets Act. Al
Minor & Assocs., Inc. v. Martin, 117 Ohio St.3d 58, 2008-Ohio-292, 881 N.E.2d
850, ¶ 12; Am.Sub.H.B. No. 320, 145 Ohio Laws, Part III, 5403, 5403-5407. The
Ohio Uniform Trade Secrets Act “displace[s] conflicting tort, restitutionary, and
other laws of this state providing civil remedies for misappropriation of a trade
secret.” R.C. 1333.67(A). However, there are three exceptions to that general rule
of preemption. Contractual remedies and criminal remedies, “whether or not based
on misappropriation of a trade secret,” are not affected by the Act.           R.C.
1333.67(B)(1) and (3). Additionally, “[o]ther civil remedies that are not based on
misappropriation of a trade secret” are not affected by the Act. R.C. 1333.67(B)(2).
       {¶ 33} In this case, we are presented with the question whether Hanneman
Family’s tort claims are preempted by the Act for being “[o]ther civil remedies,”
id. Therefore, to determine whether Hanneman Family’s tort claims are preempted,

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we must determine what it means for a civil remedy to be based on
misappropriation of a trade secret. See id. To answer this question, we first look
to the plain language of the Act.
       {¶ 34} R.C. 1333.67 preempts “conflicting tort, restitutionary, and other
laws of this state providing civil remedies for misappropriation of a trade secret,”
R.C. 1333.67(A), but it does not preempt “[o]ther civil remedies that are not based
on misappropriation of a trade secret,” R.C. 1333.67(B)(2). In other words, the Act
preempts civil remedies that are based on misappropriation of a trade secret.
“Misappropriation” under the Act generally requires either the acquisition,
disclosure, or use of a trade secret. R.C. 1333.61(B). And a trade secret is a type
of information that derives independent economic value, actual or potential, from
not being generally known to and readily ascertainable by proper means and is
subject to reasonable efforts to protect its secrecy. R.C. 1333.61(D). “Based on” is
a phrasal verb, and the verb “base” means “[t]o use (something) as the thing from
which something else is developed.” Black’s Law Dictionary 185 (11th Ed.2019)
(“their company is based on an abiding respect for the employees” [emphasis
added]).   Therefore, civil remedies that are developed from trade-secrets-
misappropriation allegations are not excepted from the Act’s preemptive reach.
       {¶ 35} Additionally, the Act instructs that its provisions “shall be applied
and construed to effectuate [its] general purpose to make uniform the law with
respect to [its] subject among states enacting [the Uniform Trade Secrets Act].”
R.C. 1333.68. “The primary goal in statutory interpretation is to give effect to the
intent of the legislature.” Bailey v. Republic Engineered Steels, Inc., 91 Ohio St.3d
38, 39, 741 N.E.2d 121 (2001). Thus, the legislature’s mandate requires us to
consider how our sister states have interpreted the Act.
       {¶ 36} There are two schools of thought concerning the types of claims that
are preempted by the Uniform Trade Secrets Act: (1) claims based on allegations
of misappropriation of a trade secret or unauthorized use of information are

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preempted or (2) claims based only on the actual misappropriation of a trade secret
are preempted. See Phoenix Process Equip. Co. v. Capital Equip. & Trading Corp.,
W.D.Ky. No. 3:16-cv-00024-RGJ-RSE, 2019 WL 1748539, *3 (Apr. 18, 2019)
(collecting cases illustrating the split of authority concerning the reach of the
Uniform Trade Secret Act’s preemption provision).
       {¶ 37} The majority view is that claims that are based on the unauthorized
use of information, regardless of whether that information meets the definition of
“trade secret,” are preempted. Parker & Justice, The Differing Approaches to
Preemption Under the Uniform Trade Secrets Act, 49 Tort Trial & Ins. Prac.L.J.
645, 648 (2014) (the majority view of preemption under the Uniform Trade Secrets
Act is that common-law claims that seek to protect confidential information are
preempted); Hauck Mfg. Co. v. Astec Industries, Inc., 375 F.Supp.2d 649, 656
(E.D.Tenn.2004) (“courts unanimously agree that in order for [claims not based on
the Uniform Trade Secrets Act] to survive they must rely on something more than
allegations of misappropriation of trade secrets, but they appear to disagree as to
what exactly that ‘something more’ must be” [emphasis added]); see, e.g., Learning
Curve Toys, L.P. v. Playwood Toys, Inc., N.D.Ill. 94 C 6884, 1999 WL 529572, *3
(July 20, 1999) (the Uniform Trade Secrets Act eliminated common-law claims
based on conduct that might support a trade-secrets action); Mtge. Specialists, Inc.
v. Davey, 153 N.H. 764, 777, 904 A.2d 652 (2006) (state’s version of the Uniform
Trade Secrets Act preempted claims that are based on the unauthorized use of
information). The rationale behind the majority view is that the purpose of the
Uniform Trade Secrets Act is “ ‘to create a uniform business environment [with]
more certain standards for protection of commercially valuable information,’ ”
Mtge. Specialists, Inc. at 775-776, quoting Auto Channel, Inc. v. Speedvision
Network, L.L.C., 144 F.Supp.2d 784, 789 (W.D.Ky.2001), and “ ‘to preserve a
single tort action under state law for misappropriation of a trade secret as defined
in the statute and thus to eliminate other tort causes of action founded on allegations

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of misappropriation of information,’ ” id., quoting Burbank Grease Servs., L.L.C.
v. Sokolowki, 278 Wis.2d 698, 693 N.W.2d 89 (2005).
          {¶ 38} The minority view on preemption under the Uniform Trade Secrets
Act is that only claims concerning information that meets the definition of “trade
secret” are preempted. See, e.g., Am. Biomedical Group, Inc. v. Techtrol, Inc., 2016
OK 55, 374 P.3d 820, ¶ 23. Courts taking the minority view rely primarily on the
plain language of their state’s enactment of the law and find that there can be a
misappropriation of trade secrets only when there is actually a trade secret. See,
e.g., Stone Castle Fin., Inc. v. Friedman, Billings, Ramsey & Co., Inc., 191
F.Supp.2d 652, 658-659 (E.D.Va.2002) (the plain meaning of the state statute
demonstrates that unless the information is a trade secret, the court cannot dismiss
alternative theories of relief as preempted).
          {¶ 39} Courts that have applied the Ohio Uniform Trade Secrets Act have
generally taken an approach consistent with the broader, majority view on
preemption. See, e.g., Sal’s Heating & Cooling, Inc. v. BERS Acquisition Co.,
L.L.C., 2022-Ohio-1756, 192 N.E.3d 537, ¶ 49 (8th Dist.); Stolle Mach. Co., L.L.C.
v. RAM Precision Industries, 605 Fed.Appx. 473, 484 (6th Cir.2015); Office Depot,
Inc. v. Impact Office Prods., L.L.C., 821 F.Supp.2d 912, 918-920 (N.D.Ohio 2011);
Rogers Indus. Prods., Inc. v. HF Rubber Mach., Inc., 188 Ohio App.3d 570, 580-
581, 936 N.E.2d 122 (9th Dist.2010). The United States Court of Appeals for the
Sixth Circuit has determined that the Act “should be understood to preempt not
only causes of action for misappropriation of trade secrets but also causes of action
that are based in some way on misappropriation of trade secrets.” Stolle Mach. Co.
at 484.
          {¶ 40} There are problems with both the majority and the minority
approaches. If we were to adopt the majority view, we would expand the phrase
“misappropriation of a trade secret,” R.C. 1333.67, to include misappropriation of
a purported trade secret. But if we were to adopt the minority view, we would be

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out of step with the majority of other jurisdictions and would essentially render the
Act meaningless—there would be no uniformity of the law, and common-law
claims based on unauthorized use of information would remain viable. This would
thwart the General Assembly’s purpose in adopting the Act.
       {¶ 41} In this situation, we should adopt the majority view that the Uniform
Trade Secrets Act should be understood to preempt other causes of action for
misappropriation of trade secrets and causes of actions that are based in some way
on misappropriation of trade secrets. See Stolle Mach. Co. at 484. This is the only
interpretation that gives effect to the legislative intent that the Act function
uniformly with other states that have adopted the Uniform Trade Secrets Act, and
this interpretation protects only the information that the General Assembly deemed
appropriate to protect. If the General Assembly intended to protect other forms of
information, then it could have done so, and it can certainly amend the Act to do
so.
       {¶ 42} The next question is how to determine whether a cause of action is
based in some way on allegations of trade-secrets misappropriation. There are two
schools of thought on how to make that determination: (1) compare the elements of
the state-law claim to the elements of the Uniform Trade Secrets Act claim or
(2) determine whether the state-law claim arises out of the same core of facts that
would underlie a potential Uniform Trade Secrets Act claim. See Stolle Mach. Co.,
605 Fed.Appx. at 484. The majority opinion implicitly adopts the second view. I
agree that the second view is the most appropriate. We should explicitly hold that
the key inquiry in this regard is whether the tort claims contain the same operative
facts that formed the basis of the misappropriation-of-trade-secrets claim. See id.
at 485; see also Robbins v. Supermarket Equip. Sales, L.L.C., 290 Ga. 462, 466-
467, 722 S.E.2d 55 (2012).       When the state-law claim has a factual basis
independent from the facts establishing the Ohio Uniform Trade Secrets Act claim,

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the claim supported by an independent factual basis survives preemption. Stolle
Mach. Co. at 485.
       {¶ 43} In this case, we look at Hanneman Family’s amended complaint to
determine whether the factual basis for its tort claims is independent from the
factual basis for its misappropriation-of-trade-secrets claim. As recognized by the
majority opinion, Hanneman Family’s tort claims all hinge on the taking and use
of the information in the preneed contracts and plainly arise from the same factual
allegations as its misappropriation-of-trade-secrets claim. Therefore, Hanneman
Family’s tort claims are preempted by R.C. 1333.67, and it is irrelevant that the
preneed contracts were not found to be a trade secret under the Ohio Uniform Trade
Secrets Act.
       {¶ 44} Because the tort claims are preempted, it is not necessary to resolve
Hanneman Family’s second proposition of law concerning damages.
                                    Conclusion
       {¶ 45} This court should join the majority of other jurisdictions and hold
that in Ohio, unauthorized-use-of-information claims that are not otherwise
preserved under the Revised Code are preempted by the Ohio Uniform Trade
Secrets Act. Further, I would hold that because Hanneman Family’s tort claims
were based solely on the unauthorized use of information found in its preneed
contracts as alleged in its misappropriation-of-trade-secrets claim, its tort claims
are preempted. Since the majority opinion correctly determines that Hanneman
Family’s misappropriation-of-trade-secrets claim is unsuccessful and reaches the
right result on the preemption issue, I concur in part and in the judgment.
       DONNELLY and STEWART, JJ., concur in the foregoing opinion.
                               _________________
       Balyeat, Leahy, Daley, Miller & Bensinger, L.L.C., Aaron L. Bensinger,
and Christopher A. Jackson, for appellant and cross-appellee.

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                            SUPREME COURT OF OHIO

       Cory, Meredith, Witter & Smith, L.P.A., J. Alan Smith, and Dalton J. Smith,
for appellees and cross-appellants.
                               _________________

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