BioPoint, Inc. v. Dickhaut

110 F.4th 337

BIOPOINT, INC., Plaintiff, Appellee, v. Andrew DICKHAUT; Catapult Staffing, LLC, d/b/a Catapult Solutions Group, Defendants, Appellants Leah Attis, Defendant.

No. 23-1575

United States Court of Appeals, First Circuit

July 30, 2024

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. Richard G. Stearns, U.S. District Judge]

Dana A. Zakarian, with whom Christopher J. Hurst, Steven D. Procopio, and Smith Duggan Cornell & Gollub LLP were on brief, for appellant.

Allison L. Anderson, with whom James W. Bucking, Rachel L. Kerner, and Foley Hoag LLP were on brief, for appellee.

Before Rikelman, Lynch, and Howard, Circuit Judges.

LYNCH, Circuit Judge.

Catapult Staffing, LLC and Andrew Dickhaut (collectively, "Catapult") appeal from separate jury and judge findings that they misappropriated BioPoint, Inc.'s trade secrets, misappropriated its confidential business information, were unjustly enriched by these activities, tortiously interfered with BioPoint's prospective business relationships, and violated the prohibitions on unfair and deceptive trade practices in the Massachusetts Consumer Protection Law, Mass. Gen. Laws ch. 93A, § 11 ("chapter 93A").

The jury found that Catapult had misappropriated and used BioPoint's trade secrets with respect to three candidates recruited by Catapult and with respect to two of BioPoint's clients, the firms Vedanta and Shire/Takeda. It also found Catapult had engaged in tortious interference with BioPoint's business relationship with one candidate. The jury awarded BioPoint $312,000 in lost profits.

The judge, prior to the jury trial, had reserved to the court decision on all equitable claims for relief. He notified the parties he would hold a bench trial and decide those equitable claims after the jury trial. He held a bench trial and then issued a twenty-nine-page decision entitled "Findings of Fact, Rulings of Law, and Order After a Bench Trial." The judge found for BioPoint as to all equitable claims and awarded it $5,061,444, consisting of the amount by which "Catapult was unjustly enriched" by its "misappropriation of BioPoint's trade secrets," trebled because "Catapult's conduct also violated [chapter 93A]." The court also awarded BioPoint reasonable costs, attorneys' fees, and prejudgment and postjudgment interest.

We largely affirm, but reduce the judge's award, and the award of judgment, by $157,068. We also reverse the district court's imposition of joint-and-several liability on Andrew Dickhaut and remand for further proceedings.

I.

"As this case comes to us following a bench trial" and a jury trial, "we recount the relevant facts as found by the district court, consistent with record support." Reyes v. Garland, 26 F.4th 516, 518 (1st Cir. 2022) (quoting Gonzalez-Rucci v. INS, 539 F.3d 66, 67 (1st Cir. 2008)).

BioPoint is a life sciences consulting firm based in Massachusetts which scouts for highly skilled candidates to place in temporary positions at pharmaceutical, biopharmaceutical, and medical device companies. Those companies pay BioPoint a (typically hourly) rate for the candidates' services (the "bill rate"), and BioPoint remits a portion of that payment to the candidates (the "pay rate"), profiting from the difference. BioPoint maintains an internal database in which it records proprietary information regarding clients, candidates, and their respective bill and pay rates. In 2015, BioPoint hired Leah Attis, who became one of the company's top salespeople.

Catapult, based in Texas, is also a placement company that operated in other industries until it attempted to enter the same field as BioPoint. Catapult opened a Boston office in 2017 and hired Andrew Dickhaut, Attis's fiancé, as Managing Director. (Dickhaut and Attis were married on February 1, 2020.) At the time that Catapult entered the Boston market, it had no intention of operating in the life sciences industry. It planned to focus instead on the "technology, light industrial, accounting, and finance industries." But Catapult's plans shifted and it began to target the life sciences space after a "disastrous" first year for the Boston office, which resulted in Dickhaut's having to take a pay cut.

In December 2017, Jeff Autenrieth, a talent acquisition consultant at Moderna, a pharmaceutical company, contacted Attis at BioPoint seeking to fill a life sciences placement at his company. Dickhaut knew Autenrieth from high school and had introduced him to Attis in 2016 at her request. Autenrieth had a particular candidate in mind, Chris Foley, and suggested that Foley be placed through BioPoint. Attis initially agreed but then proposed to Autenrieth that Dickhaut handle the placement not through BioPoint but through Catapult, because "[h]e need[ed] the headcount." When Autenrieth followed up, Attis stated that she "[didn't] want to put anything in writing over [her] system" and that Dickhaut (her fiancé) "really need[ed] a deal." Catapult ended up placing Foley at Moderna, and he was the company's first-ever life sciences placement.

In February 2018, Autenrieth became a talent acquisition consultant at Vedanta, a biotechnology company. Although Autenrieth relied on Dickhaut to place several "somewhat entry level" contractor roles at Vedanta, Autenrieth did not think Catapult had the ability at that point to fill higher-level positions.

Soon, though, Catapult did begin to make a few of those high-level placements at Vedanta. In March 2018, Dickhaut identified a candidate for a quality-assurance life sciences role at Vedanta. Dickhaut told his boss that his fiancée Attis, though she was at BioPoint, had "helped [him] with the search" and was "pitching in a little bit too via LinkedIn."

Dickhaut continued to make inroads at Vedanta. In December 2018, Catapult and Vedanta entered into a "managed services provider" ("MSP") agreement, which had been pitched by Dickhaut, under which Catapult would manage all of Vedanta's candidates' labor contracts. That agreement also granted Catapult "master vendor status" with Vedanta, such that Catapult had the first opportunity to fill openings at Vedanta.

Under the MSP agreement, in January 2019, Vedanta had an opening for a "study team leader." Dickhaut asked Attis to give him both BioPoint's bill and pay rates for that role and also to give him names of suitable potential candidates from information she had at BioPoint. Attis provided him with the rates and said she "[couldn't] give [him] names from [BioPoint's] system" because "[p]eople ha[d] [gone] to jail for that."

Around this time, Attis suggested to her supervisors the possibility of BioPoint's "supporting [Dickhaut's] hiring needs for [Vedanta]" by becoming a vendor through their MSP. Attis's superiors at BioPoint not only rejected this proposal, but they also warned Attis that she was not allowed to share any of BioPoint's confidential information with Dickhaut.

Attis did not heed that warning. In January 2019, Dickhaut asked her what BioPoint's pay rate would be for a clinical operations director, and she responded that she would "look up" someone in a comparable role whom she had just placed through BioPoint. Attis also discussed candidates for Vedanta positions, apparently obtained from BioPoint's system, with Dickhaut. Indeed, at one point, after Dickhaut had moved forward with a candidate without consulting Attis, Attis told him that "[n]ext time" he should "wait for [her] to check [her] system."

In March 2019, Vedanta needed to hire a medical director. When Dickhaut was having trouble finding someone, he asked Attis for help. Attis again asked her supervisors whether BioPoint could partner with Catapult to help fill that role, and they once again refused, reiterating that there was a "conflict of interest" and that they had "no interest in partnering with a competitor." Dickhaut became "furious" when Attis conveyed this conversation to him, and he "criticiz[ed] [Attis] and BioPoint for not working with him." Trying to appease Dickhaut, Attis wrote him: "I understand if you don't want to work with BioPoint, but I do have those two candidates set aside for you."

Using BioPoint's database information provided by Attis, Dickhaut went on to place three candidates in the medical director role, each of whom had been or was being vetted by BioPoint: Chris Da Costa, Stephen Haworth, and Candida Fratazzi. In fact, BioPoint had been about to place Fratazzi at Shire, a pharmaceutical company and Attis's biggest client, for a pay rate of $250 an hour, when Fratazzi suddenly withdrew from consideration because she had accepted a position at Vedanta for a pay rate of $300 an hour. A few days before Fratazzi withdrew, Dickhaut asked Attis for the bill rates of Takeda, a company that was in the process of acquiring Shire.

BioPoint terminated Attis's employment on December 4, 2019, after discovering that she had helped Dickhaut place Fratazzi at Vedanta. In May 2020, Vedanta terminated its MSP agreement with Catapult.

On January 21, 2020, BioPoint sued Catapult, Dickhaut, and Attis in the U.S. District Court in Massachusetts. In March, the court dismissed without prejudice BioPoint's claims against Attis so that BioPoint could refile them in state court, as required by her employment contract. BioPoint then filed a four-count amended complaint against Catapult and Dickhaut, bringing three Massachusetts state-law claims and one federal claim, under federal question and supplemental jurisdiction. BioPoint alleged (1) misappropriation of trade secrets in violation of the Massachusetts Uniform Trade Secrets Act ("MUTSA"), Mass. Gen. Laws. ch. 93 § 42, (2) misappropriation of trade secrets in violation of the federal Defend Trade Secrets Act ("DTSA"), 18 U.S.C. §§ 1831-39, (3) tortious interference with prospective relationships in violation of Massachusetts common law, and (4) unfair and deceptive trade practices in violation of chapter 93A. In the complaint, BioPoint requested...