Unjust Enrichment Under the DTSA: A Nascent Circuit Split and Its Practical Implications

"The U.S. Supreme Court has been asked to grant certiorari to resolve whether the Defend Trade Secrets Act (DTSA) permits an unjust enrichment award without any showing of actual loss resulting from the defendant's misappropriation of trade secrets. The defendant in Tata Consultancy Services Ltd. v. Computer Sciences Corp. has petitioned for certiorari, arguing that actual loss is a prerequisite for an unjust enrichment award. The petition challenges a Fifth Circuit decision affirming a $56 million unjust enrichment award and a $112 million punitive award in favor of Computer Sciences Corp. ("

"According to Tata's petition, the Fifth Circuit's ruling conflicts with the Second Circuit's decision in Syntel Sterling Best Shores Mauritius Ltd. v. The TriZetto Group. While the Second Circuit acknowledged that avoided costs can theoretically constitute unjust enrichment in some circumstances, it imposed significant restrictions and ultimately rejected such damages on the facts before it. The Seventh Circuit, in Motorola Solutions, Inc. v. Hytera Communications Corp., likewise affirmed a substantial unjust enrichment award but held that a plaintiff must demonstrate compensable harm beyond its actual loss to recover such damages."

"Taken together, these decisions create a nascent circuit split on an important interpretive question: what is the nature of unjust enrichment as a compensatory DTSA remedy, and does it require a showing of harm to the plaintiff? In the more likely event that the Supreme Court denies certiorari, plaintiffs asserting DTSA misappropriation claims should carefully consider whether the Fifth Circuit offers a more favorable forum than t"

The U.S. Supreme Court has been asked to decide whether the Defend Trade Secrets Act allows unjust enrichment awards without proof of actual loss from trade secret misappropriation. Tata Consultancy Services petitioned after a Fifth Circuit decision upheld a $56 million unjust enrichment award and a $112 million punitive award for Computer Sciences Corp. The damages were calculated using costs Tata avoided due to the theft rather than proven loss to CSC. Tata argued the Fifth Circuit conflicts with the Second Circuit’s approach in Syntel, which limited avoided-cost theories and rejected damages on the case facts. The Seventh Circuit in Motorola required compensable harm beyond actual loss to recover unjust enrichment. These rulings create a developing split over whether unjust enrichment under the DTSA is compensatory and whether harm must be shown.

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