Delaware Business Litigation Report

Chancery Finds That Delaware’s Trade Secrets Statute Preempts Unjust Enrichment Claim for Same Alleged Misconduct

250ok, Inc. v. Message Sys., Inc., C.A. No. 2020-0588-JRS (Del. Ch. Jan. 22, 2021)

This decision clarifies the scope of preemption of common law claims under the Delaware Uniform Trade Secret Act (“DUTSA”). Plaintiff asserted both a claim under the DUTSA and a claim for unjust enrichment, where both claims arose from the same alleged misconduct. The Court of Chancery concluded that a trade secret claim under the DUTSA “occupies the field” and preempts a claim for common law unjust enrichment. Applying Delaware precedent on the issue, the Court explained that preemption applies not just to tort-based claims, but to any “alternative common law claims.” And, as previous decisions have held, preemption applies at the dismissal stage even though the Court may later find that the DUTSA does not protect the information at issue. Accordingly, the Court of Chancery dismissed the unjust enrichment claim.

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