Chancery Holds that Delaware Uniform Trade Secrets Act Preempts Unjust Enrichment Claim

In a recent letter opinion, 250ok, Inc. v. Message Sys., Inc., C.A. No. 2020-0588-JRS (Del. Ch. Jan. 22, 2021), the Court of Chancery held that a claim under the Delaware Uniform Trade Secrets Act (“DUTSA”), 6 Del. C. § 2001 et seq., preempted a common law claim for unjust enrichment, when both claims arose from the same purported wrongdoing.

In dismissing the unjust enrichment claim, Vice Chancellor Slights held that, under established Delaware Supreme Court precedent, a trade secret claim under the DUTSA “occupies the field” and preempts a common law unjust enrichment claim. Slip op. at 1.

The Court further explained that preemption applies not just to tort-based claims, but to any “alternative common law claims” ” beyond those expressly exempted from preemption in the statute.  Id. at 13. Moreover, preemption applies at the dismissal stage of a proceeding, even though the Court may later find that the DUTSA does not protect the information at issue. Accordingly, the Court of Chancery dismissed plaintiff’s unjust enrichment claim.

Carl D. Neff is a partner with the law firm of Pierson Ferdinand LLP, and practices in Delaware. You can reach Carl at (302) 482-4244 or at carl.neff@pierferd.com.