Normally, baseball talk in June is all about personnel moves leading up to the trade deadline: Who needs to pick up a starting pitcher to make a run at the post-season? Who is going to give up on their season and trade away their superstars to stock up their farm system?
This June, teams’ front offices are at the forefront for a different reason. As anyone following Major League Baseball has heard, the FBI has been investigating a hacking attack against the Houston Astros, and it has now been reported that they have a suspect: the St. Louis Cardinals. The New York Times reported that the FBI uncovered evidence that Cardinals employees broke into the Astros’ scouting database and stole confidential internal communications and player evaluations.
While subterfuge and rule-bending have always been a part of baseball-I heartily recommend Jason Turbow and Michael Duca’s The Baseball Codes for a good read on the subject-stealing another organization’s confidential electronic information has serious criminal implications, as the FBI’s involvement attests. What is alleged here isn’t picking off a steal sign or reading a catcher’s signals from second base, but rather the theft of valuable trade secrets. This is serious business: millions of dollars change hands in player trades and free-agent signings, and being able to read the other side’s thoughts on a player can be a big advantage in negotiations.
While the criminal aspect to this case has been widely reported, less talked-about has been the potential for civil liability under Texas law. Under Chapter 143 of the Texas Civil Practice & Remedies Code, a person or business injured by the knowing or intentional unauthorized access of its computer systems may bring a civil lawsuit against the perpetrator. In addition to money damages, the victim can recover its attorneys’ fees.
Chapter 134A of the Texas Civil Practice & Remedies Code provides a civil cause of action for misappropriation of trade secrets, allowing the victim to sue for damages, including both the loss to the victim and the benefit to the perpetrator. If these damages cannot be calculated, the statute also allows for the recovery of a reasonable royalty for the use or disclosure of the trade secret. A court may also grant an injunction ordering the defendant-on pain of contempt of court-not to use or disclose the misappropriated trade secret. Finally, in cases involving willful, malicioufs, or bad faith, attorneys’ fees and punitive damages may be awarded.
The investigation is ongoing, and we may never know exactly what happened. While it is possible that the commissioner may be the best avenue for the Astros to seek redress, most other businesses do not have that option, and it is important to know that both the Astros and any other businesses suffering from the theft of its electronic information have the option to seek justice from the courts.
If you or someone you know have been harmed by the theft of trade secrets or other business information, contact an attorney at Abraham, Watkins, Nichols, Agosto, Aziz & Stogner by calling 713-396-3964 or toll free at 800-594-4884.