Less than two weeks ago, Judge Richard Posner left the Seventh Circuit Court of Appeals. Immediately. No senior status. No notice. Just up and left. Presumably to hang out with his cat, Pixie.
And like that, the most widely cited appellate judge since at least Henry Friendly (and probably well before that) was gone.
His post-retirement exploits are being met with more than a little skepticism and head-scratching, as he promptly released a long book airing some of his dirty laundry with his Seventh Circuit colleagues. The early returns are, how shall we put it, not great.
I met Judge Posner once, when I was a 3L at the University of Illinois College of Law and editor of the Moot Court Board. He had come down for the annual competition, and I was sort of coordinating it. He was as you'd expect. Passively intimidating, somewhat aloof, lost in his thoughts. Not on my dream dinner guest list. I've argued three cases in the Seventh Circuit but never had him on a panel, which was probably just as well. Oral arguments with him are just torture to listen to, as the whole thing seemed to resemble a reflexive exercise in self-indulgence.
In truth, I can't say he was my favorite judge. I liked his writing style, to a point, and I appreciated the unconventional approach he took with cases. I think his overly academic view of non-compete agreements, however, was not at all pragmatic (even though he claims to have been the great pragmatist). I found many of his recent opinions to be a bit out there, such as his bizarre concurring opinion in the Hively case that brought sexual orientation within Title VII's sexual discrimination ambit. And I certainly don't think he was the best judge on his own court. I always have felt Judge Frank Easterbrook was stronger, more consistent, and more clear in his writing. And even Judges Diane Sykes and David Hamilton have approaches to deciding cases that I can grasp with much greater confidence.
But, he's Posner and everyone seems to worship him. So some tribute seems in order. Though the Seventh Circuit only decides one or two trade secrets or non-compete cases per year, his influence in this area is profound with a number of important decisions under his belt. I thought I'd offer a farewell to Posner with a top ten list of cases he wrote that influence this field of law:
10. Outsource Int'l, Inc. v. Barton, 192 F.3d 662 (7th Cir. 1999). This is the one dissent from Judge Posner I am including, and it's from an appellate decision that endorses a staffing industry non-compete. Posner thought the result was correct in principle, but not under Illinois law. So he dissented. But in doing so, he outlined the historical hostility to non-competes and concluded "[t]here is no longer any good reason for such hostility." He does a nice job wading through the policy choices behind non-compete enforcement and the courts' antagonism to these restraints. But, I think he has it all wrong. His concerns are, no doubt, academically grounded. But he largely misses the point that a disparity in bargaining power, coupled with asymmetrical resources, create a large deadweight loss to society from breezy judicial attitudes towards non-compete arrangements.
9. Nightingale Home Healthcare, Inc. v. Anodyne Therapy, LLC, 626 F.3d 662 (7th Cir. 2010). This is a trademark case, but it's instructive for analyzing fee petitions. Trademark defendants can obtain fees only if the case is exceptional. In Nightingale Home Health Care, Judge Posner says that a defendant can meet the exceptionality standard by showing the case was an "abuse of process," designed to impose disproportionate costs on the defendant. This standard mirrors that under the Trade Secret Act's "bad faith" provision and reflects a pragmatic approach. Just as important, Posner cautions against an elaborate state-of-mind inquiry on the fee petition, preferring that fee-petition hearings be summary proceedings rather than drawn-out affairs.
8. Confold Pacific, Inc. v. Polaris Indus., Inc., 433 F.3d 952 (7th Cir. 2006). I call this a "trade-secrets light" case. It confronts the frequent fact-pattern of what happens when one party, bound by a contractual relationship, tries to subvert contract law and claim a host of related remedies from a relationship gone wrong, such as unjust enrichment and trade-secrets theft. Judge Posner deftly explains, as if lecturing the plaintiff's counsel, what trade secrets are and how they fit into a broad continuum of other intellectual property and informational rights.
7. Rockwell Graphic Systems, Inc. v. Dev Indus., Inc., 925 F.2d 174 (7th Cir. 1991). This is a terrific read for trade-secret practitioners who are litigating the issue of whether one made reasonable efforts to keep proprietary information secret. Factually, the case addresses a common issue. Can one claim trade-secret status for information that is disclosed to others - in this case, vendors who receive part drawings? Judge Posner says yes and explains in very simple, easy-to-understand language why that's the case.
6. Micro Data Base Systems, Inc. v. Dharma Systems, Inc., 148 F.3d 649 (7th Cir. 1998). The first of three damages cases, this one involving a claim of trade-secret misappropriation by a software developer against a buyer who disclosed the program to a third-party. The proof of damages was relatively simple, in effect allowing a non-expert to base a claimed damage award on projected lost future sales. Judge Posner rejected the argument that because the testimony was self-serving, it was inadmissible. The case also contains a good discussion of the point made earlier in Rockwell Graphic Systems - that some trade secrets (to be useful) must be disclosed to others. That won't destroy secrecy in the legal sense.
5. ATA Airlines, Inc. v. Federal Express Corp., 665 F.3d 882 (7th Cir. 2011). From a simple damages presentation to a downright intimidating one, Judge Posner vacated a jury verdict in excess of $65,000,000. Key to the discussion was the failure of the parties and the district court judge to understand the expert's damages testimony. Posner tears into the regression analysis that ATA's expert applied to the breach-of-contract suit. He makes a couple of crucial points. First, if a district court judge doesn't understand what the expert is saying he can either require him to speak in plain English or appoint the court's own expert. Second, he concluded the attorneys in the case did not understand the regression analysis central to the damages presentation (kind of shocking, given the size of the damages requested and granted by the jury). And as if to prove a point, Posner spends pages dissecting the damages analysis and ripping it apart, concluding ultimately that the expert's "regression had as many bloody wounds as Julius Caesar when he was stabbed 23 times by the Roman Senators led by Brutus." For the lawyers in the case, this must have been a tough one to read.
4. Schiller & Schmidt, Inc. v. Nordisco Corp., 969 F.2d 410 (7th Cir. 1992). Another case on damages, this one with a simpler and punchier analysis, is one of my favorite opinions. It is decidedly defense friendly, but the gist of it is that courts must pay close attention to expert witness damages theories and not let those witnesses get away with what Judge Posner calls "simplistic extrapolation and childish arithmetic." Posner's opinion chastises both the expert and the plaintiff for their failure to attribute lost revenue to causes unrelated to the act of trade secret misappropriation. This is a must-read for any defense counsel litigating a claim on damages where several intersecting causes may have played a part in the alleged loss.
3. Grip-Pak, Inc. v. Illinois Tool Works, Inc., 694 F.2d 466 (7th Cir. 1983). The hidden gem of all Judge Posner cases. I love this decision for many reasons. The gist of the action was Grip-Pak's claim that baseless anti-competitive litigation behavior violated antitrust laws under the Sherman and Clayton Acts. The essence of Posner's commentary is found in this passage: "The existence of a tort of abuse of process shows that it has long been thought that litigation could be used for improper purposes even when there is probably cause for the litigation; and if the improper purpose is to use litigation as a tool for suppressing competition in its antitrust sense...it becomes a matter of antitrust concern."
2. Roland Machinery Co. v. Dresser Indus., Inc., 749 F.2d 380 (7th Cir. 1984). If you didn't study this case in law school, you're very old or went to a shitty law school. This is the case that in effect teaches the preliminary injunction standard and how courts should evaluate the standard in light of the evidence. Not only does Judge Posner give an in-depth analysis of the "inadequate remedy at law" test, but he also gives courts a new way to think about how the traditional four injunction factors fit together. He articulates what is still called the "sliding scale" analysis, in which courts weigh the moving party's likelihood of success and the relative harms associated with grants or denials of injunctive relief. In other words, he reformulates the test so that courts may balance one against the other. A strong case for injunctive relief does not require a substantial showing of harm from a denial of that relief.
1. Curtis 1000, Inc. v. Suess, 24 F.3d 941 (7th Cir. 1994). At the time, Curtis 1000 seemed like a garden-variety non-compete case in which the employer simply failed to demonstrate a protectable interest supporting the covenant. But the case has taken on added importance in Illinois, given the ongoing and unresolved debate on just what constitutes adequate consideration for at-will employee restrictive covenants. In classic Judge Posner style, he dissects the justification for the consideration rules and then reconstructs them in a way that is readable and satisfying.