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Graham Capital Management, L.P. v. Bongiovanni

United States District Court, D. Connecticut

November 18, 2019

GRAHAM CAPITAL MANAGEMENT, L.P., Plaintiff,
v.
STEVEN BONGIOVANNI, Defendant.

          ORDER

          VICTOR A. BOLDEN UNITED STATES DISTRICT JUDGE

         RULING ON DEFENDANT'S MOTION FOR ATTORNEY'S FEES

         Graham Capital Management, L.P., (“Graham Capital” or “Plaintiff”) filed this case after learning that its former employee, Steven Bongiovanni (“Defendant” or “Bongiovanni”), allegedly had secretly recorded meetings of Graham Capital's research department.

         Bongiovanni has moved for an award of attorney's fees incurred in his successful defense of Graham Capital's motion for preliminary injunction.

         For the reasons explained below, Defendant's motion for attorney's fees is DENIED.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Steven Bongiovanni once worked at Graham Capital Management developing quantitative methods and computer software programs for systematic trading. Mem. of Decision, ECF No. 54 at 1 (Feb. 14, 2019) (“Mem.”). Bongiovanni filed a lawsuit against his former employer in Connecticut Superior Court, alleging age discrimination, a hostile work environment and retaliation. Mot. for Atty's Fees - Def.'s Mem., ECF No. 55-1 at 2 (Mar. 5, 2019) (“Def.'s Mem.”). During his deposition in that lawsuit, Bongiovanni “testified that he had secretly recorded meetings” and still held five of the recordings. Mem. at 1. On October 1, 2019, Graham Capital terminated Bongiovanni's employment. Def.'s Mem. at 2.

         On October 5, 2018 Graham Capital sought a temporary restraining order and a preliminary injunction, based on its concern that Bongiovanni's recordings of Graham Capital research department meetings posed a threat of irreparable harm to GCM. Compl., ECF No. 1 (Oct. 5, 2018); see also Mot. for Temporary Restraining Order, ECF No. 5 (Oct. 5, 2018); Mot. for Preliminary Injunction, ECF No. 6 (Oct. 5, 2018). Graham Capital argued that Bongiovanni's recordings could enable a third party to replicate or “front-run” one or more of GCM's proprietary trading strategies. In the injunction proposed by Graham Capital, Bongiovanni would be “enjoined from (a) using any [Graham Capital] confidential information or trade secrets for any matter or for any purpose, and from (b) disclosing any [Graham Capital] confidential information or trade secrets to any person or entity outside of [Graham Capital].” Mem. at 1.

         The Court granted Graham Capital's motion for temporary restraining order and scheduled a hearing on the motion for preliminary injunction. After a hearing held over the course of three days, the Court ultimately denied plaintiff's motion for temporary restraining order. The Court explained that:

Portions of the information on Bongiovanni's recordings meet the definition of confidential information as described by both his employment agreement and CUTSA. Based on the transcripts of Bongiovanni's recordings and the accompanying testimony of GCM's representatives, Misters Tricker and Tanrikulu, the court finds that information contained on the recordings has the potential to derive independent economic value from not being generally known. Especially in the context of research and development, seemingly rough ideas can prove to be important. The court further finds that GCM has demonstrated reasonable efforts to maintain the secrecy of such information. Accordingly, the court adheres to its decision finding that the material on the recordings has value to plaintiff deserving of protection.

Mem. at 6-7. The Court also indicated its willingness to order the return of the recordings to Graham Capital:

[A]ll of those tapes should be returned and no copies should be made of those tapes except insofar as I can be shown that there is some information that is useful in the state court proceeding.

Transcript, ECF No. 40 at 629 (November 27, 2018).

         In its ruling, the Court reiterated its willingness to order Bongiovanni to return his copies of the recordings to remedy any danger of insecurity. Mem. at 8. Nevertheless, although Graham Capital initially sought the return of Bongiovanni's recordings, during the course of this and the state court litigation, Graham Capital focused on preventing Bongiovanni from using or disclosing his recordings for any purpose, except to the extent permitted by the Connecticut ...


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