Boyer v. Health Grades, Inc.

Health Grades, Inc., operated a website providing information to healthcare consumers about hospitals and physicians around the country, filed suit against two of its former employees, Christopher Boyer and Patrick Singson. Its complaint alleged that Boyer and Singson created competing websites during their employment at Health Grades and solicited Health Grades’ clients to advertise on their competing websites, which utilized proprietary methodologies created by Health Grades to increase the probability that consumers would discover their websites. The complaint included claims of breach of the fiduciary duty of loyalty, misappropriation of trade secrets, tortious interference with prospective business advantage, and ultimately, breach of contract and conversion. Defendants Boyer and Singson denied Health Grades’ material allegations and asserted a counterclaim for abuse of process. In support of their counterclaim, they alleged that Health Grades’ claims lacked a reasonable factual basis or cognizable basis in law and were based on allegations Health Grades largely knew to be false. A jury rejected all of Health Grades’ claims and returned a verdict for defendants on their counterclaim. The court subsequently denied Health Grades’ motion for judgment notwithstanding the verdict. On appeal, the intermediate appellate court found that the district court erred by allowing the jury to decide the question of whether Health Grades’ claims were devoid of reasonable factual support or lacked any cognizable basis in law such that they were not immune from liability under the Petition Clause of the First Amendment; and it remanded with instructions for the district court to make an independent judicial determination of that question. Shortly after the opinion was released, the Colorado Supreme Court issued its opinion in "General Steel Domestic Sales, LLC v. Bacheller," (291 P.3d 1), holding that the heightened standard set forth in earlier case law did not apply where the underlying alleged petitioning activity was the filing of an arbitration complaint concerning a purely private dispute. On rehearing, the court of appeals modified its initial opinion, concluding that nothing in "General Steel" required the modification of its remand order. Because the Supreme Court held that the underlying rationale for its judgment in General Steel concerning arbitration proceedings was equally applicable to actions filed in courts of law, and because it was uncontested by the parties that the action filed by Health Grades involved a purely private dispute, the judgment of the court of appeals was reversed, and the matter remanded with directions to affirm the jury’s verdict. View "Boyer v. Health Grades, Inc." on Justia Law