Greenmount LLC
v.
Management LLC et al.

Trade Secret Update
August 22, 2025

 Greenmount LLC v. Management LLC et al., 2:23-cv-10376-HDV-RAO

 Summary: In the Central District of California, a court recently awarded a trade-secret defendant “prevailing party” status, and leave to seek its DTSA attorney’s fees, after it obtained a with-prejudice dismissal of plaintiffs’ claims. The decision’s novelty lies in the pendency of counterclaims asserted by a co-defendant. The Court entered partial judgment under Fed. R. Civ. P. 54(b) in the defendant’s favor on the asserted trade secret claims, establishing its “prevailing party” status under the DTSA. As the prevailing party, the court held that the defendant could proceed with seeking its attorneys’ fees and costs under the DTSA, even though other claims in the action remained pending.

Decision: The defendant, Cleanline Management LLC, had previously prevailed on its motion for judgment on the pleadings, resulting in the dismissal of all claims asserted by the plaintiff—including its DTSA claim against Cleanline, which the court dismissed for lack of subject-matter jurisdiction. With the dismissal of plaintiff’s claims, still pending were counterclaims asserted by Cleanline’s co-defendant against the plaintiff (for breach of contract, breach of fiduciary duty, and illegal recording).

Cleanline moved for entry of partial judgment under Rule 54(b). The plaintiff, in opposition, argued that entry of partial judgment was premature because the dismissed claims and pending counterclaims arose from “a single set of overlapping facts” and presented “interrelated questions of law.” Plaintiff’s defense to the counterclaims, it argued, implicated the same factual allegations on which its dismissed claims rested: that Cleanline’s co-defendant breached the same agreement containing the same non-compete and confidentiality terms supporting its DTSA claims. Plaintiff also argued that a determination of the “prevailing party” under the DTSA–and any motion for fees by Cleanline—would be premature while it continued to litigate these related issues with respect to the co-defendant’s counterclaims. In plaintiff’s view, a more “complete evidentiary record” was necessary to determine whether its DTSA claim was asserted in “bad faith,” as to sustain a fee award to Cleanline.

The Court granted the motion, entered partial judgment, and ruled that Cleanline could proceed with a motion for fees under the DTSA, as the prevailing party, notwithstanding the pendency of counterclaims. Despite “some factual overlap,” the court reasoned that the legal issues in any appeal would be sufficiently disparate and posed minimal risk of unnecessary or inconsistent appellate review. With respect to the dismissed DTSA claim, specifically, the Court found that any appeal would concern its decision that subject matter jurisdiction was lacking—and not any interrelated fact issues that remained with the district court. Most significantly, the Court rejected plaintiff’s argument that motion practice on attorneys’ fees would be premature while the action remained pending. Because judgment on plaintiff’s claims was to be entered in Cleanline’s favor, the Court held that Cleanline was a prevailing party under the DTSA; therefore, it would not be “premature” for Cleanline to move for fee recovery pursuant to 18 U.S.C. § 1836(b)(3)(D).

 Practice Note: Should other courts adopt this reasoning, parties obtaining early dismissal of trade secret claims will gain valuable leverage during the pendency of the case should they obtain partial judgment on trade secret claims. Extending the Court’s reasoning, it seems possible that a defendant (or plaintiff) could seek an early fee award even when there are claims remaining unadjudicated between the movant and its opponent. Still, efforts to obtain partial judgment on trade secret claims will be deemed premature if the dismissal of those claims is likely to raise issues on appeal that are interrelated with those remaining before the district court. Thus, the entry of partial judgment on trade secret claims—and early fee motion practice—may remain uncommon given the frequency with which a party’s claims—and its opponent’s counterclaims—share common legal and fact issues. In this case, Cleanline successfully cleared this hurdle in large part by having obtained dismissal of trade secret claims on subject matter jurisdiction grounds—drastically reducing the likelihood that any appeal would implicate live fact issues on the still-pending counterclaims.