Mayer Brown defeats $18.5 million trade secrets lawsuit after bench trial

Mayer Brown secured a complete victory for Karma Automotive, LLC and its former CEO Dr. Liang Zhou in a trade secrets lawsuit brought by VLF Automotive, LLC in Orange County Superior Court in California. VLF claimed that Karma gained confidential information about VLF’s plans to develop an electric luxury Humvee and used that information to its benefit and to the exclusion of VLF. On May 8, 2024, the court granted judgment in favor of the firm’s clients on VLF’s breach of contract and fraudulent concealment claims, thereby precluding VLF’s claim of $18.5 million in damages. The team then negotiated a favorable stipulated judgment with VLF that secured dismissal of the remaining Unfair Competition Law claim that sought injunctive relief.

In 2020, VLF sought a permanent injunction under its five causes of action: breach of contract, fraudulent concealment, intentional interference with prospective economic advantage, violations of California’s Unfair Competition Law, and misappropriation of trade secrets.

After bringing a successful motion for summary adjudication of the intentional interference and misappropriation of trade secrets claims in 2022, Mayer Brown sought a bench trial which began in March 2024 to hear the remaining claims. After VLF closed its case-in-chief, the team moved for judgment, arguing that VLF failed to prove all its remaining claims.

The Los Angeles-based team included partner John Nadolenco and associates Joseph Vescera and Iryna Riechkina.

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