Geico Says Plaintiffs' Attys Used Its Secrets Against USAA

February 22, 2017 | Law360

Daniel Siegal

Law360, Los Angeles (February 22, 2017, 9:31 PM EST) -- Geico sued two plaintiffs' attorneys in Pennsylvania federal court Tuesday, alleging they obtained confidential information in discovery in a putative class action against the insurer and tried to use it to get a leg up in a similar suit against Geico rival United Services Automobile Association, exposing Geico's trade secrets.

In the complaint filed in Pennsylvania's Eastern District, the Government Employees Insurance Co. and a host of its subsidiaries accuse Scott P. Nealey of the Law Office of Scott P. Nealey, Stephen M. Hansen of Law Offices of Stephen M. Hansen and employment litigation expert witness Bernard Siskin of BLDS LLC of misappropriating the insurance company's trade secrets, and for the attorneys, of doing so to unjustly enrich themselves.

Geico contends that Nealey and Hansen represent named plaintiffs Megan Stone and Christine Carosi in a putative class action in Washington federal court accusing the insurer of breaching its insurance agreements by shorting insureds on the value of the loss of the use of their vehicles after accidents.

In the course of that lawsuit, the plaintiffs moved to remand the suit to Washington State Superior Court — and in opposition Geico submitted a declaration from David Antonacci, a supervisor in its claims department, that contained details about Geico's claims management system, its average claim payouts, its claims handling procedures, and the numbers of certain claims it received during a period of time, according to Geico's complaint.

“Mr. Antonacci's declaration contained information that Geico strives to keep confidential and from which Geico derives independent economic value,” Geico alleged. “If a competitor were to discover information regarding the ways Geico tracks information relating to the handling of claims, the number of particular types of claims during a specific time period or the average amounts Geico paid relating to specific types of claims during a specific time period, that competitor could use the information for its own economic benefit and to Geico's economic detriment.”

Because of the sensitive nature of the information in the declaration, Geico first obtained a stipulated protective order covering confidential information in the Stone class action, and then filed two copies of the declaration — a heavily redacted public filing, and the complete version, filed under seal, with the words “Filed Under Seal” stamped in conspicuous red font on its first page, according to Geico's complaint.

Geico alleges that two days after the filing, however, the attorneys took that declaration to use in another lawsuit in which they represented plaintiffs bringing a class action against an auto insurance company — in this case, named plaintiff David and Marissa Turk's suit against United Services Automobile Association and its affiliates.

The suit further alleges that the attorneys gave the declaration to their class certification expert, Siskin, and that while Nealey deposed Siskin, with USAA counsel present, the duo produced the Antonacci declaration, with the “Filed Under Seal” mark removed.

Geico's suit seeks a permanent injunction barring the use of its misappropriated trade secrets, compensatory damages, and damages for any unjust enrichment the attorney defendants' may have obtained by using the Antonacci declaration, as well as double exemplary damages.

Hansen and representatives for Nealey and Siskin did not immediately respond to requests for comment on Wednesday.

Geico is represented by Nicholas M. Centrella and Andrew K. Garden of Conrad O'Brien PC and Dan W. Goldfine, Bruce E. Samuels and Jared L. Sutton of Lewis Roca Rothgerber Christie LLP.

Counsel information for the defendants was not immediately available on Wednesday.

The case is Government Employees Insurance Co., et al. v. Scott P. Nealey, et al., case number 2:17-cv-00807 in the U.S. District Court for the Eastern District of Pennsylvania.