Contract analysis

1. Cross-Complainant Aurelius Media Americas Inc. ("AMA") is a corporation duly organized and existing under the laws of the State of Delaware (Secretary of State File No. 5284731), qualified and authorized to transact business in the State of California, with its principal office located at 8500 Sunset Boulevard, Suite 1400, West Hollywood, California 90069. AMA is a wholly owned subsidiary of Aurelius Global Media

2. Cross-Defendant Gavin Aldrich ("Aldrich") is an individual who, upon information and belief, resides at 1140 Tower Road, Beverly Hills, California 90210. Aldrich was formerly employed by AMA as Senior Vice President of Original Content & Executive Producer from approximately September 5, 2017 through October 14, 2022, the date on which AMA terminated his employment for cause, as set forth more fully below. Jurisdi

3. This Court has jurisdiction over this Cross-Complaint because the underlying action giving rise to this matter, captioned Gavin Aldrich v. Aurelius Media Americas Inc., Case No. 22STCV41087, was filed by Aldrich as Plaintiff in this Court. Pursuant to California Code of Civil Procedure section 428.10, AMA is entitled to file this Cross-Complaint against Aldrich, as the claims asserted herein arise out of the same

4. On or about September 5, 2017, AMA and Aldrich entered into a written Employment Agreement (the "Agreement"), pursuant to which Aldrich was hired as Vice President of Original Content. On or about August 1, 2020, AMA and Aldrich executed the First Amendment to the Employment Agreement (the "First Amendment"), which memorialized Aldrich's promotion from Vice President of Original Content to Senior Vice President of

5. In his capacity as Senior Vice President of Original Content & Executive Producer, Aldrich had primary oversight of AMA's Unscripted Programming Division, which encompasses multiple show units responsible for the development, production, and delivery of unscripted and reality television content across broadcast, cable, and streaming platforms. Aldrich reported to Jonathan Mercer, President of AMA, and had as a dir

6. Section 9 of the Agreement contains restrictive covenant provisions specifically designed to protect AMA's confidential information, trade secrets, and business relationships. These provisions were a material inducement to AMA's entry into the Agreement and the First Amendment, and were the subject of arm's-length negotiation between the parties. In particular: (a) Section 9.1 — Non-Competition. Section 9.1 of the

7. In addition to the contractual obligations set forth in the Agreement, AMA maintains a company-wide Acceptable Use and Confidentiality Policy (the "Policy"), which was last revised in March 2021. The Policy applies to all AMA employees, including, without exception, senior executives and officers of the Company. The Policy expressly prohibits employees from "transmitting, forwarding, or copying Company proprietary

8. In or around August 2022, AMA's IT security team, operating under the direction of Gregory Tanaka, Vice President of Legal & Compliance, initiated a routine data loss prevention ("DLP") audit of AMA's email systems. During the course of that audit, the IT security team identified anomalous email forwarding activity originating from Aldrich's AMA email account (galdrich@aureliusmedia.com). AMA retained an independe

9. The forensic review further identified seven (7) emails sent directly from Aldrich's AMA corporate email account (galdrich@aureliusmedia.com) to the email address info@halcyoncreekprod.com between March 3, 2022 and August 18, 2022. Halcyon Creek Productions LLC ("Halcyon Creek") is a California limited liability company formed on or about February 14, 2022. Upon information and belief, Halcyon Creek was formed by

10. AMA takes extensive and comprehensive measures to protect its proprietary information and trade secrets, including, without limitation, the following: (a) Requiring all employees, including senior executives and officers, to execute Employment Agreements containing confidentiality provisions, including but not limited to the provisions set forth in Section 9.4 of the Agreement; (b) Maintaining and actively enforc

11. On October 14, 2022, AMA terminated Aldrich's employment "for cause" pursuant to Section 7.2(b) of the Agreement. The termination was based on two independent grounds: (i) Aldrich's material breach of the confidentiality provisions set forth in Section 9.4 of the Agreement and his material violation of the Acceptable Use and Confidentiality Policy, arising from his unauthorized transmission of proprietary materia

12. AMA has been damaged, and continues to be damaged, by Aldrich's wrongful conduct as described herein, including but not limited to: the unauthorized disclosure of trade secrets and confidential business information to a direct competitor; the potential compromise and diminution of AMA's competitive position in the unscripted and reality television market; the loss of the economic value of proprietary show concept

13. AMA incorporates by reference each and every allegation set forth in Paragraphs 1 through 12 above, inclusive, as though fully set forth herein.

14. On or about September 5, 2017, AMA and Aldrich entered into the Employment Agreement, which was subsequently amended by the First Amendment dated August 1, 2020. The Agreement, as amended, constitutes a valid, binding, and enforceable contract between AMA and Aldrich, supported by adequate consideration, including AMA's employment of Aldrich, the payment of compensation and benefits, the grant of restricted stock

15. Section 9.4 of the Agreement imposes an indefinite and perpetual confidentiality obligation on Aldrich, prohibiting the disclosure, use, or transmission of Confidential Information to any person or entity other than in the furtherance of Aldrich's duties to AMA. This obligation expressly survives the termination of Aldrich's employment with AMA for any reason and continues in perpetuity. Aldrich acknowledged and

16. Aldrich materially breached Section 9.4 of the Agreement by engaging in the following unauthorized conduct: (a) Forwarding approximately three hundred and forty (340) emails containing Confidential Information, as defined in the Agreement, from his AMA corporate email account (galdrich@aureliusmedia.com) to his personal email account (galdrich.private@Northgate Software.com), over a period of approximately fourte

17. In addition to his breach of Section 9.4, Aldrich materially breached Section 9.2 (Non-Solicitation of Employees) and Section 9.3 (Non-Solicitation of Business Relationships) of the Agreement by engaging in conduct designed to advance the competitive interests of Halcyon Creek Productions LLC at AMA's expense. Upon information and belief, Aldrich's transmission of AMA's proprietary materials to Halcyon Creek was

18. AMA has performed all conditions, covenants, and obligations required of it under the Agreement and the First Amendment, or, in the alternative, has been excused from performance of any such obligations. AMA paid Aldrich his full salary, provided all benefits, and granted all compensation to which Aldrich was entitled under the Agreement through the date of his termination.

19. As a direct and proximate result of Aldrich's material breaches of the Agreement, AMA has suffered, and continues to suffer, damages in an amount to be proven at trial, including but not limited to: the value of the proprietary information disclosed to Aldrich's personal email account and to Halcyon Creek Productions LLC; the competitive harm resulting from the disclosure of trade secrets and confidential busines

20. AMA incorporates by reference each and every allegation set forth in Paragraphs 1 through 19 above, inclusive, as though fully set forth herein.

21. The following materials, among others, transmitted by Aldrich as described herein constitute "trade secrets" within the meaning of California Civil Code section 3426.1(d): the show format bibles for "Apex Endurance," "The Remix," and "Untamed West"; the pilot sizzle reels for "Apex Endurance" and "The Remix"; the detailed revenue model for "Summit Challenge"; the audience analytics reports; and the talent deal te

22. The show format bibles are the core intellectual property assets of AMA's Unscripted Programming Division. Each format bible is a comprehensive proprietary document describing in detail the show's concept, structure, casting approach, visual style, episode arc, competitive landscape analysis, target audience profile, and monetization strategy. AMA invested between approximately $85,000 and $120,000 in development

23. Aldrich acquired access to these trade secrets solely through his employment with AMA and by virtue of his senior position as Senior Vice President of Original Content & Executive Producer. At all relevant times, Aldrich was under a duty to maintain the secrecy of these trade secrets pursuant to Section 9.4 of the Agreement, the Acceptable Use and Confidentiality Policy, and his fiduciary obligations as a senior

24. Aldrich's unauthorized transmission of these trade secrets to his personal email account and to Halcyon Creek Productions LLC constitutes "misappropriation" within the meaning of California Civil Code section 3426.1(b). Specifically, Aldrich's conduct constitutes the disclosure or use of a trade secret by a person who, at the time of disclosure or use, knew or had reason to know that his knowledge of the trade se

25. As a direct and proximate result of Aldrich's misappropriation, AMA has suffered, and will continue to suffer, damages in an amount to be proven at trial, including but not limited to: the loss of the economic value of the misappropriated trade secrets; the competitive harm resulting from the disclosure of proprietary show concepts and financial data to a direct competitor; the costs of developing alternative or

26. AMA is entitled to injunctive relief pursuant to California Civil Code section 3426.2 to prevent further actual or threatened misappropriation of AMA's trade secrets. AMA specifically seeks an order of this Court: (a) Requiring Aldrich to immediately return to AMA, or permanently destroy under the supervision of an independent forensic examiner, all copies of AMA's trade secrets and confidential information in hi

27. Upon information and belief, Aldrich's misappropriation was willful and malicious within the meaning of California Civil Code section 3426.3. Aldrich knowingly and deliberately transmitted AMA's most sensitive proprietary materials — including complete show format bibles, pilot sizzle reels, and the revenue model for AMA's flagship franchise — to a direct competitor, in violation of his express contractual obliga

28. AMA is further entitled to recover its reasonable attorneys' fees and costs incurred in connection with this cause of action, pursuant to California Civil Code section 3426.4, upon a finding by this Court that Aldrich's misappropriation was willful and malicious. THIRD CAUSE OF ACTION Breach of Fiduciary Duty (Against Cross-Defendant Gavin Aldrich)

29. AMA incorporates by reference each and every allegation set forth in Paragraphs 1 through 28 above, inclusive, as though fully set forth herein.

30. As Senior Vice President of Original Content & Executive Producer of AMA, Aldrich occupied a senior officer position within the Company and was entrusted with substantial authority over, and responsibility for, AMA's Unscripted Programming Division, its personnel, its creative assets, and its business relationships. By virtue of this position, Aldrich owed fiduciary duties of loyalty and care to AMA. These duties

31. Aldrich breached his fiduciary duties to AMA by engaging in the following wrongful conduct: (a) Transmitting AMA's confidential proprietary information and trade secrets, including show format bibles, pilot sizzle reels, and the "Summit Challenge" revenue model, to Halcyon Creek Productions LLC, a direct competitor of AMA, for the purpose of advancing his personal interests and/or the interests of Halcyon Creek,

32. As a direct and proximate result of Aldrich's breach of fiduciary duty, AMA has suffered, and continues to suffer, damages in an amount to be proven at trial, including but not limited to: the competitive harm resulting from the disclosure of proprietary materials to a direct competitor; the diminution in value of AMA's intellectual property, including the show concepts "Apex Endurance," "The Remix," and "Untamed

33. AMA incorporates by reference each and every allegation set forth in Paragraphs 1 through 32 above, inclusive, as though fully set forth herein.

34. AMA had, and at all relevant times continues to have, exclusive ownership rights and possessory interests in the proprietary digital files transmitted by Aldrich, including the show format bibles for "Apex Endurance," "The Remix," and "Untamed West," the pilot sizzle reels for "Apex Endurance" and "The Remix," the "Summit Challenge" revenue model, audience analytics reports, and talent deal terms and compensation

35. Aldrich's unauthorized appropriation, copying, downloading, and transmission of these proprietary digital files — first to his personal email account (galdrich.private@Northgate Software.com) and personal cloud storage (Larkspur Technologies), and thereafter to Halcyon Creek Productions LLC (info@halcyoncreekprod.com) — constituted a wrongful exercise of dominion and control over AMA's property that was inconsist

36. Aldrich's conduct substantially interfered with AMA's exclusive right to possess, control, and determine the distribution of its proprietary materials. By transmitting these materials to a competitor without AMA's knowledge or consent, Aldrich deprived AMA of the ability to control the dissemination and use of its own property and exposed AMA to competitive harm and the risk of further unauthorized disclosure.

37. As a direct and proximate result of Aldrich's conversion of AMA's property, AMA has suffered, and continues to suffer, damages in an amount to be proven at trial, including but not limited to: the value of the converted property; the consequential damages resulting from the conversion, including the competitive harm arising from the disclosure of proprietary materials to a direct competitor; and such other damage

1. For compensatory damages in an amount according to proof at trial; On the Second Cause of Action (Misappropriation of Trade Secrets, Cal. Civ. Code § 3426 *et seq.*):

2. For injunctive relief pursuant to California Civil Code section 3426.2, including but not limited to: (a) An order requiring Aldrich to return to AMA, or permanently destroy under supervised conditions, all copies of AMA's trade secrets and confidential information in his possession, custody, or control, whether stored electronically, in hard copy, or in any other format; (b) An order prohibiting Aldrich from furt

3. For compensatory damages in an amount according to proof at trial;

4. For exemplary damages in an amount up to twice any award of actual damages, pursuant to California Civil Code section 3426.3(c);

5. For reasonable attorneys' fees and costs pursuant to California Civil Code section 3426.4; On the Third Cause of Action (Breach of Fiduciary Duty):

6. For compensatory damages in an amount according to proof at trial; On the Fourth Cause of Action (Conversion):

7. For compensatory and consequential damages in an amount according to proof at trial; On All Causes of Action:

8. For pre-judgment and post-judgment interest at the maximum rate permitted by law;

9. For costs of suit incurred herein;

10. For such other and further relief as this Court may deem just and proper. Dated: January 20, 2023 CALDERWOOD & HARKNESS LLP By: /s/ Renata Vasquez ________________________________________ RENATA VASQUEZ (SBN 224578) DEVON ARCHER (SBN 301462) 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Telephone: (213) 555-7200 Facsimile: (213) 555-7201 Attorneys for Defendant and Cross-Complainant AURELIUS M