RENATA VASQUEZ (SBN 224578) DEVON ARCHER (SBN 301462) CALDERWOOD & HARKNESS LLP 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Telephone: (213) 555-7200 Facsimile: (213) 555-7201
Email: rvasquez@calderwoodharkness.com
Email: darcher@calderwoodharkness.com
Attorneys for Defendant and Cross-Complainant AURELIUS MEDIA AMERICAS INC.
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES — CENTRAL DISTRICT
GAVIN ALDRICH,
Plaintiff,
v.
AURELIUS MEDIA AMERICAS INC., a Delaware corporation,
Defendant and Cross-Complainant.
Case No. 22STCV41087
Assigned for All Purposes to the Hon. Catherine Villanueva, Dept. 52
CROSS-COMPLAINT OF DEFENDANT AND CROSS-COMPLAINANT AURELIUS MEDIA AMERICAS INC. AGAINST GAVIN ALDRICH
[1] Breach of Employment Agreement; [2] Misappropriation of Trade Secrets (Cal. Civ. Code § 3426 *et seq.*); [3] Breach of Fiduciary Duty; [4] Conversion
Defendant and Cross-Complainant Aurelius Media Americas Inc. ("AMA" or "Cross-Complainant"), by and through its attorneys of record, Calderwood & Harkness LLP, hereby files this Cross-Complaint against Plaintiff and Cross-Defendant Gavin Aldrich ("Aldrich" or "Cross-Defendant"), and alleges as follows:
INTRODUCTORY ALLEGATIONS
Parties.
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 Group PLC ("AGMG"), a public limited company organized under the laws of England and Wales (Companies House No. 08412667), with its registered headquarters at 34 Kingsway, London WC2B 6EX, United Kingdom. AGMG is publicly listed and traded on the London Stock Exchange under the ticker symbol LSE: AGMG. AMA operates in the media, entertainment, and e-commerce industry in the United States, employing approximately 3,200 employees nationwide, of whom approximately 2,400 are based in California across seven production facilities. For the fiscal year ending December 31, 2022, AMA's United States revenue was approximately $687.4 million.
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.
Jurisdiction and Venue
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 transaction, occurrence, or series of transactions or occurrences as Aldrich's complaint. Venue is proper in the County of Los Angeles because AMA's principal office is located in Los Angeles County and because the acts and omissions giving rise to the claims asserted in this Cross-Complaint occurred within Los Angeles County.
GENERAL ALLEGATIONS
The Employment Relationship
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 Original Content & Executive Producer, effective retroactively to January 1, 2020. Under the Agreement, as amended by the First Amendment, Aldrich's annual base salary was $485,000, and he was eligible for a discretionary annual performance bonus, which most recently, for fiscal year 2021, was paid in the amount of $225,000. In connection with the First Amendment, AMA also granted Aldrich 42,500 restricted stock units ("RSUs") in AGMG, subject to a four-year vesting schedule, of which 15,300 RSUs remained unvested at the time of Aldrich's termination on October 14, 2022. At all relevant times, Aldrich reported directly to Jonathan Mercer, President of AMA. True and correct copies of the Agreement and the First Amendment are attached hereto as Exhibit A and Exhibit B, respectively, and are incorporated herein by this reference.
Aldrich's Position and Access to Confidential Information
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 direct report Dwayne Prescott, Vice President of Unscripted Programming. By virtue of his senior position within the Company, Aldrich had broad and substantially unrestricted access to AMA's most competitively sensitive proprietary information, including, without limitation: show format bibles, pilot sizzle reels, audience analytics data and reports, revenue projections and profit-and-loss summaries for individual show units and the Unscripted Programming Division as a whole, talent deal terms and compensation information, production schedules, internal strategy memoranda, marketing plans, and strategic business plans. These materials constitute the core intellectual property and confidential business information of AMA's entertainment operations and are among AMA's most valuable assets.
Restrictive Covenant and Confidentiality Provisions
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 Agreement provides that, for a period of eighteen (18) months following the termination of Aldrich's employment for any reason, Aldrich shall not, directly or indirectly, engage in, be employed by, or render services to any "Competing Enterprise." The Agreement defines "Competing Enterprise" as any entity deriving twenty-five percent (25%) or more of its gross revenue from the production, licensing, or distribution of unscripted or reality television content in North America.
(b) Section 9.2 — Non-Solicitation of Employees. Section 9.2 of the Agreement provides that, for a period of twenty-four (24) months following the termination of Aldrich's employment for any reason, Aldrich shall not, directly or indirectly, solicit, recruit, induce, or encourage any employee of AMA with whom Aldrich worked or had professional contact during the twelve (12) months preceding Aldrich's termination to leave AMA's employ or to accept employment with any other entity.
(c) Section 9.3 — Non-Solicitation of Business Relationships. Section 9.3 of the Agreement provides that, for a period of twenty-four (24) months following the termination of Aldrich's employment for any reason, Aldrich shall not, directly or indirectly, solicit, contact, or divert any network, platform, or advertiser client of AMA with whom Aldrich had material contact during the twenty-four (24) months preceding Aldrich's termination, for the purpose of providing services competitive with those offered by AMA.
(d) Section 9.4 — Confidentiality. Section 9.4 of the Agreement imposes a perpetual confidentiality obligation on Aldrich. It provides, in relevant part, that Aldrich shall not "disclose, use, or transmit Confidential Information to any person or entity other than in the furtherance of [his] duties to the Company," and that this obligation "shall survive the termination of [Aldrich's] employment with the Company for any reason and shall continue in perpetuity." The Agreement defines "Confidential Information" as "proprietary content, show formats, audience data, revenue projections, talent agreements, and all information designated as confidential by the Company." Section 9.4 expressly encompasses both tangible and intangible embodiments of Confidential Information, including electronic files, documents, recordings, and data stored in any format.
AMA's Acceptable Use and Confidentiality Policy
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 information, trade secrets, or confidential data to personal email accounts, personal cloud storage, or non-Company-approved third-party recipients." The Policy further requires that any transmission of proprietary or confidential materials outside of AMA's secure systems be pre-approved in writing by the employee's department head and the Vice President of Business Affairs. On or about April 12, 2021, Aldrich executed a written acknowledgment of the Policy, confirming that he had received, read, understood, and agreed to be bound by its terms. A true and correct copy of the Policy and Aldrich's signed acknowledgment are attached hereto as Exhibit C and incorporated herein by this reference.
Aldrich's Unauthorized Transmission of Confidential Information to His Personal Email Account
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 independent digital forensics consultant to conduct a comprehensive forensic review of Aldrich's email activity logs and his AMA-issued laptop computer. The forensic review revealed that, over a period of approximately fourteen (14) months, from approximately July 12, 2021 through September 29, 2022, Aldrich forwarded approximately three hundred and forty (340) emails from his AMA corporate email account to his personal email account, identified as galdrich.private@Northgate Software.com. The forwarded emails collectively contained a significant volume of AMA's confidential and proprietary information, including, without limitation, the following categories of materials:
(a) Forty-seven (47) emails containing show concept documents, including one-sheets, treatments, and format bibles for multiple unscripted television concepts in various stages of development;
(b) Twenty-two (22) emails containing audience analytics reports, which include proprietary viewership data, demographic breakdowns, and engagement metrics for AMA's existing and in-development programming;
(c) Eighteen (18) emails containing revenue projections and profit-and-loss summaries for individual show units within the Unscripted Programming Division;
(d) Fourteen (14) emails containing talent deal terms and compensation information, including the terms of agreements between AMA and on-screen talent, producers, and key creative personnel; and
(e) Additional emails containing production schedules, internal strategy memoranda, marketing materials, vendor agreements, and miscellaneous business correspondence.
At no time did AMA authorize Aldrich to transmit confidential or proprietary materials to his personal email account. No business justification existed for such transmissions, and Aldrich did not seek or receive approval from Jonathan Mercer, Gregory Tanaka, or any other AMA officer or executive for any of the approximately 340 forwarded emails.
Aldrich's Unauthorized Transmission of Confidential Information to Halcyon Creek Productions LLC
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 Nina Castellanos, a former AMA Director of Development who voluntarily departed AMA's employ in or around January 2022. Halcyon Creek is a production company that operates in the unscripted and reality television space and is, accordingly, a direct competitor of AMA within the meaning of the Agreement. Upon information and belief, Aldrich and Castellanos share a long-standing professional relationship predating their respective employment tenures at AMA.
The seven (7) emails transmitted by Aldrich from his AMA account to Halcyon Creek contained the following materials:
(a) Three (3) complete unscripted show format bibles for concepts titled "Apex Endurance," "The Remix," and "Untamed West." All three concepts were developed by AMA's in-house development team under Aldrich's supervision during 2021 and early 2022. Each format bible is a comprehensive document describing the show's concept, structure, casting approach, visual style, episode arc, and monetization strategy;
(b) Two (2) pilot sizzle reels — for "Apex Endurance" and "The Remix" — transmitted via shared Larkspur Technologies links originating from Aldrich's personal Larkspur Technologies account (not from any AMA-approved platform), indicating that Aldrich had previously downloaded these files from AMA's secure systems and uploaded them to his personal cloud storage; and
(c) A detailed revenue model for "Summit Challenge," AMA's flagship unscripted franchise, which generates approximately $42 million in annual revenue across domestic and international licensing, advertising, and ancillary revenue streams. The "Summit Challenge" revenue model contains granular, line-item financial projections, including per-episode production costs, network license fees, international distribution revenues, advertising cost-per-mille (CPM) rates, talent compensation structures, and margin analysis. This revenue model constitutes among the most competitively sensitive data in AMA's entire portfolio and would provide a competitor with an extraordinary and unfair advantage in pricing, deal structuring, and market positioning.
AMA invested significant financial resources in the development of each of the three show concepts whose format bibles were disclosed to Halcyon Creek:
(a) "Apex Endurance": AMA invested approximately $120,000 in development costs, including location scouting across multiple domestic and international venues, casting research and talent outreach, and preparation of a full pilot treatment. At the time of Aldrich's termination, AMA had engaged in preliminary discussions with two major streaming platforms regarding a potential series order for "Apex Endurance," and a formal pitch was being prepared for presentation in the fourth quarter of 2022;
(b) "The Remix": AMA invested approximately $85,000 in development costs, including format design, music licensing research, and early-stage casting. "The Remix" was in an early-stage development phase and had not yet been pitched to external buyers, making the secrecy of the format bible particularly critical to AMA's competitive position; and
(c) "Untamed West": AMA invested approximately $95,000 in development costs, including on-location research, the production of a sizzle reel, and the development of a pitch deck. The sizzle reel for "Untamed West" was actively in use for pitch meetings with cable networks at the time of Aldrich's unauthorized transmissions.
All of the above-referenced materials — including the format bibles, pilot sizzle reels, and the "Summit Challenge" revenue model — were stored on AMA's secure internal content management system, which requires individual login credentials and is accessible only to authorized AMA personnel on a need-to-know basis. Each of these materials bears a watermark reading "CONFIDENTIAL — AURELIUS MEDIA AMERICAS INC." and is subject to the confidentiality protections of both Section 9.4 of the Agreement and the Acceptable Use and Confidentiality Policy.
At no time did AMA authorize Aldrich to transmit any of the foregoing materials to Halcyon Creek Productions LLC, to Nina Castellanos, or to any other third party outside of AMA. Pursuant to AMA's internal policies and standard business practices, all external transmissions of development materials — including transmissions to potential co-production partners, co-development entities, or joint venture participants — require the prior written approval of either the President of AMA or the Vice President of Business Affairs. No such approval was sought or obtained by Aldrich with respect to any of the seven (7) transmissions to Halcyon Creek, or with respect to any other external transmission of the materials at issue in this Cross-Complaint.
AMA's Trade Secret Protections
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 enforcing the Acceptable Use and Confidentiality Policy, which was last revised in March 2021, and which sets forth detailed rules and restrictions governing the handling, storage, and transmission of confidential and proprietary information;
(c) Requiring all employees, upon hire and upon each material revision of the Policy, to execute signed acknowledgments confirming receipt, review, and understanding of the Policy;
(d) Restricting access to confidential materials, including show format bibles, sizzle reels, revenue models, and audience analytics, through a secure internal content management system that utilizes individual login credentials, role-based access controls, and multi-factor authentication;
(e) Watermarking all confidential documents with the legend "CONFIDENTIAL — AURELIUS MEDIA AMERICAS INC.";
(f) Limiting access to revenue models, financial projections, and profit-and-loss summaries to authorized personnel on a strict need-to-know basis, as determined by department heads and the Vice President of Business Affairs;
(g) Implementing ongoing data loss prevention monitoring through AMA's IT security team, which conducts periodic audits of email activity, file transfer logs, and network traffic to detect and prevent unauthorized transmission of proprietary data; and
(h) Conducting annual information security awareness training for all employees, including sessions specifically addressing the handling of confidential content and trade secret materials.
These measures, individually and collectively, constitute reasonable efforts under the circumstances to maintain the secrecy of AMA's trade secrets and confidential information within the meaning of California Civil Code section 3426.1(d)(2).
Aldrich's Termination.
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 materials to his personal email account (galdrich.private@Northgate Software.com) and to Halcyon Creek Productions LLC (info@halcyoncreekprod.com), as set forth above; and
(ii) Aldrich's willful insubordination in connection with his refusal to comply with a direct instruction from AMA President Jonathan Mercer regarding the restructuring of the Unscripted Programming Division, and Aldrich's subsequent dissemination of disparaging communications to subordinate employees, which undermined the management chain of command and disrupted the operations of the Unscripted Programming Division.
AMA provided Aldrich with written notice of the for-cause termination on October 14, 2022, specifying the grounds therefor. A true and correct copy of the termination notice is attached hereto as Exhibit D and incorporated herein by this reference.
Damages.
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 concepts in which AMA invested substantial development resources; the costs of investigating and remediating Aldrich's misconduct, including fees incurred for forensic analysis and legal counsel; and the diversion of management time and attention from AMA's core business operations. AMA brings this Cross-Complaint to recover its damages, to protect its proprietary rights, and to prevent further misappropriation and unauthorized use of its trade secrets and confidential information.
FIRST CAUSE OF ACTION
Breach of Employment Agreement
(Against Cross-Defendant Gavin Aldrich)
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 units, and the mutual promises and obligations contained therein.
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 agreed to this obligation when he executed the Agreement and again when he executed the First Amendment.
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 fourteen (14) months, from approximately July 12, 2021 through September 29, 2022, without authorization from AMA and in violation of the express terms of Section 9.4 of the Agreement and the Acceptable Use and Confidentiality Policy; and
(b) Transmitting three (3) complete show format bibles for the concepts titled "Apex Endurance," "The Remix," and "Untamed West," two (2) pilot sizzle reels for "Apex Endurance" and "The Remix," and the detailed revenue model for AMA's flagship unscripted franchise "Summit Challenge" to Halcyon Creek Productions LLC, a direct competitor of AMA, via seven (7) emails sent between March 3, 2022 and August 18, 2022, without authorization from AMA and in direct contravention of Aldrich's confidentiality obligations under the Agreement.
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 part of a broader course of conduct in which Aldrich sought to divert AMA's business relationships and to facilitate the recruitment of AMA employees by Halcyon Creek.
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 business information to a direct competitor; the diminution in value of AMA's intellectual property and show concepts; and the costs of investigation, forensic analysis, and remediation incurred by AMA in connection with Aldrich's breaches.
SECOND CAUSE OF ACTION
Misappropriation of Trade Secrets
(California Civil Code § 3426 et seq.)
(Against Cross-Defendant Gavin Aldrich)
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 terms and compensation information. These materials qualify as trade secrets because:
(a) They derive independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from their disclosure or use. The show format bibles, sizzle reels, and revenue model embody years of creative development, market research, and financial analysis that are unique to AMA and not available to competitors through any legitimate means. The audience analytics data reflects proprietary viewership information and engagement metrics that AMA has invested substantial resources to develop and maintain. The talent deal terms contain negotiated compensation structures and contractual provisions that would be of significant value to competitors in structuring competing offers; and
(b) They are the subject of efforts that are reasonable under the circumstances to maintain their secrecy, as detailed in Paragraph 10 above, including contractual confidentiality obligations, company-wide policies, secure systems, watermarking, access restrictions, and ongoing monitoring.
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 costs for each of the three show concepts at issue — "Apex Endurance," "The Remix," and "Untamed West" — including location scouting, casting research, talent outreach, pilot treatments, sizzle reel production, and market analysis. These investments represent a substantial commitment of AMA's financial and creative resources, and the resulting materials embody a competitive advantage that cannot be replicated without similar investment and the exercise of independent creative and business judgment. The "Summit Challenge" revenue model contains detailed, line-item financial projections constituting among the most competitively sensitive data in AMA's entire portfolio. "Summit Challenge" is AMA's flagship unscripted franchise, generating approximately $42 million in annual revenue across domestic and international licensing, advertising, and ancillary revenue streams. The revenue model includes, among other things, per-episode production costs, network license fees, international distribution revenues, advertising CPM rates, talent compensation structures, and margin analysis, the disclosure of which to a competitor would provide that competitor with an extraordinary and unfair advantage in pricing, deal structuring, and competitive positioning.
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 officer of the Company. Aldrich was aware of and acknowledged these obligations, as evidenced by his execution of the Agreement, the First Amendment, and the signed Policy acknowledgment.
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 secret was:
(i) Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use, namely, Aldrich's employment with AMA and the express confidentiality obligations set forth in Section 9.4 of the Agreement and the Acceptable Use and Confidentiality Policy; and
(ii) Derived from or through a person — AMA — who owed a duty to maintain the secrecy of the trade secrets and who entrusted them to Aldrich solely for use in the furtherance of AMA's business.
Aldrich's deliberate transmission of show format bibles, pilot sizzle reels, and a detailed revenue model to Halcyon Creek Productions LLC, a direct competitor in the unscripted television market, without authorization and in violation of his contractual and fiduciary obligations, constitutes the paradigmatic example of trade secret misappropriation. Moreover, Aldrich's transmission of approximately 340 emails containing confidential materials to his personal email account, outside of AMA's secure systems, constitutes acquisition and maintenance of trade secrets by improper means and created an unacceptable risk of further unauthorized disclosure.
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 replacement show concepts; and the costs of investigation, forensic analysis, and remediation.
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 his possession, custody, or control, including all electronic copies stored on his personal email account (galdrich.private@Northgate Software.com), personal cloud storage accounts (including his personal Larkspur Technologies account), personal computers, mobile devices, external storage media, and any other location;
(b) Prohibiting Aldrich from further disclosing, using, transmitting, or otherwise exploiting any of AMA's trade secrets or confidential information, in any form, to any person or entity; and
(c) Requiring Aldrich to identify all persons or entities to whom he has disclosed or transmitted AMA's trade secrets or confidential information, to enable AMA to take appropriate steps to mitigate the harm caused by such disclosures.
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 obligations under Section 9.4 of the Agreement, in violation of the Acceptable Use and Confidentiality Policy that he had acknowledged in writing, and in violation of his fiduciary duties as a senior officer of AMA. Aldrich took affirmative steps to conceal his conduct, including by routing sizzle reels through his personal Larkspur Technologies account rather than transmitting them directly from AMA systems, and by concealing his communications with Halcyon Creek Productions and Nina Castellanos from AMA's management. Accordingly, AMA is entitled to exemplary damages in an amount up to twice any award of actual damages, pursuant to California Civil Code section 3426.3(c).
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 included, without limitation, the obligation to act in AMA's best interests at all times, to refrain from self-dealing and conflicts of interest, to subordinate his personal interests to those of AMA when acting in his capacity as an officer of the Company, and to refrain from the unauthorized disclosure of AMA's confidential information, trade secrets, and proprietary materials to third parties, including competitors.
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, and doing so without any authorization from AMA;
(b) Forwarding approximately three hundred and forty (340) emails containing confidential AMA information to his personal email account, outside of AMA's secure systems, without any legitimate business justification and in derogation of his duty to safeguard AMA's proprietary information;
(c) Concealing his communications with Halcyon Creek Productions and Nina Castellanos from AMA's management, including from his direct superior, Jonathan Mercer, President of AMA, and from Gregory Tanaka, Vice President of Legal & Compliance, thereby depriving AMA of the opportunity to protect its interests and to take timely remedial action; and
(d) Placing his personal interests, and the interests of Halcyon Creek Productions, above the interests of AMA, in direct contravention of his duty of loyalty as a senior officer of the Company.
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 West," and the commercially sensitive financial data embodied in the "Summit Challenge" revenue model; the costs of investigation, forensic analysis, and remediation; and the diversion of management time and resources.
FOURTH CAUSE OF ACTION
Conversion
(Against Cross-Defendant Gavin Aldrich)
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 information. These materials are specific, identifiable items of AMA's property, and AMA's ownership thereof is not disputed. AMA created these materials through the expenditure of substantial financial, creative, and personnel resources, and AMA maintained exclusive control over their distribution and use.
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 inconsistent with, and in derogation of, AMA's rights as the exclusive owner of the materials. Aldrich had no right, authority, or permission to copy, download, transmit, or otherwise dispose of these materials for any purpose other than the performance of his duties for AMA, and his actions exceeded any authority that AMA had conferred upon him.
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 damages as may be established at trial.
PRAYER FOR RELIEF
WHEREFORE, Cross-Complainant Aurelius Media Americas Inc. respectfully prays for judgment against Cross-Defendant Gavin Aldrich as follows:
On the First Cause of Action (Breach of Employment Agreement):
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 further disclosing, using, transmitting, or otherwise exploiting AMA's trade secrets and confidential information, in any form, to any person or entity;
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
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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 MEDIA AMERICAS INC.
VERIFICATION
I, Gregory Tanaka, declare as follows:
I am the Vice President of Legal & Compliance of Aurelius Media Americas Inc. ("AMA"), the Defendant and Cross-Complainant in the above-captioned action. I am authorized to make this verification on behalf of AMA. I have read the foregoing Cross-Complaint of Defendant and Cross-Complainant Aurelius Media Americas Inc. Against Gavin Aldrich and am familiar with its contents. The factual allegations set forth therein are true and correct to the best of my knowledge, information, and belief, except as to those matters alleged on information and belief, and as to those matters, I believe them to be true.
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.
Executed in West Hollywood, California on January 19, 2023
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GREGORY TANAKA Vice President of Legal & Compliance Aurelius Media Americas Inc.
PROOF OF SERVICE
STATE OF CALIFORNIA, COUNTY OF LOS ANGELES
I am employed in the County of Los Angeles, State of California. I am over the age of eighteen (18) years and am not a party to the within action. My business address is Calderwood & Harkness LLP, 777 South Flower Street, Suite 4200, Los Angeles, California 90017.
On January 20, 2023, I served the foregoing document described as:
CROSS-COMPLAINT OF DEFENDANT AND CROSS-COMPLAINANT AURELIUS MEDIA AMERICAS INC. AGAINST GAVIN ALDRICH
on the interested parties in this action by placing a true and correct copy thereof enclosed in a sealed envelope and/or by electronic transmission, addressed as follows:
Cameron Whitfield, Esq. WHITFIELD & ASSOCIATES 9465 Wilshire Boulevard, Suite 320 Beverly Hills, California 90212 Telephone: (310) 555-4100
Email: cwhitfield@whitfieldlaw.com
Attorneys for Plaintiff Gavin Aldrich
[BY ELECTRONIC SERVICE] Based on a court order or an agreement of the parties to accept service by electronic transmission, I caused the above-referenced document(s) to be sent to the person(s) at the electronic service address(es) listed above. I did not receive, within a reasonable time after the transmission, any electronic message or other indication that the transmission was unsuccessful.
[BY U.S. MAIL] I caused each such envelope, with postage thereon fully prepaid, to be placed in the United States mail at Los Angeles, California, addressed to the person(s) at the address(es) set forth above. I am readily familiar with Calderwood & Harkness LLP's practice of collection and processing correspondence for mailing. Under that practice, it would be deposited with the U.S. Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business.
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.
Executed on January 20, 2023 at Los Angeles, California
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