(Bloomberg) -- A California jury said Phillips 66 should pay $604.9 million for stealing trade secrets from a low-carbon fuel provider that it considered acquiring while preparing to enter the California renewables market.
The verdict Wednesday in favor of Propel Fuels Inc. is a blow to the largest US refiner by market value. The state court jury found that Phillips 66’s conduct was malicious, meaning the verdict could be tripled under California law.
The dispute kicked off when Propel Fuels sued in 2022, claiming Phillips violated a non-disclosure agreement after pulling out of take-over negotiations four years earlier. Phillips exploited troves of confidential data, including proprietary strategies, that had been shared during the due diligence process by the fast-growing retailer of ethanol and biodiesel blends, according to the complaint.
“Propel did what many innovators cannot do — it stood up to a much larger adversary and persevered through a long process to vindicate its rights,” Michael Ng, lead trial counsel for Propel Fuels, said in a statement Thursday.
After a nearly five-week trial, the jury in Alameda County found that Phillips unjustly enriched itself by stealing trade secrets, including financial and sales data, operating model and projections of Propel Fuels’ renewables business.
Twelve jurors also found that Phillips was unable to show that it could have easily ascertained the trade secrets at the heart of the dispute.
“While we are disappointed with the outcome, we respect the legal process and the time expended by the court and the jury over the past five weeks,” a spokesperson for Phillips said. “We maintain confidence in the strength of our case and will carefully evaluate all of our legal options moving forward.”
Renewable Fuels Market
In closing arguments at the trial, lawyers for Propel Fuels argued that after the theft of its intellectual property, Phillips went from being a “lagger” to “leader” in the multibillion-dollar California renewable fuel market.
Houston-based Phillips countered that the oil refiner developed its renewables business through home-grown plans and said Propel Fuels didn’t show any evidence to prove it stole proprietary information.
The case is Propel Fuels Inc. v. Phillips 66 Co., 22CV007197, California Superior Court, Alameda County.
(Updates with Propel Fuels attorney comment.)
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