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2005-067, MORTGAGE SPECIALISTS, INC. v. JOSEPH C. DAVEY, IV & a.
State: New Hampshire
Court: Supreme Court
Docket No: 2005-067
Case Date: 07/26/2006
Preview:NOTICE: This opinion is subject to motions for rehearing under Rule 22 as well as formal revision before publication in the New Hampshire Reports. Readers are requested to notify the Reporter, Supreme Court of New Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any editorial errors in order that corrections may be made before the opinion goes to press. Errors may be reported by E-mail at the following address: reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00 a.m. on the morning of their release. The direct address of the court's home page is: http://www.courts.state.nh.us/supreme. THE SUPREME COURT OF NEW HAMPSHIRE ___________________________ Rockingham No. 2005-067

MORTGAGE SPECIALISTS, INC. v. JOSEPH C. DAVEY, IV & a. Argued: March 9, 2006 Opinion Issued: July 26, 2006

Devine, Millimet & Branch, P.A., of Manchester (Alexander J. Walker, Jr. and Danielle L. Pacik on the brief, and Mr. Walker orally), and Shaheen & Gordon, P.A., of Concord (Arpiar G. Saunders, Jr. on the brief), for the plaintiff.

Sheehan Phinney Bass + Green, P.A., of Manchester (Christopher Cole and Robert R. Lucic on the brief, and Mr. Cole orally), for the defendants.

DALIANIS, J. The plaintiff, Mortgage Specialists, Inc., appeals: (1) an order of the Superior Court (Morrill, J.) denying its motion to set aside the jury

verdict on its claim for misappropriation of trade secrets, see RSA ch. 350-B (1995); and (2) a pretrial order of the Superior Court (Coffey, J.) dismissing its other claims. The defendants, Joseph C. Davey, IV, Team Mortgage, LLC, Steven Michael Carbone, and Signature Mortgage Group, LLC, cross-appeal a post-trial order of the Superior Court (Morrill, J.) assessing sanctions against them. We affirm in part, vacate in part, and remand. I. Background Mortgage Specialists is a mortgage brokerage and lending company with offices in Massachusetts and New Hampshire. Defendants Davey and Carbone worked as loan originators for Mortgage Specialists. In July 2002, both left Mortgage Specialists to work for a competitor, Mortgage Partners. When they left, each took with him copies of customer information retained in the course of his work. The most important piece of information was the customer's current interest rate, from which a competitor could learn whether refinancing would benefit the customer. Davey and Carbone subsequently started their own mortgage businesses. Davey, who worked at Carteret Mortgage for a short time after leaving Mortgage Partners, is the owner of defendant Team Mortgage, LLC. Carbone is the owner of defendant Signature Mortgage Group, LLC. Since leaving Mortgage Specialists, Davey and Carbone have both closed loans, with their subsequent employers and with their own businesses, for customers with whom they had previously worked at Mortgage Specialists. When Mortgage Specialists learned that Mortgage Partners had contacted its former customers, it initiated suit against Mortgage Partners for misappropriation of trade secrets. Davey and Carbone were both deposed in November 2002 in connection with that litigation, and both acknowledged that they had taken copies of customer information with them when they left Mortgage Specialists. Mortgage Specialists brought this suit in 2003, alleging a variety of claims and seeking injunctive relief and damages. The trial court dismissed all of Mortgage Specialists' claims except for its claim that the defendants misappropriated its trade secrets. It also issued a preliminary injunction prohibiting the defendants from misappropriating or disclosing Mortgage Specialists' customer information and prohibiting them from contacting or communicating with any of Mortgage Specialists' current or former customers, with some limited exceptions. A jury trial was held in September 2004 on the trade secrets claim. The jury returned a verdict in favor of the defendants. The trial court subsequently imposed sanctions upon the defendants for their conduct prior to and during trial.

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II. The Trade Secrets Claim Mortgage Specialists filed a motion to set aside the jury's verdict. It asserted that the jury's verdict was "against the great weight of the evidence presented at trial" and "[n]o reasonable jury could have reached the verdict it did in this case in the face of such overwhelming evidence." The trial court denied Mortgage Specialists' motion, finding that a reasonable jury could have concluded that the alleged confidential information underlying its claims was not a trade secret because "Mortgage Specialists' customer information was not subject to reasonable efforts to maintain its secrecy under the circumstances." See RSA 350-B:1, IV(b). We agree. A reasonable jury could have found the following facts: Davey and Carbone began working as loan originators for Mortgage Specialists in 1999. Both were hired as independent contractors. Upon hiring, they were neither asked to sign a non-disclosure or confidentiality agreement, nor told that Mortgage Specialists' documents or customer information was confidential or constituted trade secrets. Despite a relatively high turnover among its loan originators and the tendency of loan originators to stay in the mortgage business after leaving Mortgage Specialists, throughout the time during which Davey and Carbone worked for Mortgage Specialists, the company had no written policy regarding confidentiality or document destruction and no employee handbook. Although Mortgage Specialists created a confidentiality and non-disclosure agreement by 1999, only some of its loan originators actually signed it between 1999 and 2001. Davey and Carbone deny having seen or heard about the agreement before July 2002, when Mortgage Specialists asked all of its loan originators to sign it. Neither Davey nor Carbone signed the agreement, and each terminated his relationship with Mortgage Specialists shortly thereafter. Prior to being presented with the agreement, neither Davey nor Carbone had been told that customer information belonged to Mortgage Specialists or that they were prohibited from copying or maintaining copies of customer information. Mortgage Specialists did not ask either Davey or Carbone to return or destroy customer information before leaving the company. While Davey and Carbone were working at Mortgage Specialists, it collected and stored customer information and disseminated it to its employees and independent contractors in various formats. Lists of potential new customers and lists of potential repeat customers were distributed regularly to Mortgage Specialists' telemarketers. The lists of potential repeat customers were not marked as trade secrets or as confidential. Nevertheless, access to the lists of potential repeat customers, which contained information about each customer's loan amount, loan type, and interest rate, was restricted. Supervisors gave telemarketers only a limited number of pages from these lists during a given shift. The telemarketers were not permitted to photocopy the

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pages, and were required to return all pages of the list to the supervisor at the end of the shift. Davey and Carbone did not have access to these lists, and Mortgage Specialists has not alleged that they took copies of these lists when they left. As telemarketers contacted individuals interested in doing business with Mortgage Specialists, including both new and repeat customers, the telemarketers created "lead sheets" to be passed on to loan originators such as Davey and Carbone. The lead sheets often included the name and phone number of the individual, and sometimes included the individual's current interest rate. The lead sheets were not marked as trade secrets or as confidential. Neither Davey nor Carbone was ever instructed to destroy the lead sheets or to return them to a particular individual or department. As loan originators met with customers, the loan originators gathered all of the information needed to complete a standard residential loan application. Known as a Form 1003, the application consisted of several pages and required the applicant to disclose a great deal of personal information, including a social security number, detailed information regarding income, bank accounts, and credit history, and the interest rate on the existing mortgage. When meeting with a customer, Davey and Carbone both typically took notes on the back of the lead sheet and filled out the application by hand. The loan application was accompanied by a privacy policy disclosure, indicating that the customer's information would not be disclosed to third parties. After the loan application was completed, the application package was returned to Mortgage Specialists for processing. Davey and Carbone often retained copies of the lead sheet or the first page of the application. Carbone testified that some loan originators retained this information so that they could keep in touch with the customer throughout the loan application process. After the completed application was given to the loan processors at Mortgage Specialists, all application information was entered into Mortgage Specialists' computerized database, which could be accessed by the processors. While loans were in process, lists of all open loan applications were regularly generated from this database and distributed to all of Mortgage Specialists' loan originators. These lists, referred to as "pipeline reports," contained basic information about each customer's loan, including the customer's last name, the type of loan, and the interest rate. The pipeline reports were not marked as trade secrets or as confidential. Loan originators were not instructed to destroy the pipeline reports or to return them to a particular individual or department.

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After the loan was closed, the electronically-stored customer information was transferred into a password-protected database, accessible only by one of the owners and the office manager. If a loan originator needed access to an application after the loan was closed, he could obtain a computer printout of the application information from the individuals who had access to the database. The printout was not marked as a trade secret or as confidential, and loan originators were not instructed to return it or to refrain from copying it. While Davey and Carbone were working at Mortgage Specialists, the hard copies of customers' closed loan files were stored in the attic of Mortgage Specialists' Plaistow office. Access to the attic was through an unlocked door and was not restricted. Davey and Carbone sometimes entered the attic and retrieved old files from storage when they wanted to review or copy information. After leaving Mortgage Specialists, Davey and Carbone both worked as loan originators at Mortgage Partners. Carbone gave a telemarketer at Mortgage Partners a bag filled with copies of loan applications that he had taken with him from Mortgage Specialists and she was instructed to contact all of his former customers to let them know that he was now working at Mortgage Partners. One of the former customers, when contacted by Mortgage Partners, was angered by the fact that Mortgage Partners had access to his personal information and complained about the situation to Mortgage Specialists in August 2002. The customer spoke to several employees at Mortgage Specialists, and ultimately met with its president. Despite Mortgage Specialists' apparent knowledge that Mortgage Partners had access to its customer information, it took no steps to retrieve the customer information from Mortgage Partners' possession. On appeal, Mortgage Specialists contends that there was overwhelming evidence that the defendants misappropriated its trade secrets within the meaning of the New Hampshire Uniform Trade Secrets Act, RSA chapter 350-B. It argues that the trial court erred in denying its motion to set aside the jury verdict, claiming that no reasonable juror could have found that its efforts to maintain the secrecy of its customer information were not reasonable under the circumstances. A jury's verdict may only be set aside if it is conclusively against the weight of the evidence or if it is the result of mistake, partiality, or corruption. PMC Corp. v. Houston Wire & Cable Co., 147 N.H. 685, 692 (2002). "Conclusively against the weight of the evidence" means that the verdict was one no reasonable jury could return. Id. As the plaintiff argues only that the

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jury verdict was against the weight of the evidence, we limit our review to that issue. We will not overturn the trial court's denial of Mortgage Specialists' motion to set aside the jury verdict unless it is an unsustainable exercise of discretion. See Babb v. Clark, 150 N.H. 98, 100 (2003). For information to be a trade secret, the information must, among other things, be "the subject of efforts that are reasonable under the circumstances to maintain its secrecy." RSA 350-B:1, IV(b). Mortgage Specialists argues that the measures it took to maintain the secrecy of its customer information were "reasonable under the circumstances because they clearly put the loan originators on notice that [the] type of information contained in the Form 1003s is confidential . . . and should not be disclosed." We disagree. As the trial court indicated in its order, the jury heard testimony that the documents containing customer information, including customers' current interest rates, "were never marked confidential or trade secret," that those documents "were kept in an attic for many years," and that "the loan originators were not consistently and uniformly given instructions as to the proper treatment of the information as confidential and/or proprietary." While there was evidence that Mortgage Specialists took specific steps to maintain the secrecy of its lists of potential repeat customers, lists to which the defendants did not have access and did not copy, there was conflicting testimony as to whether Mortgage Specialists took any steps at all to maintain the secrecy of customer information that was stored and disseminated to its employees and independent contractors in other forms. Although Mortgage Specialists provided all of its customers with a privacy policy acknowledgement indicating that it would not disclose the customer's nonpublic personal information to nonaffiliated third parties, and it placed shredders around its office, these efforts could have been found by the jury only to demonstrate a need to protect customers from the sale of their personal information or from the risk of identity theft, rather than an intent to prevent Mortgage Specialists' employees from misappropriating customer information. While access to the electronic copies of old loan applications was restricted by a password, there was testimony at trial indicating that any loan originator could request that a copy of that information be printed and given to him, and that any loan originator could enter the attic storage area to access a hard copy of the closed file. While Mortgage Specialists took some steps to maintain the secrecy of its customer information, the jury could have found that its efforts were inconsistent. The trial court's decision not to set aside the jury verdict was not an unsustainable exercise of discretion, as a reasonable jury could conclude from the evidence presented at trial that Mortgage Specialists' customer information was not subject to reasonable efforts to maintain its secrecy under the circumstances, and, accordingly, was not a trade secret.

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III. Preemption of Other Claims Mortgage Specialists asserted the following claims against the defendants: misappropriation of trade secrets, see RSA ch. 350-B; conversion; tortious interference with advantageous relations; violation of the New Hampshire Consumer Protection Act (CPA), see RSA ch. 358-A (1995 & Supp. 2005); and breach of fiduciary duty. However, the trial court granted, in part, the defendants' motion to dismiss, allowing Mortgage Specialists to proceed on the trade secrets claim alone. We affirm this decision of the trial court to the extent that it dismissed the claims for conversion and breach of fiduciary duty, but vacate it to the extent that it dismissed the claims for tortious interference with advantageous relations and violation of the CPA. Mortgage Specialists alleged the following relevant facts in its writ: While Davey and Carbone were working for Mortgage Specialists, each retained copies of documentation containing confidential information about Mortgage Specialists' customers and their mortgages. While Davey and Carbone were working for Mortgage Partners, Mortgage Specialists received reports from customers that Mortgage Partners "had been contacting them, discussing confidential information with them, reporting that Mortgage Specialists had no license and was in trouble in New Hampshire, and luring them to do business with Mortgage Partners." Carbone admitted that he "informed Mortgage Specialists' customers that Mortgage Specialists was operating without the proper New Hampshire licensing." Since leaving Mortgage Specialists, both Davey and Carbone have used confidential information taken from Mortgage Specialists to contact Mortgage Specialists' customers and solicit business on behalf of Mortgage Partners. The defendants have also solicited Mortgage Specialists' employees. Prior to trial, the defendants moved to dismiss Mortgage Specialists' claims, arguing in part that the New Hampshire Uniform Trade Secrets Act, see RSA ch. 350-B (NHUTSA), preempted Mortgage Specialists' claims for conversion, tortious interference with advantageous relations, violation of the CPA, and breach of fiduciary duty. See RSA 350-B:7. The trial court construed RSA 350-B:7 as providing that any of Mortgage Specialists' claims that are "based upon the [defendants'] alleged misappropriation of [Mortgage Specialists'] trade secrets are preempted" by the NHUTSA. Finding that the common law and CPA claims were not "supported by facts other than the misappropriation or misuse of trade secrets . . . and/or confidential information," the trial court concluded that the claims were preempted by the NHUTSA. In response to Mortgage Specialists' argument that dismissal of the common law and CPA claims would be premature, given that the parties continued to dispute whether the confidential information at issue was in fact a trade secret within the meaning of the NHUTSA, the trial court ruled that RSA

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chapter 350-B "displaces . . . claims that rely on the misappropriation of trade secrets, regardless of whether [Mortgage Specialists] successfully demonstrates that the information in question qualifies as a trade secret" within the meaning of the NHUTSA. In reviewing the trial court's grant of a motion to dismiss, our task is to ascertain whether the allegations pled by Mortgage Specialists are reasonably susceptible of a construction that would permit recovery. See Berry v. Watchtower Bible & Tract Soc., 152 N.H. 407, 410 (2005). We assume that all facts pled are true, and we construe all reasonable inferences drawn from those facts in Mortgage Specialists' favor. See id. We then engage in a threshold inquiry that tests those facts against the applicable law. Id. The issue raised here also involves the interpretation of a statute, which is a question of law that we review de novo. See Woodview Dev. Corp. v. Town of Pelham, 152 N.H. 114, 116 (2005). On appeal, Mortgage Specialists argues that preemption pursuant to RSA 350-B:7 is contingent upon the information at issue qualifying as a trade secret within the meaning of the NHUTSA, see RSA 350-B:1, IV. Accordingly, it argues that the trial court prematurely dismissed the common law and CPA claims because the parties disputed whether the misappropriated information was a "trade secret" within the meaning of the NHUTSA. Alternatively, Mortgage Specialists argues that, even if preemption is not contingent upon the finding of a statutory trade secret, the claims were not preempted because they were not based solely upon the defendants' alleged misappropriation of statutory trade secrets, but also upon the defendants' alleged misappropriation of confidential information and goodwill and improper competition for customers. The defendants argue that, pursuant to RSA 350-B:7, the NHUTSA preempts all "other remedies and theories of recovery in which liability is premised upon misappropriation of `confidential information and trade secrets'" because all such remedies conflict with the NHUTSA. Accordingly, they argue that because "every one of [Mortgage Specialists'] claims [is] based entirely on the alleged misappropriation of alleged `trade secrets' or `confidential and proprietary' information," each of the common law and CPA claims is preempted by the NHUTSA. We begin our review by interpreting RSA 350-B:7. In matters of statutory interpretation, we are the final arbiters of the legislature's intent as expressed in the words of the statute considered as a whole. Woodview Dev. Corp., 152 N.H. at 116. We examine the language of the statute, ascribing to its words their plain and ordinary meanings, and interpret it in the context of the overall legislative scheme and not in isolation. In the Matter of Jerome & Jerome, 150 N.H. 626, 628-29 (2004). The NHUTSA, which is New

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Hampshire's codification of the Uniform Trade Secrets Act (UTSA) (amended 1985), 14 U.L.A. 536-659 (2005), must be construed "to effectuate its general purpose to make uniform the law with respect to the subject of [the NHUTSA] among states enacting it." RSA 350-B:8. Therefore, opinions rendered by courts interpreting the UTSA's preemption provision inform our analysis. See id. RSA 350-B:7, entitled "Effect on Other Law," states: I. Except as provided in paragraph II, this chapter displaces conflicting tort, restitutionary, and other law of this state providing civil remedies for misappropriation of a trade secret. II. This chapter shall not affect: (a) Contractual remedies, whether or not based upon misappropriation of a trade secret; (b) Other civil remedies that are not based upon misappropriation of a trade secret; or (c) Criminal remedies, whether or not based upon misappropriation of a trade secret. This provision of the NHUTSA is identical to section seven of the UTSA. See 14 U.L.A. 651. Hereinafter, we refer to the two provisions interchangeably as "the preemption provision." Mortgage Specialists urges us to construe the preemption provision to provide that no claim is preempted unless and until a determination is made that there has been a misappropriation of trade secrets in violation of the NHUTSA. We acknowledge that, if read in isolation, the plain language of RSA 350-B:7, I, appears to support Mortgage Specialists' argument because it explicitly preempts only remedies for "misappropriation of a trade secret." (Emphasis added.) However, such a narrow construction of the preemption provision ignores not only the overall legislative scheme reflected in the NHUTSA, but also the statutory directive that we must construe the NHUTSA "to effectuate its general purpose to make uniform the law with respect to the subject of [the NHUTSA] among states enacting it," RSA 350-B:8. Thus, in construing the language of the preemption provision, we must consider the purpose of the UTSA as well as the construction that other courts have given to the same provision. Prior to enactment of the UTSA, the Patent Section of the American Bar Association began considering the need for "enactment of a uniform state law to protect against the wrongful disclosure or wrongful appropriation of trade secrets, know-how or other information maintained in confidence by another." UTSA, 14 U.L.A. 531-32 prefatory note (emphases added; quotation omitted).

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The UTSA arose out of concerns that development of law on the subject had been "uneven" and that there was "undue uncertainty concerning the parameters of trade secret protection, and the appropriate remedies for misappropriation of a trade secret." Id. at 531. The drafters explained that "[t]he contribution of the [UTSA] is substitution of unitary definitions of trade secret and trade secret misappropriation, and a single statute of limitations for the various . . . theories of noncontractual liability utilized at common law." Id. (emphases added). The UTSA "also arose to create a uniform business environment that created more certain standards for protection of commercially valuable information." Auto Channel, Inc. v. Speedvision Network, LLC, 144 F. Supp. 2d 784, 789 (W.D. Ky. 2001). "[T]he purpose of the preemption provision is to preserve a single tort action under state law for misappropriation of a trade secret as defined in the statute and thus to eliminate other tort causes of action founded on allegations of misappropriation of information that may not meet the statutory standard for a trade secret." Burbank Grease Services, LLC v. Sokolowski, 693 N.W.2d 89, 98 (Wis. Ct. App. 2005) (hereinafter Burbank Grease I), rev'd in part, ___ N.W.2d ___, ___, 2006 WL 1911997, at *3-*8 (Wis. July 13, 2006). As such, the UTSA "was meant to codify all the various common law remedies for theft of ideas." Thomas & Betts Corp. v. Panduit Corp., 108 F. Supp. 2d 968, 971 (N.D. Ill. 2000) (quotation omitted); see also Bliss Clearing Niagara v. Midwest Brake Bond, 270 F. Supp. 2d 943, 948 (W.D. Mich. 2003). With the enactment of the UTSA, confidential information not rising to the level of a statutory trade secret was left largely unprotected by the law. See RSA 350-B:7, I. Mortgage Specialists urges us to adopt the position of a minority of courts that have held that common law and statutory claims are not preempted by the UTSA if they involve information that does not meet the statutory definition of a trade secret. See, e.g., Callaway Golf v. Dunlop Slazenger Group Americas, 295 F. Supp. 2d 430, 437 (D. Del. 2003); Stone Castle v. Friedman, Billings, Ramsey & Co., 191 F. Supp. 2d 652, 659 (E.D. Va. 2002); Combined Metals of Chicago Ltd. v. Airtek, Inc., 985 F. Supp. 827, 830 (N.D. Ill. 1997); see also Burbank Grease Services, LLC v. Sokolowski, ___ N.W.2d ___, ___, 2006 WL 1911997, at *3-*8 (Wis. July 13, 2006) (hereinafter Burbank Grease II). We do not find these cases persuasive, however, and the weight of authority among courts that have considered the preemption provision is that the history, purpose, and interpretation of the statutory scheme, as discussed above, do not support Mortgage Specialists' position. See, e.g., Weins v. Sporleder, 605 N.W.2d 488, 491-92 (S.D.), cert. denied, 531 U.S. 821 (2000); Ethypharm S.A. France v. Bentley Pharmaceuticals, 388 F. Supp. 2d 426, 433 (D. Del. 2005); see also, e.g., Burbank Grease II, ___ N.W.2d at ___, 2006 WL 1911997, at *12-*17 (Bradley, J., dissenting); Savor, Inc. v. FMR Corp., 812 A.2d 894, 898 (Del. 2002) (rejecting argument that preemption is contingent

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upon finding of statutory trade secret); Bliss Clearing Niagara, 270 F. Supp. 2d at 948-49 (same); Auto Channel, 144 F. Supp. 2d at 788-89 (same); Thomas & Betts, 108 F. Supp. 2d at 972-73 (same). "If a common law claim for unauthorized use of information that did not meet the statutory definition of a trade secret were permitted, the result `would undermine the uniformity and clarity that motivated the creation and passage of the [UTSA].'" Burbank Grease I, 693 N.W.2d at 99 (quoting Auto Channel, 144 F. Supp. 2d at 789). Although we rely upon the opinion of the Court of Appeals of Wisconsin in Burbank Grease Services, LLC v. Sokolowski, we acknowledge that the Wisconsin Supreme Court recently reversed the portion of that opinion which is relevant to the issue presented here. See Burbank Grease II, ___ N.W.2d at ___, 2006 WL 1911997, at *3-*8. There, the supreme court held that Wisconsin's version of the UTSA does not preempt civil remedies for the misappropriation of information "if the information does not meet the statutory definition of a trade secret." Id. at ___, 2006 WL 1911997, at *1. As noted above, while other courts have agreed with the Wisconsin Supreme Court, we do not find that position persuasive. Rather, we believe that the opinion of the Court of Appeals of Wisconsin in Burbank Grease I is well-reasoned, particularly for its adherence to the principles of uniformity and clarity that motivated the creation of the UTSA, in light of the legislative directive that the UTSA be construed to make uniform the law among the jurisdictions enacting it. See Burbank Grease I, 693 N.W.2d at 97-102; see also Burbank Grease II, ___ N.W.2d at ___, 2006 WL 1911997, at *12-*17 (Bradley, J., dissenting). We find the opinion of the Wisconsin Court of Appeals persuasive. See Burbank Grease I, 693 N.W.2d at 97-102. We conclude that RSA 350-B:7, viewed in the context of the overall legislative scheme and construed in a manner that effectuates the purpose of making uniform the law among States that have adopted the UTSA, provides that the NHUTSA preempts claims that are based upon the unauthorized use of information, regardless of whether that information meets the statutory definition of a trade secret. Thus, except as otherwise provided in RSA 350B:7, II, the NHUTSA essentially creates a system in which "information is classified only as either a protected `trade secret' or unprotected `general . . . knowledge.'" Unikel, Bridging the "Trade Secret" Gap: Protecting "Confidential Information" not Rising to the Level of Trade Secrets, 29 Loy. U. Chi. L.J. 841, 867-68 (1998). Although this result may seem harsh, we note that RSA 350B:7, II(a) continues to permit individuals and corporate entities to protect their valuable commercial information contractually, regardless of whether such information meets the statutory definition of "trade secret" in the NHUTSA.

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Accordingly, we agree with the trial court's conclusion that the preemption provision did not require that it make a determination of whether the information at issue constituted a trade secret under the NHUTSA prior to determining whether any of Mortgage Specialists' common law or CPA claims was preempted by the NHUTSA. Our review, however, does not end here. As noted above, Mortgage Specialists argues that, even if preemption is not contingent upon the finding of a statutory trade secret, its claims were not preempted because they were not based solely upon the defendants' alleged misappropriation of customer information, but also upon the defendants' alleged misappropriation of goodwill and improper competition for customers. It also argues that, to the extent that any one of its claims is based solely upon the misappropriation of customer information, the "confidential" nature of that customer information entitles it to special protection under New Hampshire law, independent of the NHUTSA. The defendants, however, argue that Mortgage Specialists' "claims for conversion, tortious interference, unfair trade practices and breach of fiduciary duty based on the alleged misuse of confidential information are no longer available in New Hampshire," by virtue of the preemption provision of the NHUTSA. We are not persuaded that the preemption provision should be applied this broadly. Whether a particular claim is preempted by the NHUTSA turns on whether the claim "conflicts" with the NHUTSA. See RSA 350-B:7, I. The majority of courts that have examined this issue have not relied upon the label attached to the claim, but have examined the facts underlying the claim to determine whether it is preempted by the UTSA. Burbank Grease I, 693 N.W.2d at 99; see also Weins, 605 N.W.2d at 491; Bliss Clearing Niagara, 270 F. Supp. 2d at 946-47. Some courts have stated that all claims that are factually related to the misappropriation of information are preempted. See Powell Products, Inc. v. Marks, 948 F. Supp. 1469, 1474 (D. Colo. 1996) (discussing cases in which courts have done so). However, we disagree with those courts. "The preemption provisions can be somewhat worrisome if they are applied mechanistically or overly conceptually. Our common law is richly flexible in redressing wrongs for improper conduct which in full or in part involves the use of information derived from the plaintiff." 1 R. Milgrim, Milgrim on Trade Secrets
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