## Facts

- Storage Technology Corporation developed data-storage networking products.
- Starting around 1999, NuSpeed Internet Systems, Inc., a start-up, recruited and hired more than 20 current or former Storage Technology employees, including Mark Schrandt and others.
- Storage Technology alleged the hiring campaign amounted to “corporate raiding” and that former employees brought or used Storage Technology’s confidential information at NuSpeed.
- In late 2000, Cisco Systems, Inc. acquired NuSpeed in a stock-for-stock transaction valued at about $450 million.
- At acquisition, NuSpeed had more than 70 employees, most of whom had never worked for Storage Technology, and NuSpeed’s work involved technologies different from what the former Storage Technology employees had worked on at Storage Technology or what Storage Technology was then developing.
- Storage Technology sued Cisco and NuSpeed asserting tortious interference, inducing breach of contract, conversion, breach of fiduciary duty, misappropriation of trade secrets, and a standalone “corporate raiding” claim.
- Storage Technology’s primary damages theory tied its alleged injury to Cisco’s $450 million acquisition price; Cisco’s NuSpeed unit later incurred operating losses of roughly $50 million by 2003.

## Issues

1. Whether Storage Technology produced non-speculative evidence of recoverable damages sufficient to support tortious interference and related business-tort claims under Minnesota law.
2. Whether Minnesota law recognizes an independent cause of action for “corporate raiding” based on aggressive hiring of a competitor’s employees.
3. Whether Storage Technology produced sufficient evidence of trade-secret misappropriation to create a genuine issue of material fact under Rule 56.

## Decision

- The Eighth Circuit affirmed summary judgment for Cisco and NuSpeed on all claims.
- The court held Storage Technology failed to present evidence of recoverable damages for tortious interference and related tort claims; reliance on the acquisition price was not a supported measure of Storage Technology’s loss.
- The court held Minnesota law does not recognize a standalone “corporate raiding” tort and declined to expand state law.
- The court held Storage Technology’s trade-secret misappropriation claim rested on speculative assertions and lacked evidence sufficient to survive summary judgment.

## Legal Principles

- Under Minnesota law, tortious interference and related business torts require proof of actual, recoverable damages; unsupported or conjectural damages theories cannot defeat summary judgment.
- Minnesota does not recognize a separate cause of action for “corporate raiding”; claims based on competitor hiring must fit within established tort or contract theories and satisfy their elements.
- At summary judgment, a trade-secret plaintiff must produce evidence permitting a reasonable factfinder to find misappropriation and resulting harm; speculation and inference alone are insufficient.

## Conclusion

The court affirmed summary judgment because Storage Technology could not show non-speculative, recoverable damages, Minnesota law provided no independent “corporate raiding” claim, and the trade-secret allegations lacked evidentiary support required to proceed to trial.


Storage Tech. Corp. v. Cisco Sys., Inc., 395 F.3d 921 (8th Cir. 2005)