Background
Sheri Speer filed a complaint against Donna Skaats and Lloyd Langhammer alleging misappropriation of her confidential records and documents in violation of the Connecticut Uniform Trade Secrets Act (CUTSA). Skaats, an attorney, had obtained Speer’s financial records via subpoena duces tecum in a prior action and allegedly copied and transferred them to Langhammer, Skaats’ counsel. Speer demanded return of the records and filed the present action on October 10, 2023.
Speer also moved to disqualify Langhammer, arguing that he previously represented her in 2007 in an unrelated commercial real estate matter and thus possessed confidential information that would disadvantage her in the current action. The trial court denied this motion, finding no substantial relationship between the two cases separated by seventeen years.
The defendants filed motions to dismiss on multiple grounds, including that Speer’s claims were barred by CUTSA’s three-year statute of limitations (General Statutes § 35-56). The defendants calculated that the statute began running on July 7, 2020, when Speer filed a prior action alleging the same misappropriation, and thus expired on July 7, 2023—before the October 2023 filing. The trial court granted the motions, concluding it lacked subject matter jurisdiction over time-barred claims.
The Court’s Holding
The appellate court affirmed the denial of Speer’s disqualification motion but reversed the dismissal on statute of limitations grounds. On the disqualification issue, the court found no abuse of discretion, holding that Speer failed to demonstrate a common factual issue or substantial relationship between the 2007 representation and the present action. Rule 1.9 of the Rules of Professional Conduct requires disqualification only when there is a substantial relationship between prior and current matters; a seventeen-year-old representation with no documented ongoing relationship did not meet this threshold.
On the statute of limitations issue, the court rejected the defendants’ procedural approach. The court held that the statute of limitations in § 35-56 is not jurisdictional in nature and therefore cannot be raised via motion to dismiss. Instead, it must be pleaded as a special defense under Practice Book § 10-50. The court reasoned that CUTSA, enacted in 1983, was a codification and clarification of pre-existing common law trade secret protections, not a creation of new rights. Because the underlying right of action for trade secret misappropriation existed at common law, the statutory time limitation is procedural rather than substantive and jurisdictional. The court noted that Connecticut courts presume jurisdiction and require a strong showing of legislative intent to create jurisdictional bars; the CUTSA legislative history revealed no such intent to divest courts of subject matter jurisdiction over untimely claims.
Key Takeaways
- Statutes of limitations must generally be pleaded as special defenses, not raised in motions to dismiss, unless the statute creates an entirely new right of action not available at common law.
- CUTSA is a codification of common law trade secret principles and does not create a new cause of action; therefore, its statute of limitations is not jurisdictional.
- Attorney disqualification requires demonstration of a substantial relationship between the prior and present representations; temporal distance alone, without factual overlap, is insufficient to establish such a relationship.
- Courts indulge every presumption favoring subject matter jurisdiction and require a strong legislative showing before concluding that a time limit is jurisdictional and bars the court’s authority to hear a case.
Why It Matters
This decision clarifies important procedural and substantive rules governing trade secret litigation in Connecticut. Defendants seeking to bar CUTSA claims on statute of limitations grounds must properly plead the defense as part of their answer, not attempt to dispose of the claim at the motion-to-dismiss stage. Failure to do so risks waiver of the defense. The ruling reinforces the principle that jurisdictional defects are not lightly inferred and that statutes codifying common law rights retain the procedural character of their underlying common law precursors.
For plaintiffs, the decision provides important procedural protection: dismissal on statute of limitations grounds requires proper pleading as a special defense, giving plaintiffs an opportunity to respond and potentially argue equitable tolling or other statutory exceptions (such as the accidental failure of suit doctrine) before the merits are foreclosed. The case was remanded for further proceedings, indicating the parties will now proceed to answer and special defense stages rather than facing early dismissal.