Boeing Loses Bid for Rehearing on Trade Secrets Claim Decision

Boeing Co. failed to convince an appeals court to reconsider the revival of a claim that could expose the company to up to $100 million in damages for allegedly misappropriating trade secrets when it worked with Alabama Aircraft Industries Inc. on a U.S. Air Force contract bid, according to an Eleventh Circuit order.

Boeing’s petition for panel rehearing was denied Wednesday in a two-page order by the U.S. Court of Appeals for the Eleventh Circuit.

On Feb. 14, the Eleventh Circuit held that AAI, previously known as Pemco Aircraft Engineering Services Inc., showed that a district court erred by concluding that Alabama’s two-year statute of limitations applied to make the claim untimely.

Missouri’s five-year statute of limitations governs because the claim arose from the exchange of proprietary information in connection with the parties’ teaming agreement, the Eleventh Circuit said.

Boeing argued in its petition for rehearing that the ruling conflicts with multiple Alabama Supreme Court and federal court decisions construing Alabama law.

The ruling “occasions a sea change in Alabama’s law relating to the choice of law governing statutes of limitations,” Boeing said.

AAI entered into a teaming agreement in 2005 to submit a joint proposal for the KC-135 Stratotanker maintenance contract whereby AAI would perform as Boeing’s subcontractor.

Boeing terminated the agreement a year later, after the Air Force changed the solicitation.

The parties then submitted individual proposals and the Air Force selected Boeing in September 2007. AAI sued in 2011.

AAI has argued that dismissing the trade secrets claim prevented it from recovering its actual losses of about $100 million.

Kirkland & Ellis LLP and Bradley Arant Boult Cummings LLP represented Boeing.

The case is Ala. Aircraft Indus. Inc. v. Boeing Co., 11th Cir., No. 20-11141, 4/20/22.