Earthgrains Baking Companies v. Sycamore et al

Filing 533

MEMORANDUM DECISION AND ORDER denying 473 Sealed Motion for Judgment as Matter of Law or for New Trial. Signed by Judge David Nuffer on 3/2/18 (alt)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
BIMBO BAKERIES USA, INC.,
Plaintiff,
v.
LELAND SYCAMORE and UNITED
STATES BAKERY, INC.,
Defendants.

MEMORANDUM DECISION AND
ORDER DENYING
[473] DEFENDANT LELAND
SYCAMORE’S MOTION FOR
JUDGMENT AS A MATTER OF LAW
ON STATUTE OF LIMITATIONS
GROUNDS OR FOR NEW TRIAL
Case No. 2:13-cv-00749-DN-DBP
District Judge David Nuffer

Defendant Leland Sycamore (“Sycamore”) filed a Motion for Judgment as a Matter of
Law on Statute of Limitations Grounds or for New Trial (the “Motion”). 1 Plaintiff Bimbo
Bakeries USA, Inc. (“Bimbo Bakeries”) opposes the Motion (the “Opposition”). 2 Sycamore
seeks a judgment barring the trade secret misappropriation claim on statute of limitations
grounds, or a new trial to address the statute of limitations issue. The statute of limitations was
not tried or submitted to the jury, which means judgment as a matter of law under Rule 50 is
improper. And the decision to deny Sycamore leave to amend his answer to include the statute of
limitations defense will not be reconsidered. Therefore, the Motion is denied.

1
2

Docket no. 473, filed November 3, 2017.

Plaintiff’s Opposition to Sycamore’s Motion for Judgment as a Matter of Law on Statute of Limitations Grounds
or for New Trial (“Opposition”), docket no. 493, filed November 17, 2017.

BACKGROUND
After Bimbo Bakeries’ case in chief at trial, Sycamore moved to amend his answer (the
“Motion to Amend”) 3 to add an affirmative defense that the trade secret misappropriation claim
against him is barred by the three-year statute of limitation in the Utah Uniform Trade Secret Act
(the “UTSA”). 4 The Motion to Amend was denied under Rule 15(b) 5 because the amendment
was untimely and because Bimbo Bakeries did not consent to trying the statute of limitations
issue. 6 Sycamore’s concurrent motion for judgment on the matter of law on the statute of
limitations was denied on the same grounds. 7 Sycamore now moves for judgment as a matter of
law under Rule 50(b), which permits a party to renew its motion for judgment as a matter of law
after a jury verdict. 8
DISCUSSION
The Motion Is Not Governed by Rule 50.
Although the Motion is brought as a motion for judgment as a matter of law, Rule 50
does not apply to Sycamore’s instant Motion. 9 Rule 50 permits the court to assess the sufficiency
of the evidence “[i]f a party has been fully heard on an issue during a jury trial.” 10 Under Rule
50, a judge may grant judgment as a matter of law at trial or submit the issue to the jury subject

3

Leland Sycamore’s Motion for Leave to Amend Answer (“Motion to Amend”), docket no. 422, filed September
30, 2017.
4

Utah Code Ann. § 13-24-7.

5

Fed. R. Civ. P. 15(b).

6

Docket Text Order Denying Leland Sycamore’s Motion for Leave to Amend Answer and Denying Motion for
Judgment As a Matter of Law on Statute of Limitations Grounds (“DTO Denying Motion to Amend”), docket no.
429, filed October 2, 2017.

7

Id.

8

Fed. R. Civ. P. 50(b).

9

Fed. R. Civ. P. 50.

10

Fed. R. Civ. P. 50(a)(1).

2

to a renewed motion for judgment as a matter of law after the issue is decided by the verdict. 11 In
this case, Sycamore’s statute of limitations defense was not rejected by the jury or even
submitted to the jury; rather, the affirmative defense was excluded from trial altogether. 12 The
sufficiency of the evidence on the statute of limitations defense cannot be assessed because,
although evidence of the timeline of events was introduced as part of Bimbo Bakeries’
presentation of evidence on its trade secret misappropriation claim, the statute of limitations
defense was not “fully heard” during the jury trial. As the Motion to Amend was denied, the jury
did not decide the statute of limitations issue, nor were they instructed on the statute of
limitations for trade secret misappropriation. 13
The Motion to Amend Will Not Be Reconsidered.
Sycamore’s Motion is, in substance, a motion to reconsider the denial of Sycamore’s
Motion to Amend his answer. The Motion to Amend was already decided by an October 2, 2017
order. 14 Motions to reconsider, to the extent such motions are recognized, are disfavored. 15
Sycamore did not satisfy Rule 15(b) for amendments to the pleading during trial. 16 Rule
15(b)(2) does not apply because Bimbo Bakeries did not expressly or implicitly consent to trial
of the statute of limitations issue. 17 Rule 15(b)(1) applies when a party objects to evidence
offered at trial that “is not within the issues raised in the pleadings.” 18 Bimbo Bakeries at no

11

Fed. R. Civ. P. 50(b).

12

DTO Denying Motion to Amend.

13

Jury Instructions, docket no. 452, filed October 6, 2017.

14

DTO Denying Motion to Amend.

15
Warren v. Am. Bankers Ins. of Fl., 507 F.3d 1239, 1243 (10th Cir. 2007) (explaining that the Federal Rules of
Civil Procedure do not recognize that creature known all too well as the ‘motion to reconsider’ or ‘motion for
reconsideration.’”).
16

Fed. R. Civ. P. 15(b).

17

DTO Denying Motion to Amend.

18

Fed. R. Civ. P. 15(b)(1).

3

point objected to an attempt by Sycamore to introduce evidence on the statute of limitations.
Instead, Sycamore sought to amend his answer to add an affirmative defense, a new legal theory,
based on the evidence elicited by Bimbo Bakeries about the timing of Sycamore initial disclosure
of the trade secret in 2008. 19
Sycamore waived the statute of limitations by not pleading the affirmative defense in his
answer to the complaint, 20 in his answer to the amended complaint, 21 or at any time prior to the
middle of trial. 22 The statute of limitations is an affirmative defense that is waived if not pleaded
in the answer. 23 The statute of limitations defense is specifically listed as an affirmative defense
subject to waiver under Rule 8(c)(1). 24 A defendant generally bears the burden of both pleading
and proving a statute of limitations affirmative defense. 25 Sycamore did not carry that burden. “It
is well settled in this circuit that untimeliness alone is a sufficient reason to deny leave to
amend.” 26 Because Sycamore, the party seeking to amend a pleading, knew or should have
known of the facts upon which the proposed amendment is based but failed to include the
affirmative defense in his original pleading, the Motion to Amend is subject to denial. 27

19

Motion to Amend.

20

Answer of Leland Sycamore, docket no. 9, filed August 27, 2013.

21

Answer of Leland Sycamore to Bimbo Bakeries’ First Amended Complaint at 15–18, docket no. 38, filed
December 29, 2014.
22

Motion to Amend.

23

Youren v. Tintic Sch. Dist., 343 F.3d 1296, 1303–04 (10th Cir. 2003). See also Staker v. Huntington Cleveland Irr.
Co., 664 P.2d 1188, 1190 (Utah 1983) (“As a general proposition, we will not reverse a trial court’s denial of a
motion to amend, made at the commencement of or during trial, to assert the statute of limitations as a defense.”).
24

Fed. R. Civ. P. 8(c)(1).

25

Youren, 343 F.3d at 1302.

26

Frank v. U.S. West, Inc., 3 F.3d 1357, 1365 (10th Cir. 1993).

27

Id. at 1366.

4

Sycamore’s Delayed Assertion of the Statute of Limitations Is Unjustified.
Sycamore’s assertion that he learned of the facts on which he could base a statute of
limitations defense during Bimbo Bakeries’ case in chief 28 is rejected. Under Utah Code § 1324-7, an action for misappropriation must be “brought within three years after the
misappropriation is discovered or, by the exercise of reasonable diligence, should have been
discovered.” 29 In applying this statute of limitations, the UTSA provides that “a continuing
misappropriation constitutes a single claim,” 30 which means Utah law applies the “single claim
theory.” Under the single claim theory, the statute of limitations begins to run once a plaintiff
learns a defendant improperly disclosed trade secrets. 31 A claim for misappropriation of a trade
secret arises for a given plaintiff against a given defendant only once, at the time of the initial
misappropriation, subject to the discovery rule. 32 The single claim rule can work to the
disadvantage of a plaintiff pursing a claim against a particular defendant for trade secret
misappropriation that unfolded over time with an early first disclosure of the trade secret. In such
cases, the statute of limitations runs from the first disclosure, subject to the discovery rule,
notwithstanding use or acquisition of the trade secret even years later.
The single claim rule applies equally to a defendant claiming protection under the statute
of limitations. Sycamore cannot say he did not know that his 2008 disclosure gave rise to a
statute of limitations defense. Sycamore argues that he did not plead a statute of limitations

28

Sycamore’s Reply Memorandum in Support of His Motion for Judgment As a Matter of Law on Statute of
Limitation Grounds at 3, docket no. 518, filed December 21, 2017.
29

Utah Code Ann. § 13-24-7.

30

Id.

31

Chasteen v. UNISIA JECS Corp., 216 F.3d 1212, 1217 (10th Cir. 2000) (applying the Colorado statute based on
the Uniform Trade Secret Act, which mirrors the UTSA).

32
Allied Erecting & Dismantling Co., Inc. v. Genesis Equip. & Mfg., Inc., 805 F.3d 701, 704–05 (6th Cir. 2015)
(explaining the “single claim” approach under the Uniform Trade Secret Act).

5

defense earlier because he assumed Bimbo Bakeries would present evidence of post-2008,
intervening acts of misappropriation. 33 However, such evidence would have had no bearing on
the statute of limitations, which began to run from Sycamore’s first act of misappropriation
against Bimbo Bakeries and its predecessors. Sycamore’s statute of limitations defense was
available from the outset of this case. The defense was not pleaded; it was waived; and the
untimely Motion to Amend to include the defense was properly denied.
ORDER
THEREFORE, IT IS HEREBY ORDERED that the Motion 34 is DENIED.
Dated March 2, 2018.
BY THE COURT:
____________________________
David Nuffer
United States District Judge

33

Motion at 9–11.

34

Docket no. 473.

6