Steves and Sons, Inc. v. Jeld-Wen, Inc.

Filing 1424

MEMORANDUM OPINION. PLAINTIFF STEVES AND SONS, INC.'S MOTION FOR SUMMARY JUDGMENT ON JELD-WEN COUNTERCLAIMS (ECF No. 885) was granted as to the Fourth and Fifth Counterclaims and denied as to the First and Third Counterclaims, except to the extent that the motion concerned JELD-WEN's damages claims for trade secret misappropriation, which will be addressed in a separate opinion. SEE OPINION FOR DETAILS. Signed by District Judge Robert E. Payne on 04/16/2018. (tjoh, )

IN THE UNITED

STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

Richmond Division

STEVES AND SONS,

INC.,

Plaintiff,
Civil Action No.

V.

JELD-WEN,

3:16-cv-545

INC.,

Defendant.

MEMORANDUM OPINION

This

SONS,

matter

INC.'S

COUNTERCLAIMS

is

before

MOTION
(ECF

No.

the

FOR
885).

Court

on

SUMMARY
For

the

PLAINTIFF

JUDGMENT
reasons

ON

set

the motion was granted in part and denied in part,
extent

that

Steves

&

Sons,

Inc.

judgment on the basis that JELD-WEN,
expert

failed

misappropriated

to

trade

apportion

secrets,

("Steves")

Inc.'s

issue

forth

below,

except to the

sought

between

on

AND

JELD-WEN

summary

("JELD-WEN")

damages

an

STEVES

which

damages
specific

the

Court

ordered further briefing because Steves raised it for the first
time at oral argument.

See ECF No.

be addressed in a separate opinion.

1290.

Those contentions will

BACKGROUND

A. Factual Background^
1. Steves' Relationships with Pierce

Steves

molded

and JELD-WEN

doorskin

are both participants

market

in

the

United

States.

doorskin is used to make interior molded doors,
to

resemble

molded

solid

doorskin

wood

plants,

doorskins

to build door

currently
done

so.

much

create

molded

slabs

a

that

type

cost.

ship

Interior

doorskins

manufacturers

are then

of

which are built

lower

and

door

That

interior

sold to

use

to
the

retailers

or

Steves is an independent door manufacturer that is

a

to

produce

result,

manufacturers.
door

where

unable
As

at

manufacturers

assembly

distributors.

doors

in the

i t must

JELD-WEN,

manufacturer,

its

meaning

own

and

purchase doorskins

however,
that

doorskins,

is

it

a

both

has

never

from doorskin

vertically
produces

integrated

doorskins

and

uses those doorskins internally to manufacture and sell finished
doors.

Steves

currently

purchases

to

long-term

supply

pursuant

a

entered into in 2012

^ Steves'

doorskins

agreement

from

that

JELD-WEN

the

parties

("the Supply Agreement").

Statement of Undisputed Facts

("SUF")

focuses

almost

entirely on procedural details about the litigation of JELDWEN' s
counterclaims,
rather
than
the
underlying
facts.
See
Steves Br. (ECF No. 884) (Under Seal) at 2-9. Accordingly, this
factual
background
relies
mostly
on
JELD-WEN's
narrative
statement of facts, to which Steves has not responded.

In

John

March

2015,

Pierce

purposes.

("Pierce"),

First,

information

Steves

would

manufacturing plant,

Pierce

as

a

a

former

JELD-WEN

consultant

for

employee,

two

primary

Steves wanted Pierce to provide i t with certain

that

"MDS project"

hired

as

("the MDS

allow

part

it

to

of what

Project").

could help verify the

build

Steves

Second,

accuracy of

its

own

doorskin

referred to

as

its

Steves believed that

JELD-WEN's

key input

costs for doorskins that it manufactured. Those input costs were
the

basis

for

the

prices

that

JELD-WEN

doorskins under the Supply Agreement,

charged

Steves

for

and JELD-WEN was required

to provide the costs to Steves on an annual basis.
When he worked at JELD-WEN,

Pierce and JELD-WEN had entered

into multiple employment contracts indicating that
be

exposed

to

certain

confidential

or

trade

Pierce

not

secrets

could

to

any

information

secrets,

disclose

third

the

that

or both.

parties

except

JELD-WEN

Under

confidential

as

Pierce would
considered

those

contracts.

information

required

by

or

law.

trade

The

confidentiality provision in the most recent employment contract
applied

even

after

Steves

later

Pierce

hired

confidentiality

retired

Pierce,

agreement

he

with

from

JELD-WEN

notified

JELD-WEN

in

2012.

When

Steves

that

the

prevented

him

from

disclosing JELD-WEN's trade secrets or confidential information.
Between

information

March

about

2015

and

JELD-WEN's

June

doorskin

2016,

Pierce

manufacturing

obtained

methods.

processes,

and

employees:

Ed

Fedio

Reed

and whether
Reed did not
information,

(ECF

SUF f
No.

remember
conceded

28;

of

giving

also

the

or

Pierce

(Under

f

that

a

trade

Seal)

Pierce
Pierce

any

28.

Pierce

knew

and

to

it

the

given

secret

was

to

is

Pierce

disputed.

confidential

("SUF

he

did

Response")

Williams

did

not

information,

but

he

confirmed

from his previous

SUF Response f 30.

Bruce

Borrell

possible

SUF

Similarly,

have

JELD-WEN

Jay

any specific or

non-public

could

five

("Williams"),

information

acknowledged that
Response

telling

Williams

with

("Takes"),

JELD-WEN's

1008)

SUF SI 30;

Dale

confidential

recall
but

interactions

Takes

substance

is

information that

WEN.

Greg

The

it

through

("Reed"),

("Fedio"),

("Borrell").

so.

costs

confidential

work with

JELD-

Fedio could only specifically

recall saying to Pierce that JELD-WEN had received good news on
favorable

resin pricing,

and did not realize that he had given

Pierce any allegedly confidential
by counsel during this

not

believe

information or

he

ever

trade

information until

litigation. SUF

gave

secrets,

Pierce

but

was

32-33.

JELD-WEN's

unable

to

he was

told

Takes also did

confidential

respond

allegedly because of the attorney-client privilege.^

fully

Id. f 35;

^ Why the attorney-client privilege would bar disclosure of the
nature of the information passed on by Fedio defies imagination.
And, the parties have not explained what information Borrell may
have provided to Pierce,

SUF Response 1 35.
with Pierce,

but

they could not

None of the employees were fired for meeting
some

received disciplinary communications that

elaborate

on allegedly because

of

the

attorney-

client privilege.^ See SUF if 29, 31, 34, 36; SUF Response SISI 29,
31,

34,

36.

In any event.
information
According

that

to

Pierce conveyed to Steves some or all of the
he

acquired

JELD-WEN,

Pierce provide

him to do so.

from

Steves

JELD-WEN

specifically

Steves with that

In addition,

those

information

had

employees.

requested

and,

in

fact,

that

paid

Steves found that information helpful

in furthering the MDS Project.''
2. Steves'

Relationship

with

Ambruz

and

Use

of

JELD-WEN's

Information

In

or

Strategic

2015,

LLC,

a

Steves

company

then

managed

retained

Global

by

Ambruz

John

as a consultant to assist with the MDS Project. Like

Ambruz

into

an

from

disclosing

viewed

July

Partners

("Ambruz"),

Pierce,

around

was

employment

during

a

former

agreement

JELD-WEN

with

confidential

his

employment.

employee

JELD-WEN

information

That

or

who

that

had

prevented him

trade

prohibition

entered

secrets

applied

he

even

^ It is difficult to conceive how the privilege would apply.
^ Steves apparently disagrees with this characterization of its
actions, given its claim that "disputed issues of material fact
exist
as
to
[the misappropriation]
element"
of
JELD-WEN's

claims. Steves Reply (ECF No. 1124) (Under Seal) at 9. However,
Steves has not identified the particular facts that it disputes.

after his employment was terminated in April 2014.

aware

of

Ambruz's

confidentiality

obligations

Steves became

at

some

point,

although i t is unclear when exactly that occurred.
In

November

2015,

principal officers,
Brothers"),

to

discuss

plant.

analysis

the

concerning

manufacturing,

the

with

possible

Pierce

Steves

the

met

Pierce

and

Edward Steves and Sam Steves II

manufacturing

for

Ambruz

construction

subsequently

Brothers

effect

of

"die

("the Steves

of

a

thereby

doorskin

a

prepared

(and

Steves'

detailed

Steves,

changes"^

on

too)

doorskin

which suggested ways to mitigate the cost of die

changes in order to maximize doorskin production efficiency at a
single

2016,

doorskin

Ambruz

assessing
doorskin

alleged
Study
that

manufacturing

feasibility

manufacturing

both

included
Pierce

plant,

Pierce
and

the

of

plant

die

Steves
("the

change

information

or

around

March

analysis

into a

study

building

an

Feasibility

analysis

that

in

was

Study").

and

derived

independent
It

is

the

Feasibility

from

information

obtained from JELD-WEN.

Sam Steves

that

Then,

incorporated parts of that

the

that

plant.

had
sent

subsequently compiled the memoranda

sent
those

to

Steves

documents

about
in

an
June

and

independent
2016

to

e-mails

doorskin

Ambruz

and

^ A die is a device used to create a specific doorskin design
during the manufacturing process. Because a plant cannot run all
its dies simultaneously, the dies in service are rotated as
required to meet a company's doorskin design needs.

Gregory

Wysock

vertically

("Wysock")-a

integrated

former

another
Steves

hired Wysock to help with the MDS Project in July 2016.

Shortly

his

he conducted another die analysis

review

reveals

of

that

capacities,
doorskin

manufacturer,

of

Masonite.

thereafter,

doorskin

employee

Pierce's
Wysock

die

was

productivity,

manufacturing

change

also

and

analysis.

aware

of

related

plants,

that was based on
Other

the

configurations,

processes

which

evidence

for

JELD-WEN

JELD-WEN's

asserts

that

Pierce had obtained from JELD-WEN employees.

Since then,
and

still

is

Steves has continued to work on the MDS Project

considering

the

doorskin manufacturing plant.

feasibility
For

customers who purchase its doors
Project

at

different

communications

stages.

with

plant.
one

Indeed,

partner,

instance,

about

about

building

Steves

its

has

own

informed

the progress of the MDS

Steves

manufacturing

manufacturing partners

of

has

also

partners

creating

a

had

and

recent

equipment

doorskin manufacturing

it was in the process of negotiating a deal with
Proteak,

when

this

litigation

caused

the

deal

to

fall apart.

B. Procedural Background

Steves
2016,

initiated this

asserting antitrust

related

to

Manufacturing,

JELD-WEN's

Inc.

and

action against
and

contract

2012

JELD-WEN

claims

acquisition

JELD-WEN's

subsequent

on June

against
of

29,

JELD-WEN

CraftMaster

breaches

of

the

Supply

Agreement.

Complaint

(ECF

No.

5)

(Under

Seal).

The

parties then engaged in discovery.
On
Answer
WEN' s

March
and

27,

to

2017,

add

counterclaims

recent discovery,

discovery,

that

information
furtherance

of

asserted

the

the

COUNTERCLAIM

Act,

trade

to

Texas

Remedies

COUNTERCLAIM

FOR

MDS

JELD-WEN;

amend

based

on

have

used

JELD-WEN's

Project.

ECF

by

No.

proposed

Violation

of

Pierce
101

and

at

the

Defend

Defend

Trade

Secret

Annotated §§
RELIEF,

FIFTH

Act,

Secrets

FOR

RELIEF,

Secrets

Texas

134A.001

Tortious

FOR
Fair

RELIEF,
Dealing

RELIEF,

Breach
Under

COUNTERCLAIM

the

Delaware

Breach of Contract.

On May 17, 2017,

Violation of
Practice

134A.008;

Interference

18

with

&

FOURTH
Contract

relating to Pierce's employment contract

contract

of

Act,

Civil

-

FIRST

Trade

THIRD COUNTERCLAIM FOR RELIEF,
Trade

JELD-WEN

counterclaims:

Violate

employment

JELD-

Ambruz—in

1-2.

FOR

RELIEF,

Interference with Contract Under Texas Common Law,
Ambruz's

its

confidential

COUNTERCLAIM

Under Texas Common Law,
with

to

Steves

SECOND

Uniform

Code

leave

1836;

U.S.C. § 1832(a)(5);
the

against

secrets—obtained

RELIEF,

18 U.S.C. §

Conspiracy

may

following

FOR

sought

from documents produced by Steves during

Steves

and

JELD-WEN

with

JELD-WEN;

Implied
Law;

Covenant
and

ECF No.

SIXTH

of

SEVENTH

106

(Under

Tortious

relating to
COUNTERCLAIM

Good

Faith

and

COUNTERCLAIM

FOR

Seal) SIf 41-78.

the Court granted JELD-WEN's request,

and JELD-

WEN filed

the

counterclaims.

Counterclaims

(ECF No.

252)

(Under

Seal).

Two
First,

other

the

causing

aspects

Fourth

Pierce

employment

of

and

and

the

Counterclaims

Fifth Counterclaims

Ambruz,

contracts

with

are

were

respectively,

JELD-WEN

by

the

Second,

First,

JELD-WEN

Second,

requested damages

"providing

Third

its

actual

secrets misappropriation,
that

was

not

Alternatively,

royalty

for

secrets.
Steves

as

accounted

JELD-WEN

Steves'

Counterclaims.
loss

well
for

sought

past

In addition,

fSl 62,

requested multiple types

and

for

based

to

and confidential information to Steves." Id.
added).

relevant

as

as

JELD-WEN

reflecting

the

sought

an

on

Steves

breach

their

trade
68

secrets

(emphasis

of relief
It

the

trade

enrichment

actual

a

loss.

reasonable

misappropriated

order:

for

primarily

of

unjust

JELD-WEN's

damages

of

result

Steves'

in

use

a

here.

(1)

trade

enjoining

from acquiring any further trade secrets or confidential

information from JELD-WEN and from using such trade secrets; and

(2)

requiring Steves to

JELD-WEN's

trade

Alternatively,
to

pay a

secrets.

At

secrets

at

the

Counterclaims,

or

records

and destroy any of

confidential

information.

JELD-WEN requested an injunction requiring Steves

reasonable
Id.

search its

royalty

for

every

future

use

of

the

trade

47-49.

same

time

that

it

allowed

JELD-WEN

to

add

the

the Court also ordered that those claims be tried

separately from the antitrust and contract claims. ECF Nos. 239240.

Trial

January
favor

for

29,

on

verdict

2018,

all
is

the

and

counts

not

antitrust

the

on

and

jury

returned

February

relevant

to

contract

15,

the

a

claims

began

verdict
ECF

2018.

Court's

in

1022.

No.

decision

on

Steves'
That

on

Steves'

the

Second,

summary judgment motion.
On
Sixth,

June
and

19,

2017,

Seventh

Steves

moved

Counterclaims

for

to

dismiss

failure

to

The Court granted the motion on September 13,
those counterclaims with prejudice. ECF Nos.
JELD-WEN

alleging

then

several

filed

trade

an

action

secrets

and

state

2017,

a

claim.

dismissing

353-354.

in

Texas

related

state

claims

court,

against

the

Steves Brothers and Pierce based on the same underlying facts as
the

Counterclaims.

voluntarily dismiss

motion,

Shortly
the

concluding

thereafter,

Counterclaims,

that

the

trade

JELD-WEN

but

moved

to

the Court denied the

secrets

litigation

had

advanced to a stage where dismissal would prejudice the parties
and that JELD-WEN's sole explanation for voluntary dismissal was

lacking. ECF Nos. 579, 734.® The Court then granted motions by
the

Steves

Brothers

and

defendants in this action.

Pierce

As a

to

result,

intervene

as

counter-

the Steves Brothers are

® The Texas action has been stayed. This case is currently set
for trial on April 30,
the trial until July.

2018,

but

10

Steves

has

moved

to

continue

now

counter-defendants

Counterclaims,
and

Third

and

to

the

Pierce

is

Counterclaims.

First,

a

Third,

Fourth,

counter-defendant

ECF

Nos.

832-833,

and

the

to

Fifth

First

However,

those

parties' status as co-defendants to Steves is immaterial here.
On April

19,

misappropriated

2017,

trade

identify

the

secrets.

ECF No.

the Court ordered JELD-WEN to

secrets

witnesses

143.

who

to be

would

JELD-WEN

presented

prove

that

responded by

Seal).

of

descriptions

the

After

Steves

raised concerns

and the

Court

noted

350)

statement,

strike

at 131:17,

ECF

No.

portions

of

2017.

that

9,

In addition,

side of making

that

there

(Under

420)

JELD-WEN

vagueness

trade

secrets

[the statement]

no

(Under

(Under Seal)

on

an

room

The

at

that

then

were

moved

to

imprecise,
ECF No.

so crystal clear and so precise

for

22:6-8.

amended

October

Seal).

secrets

the Court urged JELD-WEN to "err . . . on the

can be

filed

185

2017 Transcript

Steves

statement

updated

Seal).

contention

vague and leaving the door open." Oct.
No.

trade

ECF No.

and the Court granted that motion in part on October 6.
424.

to

statement

the

the

and

were

a

the

JELD-WEN served Steves with an updated

357-2

the

they

about

needed to be "specifically identified," Aug.
(ECF No.

trial

filing

of misappropriated trade secrets on April 26,

(Under

at

list

9

Amended

Trended

Statement
11

you

are

2017 Transcript

being
(ECF

Following those instructions,

statement

("the

3,

that

of

misappropriated

Statement").
contained

a

ECF

number

trade

No.

428

of

rows

of

trade

secrets,

but

some

rows

contained

Amended

more

Statement

than

one

conduct

its

paragraph of information.
Steves

subsequent
WEN' s

relied

Rule

two

single

30(b)(6)

whether

Mallard

secret,
also

designees.

they

combination

individual

depositions

trade

secret

both

item

rows

responded

in

the

the

confidential

row

a

Reed

also

does

list

of

keep

a

information confidential,
into items or groups.

Steves'

JELD-

Mallard

counsel asked the

rows

multiple

to

contain

trade

in

secret.

explained,

and

trade

row

SUF fSI 10-11/

secrets,

that

considers

Reed
each

a

the whole

though,

a

secrets.

considers

confidential

information

trade

Brooks

JELD-WEN

be

trade

Response SIf 10-11.

through

the Amended Statement,

that

cumulative
and

in

to

and

certain
or

to

JELD-WEN

Reed

understood

different

and that

not

of

During those depositions,

Testifying about
and

the

corporate

("Mallard").
witnesses

on

is
SUF

JELD-WEN
all

its

and does not separate that information

SUF f

10; SUF Response I

10.

JELD-WEN then filed an updated statement of misappropriated
trade

secrets to be asserted at

Statement").
WEN

moved

Statement

ECF No.

for

leave

based

468
to

on

(Under Seal).
add

the

including

JELD-WEN's

Morrison

("Morrison"),

trial

several

on November 2

Shortly thereafter,

trade

declarations

industry expert
that

they
12

("the Trial

and
had

secrets

of

to

two

former

the

JELDTrial

individuals,

employee

discovered

James

additional

misappropriated trade secrets and confidential information while
reviewing

documents

produced

by

Steves.

The

trade

secrets

described by Morrison related to sales data from internal JELDWEN

documents

reflected

that

he

in Ambruz's

Morrison

created

viewed

during

his

employment—which

Feasibility Study for

while

working

for

Steves—and

JELD-WEN.

ECF

(Under Seal). After the Court granted the motion,

were

formulas

No.

511-2

JELD-WEN filed

its amended statement of misappropriated trade secrets for trial
("the

Amended

Trial

Statement")

on

November

29.

ECF

No.

588

(Under Seal).

During
questioned

Amended

Morrison's
him

about

Trial

subsequent

the

trade

Statement.

Morrison

could

internal

JELD-WEN documents

had

seen

not

As

sales

data

Ambruz had access,
was

"generally

receiving.

the

data

data

that

an employee,

number

of

databases

added

further

number

of

JELD-WEN's

that

he

did

because

he

of

shipments

in

the

information,
seen

in

stated that

he

to

had

which

he

and

Feasibility Study

data.
not

added

he

but

counsel

SUF S[ 18;

need

was

that

to

knew

SUF

research
from

customers

his

were

SUF Response ff 17-19.

Morrison

Amended

a

were

sales

the

specific

Steves'

that

and that the data in the

He

recollection

employment

in

secrets

to

as

reflective"

Response SI5 17-19.
this

identify

deposition,

Trial

also

testified

Statement,

about

having
13

been

the

information

retained

by

in

the

JELD-WEN to

express

his

expert

confidential,
SUF f

25.

trade

protected,

When

not

and

that

retained

certain

said

to

give

an

SUF f

showing

contained

that

the

document

Id.

SISl 24,

26;

No.

884-6)

summary

expert

judgment

filed

its

after

the

also

22.

Morrison

responding
on

a

that

whether

single
secret

evaded
JELD-WEN

particular

SUF Response fSI 21-22.^

in the Amended Trial

28

rows

of

discovery
on

opposition
jury

Morrison Annotated Trial

Statement,

trade

secrets.

(Under Seal).

After

see

a

was

Id. 5 23;

trade

was

information constituted a trade secret.
rows

JELD-WEN.

it

opinion

Morrison then numbered the

information

was

questioning by

to

that

information

that

combination."

of

him

whether

valuable

whether

in

line

on

and

Morrison

"[s]eparately

had

asked

secret,

answering

opinion

January
on

returned

was

completed,

24,

2018.

February
the

antitrust and contract claims,

14.

verdict
Steves'

Steves

ECF

ECF
in

Statement

No.

No.

885.

1005.

Steves'

moved

for

JELD-WEN

Then,

favor

(ECF

on

soon
its

counsel indicated that i t

would seek to amend its motion to incorporate relevant aspects
of that verdict,

and the parties agreed to have Steves move for

^ JELD-WEN's lay witnesses also avoided similar questions upon
instruction
expert)
secret.

from

JELD-WEN's

counsel

that

witnesses

(lay

or

could not opine whether something was or was not a trade
Although

that

is

correct,

it

is

irrelevant.

witnesses
were
required to
respond to
whether
testifying about a single alleged trade secret or
combination trade

secret.
14

The

they were
an alleged

leave to amend pursuant to an expedited briefing schedule.
20,

2018

Steves'

Transcript

counsel

(ECF

notified

No.
the

not move for leave to amend.
as scheduled on March 5,

to
the

strike

and

damages

counterclaims—neither

Court

in

for

issue

at

the

13:14-18:16.
next

As a result,

2018.

certain arguments

verdict

1039)

ECF No.

having

been

on March 15,

JELD-WEN would not

Court

instructed

trade

secrets

secret

and

detail

than

WEN

pertained to

tortious

interference

addressed

an

Statement")

the

in

be

the

to

asserted

the

at

an

trial

that

Trial

statement

21,

2018.

generalized

Trial

submit

source

Amended

March

removed

Amended

ECF No.

Steves'
1207.

after JELD-WEN's counsel advised that

JELD-WEN

updated

on

in

assert but one combination trade secret,

explained

filed

statement

to

would

that

opening brief—and the Court granted the motion.

Finally,

it

JELD-WEN then moved

reply

JELD-WEN's

that

However,

Steves filed its reply

1124.

Steves'

day

Feb.

Statement

of

the

("the

trade
In

1218

also

of

trade

in

more

response,

JELD-

Amended

Trial

(Under

from

each

secret

Second

information

statement

delineated

Statement.

ECF No.

and

updated

the

Seal).

several

removed

That

rows

entirely

in
the

information constituting several trade secrets.

At oral argument,

Steves again expressed concern about

the

specificity of certain trade secrets in the Second Amended Trial
Statement

therein

as

and

Steves'

part

of

its

inability

summary
15

to

examine

judgment

the

motion.

information

During

oral

argument,
trial

JELD-WEN's counsel confirmed that it would pursue at

only

one

combination

trade

secret.

The

Court

Steves to move separately for sanctions under Fed. R.

permitted
Civ.

P. 37

based on JELD-WEN's purported failure to comply with the Court's
earlier orders to define the trade secrets with specificity.
Court

also

given

allowed

JELD-WEN's

Statement.

See

Steves

to

seek

modifications

ECF No.

a

in

continuance

the

Second

of

the

Amended

The

trial

Trial

1290.
DISCUSSION

I.

Legal Standard

Under

Fed.

R.

Civ.

P.

56,

a

court

"shall

grant

summary

judgment if the movant shows that there is no genuine dispute as

to any material fact and the movant is entitled to judgment as a
matter

of

law."

Fed.

R.

Civ.

P.

56(a).

Rule

56

requires

the

entry of summary judgment "after adequate time for discovery and

upon

motion,

sufficient to

against

a

party

establish the

that party's case,

For a

fails

proof

party's

v.

Catrett,

court to enter summary judgment,

concerning

case

make

a

showing

essential

to

and on which that party will bear the burden

genuine issue as to any material fact,

of

to

existence of an element

of proof at trial." Celotex Corp.

(1986).

who

renders

an

essential

all

other

(internal quotations omitted).
16

317,

322

"there can be no

since a complete failure

element

facts

477 U.S.

of

the

immaterial."

nonmoving
Id.

at

323

When reviewing a motion for suiranary judgment,

interpret

the

light

most

Elec.

facts

Indus.

(1986);

2017).

Lee

v.

court must

and any inferences drawn therefrom in the

favorable
Co.

a

to

v.

the

nonmoving

Zenith

Town

of

Radio

Seaboard,

party.

Corp.,

863

See

Matsushita

475

574,

587

323,

F.3d

U.S.

327

(4th

Cir.

To successfully oppose a motion for summary judgment,

nonmoving

party

specific facts
Anderson

v.

However,

"

suffice'

to

judgment,

Andrews,
Potomac
"Where .

rational

must

demonstrate

to

Liberty

Lobby,

[c] onclusory

oppose

a

there

are

genuine issue for trial.

that would create a

See

Inc.,

or

the

477

court

U.S.

speculative

properly

that

the

242,

250

allegations

supported

motion

(1986).

do

for

not

summary

'nor does a mere scintilla of evidence.'" Matherly v.

859 F.3d 264,
Elec.
.

.

Power

the

trier

280

Co.,

312

F.3d

taken

record

of

(4th Cir.

as

fact

to

2017)
645,

a

find

(quoting Thompson v.

649

whole

for

(4th

Cir.

could

not

the

2002)).
lead

non-moving

a

party,

disposition by summary judgment is appropriate." United States
V.
II.

Lee,

943 F.2d 366,

(4th Cir.

1991).

First and Third Counterclaims

Steves
Counterclaims
cannot

seeks
on

satisfy

misappropriation

Act

368

("DTSA")

summary

two

judgment

grounds.

First,

the

elements

all

claim

under

the

on

the

it

First

contends
of

federal

a

Defend

that
trade

Third

JELD-WEN
secrets

Trade

or the Texas Uniform Trade Secrets Act
17

and

Secrets

("TUTSA"),

because JELD-WEN's
in

the

Amended

inadequate description of the trade

Trial

Statement means

the existence of any trade secrets.
JELD-WEN's

that

it

Second,

cannot

secrets

establish

Steves asserts that

DTSA and TUTSA damages claims must

fail

because the

report and testimony of JELD-WEN's damages expert,

John Jarosz

("Jarosz")

reflect that the damages asserted are speculative and

inconsistent with JELD-WEN's allegations and Steves' conduct.® As
noted,

the

damages

arguments

will

be

addressed

in

a

separate

opinion when all those issues have been fully briefed.
Under

the

DTSA,

misappropriated
injunctive

"[a]n

may

relief]

owner

bring

a

. . . if

a

civil

the

product or service used in,

of

trade

action

trade

[for

secret

or intended for

secret

is

use

or foreign commerce." 18 U.S.C. § 1836(b)(1),

that

is

damages
related

in,

or

to

a

interstate

(3)(A)-(B).

Thus,

to prevail on that claim, a plaintiff must establish that: "(1)
it

owns

a

trade

misappropriated; and
or

foreign

Inc., No.

2,

secret;

(3)

commerce."

(2)

the

trade

secret

was

the trade secret implicates interstate
Space

Sys./Loral,

LLC

v.

417CV00025RAJLRL, 2018 WL 701280, at *5

Orbital

ATK,

(E.D. Va. Feb.

2018). And, of course, the plaintiff must prove damages. A

trade secret is defined by the DTSA to mean

g

Steves

also

contradicted
calculations,
been stricken,

argued

that

the

verdict

in

the

antitrust

trial

the
assumptions
underlying
Jarosz's
damages
Steves Reply at 19-25, but those arguments have
see ECF No.

1207.
18

all forms and types of financial, business,
scientific,
technical,
economic,
or
engineering information, including patterns,
plans,
compilations,
program
devices,
formulas,
designs,
prototypes,
methods,
techniques, processes, procedures, programs,
or codes,

.

.

.

(A)
the
reasonable

if—

owner
thereof
measures
to

information secret;

has
keep

taken
such

and

(B) the information derives independent
economic value,
actual
or potential,
from not being generally known to, and
not being readily ascertainable through
proper means by, another person who can
obtain

economic

disclosure

18

U.S.C.

§ 1839(3).

"acquisition,"

or

value

use

of

the

from

Misappropriation

"disclosure[,]

certain circumstances.

Id.

§

or

use"

the

information.

of

is

a

defined

trade

secret

as

under

1839(5).

The TUTSA similarly allows a

plaintiff "to recover damages

for misappropriation" "[i]n addition to or in lieu of injunctive
relief,"

Tex.

statute's

definitions

nearly
id.

Civ.

identical

§ 134A.002(3),

require

Prac.

the

same

of

trade

to
(6).

&

Rem.

secret

their
In effect,

elements,

Code § 134A.004(a).

The

and misappropriation

are

DTSA
then,

except

the

counterparts.
a

See

DTSA and TUTSA claim

latter

need

not

involve

any trade secrets that implicate interstate or foreign commerce.
Steves

acknowledges

that

JELD-WEN

has

presented

evidence

creating a genuine dispute about whether Steves misappropriated
any

trade

secrets.

It

also

appears
19

to

concede

that

the

trade

secrets
must

relate

do

so,

doorskins

as

that

interstate

to

interstate

the

trade

were,

or

secrets

according

commerce.

foreign

Indeed,

it

manufacture

of

concern

the

Steves'

to

Compl. SI 31.

commerce.

Complaint,

As

a

result,

sold

Steves

is

in

only

contesting the existence of trade secrets that JELD-WEN owns.
A. Specific Description of Trade Secrets
Because

comprise
nature

the

DTSA

multiple

of

Steves'

and

TUTSA

elements,

it

challenge.

In

definitions

is

of

necessary

this

motion,

"trade

to

secret"

clarify

Steves

does

not

to

keep

discuss whether JELD-WEN "has taken reasonable measures
[the]

information

18 U.S.C.

§

[in

its

1839(3) (A),

Amended
Tex.

Code § 134A.002(6) (A),

so

the

has

generally
giving

argued

known

that

or

in

this

not

Court

motion

readily

information

independent

Civ.

Prac.

Instead,

& Rem.

secret,"

Prac.

need

not

&

Rem.

address

whether

could satisfy that element.
that

information

ascertainable

argument is not addressed in detail.
Tex.

Statement]

Civ.

JELD-WEN has produced evidence that
Steves

Trial

economic

by

was

other

value.

Steves

But,

secrets claimed.
the

subject

that

See 18 U.S.C. § 1839(3) (B) ;

Code § 134A.002(6)(B).

the core of Steves'

cannot

not

means,

argument

is that JELD-WEN has

not identified its trade secrets with enough specificity,
that

the

apply

the

required

elements

to

the

such
trade

A plaintiff bears the burden of "describ[ing]

matter

of

its

alleged
20

trade

secrets

in

sufficient

detail

to

establish

each

element

of

a

trade

996 F.2d 655,

secret."

661

Trandes

Corp. V.

Guy F. Atkinson Co.^

As such,

the plaintiff must "'identify, with particularity,

trade secret it claims was misappropriated.
allow

the

finder

legitimately
simply

a

of

trade

confidential

fact

to

secret

but

a

available

information.'"

Inc. ,

15-CV00589-GBL-IDD,

No.

Feb.

25,

S.A. ,

2016)

331

BladeRoom

F.

(quoting
Supp.

Grp.

Kancor

secret,

Ams.,

2016

Inc.

WL

740061,

MicroStrategy

Inc.

must

the

396,

418

(E.D.

Facebook,

Inc.,

No.

(N.D.

Cal.

subject

Jan.

matter

23,
of

ATC
at

which

is

that

is

is

publicly

Ingredients,
*14

v.

Va.

at *3

or

v.

v.

2018 WL 514923,

that

information

2d

Ltd.

Mescribe

other

trade

each

This must be done to

distinguish

from

not

(4th Cir. 1993).

(E.D.

Bus.

Va.

Objects,

2004))/

see

also

5:15-CV-01370-EJD,

2018)

the

("The plaintiff

trade

secret

with

sufficient particularity to separate it from matters of general
knowledge

in

the

trade

persons . . . skilled
(quoting Imax Corp.

65

(9th Cir.

"must

its

the

of

special

trade.'"

Cinema Techs.,

knowledge

(alteration
Inc.,

may

than

fail

produce

for

singles

out

any

created

and

safeguarded

PrimeSource Bldg.

lists

lack

particular

Prod.,

that

Inc.

of

of

trade

general

v.
21

those

in original)

secret,

1164-

the plaintiff

information,"

particularity

particular

of

152 F.3d 1161,

1998))). To satisfy this requirement,

do more

claim

v.

in

or

if

it

explaining

bit

Huttig Bldg.

of

and

"never

how

it

information."

Prod.,

Inc.,

No.

16 CV 11390,

2017

WL

7795125,

at

*15

(N.D.

111.

Dec.

9,

2017)

(internal quotations omitted).^
The annotations by JELD-WEN's industry expert,
his

deposition

contained

28

indicated

rows

Statement.

Steves'

manner

his

of

33)

in

Second

that

because

of

30(b) (6)

secrets.

Amended

See

Trial

report.

Trial

See

Morrison Annotated Trial

Halton

Statement—that

JELD-WEN might
statements

at

these trade secrets,

Report

also

by

the

assert

at

Morrison

their

actual

trial
and

depositions

(ECF

No.

1008-

number

was

two

JELD-WEN

asserted

that

the

Amended

Trial

Rule

claimed

Statement

rows

in

the

Amended

was

Steves highlighted Rows

2 and 3 in support of this contention. Those rows,
subsequent

trade

indecipherable

JELD-WEN's

that

of

individually and in combination.

vague because of how it was structured.

the

Statement

industry expert numbered the rows in the same

designees

Steves

the

at

Steves initially argued—before JELD-WEN filed the

Amended

secrets

trade

expert

SIS[ 48-198.

that

Morrison,

Trial

like many of

Statement,

had

a

® With one exception, these cases did not specifically concern
DTSA or TUTSA claims.

However,

their

statements

statutes codifying the Uniform Trade Secrets Act
result,

those

laws

have

almost

identical

concerned state

("UTSA").

definitions

of

As

a

"trade

secret" to the DTSA and the TUTSA, so the logic of those cases
applies equally here. See BladeRoom Grp., 2018 WL 514923, at *2
(California UTSA); PrimeSource Bldq., 2017 WL 7795125, at *13
(DTSA and parallel Illinois Trade Secrets Act); Kancor Ams. ,
2017 WL 740061, at *14 (Virginia UTSA); Trandes, 996 F.2d at 661
(Maryland UTSA).

22

similar

format:

described

in

sentences
secrets.

5,
28,

or

a

general

that

statement

particular

paragraphs

about

row,

claiming

the

followed

specific

by

10,

and

12-14,

30,

as

the

flaws

describe

statements

to

about

financial
of

the

every

data).
trade

ambiguity

structure would not,

did

of

at

the

with

components of a

62.

pieces

constitute

593

general

rows

in

the

12.

make

even

summary

judgment

i t is clear that

if

trade

Insights,

(4th Cir.

Inc.

2009);

with

if

information

together

constituted

conjunction

or

to

information

information

secret

25-26,

the

individual

secrets

read

Sentia Grp.,

v.

when

Inc.,

Trandes,

996 F.2d at 661-

it might be the case that JELD-WEN grouped particular

of

Moreover,

4-

trade secret in isolation or in

information,

See Decision

App'x 586,

Thus,

(Rows

combination trade secret are not identified with

specificity

individually.
311 F.

other

trade

however,

only making

for lack of specificity appropriate. After all,

combination

not,

secret,

by itself,

information may be considered a

3-10

(Rows 21-23,

Steves

more

as

" [n\] any

of

Amended Trial Statement." Steves Br.

This

or

information

and 18-19); i ^ at 10-12

secrets

two

See Morrison Annotated Trial Statement at

7-8,

enough

trade

all

Steves'

in

any

secrets

of

a

the

trade

other

objection

the

therein

in

rows,

with
23

the

same

secret

only

information
concerns

each

more

row

the

row

in

because

when

the

read

specificity

in

paragraph.

substance

described

that

the

than

of

the

trade

in

the

cases

cited

(plaintiff
and

by

Steves.

asserted

"refused

to

See

only

Trandes,

that

provide

it

any

information

and,

similarly,

Tunnel

both

a

had

F.2d

at

possessed "secret

formulas" at trial,

System

996

661-62

'formulas'"

whatsoever

about

the

"presented evidence that the

structure

and

an

organization,

but

explained neither how the program was structured nor how it was
organized");

Kancor

Ams.,

2016

WL

740061,

at

*14-15

(summary

judgment granted where counter-plaintiff gave "merely conclusory
identification
target

samples

potential
meant);

of

its

obtained

customers,"

see

alleged

also

trade

by

such

[counter-plaintiff]

and did not

PrimeSource

secrets,"

explain what

Bldg.,

2017

WL

as

"[a]11

from

"target
7795125,

its

sample"
at

*15

(plaintiff was unlikely to succeed on merits of its claim where

it

"pointed

only

to

general

marketing

secrets").

Unlike

provided a

significant amount of detail about its asserted trade

the

And,

even where

Amended

subsequent
specificity.

plaintiffs

Trial

or

those

was

somewhat

paragraphs

instance.

cases,

Row

7

trade

in

a

that

the

has

row

generalized,

provided

stated

to

JELD-WEN

introductory sentence

Statement

sentences
For

the

in

amount[ed]

and

information

secrets.

assert[ed]

of

budgeting

the

it

categories

in

the

necessary

JELD-WEN

"has

developed processes and know-how for manufacturing refined fiber

in a

way that

ensures

that

the

24

resin

can properly bond fiber

bundles together," and then described the precise nature of that
know-how.

Morrison Annotated Trial

However,

the

facial

Statement

was

only

testimony

of

relevant

whether

trade

the

secrets,

ambiguity

compounded,

one

not

JELD-WEN

information

in

Statement at

Row

of

the

resolved,

witnesses.
5

trade

Amended

by
For

constituted

combination

4.

the

deposition

example,

several

secret,

Trial

or

asked

individual

both.

Reed

stated that JELD-WEN considers "[a]ll of the multiple individual
items . . . to

specify

be

that

confidential,"

"these

things

and

are

that

considered

JELD-WEN

does

individual,

things are considered a group or a cluster." Reed Dep.
884-2)

(Under

Seal)

at

question about Row 21,

these

it's

[paragraph]

however.

are .

.

the . . . compilation

the picture,

Dep.

99:5-100:10.

so to speak,

(ECF No. 884-3)

testified

that

information

combination."
meant,

response

of
and

to

these

(ECF No.
the

same

Mallard said that "while each of

. confidential

of

all

these

and

a

trade

secret,

that

give[s]

together

that's the real trade secret." Mallard

(Under Seal) at 331:9-13. Finally, Morrison

he

understands

Row

2

Pressed

a

for

trade

an

JELD-WEN

secret

explanation

to

information

as

noted

that

only

a

on

what

or

"all

25

the

and

this

combination

this

in

phrase

testify about

separate
of

consider

"[s]eparately

Morrison responded that he could not

existence
secret,

in

In

not

the

trade

information

is

considered by JELD-WEN to be confidential." Morrison Dep.
No.

884-5)

(Under Seal)

(ECF

at 94:18-97:10.

Those explanations confounded the description of the trade
secrets

Row

in

2,

the Amended Trial

for

combination
secrets

instance,
trade

(based

could

secret;

on

Statement.

the

have

(2)

number

12
of

As

Steves

contained:
separate,

pointed out.

(1)

a

single

individual

sub-paragraphs),

which

trade
may

or

may not combine to also form a single combination trade secret;

or (3)

some third alternative in between those two.^° Even if one

conclusion

might

have

appeared more

likely

based

on

the

plain

language of the Amended Trial Statement,

the testimony of JELD-

WEN' s

impossible

witnesses

Consequently,
Statement,

if

some

specificity.

In

made

it

JELD-WEN
of

its

sum,

virtually
were

trade

as

of

the

secrets
the

motion for summary judgment,

relying

on

the

might

date

that

to

tell.

Amended

fail

for

Steves

Trial

lack

filed

of

this

JELD-WEN had materially obfuscated

identification of the trade secrets

to be

tried,

and this

was accomplished deliberately.

Steves
multiple

also

contended

details

in

Row

that
2

certain

could

sub-paragraphs

themselves

have

with

contained

multiple trade secrets. But the Amended Trial Statement clearly
indicated that "the plant configuration and capacity for each of
its door skin facilities" are each an individual trade secret.
Morrison Annotated Trial Statement at 1. The details that JELD-

WEN

provided

ambiguity

of

about

those

those

trade

configurations

secrets;

particularity of those secrets.
26

they

did

not

only

increase

added

to

the

the

For

Second

that

reason

Amended

Trial

representation
trade

secret,

trade

the

that
has

secrets

ordered

Statement

JELD-WEN
cured

in

Court

the

which,

will

the

along

pursue

structural

Amended

JELD-WEN

Trial

to

with

only

one

problems

file

the

counsel's

combination

obscuring

the

JELD-WEN

has

Statement,

separated each trade secret into its own row and identified the
source of the trade secret.

Statement

Furthermore,

contained numerous

Second Amended Trial

rows

Statement

where the Amended Trial

with multiple paragraphs,

contains

only a

few,

the

in which a

general statement about "know-how" or "knowledge" is followed by

several

sub-paragraphs explaining that

detail.

See,

15,

18).

whether

e.g..

These

changes

information

combination trade

The
further

Second Amended

have

know-how or

Trial

mostly

constitutes

an

Statement

removed

individual

knowledge
at

any
trade

6-8

doubt

in

(Nos.

about

secret

or

a

secret.

explanations
clarified

the

of

JELD-WEN's

matter.

counsel

Steves'

at

counsel

oral

argument

contested

the

specificity of several trade secrets in the Second Amended Trial

Statement—15, 18, 22, 23,

62,

63,

66, and 67—on the same grounds

it raised with respect to the Amended Trial Statement. Like many
of the rows in the Amended Trial Statement,
those

the

eight

trade

category of

several

secrets

consist

information

sub-paragraphs

in

of a

the

detailing that
27

the descriptions for

general

trade

statement about

secret,

general

followed

description.

by
See

id.

at 6-7,

at

7-8,

No.

15

No.

elements);

("know-how" consisting of six elements);

18

id.

("negative

at

9-10,

know-how"

No.

22

consisting

("unique

23

id.

factors") ;
on

id.

investment"

at

23,

and

No.

62

associated

("projected

and

know-how"

"negative

No.

63

("projected

costs

and

return

on

certain things at JELD-WEN's Louisiana plant);

("projected

volumes"

customers

certain

in

percentages"

of

certain

22,

63,

62,

that

66,

the

of

doorskins

for

years);

id.

at

25-26,

shipped

to

counsel

indicated

and

67

are

information

trade

therein

id.

does

customers

that

66

("projected

Nos.

in their

not

No.

for

third-party

67

third-party

secrets

at 23-

at 25,

to

No.

doorskins

id.

investment"

shipped

JELD-WEN's

years).

such

at 10-11,

costs

certain processes at JELD-WEN's West Virginia plant);
24,

of

("knowledge" of the need to "regularly monitor and adjust

[eight]
return

four

combination

knowledge" about the interaction of six factors);
No.

of

id.

15,

in
18,

"entirety,"

constitute

a

trade

secret if JELD-WEN cannot prove at trial that each sub-paragraph
does not meet the statutory elements of a trade secret. Mar.
2018

Transcript

that

the

secret,

last

because

(ECF
trade

none

No.

1295)

at

70:24-71:5.

secret.

No.

of

sub-paragraphs

the

23,

is

a

She

also

stated

combination

are

trade

26,

trade

secrets

individually but qualify as a trade secret when read as a whole.

Id.

at 71:8-21.

Notwithstanding any ambiguity on the face of the

Second Amended Trial Statement,

these statements make JELD-WEN's
28

position
trial.

clear

and

Therefore,

thereby

Steves'

enable

motion

Steves

will

to

be

defend

denied

to

itself
the

at

extent

that it seeks summary judgment on specificity grounds.
B. Elements of Specific Trade Secrets

Even

if

JELD-WEN

particularity,
granted as
Trial

to

can

Steves

argues

some

Statement

information

of

the

because

therein

identify

that

trade

its

summary

secrets

JELD-WEN

constitutes

trade

judgment

in

cannot
a

secrets

the

should

be

Second Amended

establish

trade

with

that

secret.Where

the
a

plaintiff has identified specific information that might qualify
as

a

"•*3

trade

secret,

fact-intensive

Insights,
Nan Ya

311

a

MicroStrategy,
the

App'x

996

conclusion

facts

a

trade

question to be

Plastics Corp.,

also Trandes,

is

F,

whether

at

592

174

F.3d
661

of

411,

based

331 F.

present

.

Supp.
.

.

Hoechst

419

upon

to

the

is

generally

trial.'"

Decision

Diafoil

(4th Cir.

("The existence

2d at 416

serve

exists

resolved at

(quoting

F.2d at

law

secret

of a

Co.

1999));
trade

applicable

v.
see

secret

facts.");

("The question is whether

elevate .

.

.

information

to

the status of trade secrets."). However, summary judgment may be

Steves'

arguments

pertained to

the Amended Trial

Statement,

given that the Second Amended Trial Statement was only recently
filed, but Steves presumably has the same problems with the
latter to the extent that the challenged information is still
claimed as

a

trade

secret.
29

appropriate if JELD-WEN has failed to present enough evidence to
satisfy the required elements under the DTSA and the TUTSA.
As

appears

noted,

to

the

only

challenge

trade

secrets

this

motion

in

elements

are

that

(1)

whether

information in question was not generally known to,
readily

ascertainable

who

obtain

can

through

economic

value

proper
from

means

the

by,

Steves

and

(2)

"another

disclosure

or

use

the
not

person
of

the

information," such that the information has independent economic

value.

18 U.S.C. § 1839(3) (B).

refers not to
the

knowledge by the public at

knowledge

persons

who

of

other

can

MicroStrateqy,

The "generally known"

members

gain

of

economic

large,

but

the

relevant

benefit

from

331 F. Supp. 2d at 416.

requirement

rather "to

industry—the
the

In addition,

secret."

the "readily

ascertainable" requirement asks whether the claimed trade secret

can be acquired "through legitimate means.
easily discover

the

information

If a competitor could

legitimately,

that the information was either essentially

minimus

economic

value."

Id.

at

416-17.

the

inference

'public'

The

or is of de

"proper means

which one could learn a trade secret" include "observ[ing]
product on public use

or display or . . . review[ing]

available literature." Id.

Byrne,

123

F.

Supp.

3d

at 417;

909,

information by observation,
is

lawful,

but

information

915

see also A.M.

(S.D.

Tex.

experimentation,
is
30

unlawfully

by
the

publicly

Castle & Co.

2015)

is

v.

("Obtaining

or general inquiry
obtained

if

it

is

gained

through

omitted)).

a

breach

"What

of

confidence."

(internal

readily

ascertainable

constitutes

quotations
through

proper means is heavily fact-dependent and simply boils down to
assessing

the

ease

with

which

a

trade

secret

independently discovered." MicroStrategy^

could

331 F.

have

been

Supp. 2d at 417

(emphasis in original).
As

an

initial

information
instance,

to

matter,

which

Steves makes

it

is

Steves'
the

important

arguments

to

do

sweeping statement

highlight

not

the

apply.

that

For

"much of the

information in the Amended Trial Statement is generally known or

readily

ascertainable

by

proper

means"

information was given to Steves by Pierce,
Steves Br.
is

not

at 16.

simply

because

an "industry expert."

Even if Pierce is such an expert,

necessarily

true

that

he

that

acquired

the

however,

claimed

it

trade

secrets from that position,

instead of through his employment at

JELD-WEN.
that
it

was

has

that

Moreover,

Steves

has

"generally

known"

to

not

demonstrated the

element.

failure
Pierce

secrets

Likewise,

not

Steves'

to

discipline

employees

and

JELD-WEN's

lack

are

any

industry experts

absence

of

identified

only marginally relevant

about

disclosed

written

do

not

influence

the

31

of

to whether the

Court's

so

about

JELD-WEN's

information

record

possessed by JELD-WEN constitutes trade secrets.
contentions

Pierce,

genuine dispute

assertions

who
a

of a

like

information

its

to

trade

information

These overbroad

determination

of

whether

trade

secrets

exist,

and

the

Court

will

focus

only

on

the specific trade secrets attacked by Steves.

Steves

points

to

only

three

rows

from

the

Amended

Trial

Statement that purportedly contain information that is generally
known

or

readily

ascertainable

assertions are misguided.
(1)

Row

29,

formulas

because

noted

WEN 0pp.

in

(ECF No.

factors
door

skin

Second
Nos.

and

to

1008)

plant,"

64-67

the

in

in

source

of

constitute

(Under Seal)

deciding

Morrison

Trial
the

withdrew

the

on

a

at

Amended

sales

a

trade

"the

But

claim
secret,

Steves'

optimal

And,

Trial

and

that
see

(2)

secret the

Trial

4-5.

data

its

trade

Annotated

Statement

Second

means.

at 10 n.l2;

longer claims as

consider

Amended

row

proper

rows are no longer at issue here:

JELD-WEN

that

because JELD-WEN no

Two

by

to

Row

Statement—the

highlighted

JELD-

Row 3,
list of

location

Statement
as

the

are

of
at

a
2;

30—now

substance

contested.

Steves cites Morrison's testimony to establish that the data is
not

confidential,

asserted,

and

JELD-WEN,

however,

underlying

was

reflects
not

found

notes

information

in

he worked there.Indeed,

Whether that
in

this

something
in

that

other

internal

Morrison

confidential

than

JELD-WEN

recalled

JELD-WEN

what

is

documents.

viewing

documents

the
when

the Court allowed JELD-WEN to add Row

recollection is admissible has not been pressed

motion.

32

30

to

the

declaration

Amended
to

Trial

that

Statement

effect.

See

based

Morrison

on

Decl.

Morrison's

(ECF

29) SI 10. These disagreements are not surprising,

No.

1008-

given that the

secrecy elements of trade secrets are highly fact-dependent.
MicroStrategy,

has

shown

a

those rows

F.

Supp.

genuine

is

proper means,
III.

331

not

2d

dispute

generally

at

as

416-17.

to

But

whether

because

the

See

JELD-WEN

information

in

known and readily available through

summary judgment cannot be granted.

Fourth and F i f t h Counterclaims

Steves moves
Counterclaims

on

for
the

summary

sole

judgment

basis

that

on

the

those

Fourth

tortious

and

Fifth

interference

with contract claims are preempted by the Third Counterclaim for
trade secrets misappropriation under the TUTSA.
The

TUTSA

restitutionary,
remedies
Prac.

&

affect

Rem.

and

or

(2)

other

"displaces
law

misappropriation
Code §

certain

whether

[or]

for

generally

not

134A.007(a).

claims,
based

other

of

a

[Texas]
trade

However,

including:

upon

civil

of

"(1)

remedies

that

also

argued

that

JELD-WEN

has

the

of

Tex.

TUTSA

a

does

Civ.
not

remedies,

trade

not

civil

secret;

based

upon

§ 134.007(b).

presented

evidence to obtain damages on either claim,
14, but the Court has stricken that argument,
33

secret."

are

tort,

providing

contractual

misappropriation

misappropriation of a trade secret." Id.

Steves

conflicting

insufficient

Steves Reply at 12see ECF No.

1207.

The

parties

dispute

whether

JELD-WEN's

tortious

interference claims are "based upon misappropriation of a
secret.

Resolving

"whether

the

that

facts

relied

interference]

claim[s]

claim." AMID,

241

three

arise

claims

acquisition

of

issue

F.

on

differ
Supp.

from

trade

requires

from

3d at

the

secrets

to

those

exact

Court

support

826.

and

the

to

Steves

same

consider

the

supporting

[tortious

the

contends

TUTSA

that

conduct—the

confidential

trade

all

alleged

information

by

Pierce and Ambruz, who conveyed the information to Steves. Thus,

The Court would not even need to decide this question if JELDWEN's
tortious
interference
with
construed as "contractual remedies"

Mortg.

Grp.,

00847-SS,
(finding

contract

LLC

2016
breach

claims

concerning
"depend[ed]

v.

WL
of

not

Homebridge

900577,

Fin.

at

contract

*7
and

preempted under

contract
claims
under the TUTSA.

Servs.,

(W.D.

Inc.,

Tex.

tortious

can
See

No.

be
360

A-14-CA-

Mar.

2,

2016)

interference

with

TUTSA preemption provision

"contractual
remedies,"
on
the
existence
and

because
content

both
of
a

claims
written

agreement"). JELD-WEN has implicitly adopted this assertion by
citing 360 Mortgage Group on that point. See JELD-WEN 0pp. at 36
n.36. However, 360 Mortgage Group's conclusion on the tortious
interference preemption issue appears to be mistaken.
Most
courts
applying
the
TUTSA or
similar
statutes
to
tortious
interference claims recognize that tortious interference is a
tort claim, not a contract claim-making the question of whether
the claim is "based upon the misappropriation of a trade secret"
relevant. See, e.g., Downhole Tech. LLC v. Silver Creek Servs.

Inc. ,

No.

CV H-17-0020,

2017 WL 1536018,

at *3

(S.D.

Tex.

Apr.

27, 2017); AMID, Inc. v. Medic Alert Found. U.S., Inc., 241 F.
Supp. 3d 788, 826-27 (S.D. Tex. 2017) (citing cases involving
other Uniform Trade Secrets Acts). Moreover, preemption "is not
avoided simply because a claim requires different elements of
proof than a
[TUTSA]
claim." AMID, 241 F. Supp. 3d at 826
(internal quotations omitted). Therefore, it is immaterial that
JELD-WEN must demonstrate the existence of a contract
tortious interference claims but not its TUTSA claim.
34

for

its

the tortious

interference

misappropriation of a
those

claims

certain
the

as

a

hand,

in case

qualifies

asserts

preemption issue at

are necessarily based upon the

trade secret,

backstop

information

other

claims

as

that

this

a

it

and JELD-WEN is only using
they

cannot

trade
is

establish

secret.

premature

to

stage given the parties'

that

JELD-WEN,
resolve

on
the

disagreement

about whether JELD-WEN can establish that any of its information
is

a

trade

secret.

evidence that
and

Ambruz's

its

Furthermore,

tortious

disclosure

JELD-WEN does not assert

says

JELD-WEN,

interference claims

of

some

is a

confidential

trade secret,

it

has

produced

rely on

Pierce's

information

that

so those claims are

not premised entirely on trade secret misappropriation,

as

they

must be to be preempted.

The scope of the TUTSA is a
the

TUTSA

was

interpreted the
to have done

Fresh

Tex

so

enacted,

few

Texas

scope of its preemption provision.

so in detail,

Produce,

acknowledged

recently

question of Texas

that

in Super Starr

LLC,

531

S.W.3d

the

TUTSA

"^was

law.

courts

(Tex.

intended

have

The only one

International,

829

Because

LLC v.

App.

2017),^^

to

prevent

The Court may look to this decision for guidance here because
the
precise
question
presented
here—whether
a
tortious
interference claim based on the misappropriation of both trade
secrets and confidential information is preempted by a TUTSA
claim—has not been addressed by the Texas Supreme Court. See
Webb V. City of Dallas, 314 F.3d 787, 795 (5th Cir. 2002).

35

inconsistent

eliminating

theories

of

alternative

relief

for

theories

the

of

same underlying harm by

common

law

recovery

which

are premised on the misappropriation of a trade secret.'" Id. at
843

(quoting Smithfield Ham & Prod.

Co.

v.

Portion

Pac,

Inc.,

905 F. Supp. 346, 348 (E.D. Va. 1995)).^® As a result, the court
found

that

a

distributor's

TUTSA

claim

preempted

its

separate

breach of fiduciary duty claim because the latter was alleged in
such a

way

that

the

breaches

of

fiduciary

duty

could not

have

occurred "without the use of alleged trade secrets." Id.

The

effect

interference

might

not

claims

are

that

claims

apply

to

this

is

on

case,
the

information.

Super

position that a

Starr
.

.

holding

unclear.

this

founded

confidential
out

of

where
use

that

information)

of

a

not

JELD-WEN's
notes

the

Super Starr

potentially

both

Texas

that

trade

federal

conclusively

tortious

preempted

secrets

court pointed

preclude

alleged

trade

the

holding was

secrets

(not

merely

confidential

were a necessary component of the facts

Software,

[the]

premised on the

supporting

the breach of fiduciary duty claim." Embarcadero Techs.,
Redqate

and

. claim based on confidential information is

not preempted by TUTSA because

finding

JELD-WEN

Indeed,
"did

on

Inc.,

No.

1:17-CV-444-RP,

2018

WL

Inc.

v.

315753,

at

Although Smithfield was discussing the preemption provision of
the Virginia UTSA ("VUTSA"), that provision is nearly identical
to the TUTSA's preemption provision. Compare Va. Code § 59.1-341
with Tex.

Civ.

Prac.

& Rem.

Code §
36

134A.007.

*3

(W.D.

Tex.

Jan.

5,

2018).

JELD-WEN takes this silence to mean

that TUTSA preempts only those claims that are based entirely on
trade

secret

misappropriation—that

is,

claims

that

could

not

also be based on confidential information misappropriation.
Super

Starr

assertion.

Its

does

statement

misappropriation of a
T[UTSA]"
531
with

of

simply

S.W.3d
two

which

including

843.

Texas

to

tortious

misappropriation

("[Plaintiff]'s
the misuse of
include

trade

("[Plaintiff]
misappropriated

alternatively

the

offer

as

both

secrets.");
sought

for

based

that

relied

2017

that
on

a

the

theory

consistent
Starr,

.

both

tort

claims,

the

alleged

confidential

. also

at

*4

alleges

which may or may not
F.

Supp.

theory

protected

on

Starr,

1536018,

claim .

241

is

and

WL

information,'

Super

certain

Tech.,

on

See

Super

secrets

relief

the

preceding

preempted

AMID,

is

reading

trade

information

under

claim

language.

interference

^confidential

support

then it is preempted by the

cases

interference,

tortious

a

JELD-WEN's

court

Downhole

any

"[w]here

TUTSA's

dismiss

of

See

that,

However,

federal

refused

itself

trade secret,

repeats

at

information.

not

as

that

3d

that

trade

the

at

827

[defendant]
secrets,

and

misappropriated

information was not a trade secret but was confidential.").

Those cases observed, as many have,

decide

whether

before a

an

alternative

plaintiff has

shown,

theory
or it
37

is

that it is premature to

of

relief

not

is

disputed,

preempted
that

the

misappropriated information constituted trade secrets.

241 F.
on

a

Supp.

3d at 826-27

motion

to

See AMID,

("''Where courts have found preemption

dismiss,

they

repeatedly

establish

that

the

information in issue as alleged constitutes trade secrets before

reaching the preemption question.'"
Inc.

V.

Friedman,

658-59

(E.D.

Va.

Excavating,

Va.

Billings,
2002)));

Inc.,

July

24,

No.

see

existence

entitlement

F.
the

Supp.

of

to

2d at

Corp.,

by

108

fiduciary

duty

substantial

information
constitute[d]

("[U]nless

in

question

dismiss

the

F.

secret,

WL

claim was

that

that

the

it

trade

&

(N.D.

confidential

allegations

not

yet

*7

(W.D.

was

proven

its

Fin.,

191

Stone Castle

a

trade

Betts

111.

Corp.

2000)

this

misuse

of

(breach

and

of

[wa]s

related

[plaintiff]

Court

same way,

as

Panduit

evidence

from

the

relief

v.

data

took

Furthermore,

secret,

of

"[t]he

sales

allegedly

about

at

argument

theories

the VUTSA's preemption provision in the
"conjunctive"

Commonwealth

can be clearly discerned that

preempted where

secrets").

2d 652,

sufficiently alleged

ha[d]

972

[defendant]

v.

3830500,

ha[d]

Thomas

968,

Supp.

preemption

alternative

2d

F.

Inc.

constitutes

VUTSA.");

Supp.

it

191

AWP,

2013

[plaintiff]

trade

659

cannot

preempted

also

relief under the VUTSA");

information

[c]ourt

a

& Co.,

(defendant's

premature where "although
the

Ramsey

5:13CV031,

2013)

(quoting Stone Castle Fin.,

has

read

finding

that

"confidential

information and trade secrets" precluded preemption because they
38

"reveal[ed]

that

predicated

on

[plaintiff]'s

the

claims

misappropriation

[we]re
trade

Indus./

Inc.,

DuPont de Nemours

& Co.

v.

443,

2009)

solely

secrets."

If
would

(E.D. Va.

that
be

evidence
Steves'

logic

can

improper,
to

create

be

applied

because
a

JELD-WEN

genuine

misappropriation

of

JELD-WEN's

actions

employment

caused

contracts

Pierce

with

then
has

dispute

in addition to its trade secrets.
Steves'

here,

688

of

F.

E.I.

(emphasis in original).

453

Kolon

of

not

Supp.

summary

judgment

presented

material

confidential

enough

fact

about

information

JELD-WEN clearly alleged that
and

JELD-WEN

Ambruz

by

to

"providing

breach

trade

their

secrets

and confidential information to Steves." Counterclaims Slf 62,

(emphasis added).

And,

2d

contrary to what Steves asserts,

68

JELD-WEN

cites multiple pieces of evidence that establish that Pierce and

Ambruz

may

JELD-WEN

(Under

had

does

Seal),

not

cited

discussed

asserted
cannot

trade

have

misappropriated

not

consider

a

Seal).

that

evidence,

it

trade
at

confidential

secret
trial

Although

motions to dismiss,

summary

secret.

(Under

establish

secret.

trade

1008-31

above-use

as

a

confidential

judgment

to

show

that

those

See

Moreover,

could

information
ECF

even

Nos.

if

still—under

information

tortious

that

information

cases

concerned

1008-6

JELD-WEN

the

cases

is

also

interference

such

that

if

constitutes

preemption

it
a

on

their common principle still applies at the

stage,

given

that
39

there

are

genuine

disputes

about

the

issue

here.

on

categorization
Dismissing

preemption

that

the misappropriated

JELD-WEN's

grounds

inconsistently

of

would

tortious

reward

JELD-WEN's

information

interference

Steves

alleged

for

trade

at

claims

asserting

secrets

are

trade secrets for purposes of deciding the TUTSA claim,

not

but are

trade secrets for purposes of deciding the tortious interference
claims.

That

result makes

Nonetheless,

a

little

sense.

closer examination of Super Starr shows that

the TUTSA's preemption provision should not be read so narrowly.
Even though Super Starr found the breach of fiduciary duty claim
at issue was preempted because the claim necessarily depended on
"the

use

of

information

alleged
underlying

"confidential

(emphasis
reference

as

and

trade

secrets,"

that

proprietary

added).
to

trade

claim

was

information."

Consequently,
secrets.

the

misappropriated
alleged

531

Starr

requiring preemption both where a

is

tort

misappropriation of trade secrets alone,

be

at

843

S.W.3d

notwithstanding

Super

to

its

properly

specific
understood

claim depends

on the

and where such a

claim

is dependent on the misappropriation of either trade secrets or
confidential

information.

Indeed,

Embarcadero

precisely

that

encompasses all
confidential

way,

Technologies

finding

that

has

"TUTSA's

read

Super

preemption

Starr

in

provision

claims based on the alleged improper taking of

business

information."
40

Embarcadero

Techs.,

2018

WL

315753,

at

*3.

underlying
preclude

purpose

harm

recovery

trade

of

the

"^inconsistent

underlying
law

Concluding

by

are

Id.

Moreover,

[that

theories

would

of

relief

alternative

premised

on

the

Super

courts

UTSA

was

the

provision
for

the

theories

Starr,

531

of

S.W.3d

common

to

of

a

at

843).

question

this

intended

to
same

misappropriation

considering

the]

frustrate

preemption

(quoting

"Mni]ost

determined

TUTSA's

eliminating

which

secret.'"

otherwise

have

preempt

all

claims

based upon the unauthorized use of information,'" whether or not

that

information

Mortg.
Mats,

Grp. ,

UTSA

2016

LLC V.

("Most

of

constitutes
WL

Keener,

the

preemption

900577,
989

courts

a

F.

that

extends

trade
at

*8);

Supp.
have

to

secret.
see

2d 522,

for

also

534

considered

claims

Id.

New

(S.D.

this

the

(quoting
S.

Equip.

Miss.

issue

360

2013)

hold

that

misappropriation

of

confidential or proprietary information that does not qualify as
trade secrets."); Mattel,
2d

911,

987

claims

definition
Bentley

(C.D.

Cal.

on

the

based

information,

Inc.

v.

2011)

MGA Entm't,
("[T]he

.

Inc.,
.

782 F.

. UTSA

misappropriation

of

Supp.

supersedes

confidential

whether or not that information meets the statutory
of

Pharm.,

a

trade
Inc.,

secret.");

388

F.

Supp.

Ethypharm
2d

426,

S.A.

433

(D.

France
Del.

v.

2005)

("Because all claims stemming from the same acts as the alleged
misappropriation
displaced

even

are
if

intended
the

to

be

information
41

displaced,
at

issue

a
is

claim
not

can
a

be

trade

secret.
issue

Thus,

a

determination

constitutes

prior

to

a

making

Clearing

948-49

a

Niagara,

2d

943,

trade

determining

whether

[Michigan]

Dole,

Here,

taken by
But

2018

"to

of

& Tech.

have

a

is

[Steves]

preclude

are
the

a

court

109

from

by

the

one.

See

Richard

(citing
the

of

F.

Uniform

Trade

(2014)).

in Embarcadero Technologies,

that

claim

for

qualifies

claim

escape

status

majority

by

95,

F.

displaced

*3

Law

L. Rev.

270

disputed

for

all

the

fact

all

as

the

of

[its]

trade

a

of

that does not qualify as a

cannot

addressed

Supp.

at

State

be

Bond Co.,

claims

TUTSA

interference]

[Steves]

JELD-WEN

Other

not

at

Bliss

not

315753,

information

displacement.");

("[T]he

approach
WL

the

need

Brake

does

or

.

of

the plaintiff

taken by

[tortious

.

2003)

claim

This

like

wants

.

Midwest

secret

17 SMU Sci.

just

information
a

a

Preemption

Secrets Act,

and

trade

Techs.,

Jr.,

JELD-WEN

a

secret

Mich.

UTSA.").

Embarcadero

v.

(W.D.

as

whether

determination

Inc.

information

of

secret

information

trade secret." Id.

that

its

tortious

interference claims are based on exactly the same conduct as its
TUTSA

claim—namely,

Steves'

acquire

confidential

give

to

it

Steves

inducement

information

for

use

in

of

from

the

Pierce

JELD-WEN

MDS

and Ambruz

employees

Project.

The

to

and

tortious

interference claims might not be preempted if they also relied

on

some

other

factual

confidential information.

predicate

See,

e.g.,
42

besides

the

Kolon Indus.,

taking

688

F.

of

Supp.

2d

at

453

(complaint

alleged

facts

that

did

not

involve

misappropriation but could establish tortious interference,
as

defendant

employee
349

to

(even

sending

commit

representatives

tortious

"without

acts);

considering

defendant's "exploitation of
direct

solicitation

tortious

not,

of

[a

interference with

however,

to

Smithfield,

third

party]

contractual

plaintiff s

905

misappropriation

[plaintiff's]

presented

recruit

F.

Supp.

at

allegations,"

knowledge through the

might

still

relations").

evidence

such

of

constitute

JELD-WEN

any

other

has

non-

misappropriation basis for its tortious interference claims.
JELD-WEN's

the

contrary

unavailing.

attempts

to

reconcile

conclusion

Although

in

Downhole

the

cases

Technology

cites

with

Technologies

Embarcadero

it

are

and AMID

suggest

that

the TUTSA preemption provision should not be applied to dismiss
claims

prematurely,

courts

in

how

those

to

interpret

Embarcadero Technologies
the

case

proper breadth

is

insists

far
that

in Kolon

that

it

more

of

the

the Court must

that

the

guidance

provision.

preemption provision,

here.

Likewise,

reach the

the Court

discussing

lacked

In

452

(emphasis

Texas

contrast,

"the

same

so

that

although

result

here

added).

recent

JELD-WEN
as

i t did

specifically noted in that

prevailing .

.

That
43

analysis

case

. interpretation

the VUTSA in the Eastern District of Virginia." 688 F.
at

of

could rely on Super Starr to determine

persuasive

Industries,

was

courts

would

Supp.

certainly

of

2d
be

helpful

in

interpreting

the

analogous

Texas courts had spoken on the issue.
read

the

TUTSA

to

allow

dismissal

on

TUTSA

provision

if

no

But those courts have not
the

basis

of

preemption

only if a claim is "solely predicated on the misappropriation of
trade

from

secrets."

one

state

Id.

at

cannot

453.

be

The

Court's

applied

to

reading

overcome

of

a

a

statute

different

interpretation of another state's statute by the courts in that
state,

result,
manner

no

matter

the

similarity

between

those

statutes.

As

a

considering the TUTSA preemption provision in the broad
suggested

JELD-WEN's

by

tortious

Super

Starr

interference

preemption grounds.

44

and

Embarcadero

claims

will

be

Technologies,
dismissed

on

CONCLUSION

For
INC.'S

(ECF

the

foregoing

MOTION

No.

FOR

885)

SUMMARY

was
and

Counterclaims,

except

damages

denied

to

as
as

the

claims

PLAINTIFF

JUDGMENT

granted

Counterclaims

JELD-WEN's

reasons,

ON

to
to

extent

for

trade

STEVES

JELD-WEN

the

First

the

secret

and
and

motion

is

so ORDERED.

/s/

Date:

Virginia

April _02_i 2018

45

Third

misappropriation,

Robert E. Payne
Senior United States District Judge
Richmond,

Fifth

concerned

which will be addressed in a separate opinion.
It

SONS,

COUNTERCLAIMS

Fourth

the

that

AND