Key Points

  • The Eighth Circuit affirmed a jury verdict that Cody Downing willfully and maliciously misappropriated Wilbur-Ellis's trade secrets, leaving intact $66,000 in compensatory and $132,000 in exemplary damages.
  • The court held that the denial of Downing's summary judgment motion was unreviewable after trial under Dupree v. Younger because it rested on the sufficiency of the evidence, not a purely legal issue.
  • The court found sufficient evidence of causation and damages, distinguished Wilbur-Ellis Co. v. Gompert, rejected Downing's reliance on Dewberry Group v. Dewberry Engineers, and found any evidentiary errors harmless.
  • The court vacated the $447,824.16 attorney's fee award because the district court never considered Wilbur-Ellis's overall degree of success under Hensley v. Eckerhart, given that it recovered about 13% of the $1.56 million it sought.
  • The district court did not abuse its discretion in declining to segregate fees by claim, and on remand it may either keep or reduce the award.

A federal appeals court on Monday upheld a jury's finding that a former seed salesman misappropriated his employer's trade secrets when he left for a competitor, but it threw out the $447,824.16 in attorney's fees he was ordered to pay because the trial judge never considered how little of its damages demand the company had won.

Judge Erickson wrote for a U.S. Court of Appeals for the Eighth Circuit panel that also included Judges Loken and Benton. The panel affirmed the judgment for Wilbur-Ellis Company LLC against Cody Downing, its former sales representative, including the jury's $198,000 damages award, and sent the fee question back to the U.S. District Court for the Southern District of Iowa.

The fee ruling turned on the gap between what Wilbur-Ellis asked for and what it got. The company sought $1.56 million in damages and recovered about 13% of that. The district court trimmed the company's fee request for hourly rates, billing practices and the company's conduct during the litigation, but the appeals court held that "None of its considerations addressed the relationship between the relief Wilbur-Ellis sought and the relief it obtained."

According to the opinion, Downing sold seed to Iowa farmers for Wilbur-Ellis, which password-protected its customer and pricing information and limited access to employees who needed it. On Aug. 13, 2021, he gave notice that he was resigning, effective Aug. 27. He later went to work for Simplot, a competitor. The day before, he copied his Microsoft Outlook file and hundreds of other files containing detailed customer purchase information to a personal external hard drive.

At Simplot, Downing used Wilbur-Ellis's information to negotiate dealer agreements and shared its pricing, volume, dealer terms and sales history with his new colleagues, the court said. After he and other members of the sales team left, 79 of Wilbur-Ellis's 80 customers in its Creston market moved to Simplot. The Creston operation had generated nearly $2 million in sales at a 20% target profit margin, and Wilbur-Ellis eventually shut it down.

Wilbur-Ellis sued under the federal Defend Trade Secrets Act and the Iowa Uniform Trade Secrets Act, and also alleged breach of the duty of loyalty and tortious interference. The jury found that Downing acted willfully and maliciously and awarded $66,000 in compensatory damages and $132,000 in exemplary damages. Wilbur-Ellis then asked for $731,442 in fees and $33,157.91 in costs; the district court awarded $447,824.16 in fees and $11,226.75 in costs.

On appeal, Downing first challenged the denial of his pretrial motion for summary judgment. The panel held it could not review that ruling under the Supreme Court's 2023 decision in Dupree v. Younger, because the motion turned on the sufficiency of the evidence rather than a purely legal issue. "Downing's contention that a fixed factual record renders the district court's summary judgment ruling purely legal is mistaken," Judge Erickson wrote.

The court also rejected Downing's bid for judgment as a matter of law on causation and damages. Jurors heard that before resigning, Downing thanked the owner of a Wilbur-Ellis dealership for "being willing to follow [him]" and asked the owner to keep their talk quiet. The jury could reasonably infer from that evidence and "the subsequent movement of virtually all of Wilbur-Ellis's Creston customers to Simplot that his misappropriation of trade secrets caused loss to Wilbur-Ellis," the opinion said.

The panel held that the Eighth Circuit's 2026 decision in Wilbur-Ellis Co. v. Gompert did not mandate a different result. Gompert affirmed summary judgment against the company because it had not identified its trade secrets with enough specificity, failed to establish misappropriation and could not tie its damages to individual defendants. "This case comes to us on a different footing," Judge Erickson wrote, noting that here the company identified the protected information, described the steps it took to guard it and showed that Downing took it.

The panel likewise found no help for Downing in Dewberry Group Inc. v. Dewberry Engineers Inc., the Supreme Court's 2025 holding that an award of the "defendant's profits" under the Lanham Act cannot include profits earned by nonparty corporate affiliates. Wilbur-Ellis sought its own losses, the court said, and evidence that customers moved to Simplot "does not convert Wilbur-Ellis's claim into one seeking non-party corporate profits." The panel also held that any errors in admitting certain emails, reports and witness testimony were harmless.

Both trade-secrets statutes allow a court to award reasonable attorney's fees when misappropriation is willful and malicious. Under the Supreme Court's 1983 decision in Hensley v. Eckerhart, a reasonable fee depends in part on the results obtained, and the degree of success is "the most critical factor." The panel found no abuse of discretion in the district court's decision not to split the fees claim by claim, since the company's claims arose from a common core of facts.

But the panel held that the district court still had to ask whether the company's overall success justified the fees. "We do not ordinarily infer that a district court considered a factor that it did not mention," Judge Erickson wrote, citing the circuit's 2008 decision in Lash v. Hollis. The court said Hensley does not require fees to be proportional to damages and declined to treat the omission as harmless.

"On remand, the district court may conclude that Wilbur-Ellis's $198,000 recovery justifies the fees it awarded, or it could conclude that Wilbur-Ellis's recovery of approximately 13% of the total damages it sought warrants a reduction," the opinion said. The panel added that it expressed no view on the amount, which it called "a determination belonging to the district court in the first instance."

The case now returns to the Southern District of Iowa for the district court to reconsider the fee award in light of Wilbur-Ellis's overall degree of success. The panel also denied the parties' motions to seal. The case is Wilbur-Ellis Company, LLC v. Cody Downing, No. 25-2865, in the U.S. Court of Appeals for the Eighth Circuit.