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Bimbo Bakeries USA, Inc. v. Sycamore

United States District Court, D. Utah, Central Division

December 10, 2018

BIMBO BAKERIES USA, INC., Plaintiff,
v.
LELAND SYCAMORE and UNITED STATES BAKERY, INC., Defendants.

          MEMORANDUM DECISION AND ORDER DENYING [544] SYCAMORE'S RENEWED MOTION FOR JUDGMENT

          David Nuffer, United States District Judge

         Plaintiff Bimbo Bakeries USA, Inc. (“Bimbo Bakeries”) asserted a claim for trade secret misappropriation against defendants Leland Sycamore (“Sycamore”) and United States Bakery, Inc. (“U.S. Bakery”), as well as a claim for false advertising against U.S. Bakery. On October 6, 2017, the jury returned a verdict in favor of Bimbo Bakeries on both claims.[1] The jury found that Bimbo Bakeries suffered damages in the amount of $2, 105, 256 as a result of trade secret misappropriation and found U.S. Bakery responsible for $1, 578, 942 (75% of the damages) and Sycamore responsible for $526, 314 (25% of the damages).[2]

         Sycamore has filed a Motion for Judgment as a Matter of Law, Motion for a New Trial or Remittitur or for an Altered or Amended Judgment (“Renewed Motion for Judgment”).[3] Bimbo Bakeries filed an opposition.[4] Sycamore replied.[5] This is Sycamore's second renewed motion for judgment as a matter of law.

         Sycamore asserts two arguments with respect to Bimbo Bakeries' trade secret misappropriation claim: (1) Bimbo Bakeries failed to provide evidence to support the jury's allocation of fault to Sycamore; and (2) Bimbo Bakeries' claim against Sycamore is barred by res judicata and collateral estoppel. However, the jury had a sufficient evidentiary basis to find for Bimbo Bakeries and to allocate fault to Sycamore. Sycamore forfeited its affirmative defenses of res judicata and collateral estoppel. For these reasons, the Renewed Motion for Judgment is denied.

         Contents

         Background ..................................................................................................................................... 2

         Standard of Review ......................................................................................................................... 6

         Discussion ....................................................................................................................................... 7

         An evidentiary basis in the record supports the jury's award of damages .......................... 7

         Sycamore forfeited his defenses of res judicata and collateral estoppel ............................. 9

         Order…. . ....................................................................................................................................... 11

         BACKGROUND

         In June 2009, Bimbo Bakeries' predecessor, Sara Lee Corporation, filed suit (the “523 Action”) against Sycamore and his entity Sycamore Family Bakery, Inc. for trademark infringement and other claims related to the marketing and sale of granny-style bread.[6] The 523 Action was tried to a jury from April 9-11, 2012. The jury returned a verdict against Sycamore and a judgment was entered against him in the amount of $4, 236, 858.[7] The 523 Action did not include a claim for trade secret misappropriation.

         On August 7, 2013, Bimbo Bakeries' immediate predecessor, EarthGrains Baking Companies, Inc., initiated this suit against Sycamore; his son Tyler Sycamore; Tyler's bakery Wild Grains Bakery, LLC; and U.S. Bakery.[8] Tyler Sycamore and Wild Grains Bakery, LLC were voluntarily dismissed prior to trial, leaving U.S. Bakery and Sycamore as the remaining defendants.[9] The only claim tried against Sycamore was for trade secret misappropriation.[10]

         Prior to trial, Sycamore filed a motion in limine regarding damages, seeking to preclude Bimbo Bakeries from (1) introducing evidence of damages against him; and (2) asking the jury to return a monetary verdict against him.[11] Sycamore asserted that Bimbo Bakeries had failed to quantify a specific amount of damages caused by Sycamore.[12] Sycamore's motion in limine was denied, on the basis that the apportionment of damages is a question for the jury.[13]

         At trial, Bimbo Bakeries' expert, Richard Hoffman, testified regarding damages related to the trade secret misappropriation. Mr. Hoffman's testimony included the following calculations of unjust enrichment and lost profits:[14]

Trade Secret Claim Damages

Grandma Emilie's

U.S. Bakery's Unjust Enrichment on the Sale of Grandma Emilie's

OR

Bimbo Bakeries' Lost Profit on U.S. Bakery's Sale of Grandma Emilie's

$357, 791

OR

$194, 012 to

$373, 425

Bread Lovers

Bimbo Bakeries' Lost Profit on U.S. Bakery's Sale of Bread Lovers

$1, 911, 244 to $3, 893, 756

Bimbo Bakeries' Extra Advertising Expense

$358, 911

         Mr. Hoffman did not calculate the amount of damages caused solely by Sycamore.[15] U.S. Bakery's presented testimony from its expert, Gil Miller, to rebut the methods used by Mr. Hoffman and to challenge his calculations.[16] Sycamore did not present any expert testimony at trial.

         In his Answer to the Amended Complaint, Sycamore raised several affirmative defenses, including res judicata, collateral estoppel, claim preclusion, and issue preclusion.[17] However, Sycamore did not assert these defenses by motion or at trial. In another motion in limine, Sycamore had sought to exclude evidence of other cases that Bimbo Bakeries had brought against Sycamore, including the 523 Action.[18] Sycamore argued that the allegations brought by Bimbo Bakeries in this case were unrelated to Bimbo Bakeries' claims in the 523 Action.[19] The motion in limine was granted in part and denied in part.[20] Evidence common to this case and the 523 Action was allowed, if found to be relevant at trial; however, references to the litigation, its process and outcomes were not admissible.[21]

         At the close of Bimbo Bakeries' case-in-chief, Sycamore's counsel made an oral motion for directed verdict on: (1) the insufficiency of evidence supporting liability on the claim for trade secret misappropriation; (2) the insufficiency of evidence on damages pertaining to Sycamore; and (3) the statute of limitations under the Trade Secret Act.[22] The court deferred ruling on the motion for directed verdict until the end of the presentation of evidence and the verdict.[23] After the jury heard all of the evidence, Sycamore's counsel made another oral motion to join U.S. Bakery's motion for judgment as a matter of law and renewed his prior motion for directed verdict, “particularly with respect to damages.”[24]

         The jury returned a verdict in favor of Bimbo Bakeries on the claim for trade secret misappropriation and on the claim for false advertising. With respect to the trade secret misappropriation claim, the jury found:[25]

(1) U.S. Bakery misappropriated the trade secret and is responsible for damages in the amount of $1, 578, 942; and
(2) Sycamore also misappropriated the trade secret and is responsible for damages totaling $526, 314.

         On November 3, 2017, Sycamore filed his first renewed motion for judgment as a matter of law or for a new trial.[26] The first motion only addressed Sycamore's statute of limitations defense and was denied.[27]

         STANDARD OF REVIEW

         Pursuant to Federal Rule of Civil Procedure 50(a), a court may “grant a motion for judgment as a matter of law” after a party has been heard on the issue and “the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue.”[28] In making this determination, a court must “construe the evidence and inferences most favorably to the nonmoving party, and refrain from weighing the evidence, passing on the credibility of witnesses, or substituting [its] judgment for that of the jury.”[29]

         If the court does not grant judgment as a matter of law, the party may renew that motion under Rule 50(b) after trial. A renewed motion must be on the same grounds as a motion made prior to submitting the case to the jury.[30] In ruling on a renewed motion, the court may: (1) allow judgment on the verdict; (2) order a new trial; or (3) direct entry of judgment as a matter of law.[31]

         The court may, on motion, grant a new trial, “after a jury trial, for any reason for which a new trial has heretofore been granted in an action at law in federal court.”[32] “A motion for new trial on the grounds that the jury verdict is against the weight of the evidence normally involves a review of the facts presented at trial, and thus involves the discretion of the trial court.”[33] “The inquiry focuses on whether the verdict is clearly, decidedly or overwhelmingly against the weight of the evidence.”[34] When considering a motion for new trial, the court must view all evidence in the light most favorable to the prevailing party.[35] Moreover, “the jury's award is inviolate unless . . . it [is] ‘so excessive that it shocks the judicial conscience and raises an irresistible inference that passion, prejudice, corruption, or other improper cause invaded the trial.'”[36] “The amount of damages awarded by the jury can be supported by any competent evidence tending to sustain it[.]”[37]

         DISCUSSION

         An evidentiary basis in the record supports the jury's award of damages

          In his Renewed Motion for Judgment, Sycamore does not contest that the jury reasonably could have found Bimbo Bakeries suffered $2, 105, 256 in total damages for trade secret misappropriation.[38] Instead, he asserts that ...


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