Wilbur-Ellis Company LLC v. Gompert

          IN THE UNITED STATES DISTRICT COURT                        
             FOR THE DISTRICT OF NEBRASKA                            

WILBUR-ELLIS COMPANY LLC,                                                 

          Plaintiff,                    8:21CV340                    

v.                                                                   
                                     MEMORANDUM                      
JOSH GOMPERT, AARON PETERSEN,               AND ORDER                     
JAMES KUNZMAN, and CHAD                                                   
MUELLER,                                                                  

          Defendants.                                                

On June 11, 2024, the Court granted summary judgment (Filing No. 183) in favor 
of  defendants  Josh  Gompert,  Aaron  Petersen,  James  Kunzman,  and  Chad  Mueller 
(collectively, “defendants”) on most of plaintiff Wilbur-Ellis Company LLC’s (“Wilbur-
Ellis”)  claims  against  them,  including  its  claim  that  the  defendants  misappropriated 
Wilbur-Ellis’s trade secrets in violation of the Defend Trade Secrets Act (“DTSA”), 

18 U.S.C. § 1836

 et seq.  In reaching that decision, the Court concluded Wilbur-Ellis “never 
clearly and adequately identif[ied] the ‘trade secrets’ at issue, let alone how they were 
used or misused or the damages reasonably attributable to each defendant.”  The Court 
further  explained,  “Wilbur-Ellis’s  reliance  on  broad  terms,  general  descriptions,  and 
repeated,  non-specific  references  to  the  ‘nearly  6,000  documents’  it  produced  in 
discovery d[id] not suffice.”                                             
Now before the Court is the defendants’ Consolidated Motion for Attorney Fees 
and Costs (Filing No. 217).  Asserting they “are the prevailing party in this action in bad 
faith,” they seek $372,531 in attorney fees under 

18 U.S.C. § 1836

(b)(3)(D).1  That 

1The defendants also sought $11,954.60 in costs, noting they were available by 
rule and statute.  Those costs are no longer at issue after the Clerk of Court entered an 
unopposed Taxation of Costs in that amount on June 11, 2025 (Filing No. 238), without 
any objection.  See Fed. R. Civ. P. 54(d); 

28 U.S.C. § 1920

.              
provision authorizes the Court to award reasonable attorney fees to a prevailing party if 
the other party makes a claim for misappropriation of trade secrets “in bad faith.”  The 
prevailing party can show the other party’s bad faith “by circumstantial evidence.”  

Id.

  
Wilbur-Ellis  does  not  dispute  that  the  defendants  are  prevailing  parties  for 
purposes of the DTSA (Filing No. 227).  See Dunster Live, LLC v. LoneStar Logos Mgmt. 
Co., LLC., 

908 F.3d 948, 953

 (5th Cir. 2018) (confirming “prevailing party” status under 
the DTSA “is a question of federal law” answered by reference to settled meanings in 
other fee statutes).  At this point, the fighting issue is whether the defendants can show 
bad faith.  The defendants say they can; Wilbur-Ellis says they can’t.    
The DTSA does not define “bad faith.”  See Elmagin Cap., LLC v. Chen, No. 22-
2739, 

2024 WL 2845535

, at *5 n. 14 (3d Cir. Mar. 21, 2024).  And neither the Eighth 
Circuit nor any of its sister circuits has been quick to delineate “the precise contours of” 
that pivotal phrase “in a published decision.”  Shepard & Assocs., Inc. v. Lokring Tech., 
LLC, No. 24-3348, 

2025 WL 1420931

, at *4 (6th Cir. May 16, 2025); see also LQD Bus. 
Fin., LLC v. AKF, Inc., No. 24-1071, 

2025 WL 830444

, at *4 (7th Cir. Mar. 17, 2025) 
(assuming  the  standard  for  bad  faith  under  the  DTSA  was  similar  to  the  state-law 
standard); Akira Techs., Inc. v. Conceptant, Inc., 

773 F. App’x 122

, 125 (4th Cir. 2019) 
(unpublished per curiam) (stating a finding of bad faith “requires, at a minimum, that the 
plaintiff’s ‘claim had no chance of success under existing law’” (quoting Tullidge v. Bd. 
of Supervisors of Augusta Cty., 

391 S.E.2d 288, 290

 (Va. 1990))).         
Still, some basic parameters have taken shape based on definitions of bad faith in 
similar contexts.  See Shepard, 

2025 WL 1420931

, at *4; Recoop LLC v. Outliers Inc., 
No. 24-CV-01810, 

2025 WL 1725024

, at *14-*16 (S.D.N.Y. June 20, 2025) (concluding 
circuit-court decisions on this point “have differed slightly in their formulation of the 
standard for a claim made in bad faith under the DTSA”).  Many courts have decided 
“that the standard contains both objective and subjective components: the claim must be 
known to be meritless, and the party must pursue it with an improper motive.”  Shepard, 

2025 WL 1420931

, at *4 (“No matter how the standard is articulated, a district court must 
find that a party’s claim was meritless, that the party knew at a certain point that it was 
meritless and nonetheless maintained it, and that the party brought or maintained the 
claim for some improper purpose.”); Elmagin, 

2024 WL 2845535

, at *5 (“A claim is 
brought in bad faith if the plaintiff completely lacked . . . evidence and knew or was 
reckless in not knowing that its claims lacked merit.”) (quotation and internal marks 
omitted).                                                                 
Here, both parties apply such a two-pronged approach that requires the plaintiff to 
prove the “(1) objective speciousness of the plaintiff’s claim, and (2) plaintiff’s subjective 
misconduct in bringing or maintaining a claim for misappropriation of trade secrets.” 
Norwood Operating Co. v. Beacon Promotions, Inc., No. CIV 04-1390 MJD/SRN, 

2006 WL 3103154

, at *1-*2 (D. Minn. Oct. 31, 2006) (quoting Contract Materials Processing, 
Inc. v. Kataleuna GMBH Catalysts, 

222 F.Supp.2d 733, 744

 (D. Md. 2002)); accord 
Recoop, 

2025 WL 1725024

, at *15 (“Most courts hold that claim must be ‘objectively 
specious’ and that Plaintiff must have engaged in ‘subjective misconduct in bringing the 
claim.’”).                                                                
The defendants can show objective speciousness “by demonstrating that there was 
no misappropriation or threatened misappropriation or that the opposing party could not 
have  suffered  any  economic  harm.”    Farmers  Edge  Inc.  v.  Farmobile,  LLC,  No. 
8:16CV191, 

2018 WL 3747833

, at *6 (D. Neb. Aug. 7, 2018).  It “exists where there is a 
complete lack of evidence supporting Plaintiff’s claims.”  

Id.

 (quoting Sun Media Sys., 
Inc. v. KDSM, LLC, 

587 F. Supp. 2d 1059, 1073

 (S.D. Iowa 2008)).  “[I]t is not necessary 
that the court find that an action was meritless as of filing, or even shortly thereafter.  It 
can become apparent part-way through a suit that an action that initially appeared to have 
merit is in fact meritless” and should be abandoned.  Shepard, 

2025 WL 1420931

, at *4. 
“Subjective  misconduct  is  judged  by  the  relative  degree  of  speciousness  of 
plaintiff’s trade secrets claim and its conduct during litigation.”  Norwood Operating, 

2006 WL 3103154

, at *2.  Generally, “‘something more’ is required than the knowing 
pursuit of meritless claims.”  Shepard, 

2025 WL 1420931

, at *4 (alteration omitted) 
(quoting BDT Prods., Inc. v. Lexmark Int’l, 

602 F.3d 742, 753

 (6th Cir. 2010)).  That 
“something more” can include “[h]arassing the opposing party, delaying or disrupting 
litigation, hampering the enforcement of a court order, or making improper use of the 
courts.”  

Id.

 (alteration in original) (quoting BDT Prods., 

602 F.3d at 754

); Farmers Edge, 

2018 WL 3747833

, at *7 (“Subjective bad faith ‘means the action was commenced or 
continued for an improper purpose, such as harassment, delay, or to thwart competition.’” 
(quoting SASCO v. Rosendin Elec., Inc., 143 Cal. Rptr. 3d. 828, 835 (Ct. App. 2012))).  
Without  more,  an  adverse  ruling  on  summary  judgment  does  not  necessarily 
establish bad faith.  See LQD Bus. Fin., 

2025 WL 830444

, at *1, *5; Farmers Edge, 

2018 WL 3747833

, at *7 (“A grant of summary judgment to an opposing party does not 
establish objective speciousness of a trade secrets claim.”).  As Wilbur-Ellis points out, 
“it is important that a district court resist the understandable temptation to engage in post 
hoc reasoning by concluding that, because a plaintiff did not ultimately prevail, his action 
must have been unreasonable or without foundation.”  Christiansburg Garment Co. v. 
EEOC, 

434 U.S. 412, 421-22

 (1978).  Such “hindsight logic could discourage all but the 
most airtight claims, for seldom can a prospective plaintiff be sure of ultimate success.”  

Id. at 422

.                                                               
Applying these labyrinthine standards to the facts of this case, the Court finds the 
defendants  have  not  sufficiently  established  that  Wilbur-Ellis  either  brought  or 
maintained its DTSA misappropriation claims against the defendants “in bad faith.”  

18 U.S.C. § 1836

(b)(3)(D).  First, while Wilbur-Ellis did not adduce sufficient evidence to 
withstand  summary  judgment  on  its  DTSA  claims,  that  failure—by  itself—does  not 
demonstrate bad faith in these circumstances.  See Christiansburg Garment, 

434 U.S. at 421-22

 (noting the space between the two standards).  Some of Wilbur-Ellis’s evidence 
did not pass muster on summary judgment, but the Court is unable to find that those 
claims were wholly without merit or completely lacked evidentiary support.  See LQD 
Bus. Fin., 

2025 WL 830444

, at *1, *5 (concluding the bad-faith standard was “plainly not 
met” where the plaintiff “had several nonfrivolous reasons to believe” its trade secrets 
had  been  misappropriated  and  the  district  court’s  ultimate  rejection  of  the  experts’ 
conclusion to the contrary did not vitiate the plaintiff’s “prior good faith basis for its 
claim”); Farmers Edge, 

2018 WL 3747833

, at *6.                            
Second, Wilbur-Ellis’s actions in this case are certainly not beyond reproach.  If 
nothing else, it unnecessarily complicated these proceedings by repeatedly refusing to 
identify  with  any  reasonable  specificity  the  trade  secrets  the  defendants  allegedly 
misappropriated.  Those actions may have played a part in their failure at summary 
judgment.  But again, without more, they do not show the type of harassment, ill intent, 
or improper motive necessary to meet the high bar of demonstrating bad faith under 
§ 1836(b)(3)(D).    See  Shepard,  

2025 WL 1420931

,  at  *4;  Farmers  Edge,  

2018 WL 3747833

, at *7.  In short, though the defendants appear to sincerely allege Wilbur-Ellis 
“filed this lawsuit solely in an attempt to harass and retaliate against [them] for leaving 
[Wilbur-Ellis] for employment with a competitor,” they fail to prove it.  
For the foregoing reasons,                                           
IT IS ORDERED:                                                       
1.   Defendants  Josh  Gompert, Aaron  Petersen,  James  Kunzman,  and  Chad 
     Mueller’s  Consolidated  Motion  for  Attorney  Fees  and  Costs  (Filing 
     No. 217) is denied.                                             
2.   The  defendants’  request  for  attorney  fees  pursuant  to  

18 U.S.C. § 1836

(b)(3)(D) is denied on the merits.                        
3.   Their request for $11,954.60 in costs is denied as moot in light of the 
     Taxation of Costs in that amount entered by the Clerk of Court on June 11, 
     2025 (Filing No. 238).                                          
Dated this 22nd day of July 2025. 

                               BY THE COURT: 

                               Robert F. Rossiter, Jr. 
                               Chief United States District Judge