Double Eagle Alloys, Inc. v. Hooper

         Qnuited  States  District  Court 
            for the S2Qorthern District of Oklahoma 

                   Case No. 19-cv-243-JDR-CDL 

DOUBLE EAGLE ALLOYS, INC., 
                                                         Plaintiff, 
                              versus 
MICHAEL Hooper;  AcE ALLoys,  LLC, 
                                                      Defendants. 

                    OPINION AND ORDER 

     Following the entry of an order granting summary judgment in their 
favor, Defendants Ace Alloys, LLC and Michael Hooper filed a motion for an 
award of attorneys’ fees pursuant to Rule 54 of the Federal Rules of Civil Pro- 
cedure. Dkt. 346. Defendants argue that, as the prevailing parties in this case, 
they are entitled to recover the attorneys’ fees they incurred in defense of 
Double Eagle’s federal and state trade-secret misappropriation claims. See 

18 U.S.C. § 1836

(b)(3)(D) and 

Okla. Stat. Ann. tit. 78, § 89

. The Court DENIES 
the motion. 
     Section 1836(b)(3)(D) provides that a court may award reasonable at- 
torneys’ fees to a prevailing party where a trade-secret misappropriation is 
made in bad faith. 

18 U.S.C. § 1836

(b)(3)(D). The standard for an award of 
fees under Oklahoma law is the same. 

Okla. Stat. Ann. tit. 78, § 89

. There is 
no question that Defendants are the prevailing parties in this case. E.g., API 
Americas Inc. v. Miller, 

380 F. Supp. 3d 1141, 1150

 (D. Kan. 2019) (concluding 
that the plaintiff was entitled to summary judgment on its misappropriation 
claims  but  reserving  for  a jury  the  question  of whether  the  defendant’s 

                         Case No. 19-cv-243 

conduct justified an award of fees). The only question disputed by the parties 
is whether Plaintiff’s misappropriation claims were made in bad faith. See 
Dkt. 346 at 3, 9-13; Dkt. 352 at 13-25.' 
     Defendants suggest that the only purpose of this action was to intimi- 
date Defendants  and stifle competition.  Dkt.  346  at 2-3,  7.  The  evidence 
shows  that Double Eagle had  a good faith belief that Defendant Michael 
Hooper had stolen information that, in Double Eagle’s estimation, consti- 
tuted trade secrets. Double Eagle has consistently claimed that Mr. Hooper 
downloaded confidential files to a personal storage device prior to leaving his 
employment to work for Ace Alloys. Dkt. 2 at 912. It had a factual basis for 
making this claim, as Defendants acknowledge. Dkt. 346 at 4-5. Double Ea- 
gle’s claim gained momentum as the case progressed; discovery and expert 
evidence confirmed Double Eagle’s  suspicion that Mr.  Hooper had taken 
Double Eagle’s information and accessed it while employed by Ace. See Dkt. 
352 at 10-11. Although the Court ultimately found that Double Eagle failed to 
present sufficient evidence to establish that the misappropriated files contained 
or constituted trade secrets, it did not find that Double Eagle could not have 
presented such evidence. Dkt. 343. In fact, the Court found the opposite. See 
id. at 9-10 (acknowledging the possibility that the misappropriated files con- 
tained trade secrets but granting summary judgment because Double Eagle 
had “done nothing to distinguish the wheat from the chaff”). 
     Defendants argue that Double Eagle’s failure to articulate a trade se- 
cret is proof of bad faith, and cites Cherokee Chemical Co. v. Frazier, No. CV 
20-1757-MWF (ASX), 

2022 WL 2036305

 (C.D. Cal. Apr. 27, 2022), in sup- 
port. It is true that, in  Cherokee Chemical, the plaintiff’s misappropriation 
claim was deemed “objectively specious” because the plaintiff had failed to 
identify a potential trade secret with “reasonable particularity.” Jd. at *4. But 
the court’s determination of bad faith did not rest on that fact alone: The 

     ‘ All citations utilize CMECF pagination.

                         Case No. 19-cv-243 

court also considered other circumstantial evidence suggesting the suit was 
brought to suppress competition, including the timing of the litigation; the 
history of litigation between the parties; the plaintiff’s failure to produce doc- 
uments, meet and confer regarding discovery motions, or provide its portion 
of a joint stipulation; and the fact that a settlement was reached the day before 
the plaintiff was required to supplement its discovery. Jd. at *5. The evidence 
that supported a finding of bad faith in Cherokee Chemical is not present here.’ 
     Although Double Eagle’s misappropriation claims ultimately failed as 
a matter of law, they were not objectively baseless. See Fed. Trade Comm’n pv. 
Freecom Comme’ns, Inc., 

401 F.3d 1192, 1201

 (10th Cir. 2005) (recognizing that 
“a claim that fails as a matter of law is not necessarily lacking any basis at 
all”). It was not unreasonable for Double Eagle to believe that it could have 
made out a trade-secret claim, even if it ultimately failed to do so. The Court 
cannot say, based on the evidence provided in parties’ briefing in connection 
with both this motion and their motions for summary judgment, that Double 
Eagle’s claims were “entirely without color” or were “asserted wantonly, for 
purposes of harassment or delay, or for other improper reasons.” Sterling En- 
ergy, Ltd. v. Friendly Nat’! Bank, 

744 F.2d 1433, 1435

 (10th Cir. 1984) (citation 
and internal quotation marks omitted). Accordingly, the Court finds that the 
evidence is not sufficient to support an award of attorneys’ fees, and Defend- 
ants’ motion [Dkt. 346] is DENIED. Defendants’ corresponding motion to 

     * The other cases relied upon by Defendants are likewise distinguishable. There is 
no evidence that the allegations in Double Eagle’s complaint were “intentionally mislead- 
ing.” Cf Magnum Mach., LLC v. Terves, LLC, No. 20-3779, 

2021 WL 5772533

, at *5 (6th 
Cir. Dec. 6, 2021) (affirming finding of bad faith where a document “didn’t actually contain 
the elaborate trade secrets presented in [the] complaint”). Nor is there any indication that 
the claims lacked factual support by the close of discovery. Cf Zoppas Indus. de Mexico, S_A. 
de C.V. ».  Backer  EHP Inc., No. CV 18-01693-GBW-C]B, 

2023 WL 7530247

, at *2 (D. Del. 
Nov. 13, 2023) (awarding attorneys’ fees where the parties “agree[d] that there [was] no 
evidence” in support of the plaintiff’s allegations by the time summary judgment was en- 
tered).

                         Case No. 19-cv-243 

bifurcate the issue of entitlement to fees from the issue of the amount of fees 
is DENIED as MOOT. 
     DATED this 19th day of November 2024. 

                                Joun D.  RUSSELL 
                                 United States District Judge 

                                aA