Monday, November 3, 2025
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Ninth Circuit Reinstates $25.7 Million Verdict
Panel Says Magistrate Judge Failed to Accord Deference to Jury’s Conclusion
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals Friday ordered reinternment of a $25.7 million jury verdict in a trade-secret misappropriation case, holding that a magistrate judge improperly overrode the decision of a unanimous panel.
Jurors assessed general damages against Medallia, Inc. at $11.7 million in an action by EchoSpan, Inc., a maker of employee feedback software, then added an award of $14 million in exemplary damages. But Magistrate Judge Nathanael M. Cousins on July 2, 2024 granted judgment as a matter of law in favor of the defendant, saying:
“In an eight-day trial, EchoSpan proved Medallia misappropriated one of EchoSpan’s trade secrets, and the jury awarded EchoSpan more than $25 million dollars. But along the way EchoSpan failed to apportion its damages. EchoSpan alleged nine trade secrets and sought damages for them as a group. Two never went to the jury. And EchoSpan proved only one. How could the jury distill damages for the whole group down to one? Spoiler: it couldn’t. Thus, as Medallia argues on this renewed motion for judgment as a matter of law, EchoSpan did not provide the jury a reasonable basis for its damages award.”
In a memorandum opinion, signed by Circuit Judge Danielle J. Forrest and Senior Circuit Judges Carlos T. Bea and Richard A. Paez, the Ninth Circuit reversed.
“The district court erred in assuming the jury did not apportion its unjust enrichment award and instead awarded EchoSpan the cumulative total sought for all nine alleged trade secrets,” the judges wrote.
They said that Cousins “was required to view the evidence in the light most favorable to the jury’s verdict and draw all reasonable inferences in favor of preserving the jury’s verdict,” but didn’t.
The judges reasoned that “if the jury had a reasonable basis for awarding $1.7 million in unjust enrichment based on any combination of categories, the court necessarily erred in assuming that the jury awarded EchoSpan the cumulative total EchoSpan sought for all nine alleged trade secrets.”
Under the evidence adduced, the award “had a reasonable basis,” they said.
Testimony showed that Medallia employees secured a test copy of EchoSpan’s software, then distilled from it an element—“TS 6”— that was used by the company in a competing product.
The case is EchoSpan, Inc. v. Medallia, Inc., 24-4751.
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