Double Eagle Alloys v. Hooper

134 F.4th 1078
CourtCourt of Appeals for the Tenth Circuit
DecidedApril 22, 2025
Docket24-5089
StatusPublished
Cited by9 cases

This text of 134 F.4th 1078 (Double Eagle Alloys v. Hooper) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Double Eagle Alloys v. Hooper, 134 F.4th 1078 (10th Cir. 2025).

Opinion

Appellate Case: 24-5089 Document: 43-1 Date Filed: 04/22/2025 Page: 1 FILED United States Court of Appeals PUBLISH Tenth Circuit

UNITED STATES COURT OF APPEALS April 22, 2025

Christopher M. Wolpert FOR THE TENTH CIRCUIT Clerk of Court _________________________________

DOUBLE EAGLE ALLOYS, INC.,

Plaintiff - Appellant,

v. No. 24-5089

MICHAEL HOOPER; ACE ALLOYS, LLC,

Defendants - Appellees. _________________________________

Appeal from the United States District Court for the Northern District of Oklahoma (D.C. No. 4:19-CV-00243-JDR-CDL) _________________________________

Jason S. Taylor (Hayley N. Stephens and Kayla Finnegan, with him on the briefs) of Conner & Winters, LLP, Tulsa, Oklahoma, for Plaintiff-Appellant.

Ryan A. Ray (David R. Ross, with him on the brief) of Norman Wohlgemuth, LLP, Tulsa, Oklahoma, for Defendants-Appellees. _________________________________

Before BACHARACH, SEYMOUR, and PHILLIPS, Circuit Judges. _________________________________

PHILLIPS, Circuit Judge. _________________________________

Double Eagle Alloys, Inc. appeals the district court’s order granting

summary judgment to Ace Alloys, LLC and Michael Hooper on all claims. This

litigation arises from Michael Hooper’s possession of digital files containing Appellate Case: 24-5089 Document: 43-1 Date Filed: 04/22/2025 Page: 2

Double Eagle’s business information. After a decade-long career at Double

Eagle, Hooper jumped ship for competitor Ace Alloys. He also took 2,660 files

downloaded from his Double Eagle computer with him. Double Eagle later

discovered the download and sued both Hooper and Ace Alloys, alleging trade-

secret violations, misappropriation of confidential business information, and

civil conspiracy. After the parties conducted discovery, they cross-moved for

summary judgment. The district court granted summary judgment to Hooper

and Ace Alloys on all claims.

On appeal, Double Eagle challenges the district court’s rulings on three

fronts. First, Double Eagle asserts that it had identified the alleged trade secrets

with sufficient particularity to maintain its trade-secret claims. Second, Double

Eagle contends that its business information was confidential to sustain its

misappropriation claim. And third, Double Eagle argues that the trade-secret

and misappropriation claims qualify as underlying torts to support the civil-

conspiracy claim. We disagree and so, exercising our jurisdiction under 28

U.S.C. § 1291, we affirm.

BACKGROUND

I. Factual Background 1

1 “In reciting the facts of this case, we view the evidence in the light most favorable to the non-moving party, as is appropriate when reviewing a grant of summary judgment.” Deherrera v. Decker Truck Line, Inc., 820 F.3d 1147, 1151 n.1 (10th Cir. 2016) (internal quotation marks omitted).

2 Appellate Case: 24-5089 Document: 43-1 Date Filed: 04/22/2025 Page: 3

A. Hooper’s Job Change

Double Eagle and Ace Alloys are specialty-metals distributors. They buy

and resell alloys for companies in the oil-and-gas industry. 2 Double Eagle is the

established player, while Ace Alloys is the industry upstart. Ace Alloys directly

competes with Double Eagle. Michael Hooper is a former Double Eagle

employee who now works for Ace Alloys. His conduct during that job

transition is the subject of this litigation.

Hooper had worked as the Inside Sales Manager at Double Eagle for

nearly five years before resigning and joining Ace Alloys. 3 When he left for

Ace Alloys, he took his handwritten notes and 2,660 digital files, which he

downloaded from his Double Eagle computer to an external storage device. The

digital files contained Double Eagle’s important sales information. Double

Eagle later discovered the download and filed suit.

B. The Alleged Trade Secrets

Double Eagle contends that the financial, technical, and business

information contained in the downloaded files qualifies as trade secrets. On

appeal, Double Eagle categorizes the downloaded files into three types of trade

2 An alloy is a fused substance composed of two or more metals or a metal and a nonmetal. Alloy, Merriam-Webster.com, https://www.merriam- webster.com/dictionary/alloy (last visited Apr. 21, 2025). 3 Before becoming the Inside Sales Manager, Hooper had worked as a saw operator and in an inside-sales position for Double Eagle from 2007 to 2014. 3 Appellate Case: 24-5089 Document: 43-1 Date Filed: 04/22/2025 Page: 4

secrets: (1) pump-shaft-quality (PSQ) specifications, (2) pricing, and

(3) customer drawings. 4 We provide an overview of each trade-secret category.

1. PSQ Specifications

Within the specialty-metals industry is a sub-industry for supplying PSQ

material to the oil-and-gas industry. Companies that sell PSQ material often

develop specifications for PSQ alloys that they supply to their customers. These

specifications list the packaging requirements, chemical composition,

mechanical properties, bar condition, and other standards for the PSQ-alloy

product. PSQ specifications aggregate the preferences of various customers and

allow the distributor to purchase material suitable to multiple customers, as

opposed to a single customer.

Double Eagle is no exception. It has developed its own specifications for

various PSQ materials, including the 718 and K500 PSQ specifications. See

Sealed App. vol. III, at 503–06. According to Double Eagle, its PSQ

specifications qualify as trade secrets and disclosure of these specifications

would cause substantial competitive harm.

4 In the district court, Double Eagle identified its trade secrets as “PSQ specifications, pricing, margins, costs, and customer drawings.” Double Eagle Alloys, Inc. v. Hooper, No. 4:19-CV-00243-JDR-CDL, 2024 WL 3166921, at *2 (N.D. Okla. June 25, 2024) (internal quotation marks omitted). On appeal, Double Eagle subsumed margins and costs into the pricing category. 4 Appellate Case: 24-5089 Document: 43-1 Date Filed: 04/22/2025 Page: 5

2. Pricing

The downloaded files also contain information on Double Eagle’s

pricing. Double Eagle sets prices based on the published surcharge, machining

costs, material costs, and customer-specific target margins. 5 Sealed App. vol.

VI, at 1117. The material costs and customer-specific target margins are,

according to Double Eagle, “highly confidential.” Id. Double Eagle maintains

detailed spreadsheets of its machining costs, material costs, inventory levels,

and customer purchasing history (actual and targeted margins). Sealed App.

vol. III, at 507–14, 522–24. Though Double Eagle shares its prices with

customers, it does not share its pricing model. Sealed App. vol. VI, at 1117.

Double Eagle claims its pricing model as a trade secret.

3. Customer Drawings

Finally, the downloaded files include customer drawings. As routine

business practice, customers prepare and share drawings of requested parts with

distributors. See Sealed App. vol. II, at 333 (example drawing). The

distributors, in turn, quote prices for the requested parts based on the drawings.

A specialty-metals distributor must have these customer drawings to quote

prices for various parts. Double Eagle contends that these customer drawings

are trade secrets.

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