EchoSpan, Inc. v. Medallia, Inc.

Opinion

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9

10 ECHOSPAN, INC., Case No. 22-cv-01732-NC 11 Plaintiff, ORDER DENYING 12 MEDALLIA’S MOTION FOR v. RECONSIDERATION; AND 13 GRANTING ECHOSPAN’S MEDALLIA, INC., MOTION FOR ENTRY OF 14 REINSTATED JUDGMENT Defendant. 15 Re: ECF 534, 538-1 16 17

18 19 In this civil case between Plaintiff EchoSpan, Inc. and Defendant Medallia, Inc., a 20 unanimous jury determined that Medallia willfully misappropriated a trade secret and 21 awarded EchoSpan $11.7 million in unjust enrichment and $14 million in exemplary 22 damages. ECF 389. The Court determined that these damages were properly a question 23 for the jury, and therefore, no separate findings of fact or conclusions of law were required. 24 ECF 437 (Rule 52(a) Order). The Court subsequently entered the jury’s verdict as 25 judgment. ECF 438 (Original Judgment). The Court then granted judgment as a matter of 26 law to Medallia that the jury did not have a reasonable basis for its damages award and 27 entered an amended judgment in favor of Medallia on damages for misappropriation of a 1 appealed the Court’s amended judgment and judgment as a matter of law on damages to 2 the Ninth Circuit. ECF 512. The Ninth Circuit then reversed the Court’s grant of 3 judgment as a matter of law and remanded back to the Court with instructions to reinstate 4 the jury’s verdict. ECF 532. 5 Medallia now moves for the Court to reconsider its Rule 52(a) Order, specifically 6 its conclusions that (1) the jury verdict awarding unjust enrichment and exemplary 7 damages was binding rather than advisory, and (2) the Court did not need to issue 8 independent findings of fact and conclusions of law under Federal Rule of Civil Procedure 9 52(a). ECF 538-1. EchoSpan also moves for the Court to vacate the Amended Judgment 10 and reinstate the Original Judgment. ECF 534. The Court finds that Medallia did not meet 11 its burden to bring a motion for reconsideration and therefore DENIES Medallia’s motion 12 to reconsider and GRANTS EchoSpan’s motion for entry of reinstated judgment. 13 I. BACKGROUND 14 The Court gives a brief summary of the relevant background. 15 EchoSpan alleged Medallia misappropriated nine EchoSpan trade secrets under the 16 Defend Trade Secrets Act (DTSA) and Georgia Trade Secrets Act (GTSA). ECF 1. 17 Before the case went to trial, Medallia moved to bifurcate the proceeding so that its 18 injunctive relief and unjust enrichment damages “would be tried by the Court rather than a 19 jury.” ECF 271 at 1–2. The Court denied the motion in part because the claims were 20 “legal in nature.” ECF 318. 21 The case then went to trial. ECF 360. The jury found that Medallia willfully 22 misappropriated one alleged trade secret, Trade Secret 6 (TS 6). ECF 389. The jury 23 awarded EchoSpan $11.7 million in compensatory damages and $14 million in exemplary 24 damages. Id. 25 After trial, Medallia moved this Court to treat the jury’s verdict as to unjust 26 enrichment and exemplary damages as advisory and issue an independent findings of fact 27 and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a). ECF 416. 1 determine” and that only the Court could award exemplary damages. Id. at 3. The Court 2 was fully briefed. ECF 424; ECF 429. The Court denied Medallia’s Rule 52(a) motion, 3 referencing its motion for bifurcation order at ECF 318 and finding that “juries routinely 4 decide whether and in what amounts to award unjust enrichment damages available under 5 trade secrets statutes.” Rule 52(a) Order at 5. The Court then entered judgment and 6 awarded EchoSpan $11.7 million in compensatory damages and $14 million in exemplary 7 damages. Original Judgment. 8 Medallia subsequently moved for judgment as a matter of law, in part arguing that 9 EchoSpan’s damages evidence did not give the jury a reasonable basis for its award. ECF 10 468. The Court granted Medallia’s motion as to this point and overturned the jury’s 11 damages award. JMOL Order. The Court then entered an amended judgment as a matter 12 of law in favor of Medallia on damages for misappropriation. Amended Judgment. 13 EchoSpan appealed the Court’s JMOL Order and the Amended Judgment to the 14 Ninth Circuit. ECF 512. The Ninth Circuit found “the jury had a reasonable basis” to 15 award its unjust enrichment damages. ECF 532 at 4. Thus, the Ninth Circuit reversed the 16 Court’s “grant of judgment as a matter of law” and remanded back to the Court with 17 “directions to reinstate the jury’s verdict.” Id. at 6. 18 EchoSpan moved for entry of a reinstated judgment, requesting the Court to 19 reinstate its Original Judgment. ECF 534. Medallia opposed. ECF 539. EchoSpan 20 replied. ECF 542. 21 Medallia filed a motion for leave to file a motion for reconsideration of the Court’s 22 Rule 52(a) Order. ECF 538. EchoSpan opposed and Medallia replied. ECF 540, ECF 23 541. The Court granted EchoSpan’s motion for leave and allowed for full briefing. ECF 24 546. Medallia’s motion for reconsideration of the Challenged Order is filed at ECF 538-1. 25 EchoSpan opposed at ECF 550. Medallia replied at ECF 551. 26 Both parties have consented to magistrate judge jurisdiction. ECF 65; ECF 67. 27 1 II. LEGAL STANDARD 2 “[A]ny order or other decision . . . that adjudicates fewer than all the claims or the 3 rights and liabilities of fewer than all the parties . . . may be revised at any time before the 4 entry of a judgment adjudicating all the claims and all the parties’ rights and liabilities.” 5 Fed. R. Civ. P. 54(b). In the Northern District of California, the moving party bears the 6 burden to show reasonable diligence in bringing the motion and one of the following: 7 (1) That at the time of the motion for leave, a material difference in fact or law 8 exists from that which was presented to the Court before entry of the 9 interlocutory order . . . 10 (2) The emergence of new material facts or a change of law occurring after the 11 time of such order; or 12 (3) A manifest failure by the Court to consider material facts or dispositive legal 13 arguments which were presented to the Court before such interlocutory 14 order. 15 N.D. Cal. Civ. R. 7-9(b). 16 Reconsideration is an “extraordinary remedy, to be used sparingly.” Kona Enters., 17 Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000). Reconsideration is appropriate 18 only “if the district court (1) is presented with newly discovered evidence, (2) committed 19 clear error or the initial decision was manifestly unjust, or (3) if there is an intervening 20 change in controlling law.” Sch. Dist. No. 1J, Multnomah Cnty., Or. v. ACandS, Inc., 5 21 F.3d 1255, 1263 (9th Cir. 1993). 22 III. ANALYSIS 23 A. The Court Denies Medallia’s Motion for Reconsideration 24 Medallia moves the Court to reconsider its Rule 52(a) Order, specifically its 25 conclusions that (1) the jury verdict awarding unjust enrichment and exemplary damages 26 was binding rather than advisory, and (2) the Court did not need to issue independent 27 findings of fact and conclusions of law under Rule 52(a). ECF 538-1 at i. The parties 1 First, whether the Ninth Circuit’s mandate foreclosed this motion. ECF 551 at 2. Second, 2 whether Medallia waived this motion when it failed to appeal or cross-appeal. EF 551 at 3. 3 Third, whether there has been an intervening change in controlling law. ECF 551 at 5. 4 The Court finds that the mandate did not foreclose, and Medallia did not waive, this 5 motion for reconsideration. However, it also finds that Medallia has not met its burden of 6 showing that there was an intervening change in controlling law, and therefore, denies its 7 motion for reconsideration. 8 1. The Ninth Circuit’s Mandate Did Not Foreclose the District Court 9 From Reconsidering its Rule 52(a) Order 10 EchoSpan first argues that the Ninth Circuit’s mandate foreclosed the district court 11 from reconsidering its Rule 52(a) Order. 12 A district court can be precluded from determining an issue if the law of the case or 13 rule of mandate applies. Hall v. City of L.A., 697 F.3d 1059, 1067 (9th Cir. 2012). The 14 law of the case doctrine is discretionary and “generally precludes a court from 15 reconsidering an issue decided previously by the same court or by a higher court in the 16 identical case.” Id. (citations omitted). The issue in question must have been decided 17 explicitly or by necessary implication in the previous disposition. Id. The rule of mandate 18 states that “[a] district court that has received the mandate of an appellate court cannot 19 vary or examine that mandate for any purpose other than executing it.” Id (citation 20 omitted). At the same time, the rule “allows a lower court to decide anything not 21 foreclosed by the mandate.” Id. (citation omitted). Violation of the rule of mandate is a 22 jurisdictional error. Id. (citation omitted). 23 Therefore, the critical question in determining whether the Court has jurisdiction to 24 reconsider its Rule 52(a) Order is what issues were left open by the Ninth Circuit’s 25 mandate. See Laitram Corp. v. NEC Corp., 115 F.3d 947, 951 (Fed. Cir. 1997). The 26 mandate here “reversed and remanded with directions to reinstate the jury’s verdict.” ECF 27 532 at 6. The mandate leaves open the opportunity for the Court to reconsider its Rule 1 First, EchoSpan has not shown that the Rule 52(a) issues were decided explicitly or 2 by necessary implication on appeal. Indeed, EchoSpan agrees that the Rule 52(a) issues 3 were not decided explicitly. ECF 540 at 4 (stating that “the Ninth Circuit did not address 4 the Court’s denial of Medallia’s Rule 52(a) motion”). And EchoSpan did not sufficiently 5 argue that the Ninth Circuit decided any Rule 52(a) issues by necessary implication. It is 6 not enough to only argue that “the Court had decided Medallia’s Rule 52(a) motion by the 7 time of EchoSpan’s appeal.” ECF 550 at 7. While whether the Court has decided the 8 motion can be a factor in deciding whether the motion was necessarily implicated, it does 9 not, by itself, establish the motion was necessarily implicated in the appeal. For example, 10 in Laitram, the fact that the district court previously ruled that the issues were “moot” was 11 only one part of its primary analysis of determining whether the issues were decided by 12 necessary implication. It also considered other factors, such as whether the issues were 13 appealed or if the issues were antecedent logically or legally to the appeal, to come to its 14 conclusion. 115 F.3d at 951. The court in U.S. v. Kellington similarly focused on whether 15 the motion was before the appellate court and what the appellate decision covered, not 16 whether the district court decided the issue, in finding that the district court was not 17 foreclosed from reinstating a motion. 217 F.3d 1084, 1095–96 (9th Cir. 2000). 18 Nor has EchoSpan sufficiently shown that Medallia’s motion for reconsideration is 19 “irreconcilable with” or “beyond the scope of” the mandate. ECF 550 at 5–6. The 20 mandate only directed the Court to “reinstate the jury verdict.” ECF 532. It does not 21 instruct the Court to do anything else, such as to enter judgment or refrain from 22 considering certain arguments. Id. To reinstate means to “place again in a former state or 23 position” or “to restore.” Reinstate, Black’s Law Dictionary (12th ed. 2024). As such, the 24 Ninth Circuit’s instruction directs the Court only to restore the jury verdict to its original 25 state. It does not add any limitation on what the Court could consider on remand. 26 Compare U.S. v. Thrasher, 483 F.3 977, 983 (finding that the mandate precluded the 27 district court from considering other arguments when the appellate court remanded “for a 1 Indeed, Courts have previously found that a mandate to “reinstate the jury verdict” 2 leaves open the opportunity for, and even can obligate, the district court to rule on issues 3 that were not appealed or not decided on appeal and can affect aspects of the final 4 judgment. See, e.g., Laitram, 115 F.3d at 952–53 (finding it was within the court’s power 5 and the court’s obligation to rule on certain issues because they were no longer moot and 6 could have affected aspects of the final judgment); cf. Jules Jordan Video, 468 Fed. App’x 7 at 677 (finding that the only proceeding necessary on remand was the entry of judgment 8 because the circuit court’s prior decision and mandate were based on a complete review of 9 all arguments raised in the initial appeal and any new arguments were waived). 10 The Court therefore finds that the Ninth Circuit’s mandate does not foreclose this 11 Court from reconsidering its Rule 52(a) Order. 12 2. Medallia Did Not Waive the Rule 52(a) Issue When It Failed to 13 Raise It Through Appeal or Cross-Appeal 14 EchoSpan then argues that Medallia “waived on appeal any challenge to this 15 Court’s denial of its Rule 52(a) motion” 1 because it could have appealed the judgment or 16 cross-appealed to protect its rights in the event of remand. ECF 550 at 6, 8. 17 It is questionable as to whether Medallia could have appealed the unjust enrichment 18 and exemplary damages portion of the Amended Judgment by arguing that the jury verdict 19 for these damages was not binding. See United States v. Good Samaritan Church, 29 F.3d 20 487, 488 (9th Cir. 1994) (“A party may not appeal from a judgment . . . in his favor, for the 21 purpose of obtaining a review of findings he deems erroneous which are not necessary to 22 support the decree.”). Medallia was not “aggrieved” by the damages judgment, which was 23 entered “in favor of Medallia.” ECF 550 at 8; Amended Judgment. While Medallia was 24 aggrieved by the Court’s Amended Judgment on whether it willfully and maliciously 25

26 1 Medallia disputes EchoSpan’s use of the term “waiver” as opposed to “forfeiture.” ECF 551 at 3 n.1. However, Medallia does not explain the practical significance of this 27 difference. Regardless, “there is little practical difference in consequences between a 1 misappropriated TS 6, Medallia is not asking the Court to reconsider this issue—only the 2 unjust enrichment and exemplary damages. 3 Regardless, Medallia was the appellee, not the appellant, in this case. And courts 4 have distinguished between how they assess how a waiver applies to appellees and 5 appellants because “appellees do not select the issues to be appealed” and “are at a 6 procedural disadvantage in appeals.” See Laitram, 115 F.3d at 954. The Court therefore 7 focuses on EchoSpan’s arguments and cases relating to waiver on cross-appeal. See 8 Sogecable, S.A. v. NDS Grp. PLC, No. 03-cv-1174-DOC-ANX, 2008 WL 11636287, at *2 9 (C.D. Cal. Jan. 25, 2008) (declining to apply a case about an appellant’s waiver of an issue 10 to an appellee’s waiver). 11 Courts have found that “[w]aiver is only proper where the party who failed to cross- 12 appeal was required to do so.” Amgen Inc. v. Sanofi, No. 14-cv-1317-RGA, 2019 WL 13 494620, at *2 (D. Del. Feb. 8, 2019); see also Laitram, 115 F.3d at 954 (stating the issue 14 of waiver was “what it was required to argue, or indeed could properly have argued”); 15 Akamai Techs., Inc. v. Limelight Networks, Inc., No. 06-cv-11109-RWZ, 2016 WL 16 10675906, at *3 (D. Mass. Apr. 25, 2016) (finding that an issue was waived if it “could 17 have been, but w[as] not, raised on cross-appeal”). “[A] party must file a cross-appeal if, 18 although successful in the overall outcome in the district court, the party seeks, on appeal, 19 to lessen the rights of its adversary or to enlarge its own rights.” Lazare Kaplan Int’l, Inc. 20 v. Photoscribe Techs., Inc., 714 F.3d 1289, 1293 (Fed. Cir. 2013). This “cross-appeal 21 rule” is a “rule of practice and not a jurisdictional bar,” and thus, appellate courts have the 22 “broad power to make such dispositions as justice required.” Stormans, Inc. v. Wiesman, 23 794 F.3d 1064, 1085 (9th Cir. 2015). Further, it is ambiguous whether a district court can 24 apply the cross-appeal rule to preclude certain arguments in its court on remand. Lazare 25 Kaplan Int’l, Inc., 714 F.3d 1289 at 1294–95 (stating that the cross-appeal rule is normally 26 applied not by district courts, but by appellate courts). 27 To the extent that this Court can apply the cross-appeal rule here, it uses its 1 required. At the time of EchoSpan’s appeal, because no unjust enrichment or exemplary 2 damages awarded to EchoSpan for Medallia’s misappropriation, Medallia’s cross-appeal to 3 make the jury findings advisory would not have decreased its monetary liability. See Lee 4 v. Burlington N. Santa Fe Ry. Co., 245 F.3d 1102, 1107 (9th Cir. 2001) (the Ninth Circuit 5 has required a cross-appeal when a party seeks to increase its monetary recovery or 6 decrease its monetary liability). It is uncertain whether this circuit requires an appellee to 7 file a protective cross-appeal. Compare Valdez v. Rosenbaum, 302 F.3d 1039, 1044 (9th 8 Cir. 2002) (“[P]revailing parties . . . need not have filed cross-appeals in order to correct 9 errors in the district court’s reasoning.”), with Fed. Trade Comm’n v. Dantuma, 748 F. 10 App’x 735, 739 (9th Cir. 2018) (stating that “even parties who were satisfied with the 11 district court’s judgment must file a cross-appeal to preserve issues for review in 12 subsequent appeals following a remand”). 13 Additionally, a party’s failure to raise an issue on appeal “will be excused” when 14 there is “a change in the law.” Lee, 245 F.3d at 1108. For the reasons in Section III.A1.3., 15 the Court does not find there was a change in the law. 16 As such, in the absence of prejudice to EchoSpan and in the interest of fairness to 17 Medallia, we exercise our discretion to reach the issue. See Stormans, 794 F.3d at 1085. 18 3. Medallia Does Not Point to Any Intervening Changes to the Law. 19 Medallia alleges that its motion for reconsideration is based on “intervening 20 authority from the Ninth Circuit and elsewhere.” ECF 538-1 at 4. Medallia does not 21 allege any other basis for reconsideration. An intervening change in controlling law is 22 found where the reasoning or theory of a case “is clearly irreconcilable with the reasoning 23 or theory of intervening higher authority.” Miller v. Gammie, 335 F.3d 889, 893 (9th Cir. 24 2003). Because the Court is not persuaded that there was an intervening change in 25 controlling law, it denies Medallia’s motion for reconsideration. 26 As an initial matter, the Court is not persuaded that its order at ECF 546 granting 27 leave to Medallia to file a motion for reconsideration alone permits reconsideration. ECF 1 7(b)(2), which requires a “change in law.” This is broader than what Medallia is required 2 to show for reconsideration, which demands an “intervening change in controlling law.” 3 Further, the Court is not tied to its initial screening decision—it now benefits from 4 additional argument and briefing. 5 Medallia points to four cases to support an alleged intervening change in controlling 6 law: (1) Proofpoint, Inc. v. Vade USA, Inc., No. 23-cv-16085, 2024 WL 4003096, at *1 7 (9th Cir. Aug. 30, 2024); (2) Rearden LLC v. Walt Disney Pictures, 152 F.4th 1058 (9th 8 Cir. 2025); (3) Motorola Solutions, Inc. v. Hytera Communications Corp., 108 F.4th 458 9 (7th Cir. 2024), and (4) BioPoint, Inc. v. Dickhaut, 110 F.4th 337 (1st Cir. 2024). The 10 Court is not persuaded that these are intervening changes in controlling law. 11 First, the Court notes that three of these cases—Proofpoint, Hytera, and BioPoint, 12 are not “controlling” law. Proofpoint is unpublished2, and Hytera and BioPoint are out-of- 13 circuit decisions. Medallia concedes that Rearden is the only controlling decision out of 14 the four cases it identified. ECF 551 at 13. While it argues that the Court “may consider 15 other intervening authorities that inform controlling Ninth Circuit law,” it cites to a case 16 where it did so in addition to finding intervening controlling authority in two Supreme 17 Court cases. ECF 551 at 13–14 (citing Murray v. Mayo Clinic, 934 F.3d 1101, 1107 (9th 18 Cir. 2019)). 19 The Court also finds that the ruling in Rearden is not an “intervening change” 20 because it affirmed the relevant portion of the district court’s order striking the jury 21 demand on the issue of disgorgement of profits. 152 F.4th at 1077; see Anderberg v. Hain 22 Celestial Grp., Inc., No. 21-cv-01794-RBM-SBC, 2023 WL 7311200, at *5 (S.D. Cal. 23 Nov. 6, 2023) (finding that the binding appellate decision was not an intervening change 24 because it merely affirmed the district court’s ruling). Further, it did not squarely address 25

26 2 The Court also notes that Medallia uses Proofpoint as its primary argument that there was intervening changes in law establishing that exemplary damages award is for the Court, not 27 the jury, to decide. ECF 538-1 at 10. However, Proofpoint explicitly does not decide the 1 the issue at hand—while it found that there was no statutory right to a jury trial under the 2 Copyright Act, it did not find as such for the DTSA or GTSA. Rearden, 152 F.4th at 1076. 3 Medallia uses this case to speculate on what the Ninth Circuit would have ruled had it 4 instead addressed the DTSA or GTSA. See In re Countrywide Fin. Corp. Mortg.-Backed 5 Sec. Litig., 966 F. Supp. 2d 1031, 1036 (C.D. Cal. 2013) (citing Texas v. Cobb, 532 U.S. 6 162, 169 (2001)) (“A material change of law . . . cannot arise ‘by inferences from opinions 7 which did not address the question at issue.’”). 8 Medallia then argues that the Court should still grant reconsideration because it 9 “retains the discretion to sua sponte reconsider” an inconsistent earlier order. ECF 551 at 10 14 (citing Barker v. Insight Global, LLC, 2019 WL 176260, at *3 (N.D. Cal. Jan. 11, 11 2019)). The Court declines to use its discretion here in light of the Ninth Circuit’s 12 instruction to use motions for reconsideration “sparingly in the interests of finality and 13 conservation of judicial resources.” Kona Enterprises, Inc., 229 F.3d at 890 (9th Cir. 14 2000). This case has lasted for almost 5 years—during that time, it went through a full 15 jury trial, had extensive post-trial motions, and went to and returned from the Ninth 16 Circuit. Further, the specific issue of whether unjust enrichment and exemplary damages 17 are legal or equitable damages, and should therefore be ultimately decided by the Court, 18 has already twice been addressed by the Court. See ECF 271; ECF 416. 19 As such, the Court denies Medallia’s motion for reconsideration of the Court’s Rule 20 52(a) Order. Medallia did not show an intervening change in controlling law or that the 21 Court should use its discretion to sua sponte reconsider its Order. 22 B. The Court Grants EchoSpan’s Motion for Reinstated Judgment 23 EchoSpan moved this Court to vacate the Amended Judgment and reinstate the 24 Original Judgment. ECF 534 at 2. Taking into account the Ninth Circuit’s mandate to 25 reinstate the jury verdict and the Court’s denial of reconsideration of its Rule 52(a) Order, 26 the Court finds that its Original Judgment implementing the jury’s verdict awarding 27 EchoSpan $11.7 million in compensatory damages and $14 million in exemplary damages 1 || for Medallia’s misappropriation of Trade Secret 6 is correct. Thus, the Court GRANTS 2 || EchoSpan’s motion for reinstated judgment. 3 || IV. CONCLUSION 4 In conclusion, the Court DENIES Medallia’s motion for reconsideration and 5 || GRANTS EchoSpan’s motion for reinstated judgment. Second Amended Judgment to 6 || follow. 7 8 IT IS SO ORDERED. 9 10 || Dated: May 14, 2026 —> NATHANAEL M. COUSINS 11 United States Magistrate Judge 12

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