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           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                          United States Court of Appeals
                                                                                   Fifth Circuit

                                                                                 FILED
                                      No. 16-51224                       September 4, 2018
                                                                            Lyle W. Cayce
TRANSVERSE, L.L.C.,                                                              Clerk


               Plaintiff - Appellee Cross-Appellant,

v.

IOWA WIRELESS SERVICES, L.L.C., doing business as i wireless,

               Defendant - Appellant Cross-Appellee.




                  Appeals from the United States District Court
                        for the Western District of Texas
                             USDC No. 1:10-CV-517


Before ELROD, COSTA, and HO, Circuit Judges.
PER CURIAM:*
       Iowa Wireless Services, a wireless telephone service provider, hired
Transverse, a software development company, to develop customized billing
software. When their business relationship eventually broke down, they sued
each other. Both dissatisfied after a jury and bench trial, they appealed to this
court. In Transverse I, we affirmed in part, reversed and rendered in part,




       * Pursuant to Fifth Circuit Rule 47.5, the court has determined that this opinion
should not be published and is not precedent except under the limited circumstances set forth
in Fifth Circuit Rule 47.5.4.
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vacated in part, and remanded. Both parties have appealed again, challenging
various determinations made by the district court on remand.
      The district court correctly awarded damages. It also correctly
determined that IWS is not entitled to the costs of the premiums for its
supersedeas bond. Accordingly, we now AFFIRM in part, VACATE the district
court’s judgment only as to Transverse’s take-nothing judgment on its Texas
Theft Liability Act claim because IWS is the prevailing party, and REMAND
because IWS is entitled to a mandatory award of costs and attorney’s fees on
this claim.
                                       I.
      IWS hired Transverse to develop customized billing software, which was
known as “blee(p).”      IWS and Transverse documented their business
relationship in a “Mutual Non-Disclosure Agreement” and a “Supply Contract.”
The non-disclosure agreement required IWS not to disclose Transverse’s
“Confidential Information.”     The Supply Contract contained a plan for
Transverse to provide IWS customized billing software that satisfied mutually
developed “acceptance criteria” on a specific timeline. According to the Supply
Contract, the acceptance criteria was to be developed together in a “User
Acceptance Test” document.
      However, agreeing on acceptance criteria before the deadline proved
difficult for IWS and Transverse. After several meetings, they only had a draft
User Acceptance Test document. Critically, IWS kept notes of these meetings.
Once it became clear that the project would not be finished by the deadline,
IWS began considering other options. IWS contacted Info Directions about
potentially developing the billing system. In order to expedite the process, IWS
provided Info Directions with the draft User Acceptance Test and the relevant
meeting notes. Meanwhile, IWS allowed a timeline change for Transverse as
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long as IWS did not have to “waiv[e] any rights or terms under the original
contract.”
      The changed deadline, however, was not enough. Even though IWS and
Transverse did eventually agree to a User Acceptance Test document, the
deadline still passed without delivery. Finally giving up on the relationship,
IWS terminated the Supply Contract. IWS then hired Info Directions for its
billing software needs.
      Transverse filed a lawsuit against IWS in Texas state court, alleging
breach of the Supply Contract, breach of the non-disclosure agreement, and
three tort claims: misappropriation of trade secrets, conversion, and violation
of the Texas Theft Liability Act. IWS removed the case to federal court and
counterclaimed for breach of the Supply Contract. The claims related to the
breach of the Supply Contract were tried to a jury, and the remaining claims
were tried to the bench because of the non-disclosure agreement’s jury-waiver
provision.
      Determining that IWS breached the Supply Contract both by wrongfully
terminating it and by violating an express prohibition to not give “a competitor
access to the Service,” the jury found in favor of Transverse. The jury awarded
Transverse lost profit damages, reliance damages, and lost value damages for
the “access to the Service” breach. The district court, however, set aside the
award for the “access to the Service” breach because it determined that it was
not supported by legally sufficient evidence. The district court also ruled
against Transverse on its tort claims and on its claim for breach of the non-
disclosure agreement.
      When the parties cross-appealed, we affirmed in part, reversed and
rendered in part, vacated in part, and remanded. We held that IWS did breach
the Supply Contract by wrongfully terminating but not by providing “access to
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the Service” to a competitor. Moreover, we determined that the district court
should not have permitted Transverse to recover lost profits for a twelve-year
period for the breach of the Supply Contract claim. We also explained that
Transverse could not recover both lost profits and reliance damages for the
same breach. Furthermore, we held that IWS did breach the non-disclosure
agreement.
      We explained that:
      On remand, the issues remaining . . . are the proper amount and
      type of damages that Transverse may collect on its breach-by-
      termination claim; the amount of damages, if any, that Transverse
      may collect for IWS’s breach of the [non-disclosure agreement];
      and whether IWS is liable under any of the tort theories pressed
      by Transverse.

      Returning to the district court, Transverse elected reliance damages
instead of lost profits, and the district court awarded Transverse $1.7 million
in reliance damages for IWS’s breach of the Supply Contract. The district court
determined that Transverse had “no cognizable damages” for IWS’s breach of
the non-disclosure agreement “as a matter of law.” Having determined that
IWS’s conduct resulted in no lost value to Transverse, the district court also
rejected Transverse’s misappropriation of trade secrets, conversion, and Texas
Theft Liability Act claims.
      The district court also made determinations related to attorney’s fees. It
determined that: (1) IWS is not a prevailing party under the Texas Theft
Liability Act (and thus not entitled to a mandatory award of costs and
attorney’s fees); and (2) IWS is not entitled to costs for the supersedeas bond
premiums on its first appeal. 1



      1   IWS also moved to alter or amend this judgment, but that motion was denied.
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       On appeal, IWS now argues that reliance damages are inappropriate
because Transverse failed to prove damages as a matter of law. IWS also
challenges the district court’s determinations related to attorney’s fees. 2
Specifically, it argues that IWS is entitled to attorney’s fees for the Texas Theft
Liability claim because it is a prevailing party and that IWS should be entitled
to costs of the supersedeas bond premiums on the first appeal. In its cross-
appeal, Transverse argues that it proved reliance damages and development
costs, which are acceptable damages models.
                                               II.
       We review a district court’s ruling on a motion for judgment as a matter
of law de novo. Flowers v. S. Reg’l Physician Servs. Inc., 247 F.3d 229, 235 (5th
Cir. 2001). “[J]udgment as a matter of law should not be granted unless the
facts and inferences point ‘so strongly and overwhelmingly in the movant’s



       2  IWS contends that Texas law should govern issues—including attorney’s fees—
arising out of the Supply Contract claims. In Transverse I, we said that it was “not entirely
clear whether Texas or Iowa contract law” applied, but because the parties agreed that the
law at issue was nearly identical, a resolution of the choice-of-law question was unnecessary.
On remand, the district court held that Texas law applies under the Supply Contract. IWS
now urges us to reverse and render on this point because it contends that Iowa law should
govern. In response, Transverse insists that IWS did not adequately raise the choice-of-law
issue in its first appeal and that it should be judicially estopped from bringing it now.
        Assuming arguendo that IWS adequately preserved this issue, the first question is
whether the Iowa and Texas law, in fact, conflict. Bailey v. Shell Western E&P, Inc., 609 F.3d
710, 722 (5th Cir. 2010) (explaining that, under Texas’s conflict-of-law rules, the initial
determination is whether Texas law conflicts with “other potentially applicable law”). During
the first appeal, IWS said that the analysis “of the legal insufficiency of the evidence on the
contract claims and damages” was the same under Iowa or Texas law. Now, IWS again does
not articulate or even identify a conflict between Texas or Iowa law, so our choice-of-law
analysis necessarily stops. Accordingly, we will not reach this issue. See, e.g., R.R. Mgmt.
Co. v. CFS La. Midstream Co., 428 F.3d 214, 222 (5th Cir. 2005) (“Where there are no
differences between the relevant substantive laws of the respective states, there is no conflict,
and a court need not undertake a choice of law analysis.”); Vandeventer v. All Am. Life & Cas.
Co., 101 S.W.3d 703, 711–12 (Tex. App.—Fort Worth 2003, no pet.) (“In the absence of a true
conflict, we need not undertake a choice-of-law analysis.”).

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favor that reasonable jurists could not reach a contrary conclusion.’”        Id.
(quoting Omnitech Int’l, Inc. v. Clorox Co., 11 F.3d 1316, 1322 (5th Cir. 1994)).
                                      III.
                                       A.
      We begin with the breach of the Supply Contract. The issue here is
Transverse’s damages award. The jury originally awarded Transverse $10
million in lost profits and $1.7 million in reliance damages based on IWS’s
breach of the Supply Contract. On the first appeal, we vacated the $10 million
award because we determined that Transverse could only recover lost profits
for a two-year period, not a ten-year period. We also explained that Transverse
“may not recover its lost profits and reliance damages for the same breach.”
Accordingly, we “vacate[d] the $10 million award and remand[ed] for a
determination of the proper amount of lost profits and, if necessary, an election
between lost profits and reliance damages, consistent with this opinion.”
      On remand, Transverse did not argue for damages based on lost profits
over a two-year period but rather elected a reliance damages award. Thus, the
district court awarded Transverse $1.7 million in reliance damages. IWS
asserts that Transverse failed to prove reliance damages as a matter of law.
In response, Transverse argues that IWS made the same arguments during its
first appeal, and this court rejected those arguments. It insists that IWS
cannot re-litigate issues such as causation and proof of damages.
      “[A]n issue of law decided on appeal may not be reexamined . . . by the
appellate court on a subsequent appeal.” Med. Ctr. Pharm. v. Holder, 634 F.3d
830, 834 (5th Cir. 2011) (footnote omitted) (quoting United States v. Lee, 358
F.3d 315, 320 (5th Cir. 2004)).       In our first opinion, we said, without
reservation, that “Transverse may collect on its breach-by-termination claim.”
We gave Transverse an express choice: prove lost profits based on the
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appropriate time period or accept reliance damages, and Transverse chose
reliance damages. IWS objected to the reliance damages award during the first
appeal, and those challenges failed as we explained that it was “a
quintessential case for reliance damages.”
      “The rule of the law of the case is a rule of practice, based upon sound
policy that when an issue is once litigated and decided, that should be the end
of the matter.” United States v. U.S. Smelting Ref. & Min. Co., 339 U.S. 186,
198 (1950). IWS may not challenge, for a second time, the propriety of the
reliance damages award. Accordingly, we affirm the district court’s judgment
for Transverse for $1.7 million in reliance damages.
                                      B.
      The next issue is whether the district court, on remand, erred in
awarding no damages to Transverse based on IWS’s breach of the non-
disclosure agreement. In Transverse I, we determined that IWS did breach the
non-disclosure agreement by providing Info Directions with designated
“Confidential Information”—the “User Acceptance Test” document and
meeting notes. Originally, the district court had concluded that IWS did not
breach the non-disclosure agreement, so it did not reach the issue of damages.
Therefore, we remanded for the district court “to evaluate the evidence and
testimony presented at trial and determine the appropriate amount of
damages to award, if any.” We explained that we had “doubts about the
reliability and sufficiency of evidence Transverse presented at trial about the
damages caused by the disclosure.” On remand, after evaluating again “the
evidence and testimony presented at trial,” the district court determined that




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“Transverse has no cognizable damages for breach of the NDA as a matter of
law.”
        On appeal, Transverse asserts that it did establish damages based on
the diminished value of the blee(p) technology due to IWS’s disclosure to
Transverse’s competitor. Transverse insists that the district court should have
used the “very flexible” law of damages for trade secret misappropriation here
and allowed Transverse to prove damages based on the diminished market
value of blee(p). According to Transverse, “[b]lee(p)’s diminished market value
is a proper means of measuring Transverse’s damages for IWS’s non-disclosure
agreement breach because IWS’s wrongful disclosure to a Transverse
competitor severely diminished or destroyed the secrecy of its main asset.”
        Even assuming arguendo that the diminished market value of blee(p) is
an appropriate measure of damages in this case, the district court correctly
determined that Transverse failed to establish any lost value to blee(p) based
on IWS’s disclosure of the User Acceptance Test document and meeting notes.
On this record, there is not legally sufficient evidence that the purported lost
value to blee(p) resulted from IWS’s specific disclosure. As just one example,
even though Transverse’s damages expert testified that a percentage of
blee(p)’s features were described in the disclosure, there was no testimony that
blee(p)’s source code was disclosed to its competitor, and there was no evidence
that IWS’s disclosure prevented Transverse from developing and selling the
blee(p) software. In fact, as the district court observed, Transverse conceded
that it abandoned marketing blee(p) software for reasons other than IWS’s




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breach of the non-disclosure agreement. Accordingly, we affirm the district
court’s take-nothing judgment for Transverse. 3
                                              C.
       Transverse brought three tort claims also based on IWS’s breach of the
non-disclosure agreement.          Transverse asserted that IWS disclosed trade
secrets in violation of its confidential relationship with Transverse and
misappropriated them by disclosing them to its competitor. Transverse also
brought a conversion claim and a claim under the Texas Theft Liability Act
based on this same conduct. Because the district court originally ruled that
IWS did not breach the non-disclosure agreement, it also ruled that IWS could
not be liable in tort for that conduct. In Transverse I, we held that IWS did
breach the non-disclosure agreement when it disclosed the User Acceptance
Test document and meeting notes, so we remanded to the district court to
consider whether IWS was liable under any of the tort theories pressed by
Transverse. We stated “no opinion on whether Transverse proved the elements
of any of its tort causes of action.”
       On     remand,      the    district    court     concluded      that    Transverse’s
misappropriation of trade secrets, conversion, and violation of the Texas Theft
Liability Act claims all failed. These claims, the district court reasoned, were



       3   Transverse also insists that the district court erroneously failed to consider its
development cost damages as an alternative damages model. Transverse, however, did not
assert this theory of recovery at trial. The jury awarded the $9.3 million under the
“Transverse’s Lost blee(p) Value” category, not a category assessing the development costs
avoided by IWS. Transverse’s damages expert did not testify about development costs.
Transverse can only point to one remark by its chief operating officer as to the amount of
money spent by Transverse. Because Transverse failed to argue for development costs during
trial, it has forfeited this argument. See F.D.I.C. v. Mijalis, 15 F.3d 1314, 1327 (5th Cir.
1994) (“As we have held, if a litigant desires to preserve an argument for appeal, the litigant
must press and not merely intimate the argument during the proceedings before the district
court.”).
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all based on IWS’s disclosure, and the damages sought were the same sought
in its claim for breach of the non-disclosure agreement. Because IWS’s
disclosure resulted in no lost value to Transverse, the district court
determined, all of its tort claims failed.
      Proof of damages is an essential—and in this case missing—element of
each of Transverse’s three causes of action.            See Spear Mktg., Inc. v.
BancorpSouth Bank, 844 F.3d 464, 467 (5th Cir. 2016) (“To establish a claim
for theft of trade secrets under . . . the TTLA . . . , a plaintiff had to show [that]
. . . the plaintiff sustained damages as a result.”); Daniels Health Scis., L.L.C.
v. Vascular Health Scis., L.L.C., 710 F.3d 579, 583 (5th Cir. 2013) (“To
establish   trade    secret   misappropriation     in   Texas,     a   plaintiff   must
show ‘. . . damages.’” (quoting Taco Cabana Int’l, Inc. v. Two Pesos, Inc., 932
F.2d 1113, 1123 (5th Cir. 1991))); United Mobile Networks, L.P. v. Deaton, 939
S.W.2d 146, 147 (Tex. 1997) (“A plaintiff must prove damages before recovery
is allowed for conversion.”). Because we agree with the district court that
IWS’s disclosure resulted in no lost value to Transverse, we also agree that
Transverse’s misappropriation of trade secrets, conversion, and Texas Theft
Liability Act claims fail. Even assuming arguendo that the “flexible” damages
approach of trade secret misappropriation applies, Transverse failed to prove
damages, and so all three of these claims necessarily fail. See, e.g., Carbo
Ceramics, Inc. v. Keefe, 166 F. App’x 714, 724–25 (5th Cir. 2006) (affirming the
district court’s grant of summary judgment because the plaintiff “failed to meet
its burden of presenting sufficient evidence . . . as to actual damages
recoverable under its trade secret misappropriation claim”).
                                         D.
      Next is attorney’s fees and costs. When we remanded this case to the
district court, we instructed the district court to consider “the attorney’s fees
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for both parties upon timely filed motions,” and our judgment ordered that each
party bear its own costs on appeal. One issue is whether IWS is a prevailing
party under the Texas Theft Liability Act. The district court determined that
IWS is not a prevailing party, but IWS insists that it is the prevailing party
and thus entitled to a mandatory award of attorney’s fees and costs under the
Texas Theft Liability Act.
      The Texas Theft Liability Act provides that “[e]ach person who prevails
. . . shall be awarded court costs and reasonable and necessary attorney’s fees.”
Tex. Civ. Prac. & Rem. Code § 134.005(b). The Texas Theft Liability Act “can
provide the basis for an attorneys’ fee award if [the Texas Theft Liability Act]
supplies the rule of decision.” Spear Mktg., 844 F.3d at 470 (emphasis added).
“Texas courts have interpreted ‘prevails’ to include parties who successfully
defend against a TTLA claim, such as achieving a dismissal with prejudice.”
Id. at 470 n.6. However, “[a] defendant who has the claims against him
resolved by voluntary dismissal without prejudice generally is not considered
a prevailing party or entitled to an award of attorney’s fees.” Arrow Marble
LLC v. Estate of Killion, 441 S.W.3d 702, 706–07 (Tex. App.—Houston [1st
Dist.] 2014, no pet.).
      Transverse argues that IWS is not a prevailing party because the Texas
Theft Liability Act was not the “rule of decision.” However, Transverse’s Texas
Theft Liability Act claim failed on its own merits. Regardless of whether the
tort claims are subsumed under the terms of the non-disclosure agreement,
IWS’s disclosure resulted in no lost value to Transverse, and damages are a
necessary element of a Texas Theft Liability Act claim. IWS is a prevailing
party because it “successfully defend[ed] against a TTLA claim.” See Spear
Mktg., 844 F.3d at 470 n.6. The parties’ legal relationship changed to IWS’s
benefit: IWS cannot again be sued by Transverse for claims arising out of the
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same subject matter. Therefore, IWS is the prevailing party and is entitled to
a mandatory award of attorney’s fees and costs. See Tex. Civ. Prac. & Rem.
Code § 134.005(b).
      The next issue is whether IWS is entitled to the costs of the premiums
for its supersedeas bond from its first appeal. The district court originally
entered judgment in favor of Transverse, and IWS procured a supersedeas
bond to stay execution of the judgment. On the first appeal, we vacated the
district court’s judgment for Transverse. We ordered that each party bear its
own costs on appeal. The district court, on remand, denied IWS’s motion for
the costs of the premiums for its supersedeas bond.
      The district court correctly determined that, under the law of the case, it
does not have discretion to award appellate costs. Federal Rule of Appellate
Procedure 39 provides that “if a judgment is affirmed in part, reversed in part,
modified, or vacated, costs are taxed only as the court orders.” We did order:
that each party bears its own costs, which includes the premiums for a
supersedeas bond. Therefore, the district court did not err in denying IWS’s
motion.
                                      IV.
      In sum, we now hold that the district court was correct in awarding
reliance damages to Transverse based on its breach of the Supply Contract
claim; in awarding no damages to Transverse based on its breach of the non-
disclosure agreement claim and its three related tort causes of action; and in
determining that IWS is not entitled to the costs of the premiums for its
supersedeas bond.
      Accordingly, we now AFFIRM in part, and we VACATE the district
court’s judgment only as to Transverse’s take-nothing judgment on its Texas
Theft Liability Act claim because IWS is the prevailing party and REMAND
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because IWS is entitled to a mandatory award of costs and attorney’s fees on
this claim.




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