N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
JOSHUA DAVID M ELLB ER G LLC , DB A JD M e llbe rg Fina

n c ia l, a n Ariz ona lim i te d lia bility c om pa ny ; JOSHUA DAVID M ELLB ER G, a

n individual, Pla i ntiffs-c ounte rde fe nda nts-Appe l la

nts,
v. JOVAN W ILL, a

n individual; TR

EE FINE, an individual; FER N ANDO GODINEZ; C ARLY URE TZ,

De fe nda n ts-Appe lle e s, IM PAC T PAR TNER SHIP LLC , a Ge orgia lim i te d lia bility c om pa ny , De fe nda n t-c ounte r-c la im antAppe lle e , and JOHN STEVE AR

EC O; JANE DOE AREC O; JANE DOE GODINEZ; PATR IC IA LATHAM ; JOHN DOE LATHAM ; JOHN DOE UR ETZ, No. 20-16215

D.C . No. 4:14-c v-02025-C KJ-LC K
M EM O R ANDUM * 

# FIL ED

SEP 30 2021 M OLLY C. DW Y E R, CLERK U. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public at ion a

nd is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3.De fe nda n ts.
JOSHUA DAVID M ELLB ER G LLC , DB A JD M e llbe rg Fina

n c ia l, a n Ariz ona lim i te d lia bility c om pa ny ; JOSHUA DAVID M ELLB ER G, a

n individual, Pla i ntiffs-c ounte rde fe nda nts-Appe l le e s,
v. JOVAN W ILL, a

n individual; TR

EE FINE, an individual; FER N ANDO GODINEZ; C ARLY URE TZ; JOHN STEVE AREC O; JANE DOE AR EC O; JANE DOE GODINEZ; PATR IC IA LATHAM ; JOHN DOE LATHAM ; JOHN DOE URETZ,

De fe nda n ts,
and IM PAC T PAR TNER SHIP LLC , a Ge orgia lim i te d lia bility c om pa ny , De fe nda n t-c ounte r-c la im antAppe lla nt. No. 20-16216 D.C . No. 4:14-c v-02025-C KJ-LC K

Appe a l from

the Unite d

Stat e s Distric t C ourt for the Distric t of Ariz o na C indy K. Jorge nson, Distric t Judge , Pre s iding

2A rgue d a nd Subm itte d

Se pte m be r 1, 2021 San Fran c isc o , C a lifornia B e fore : SC HR OEDER , R AW LINSON, a

nd B Y B EE, C irc uit Judge s. Appe lla nts Joshua

M e llbe rg and his c om

pa ny , Joshua

David M e llbe rg, LLC (JDM ) file d this a c tion a ga inst form e r e m ploy e e s a nd the ir c om

pa ny , Im p a c t, for
m isa p propria tion of tra de se c re ts, a

nd unjust enric hm e n t. The distric t c ourt gra nte d
sum m ary judgm e nt to de fe n da

n ts a nd we a ffirm . W e a lso a ffirm the distric t
c ourt’ s gra

nt of sum m ary judgm e nt to pla intiffs on de fe nda nts’ c ounte rc la im
. Sum m a ry judgm e nt wa s a

ppropria te on the tra de se c re t c l a im be c a use pla i ntiffs fa ile d

to e sta blish de fe nda

nts’ c onduc t c a

use d a ny dam a ge s. To support the i r c l a im of m one ta

ry loss in e xc e ss of $16 mi llion from the loss of thetra de
se c re ts, pla intiffs offe re d the e xpe rt opinion of Ly nton Kotz in. His opinion
a ssum e d lia bility on the pa rt of the de fe nda

nts a n d opine d only

on the am ount of dam a ge s. The re wa s no e v i de nc e tha t de fe nda nts c a u se d pla intiffs to lose posse s sion of the ir tra de se c re ts, or inde e d tha t the inform ation wa s no longe r c onta ine d on pla intiffs’ se rve r ne twork. M ore o ve r, the re wa s undispute d e vide nc e that de fe n da nt Fine and one of pla intiffs’ e m ploy e e s uploa de d the data on Fine ’ s c om pute r to the pla intiffs’ ne twork in orde r to pre se rve it. The re wa s thus no showing tha

t de fe nda n ts c a use d pla intiffs m one ta

ry dam a ge s from

the loss of

3tra de se c re t da ta and sum m ary judgm e nt for the de fe nda nts wa s a ppropria te . Se e C e lote x C orp. v . C atre tt , 477 U.S. 317, 322-23 (1986). W ith re spe c t to thec la i m

of unjust e nric hm e nt, pla intiffs ha d offe re d no dam a ge c a lc ulation a s of the tim e disc ove ry c l ose d. The y

offe re d a supple m e nta l de c la ra tion from

M e llbe rg a

y e ar late , a

nd it re pre se nte d no m ore tha n his la y opinion tha

t de fe nda nts ha d be e n unjustly

e nric he d by

m ore tha n $27 m i llion. The distric t c o urt sa

nc tione d pla intiffs by

e xc l uding thelate dam a ge c a lc ulation. This
wa s within its disc

re tion pursua

nt to FR C P 37 (c ) (1), a fte r it took into a c c ount the le ngth of thede la

y and the pre

judic e it would c a

use . R ule 26a (1)(A)(iii) re quire s a c om puta tion of e a c h c a te gory

of da m a ge s a nd m aking a

va ila ble the supporting
e vide ntia ry m a te ria l. It is not enough to re ly on ge ne ra l a lle gations of the
c om pla i nt, a s pla intiffs a

tte m p t to a rgue on a ppe a l. Fe d. R . C iv. P. 26a (1)(A)(iii) (re quiring “ a

c om p utation of e a c h c ate gory of da m a ge s c l a im e d” ); se e R & R Sails, Inc
. v . Ins. C

o. of Pe nnsy lv ania , 673 F.3d 1240, 1243, 1246-47 (9th Cir. 2012). The re wa s a lso no a

buse of disc re tion in the distric t c ourt’ s de nia l of pla i ntiff’ s m otion for sa

n c tions for spolia

tion of e vide n c e re lating to the
re form a tting of de fe nda

nts’ c om pute rs. B e c a

use the pla i ntiffs c ould not prove dam a ge s in a

ny e ve nt, the c om

pute rs we re no longe r m ate ria l a nd the spolia

tion
c la im wa s m oot. Sim ila

rly , without a

showing of ha

rm re quisitefor suc c e ss on the
4m e rits, the pla i ntiffs we re not e ntitle d to pe rm ane nt injunc tive re lie f. Se e Edmo v
.

C orizon, Inc
. , 935 F.3d 757, 784 (9th C ir. 2019). M e llbe rg’ s c la im

a ga inst de fe nda

nt W ill re lat e s to the a lle ge d m isha ndling of funds be longing to the L LC , a nd wa s a ppropria te ly dism isse d for fa ilure to
c om ply with thesta

tutory re quire m e nts pe rta ining to derivative suits se t forth in A.R .S. § 29-831(2)-(3). The m a gistra te judge ’ s de c ision to rai se this issue s ua sponte a t sum

m ary judgm e nt did not re sult in pre judic e be c a

use M e llbe rg ha d the opportunity

to re spond in his supple

m e nta l brie fing be fore the m a gistra te judge
. Se e Riv e ra v . Anay a , 726 F.2d 564, 566 (9th C ir. 1984) (“ [A] b se n t pre judic e to the pla i ntiff, a

de fe nda n t m ay ra ise an a ffirm ative de fe nse in a m otion for sum

m ary judgm e nt for the first tim e ” ). De fe nda nt Im pa c t’ s c ounte rc la im

for fa l se a dve rtising under the La nham Ac t, 15 U.S.C . § 1125(a )(1)(B ), wa s not supporte d by any suffic ie n t showing of
m a te ria l ity
. Se e Southland Sod Farms v . Stov e r Se e d C o. , 108 F.3d 1134, 1139 (9th C ir. 1997). AFFIRM E D.

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