UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION

GIDDY HOLDINGS, INC.,

 Plaintiff / Counter-Defendant,

vs.

ERNEST KIM,

 Defendant / Counter-Plaintiff,

vs.

BRETT JACOBSON,

 Counter-Defendant.

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No. 1:20–CV–434–DAE

ORDER MODIFYING IN PART BUT OTHERWISE 

ADOPTING REPORT AND RECOMMENDATION

Before the Court is a Report and Recommendation (“R&R”) filed by 

Magistrate Judge Mark Lane (“Judge Lane” or the “Magistrate Judge”) on March 

9, 2022. (Dkt. # 79.) All pretrial motions in this case were referred to Judge Lane. 

(Dkt. # 28.) The R&R pertains to four of the five1 pending motions in this case. 

(Dkts. ## 47, 66, 67.) Notice of the R&R was sent to the parties on March 9, 2022. 

1 This R&R does not pertain to Defendant / Counter-Plaintiff Ernest Kim’s Motion

in Limine. (Dkt. # 77.)

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(Dkt. # 79.) Objections were due within fourteen (14) days after being served with 

a copy. On March 23, 2022, Defendant / Counter-Plaintiff Ernest Kim (“Kim”)

timely filed Objections to the Magistrate Judge’s R&R (“Objections”). (Dkt. 

# 80.) No other party timely filed objections.

The Court finds its review of the R&R suitable for disposition without 

a hearing. After careful consideration, and for the reasons given below, the Court 

MODIFIES IN PART BUT OTHERWISE ADOPTS the Magistrate Judge’s 

R&R. (Dkt. # 79.)

LEGAL FRAMEWORK

The Court must conduct a de novo review of any of the Magistrate 

Judge’s conclusions to which a party has specifically objected. See 28 U.S.C. 

§ 636(b)(1)(C) (“A judge of the court shall make a de novo determination of those 

portions of the report or specified proposed findings or recommendations to which 

objection is made.”). The objections must specifically identify those findings or 

recommendations that the party wishes to have the district court consider. 

Thomas v. Arn, 474 U.S. 140, 151 (1985). A district court need not consider 

“[f]rivolous, conclusive, or general objections.” Battle v. U.S. Parole Comm’n, 

834 F.2d 419, 421 (5th Cir. 1987). Findings to which no specific objections are 

made do not require de novo review; instead, the Court need only determine 

whether the R&R is clearly erroneous or contrary to law. United States v. Wilson, 

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864 F.2d 1219, 1221 (5th Cir. 1989). “A judge of the court may accept, reject, or 

modify, in whole or in part, the findings or recommendations made by the 

magistrate judge.” 28 U.S.C. § 636(b)(1)(C).

DISCUSSION

Kim objects to Judge Lane’s findings that (1) Plaintiff / Counter 

Defendant Giddy Holdings, Inc., (“Giddy”) is entitled to summary judgment on its 

Computer Fraud and Abuse Act (CFAA) and Texas Harmful Access by Computer 

Act (THACA) claims; (2) Giddy is entitled to summary judgment on its breach of 

contract claim; (3) Giddy is entitled to summary judgment on its libel per se claim; 

(4) Giddy is entitled to summary judgment on its trade secret misappropriation and 

breach of fiduciary duty claims; and (5) Counter Defendant Brett Jacobson’s

(“Jacobson”) motion to strike Kim’s Second Amended Counterclaims should be 

granted. (Dkt. # 80.) The Court modifies Judge Lane’s findings on Giddy’s

CFAA, THACA, misappropriation, breach of fiduciary duty, breach of contract,

and libel per se claims and adopts Judge Lane’s findings on Giddy’s conversion 

claim and on Jacobson’s motion to strike. 

I. CFAA and THACA

Judge Lane concluded that Giddy was entitled to summary judgment 

on its CFAA and THACA claims. Kim’s sole objection to Judge Lane’s findings

on these claims is that Giddy failed to prove damages because it “provided only 

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conclusory, general statements of nonspecific harm . . . .” (Dkt. # 80 at 6.) In 

support of its CFAA and THACA Giddy submitted the deposition testimony and 

declaration of Jacobson, Giddy’s founder and CEO, that Kim deleted company 

data worth hundreds of thousands of dollars that cost “over $200,000 to recreate.”

(Dkt. ## 66-1 at 18, 66-4 ¶ 14.) This figure is only a portion of the damages 

Jacobson estimates the company has suffered so far. (See dkt. # 66-4 ¶ 16 

(estimating total damages are $1.2 million dollars and that the number continues to 

grow)). Jacobson’s testimony describes the damage Giddy suffered and how that 

damage was caused by Kim’s alleged data deletion. (Dkt. # 66-4 ¶¶ 13–15.) On 

the other hand, Kim stated in his declaration that he “did not transfer, delete[,] or 

hide any data, information[,] or company emails from Giddy” after his termination. 

(Dkt. # 68-1 ¶ 24.)

Witness credibility is not an issue to be resolved at the summary 

judgment stage. See Lodge Hall Music, Inc. v. Waco Wrangler Club, Inc., 831 

F.2d 77, 81 (5th Cir. 1987). Thus, the Court will not determine the relative 

credibility of Kim’s and Jacobson’s testimony—such a determination is reserved 

for the fact finder. Because there is conflicting testimony regarding whether Kim 

deleted files after his termination, summary judgment is not appropriate in favor of 

either party. After reviewing the summary judgment evidence on Giddy’s CFAA 

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and THACA claims de novo, the Court finds that summary judgment should be 

DENIED.

II. Breach of Contract and Libel per se

Giddy argues it is entitled to summary judgment on its breach of 

contract claim because Kim allegedly disparaged the company on Twitter after his 

termination. Giddy claims it suffered damages as a result of this breach because an 

investor “pulled back $300,000 in funding due to [Kim’s] Twitter comments and 

the potential consequences.” (Dkt. 66 at 14.) Kim argues summary judgment 

would be improper because there is insufficient evidence that (1) he breached his 

contract with Giddy by disparaging it; and (2) his breach, if any, caused Giddy’s

$300,000 loss. (Dkt. # 68 at 15–17.) The Court agrees. 

In its motion for summary judgment, Giddy claims “[i]t would be 

clear to anyone reading the tweets with knowledge of Defendant and who he 

worked for that Defendant was talking about Giddy.” (Dkt. # 66 at 15.) But the 

only evidence Giddy submits in support of this claim is Jacobson’s unsubstantiated 

testimony that some of Giddy’s investors were troubled by the comments and that 

one investor withdrew funding. (Dkt. ## 66-1 at 4–5, 66-4 ¶ 17.) This evidence is 

not sufficient to entitle Giddy to summary judgment. See Ragas v. Tennessee Gas 

Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998) (“[U]nsubstantiated assertions are 

not competent summary judgment evidence.”).

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While Giddy is correct that Kim’s tweets need not identify Giddy by 

name, it is not clear from the evidence that those who “knew and were acquainted 

with” Giddy would know from Kim’s tweets that he was referring to Giddy. See

Newspapers, Inc. v. Matthews, 339 S.W.2d 890, 894 (1960) (“[I]t is not necessary 

that the individual referred to be named if those who knew and were acquainted 

with the plaintiff understand from reading the publication that it referred to 

plaintiff.”). In short, there is a genuine dispute as to whether those familiar with 

Giddy would understand that it was the target of Kim’s messages even though Kim 

did not mention the company’s name.

Summary judgment in Giddy’s favor is improper on its libel per se 

claim for the same reason it is improper on Giddy’s breach of contract claim. 

Namely, there is a genuine issue of material fact regarding whether someone 

acquainted with Giddy would understand from Kim’s tweets that he was talking 

about Giddy despite the fact that he did not mention the company by name. Thus, 

Giddy’s motion for summary judgment on its breach of contract and libel per se 

claims is DENIED. The Court finds that neither party is entitled to summary 

judgment on those two claims.

III. Misappropriation and Breach of Fiduciary Duty

Kim argues Giddy is not entitled to summary judgment on its 

misappropriation and breach of fiduciary duty claims because Giddy failed to 

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“identify what trade secrets were misappropriated, how they were used by Kim, 

and how that caused specific harm” to Giddy. (Dkt. # 80 at 13.) Giddy claims it 

was harmed by Kim’s alleged deletion of data and his “tweeting false accusations 

of fraud and discrimination.” (Dkt. # 66 at 16–17.) Again, there is a factual 

dispute. 

As the Court already discussed above, there is a genuine dispute 

regarding whether Kim deleted documents as Giddy suggests. And the only

evidence Giddy cites in support of its claim that investors withdrew funding 

because of Kim’s tweets is Jacobson’s deposition testimony that one investor’s 

reason for withdrawing his investment was “[t]he Twitter comments and not 

knowing what the consequences of those would be” and Jacobson’s declaration 

that “multiple potential and current Giddy investors reached out to [him]

personally” reporting that they saw Kim’s tweets. (Dkt. ## 66-1 at 4–5, 66-4 ¶ 17.) 

Because the Court finds that, should this evidence be admitted at trial, a rational 

trier of fact could choose not to believe Jacobson’s testimony and conclude that the 

investor withdrew funding for another reason, summary judgment is not 

appropriate. See Hillman v. Loga, 697 F.3d 299, 302 (5th Cir. 2012) (stating 

summary judgment is proper where a rational trier of fact could find only for the 

moving party).

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After viewing the evidence in the light most favorable to Kim, as the 

Court must, it finds that Jacobson’s unsubstantiated account of investors’ reactions 

to Kim’s comments is not enough to entitle Giddy to summary judgment on its 

misappropriation and breach of fiduciary duty claims. And, as already discussed, 

there is a dispute surrounding Kim’s alleged deletion of data. Thus, summary 

judgment on these two claims is DENIED. 

IV. Motion to Strike

As Judge Lane observed (and Kim concedes) this Court allowed Kim 

the opportunity to “amend his fraud claim to the extent it relates to the details of 

his termination . . . .” (Dkt. # 61 at 14.) Rather than addressing a fraud claim 

related to the details of his termination, Kim’s second amended counterclaim deals 

exclusively with alleged fraud in the hiring process. (Dkt. # 65 ¶¶ 36–51.) 

Because Kim’s amended fraud claim goes beyond what he was granted leave of 

court to file, Jacobson’s motion to strike is GRANTED. Should Kim wish to 

refile an amended counterclaim, he must seek leave of court to do so. Because the 

Court grants Jacobson’s motion to strike, his alternative motion to compel 

arbitration is MOOT.

V. Conversion

No party timely objected to Judge Lane’s conclusion that summary 

judgment should be granted in Kim’s favor on Giddy’s conversion claim. Thus, 

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the Court reviews Judge Lane’s findings on this claim only to determine if they are 

clearly erroneous or contrary to law. Wilson, 864 F.2d at 1221. Because the Court 

finds that Judge Lane’s findings on Giddy’s conversion claim are neither clearly 

erroneous nor contrary to law, the Court ADOPTS those findings and GRANTS

summary judgment in Kim’s favor on Giddy’s conversion claim.

CONCLUSION

Except as otherwise MODIFIED in this Order, the Court ADOPTS 

the R&R as the opinion of the Court. (Dkt. # 79.) Kim’s Motion for Summary 

Judgment is DENIED IN PART AND GRANTED IN PART—the motion is 

GRANTED on Giddy’s conversion claim but is DENIED in all other respects. 

(Dkt. # 47.) Giddy’s Motion for Summary Judgment is DENIED. (Dkt. # 66.) 

Jacobson’s Motion to Strike Counterclaim or in the Alternative Motion to Compel 

Arbitration is GRANTED IN PART AND DENIED AS MOOT IN PART—the 

motion to strike is GRANTED and the motion to compel arbitration is DENIED 

AS MOOT. (Dkt. # 67.)

IT IS SO ORDERED.

DATED: Austin, Texas, March 30, 2022.

______________________________________

David Alan Ezra

Senior United States District Judge

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