### In the 

# United States Court of Appeals For the Seventh Circuit

____________________ Nos. 19-1528 & 19-1613

E PIC S YSTEMS C ORP ., Plaintiff/Counterclaim Defendant-Appellee/Cross-Appellant

,

v.

T ATA C ONSULTANCY S ERVICES L TD

. & T ATA A MERICA I NTERNATIONAL C ORP

. d/b/a TCS A MERICA, Defendants/Counterclaim Plaintiffs-Appellants/Cross-Appellees

.

____________________ Appeals from the United States District Court for the Western District of Wisconsin. No. 14-cv-748 — William M. Conley

, Judge

.

____________________

A RGUED J ANUARY 16, 2020

— D ECIDED A UGUST 20, 2020

____________________

Before F LAUM, M ANION, and K ANNE , Circuit Judges

. K ANNE , Circuit Judge . Without permission from Epic Systems, Tata Consultancy Services (“TCS”) 1 downloaded, from

1 Tata Consultancy Services Limited is an Indian company; Tata America International Corp. is a New York corporation that is wholly owned by Tata Consultancy Services. We refer to these companies collectively as “TCS.”2 Nos. 19-1528 & 19-1613

2012 to 2014, thousands of documents containing Epic’s confi dential information and trade secrets. TCS used some of thisinformation to create a “comparative analysis”—a spreadsheet comparing TCS’s health-record software (called “Med Mantra”) to Epic’s software. TCS’s internal communications show that TCS used this spreadsheet in an a tt empt to enter the United States health-record- software market, steal Epic’sclient, and address key gaps in TCS’s own Med Mantra software. Epic sued TCS, alleging thatTCS unlawfully accessed and used Epic’s con fi dential information and trade secrets. A jury ruled in Epic’s favor on all cl aims, including multiple Wisconsin tort claims. The jury then awarded Epic $140 million in compensatory damages, for the bene fi t TCS received from using the comparative-analysis spreadsheet; $100 million for the bene fi t TCS received from using Epic’s other con fi dential information; and $700 million in punitive damages for TCS’s conduct. Ruling on TCS’s motions for judgment as a ma tt er of law, the district court upheld the $140 million compensatory award and vacated the $100 million award. It then reduced the punitive-damages award to $280 million, re fl ecting Wisconsin’s statutory punitive-damages cap. Both parties appealed di ff erent aspects of the district court’s rulings. We agree with the districtcourt that there is su ffi cient evidence for the jury’s $140 millio n verdict based on TCS’s useof the comparative analysis, but not for the $100 million verdict for uses of “other information.” We also agree with the district court that the jury co uld punish TCS by imposing punitive damages. But the $280 million punitive-damages award is constitutionally excessive, so we remand to the districtNos. 19-1528 & 19-1613 3

court with instructions to reduce the punitive-damages award.

I. B ACKGROUNDEpic Systems is a leading developer of electronic-healthrecord software. This software aims to improve patients’ quality of care by keeping releva nt information about patients— like patient schedules and billin g records—in a central location. Epic provides versions of this software to some of the top hospitals in the United States . Each customer licenses from Epic software applications (modules) to fi t the customer’s speci fi c needs. The customer can then customize the software toensure it operates properly within the customer’s organizational structure. The complexity of Epic’s health-record system requiresEpic’s customers to consistently update and test their systems. To facilitate this process, Epic provides its customerswith access to a web portal called “UserWeb.” UserWeb provides various resources—including administrative guides,training materials, and software updates—and it also supplies an online forum where Ep ic’s customers can share information. Along with these helpful resources, UserWeb contains

con fi dential information about Epic’s health-record software. To protect this information, Ep ic restricts who can access theUserWeb portal. Epic’s customers, who have access, are required to maintain the con fi dentiality of this information, and they are expected to allow speci fi c individuals access to this sensitive information on a “need-to-know” basis only. To guard this con fi dentiality, Epic allows only credentialed users to access UserWeb; to get credentialed, users must4 Nos. 19-1528 & 19-1613

prove they are either a custom er or a consultant. Customersget access to all features and documents related to the modules they license from Epic. Consultants—who are hired bycustomers to implement and test Epic’s software—cannot access features like the discussion forum and training materials. In 2003, Kaiser Permanen te—the largest managedhealthcare organization in the United States—obtained a license from Epic to use KP HealthConnect, a Kaiser-speci fi c version of Epic’s electronic-hea lth-record software. Because of Kaiser’s size, implementation of KP HealthConnect is highlycomplex; testing and tweaking it after each update is complicated and time consuming. For help with these tasks, Kaiser hired TCS in 2011. TCS provides information-technology services, like software testing and consulting, on a global basis. But TCS also has its own electronic-health-record software, Med Mantra, which at the time was predominately sold in India. Epic was aware of this con fl ict of interest and was concerned about TCS’s relationship with Kaiser. Still, Kaiser used TCS to test KP HealthConnect. But to ful fi ll its obligation of

con fi dentiality to Epic, Kaiser im posed rules for TCS to follow while working on Kaiser’s account. First, TCS was required to perform all services related to KP HealthConnect at Kaiser o ffi ces in the United States or o ff

shore development centers—approved facilities outside the United States.Second, TCS was required to follow strict security protocols at the o ff shore development centers. Desktop computers used to work on KP HealthCo nnect could be used only for Kaiser-related work. To ensu re these computers could notNos. 19-1528 & 19-1613 5

access the internet or TCS’s email system, a fi rewall was installed. Other computers at the o ff shore facilities could accessTCS’s network and email system but were not allowed to access KP HealthConnect material.TCS, while operating under these strict requirements, provided testing and support services to Kaiser. But TCS employees claimed they could perform the required tasks more e ffi

ciently if they had full access to UserWeb. Kaiser repeatedly asked Epic to grant TCS this a ccess; Epic repeatedly declined to do so.

Unsatis fi ed with this lack of access, in late 2011, TCS found a way to gain unfe tt ered access to all the information availableon UserWeb: the key was Ramesh Gajaram. TCS hired Gajaram to work on the Kaiser account from an o ff shore development center in Chennai, India. Before working for TCS, Gajaram worked for a di ff erent company that also helped Kaiser test KP HealthConnect. While working for that company, Gajaram falsely identi fi ed himself to Epic as a Kaiser employee, and Epic granted Gajaram full access to UserWeb. Gajaram informed his superior at TCS, Mukesh Kumar, that he still had access to User Web. At Kumar’s request, Gajaram accessed the UserWeb portal. Gajaram also shared his login credentials with other employees at the Chennai o ff

shore development center. A few years later, Gajaram transferred to TCS’s Portland, Oregon o ffi ce; he again shared hisUserWeb login credentials with at least one other TCS employee. Thanks to Gajaram’s actions, dozens of TCS employees gained unauthorized access to UserWeb. And from 2012 to 2014, TCS employees accessed UserWeb thousands of times6 Nos. 19-1528 & 19-1613

and downloaded over 6,000 documents (1,600 unique documents) totaling over 150,000 pages. These documents contained Epic’s con fi dential information, including some of its trade secrets. And not all of this information related to TCS’s work for Kaiser; employees downloaded information related to a medical-laboratory module that Kaiser does not license from Epic. This unauthorized access came to light in early 2014, when Philip Guionnet, a TCS employee, a tt ended meetings concerning the Med Mantra software. At the fi rst meeting, Guionnetobserved a demonstration of Med Mantra for Kaiser executives. Guionnet was “astounded”; he had seen Med Mantraseveral times before and believed the software had dramatically improved. After this meeting, Guionnet was concerned that “some of the information from Kaiser ha d been used to improve MedMantra.” So, Guionnet visited the Med Mantra product development team. During his visit, a TCS employee showed Guionnet a spreadsheet that compared Med Mantra to Epic’selectronic-health-record software. The spreadsheet compared, in some detail, the functionalities of the two products. Guionnet believed this spreadsheet con fi rmed his suspicion that information regarding Kaiser’s version of Epic’s software had been used to improve Med Mantra. Guionnet then asked for a copy of this spreadsheet. What he received instead wasa less-detailed document referred to as the “comparative analysis.” The comparative analysis—a ke y document in this appeal—was created as a part of TCS’s e ff ort to see if it could sell Med Mantra in the United States. Speci fi cally, TCS wanted to sell Med Mantra directly to Kaiser, who was usingNos. 19-1528 & 19-1613 7

Epic’s software, and wanted to be sure that “key gaps” in Med Mantra were addressed before this a tt empted sale. So, TCS gave a consultant from the Me d Mantra team the task of creating a comparison between Med Mantra and Epic’s software. In doing so, this employee worked with “Subject Ma tt er Experts”—employees who had experience with Epic’s software—and created the comparative analysis that was ultimately sent to Guionnet. The comparative analysis is an 11-page spreadsheet that compares Med Mantra to Epic’s software. The fi rst page lists 33 modules, and it notes whether the module is available in Med Mantra and Epic’s software; the next 10 pages list Med Mantra’s functions and note whether Epic’s software contains the same functions. Multiple TCS employees con fi rmed thatthe information used in this comparative analysis is not publicly available. 2

Guionnet—after a tt ending these meetings and viewing the comparative analysis—reported his concerns in June 2014to TCS, Kaiser, and Epic employees. Epic and Kaiser immediately investigated Guionnet’s claim and discovered that TCS employees had gained unauthor ized access to UserWeb. But TCS employees were less than forthcoming during Kaiser’s investigation; multiple TCS employees lied to investigators about TCS’s access to UserWeb. A few months later, Epic fi led suit against TCS, alleging that TCS used fraudulent means to access and steal Epic’s

2 In fact, TCS was barred from arguing that the comparative analysis was created from information in publicly available sources because it failed to “direct the court to any evidence that the comparative analysis was created from such sources.”8 Nos. 19-1528 & 19-1613

trade secrets and other con fi dential information. During a contentious year-and-a-half discovery process, Epic learned that TCS had failed to preserve relevant evidence. The district court sanctioned TCS for its discovery failures by ultimately providing the jury with an adverse-inference instruction: If you fi nd by a preponderance of the evidence thatEpic has proven TCS both: (1) intentionally destroyed evidence (or intentionally caused evidence to be destroyed), and (2) caused the evidence to be destroyed in bad faith, then you may assume that this evidence contained information helpful to Epic and harmful to TCS. The district court bifurcated proceedings into a liability phase and a damages phase. The liability phase began in April 2016. The jury returned a verdict infavor of Epic on all claims, including those under Wisconsin law for breach of contract,fraudulent misrepresentation, misappropriation of trade secrets, unfair competition, deprivation of property, and unjust enrichment.Before the damages phase of trial, Epic presented the district court with evidence it sought to present to the jury regarding the bene fi t TCS received by using Epic’s con fi dential information and trade secrets. Ep ic’s expert, Thomas Britven, initially based his damages calculation on costs Epic incurred developing the modules underlying all the documents TCS stole. But the district court co ncluded that the evidence did not support Epic’s broad claims of the use to which TCS put the stolen information. The dist rict court accordingly rejected Epic’s initial damages pro ffer but gave Epic another opportunity to present evidence of TC S’s uses of the stolen information and the value of those uses to TCS.Nos. 19-1528 & 19-1613 9

Epic went back to the drawing board and returned to the district court with a new, more limited theory of damages. Britven based his new calculation on only the con fi dential information and trade secrets that were incorporated into the comparative analysis spreadsheet. This calculation still used a proxy for the bene fi t TCS received: the costs Epic incurred in developing these speci fi c software modules—accounting for coding costs that did not bene fi t TCS and technology decay over time. The district court accepted this “ratchet[ed]back” damages theory, noting the new calculation “more approximates what was actually received and apparently used by [TCS] both in the comparativ e model but also what were ongoing discussions by marketing people within [TCS].” During the damages trial, Epic presented two witnesses: Stirling Martin and Britven. M artin used a chart that both identi fi ed which Epic modules were re fl ected in TCS’s downloads and identi fi ed, with a checkmark, which of these modules were re fl ected in the comparative analysis. Martin testifi ed about what stolen information was incorporated into the comparative analysis. Britven then presented a calculation ofthe value TCS received by avoiding research and development costs they would have incurred without the stolen information. First, Britven identi fi ed how much it cost Epic to develop the modules related to the trade secrets and con fi dential information that made their way into the comparative analysis. Then, Britven adjusted this number based on certain coding costs (which conferred no bene fi t on TCS) and the decay in the value of technology over time. He reached an approximate bene fi t to TCS of about $200 million. TCS called its damages expert—Brent Bersin—to testify about the value of the bene fi t TCS received related to the10 Nos. 19-1528 & 19-1613

comparative analysis. Bersin testi fi ed that Epic was not entitled to an award of economic damages, but he also testi fi ed that Britven incorrectly calculated the damages. Speci fi cally, Bersin pointed out that Britven’ s calculation failed to account for reduced labor costs in India; TCS could pay its India-based engineers about 30% to 40% less than Epic would have to pay its engineers to develop the same software. At the end of the damages trial, the district court gave thejury a special-verdict form concerning compensatory damages. The jury was asked to determine the amount of damages, if any, to which Epic was entitled based on (a) the “Bene fi t of TCS’s Use of [the] Comparative Analysis,” and (b) the “Bene fi t of TCS’s Use of Other Con fi dential Information.” The jury was also asked to determine whether Epic should be awarded punitive damages, and if so, in what amount. The jury returned a $940 million total damages award: $140 million for uses of the comparative analysis, $100 million for uses of “other” con fi dential information, and $700 million in punitive damages. The district court entered an injunction prohibiting TCS from using, possessing, or retaining any of Epic’s trade secrets or con fi dential information.

The court then addressed seve ral post-trial motions, including TCS’s three motions for judgment as a ma tt er of law on liability and damages. Fed. R. Civ. P. 50(a). The district court upheld the jury’s liability verdict and its $140 million compensatory-damages award ba sed on TCS’s uses of the comparative analysis, which contained Epic’s information. But the district court struckthe $100 million compensatory award for “other uses” of Epic’s con fi dential information and also reduced the punitive-damages award to $280 millionNos. 19-1528 & 19-1613 11

based on a Wisconsin statutor y cap on punitive damages. See Wis. Stat. § 895.043(6).

TCS then fi led a post-judgment motion under Rules 50(b) and 59, again seeking judgment as a ma tt er of law, or in the alternative, a new trial. But this motion “largely repeat[ed] thesame arguments previously raised in [TCS’s] Rule 50(a) motion.” The district court denied this new motion, leaving intact the $140 million compensatory award based on the comparative analysis. It also upheld the previously reduced $280million punitive-damages award, noting that its prior decision to vacate part of th e compensatory-damages award “does not undermine the jury’s award of punitive damages.”

II. A NALYSIS Both parties appealed di ff erent aspects of the district court’s post-trial rulings. TCS challenges the district court’s decision to leave intact the $140 million compensatory award related to the comparative analysis. TCS also challenges the district court’s punitive damages decisions. On cross-appeal, Epic challenges the district court’s decision to vacate the $100 million compensatory award based on “other uses” of Epic’s

con fi dential information.

We fi rst note what law applies to these appeals. Jurisdiction in this case is based on diversity of citizenship and a federal question (with supplemental jurisdiction over the statelaw claims). When hearing stat e-law claims that arise under diversity jurisdiction, 28 U.S. C. § 1332, or supplemental jurisdiction, id. § 1367, federal courts are “obliged to follow state decisional law, as well as all other state law.” Houben v. Telular Corp. , 309 F.3d 1028, 1032 (7th Cir. 2002). And when a federal jury awards compensatory damages based on a state-law12 Nos. 19-1528 & 19-1613

claim, state law applies to our review of that damages award. Kaiser v. Johnson & Johnson , 947 F.3d 996, 1019 (7th Cir. 2020). Similarly, when state law provides the basis for liability, the punitive-damages award must be consistent with state law. See Kapelanski v. Johnson , 390 F.3d 525, 534 (7th Cir. 2004). Epic’s damages award for unju st enrichment was based on its claims under Wisconsin law for misappropriation of its trade secrets and con fi dential information. And its award of punitive damages had to be based on Epic’s Wisconsin law “trade secrets, fraudulent misrepresentation[,] and unfair competition claims.” Wisconsin law therefore applies to the parties’ substantive challenges of these damages awards. With that in mind, we address the parties’ challenges to the district court’s decisionsregarding compensatory damages. We then turn to TCS’s arguments concerning punitive damages. A. “Comparative Analysis” Compensatory AwardThe jury awarded Epic $140 million in compensatory damages based on the bene fi t TCS derived from using the comparative analysis, which contained some of Epic’s con fi dential information. The district court upheld this award on two occasions: fi rst, when ruling on TCS’s post-trial motion for judgment as a ma tt er of law, Fed. R. Civ. P. 50(a); and second,when ruling on TCS’s renewed motion for judgment as a matter of law, id. 50(b), and motion for a new trial, id. 59.We review a district court’s denial of a motion for judgment as a ma tt er of law de novo

. Empress Casino Joliet Corp. v. Balmoral Racing Club, Inc. , 831 F.3d 815, 822 (7th Cir. 2016); see also Abellan v. Lavelo Prop. Mgmt., LLC , 948 F.3d 820, 827 (7th Cir. 2020) (applying Rule 50 and reviewing the district court’sNos. 19-1528 & 19-1613 13

decision de novo when state substantive law applied). “Thus,like the district court, we decide whether the jury had ‘a legally su ffi cient evidentiary basis’ for its verdict.” May v. Chrysler Grp., LLC, 716 F.3d 963, 971 (7th Cir. 2013) (per curiam) (quoting Fed. R. Civ. P. 50(a)(1)). In doing so, we construe all evidence in the record—and inferences that can be reasonably drawn from that ev idence—in favor of the party that prevailed at trial on the i ssue; that party here is Epic. May, 716 F.3d at 971. This is a high bu rden for the moving party to satisfy: we reverse the verdict “only if no rational jury could have found in [Epic’s] favor.” Andy Mohr Truck Ctr., Inc. v. Volvo Trucks N. Am. , 869 F.3d 598, 602 (7th Cir. 2017). Additionally, we review a district co urt’s denial of a motion for a new trial under Rule 59 for an abuse of discretion. Abellan , 948 F.3d at 830. TCS argues it is entitled to judgment as a ma tt er of law on this compensatory-damages award because there is no logicalconnection between the basis for liability and the jury’s damages verdict. Speci fi cally, TCS argues that a reasonable jury could not fi nd that TCS received a $140 million bene fi t by incorporating Epic’s con fi dential information and trade secrets into what TCS characterizes as a “stale marketing document.” Unjust enrichment damages are available as a remedy for a defendant’s misappropriation of trade secrets, Wis. Stat. § 134.90, and are also available as a remedy for Wisconsin tort claims, see Pro-Pac, Inc. v. WOW Logistics Co. , 721 F.3d 781, 786 (7th Cir. 2013). An action for re covery seeking unjust enrichment damages is “grounded on the moral principle that one who has received a bene fi t has a duty to make restitution where retaining such a bene fi t would be unjust.” Wa tt s v. Wa tt s , 405 N.W.2d 303, 313 (Wis. 1987).14 Nos. 19-1528 & 19-1613

Because the recovery of unjust enrichment damages is grounded in equitable principles, Wisconsin law limits the measure of unjust enrichment damages to the value of the “bene fi t conferred upon the defendant.” Mgmt. Comput. Servs., Inc. v. Hawkins, Ash, Baptie & Co. , 557 N.W.2d 67, 79–80 (Wis. 1996); cf. Halverson v. River Falls Youth Hockey Ass’n , 593 N.W.2d 895, 900 (Wis. Ct. App. 1999) (“Making improvements alone does not prove the [defendant] received any bene fi t from them.”). Unjust enrichme nt damages must be proven with reasonable certainty, Mgmt. Comput. Servs. , 557 N.W.2d at 80, and any costs the plainti ffmay have incurred are “generally irrelevant,” Lindquist Ford, Inc. v. Middleton Motors, Inc.

, 557 F.3d 469, 477 (7th Cir. 2009).

But the reasonable value of the bene fi t conferred on a defendant can be measured in a variety of ways. In ordinary unjust enrichment cases involv ing money or services, the amount of recovery “is the amou nt of money advanced or the reasonable value of the services rendered.” Shulse v. City of Mayville, 271 N.W. 643, 647 (Wis. 1937). In other cases, a bene fi t is conferred under circumstances in which the “benefactor reasonably believes that he will be paid,” so the benefactor may be entitled to receive damages equaling “the market value of the bene fi t.” Cosgrove v. Bartolo tt a , 150 F.3d 729, 734 (7th Cir. 1998). And the Restatemen t of Restitution and UnjustEnrichment—which Wisconsin courts treat as persuasive authority, see, e.g. , Bucke ttv. Jante, 767 N.W.2d 376, 382–83 (Wis. Ct. App. 2009)—provides many examples of how to calculate the bene fi t conferred on a defendant depending on the context in which that bene fi t is received. See, e.g. , Restatement (Third) of Restitution and Un just Enrichment § 41 (2011) (providing guidance on how to calculate the bene fi t conferredNos. 19-1528 & 19-1613 15

on the defendant in cases invo lving the misappropriation of fi nancial assets). Simply put, there is no single way to measure the bene fi t conferred on a defendant; th e measurement is context dependent. The important considerations are that a judge or jury calculates the bene fi t to the defendant—not the loss to the plainti ff —and that this calculation is done with reasonable certainty. See, e.g. , Mgmt. Comput. Servs. , 557 N.W.2d at 80 (holding that evidence of lost pro fi ts is insu ffi cient for a “fairand reasonable approximation of unjust enrichment damages” because “unjust enrichme nt is not measured by the plainti ff’s loss”); W.H. Fuller Co. v. Seater , 595 N.W.2d 96, 100 (Wis. Ct. App. 1999) (remanding wi th instructions for the trial

court to fi rst determine which of the plainti ff’s services the defendant actually bene fi ted from and then determine the value of that bene fi t). Following this general approach, we have noted at least one way a plainti ff may prove the amount of bene fi t conferred on the defendant when the case involved misappropriation of trade secrets. In 3M v. Pribyl , we upheld the jury’s liability fi nding concerning the defendan t’s misappropriation of 3M’s trade secret (operating procedures and manuals). 259 F.3d 587, 595–97 (7th Cir. 2001) (applying Wisconsin trade secret law). We found in the record su ffi cient evidence that the defendants used the misappropriated operating procedures and manuals to gain “a signi fi cant head start in their operation.” Id. at 596. While this trade secret was not used directly to develop a new product and was not tied to any of the defendant’s speci fi c pro fi ts, we a ffi rmed the jury’s liability verdict, and also noted that damages were awarded based on “what16 Nos. 19-1528 & 19-1613

it would have cost the defendants to independently develop the trade secrets at issue.” Id. at 607. So, avoided research and development costs have been awarded when the defendants gained a signi fi cant head start in their operations. TCS believes that avoided research and development costs are not a reasonable proxy for the bene fi t it received from the comparative analysis. TCS assu mes that Epic could prove only that the comparative analys is was used as a “stale marketing document.” Additionally, TCS argues that Britven— Epic’s damages expert—made a fundamental error under Wisconsin law: he based his unjust enrichment damages on Epic’s cost rather than TCS’s bene fi t . So, TCS reasons, the damages awarded based on this calculation must fail as a ma tt er of law. We disagree. Calculating the bene fi t conferred on a defendant to determine unjust en richment damages is a contextspeci fi c analysis. Under Wisconsin law, the jury could award avoided research and developmen t costs based on TCS gaining a “signi fi cant head start in [its] operation.” Id. at 596. And, viewing the evidence in the lightmost favorable to Epic, the jury would have a su ffi cient basis to award Epic $140 million in compensatory damages based on the “head start” TCS gained in development and competition. That “head start,”the jury could conclude, came from TCS’s use of the comparative analysis and thus the st olen information incorporated into that analysis. Furthermore, the jury could base its award on the bene fi t TCS received from avoided research and development costs, not the cost Epic incurred when creating the same information.Nos. 19-1528 & 19-1613 17

Let’s turn from the legal theory that supports the jury verdict to the evidence that supports the damages award. First, Epic presented evidence that TCS stole con fi dential information and trade secrets from Epic’s UserWeb. Gajaram, a TCS employee, testi fi ed that he improperly obtained credentials that allowed him to view UserWeb in its entirety. Gajaram also testi fi ed that he shared his credentials with other TCS employees. Stirling Martin, Epic’s senior vice president, testi fi ed that he determined TCS employees downloaded at least 1,600 unique fi les from UserWeb in two years. Martin

con fi rmed that these fi les contained con fi dential information, including trade secrets. The jury also saw slides froma TCS PowerPoint presentation showing that TCS strategized as to how it could start selling electronic-health-record software in the United States. TCS noted in this PowerPoint, however, that there were “key gaps” in Med Mantra that TCS would need to address before selling it to United States companies. In a deposition played for the jury, a TCS employee con fi rmed that TCS wanted to“implement” Med Mantra at Kaiser, one of Epic’s biggest customers, and that he was asked to create the comparative analysis to help achieve this goal. This employee also testi fi ed that he refused to create the comp arative analysis because he did not want to get in trouble for disclosing Epic’s con fi dential information. Still, the jury saw in ternal emails showing that TCS found a willing participant an d the comparative analysis was created. The jury also heard Guionnet testify that TCS wanted to fi nd a way to implement “Med Mantra, either as a whole or in modules, in the U.S.” To that end, Guionnet testi fi ed that TCS worked with DaVita to develop a lab module. And the18 Nos. 19-1528 & 19-1613

PowerPoint slides shown to the jury show that TCS—as a part of its United States entry strategy—would use DaVita “as areference site to promote Lab Management solution[s] to Hospitals and Independent Laboratories.” This lab module was a success; an email shown to the jury indicated that TCS planned on “marketing the [l]ab product as a starter immediately to position [itself] in the Provider space.” Additionally, Epic presented evidence that, based on TCS’s discovery violations, would allow it to draw an adverse inference against TCS. The jury heard evidence that TCS failed to preserve proxy logs that would have indicated who accessed UserWeb and when. It also heard that TCS failed to preserve the contents of its computer hard drives. So, the jury could conclude that TCS destroyed evidence of additional downloaded documents that “contained information helpful to Epic and harmful to TCS.” The jury could conclude, based on all the evidence we’ve described, that TCS used Epic’s stolen con fi dential information, including trade secrets, to create the comparative analysis. Then, the jury could in fer from the evidence that the comparative analysis was used for a variety of purposes. These purposes include: a tt empting to sell Med Mantra to Kaiser, one of Epic’s largest customers; a tt empting to enter the United States market and compet e directly with Epic; and addressing any key gaps in Med Mantra, potentially by improving the product. These fi ndings are bolstered by the adverse inference against TCS—an inference that would allow the jury to conclude that more documents harmful to TCS existed. The jury could therefore fi nd that TCS’s bene fi t, based on TCS’s use of the comparative an alysis, was a “head start” in competition and development. Indeed, the evidence allowedNos. 19-1528 & 19-1613 19

a jury to conclude that TCS used Epic’s con fi dential information to thoroughly evaluate what it would take to compete in a new market. In other words, a jury could conclude that TCS had a free shot—using stol en information—to determine whether it would be pro fi table to improve Med Mantra and implement a variety of tactics to enter the United States electronic-health-record market. Based on these intermediate fi ndings, a jury could determine that a reasonable valuation of this bene fi t is the cost TCS avoided by not having to develop this information by itself. And the jury could value that bene fi t—avoided research and development costs—at $140 million. Martin testi fi ed that information taken from UserWeb was incorporated into the comparative analysis. He explai ned that the stolen information corresponded to speci fi c modules of Epic’s software; so, Martin broke down for the jury which information, corresponding to speci fi c modules, had been embedded in the comparative analysis. Martin thenshowed the jury an exhibit on which he placed a checkmarkby each module of Epic’s software that he believed made its way into the comparative analysis.

Britven then calculated TCS’s bene fi t from avoiding the cost of researching and develo ping the stolen modules that were incorporated into the comparative analysis. He started by calculating Epic’s cost in developing all of the information taken by TCS; he then reduced that number to re fl ect only the cost Epic incurred from developing modules incorporated into the comparative analysis. A few more reductions were made: one subtracting the costs of Epic’s coding that TCS did not receive, and one re fl ecting the decayed value of technology over time. Britven concluded, based on this calculation,20 Nos. 19-1528 & 19-1613

that TCS received a $200 million bene fi t even though “Epic incurred [$]306 million to develop those same trade secrets and con fi dential information.” TCS’s expert, Bersin, testi fi ed about what he believed to be missing from Britven’s calculation: a labor-cost reduction. He explained that Med Mantra’s deve lopment team is located in India, where labor costs are 30–40% less than in the United States, where Epic developed it s software. So, he reasoned, TCS’s avoided research and development costs should be 30–40% less than the $200 million Britven calculated. And applying a 30% reduction to Britven’s $200 million bene fi t value leaves you with an estimate d $140 million in avoided research and development costs—the exact amount of damages awarded by the jury. In sum, the jury had a su ffi cient basis to reach the $140 million “comparative analysis” compensatory award. TCS’s argument to the contrary relies on the assumption that the comparative analysis was used as nothing more than a stalemarketing document. But the jury was presented with evidence that would allow it to conclude the comparative analysis was not just a stale mark eting document; the comparative analysis—and therefore Epic’s information—was used to help TCS evaluate its United States entry strategy and potentiallyeven address key gaps in Med Mantra by improving the product. The evidence also allowed the jury to conclude that avoided research and development costs were a reasonable valuation of the bene fi t TCS received from using the comparative analysis, which contained stolen information. Likewise, using avoided research and deve lopment costs as the valuation of TCS’s bene fi t, the jury could have reached a $140 million compensatory award. Importantly, it could do so withoutNos. 19-1528 & 19-1613 21

equating Epic’s development costs ($306 million, by Britven’s estimate) to TCS’s bene fi t from using Epic’s information in the comparative analysis. So, we agr ee with the district court’s decisions to uphold this dama ges verdict and deny TCS’s motion for a new trial. TCS’s next argument concerns the punitive-damages award. But before we shift to punitive damages, we address Epic’s cross-appeal of the district court’s decision to vacate the jury’s $100 million compensatory-damages award for TCS’s “other uses” of Epic’s con fi dential information.

B. “Other Con fi dential Information” Compensatory Award The district court presented th e jury with a special-verdictform that allowed it to award damages based on (a) the benefi t of TCS’s use of the comparat ive analysis and (b) the bene fi t of TCS’s use of other con fi dential information. The district court included “part b” of the verdict because “there was some evidence that other con fi dential information was disseminated ‘out beyond the speci fi c people who discussed the comparative analysis.’” The jury initially awarded $100 million for “the bene fi t of TCS’s use of other con fi dential information” in addition to the $140 million awarded for the “bene fi t of TCS’s use of [the] comparative analysis.” But, in partially granting TCS’s Rule 50 motion for judgment as a ma tt er of law, the district court held that this $100 million award for bene fi ts from “other information” was too speculative and was “tied to no evidence of speci fi c use at all.”

We review a district court’s de cision to grant judgment as

a ma tt er of law de novo

. Passananti v. Cook County, 689 F.3d 655, 659 (7th Cir. 2012). “Our job is to assure that the jury had a22 Nos. 19-1528 & 19-1613

legally su ffi cient evidentiary basis for its verdict.” Filipovich v. K & R Express Sys., Inc. , 391 F.3d 859, 863 (7th Cir. 2004). In deciding a Rule 50 motion, we “construe[] the evidence strictly in favor of the party who prevailed before the jury” and we do not make credibility determinations or reweigh the evidence. Passananti, 689 F.3d at 659. Still, “a verdict supported by no evidence or a mere scintilla of evidence will not stand.” Martin v. Milwaukee County, 904 F.3d 544, 550 (7th Cir. 2018). The speci fi c verdict at issue here is the jury’s award ofcompensatory damages apart from those based on the comparative analysis. Under Wisconsin law, compensatory damages must be “proved with reasonable certainty.” Novo Indus. Corp. v. Nissen , 140 N.W.2d 280, 284 (Wis. 1966). This does not require the plainti ff to prove damages with “mathematical precision; rather, evidence of damages is su ffi cient if it enables the jury to make a fair and reasonable approximation.” Mgmt. Comput. Servs. , 557 N.W.2d at 80. Epic—to prove it was entitled to unjust enrichment damages for TCS’s use of other con fi dential information—needed to show that TCS used con fi dential information that was not incorporated into the comparative analysis. Epic says the jury heard evidence that would allow it to conclude that other confi dential information—that was not incorporated into the comparative analysis—was used to improve Med Mantra.Epic points to Guionnet’s testimony, testimony that TCS assigned a Med Mantra team member to the Kaiser account, testimony about TCS’s downloading of information unrelated to its work for Kaiser, and the adve rse-inference jury instructionin support of this theory. Epic also points to evidence it believes the jury could have used to reasonably determine thatNos. 19-1528 & 19-1613 23

TCS received a $100 million bene fi t based on its use of this alleged other con fi dential information. But we believe the evidence isn’t enough to supportthe jury’s $100 million award. Let’s start with Guionnet’s testimony. Guionnet—a TCS manager responsible for the Kaiser account—testi fi ed that he

a tt ended a meeting where Med Mantra was presented to Kaiser executives. He left the meeting “astounded”; Med Mantra had improved signi fi cantly since the last time he had seen the software, and he “was concerned that some of the information from Kaiser had been used to improve Med Mantra.” Guionnet then met with members of the Med Mantra team. A TCS employee—introduced to Guionnet as the “interface between Med Mantra” and the Kaiser team—showed Guionnet a “comparison ... between Med Mantra and Epic.” Guionnet “basically ... knew” at that point that TCS had improperly used Epic’s information. In a portion of Guionnet’s deposition played for the jury, Guionnet con fi rmed that he more than suspected that Epic’s information was used to improve Med Mantra: “it’s knowledge.” He stated that Epic’s “work fl ow, data model, functionalities, [and] test scrip ts” were used in Med Mantra’s development. But when pressed about how he knew Epic’sinformation was used to improve Med Mantra, Guionnet consistently responded by saying “I don’t remember,” “I don’t remember the details,” or by saying he would have to go back and look at his emails.Guionnet then confronted TCS’s president with information about TCS’s misconduct. But rather than initiating an investigation, TCS’s president transitioned Guionnet away from the Kaiser account and told him that if he did not24 Nos. 19-1528 & 19-1613

transition “peacefully,” he woul d be “put ... in a corner” and TCS would “make [his] life miserable.” This evidence is missing something: any proof that TCS used any con fi dential information besides the information incorporated into the comparative analysis. Guionnet testi fi ed that he knew TCS used Epic’s information to improve Med Mantra, but the evidence indica ted that his knowledge came from reviewing the comparativ e analysis, only. And whenpressed at his deposition about how he knew that Med Mantra improved, Guionnet provided nothing but a lack of memory and some general stat ements that Med Mantra hadimproved. Basically, Guionnet was unable to tie what he perceived to be Med Mantra’s signi fi cant improvements to any “other information” beside s the comparative analysis. Guionnet’s testimony about his meeting with the Med Mantra team does not add any su pport for the verdict. Guionnet testi fi ed that at this meeting, he received a detailed rundown of Med Mantra’s functionality. Additionally, a TCS employee showed him a spreadsh eet comparing Med Mantra to Epic’s software. But this information is related to TCS’s use of the comparative analysis; it has nothing to do with Epic’s other con fi dential information. Guionnet’s testimony thus supports an inference that TCS used Epic’s con fi dential information, but only the informatio n that was incorporated into the comparative analysis. Epic next points to evidence that TCS assigned membersof the Med Mantra team to the Kaiser account. Guionnet testi fi ed that “DV” Prasad “was a member of the Med Mantra team who was planted in [the Kaiser] organization.” And in a deposition played for the jury, Prasad stated that Reddy, a senior TCS executive, asked him to prepare a presentationNos. 19-1528 & 19-1613 25

comparing Med Mantra and Epic. Prasad then con fi rmed that he “never did” prepare the presentation because he knew it was “not right.” But even wi thout Prasad’s compliance, Reddy found a willing employee and created the comparative analysis.

Guionnet testi fi ed that he later caught wind that Prasad— a member of the Med Mantra team—was planted in the Kaiser organization. Guionnet a tt empted to get rid of Prasad immediately; the head of TCS’s health care unit denied this request, leaving this “plant” on the Kaiser team. This evidence, contrary to Ep ic’s argument, has nothing to do with TCS’s uses of “otherinformation.” Reddy made his intentions clear: Prasad was to use Epic’s con fi dential information to compare Med Mantra to Epic’s software before attempting to sell Med Mantra to Kaiser. This evidence shows only that Epic’s con fi dential information made its way into the comparative analysis, which wa s then used as part of an overall market-entry strategy. Rather than proving that “other information” was used, this evidence simply provides additional support for the ju ry’s compensatory-damages award for TCS’s use of the comparative analysis. So again, we see no evidence tying any of Epic’s other stolen con fi dential information to any use outside of the comparative analysis.

In another a tt empt to show TCS used other con fi dential information to improve Med Mant ra, Epic points to evidence regarding TCS’s laboratory modu le. First, Epic points to TCS’s PowerPoint, which acknowledges that there were key gaps in Med Mantra that needed to be addressed. And Martin testi fi ed that TCS employees stole information regarding Epic’s laboratory product, Beaker. Guionnet testi fi ed that TCS had partnered with DaVita to create its own laboratory26 Nos. 19-1528 & 19-1613

module. This project, however, fell behind and was described as “well below average” by an independent third party. Still, an email from a TCS employee showed that TCS was “very seriously thinking” about “marketing the Lab product as a starter immediately to position [TCS] in the Provider space.” TCS later licensed the DaVita laboratory module to another United States company, Quest Diagnostics. But this is where evidence concerning Beaker ends. Epic asserts that the mere fact th at TCS downloaded information about Beaker shows that “TCS used [its] con fi dential information and trade secret inform ation to improve the lab product it developed for DaVita.” Yet Epic fails to provide any examples of how Epic’s modules or information, including the Beaker module, could be tied to uses or improvements involving the DaVita project. So, Epic presented evidence only that TCS downloaded information concerning Beaker; but it does not present evidence that TCS actually usedthis information.Without a link from this information to any use, Epic’s evidence does not support a fi nding that TCS used “other con fi

dential information.” Epic a tt empts to plug the evid entiary holes described above by pointing to the advers e-inference instruction. It’s true that—given the district court’s instruction—the jury heard evidence supporting an inference that TCS destroyed documents that were harmful to TCS and helpful to Epic. But even with this inference, there is still no concrete evidence showing that TCS used Epic’s “other information.” Epic is thus left asking a jury to award damages based solely on speculation as to what mightbe contained in the destroyed documents. And if this type of broad adverse inference based on the destruction of evidence—standing alone—Nos. 19-1528 & 19-1613 27

were enough to support a jury’s damages verdict, a jury could hypothetically award a plainti ff any amount of damages based on any theory of liability. This would be antithetical to the purpose of adverse-inference instructions: sanctioning misconduct while levelingthe evidentiary playing fi eld. See Silvestri v. General Motors Corp. , 271 F.3d 583, 590 (4th Cir. 2001). To be clear, evidence supporting an adverse inference, combined with other relevant circumstantial evidence, may be a su ffi cient evidentiary basis for a jury’s verdict. See Aspen Tech., Inc. v. M3 Tech., Inc. , 569 F. App’x 259, 266 (5th Cir. 2014) ( fi nding the jury had a legally su ffi cient basis for its verdict based on circumstantial evidence and two adverse-inference instructions); cf. Kronisch v. United States , 150 F.3d 112, 128 (2d Cir. 1998) (“[A]t the margin, wh ere the innocent party has produced some (not insubstantial) evidence in support of his claim, the intentional destruction of relevant evidence ... maypush a claim that might not otherwise survive summary judgment over the line.”). But the destruction of evidence—by itself—is insu ffi cient to support a jury’s verdict as a ma tt er of law. Cf. Kronisch , 150 F.3d at 128 (“We do not suggest that the destruction of evidence, standing alone, is enough to allow a party who has produced no evidence—or u tt erly inadequate evidence—in support of a given claim to survive summary judgment on that claim.”). See generally HK Sys., Inc. v. Eaton Corp. , 553 F.3d 1086, 1088 (7th Cir. 2009) (noting that the standard is the same for su mmary judgment and for judgment as a ma tt er of law). So, if Epic were truly using the adverse inference to plug evidentiary holes, this verdict might survive. But the other evidence on which Epic relies provides “u tt erly inadequate”28 Nos. 19-1528 & 19-1613

support for a fi nding that TCS used con fi dential information apart from that incorporated into the comparative analysis. Kronisch, 150 F.3d at 128. As a result, Epic seeks to use the adverse inference not just to plugevidentiary holes but to hold all the water for a fi nding that TCS used other con fi dential information. But Epic cannot rely on an adverse inference to do so much. In sum, Epic has not provided more than a mere scintilla of evidence in support of its theory that TCS used any of its other con fi dential information. This portion of the jury’s damages award cannot stand. With compensatory damages sorted out, we now turn to punitive damages. C. Punitive Damages In addition to the $240 million awarded in compensatorydamages, the jury initially awarded Epic $700 million in punitive damages. The district court cut that award to $280 million based on a Wisconsin law capping statutory damages at two times the amount of compensatory damages, Wis. Stat. § 895.043(6). 3 The district court then denied TCS’s renewed motion for judgment as a ma tt er of law under Rule 50(b) andTCS’s motion for a new trial under Rule 59; the court accordingly left the $280 million punitive-damages award intact, reasoning in part that its decisi on to vacate the jury’s $100 million compensatory award for use of “other information” did

not a ff ect the jury’s punitive damages verdict. Whether the district court erred in denying TCS’s Rule 50 motion is a question of law that we review de novo

. Valdivia v.

3 Recall that the district court also reduced the compensatory award by$100 million, leaving $140 million in compensatory damages and $280 million in punitive damages.Nos. 19-1528 & 19-1613 29

Twp. High Sch. Dist. 214 , 942 F.3d 395, 396 (7th Cir. 2019). In reviewing this decision, “[w]e view the facts and evidence inthe light most favorable to [Epic], as the litigant who prevailed before the jury.” Id. To the extent TCS asked the district court for a new trial regarding punitive damages under Rule 59, we review the district court’s decision to deny this motion for an abuse of discretion. Abellan , 948 F.3d at 830. And because the punitive damages stand on Wisconsin causes of action, the punitive-damages award must be consistent with Wisconsin law. See Kapelanski, 390 F.3d at 534. TCS presents four arguments challenging the $280 million punitive-damages award: First, TCS argues that, to receive punitive damages under Wisconsin law, the plainti ffmust prove an actual injury—which Epic did not do. Second, TCS argues that the punitive-damag es award here must be set aside because it may have beenbased on a claim that cannot support punitive damages as a ma tt er of law. Third, TCS argues that the punitive-damages award must be vacated and retried in light of the district court’s decision to vacate the$100 million compensatory-damages award. Finally, TCS argues the punitive-damages award is constitutionally excessive. We take each in turn. 1. “Actual Injury” Requirement TCS argues that the punitive -damages award fails as a

ma tt er of law because Epic failed to prove an “actual injury.” TCS contends that under Wisconsin law, an actual injury and a damages award re fl ecting redress for this injury are “threshold requirements before punitive damages may be awarded.” TCS reasons that, because Epic did not su ffer an actual injury and instead was awarded damages solely based on the bene fi t TCS received, Epic cannot receive punitive damages.30 Nos. 19-1528 & 19-1613

But Wisconsin law is not as exacting as TCS argues. Rather, Wisconsin law requires—for punitive damages to be awarded—the imposition of compensatory damages. TCS fi rst cites to Tucker v. Marcus for the proposition that a plainti ff must prove “some actual injury which would justify an award of actual or compensatory damages before punitive damages may be awarded. ” 418 N.W.2d 818, 823 (Wis. 1988) (quoting Hanson v. Valdivia , 187 N.W.2d 151, 155 (Wis. 1971)). However, Tuckermakes clear that the threshold requirement for punitive damages is an “‘award’ of actual or compensatory damages” rather than an injury to the plainti ff

. Tucker, 418 N.W.2d at 827. In fact, the Wiscon sin Supreme Court speci fi cally held that—even though the jury foun d “there had been injury suffered”—“punitive damages were inappropriately allowed in this case” because the plainti ffcould not recover “actual damages.” Id. at 823. In a more recent decision, the Wisconsin Supreme Court

a ffi rmed that compensatory damages are a su ffi cient predicate for punitive damages. “[W]e have held that ‘where there exists a “cause of action,” but the action is not one for which the recovery of compensatory damages is justi fi ed, punitive damages cannot be awarded.’” Groshek v. Trewin , 784 N.W.2d 163, 173 (Wis. 2010) (emphasis added) (quoting Tucker, 418 N.W.2d at 824). Groshek , like Tucker, holds that the availability of punitive damages is governed by whether compensatory damages are recoverable, and not by whether an “actual injury” has been in fl icted. See Groshek , 784 N.W.2d at 173; cf. Tucker

, 418 N.W.2d at 830 (He ffernan, C.J., dissenting) (“Today’s majority holds that [actual damages] should be de fi ned in a manner that no punitive damages may be awarded in the absence of a recovery for compensatory damages.”).Nos. 19-1528 & 19-1613 31

Since Groshek, we have further expounded on when punitive damages are appropriate under Wisconsin law. In ProPac, Inc. v. WOW Logistics Co. , we stated that punitive damages are recoverable under Wisconsin law regardless of whether damages are based on “gain to [the defendant] ( i.e. , restitutionary damages) or loss to [the plainti ff ] ( i.e. , compensatory damages).” 721 F.3d 781, 788 (7th Cir. 2013). This is true because Wisconsin law allows “awards of punitive damages when ‘compensatory damages’ are imposed,” and Wisconsin de fi nes compensatory damages to include compensation, indemnity, and restitution. Id. So, TCS is incorrect that Wisco nsin law requires Epic to prove an “actual injury” to obtain punitive damages. Instead, punitive damages are available when compensatory damages are imposed, as they were in this case. Epic is therefore not barred from recovering punitive damages simply because compensatory damages were awarded for TCS’s bene fi t rather than any injury Epic sustained. 2. Claims that SupportPunitive Damages TCS next argues that the puni tive-damages award must be set aside because it might have been based on one of Epic’s claims that does not support punitive damages as a ma tt er of law. Speci fi cally, TCS points out that Epic’s unjust enrichment claim does not support punitive damages, and there is no way to know—based on the generality of the jury’s punitive-damages verdict—if that is the clai m the jury used to support punitive damages. We can quickly dispose of this argument. The jury was speci fi cally instructed that it could only award punitive damages “with respect to Epic’s trade secrets, fraudulent32 Nos. 19-1528 & 19-1613

misrepresentation[,] and unfair competition claims.” “Jurors are presumed to follow a court’s instructions.” Seifert ex rel. Scoptur v. Balink , 869 N.W.2d 493, 504 (Wis. Ct. App. 2015); see also Schandelmeier-Bart els v. Chi. Park Dist. , 634 F.3d 372, 388 (7th Cir. 2011) (“[W]e presume th at juries follow the instructions they are given.”). So we may presume that the jury based its punitive-damages award on these claims, and not on the unjust enrichment claim.And Epic’s claims for trade secrets, fraudulent misrepresentation, and unfair competition all allow recovery of damages on a theory of gain to the defendant. Wis. Stat. § 134.90(4)(damages for a violation of Wisconsin’s trade secrets act include “unjust enrichment caused by the violation”); Pro-Pac, 721 F.3d at 786 (restitutionary damages, i.e. damages based on the defendant’s bene fi t, are recoverable “as compensation for tort claims”). As discussed above, punitive damages can be awarded when compensatory damages—including damages based on a defendant’s gain—are imposed. Pro-Pac, 721 F.3d at 788. TCS does not dispute that Epic’s trade secrets, fraudulent misrepresentation, and unfair competition claims support an award of punitive damages; in fact, it admits these claims “could support punitive damages.” And because the jury was instructed to base punitive damages on these claims only, the punitive-damages award was not based on a claim that does not support punitive damages as a ma tt er of law.

3. Conduct on which Punitive Award is Based TCS next argues that the puni tive-damages award must be vacated and retried in light of the district court’s decision— which we a ffi rm—to vacate the $100 million damages awardNos. 19-1528 & 19-1613 33

for TCS’s uses of other con fi dential information. TCS argues that when the jury determined punitive damages, it had inmind a broader range of conduct “than was legally sustainable.” And because we cannot know whether the jury’s punitive-damages decision was base d on “a permissible or impermissible claim or theory,” we must vacate the punitive award and remand for the issue to be retried.But this argument fundamentally misunderstands punitive damages. Punitive damages are imposed to “punish[] unlawful conductand deter[] its repetition.” Trinity Evangelical Lutheran Church v. Tower Ins. Co. , 661 N.W.2d 789, 798 (Wis. 2003) (emphasis added); see also Kemezy v. Peters , 79 F.3d 33, 34 (7th Cir. 1996) (“The standard judicial formulation of the purpose of punitive damages is th at it is to punish the defendant for reprehensible conduct and to deter [the defendant] and others from engaging in similar conduct.”). Stated di fferently, punitive damages are ba sed on the defendant’s conduct underlying a plainti ff’s claims, not on the claims themselves.

And the cases TCS cites in su pport of its argument provide further support for this understanding of punitive damages. Take Robertson Oil Co. v. Phillips Petroleum Co. , 871 F.2d 1368(8th Cir. 1989), as an example. The jury in that case found Phillips Petroleum liable for fraud, breach of the duty of good faith and fair dealing, tortious interference, and negligence. Id. at 1370. The jury also awarded Robertson Oil punitive damages. Id. But on appeal, the Eighth Circuit a ffi rmed only the theory of tortious interfer ence with a business relationship. Id. at 1375. And Phillips’s conduct “relevant to an award of punitive damages necessarily di ffer[ed] according to thevarious theories of liability on which the jury based its verdict.” Id. at 1376. So, because the court could not “ascertain34 Nos. 19-1528 & 19-1613

what conduct of Phillips was determined by the jury to merit punitive damages,” the Eighth Circuit ordered the district court to retry punitive damages. Id. The Eighth Circuit in Robertson Oil did not require a retrial of punitive damages simply because it found that some of the theories of liability failed as a ma tt er of law. Instead, the emphasis was on the conductunderlying these theories. Because the court could not be sure which of Phillips’s conduct led the jury to believe punitive damages were necessary, and some of that conduct did not warrant damages as a ma tt er of law, a new trial was necessary. This un derstanding of punitive damages holds true throughout the cases TCS cites in support of its argument. See, e.g. , CGB Occupational Therapy, Inc. v. RHA Health Servs. Inc. , 357 F.3d 375, 390 (3d Cir. 2004) (reversing punitive damages because it was unclear which act of tortious interference formed the basis of punitive damages when the plainti ff interfered with two distinct contracts); Marrero v. Goya of P.R., Inc. , 304 F.3d 7, 30 (1st Cir. 2002) (a ffi rming a harassment claim, reversing a retaliation claim because there was no evidence of an adverse personnel action, and requiring a new trial on punitive damages because the court could not besure if punitive damages were based on the erroneous retaliation fi nding). So, a punitive-damages award requires a new trial only when (1) the claims of liability supporting punitive damages are based on di ff erent underlying conduct by the defendant,and (2) one of those claims (and therefore the conduct underlying that claim) is found to be unsupported as a ma tt er of law. TCS argues that di ff erent conduct underlies the two separate compensatory-damages aw ards, and we cannot know which conduct led the jury to award punitive damages.Nos. 19-1528 & 19-1613 35

But the conduct underlying both compensatory-damages awards was the same. One compensatory-damages award was based on the “bene fi t of TCS’s use of [the] comparative analysis” and the other was based on the “bene fi t of TCS’s use of other con fi dential information.” The key distinction between these two compensatory awards is information , not conduct. By awarding damages for TCS’s uses of “other con fi dential information,” the jury did not have to fi nd any uses—or any conduct—that di ff ered from the uses and conduct underlying the comparative-analysis portion of the compensatory award. Based on reasonable inferences drawn in Epic’s favor, a jury could conclude that TC S used the comparative analysis (and therefore Epic’s informatio n incorporated into that analysis) to improve its marketing strategy, to try to enter the United States market, and to generally improve Med Mantra before a tt empting to sell it to Kaiser. And these are the only uses that can be found in the re cord; TCS does not point us to a single use of Epic’s information that is not also a use that the jury could reasonably infer stemmed from the comparative analysis. So, the overall conduct underlying these two verdicts is the same. TCS stole thousands of Epic’s documents, lied about it, covered it up, and used Epic ’s information in a variety of ways. This course of conduct is the same regardless of whether the jury incorrectly found that this course of conduct included the use of a few more pieces of Epic’s information.Whether the jury found that TCS received an additional bene fi t based on other con fi dential information does not a ff ect the jury’s assessment of TCS’s ov erall conduct. So, our determination that TCS did not use “other con fi dential information” does not disturb the jury’s punitive-damages award.36 Nos. 19-1528 & 19-1613

4. Constitutionality of the Punitive-Damages Award

TCS fi nally argues that the punitive-damages award of $280 million violates its due process rights under the federal constitution and Wisconsin law. We review these questions de

novo

. Rainey v. Taylor , 941 F.3d 243, 254 (7th Cir. 2019); Trinity Evangelical Lutheran Church , 661 N.W.2d at 799.

The Due Process Clause of the Fourteenth Amendment imposes constitutional limitations on punitive damages. State Farm Mut. Auto. Ins. Co. v. Campbell , 538 U.S. 408, 416–17 (2003). Punitive damages may be imposed to further a state’s legitimate interests in imposingpunishment for and deterring illegal conduct, but punitive damages violate due processwhen the award is “‘grossly excessive’ in relation to these interests.” BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 568 (1996). The Supreme Court, in testing awards of punitive damages for compliance with due process, has established three“guideposts”: “(1) the reprehensibility of the defendant’s conduct; (2) the disparity between the actual harm su ffered and the punitive award; and (3) the di fference between the awardauthorized by the jury and the penalties imposed in comparable cases.” Rainey, 941 F.3d at 254 (citing Gore, 517 U.S. at 575). Wisconsin courts apply a “virtually identical test.” Trinity Evangelical Lutheran Church , 661 N.W.2d at 800. 4

4 Wisconsin courts consider the factors most relevant to the case at hand, with those factors coming from the following list: (1) the grievousness of the acts, (2) the degree of malicious intent, (3) whether the award bears a reasonable relationship to the award of compensatory damages, (4) the potential damage that might have been caused by the act, (5) the ration ofthe award to civil or criminal penalties that could be imposed for comparable misconduct, and (6) the wealth of the wrongdoer. Trinity Evangelical Lutheran Church , 661 N.W.2d at 800.Nos. 19-1528 & 19-1613 37

The Supreme Court’s fi rst guidepost—reprehensibility of the defendant’s conduct—is the most important. Gore, 517 U.S. at 575. In determining the reprehensibility of the defendant’s conduct, we consider fi ve factors: whetherthe harm caused was physical as opposed to economic; the tortious conduct evinced an indi ff erence to or a reckless disregard of the health or safety of others; the target of the conduct had fi nancial vulnerability; the conduct involved repeated actions or was an isolated incident; and the harm was the resultof intentional malice, trickery, or deceit, or mere accident. Campbell , 538 U.S. at 419. If none ofthese factors weigh in favor of the plainti ff , the award is “suspect.” Id. And even if one factor weighs in the plainti ff’s favor, that may not be enough to sustain the punitive award. Id. And fi nally, since a plainti ff is presumed to be made whole by the compensatory award, punitive damages should be awarded only if the defendant’s conduct is “so reprehensible as to warrant the imposition of further sanctions to achieve punishment or deterrence.” Id.

The fi rst factor asks us to consider if the harm was physical as opposed to economic. Id. Conduct producing physicalharm is more reprehensible than conduct producing economic harm. See Gore, 517 U.S. at 576. Epic did not su ffer physical harm as a result of TCS’s conduct. So this factor weighs against fi nding TCS’s conduct reprehensible. Turning to the second factor, we do not believe that TCS’s conduct evinced an indi fference to or a reckless disregard of the safety of others. Epic does not a tt empt to persuade us otherwise. This factor also weighs against fi nding TCS’s conduct reprehensible.38 Nos. 19-1528 & 19-1613

The third factor—the fi nancial vulnerability of the target of the defendant’s conduct—stands for the proposition that conduct is more reprehensible if it impacts fi nancially vulnerable plainti ff s. See, e.g. , Saccameno v. U. S. Bank Nat’l Ass’n , 943 F.3d 1071, 1087 (7th Cir. 2019); EEOC v. AutoZone, Inc. , 707 F.3d 824, 839 (7th Cir. 2013). Epic, one of the largest producers of electronic-health-record software, is not fi nancially vulnerable. This factor again weighs against fi nding TCS’s conduct reprehensible. Applying the fourth factor, TCS’s conduct did involve a repeated course of wrongful acts. Epic presented evidence that TCS knew it lacked authority to access con fi dential information from UserWeb. Yet TC S employees still accessed and downloaded Epic’s con fi dential information for years, downloading over 1,600 unique documents from UserWeb and gaining access to information that Epic speci fi cally forbid TCS from accessing. This factor weighs in favor of fi nding TCS’s conduct reprehensible and provides support for some award of punitive damages.

As for the last factor—whether the harm was the result of intentional malice, trickery or deceit, or mere accident—TCS argues that Epic su ffered no harm. Speci fi cally, TCS contends that because Epic was not depr ived of the enjoyment of its software, did not lose busine ss, and did not face any new competition, there could not have been any harm to Epic. But even though it is hard to quantify, Epic likely su ffered a competitive harm; TCS, a potential competitor, had access to Epic’s con fi dential information for years without Epic’s knowledge. This gave TCS insight into the strengths and weaknesses of Epic’s software, regardless of whether TCS was able to turn that knowledge in to a direct economic harm toNos. 19-1528 & 19-1613 39

Epic. Cf. United Tech. Corp. v. U.S. Dept. of Def. , 601 F.3d 557,564 (D.C. Cir. 2010) (discussing, for purposes of what constitutes “con fi dential information” under an exemption to the Freedom of Information Act, what constitutes substantial competitive harm). We can also think of at least one economic harm, albeit minor, that Epic su ffered as a result of TCS’s conduct. Epic, after it became aware of TCS’s unlawful access to UserWeb, had to expend time and resources investigating the extent to which TCS had accessed Epic’s con fi dential information and trade secrets.And these harms were the result of TCS’s repeated, intentional a tt empts to deceive Epic. See Gore, 517 U.S. at 576 (noting that deceit is more repreh ensible than negligence). Epic repeatedly denied Kaiser’s an d TCS’s requests to allow TCS access to UserWeb. But TCS gained access to UserWeb through other means, using Gaja ram’s account, which he obtained by falsely identifying as a Kaiser employee. The jury heard testimony that Gajaram ’s account information was shared throughout TCS and was frequently used to download and share Epic’s con fi dential information. TCS employees also lied to prevent Kaiser and Epic from discovering that TCS had access to Epic’s UserWeb. A TCS employee testi fi ed that his manager told him to hide the truth from investigators. This employee obeyed these instructionsand lied to investigators, telling them that he had only accessed UserWeb one time when he knew he had accessed it more than once. The harms to Epic resulted from TCS’s deceitful conduct. This factor weighs in favor of fi nding TCS’s conduct reprehensible and supports some award of punitive damages.40 Nos. 19-1528 & 19-1613

In sum, we agree with the dist rict court that TCS’s conductwarrants punishment. But TCS’s conduct was not reprehensible “to an extreme degree.” Saccameno , 943 F.3d at 1088. TCS caused no physical harm to Ep ic. TCS also did not recklessly disregard the safety of others. And Epic is not a fi nancially vulnerable plainti ff . But TCS’s conduct consisted of a repeated course of wrongful actions spanning multiple years.TCS’s conduct was also intentional and deceitful, not negligent. We therefore conclude that TCS’s conduct justi fi es punishment, though not in the am ount of a $280 million punitivedamages award.Turning to the Supreme Court’s second guidepost, we analyze the ratio of punitive damages to the “harm, or potential harm” in fl icted on the plainti ff

. Campbell , 538 U.S. at 424. In most cases, the compensatory -damages award approximates the plainti ff’s harm. In those cases, identifying the ratio isstraightforward: we compare compensatory and punitivedamages awards. See, e.g. , Rainey, 941 F.3d at 255. But in somecases, the jury’s compensatory-damages award does not refl ect the plainti ff’s quanti fi able harm. Still, we may account for that harm in the harm-to-punitive-damages ratio. See Sommer fi eld v. Knasiak , No. 18-2045, 2020 WL 4211297, at *5 (7th Cir. July 23, 2020).The circumstances of this case, however, present an unusual issue in determining the amount of “harm” under this guidepost. The jury awarded $140 million in compensatory damages based on the bene fi t to TCS, not because of any harm

su ff ered by Epic. This award, then, does not re fl ect Epic’s harm. And if Epic su ffered quanti fi able economic harm, that harm is signi fi cantly smaller than $140 million, which would in turn drastically change the relevant ratio. If we had toNos. 19-1528 & 19-1613 41

quantify that harm to arrive atthe appropriate ratio, applying the second due-process guidepost would pose a challenging task. But TCS makes no argument here—and did not argue tothe district court—that we should compare any number besides compensatory damages to the punitive-damages award. See Pu ff

er v. Allstate Ins. Co. , 675 F.3d 709, 718 (7th Cir. 2012) (underdeveloped arguments are waived). In fact, most of its argument under this guidepost emphasizes the size of the compensatory award as a reasonthe punitive-damages award violates due process. TCS has thus waived any argument that the compensatory award is the incorrect denominator in the ratio analysis. And at least one other court has compared an unjust enrichment award to the punitive-damages award under this guidepost when state law allowed punitive damages to be imposed for the underlying claim. See Rhone-Poulenc Agro, S.A. v. DeKalb Genetics Corp. , 272 F.3d 1335, 1351 (Fed. Cir. 2001) (concluding it is appr opriate to base punitive damages on an unjust enrichmentaward when the defendant’s gain “is logically related” to the plainti ff’s “harm or potential harm”), vacated, 538 U.S. 974 (2003), remanded to 345 F.3d 1366 (2003) (reaching the same result as to punitive damages). So, we will conduct the ratio anal ysis using the $140 million compensatory award as the denominator.In conducting this analysis, the Supreme Court has declined to set a fi xed ratio limiting punitive damages. Campbell

,538 U.S. at 425 (“[T]here are no rigid benchmarks that a punitive damages award may not surpass ... .”). The SupremeCourt has, however, noted that “few awards exceeding a single-digit ratio between punitive and compensatory damages ... will satisfy due process.” Id.42 Nos. 19-1528 & 19-1613

The punitive award in this case—after the district courtlowered it to comply with Wisconsin’s statutory cap on punitive damages—is two times the ultimate compensatory award. Our court and Wisconsin courts have upheld signi fi

cantly higher ratios. See, e.g. , Rainey, 941 F.3d at 255 (a ffi rming a 6:1 ratio); Mathias v. Accor Econ. Lodging, Inc. , 347 F.3d 672, 676–78 (7th Cir. 2003) (a ffi rming a 37:1 ratio); Kimble v. Land Concepts, Inc. , 845 N.W.2d 395, 412 (Wis. 2014) ( fi nding a 3:1 ratio appropriate and constitutional); Trinity Evangelical Lutheran Church , 661 N.W.2d at 803 (a ffi rming a 7:1 ratio).But the compensatory damages here are high. The Supreme Court has noted that “[ w]hen compensatory damages are substantial, then a lesser rat io, perhaps only equal to compensatory damages, can reach th e outermost limit of the due process guarantee.” Campbell , 538 U.S. at 425. And the $140 million award in this case far exceeds what other courts have considered “substantial

. ” See Lompe v. Sunridge Partners, LLC

,818 F.3d 1041, 1069 (10th Cir. 2016) (“[I]n many cases, compensatory damages less than $1,000,000 have also been considered substantial.”). In fact, neither party points us to anycomparable cases in which any court has upheld a 2:1-orhigher ratio resulting in over $200 million in punitive damages. 5

5 Epic only cites to one case with a relatively comparable award, Yung v. Grant Thornton, LLP, 563 S.W.3d 22, 73 (Ky. 2018) (upholding $80 million in punitive damages, resulting in a 4:1 ratio). It’s true that in Yung, like in this case, only the last two reprehensi bility factors weighed in favor of allowing punitive damages. Id. at 67. But the economic harm suffered by the plaintiffs in Yungdistinguishes that case from the circumstances here. In Yung, the plaintiffs suffered substantial, quantifiable economic harm, including millions of dollars in taxes, interest, and fees owed to the IRS. Id. at 57. Here, there is hardly evidence that Epic suffered any economicNos. 19-1528 & 19-1613 43

Many courts have instead found awards “substantial” and imposed a 1:1 ratio based on signi fi cantly lower compensatory awards. See Saccameno , 943 F.3d at 1090 (gathering caseswhere courts have imposed a 1:1 ratio when the compensatory award is less than $1 million); cf. Estate of Moreland v. Dieter, 395 F.3d 747, 756–57 (7th Cir. 2005) (a ffi rming a $15 million punitive-damages award that was “a fraction of the underlying compensatory damages award” and was based on “truly reprehensible” conduct). Still, the precise award must be based on “the facts and circumstances of the defendant’s conduct and the harm to the plainti ff

. ” Campbell , 538 U.S. at 425; cf. Sommer fi eld, 2020 WL 4211297, at *6 (noting that sanctions should be based on the wr ong done rather than the defendant’s wealth). The facts and circumstances of this case do not justify awarding $280 million in punitive damages. As noted above, three of the fi ve reprehensibility factors weigh against the reprehensibility of TCS’s conduct. TCS’s conduct was reprehensible, but not to an extreme degree. See, e.g. , Bridgeport Music, Inc. v. Justin Combs Publ’g, 507 F.3d 470, 490 (6th Cir. 2007) (based on “the low level of reprehensibility of defendants’ conduct, a ratio of closer to 1:1 or 2:1 is all that due process can tolerate in this case”). But see, e.g. , Rainey, 941 F.3d at 255 (“the truly egregious nature” of the defendant’s acts of sexual objecti fi cation and assault justi fi ed “the size of [the] punitive award even with [a] signi fi cant compensatory award”); Mathias , 347 F.3d at 675–78 (a ffi rming a 37:1 ratio in part because

harm; the compensatory award was ba sed on TCS’s benefit. And any potential future economic harm has not been quantified.44 Nos. 19-1528 & 19-1613

the motel company refused to have bed bugs in hotel rooms exterminated when it was aware of the risk to its customers). And although TCS’s actions did harm Epic, that harm does not support the size of the punitive-damages award. Cf. Rainey, 941 F.3d at 254–55 (a ffi rming a punitive-damages award six times larger than the $1.13 million compensatory award in part because the plainti ff su ffered “pain and humiliation” as a result of the defendant’s groping and acts of sexual objecti fi cation); In re Exxon Valdez , 472 F.3d 600, 623–25 (9th Cir. 2006), amended490 F.3d 1066, (reducing punitive damages to $2.5 billion, re fl ecting a 5:1 ratio with compensatory damages, where the plainti ff caused severe economic harm and emotional harm to thousands of people by spilling 11 million gallons of crude oil into United States waters).We therefore conclude—based on the substantial compensatory award and the circumstances of this case—that a 2:1ratio exceeds the outermost limit of the due process guarantee. See Campbell , 538 U.S. at 425. Instead, the ratio relative to the $140 million compensatory award should not exceed 1:1.

We now turn to the fi nal guidepost: the di fference between the punitive award authorized by the jury and civil penaltiesimposed in comparable cases. Although “this guidepost generally deserves less weight than the other two,” Rainey, 941 F.3d at 255, it serves an important purpose: to “allow[] courtsto show ‘substantial deference to legislative judgments concerning appropriate sanctions for the conduct at issue.’” AutoZone, 707 F.3d at 840 (7th Cir. 2013) (quoting Gore, 517 U.S. at 583). TCS has made no argument about this guidepost and has thus waived any argument that it points toward the awardNos. 19-1528 & 19-1613 45

being unconstitutional. Although TCS has not pointed us to a single relevant civil penalty fo r comparison, we recognize that both the $280 million award the di strict court entered, and a $140 million award that would re fl ect a 1:1 ratio, comply with Wisconsin’s statutory cap on punitive damages. That cap is one indication of what the Wi sconsin legislature has judged to be an inappropriate sanction for reprehensible conduct: any punitive award exceeding a 2:1 ratio is inappropriate. Wis. Stat. § 895.043(6); see AutoZone, 707 F.3d at 840 (“We recognize that this statutory cap suggests that an award of damages at the capped maximum is not outlandish.”). So, the fi nalguidepost does not point toward a $280 million or $140 million punitive-damages award being unconstitutional. In sum, we conclude that the federal constitution prohibits a punitive-damages award here exceeding a 1:1 ratio with the $140 million compensatory award. And TCS only mentions Wisconsin law to point out that Wisconsin courts apply a test substantively identical to the federal test analyzed above. So,TCS has waived any argument that Wisconsin law might produce a di fferent result. We therefore remand for the district court to amend its judgment and reduce punitive damages to, at most, $140 million.

III. C ONCLUSION The jury heard plenty of evid ence that TCS stole Epic’s

con fi dential information and incorporated it into a comparative-analysis spreadsheet. And, drawing all inferences in favor of Epic, the jury could conclude that TCS used the comparative analysis for a variety of purposes, including the improvement of Med Mantra. However, the jury did not hear any evidence that would allow it to infer that any of Epic’s other information was used by TCS.46 Nos. 19-1528 & 19-1613

Pursuant to the reasoning set forth above, the judgment of the district court upholding the jury’s $140 million compensatory-damages award connected to the comparative analysis is AFFIRMED; and, the judgment of the district court vacating the jury’s $100 million compensatory damages award for TCS’s use of other informat ion is also AFFIRMED. Further, the judgment of the district court awarding $280 million in punitive damage is VACATED as it exceeds the outermost limit of the Due Proc ess guarantee in the Constitution; and, the issue of the am ount of punitive damages is REMANDED with instruction to the district court to reduce the punitive-damages award consistent with the analysis in this opinion.