In June 2020, we wrote about a Texas appellate court overturning a $740 million judgment for real estate analytics company HouseCanary because the jury instructions included theories of liability for which there was no evidence and allowed recovery on claims that were preempted by the Texas Uniform Trade Secrets Act.
On June 18, 2020, the appellant, Title Source, Inc., filed a motion for reconsideration of the appellate court’s June 3 decision. In response, the Fourth Court of Appeals of Texas withdrew the June 3, 2020, opinion and issued a subsequent opinion on August 26, 2020. The court maintained its June 3 decision to reverse based on the jury instructions, remanding for a new trial. It noted that, even though it was reasonably certain that the jury did not base its findings on bribery or espionage—because HouseCanary did not assert those theories of liability—the court was reasonably certain that the jury was “significantly influenced” by the erroneous inclusion of the “breach or inducement of a breach of duty to maintain secrecy, to limit use, or to prohibit discovery of a trade secret” instruction. HouseCanary argued throughout the trial that TSI breached a duty to limit its use of HouseCanary’s trade secret. But TSI did not actually acquire the trade secrets through those breaches, rather the evidence shoes those breaches occurred after House Canary willingly turned over the trade secrets for collaborative business pursuits under the parties’ non-disclosure agreement and House Canary elected to recover only on the misappropriation and fraud claims. A verdict on this theory of liability would have been contrary to the evidence. Because HouseCanary did not elect to recover on the breach of contract claim, that claim was not considered in the first appeal. On reconsideration, Title Source argued that a partial remand was not appropriate because all of the claims relied on interrelated facts and overlapping measures of damages. The court agreed, holding that because the claims relied on the same facts, a retrial could result in a verdict that conflicted with the jury’s contract findings. Thus, if HouseCanary wants to retry its trade secret and fraud claims, it must also retry its breach of contract claim. Alternatively, it could recover on the jury’s contract findings that were not successfully challenged in the original appeal.
The case is Title Source, Inc. v. HouseCanary, Inc., ___S.W.3d___, No. 04-19-00044-CV, 2020 WL 5027667 (Tex. App. Aug. 26, 2020). [In June 2020, we wrote “Texas Court Orders New Trial After $740M Judgment“]