Snyder v. Beam Technologies
Appellate Case: 24-1136 Document: 55-1 Date Filed: 08/05/2025 Page: 1 (2025)
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Rule of Law:
To maintain trade secret protection under the DTSA and CUTSA, an individual must take reasonable measures to keep the information secret, and a Rule 702 motion for expert witness exclusion cannot be expanded to effectively grant summary judgment by precluding all evidence and witnesses on a specific damages theory without proper Rule 56 notice and procedures.
Facts:
- From December 2006 to August 2016, John Snyder was employed by Guardian Life Insurance Company.
- In February 2015, while still a Guardian employee, Snyder downloaded a national customer list of over 40,000 insurance broker names (the Guardian Broker List) from Guardian’s client-relationship-management software and emailed it to his personal Hotmail account.
- Guardian terminated Snyder's employment in August 2016.
- In August 2018, Snyder accepted an offer of employment from Beam Technologies, Inc. as a Regional Director of Broker Success and moved to Colorado, with Beam providing a $30,000 moving allowance.
- Snyder created three state-specific spreadsheets (Texas, Utah, Colorado lists) using the Guardian Broker List as a template, but accidentally included the full Guardian Broker List as a separate tab in each.
- Snyder emailed these spreadsheets, including the full Guardian Broker List, to ten Beam employees without marking them confidential, password protecting them, or requiring confidentiality agreements.
- After distributing the Guardian Broker List, Snyder did not object to Beam's use of the broker contacts or attempt to retrieve the materials; instead, he told Beam's CEO that he had purposefully shared the Guardian Broker List with Beam employees.
- Beam Technologies, Inc. terminated Snyder's employment in November 2018.
Procedural Posture:
- John Snyder filed a lawsuit against Beam Technologies, Inc. in the United States District Court for the District of Colorado in October 2020.
- Snyder filed an amended complaint in February 2021, asserting a Defend Trade Secrets Act (DTSA) claim and Colorado state law claims.
- Beam Technologies, Inc. filed a partial motion for summary judgment against Snyder's trade secret claims, arguing lack of ownership, failure to safeguard, and no misappropriation.
- The district court granted Beam Technologies, Inc.'s motion for summary judgment on the two trade secret claims (DTSA and CUTSA), ruling that Snyder failed to provide sufficient evidence of ownership of the customer list.
- The district court denied Beam Technologies, Inc.'s motion for summary judgment on Claims Three (obtaining worker by misrepresentation), Four (fraudulent misrepresentation), and Five (promissory estoppel).
- Both parties filed motions under Federal Rule of Evidence 702 to exclude certain expert witnesses from testifying at trial.
- The district court granted Beam Technologies, Inc.'s Rule 702 motion to exclude Snyder's damages expert (Nicholas Adamy) and broadly precluded Snyder from offering any evidence or witnesses on lost wages for the remaining claims.
- Snyder filed a motion to reconsider the Rule 702 Order, arguing it effectively entered summary judgment; the district court denied this motion.
- Following the Rule 702 Order, Snyder and Beam Technologies, Inc. settled the promissory estoppel claim and jointly moved the district court to dismiss the two remaining claims for entry of final judgment.
- The district court granted the joint motion, dismissing the remaining claims and ordering entry of final judgment.
- Snyder timely appealed to the United States Court of Appeals for the Tenth Circuit.
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Issue:
1. Did John Snyder take reasonable measures to maintain the secrecy of the Guardian Broker List, as required for trade secret protection under the Defend Trade Secrets Act (DTSA) and the Colorado Uniform Trade Secrets Act (CUTSA)? 2. May a district court, through a Federal Rule of Evidence 702 order excluding an expert witness, also preclude all other evidence and fact witnesses on a damages theory without providing the nonmovant the procedural protections of Federal Rule of Civil Procedure 56?
Opinions:
Majority - Federico, Circuit Judge
1. No, John Snyder did not take reasonable measures to maintain the secrecy of the Guardian Broker List. The court affirmed summary judgment on Snyder's trade secret claims (DTSA and CUTSA) but on different grounds than the district court. While the district court focused on Snyder's lack of "ownership," the Tenth Circuit determined that Snyder failed to present sufficient evidence that he took reasonable measures or efforts to maintain the secrecy of the Guardian Broker List, a core requirement for trade secret protection. The court acknowledged that Snyder saved the list on his personal computer, a USB drive, and a password-protected work laptop, but found these actions insufficient. Crucially, Snyder emailed the full Guardian Broker List to ten Beam employees without marking it as confidential, password protecting it, requiring confidentiality agreements, or informing recipients that the information was a trade secret. Furthermore, after the initial disclosure, Snyder did not object to Beam's use of the contacts, attempt to retrieve the materials, or notify Beam of any mistake. Instead, he "affirmatively ratified" his disclosure by telling Beam's CEO that he had purposefully shared the full list. Given these actions, the court concluded that no reasonable jury could find that Snyder met the minimum definition of reasonable measures or efforts to maintain secrecy under federal or Colorado law, citing Sw. Stainless, LP v. Sappington and Double Eagle Alloys, Inc. v. Hooper. 2. No, a district court may not expand a Federal Rule of Evidence 702 order to preclude all other evidence and fact witnesses on a damages theory without providing the nonmovant the procedural protections of Federal Rule of Civil Procedure 56. The court reversed the district court's Rule 702 Order. The Tenth Circuit held that the district court improperly broadened the scope of a motion to exclude an expert witness under Rule 702 to preclude any evidence or witnesses regarding lost wages, effectively granting summary judgment on damages without adhering to the procedural safeguards of Federal Rule of Civil Procedure 56. The court noted that while a district court can grant sua sponte summary judgment, it must provide proper notice and an opportunity for the nonmovant to come forward with all evidence and arguments. Snyder was prejudiced because he lacked fair notice that the Rule 702 motion would be treated as a dispositive motion on damages for all claims, requiring him to present all his fact evidence. The court cited Sports Racing Servs., Inc. v. Sports Car Club of America, Inc. and Oldham v. O.K. Farms, Inc. to emphasize the necessity of Rule 56 protections.
Dissenting - Bacharach, J.
1. Yes, a lawful possessor of a trade secret can sue for its misappropriation, and a genuine issue of material fact exists regarding the lawfulness of John Snyder's possession. Justice Bacharach concurred with the majority on reversing the Rule 702 Order but dissented on the trade secret claims. He argued that the district court erred by granting summary judgment on the basis that Snyder did not "own" the Guardian Broker List. Justice Bacharach stated that under both the Defend Trade Secrets Act (DTSA) and the Colorado Uniform Trade Secrets Act (CUTSA), lawful possessors of trade secrets, not just conventional "owners," can sue for misappropriation, referencing Gates Rubber Co. v. Bando Chemical Industries and legal scholarship. He pointed out that the DTSA broadly defines ownership to include lawful possession, and the CUTSA's intent for uniformity with other states supports this interpretation. He also contended that a genuine issue of material fact existed regarding the lawfulness of Snyder's possession, as Snyder testified that Guardian had given him the right to possess the list, and Beam did not adequately argue otherwise at the summary judgment stage. Justice Bacharach further argued that the majority should not have affirmed summary judgment on the alternative grounds of failure to take reasonable measures to maintain secrecy, as the district court did not rule on this issue, and it was not fully briefed by the parties on appeal. He believed this issue should have been remanded to the district court for initial consideration.
Analysis:
This case clarifies two critical procedural and substantive points in trade secret litigation. First, it underscores that for trade secret claims, the "reasonable measures to maintain secrecy" element is a stringent factual inquiry, demanding more than passive preservation; active steps to protect confidentiality and mitigate disclosure are essential. Second, the ruling serves as a strong reminder to district courts about the procedural limits of Rule 702 motions, preventing their expansion into de facto summary judgments without affording the non-moving party the explicit notice and protective framework of Federal Rule of Civil Procedure 56. This ensures parties have a fair opportunity to present their case on substantive merits, particularly regarding damages.
