No Sifting Through Databases: Fifth Circuit Demands Particularized Identification and Proof of “Commercial Use” in Texas Trade Secret Cases

Introduction

In DeWolff, Boberg & Associates Inc. v. Pethick & The Randall Powers Company, the Fifth Circuit affirmed summary judgment against a plaintiff alleging trade secret misappropriation under Texas law. The court did not reach the district court’s Daubert ruling excluding the plaintiff’s damages expert, instead affirming on alternative grounds rooted in the plaintiff’s failure to produce (1) specific, non-conclusory identification of the alleged trade secrets and (2) competent evidence of “use” of those trade secrets by the defendants.

The case arises from a common fact pattern in the consulting industry: an executive (Justin Pethick) leaves one firm (DB&A) for a competitor (The Randall Powers Company), and several business opportunities follow. DB&A claimed its proprietary sales-and-marketing data—especially entries in its Salesforce and SharePoint repositories, including a so-called “DOD List”—were misappropriated and used to divert three prospective accounts: Sechan Electronics, Arcosa Wind Towers, and Beyond Meat. The district court excluded DB&A’s damages expert and granted summary judgment on the resulting absence of damages evidence. The Fifth Circuit affirmed on two alternative merits elements—trade secret identification and proof of use—sending a clear message about the evidentiary rigor required at summary judgment in trade secret cases.

Summary of the Opinion

Applying de novo review, the Fifth Circuit held that summary judgment for defendants was appropriate on two independent grounds:

DB&A failed to identify its alleged trade secrets with specificity. Its reliance on large swathes of Salesforce and SharePoint data—submitted as a heavily redacted “Exhibit X” without directing the court to a sealed, unredacted version—and generalized descriptions of “confidential contact information” and “notes from prior meetings” were “vastly overbroad.” The court declined to “sift through the record” to find trade secrets.
Even assuming protectable trade secrets existed, DB&A failed to adduce evidence of “use” or disclosure by Pethick or the Powers Company. The only concrete item—a pre-departure email in which Pethick asked for the DOD List—did not establish possession or use; imaging of Pethick’s device did not show the DOD List. A suspicious timeline of client engagements was insufficient.

Because these merits deficiencies independently justified judgment as a matter of law, the court affirmed without addressing the district court’s Daubert analysis of damages.

Analysis

Precedents Cited and Their Influence

Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993): Cited because the district court excluded DB&A’s damages expert under Daubert. The Fifth Circuit expressly did not reach this issue, reinforcing the principle that appellate courts may affirm on alternative grounds where threshold evidentiary rulings are unnecessary to the outcome.
Nickell v. Beau View of Biloxi, L.L.C., 636 F.3d 752 (5th Cir. 2011): Provides the de novo standard of review for summary judgment.
Fed. R. Civ. P. 56(a): Establishes that summary judgment is proper where there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.
Lindsey v. Sears Roebuck & Co., 16 F.3d 616 (5th Cir. 1994) (per curiam): Clarifies the movant’s burden where the nonmovant bears the ultimate burden at trial. The movant may point to the absence of evidence, shifting the burden to the nonmovant to produce competent summary judgment evidence. This burden-shifting framework is central to the court’s conclusion that DB&A failed to meet its evidentiary obligations on two elements.
Donaghey v. Ocean Drilling & Exploration Co., 974 F.2d 646 (5th Cir. 1992): Confirms that the nonmovant cannot rely on pleadings alone and must submit competent evidence (depositions, affidavits, etc.). The opinion invokes this standard to reinforce DB&A’s duty to supply specific, admissible proof.
CQ, Inc. v. TXU Mining Co., 565 F.3d 268 (5th Cir. 2009) and Gaia Techs. Inc. v. Recycled Prods. Corp., 175 F.3d 365 (5th Cir. 1999): Set out the three elements of misappropriation under Texas law: (1) existence of a trade secret, (2) acquisition through breach of a confidential relationship or improper means, and (3) unauthorized use. The Fifth Circuit employs this framework and disposes of the claim on elements (1) and (3).
Universal Truckload, Inc. v. Dalton Logistics, Inc., 946 F.3d 689 (5th Cir. 2020) (quoting Forsyth v. Barr, 19 F.3d 1527): Emphasizes that courts have “no obligation to sift through the record” to find evidence supporting the nonmovant’s case. This principle is the backbone of the court’s rejection of DB&A’s overbroad, non-specific submission of database materials.
Gen. Universal Sys., Inc. v. HAL, Inc., 500 F.3d 444 (5th Cir. 2007): Defines “use” in the trade secret context as “commercial use” by which an entity seeks to profit. The court relies on this definition to conclude that the record lacked proof of actionable use.
United States v. McSween, 53 F.3d 684 (5th Cir. 1995): Confirms that the appellate court may affirm on any ground supported by the record, even if not relied upon by the district court. This enables the Fifth Circuit to affirm on trade secret identification and use without reaching damages or Daubert.

Legal Reasoning

The court’s reasoning is organized around two merits elements that DB&A failed to carry at summary judgment.

1) Failure to Identify Trade Secrets with Specificity

DB&A argued that its Salesforce entries and SharePoint materials—especially a “DOD List”—encompassed proprietary sales-and-marketing intelligence, including customer contacts, meeting notes, and opportunity assessments. But the court found DB&A’s approach “vastly overbroad” because:

DB&A did not differentiate public from non-public information within the vast database materials. A trade secret must be a specific, protectable compilation or item conferring independent economic value from its secrecy. Simply labeling an entire repository “trade secret” does not suffice.
DB&A relied on a heavily redacted “Exhibit X” and did not provide the court with a sealed, unredacted version to review. Without precise record citations to specific entries or fields, the appellate court refused to undertake its own excavation of the record.
The DOD List, on its face, did not appear to contain confidential or proprietary information. DB&A claimed it reflected confidential external contacts, but the document listed individuals affiliated with DB&A. Absent evidence showing what, exactly, was secret and why, the list could not create a fact issue.

The Fifth Circuit’s invocation of Universal Truckload and Forsyth underscores a procedural discipline: under Rule 56, the nonmovant must marshal targeted, competent evidence and direct the court to it. The failure to isolate discrete items (e.g., particular fields, entries, names, strategies, or analyses) that are genuinely secret is fatal at summary judgment.

2) No Evidence of “Use” or Disclosure

Even assuming arguendo that DB&A possessed protectable trade secrets, the claim independently failed for lack of proof of “use.” Drawing from General Universal Systems, “use” requires commercial exploitation—leveraging the information to gain a marketplace advantage or profit.

The only direct item DB&A identified was a pre-departure email in which Pethick requested the DOD List. But a request is not proof of receipt, possession, or use. Forensic imaging of Pethick’s device did not locate the DOD List. Absent logs, metadata, or documents showing that the list was actually obtained, viewed, transferred, or deployed in sales activity, this evidence was insufficient.
The temporal proximity between Pethick’s departure and the Powers Company securing work with Sechan, Arcosa, and Beyond Meat is circumstantial and, standing alone, too thin to support an inference of “use.” The opinion implicitly distinguishes standard competitive movement of business opportunities from actionable misappropriation.

With no competent evidence that defendants used or disclosed any trade secret for commercial gain, a critical element of misappropriation was missing.

3) Appellate Disposition on Alternative Grounds

The court noted its “concerns” about the district court’s Daubert analysis but declined to reach it. Relying on McSween, the panel affirmed on alternative grounds supported by the record. This conserves judicial resources and spotlights the primacy of merits elements—existence of a trade secret and use—independent of damages proof.

Impact

The opinion crystallizes two practice-shaping principles in Texas trade secret litigation at the summary judgment stage.

A. Precision in Identifying the Trade Secret

Plaintiffs must isolate the specific items or compilations claimed as trade secrets. Vague labels like “Salesforce data” or “meeting notes” are inadequate. Courts expect itemized descriptions (e.g., specific fields, data schemas, curated contact hierarchies, non-public decision-maker matrices, uniquely derived opportunity scoring models) and substantiation of their secrecy and economic value.
Plaintiffs should distinguish the secret from the non-secret within the same dataset and explain how public-facing information (e.g., names and titles findable on LinkedIn) was augmented by proprietary intelligence to form a protectable compilation.
Redactions must be managed carefully. If submitting redacted exhibits, parties should file sealed, unredacted versions and cite the precise portions relied upon. This decision underscores that appellate courts will not guess at what the redactions conceal.

B. Proof of Commercial “Use”

Plaintiffs need evidence that the defendant did something with the information to seek profit—such as proposals quoting unique metrics, sales scripts tracked to the secret compilation, internal emails cross-referencing proprietary fields, access logs showing retrieval post-departure, or forensic evidence of transfer.
Mere timing or suspicion is insufficient. Mobility of employees and subsequent client engagements, without more, do not establish misappropriation.

C. Procedural and Strategic Consequences

Expect more early summary judgment challenges aimed at specificity and use. Defendants can prevail by “pointing to the absence of evidence” on either element, shifting the onus to plaintiffs to produce granular, admissible proof.
Plaintiffs should consider early trade secret identification disclosures and evidence-mapping (e.g., charts tying each alleged secret to record citations, secrecy measures, and concrete instances of use).
For defendants, disciplined offboarding (device imaging, data purges, NDAs validation) and neutral forensic attestations can be powerful rebuttal evidence, as they were here regarding the DOD List.

Complex Concepts Simplified

Trade secret: Information that derives independent economic value from not being generally known and is the subject of reasonable efforts to keep it secret. Examples can include curated contact hierarchies combined with internal decision-mapping, pricing algorithms, or non-public process metrics.
Misappropriation: Acquisition by improper means or use/disclosure without authorization of a trade secret.
“Use”: Commercial exploitation—employing the secret in marketing, sales, negotiations, pricing, or product development to gain economic advantage.
Summary judgment: A procedure to resolve cases without trial when there is no genuine dispute of material fact. The movant may prevail by demonstrating the nonmovant lacks evidence on essential elements, shifting the burden to the nonmovant to produce competent proof.
“No obligation to sift through the record”: Courts expect precise citations to evidence; they will not comb voluminous records to find support for a party’s position.
Affirmance on “alternative grounds”: An appellate court may uphold a judgment based on any ground supported by the record, even if the district court relied on a different rationale (e.g., affirming on merits elements instead of damages).

Conclusion

DeWolff, Boberg v. Pethick marks a clear, practical directive in Fifth Circuit trade secret cases: at summary judgment, plaintiffs must (1) identify the alleged trade secrets with particularity, segregating non-public from public information within large datasets, and (2) produce competent evidence of “commercial use” or disclosure by the defendant. Overbroad references to entire databases, heavily redacted exhibits without precise sealed citations, and circumstantial timing alone will not suffice. The court’s refusal to reach Daubert underscores that where plaintiffs cannot make a prima facie showing on core elements, damages disputes are beside the point.

The opinion strengthens the procedural rigor of Texas trade secret litigation and reinforces a balanced approach to employee mobility: client movement following a job change is not, without more, proof of misappropriation. For litigants, the takeaways are concrete—be exacting about what the secret is, demonstrate why it is secret and valuable, and show how the defendant actually used it to seek profit. Anything less invites summary judgment.