Edward Mandel v. Steven Thrasher, et al.

After a full trial, the bankruptcy court rejected as unreliable the evidence purporting to assert a “lostasset” model of damages in a trade-secret misappropriation case. After the Fifth Circuit asked it to clarify how it had calculated the $1 million damages given the rejection of the lost-asset model, the bankruptcy court did an about face. It suddenly embraced the lostasset model, even though it did not receive any additional expert evidence that would have cured the flaws of the model that the bankruptcy court had already identified. The bankruptcy court reaffirmed the $1 million award, and a divided panel of the Fifth Circuit affirmed. Because the panel affirmed the $1 million trade-secret-damages award—an amount that the dissent below called “pie-in-the-sky damages” that were not “grounded…in theory [or] fact,” [App. 28]—the majority opinion declined to substantively review the damages on other causes of action that it determined were subsumed in that award, even though substantive review of each damage award will be necessary if any award is deemed non-dischargeable under the Bankruptcy Code. Accordingly, the questions presented are the following: 1. Where, without an intervening change in the law or the evidentiary record, the trial court subsequently adopted damages models and evidence that it had previously rejected in this