Shuttlewagon, Inc. v. Scott Higgins
WD83882
| Mo. Ct. App. | Jun 22, 2021Background
- Shuttlewagon (former employer) designs railcar movers; owner Ying sold Shuttlewagon to Nordco in 2008, then founded IQS in 2017 and hired several former Shuttlewagon engineers (Crist, Coon, Higgins).
- Shuttlewagon stored engineering files in a password-protected cloud system (CallTrak); departing employees used still-active credentials and some later possessed external drives and copies of Shuttlewagon files at IQS.
- Parties litigated claims including computer tampering, violations of the Missouri Uniform Trade Secrets Act, unfair competition, and conspiracy; the court entered a protective order allowing parties to designate discovery as "Confidential" or "Attorneys’ Eyes Only (AEO)," with AEO accessible only to independent experts (not Shuttlewagon’s expert Yoder).
- Shuttlewagon’s designated expert Yoder was denied AEO access as non‑independent; Shuttlewagon sought to impeach witnesses with IQS’s AEO designations at trial; during trial IQS withdrew its AEO/Confidential markings in writing after the court indicated such markings could be used for impeachment if a foundation were laid.
- Shuttlewagon moved for sanctions, alleging bad‑faith AEO designations had impeded its ability to prepare and present its case; the trial court denied sanctions, the jury returned verdicts for defendants on most claims, and Shuttlewagon appeals four issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Denial of sanctions for AEO designations | IQS used AEO in bad faith to withhold critical documents and manufacture a defense; sanctions required | AEO designations were made in good faith; withdrawal was responsive to trial developments and not fraudulent | Trial court did not abuse discretion; no bad faith or fraud proved and Shuttlewagon failed to challenge AEO pretrial |
| Admission/argument about witnesses' inability to "trace" Shuttlewagon info into IQS product | Evidence that lay witnesses couldn’t trace confidential info was misleading because Shuttlewagon was barred from explaining why (AEO exclusion) | Defendants: testimony about lack of tracing was relevant; the record shows jurors heard that experts/witnesses lacked access | No abuse of discretion; record contains testimony and argument explaining limited access; issue largely preserved against challenge |
| Admission of testimony about Yoder’s workplace misconduct | Such evidence was improper character impeachment and irrelevant to trade‑secret/tampering claims | Defendants: testimony was relevant to credibility; evidence was cumulative of admissible testimony | No prejudicial error; evidence was cumulative and similar misconduct was elicited without objection from Yoder himself |
| Jury instructions on mitigation of damages (affirmative defense) | Mitigation is not an affirmative defense to intentional torts; instructions unsupported by authority/evidence and could nullify liability | Mitigation is permissible; instructions conditioned mitigation on finding liability; no prejudice because jury found no liability on those claims | No reversible error; instructions were conditioned on liability and jury never reached damages, so any instructional error was not prejudicial |
Key Cases Cited
- Hale v. Cottrell, Inc., 456 S.W.3d 481 (Mo. App. W.D. 2014) (trial court sanctions for discovery abuse reviewed for abuse of discretion; bad faith standard explained)
- Rea v. Moore, 74 S.W.3d 795 (Mo. App. S.D. 2002) (fraud on the court standard for sanctions described)
- Sherrer v. Boston Scientific Corp., 609 S.W.3d 697 (Mo. banc 2020) (admission/exclusion of evidence reviewed for abuse of discretion)
- Cox v. Kansas City Chiefs Football Club, Inc., 473 S.W.3d 107 (Mo. banc 2015) (definition of legal vs. logical relevance and abuse‑of‑discretion standard)
- Sterbenz v. Kansas City Power & Light Co., 333 S.W.3d 1 (Mo. App. W.D. 2010) (warning against verdict instructions that mix liability and mitigation so jury cannot separately address damages)
- Sparks v. Ballenger, 373 S.W.2d 955 (Mo. 1964) (if jury returns for defendant on liability, correctness of damage instructions is immaterial)