Compulife Software, Inc. v. Binyomin Rutstein
Citation111 F.4th 1147
Date Filed2024-08-01
Docket21-14074
Cited12 times
StatusPublished
Full Opinion (html_with_citations)
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 1 of 29
[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 21-14071
____________________
COMPULIFE SOFTWARE, INC,
Plaintiff-Appellee,
Cross-Appellant,
versus
MOSES NEWMAN,
AARON LEVY,
BINYOMIN RUTSTEIN,
DAVID RUTSTEIN,
Defendants-Appellants,
Cross-Appellees.
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 2 of 29
2 Opinion of the Court 21-14071
____________________
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 9:16-cv-81942-BER
____________________
____________________
No. 21-14074
____________________
COMPULIFE SOFTWARE, INC,
Plaintiff-Appellee,
Cross-Appellant,
versus
BINYOMIN RUTSTEIN,
DAVID RUTSTEIN,
Defendants-Appellants,
Cross-Appellees.
____________________
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 9:16-cv-80808-BER
____________________
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 3 of 29
21-14071 Opinion of the Court 3
Before JORDAN, BRASHER, and ABUDU, Circuit Judges.
BRASHER, Circuit Judge:
We must once again consider an intellectual property dis-
pute between Compulife and its competitors—defendants Moses
Newman, Aaron Levy, Binyomin Rutstein, and Binyomin’s father,
David Rutstein.
Compulife created software to generate life insurance
quotes. To create these quotes, the software relied on Compulife’s
secret database of insurance rates. Compulife accuses the defend-
ants of infringing on its copyright by copying the software’s code
and using it for their own website. And it says that they stole its
trade secret by acquiring portions of the database through im-
proper means. In a previous appeal, we remanded for a trial on
Compulife’s claims for copyright infringement and misappropria-
tion of trade secrets. See Compulife Software Inc. v. Newman, 959 F.3d
1288 (11th Cir. 2020) (Compulife I).
After a bench trial, the district court ruled against Compulife
on the former, but in favor of Compulife on the latter. All parties
have appealed again. Their appeals raise three questions.
First, did the district court err in concluding that Com-
pulife’s competitors did not infringe on its copyright? We think that
by failing to consider the copyrightability of the code’s arrange-
ment, the district court erred. And, because of that error, we must
reverse and remand for the district court to make new fact findings
on the copyright claim.
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 4 of 29
4 Opinion of the Court 21-14071
Second, did the district court err in concluding that the de-
fendants acquired Compulife’s trade secret through improper
means? We believe that under Compulife I and E. I. duPont
deNemours & Co. v. Christopher, 431 F.2d 1012 (5th Cir. 1970), the
district court did not err.
Third, did the district court err in holding the defendants
jointly and severally liable for misappropriating Compulife’s trade
secret despite their varying levels of culpability? We believe the dis-
trict court did not err. Joint and several liability is the standard for
trade secret claims, and that sort of liability ignores different de-
grees of wrongdoing. Accordingly, we affirm the judgment on the
trade secret claim.
So we affirm in part, reverse in part, and remand for further
proceedings.
I.
Compulife makes life insurance comparison and quotation
software. It both licenses the software to customers and has an
online version that public users can access to generate quotes.
Compulife’s software relies on its proprietary database—a
factual compilation of insurance rates used as the raw materials to
develop quotes for customers. Some rates are independently avail-
able, but the whole compilation is not, and it includes some rates
not publicly available. Compulife has developed working relation-
ships with various insurance companies. It obtains rates monthly
and often ahead of their public release, making Compulife’s
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 5 of 29
21-14071 Opinion of the Court 5
database and software especially valuable. As a result, Compulife
encrypts its database.
The software works by looking up information in the data-
base and compiling a quote. It has different blocks of code to cor-
respond to different areas of the database. The major components
of Compulife’s code were arranged as follows: state, birth month,
birthday, birth year, sex, smoking status, health classification, in-
surance type, payment option, sorting output, face amount, and
minimum life insurance company rating. For the software to work
with the database, it must be arranged in exactly that manner, or
the user will get an error.
The code uses some elements that Compulife claims are cre-
ative, including: (1) the names it came up with for the various var-
iables throughout the code, (2) radio buttons when making certain
input selections, and (3) camel case when writing out the names of
variables in the code. The latter two require a brief explanation.
Radio buttons are (typically) circular buttons that allow a user to
identify single inputs from a defined field of mutually exclusive op-
tions. For example, in the picture below, radio buttons constitute
the input method on the left, while a dropdown menu is the input
method on the right.
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 6 of 29
6 Opinion of the Court 21-14071
Camel case, meanwhile, is a typographical practice when phrases
are written without spaces but with capitalization. For example, a
variable in Compulife’s code collecting birth year information was
written in camel case as “BirthYear,” instead of in uppercase as
“Birth Year,” or in lowercase as “birth year.”
A group of Compulife’s competitors allegedly infringed its
copyright and stole its trade secret. David Rutstein was an insur-
ance agent at one time, but he was permanently barred from the
profession. He created several websites that used Compulife’s soft-
ware without a license. The sites were registered in his son Bin-
yomin Rutstein’s name, and one of them was later owned by Aaron
Levy. David got the software by misleading Compulife into think-
ing that he worked with someone who was licensed to use it. Bin-
yomin allowed his father to conduct these insurance activities with
his insurance agent license number. On Levy’s and David’s de-
mands, an employee, Moses Newman, supervised a scraping attack
of Compulife’s website to get many millions of quotes generated
by its website—far more than a human could ever physically ob-
tain. The men then used those quotes for their own websites. Com-
pulife’s sales declined as a result.
Compulife sued these competitors for copyright infringe-
ment and misappropriation of trade secrets, among other claims.
The parties consented to a magistrate judge and waived their right
to a jury trial. The magistrate judge held a bench trial. On appeal
from the bench trial, we clarified some standards that apply and
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 7 of 29
21-14071 Opinion of the Court 7
directed the district court to make more specific findings. See gener-
ally Compulife I, 959 F.3d 1288.
On remand, a new judge conducted a second bench trial but
incorporated all our findings as the law of the case. The district
court found that most of Compulife’s code was not protectable,
and the protectable parts were not substantially significant to the
defendants’ code. The district court thus concluded that Com-
pulife’s copyright claim failed. The district court did not consider
the arrangement of the code as a whole, though it did examine the
arrangement of some of the variables. Separately, the district court
concluded that Compulife prevailed on its misappropriation claim
because the scraping constituted improper means. Based on those
rulings, the district court granted Compulife injunctive relief and
entered judgment for $184,225.87 in compensatory damages, rele-
vant prejudgment interest, and $368,451.74 in punitive damages
against all defendants jointly and severally.
Both parties appealed. Compulife appeals the judgment
against its copyright claim. Meanwhile, the defendants say Com-
pulife should not have won its misappropriation claim, and in the
alternative, that they should not have been held jointly and sever-
ally liable on that claim.
II.
“On appeal from a bench trial, the district court’s conclu-
sions of law are reviewed de novo, but its findings of fact shall not
be set aside unless clearly erroneous.” Compulife I, 959 F.3d at 1301
(cleaned up). In other words, reviewing a bench trial raises a mixed
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 8 of 29
8 Opinion of the Court 21-14071
question of law and fact, and the relevant standard depends “on
whether answering it entails primarily legal or factual work.” Id.
“Separately, when an appellate court discerns that a district court
has failed to make a finding because of an erroneous view of the
law, the usual rule is that there should be a remand for further pro-
ceedings to permit the trial court to make the missing findings.” Id.
(cleaned up).
III.
We address three main issues in this intellectual property
dispute. First, we must determine whether the district court erred
in finding that the defendants did not infringe on Compulife’s cop-
yright by copying their code. Second, we must determine whether
the district court erred in finding that the defendants misappropri-
ated Compulife’s trade secret by improper means when they ob-
tained a portion of Compulife’s database through scraping. Third,
we must determine whether the district court erred in holding the
defendants jointly and severally liable. We address each issue in
turn.
A.
We will start with Compulife’s appeal of the district court’s
judgment against its copyright infringement claim. To establish
copyright infringement, a plaintiff must prove “(1) ownership of a
valid copyright[] and (2) copying of constituent elements of the
work that are original.” Bateman v. Mnemonics, Inc., 79 F.3d 1532,
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 9 of 29
21-14071 Opinion of the Court 9
1541 (11th Cir. 1996) (internal quotation marks omitted) (quoting
Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991)).
The first element is easy. We earlier recognized that the ex-
istence and validity of Compulife’s copyright is undisputed. Com-
pulife I, 959 F.3d at 1301. “Under the law-of-the-case doctrine, [the
resolution of] an issue decided at one stage of a case is binding at
later stages of the same case.” Schiavo ex rel. Schindler v. Schiavo, 403
F.3d 1289, 1291 (11th Cir. 2005) (alteration in original) (quoting
Toole v. Baxter Healthcare Corp., 235 F.3d 1307, 1313 (11th Cir.
2000)). So we can proceed to the second copyright infringement
element—copying.
The copying element “comprises two subparts, ‘factual and
legal copying,’ both of which Compulife, as the plaintiff, has the
burden to prove.” Compulife I, 959 F.3d at 1301. The factual copying
inquiry is “whether the defendant, as a factual matter, copied por-
tions of the plaintiff’s program.” MiTek Holdings, Inc. v. Arce Eng’g
Co., 89 F.3d 1548, 1554 (11th Cir. 1996) (quoting Gates Rubber Co. v.
Bando Chem. Indus., Ltd., 9 F.3d 823, 832 (10th Cir. 1993)). Again,
we already determined that Compulife established factual copying.
Compulife I, 959 F.3d at 1302.
Compulife’s appeal turns on the element of legal copying.
As relevant here, “legal—or actionable—copying occurs when
those elements of the copyrighted work that have been copied are
protected expression and of such importance to the copied work
that the appropriation is actionable.” Id. (cleaned up). The district
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 10 of 29
10 Opinion of the Court 21-14071
court found no legal copying, but it came to that conclusion after
slightly erring in applying our test.
We have adopted a three-step test for legal copying: the ab-
straction-filtration-comparison test. First, a court should “ab-
stract”—“break down the allegedly infringed program into its con-
stituent structural parts.” Id. at 1303 (cleaned up). Second, a court
should filter—“sift out all non-protectable material.” Id. (cleaned
up). Finally, the court should compare the protected material with
the copycat. When considering the literal elements of a program,
like source code and object code, the plaintiff need establish only a
“substantial similarity” between the two works. Id. at 1302 n.6. As
we held in Compulife I, because the dispute here concerns source
code, the substantial similarity standard applies. Id.
Compulife argues that the district court erred at each step of
this three-part test; the defendants argue that it did not. We agree
in part with Compulife and in part with the defendants.
1.
Turning first to “abstraction,” we must “break[] down the
allegedly infringed program into its constituent structural parts.”
Id. at 1303. Compulife argues that the arrangement of its various
components of source code—state, birth month, birthday, birth
year, sex, smoking status, health classification, insurance type, pay-
ment option, sorting—is creative and therefore protectable. That
is, Compulife argues that one “constituent” part of its program is
the arrangement of its source code.
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 11 of 29
21-14071 Opinion of the Court 11
Just as we have held that the arrangement of yacht listings
within a used boat guide could be protectable, see BUC Int’l Corp. v.
Int’l Yacht Council Ltd., 489 F.3d 1129, 1145 (11th Cir. 2007), Com-
pulife argues that the arrangement of the variables in its code could
be protectable. And, generally, we have held that the arrangement
of elements in a program may be protectable. See MiTek Holdings,
Inc., 89 F.3d at 1558 (recognizing that the arrangement of elements
of a user interface may be protectable as a factual compilation); see
also Oracle Am., Inc. v. Google Inc., 750 F.3d 1339, 1356 (Fed. Cir.
2014) (holding that the sequence, structure, and organization of
various packages in a software are protectable).
A careful reader might argue that this caselaw is distinguish-
able. Our decision in MiTek addressed the potential protectability
of the arrangement of nonliteral elements of a program, like a user
interface. Here, however, we consider the arrangement of a literal
element—source code. So one might conclude that, unlike the ar-
rangement of a nonliteral element, the arrangement of a literal el-
ement is not protectable.
But we think there is no principled distinction to draw be-
tween those two contexts. We explained in Compulife I that the vir-
tual-identicality standard governs the arrangement of nonliteral el-
ements of a program, even though the substantial-similarity stand-
ard is the default standard for other cases. See 959 F.3d at 1302 n.6.
The substantial-similarity standard asks, unsurprisingly, whether
there is a “‘substantial similarity’ between the allegedly offending
program and the protectable, original elements of the copyrighted
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 12 of 29
12 Opinion of the Court 21-14071
works.” Id. at 1302. The virtual-identicality standard, on the other
hand, asks whether the two works are virtually identical, which is
“a level of similarity greater than the ‘substantial similarity’ stand-
ard.” MiTek, 89 F.3d at 1558 n.24. This difference, though, concerns
only the analysis that a court engages in when comparing the cop-
ied and copying works.
But we’re not comparing, we’re abstracting. There is no
other meaningful difference between the virtual-identicality stand-
ard and the substantial-similarity standard to make us think that,
when abstracting, courts ought not consider the arrangement of a
program. In fact, we have applied the latter standard to the arrange-
ment of information in other contexts multiple times. See e.g., BUC
Int’l Corp., 489 F.3d at 1149 n.42 (explaining that BellSouth Advert. &
Pub. Corp. v. Donnelley Info. Pub., Inc., 999 F.2d 1436 (11th Cir. 1993)
(en banc), “established the ‘substantial similarity’ standard as the
default mode of analysis for compilation copyright claims”). Our
conclusion in MiTek compels courts, when abstracting, to assess
the arrangement of literal elements as a potentially protected con-
stituent part of the program.
Although the district court considered the selection and ar-
rangement of Compulife’s code to some degree, the district court
never identified the entire arrangement of these variables in the
code as a constituent component of the code. For example, the dis-
trict court expressly evaluated the arrangement of the birth month,
birthday, and birth year variables before filtering. But it didn’t look
at the arrangement of all the variables together. And, relying on
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 13 of 29
21-14071 Opinion of the Court 13
Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340,
347–48 (1991), the district court recognized that factual compila-
tions, “like the ones performed by Compulife’s software in compil-
ing facts . . . to generate a quote” can be protectable. But the ar-
rangement of the code itself can be protectable, not just the results
produced by the software.
Given that the arrangement of the code may be protectable,
we agree with Compulife that the district court should have ab-
stracted the “arrangement” as something to be analyzed at the sub-
sequent filtration step. The defendants offer two arguments to the
contrary, but neither works.
To start, the defendants argue that we should not consider
whether the arrangement of code is protectable because Compulife
forfeited this argument below. After all, typically, we do not con-
sider issues for the first time on appeal. See Access Now, Inc. v. Sw.
Airlines Co., 385 F.3d 1324, 1331 (11th Cir. 2004). But Compulife
raised this issue below. In its proposed findings of fact and conclu-
sions of law before the district court, Compulife said that its “code
contained numerous creative elements including a creative way to
identify and organize variables related to requests for insurance
quotation information.”
On the merits, the defendants argue that the abstraction-fil-
tration-comparison test forecloses analyzing the arrangement of
the entire code because abstraction requires the court to break
down the code into its constituent structural components. But by
recognizing that the arrangement of elements of a program can be
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 14 of 29
14 Opinion of the Court 21-14071
protectable, precedents such as MiTek and Oracle suggest that the
arrangement is a constituent structural component suitable to be
analyzed in the abstraction and filtration steps.
We draw no conclusion about whether the arrangement of
this code is protectable. We simply hold that the district court erred
by failing to consider whether it was.
2.
Although we must remand for the district court to assess
whether the arrangement of the code is protectable, we will con-
tinue with Compulife’s arguments about the district court’s appli-
cation of other elements of the test. See United States v. White, 846
F.2d 678, 688 (11th Cir. 1988) (explaining that we can address addi-
tional alleged errors to provide guidance to the district court in fur-
ther proceedings).
We will start with filtration. “Before comparing two works
to determine if they display the required substantial similarity, a
court must ‘eliminate from comparison the unprotectable ele-
ments of’ the copyrighted work.” Compulife I, 959 F.3d at 1303
(quoting Bateman, 79 F.3d at 1545). Beyond the arrangement of the
variables, which we leave for the district court to consider on re-
mand, Compulife argues that the district court erroneously filtered
out other protectable content: (1) the chosen name of the variable
that collects birth years (i.e., using “BirthYear” instead of another
option like “year”); (2) its use of camel case when naming variables;
and (3) the use of radio buttons for making certain selections such
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 15 of 29
21-14071 Opinion of the Court 15
as smoker status or gender, rather than other options like a
dropdown menu, check box, or manual entry in a text field.
We disagree with Compulife. The district court was right to
conclude that those elements are not protectable.
We’ll consider first the name of the BirthYear variable.
Compulife argues that its competitors could have chosen any other
name for the variable. But “obvious label[s] . . . lack the requisite
originality for copyright protection.” BellSouth, 999 F.2d at 1444
(holding that a heading of “Attorneys” for a list of attorneys or
“Banks” for a list of banks is not original expression and therefore
not protectable). Common sense instructs that the name
“BirthYear” for a variable that invites users to input their birth year
is too obvious to be original.
Now we’ll turn to Compulife’s choice to use camel case
there and elsewhere. Under Compulife I, expression dictated by ex-
ternal factors like industry standards is not protectable. See 959 F.3d
at 1304–05. There was testimony at trial that camel case is an in-
dustry standard. It is perfectly reasonable for the district court to
have found that this industry standard dictated Compulife’s choice
of camel case for “BirthYear” and other variables. So the district
court did not err in filtering these elements out.
Finally, we’ll address Compulife’s use of radio buttons for
certain user selections. “Under the merger doctrine, ‘expression is
not protected in those instances where there is only one or so few
ways of expressing an idea that protection of the expression would
effectively accord protection to the idea itself.’” BellSouth, 999 F.2d
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 16 of 29
16 Opinion of the Court 21-14071
at 1442 (quoting Kregos v. Associated Press, 937 F.2d 700, 705 (2d Cir.
1991)). For example, because there are so “few ways of visually pre-
senting the idea that an activity is not permitted,” an expression of
that idea in the form of “a circle with a diagonal line crossed
through it” is not protectable under the merger doctrine. See BUC
Int’l Corp., 489 F.3d at 1143.
Likewise, the merger doctrine makes Compulife’s use of ra-
dio buttons unprotectable. There are very few practicable ways to
invite users to make single selections among a set of defined op-
tions. A few of Compulife’s proposed alternatives don’t fit the bill.
Checkboxes generally allow you to make multiple selections sim-
ultaneously. Open text fields don’t limit you to a defined set of op-
tions. Only radio buttons and dropdown menus remain. With so
few options, allowing Compulife to copyright its use of radio but-
tons would merge the expression (the use of radio buttons) with
the idea (making single selections from a set of defined options).
That is contrary to our law and, at times, Compulife’s own opin-
ion. After all, Compulife inconsistently concedes that its use of ra-
dio buttons was not protectable, saying “[n]or did Compulife claim
that its use of a radio button was copyrightable,” but later arguing
the opposite.
For all these reasons, the district court did not err in filtering
out all the other elements besides the arrangement of the code.
3.
Finally, let us turn to comparison. “The last step is to com-
pare any remaining kernels of creative expression with the
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 17 of 29
21-14071 Opinion of the Court 17
allegedly infringing program to determine if there is in fact a sub-
stantial similarity—comparison.” Compulife I, 959 F.3d at 1303
(cleaned up). Under this step, “both the quantitative and the quali-
tative significance of the amount copied” must be assessed. Peter
Letterese & Assocs., Inc. v. World Inst. of Scientology Enters., 533 F.3d
1287, 1307 (11th Cir. 2008).
Compulife argues its competitors’ copying was both quanti-
tatively and qualitatively significant. It complains that the defend-
ants copied 84 percent of its code. And it says the copying was qual-
itatively similar, arguing that the defendants copied the way it
named and formatted its variables. Again, we leave Compulife’s ar-
guments about the arrangement of the code for the district court to
consider on remand. But we disagree with Compulife that there
was significant copying of the remaining elements of the code.
Start with quantitative significance. Yes, Compulife’s com-
petitors copied 84 percent of its code. But “even substantial simi-
larity between a copyrighted work’s unprotectable elements and a
purportedly infringing work isn’t actionable, regardless of how
many unprotectable elements are copied or how important they
may be.” Compulife I, 959 F.3d at 1303. Of the elements the district
court did find protectable, Compulife’s competitors copied only 27
of the 347 lines. That’s not the 84 percent that Compulife alleges,
but a mere 7.78 percent.
Qualitative significance protects against even quantitatively
insignificant copying of a computer program, when that small, cop-
ied portion gives the program “distinctive features” or makes “the
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 18 of 29
18 Opinion of the Court 21-14071
program especially creative or desirable.” Id. at 1302 (quoting 4
Nimmer on Copyright § 13.03 (2019)). Qualitative significance is
used to protect quantitatively insubstantial but otherwise incredi-
bly significant copying—like copying “the most powerful passages”
from President Ford’s autobiography, concerning his pardon of
President Nixon (one of the most significant moments of his presi-
dency). Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539,
565 (1985).
Compulife does not offer any reason why the remaining el-
ements are qualitatively significant. It argues that these elements
were necessary to perform “key functions” of the program. But
their importance is not the key to their protectability. Nothing in
the record suggests the district court erred in finding the remaining
elements not distinctive or especially creative.
B.
Having addressed copyright infringement, we will move on
to Compulife’s trade secret claim. Compulife says that the defend-
ants stole its database of insurance rates, which it argues is a trade
secret. A trade secret is a piece of information that has independent
economic value from being kept secret and is in fact subject to rea-
sonable efforts to maintain its secrecy. See Compulife I, 959 F.3d at
1311. A plaintiff in Florida can sue a defendant who steals his trade
1
secret under both federal and Florida law.
1 Compulife brings claims under the federal Defend Trade Secrets Act and the
Florida Uniform Trade Secrets Act. We already held, and the parties seem to
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 19 of 29
21-14071 Opinion of the Court 19
To prove that the defendants stole its trade secret, Com-
pulife “must demonstrate that (1) it possessed a trade secret and (2)
the secret was misappropriated.” Yellowfin Yachts, Inc. v. Barker Boat-
works, LLC, 898 F.3d 1279, 1297 (11th Cir. 2018) (quotation and in-
ternal quotation marks omitted). First, we will consider whether
Compulife’s database constituted a trade secret, and second, we
will consider whether the defendants misappropriated it.
1.
We concluded previously that it was not clearly erroneous
for the district court to find that Compulife’s database was a trade
secret. Compulife I, 959 F.3d at 1311. On remand, the district court
reasoned that it must respect that finding as the law of the case.
The law-of-the-case doctrine has three exceptions: when “(1) a sub-
sequent trial produces substantially different evidence, (2) control-
ling authority has since made a contrary decision of law applicable
to that issue, or (3) the prior decision was clearly erroneous and
would work manifest injustice.” Wheeler v. City of Pleasant Grove,
746 F.2d 1437, 1440 (11th Cir. 1984) (quoting United States v. Robin-
son, 690 F.2d 869, 872 (11th Cir. 1982)).
The defendants argue that the first exception to the law-of-
the-case doctrine applies here. After we remanded the case in Com-
pulife I, the district court held a new trial. The defendants say that
agree, that the federal law is so much like the Florida law that an analysis of a
Florida claim amounts to an analysis of a federal one. Compulife I, 959 F.3d at
1311 n.13. So like we did in Compulife I, we will proceed under the Florida law.
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 20 of 29
20 Opinion of the Court 21-14071
substantially different evidence emerged that suggests that the da-
tabase was not subject to reasonable efforts to maintain its secrecy.
Specifically, the defendants point to new evidence about how
Compulife protected its software. None of this evidence under-
mines our assessment in the initial appeal.
First, contrary to what was originally known, the licensee
through which David Rutstein accessed the database was not re-
quired by Compulife to sign a license until 2015, long after the mis-
appropriation happened. But there was also testimony from the li-
censee that he had always understood that his company was bound
by a license when using the Compulife software, even before he
formally signed one; he said that he treated the software the same
way he treated his company’s own trade secrets. None of this new
information undermines our conclusion on the first appeal that
Compulife goes to great lengths to control the use of its software
through licenses.
Second, David Rutstein separately accessed the database by
sending a misleading email to Compulife, which gave him access
without verifying his statements. But David Rutstein lied. He said
he had an account with Compulife through a real Compulife licen-
see it recognized and asked for help in using the service on the li-
censee’s behalf. Perhaps Compulife should have had a second-fac-
tor authentication, but it is not unreasonable for it to believe that
someone asking for specialized help in using its service on a licen-
see’s behalf works for that licensee. At the very least, it does not
negate all the other work Compulife does in encrypting, licensing,
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 21 of 29
21-14071 Opinion of the Court 21
and otherwise securing its database. See Compulife I, 959 F.3d at
1312 (“So long as the precautions taken were reasonable, it doesn’t
matter that the defendant found a way to circumvent them. In-
deed, even if the trade-secret owner took no measures to protect
its secret from a certain type of reconnaissance, that method may
still constitute improper means.”).
Third, the public has always been able to pull insurance
quotes from the database through the website, with no limitations
on how many quotes they could pull. But we previously men-
tioned that even if individual quotes that are publicly available lack
trade secret status, the whole compilation of them (which would
be nearly impossible for a human to obtain through the website
without scraping) can still be a trade secret. See id. at 1314.
One final point on the law of the case: the defendants also
say, with no argument, that we should conclude that our previous
decision was clearly erroneous, such that following it would work
a manifest injustice. Because the defendants make merely a passing
reference to this exception and offer no argument about why it
should apply, we consider this issue abandoned. See Sapuppo v. All-
state Floridian Ins. Co., 739 F.3d 678, 681 (11th Cir. 2014).
So the law-of-the-case doctrine applies, and the database is a
trade secret.
2.
Now, let us consider whether the defendants misappropri-
ated Compulife’s trade secret. “One party can misappropriate
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 22 of 29
22 Opinion of the Court 21-14071
another’s trade secret by either acquisition, disclosure, or use.”
Compulife I, 959 F.3d at 1311(citingFla. Stat. § 688.002
(2)). “Com-
pulife alleges misappropriation both by acquisition and by use—
but not by improper disclosure.” Id.
Misappropriation by acquisition occurs when a person ac-
quires a trade secret and knows or has reason to know that it was
acquired by improper means. Id. Misappropriation by use occurs
when a person uses a trade secret without consent and either:
(1) used improper means to acquire the trade secret; (2) at the time
of use knew or had reason to know that it was (a) derived from a
person who used improper means, (b) acquired in a manner giving
rise to a duty to maintain secrecy, or (c) derived from a person who
owed a duty to maintain secrecy to the owner; or (3) before a ma-
terial change in his position, knew or had reason to know that it
was a trade secret and had been acquired by accident or mistake.
Id.
Two key questions are at issue. First, did the defendants use
improper means? And second, did the defendants acquire the trade
secret? The district court answered “yes” to both. And we cannot
say the district court erred.
Let’s start with improper means. As we previously ex-
plained, “[a]ctions may be ‘improper’ for trade-secret purposes
even if not independently unlawful.” Id. at 1312. (citing Christopher,
431 F.2d at 1014). “Under the broad definition adopted in [our prec-
edent] Christopher, misappropriation occurs whenever a defendant
acquires the secret from its owner ‘without his permission at a time
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 23 of 29
21-14071 Opinion of the Court 23
when he is taking reasonable precautions to maintain its secrecy.’”
Id.
Here, Compulife alleges that the defendants used “scraping”
to acquire its trade secret—i.e., its database of insurance quotes. It
is important to note that scraping and related technologies (like
crawling) may be perfectly legitimate. Much of the modern internet
is built on those technologies. See Han-Wei Lui, Two Decades of
Laws and Practice Around Screen Scraping in the Common Law World
and Its Open Banking Watershed Moment, 30 WASH. INT’L L.J. 28, 29
(2020) (explaining that scraping “is now used for targeted advertis-
ing, price aggregation, budgeting apps, website preservation, aca-
demic research, journalism, and more”) (citations omitted). But the
defendants in this case did not take innocent screenshots of a pub-
licly available site; instead, they copied the order of Compulife’s
copyrighted code and used that code to commit a scraping attack
that acquired millions of variable-dependent insurance quotes. If
they had not formatted and ordered their code exactly as Com-
pulife did, they would not have been able to get the millions of
quotes that they got. As we explained in the previous appeal, this
deceptive behavior resembles the acquisition of a trade secret
through surreptitious aerial photography, which we addressed in
Christopher.
Now let’s consider acquisition. The district court found that
the defendants stole anywhere from 3 million to 43.5 million
quotes. It is true that we don’t know the total percentage of the
database that was taken. But the district court found that Com-
pulife’s revenue declined after the scraping attack, that it lost
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 24 of 29
24 Opinion of the Court 21-14071
business it otherwise expected to receive, that the number of cus-
tomers looking for free trials declined, that the number of free trials
that converted to four-month subscriptions declined, and that the
number of four-month subscriptions that converted to annual sub-
scriptions declined. All the while, quotes generated from Com-
pulife’s software continued to appear on the defendants’ website.
A fair reading of this record supports the district court’s finding that
the defendants obtained so much of the database that they posed a
competitive threat to Compulife. Faced with this record, the dis-
trict court did not err in concluding that Compulife’s trade secret
was acquired by its competitors.
C.
Now let us consider the joint and several liability of the de-
fendants for Compulife’s claim of misappropriation of trade se-
crets. The defendants think it unwarranted because they each ar-
gue that they are less at fault than others. Compulife thinks it ap-
propriate.
We start with a few basic principles. First, Florida is a com-
parative fault regime with an exception for intentional torts. See
Barton Protective Servs., Inc. v. Faber, 745 So. 2d 968, 976 (Fla. Dist.
Ct. App. 1999). Second, in Florida, trade secret misappropriation is
an intentional tort. See Vance v. Tire Eng’g & Distrib., LLC, 32 So. 3d
774, 776 (Fla. Dist. Ct. App. 2010). Third, joint and several liability
is applied “when the defendants acted in concert” and their “sepa-
rate independent” tortious acts “combined[] to produce a single in-
jury.” Basel v. McFarland & Sons, Inc., 815 So. 2d 687, 691 (Fla. Dist.
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 25 of 29
21-14071 Opinion of the Court 25
Ct. App. 2002) (quoting Smith v. Dep’t of Ins., 507 So. 2d 1080, 1091
(Fla. 1987)). The upshot is that defendants in trade secret misappro-
priation cases are jointly and severally liable under Florida law
when their conduct produces a single injury.
The doctrine of joint and several liability does not require
equal fault among all defendants. “Joint and several liability was
established through the common law and later codified by the leg-
islature. It allows a claimant to recover all damages from one of
multiple defendants even though that particular defendant may be
the least responsible defendant in the cause.” Agency for Health Care
Admin. V. Associated Indus. Of Fla., Inc., 678 So. 2d 1239, 1257 (Fla.
1996). Joint and several liability’s whole purpose is to treat the de-
fendants as equally responsible, regardless of their fault. It must
hold true when applied to trade secret claims. At least one of our
sister circuits agrees that joint and several liability applies to trade
secrets cases and copyright infringement cases like this one. Salton,
Inc. v. Philips Domestic Appliances & Pers. Care B.V., 391 F.3d 871, 877
(7th Cir. 2004). To hold otherwise, we would need to conclude that
comparative fault, rather than joint and several liability, is the de-
fault regime in trade secret cases.
Applying those principles here supports joint and several li-
ability. There are enough facts in the record to support the district
court’s finding that each of the defendants acted in concert to com-
mit the wrongs causing Compulife’s injury: David Rutstein lied in
an email to get Compulife’s web quoter put onto his website; New-
man supervised the scraping attack at David’s and Levy’s direction;
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 26 of 29
26 Opinion of the Court 21-14071
Binyomin was the investor and owner of the company that his fa-
ther David used to design the website (the infringing website was
registered in his name), and Binyomin gave his father permission
to use his insurance license and his agency to collect fees from in-
surance sales generated by the stolen trade secret. These acts
caused a single injury—lost sales and revenues—and, under Florida
law, the defendants are jointly and severally liable for that single
injury.
The defendants offer no argument for why we may or
should create an exception to the typical rules of joint and several
liability in the trade secret context. The defendants say that several
courts have suggested that joint and several liability is appropriate
when the degree of wrong is the same among the several defend-
ants. See Brocade Commc’ns Sys., Inc. v. A10 Networks, Inc., 873 F.
Supp. 2d 1192, 1218 (N.D. Cal. 2012); Fishkin v. Susquehanna Part-
ners, G.P., No. CIV.A.03-3766, 2007 WL 853769, at *3 (E.D. Pa. Mar.
19, 2007). But they are not right that multiple defendants must have
the same degree of wrong to apply joint and several liability. To
draw that conclusion would be “to commit the fallacy of the in-
verse (otherwise known as denying the antecedent): the incorrect
assumption that if P implies Q, then not-P implies not-Q.” N.L.R.B.
v. Noel Canning, 573 U.S. 513, 589 (2014) (Scalia, J., concurring in the
judgment).
In fact, the very authorities the defendants cite suggest that
joint and several liability is appropriate in this circumstance. The
courts in both Brocade and Fishkin relied on a leading treatise,
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 27 of 29
21-14071 Opinion of the Court 27
Milgrim on Trade Secrets. It suggests that the general rule for mis-
appropriation of trade secrets is joint and several liability. See Bro-
cade, 873 F. Supp. 2d at 1218 (citing Milgrim for the proposition that
“[c]ommentators on trade secret law also suggest that, in general,
liability for misappropriation claims is joint and several” before
quoting the same degree of wrong language); Fishkin, 2007 WL
853769, at *3 (citing Milgrim for the identical point). The treatise
proposes a narrow exception to this general rule for a hypothetical
corporate employe who is independent of his corporate employer.
4 Milgrim on Trade Secrets § 15.02 (2023). The treatise hypothe-
sizes that in some cases a court could split a single loss into multiple
losses across time, such that if a corporate employee quits his job
“at some time during the period of wrongful use, as to him dam-
ages might only be computed for wrongful use prior to such termi-
nation.” Id. The narrowness of that hypothetical exception—which
is not present on the facts here—emphasizes the breadth of the pre-
sumption in favor of joint and several liability.
Binyomin Rutstein separately suggests that his culpability
was so low that he should not have been found liable at all. But we
cannot say the district court clearly erred. The district court found
that David Rutstein’s infringing websites were registered in Bin-
yomin’s name, Binyomin owned an insurance agency which bene-
fited from the stolen database, and Binyomin allowed David to use
his license in violation of a consent decree to illicitly engage in the
insurance business. Nothing in the record suggests that those find-
ings are clearly erroneous. And those findings support the district
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 28 of 29
28 Opinion of the Court 21-14071
court’s conclusion that Binyomin participated in and benefited
from the misappropriation of Compulife’s trade secret.
We will mention one final issue about joint and several lia-
bility. One could argue that, even though joint and several liability
is the rule for compensatory damages in a case like this one, the dis-
trict court should have considered the defendants’ different levels
of culpability in the context of punitive damages. The general prin-
ciple is that “exemplary damages imposed on a defendant should
reflect ‘the enormity of his offense.’” BMW of N. Am., Inc. v. Gore,
517 U.S. 559, 575(1996) (quoting Day v. Woodworth,54 U.S. 363, 371
(1852)). And several of our sister circuits have recognized that,
under certain state laws, joint and several liability is inappropriate
for punitive damages. See, e.g., Rodick v. City of Schenectady, 1 F.3d
1341, 1349(2d Cir. 1993); Bader Farms, Inc. v. BASF Corp.,39 F.4th 954
, 973 (8th Cir. 2022). For their part, however, the Florida courts
at least occasionally approve of joint and several liability for puni-
tive damages. See Parton v. Palomino Lakes Prop. Owners Ass’n, Inc.,
928 So. 2d 449, 454(Fla. Dist. Ct. App. 2006); Wrains v. Rose,175 So. 2d 75, 79
(Fla. Dist. Ct. App. 1965). Whether the district court
should have considered imposing separate punitive damages is a
complicated issue, which would have benefited from the parties
raising it. Nobody did. So the issue was forfeited. See United States
v. Campbell, 26 F.4th 860, 873 (11th Cir. 2022). We therefore do not
address it.
USCA11 Case: 21-14071 Document: 103-1 Date Filed: 08/01/2024 Page: 29 of 29
21-14071 Opinion of the Court 29
IV.
The district court is AFFIRMED in part and REVERSED in
part. The matter is REMANDED for further proceedings con-
sistent with this opinion.