IP Law Daily, TRADE SECRETS—10th Cir.: Hacking, trade secrets claims reinstated in dispute between rival pest control businesses, (Jan 23, 2026)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

The district court erred in its interpretation of statutory loss under the CFAA and in the application of causation standards under the DTSA and the UTSA.

In a mixed ruling, the U.S. Court of Appeals for the Tenth Circuit has reinstated Moxie Pest Control’s claims under the Computer Fraud and Abuse Act (CFAA) and revived its trade secret claims under federal and Utah law, holding that the district court erred in requiring a showing of technological harm under the CFAA and wrongly dismissed all trade secret remedies for want of causation. However, the court affirmed dismissal of Moxie’s RICO claims and upheld the denial of its broad discovery motions (Moxie Pest Control (UTAH), LLC v. Nielsen, No. 24-4076 (10th Cir. Jan. 21, 2026)).

Background. Moxie Pest Control is a network of pest control businesses that operate nationwide, using a seasonal, door-to-door sales model and heavily relying on hiring college students as commission-based representatives. Aptive Environmental, based in Utah, is one of its largest competitors and recruits from the same workforce. The companies vie for top sellers by showcasing past sales performance data, which Moxie maintains in a confidential internal system.

Moxie’s asserted trade secrets include its internal sales leaderboards stored on a password-protected platform called SalesRoutes. These leaderboards track representatives' sales performance and are used to recruit new hires. Moxie requires confidentiality agreements from those with access to this data, including independent contractors, who sign agreements through third-party entities with Moxie as a beneficiary.

Moxie alleged that Aptive, through senior executives Kyle Nielsen and Connor Ruggio, orchestrated a scheme in 2019 and 2020 to unlawfully obtain Moxie’s sales data. The complaint alleged that Ruggio offered bounties to Aptive employees who could acquire screenshots of Moxie’s data. In 2020, Nielsen paid a former Aptive employee, who had joined Moxie, $2,000 and a pair of sneakers in exchange for his login credentials. Using those credentials, Nielsen accessed SalesRoutes and circulated the data within Aptive to boost recruitment.

Therefore, Moxie sued Aptive and four of its employees in federal district court in Utah, asserting claims under the CFAA, DTSA, UTSA, and the Racketeer Influenced and Corrupt Organizations Act (RICO). The district court dismissed the CFAA claim for failure to plead statutory loss, denied Moxie’s discovery motions for damages-related evidence, and granted summary judgment to Aptive on the remaining claims. Moxie appealed.

CFAA. The Tenth Circuit reversed the dismissal of Moxie’s CFAA claim. The district court had found that Moxie failed to allege a qualifying loss because its claimed investigative costs did not involve technological harm, citing Van Buren v. United States, 593 U.S. 374 (2021). The Tenth Circuit disagreed, holding that the CFAA’s definition of “loss” under 18 U.S.C. §1030(e)(11) includes reasonable costs incurred in responding to a breach, including investigation. Citing A.V. ex rel. Vanderhye v. iParadigms, LLC, 562 F.3d 630, 646 (4th Cir. 2009), and Brown Jordan Int’l, Inc. v. Carmicle, 846 F.3d 1167, 1174–75 (11th Cir. 2017), the court found that Moxie’s allegations of more than $5,000 in investigative costs sufficed at the pleading stage.

Discovery. The Tenth Circuit affirmed the district court’s denial of Moxie’s motions to compel. Moxie had sought broad discovery into Aptive’s recruitment, compensation, and revenue practices from 2016 to 2021. The district court instead ordered Aptive to disclose information related only to individuals on the stolen Moxie rosters who later joined Aptive. The Tenth Circuit held that the court acted within its discretion and noted that Moxie failed to seek further discovery after receiving initial disclosures.

Causation—RICO and trade secret claims. On summary judgment, the district court ruled that Moxie had failed to prove that Aptive’s alleged misappropriation of trade secrets caused it harm. The Tenth Circuit affirmed this ruling as to Moxie’s RICO claims. Citing GeoMetWatch Corp. v. Behunin, 38 F.4th 1183, 1204–05 (10th Cir. 2022), the appellate court found that Moxie’s evidence of increased Aptive revenue during the years of the alleged misconduct did not establish causation. Anecdotal evidence, such as the decision of one recruit, Zak Benson, who ultimately resigned before the season began, was insufficient. Survey data about hypothetical recruit preferences also failed to show that Aptive’s conduct caused financial loss.

The appellate court parted ways with the district court on Moxie’s DTSA and UTSA claims. While it agreed that causation was essential for pursuing unjust enrichment, it clarified that other remedies, such as injunctive relief and reasonable royalties, do not require proof of actual harm. Citing Storagecraft Tech. In Corp. v. Kirby, 744 F.3d 1183, 1185 (10th Cir. 2014), the court explained that reasonable royalties can be based on a hypothetical license negotiation, independent of the defendant's actual sales or profits.

District court’s treatment of royalties. Although Aptive argued that Moxie had abandoned or waived its claim for royalty damages, the Tenth Circuit disagreed. The district court had expressed concern with Moxie’s use of the term “royalty,” but appeared to allow Moxie to pursue such damages under the alternative label of “license value.” Because the district court did not exclude this remedy, and Moxie continued to press the claim at summary judgment, the appellate court held that the claim remained viable.

Injunctive relief. The Tenth Circuit also found that the district court failed to evaluate Moxie’s request for injunctive relief. As the court did not reach this issue in its summary judgment order, the Tenth Circuit declined to affirm on alternative grounds. Citing United States v. Suggs, 998 F.3d 1125, 1141 (10th Cir. 2021), the panel remanded the DTSA and UTSA claims for further proceedings on injunctive and royalty-based remedies.

Conclusion. Thus, the Tenth Circuit reversed the dismissal of the CFAA claim, affirmed the discovery ruling, affirmed summary judgment on RICO, and partially reversed the summary judgment on trade secret claims, remanding the case for further proceedings on those fronts.

The case is No. 24-4076.

Judge: Moritz, N.

Attorneys: Brent O. Hatch (Hatch Law Group P.C.) for Moxie Pest Control [Utah], LLC. Nathaniel E. Broadhurst (Clyde Snow & Sessions PC) for Kyle Nielsen.

Companies: Moxie Pest Control (Utah), LLC

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