USCA4 Appeal: 22-2090 Doc: 34 Filed: 09/03/2024 Pg: 1 of 15

UNPUBLISHED

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 22-2090

GMS INDUSTRIAL SUPPLY, INC.,

Plaintiff − Appellee,

v.

WESTLY L. GREER,

Defendant – Appellant,

and

G&S SUPPLY, LLC; SABRINA GREER; GREER GROUP, LLC; GREGORY K. SPIRES; COUNTRY ROADS, LLC; THOMAS HAYES; MIKE WELTON; WARTECH INDUSTRIES, LLC; HMC SUPPLY, LLC,

Defendants.

Appeal from the United States District Court for the Eastern District of Virginia, at Norfolk. Roderick Charles Young, District Judge. (2:19−cv−00324−RCY−LRL)

Submitted: November 9, 2023 Decided: September 3, 2024

Before DIAZ, Chief Judge, AGEE, Circuit Judge, and TRAXLER, Senior Circuit Judge.

Vacated and remanded by unpublished opinion. Chief Judge Diaz wrote the opinion, in which Judge Agee and Senior Judge Traxler joined. USCA4 Appeal: 22-2090 Doc: 34 Filed: 09/03/2024 Pg: 2 of 15

ON BRIEF: Robert W. McFarland, V. Kathleen Dougherty, Jeanne E. Noonan, Norfolk, Virginia, Sean A. McClelland, MCGUIREWOODS LLP, Washington, D.C., for Appellant. William A. Lascara, Thomas S. Berkley, Jeffrey D. Wilson, PENDER & COWARD, P.C., Virginia Beach, Virginia, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

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DIAZ, Chief Judge:

GMS Industrial Supply, Inc. sued its former employee, Westly Greer, after it

discovered that he’d secretly founded and operated two competitor companies while

serving as GMS’s Director of Sales.

A jury found Greer liable for violating Virginia’s computer trespass and trade

secrets statutes and awarded judgment to GMS on those claims. Before and after the

verdict, Greer moved for judgment as a matter of law on both claims. He argued that

because his offending conduct occurred in Colorado, neither Virginia tort statute applied.

Virginia courts traditionally apply the law of the jurisdiction where the perpetrator

committed the tort but allow parties to choose a different jurisdiction’s law by contract.

The district court denied Greer’s motions and found that a choice-of-law provision in his

employment contract superseded Virginia’s traditional choice-of-law rules.

Greer appeals. Because we agree with him that the contractual provision doesn’t

cover GMS’s statutory computer trespass and trade secrets claims, we vacate the judgment

and remand for further proceedings.

I.

A.

GMS is a Virginia-based sales company that supplies industrial products to military

bases. It employs sales agents nationwide, and it supervises those agents remotely.

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GMS hired Greer as a sales agent in 2011. The company promoted Greer several

times, and he became GMS’s Director of Sales in 2015. That year, Greer moved to

Colorado, where he worked for GMS remotely.

Greer and another GMS employee then founded two competitor companies that sold

industrial products to GMS’s customers. Greer didn’t tell GMS about the companies, and

he continued to operate them while serving as GMS’s Director of Sales.

In January 2019, Greer quit his position as Director of Sales, and GMS hired him as

an independent sales agent. Greer signed an Independent Sales Agent Agreement, which

like his previous GMS employment contracts, required him to keep GMS’s proprietary

information confidential.

But unlike his prior contracts, the Agreement contained a choice-of-law provision,

which stated that it “shall be governed by and construed in accordance with the laws of the

State of Virginia . . . .” J.A. 1412. It also contained a forum-selection clause, requiring the

parties to sue in the state or federal courts in Virginia for “any action . . . relating to or

arising from [the] Agreement.” J.A. 1412.

When GMS learned of Greer’s clandestine dealings in April 2019, it terminated the

Agreement. It also sent Greer a cease-and-desist letter ordering him to return his GMS

computers and to cease using or disclosing GMS’s confidential information.

Greer eventually returned the computers, but not before downloading and deleting

thousands of documents from GMS’s servers.

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B.

GMS sued Greer, the competitor companies, and Greer’s other GMS confederates

who simultaneously worked for the competitor companies. As relevant here, GMS’s

complaint raised claims for misappropriation of trade secrets under the Virginia Uniform

Trade Secrets Act,

et seq., and a violation of Virginia’s computer

trespass statute, the Virginia Computer Crimes Act,

et seq. 1

After discovery, Greer moved for sanctions against GMS. Greer argued that GMS’s

trade secret and computer trespass claims weren’t cognizable because his offending

conduct happened in Colorado.

The district court denied the motion, and the case proceeded to trial. Before trial,

Greer orally moved for judgment as a matter of law. The district court denied Greer’s

motion as to the trade secret and computer trespass claims. It didn’t explain its decision

but referred to the forum selection clause in the Agreement during the motion hearing.

At the end of trial, Greer renewed his motion for judgment as a matter of law. The

district court denied the motion as to the trade secret and computer trespass claims. And it

instructed the jury on both claims, rejecting Greer’s challenges to the jury instructions.

1 GMS also brought corresponding claims under the federal Defend Trade Secrets Act,

et seq., and the federal Computer Fraud and Abuse Act,

et seq. Those claims aren’t relevant to this appeal, and any reference to GMS’s trade secret and computer trespass claims in this opinion refers to its claims under Virginia law.

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The jury ultimately reached a verdict against Greer on both claims. It awarded GMS

no damages on the trade secrets claim and $50,000 in statutory damages on the computer

trespass claim. The court entered judgment, and this appeal followed.

II.

Greer argues that he was entitled to judgment as a matter of law on the trade secrets

and computer trespass claims, a contention that we review de novo. Legacy Data Access,

Inc. v. Cadrillion, LLC,

(4th Cir. 2018). In doing so, we “view[] the

evidence in the light most favorable to [GMS], the prevailing party in the trial court.”

A.

“A federal court hearing a diversity claim must apply the choice-of-law rules of the

state in which it sits.” Res. Bankshares Corp. v. St. Paul Mercury Ins.,

, 635

(4th Cir. 2005). Because this appeal arises from a complaint filed in the Eastern District

of Virginia, we look to Virginia’s choice-of-law rules.

Virginia applies the principle of lex loci delicti to determine the applicable

substantive law in tort suits. Demetres v. E.W. Constr., Inc.,

(4th Cir.

2015). According to that principle, “the law of the place of the wrong” governs the

substantive cause of action. Milton v. IIT Rsch. Inst.,

(4th Cir. 1998).

So Virginia courts apply the law of the jurisdiction where the perpetrator committed the

tort, not the jurisdiction where the victim felt the harm.

. Here, that’s Colorado.

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That said, Virginia allows contracting parties to choose the laws of a different

jurisdiction by contract. See Paul Bus. Sys., Inc. v. Canon U.S.A., Inc.,

(Va. 1990) (“[W]here parties to a contract have expressly declared that the agreement

shall be construed as made with reference to the law of a particular jurisdiction, we will

recognize such agreement and enforce it, applying the law of the stipulated jurisdiction.”).

“Virginia law looks favorably upon choice[-]of[-]law clauses in a contract, giving them

full effect except in unusual circumstances.” Hitachi Credit Am. Corp. v. Signet Bank,

, 624 (4th Cir. 1999).

B.

Greer and GMS agree on these basic legal principles, but they diverge on their

application to this case. Greer raises two arguments for why the choice-of-law provision

in the Agreement doesn’t apply: (1) most of his tortious conduct happened before he signed

the Agreement, or after GMS terminated it, and (2) the choice-of-law provision doesn’t

reach tort claims created by statute.

1.

GMS argues that Greer didn’t adequately present the timing issue to the district

court, and we agree. Though Greer argued many times that his conduct fell outside the

scope of the Agreement or that the Agreement applied only to breach of contract claims,

see J.A. 458–59 (sanctions motion); J.A. 718 (jury instruction objections); J.A. 727–28

(bench brief); J.A. 1017–22, 1028–30 (pre-trial Rule 50 motion); J.A. 1250–52 (post-trial

Rule 50 motion), he didn’t raise that his tortious conduct happened before and after the

Agreement was in effect.

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The record shows Greer only referenced his pre-Agreement conduct once in his

arguments. In his reply brief in support of his sanctions motion, Greer argued that “[his]

Employment Contract did not contain a choice[-]of[-]law provision,” so the Agreement

provision shouldn’t apply. J.A. 511. In the context of a 1500-page record, though, that

single sentence isn’t sufficient to preserve the issue. See Grayson O Co. v. Agadir Int’l

LLC,

(4th Cir. 2017) (noting that a party forfeits an issue if its brief takes

only a “passing shot” at it). And the district court didn’t otherwise address the timing issue.

See Volvo Constr. Equip. N. Am., Inc. v. CLM Equip. Co.,

, 604 (4th Cir.

2004) (holding that we may consider issues “specifically decided by [the] district court”).

Greer argues that this theory was “plainly encompassed by the submissions in the

underlying litigation.” Reply Br. at 19 (quoting United States v. Boyd,

(4th Cir. 2021)). But we disagree that he put the district court on notice of the timing issue.

See Nelson v. Adams USA, Inc.,

(2000) (“[T]he general rule that issues

must be raised in lower courts in order to be preserved as potential grounds of decision in

higher courts . . . requires that the lower court be fairly put on notice as to the substance of

the issue.”). Instead, Greer mainly argued that the choice-of-law provision applied only to

“dispute[s] under this [A]greement,” J.A. 1028–29, and thus wasn’t “broad enough to

encompass tort claims,” J.A. 1251. But that has nothing to do with his claim that his

conduct occurred before and after the Agreement.

Because Greer didn’t raise the timing objection to the district court, we need not

consider it. See Sines v. Hill,

, 349 (4th Cir. 2024) (“[I]ssues raised for the

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first time on appeal are generally not considered absent exceptional circumstances.”

(cleaned up)).

We’ve carved out two limited exceptions to this rule. “When a party in a civil case

raises an argument for the first time before us, we may reverse only if the newly raised

argument establishes fundamental error or a denial of fundamental justice.” Tarashuk v.

Givens,

(4th Cir. 2022) (cleaned up).

But even if Greer could satisfy this demanding standard, we’ve repeatedly refused

to undertake such review if the party doesn’t argue for it. See Makdessi v. Fields,

(4th Cir. 2015); In re Under Seal,

(4th Cir. 2014). Greer

doesn’t argue that the district court fundamentally erred or that its decision effected a denial

of fundamental justice. So he’s abandoned the issue, and we decline to consider it.

2.

With the timing issue behind us, we proceed to whether the choice-of-law provision

encompasses GMS’s computer trespass and trade secrets claims. It doesn’t.

We start, as we must, with the text of the Agreement. It provides:

This Agreement shall be governed by and construed in accordance with the laws of the State of Virginia without giving effect to any choice of law provisions. Any dispute that should arise will be handled accordingly. Both parties agree that the exclusive venue for any action, demand, claim or counterclaim relating to or arising from this Agreement, shall be in the state or federal courts located in Virginia Beach, Virginia and that such courts shall have personal jurisdiction over the parties to this Agreement.

J.A. 1412.

The parties advance two readings of the provision. According to GMS, the

provision governs “‘[a]ny dispute that should arise’ between the parties.” Appellee’s Br.

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at 6. But according to Greer, the provision “covers only those [claims] ‘arising from’ the

2019 [A]greement itself.” Appellant’s Br. at 16.

Greer has the better argument. Though the “any dispute that should arise” language

may refer to any dispute between the parties, as GMS argues, that clause is bookended by

clauses referring specifically to the Agreement. Virginia law commands us to “consider

the document as a whole,” Pocahontas Mining Ltd. Liab. Co. v. CNX Gas Co.,

(Va. 2008), and when we read the sentences in the provision together, we

conclude that the provision applies only to claims that relate to or arise from the Agreement.

Additionally, if any term is omitted from the contract, Virginia courts consider that

as “evidence that the parties intended to exclude that term.”

Though the parties could

have explicitly stated their intent to cover all claims between them, they didn’t. So we

decline to read that language into the contract for the benefit of GMS, the contract’s drafter.

See generally Winn v. Aleda Constr. Co.,

(Va. 1984) (“[A] contract

will be construed more strictly against the party who prepared it.”).

What claims relate to or arise from the Agreement is a trickier question. Though

we could read the provision to reach only contract claims, we think it’s broad enough to

encompass contract-related tort claims as well. See Hitachi, 166 F.3d at 628 (holding that

“[w]here a choice[-]of[-]law clause in the contract is sufficiently broad to encompass

contract-related tort claims such as fraudulent inducement,” the clause determines what

substantive law governs those tort claims).

First, the provision references “[a]ny dispute that should arise.” J.A. 1412

(emphasis added). While that dispute must be tethered to the Agreement, the word “any”

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favors a broad construction. See United States v. Gonzales,

(1997) (“Read

naturally, the word ‘any’ has an expansive meaning, that is, ‘one or some indiscriminately

of whatever kind.’” (quoting Any, Webster’s Third New International Dictionary 97 (Philip

Babcock Gove, ed., 1976))); see also Romero v. Barr,

, 292–93 (4th Cir. 2019)

(collecting cases construing the term “any” to have a broad meaning).

And under Virginia law, “[n]o word or clause in the contract will be treated as

meaningless if a reasonable meaning can be given to it, and there is a presumption that the

parties have not used words needlessly.” PMA Cap. Ins. v. US Airways, Inc.,

, 372–73 (Va. 2006) (cleaned up). We thus credit the parties’ inclusion of “any” and

conclude that they included it to expand the scope of the provision.

Second, while the forum-selection clause isn’t dispositive, it would be incongruous

to require the parties to sue in Virginia, where the contract claims would be resolved under

Viginia law and any related tort claims wouldn’t be. See Zaklit v. Glob. Linguist Sols.,

LLC, No. 1:14-cv-314,

, at *11 (E.D. Va. July 8, 2014) (“The only

reasonable inference is that the parties intended to provide for an efficient and businesslike

resolution of possible future disputes by choosing a single forum and a single body of law

to govern all claims . . . .”).

But even if we interpret the choice-of-law provision to encompass contract-related

tort claims, we can’t agree that GMS’s trade secrets and computer trespass claims relate to

or arise from the Agreement.

Ulloa v. QSP, Inc.,

(Va. 2006), guides us. There, the Supreme Court

of Virginia considered whether a contractual fee-shifting provision encompassed the

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plaintiff’s misappropriation of trade secrets claim, also brought under the Virginia Uniform

Trade Secrets Act.

. The jury awarded judgment to the plaintiff company on its

trade secrets claim,

, and the company sought attorneys’ fees in accordance with a

provision in the defendant’s employment contract that stated: “[I]f I violate this Agreement

. . . I will be responsible for all attorneys’ fees, costs and expenses incurred by [the

company] by reason of any action relating to this Agreement.”

.

The court held that the “misappropriation of trade secrets claim does not qualify as

‘any action relating’ to the parties’ contract as contemplated by the contract’s fee-shifting

provision.”

. That’s because “[t]hat language expressly limits ‘any action’ to one

‘relating’ to their agreement and thereby excludes an independent action such as one under

the Act.”

(second emphasis added).

Though Ulloa concerns a different context, its reasoning is on-point. Of course, it

involves a claim under the Virginia Uniform Trade Secrets Act, one of the very statutes at

issue here.

We also note that the Virginia Uniform Trade Secrets Act creates separate remedies,

independent of the Agreement. It authorizes attorneys’ fees,

,

and punitive damages,

§ 59.1-338(B), in certain circumstances. The Virginia Computer

Crimes Act likewise authorizes attorneys’ fees, id. § 18.2-152.12(B), (C), and court costs,

id. § 18.2-152.12(A).

In short, regardless of the Agreement, Greer had a duty, under the statutes, not to

misappropriate GMS’s trade secrets nor to misuse its technology. Because both statutes

impose “legal obligations [that are] independent of the contract,” Pyott-Boone Elecs., Inc.

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v. IRR Tr. for Donald L. Fetterolf Dated Dec. 9, 1997,

(W.D. Va.

2013), we think the Supreme Court of Virginia would find that neither claim “arises under”

nor “relates to” the Agreement. Cf., e.g., Nature Conservancy v. Machipongo Club, Inc.,

(4th Cir. 1978) (recognizing that, when sitting in diversity, a federal

court must apply the law of a state’s highest court or predict how the court would rule were

the case before it).

GMS urges us to rely on another Supreme Court of Virginia case, Paul Business

Systems, Inc. v. Canon U.S.A., Inc.,

(Va. 1990). There, the court held that

the plaintiff’s business conspiracy and defamation tort claims were covered by the forum-

selection clauses in the parties’ agreements that applied to “any and all causes of action

hereunder by and between the parties hereto.”

at 806–08. The court found that the

“hereunder” language covered the tort claims because the action “flow[ed] directly from

the contracts.”

. That was in part because “the business relationship [between

the parties] f[ound] its basis in the agreements.”

GMS says that because the Agreement likewise creates the parties’ business

relationship, its claims also arise under the Agreement. But the Paul Business Systems

court also emphasized the close relationship between the tortious conduct and the

agreement itself. As it remarked, the plaintiff alleged that the defendants conspired to

injure its business by making defamatory statements that the termination of the parties’

agreement was imminent.

But here, neither the computer trespass claim nor the trade secrets claim implicates

the Agreement in the same way. The Agreement says nothing about Greer’s work

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technology nor his duty to maintain the files on his computers after his termination. While

the Agreement does mention his duty not to disseminate trade secret information, it’s the

statute—not the Agreement—that fills in the definition of “trade secret” and Greer’s

liability for misappropriation of trade secrets.

So we think Paul Business Systems is distinguishable and must be read together with

the Supreme Court of Virginia’s clear mandate in Ulloa, a case decided sixteen years later.

In short, because, under Ulloa, GMS’s statutory tort claims don’t relate to the Agreement,

it logically follows that they also don’t arise from it.

That means then that the choice-of-law provision doesn’t apply to GMS’s trade

secret and computer trespass claims. So, we return to Virginia’s traditional choice-of-law

rules. Greer’s tortious conduct all happened in Colorado, so under the doctrine of lex loci

delicti, Colorado law applies. The district court should have granted Greer’s motion for

judgment as a matter of law on these claims.

III.

We arrive now at the final hurdle: the proper remedy. Under Federal Rule of Civil

Procedure 50(e), we may “order a new trial, direct the trial court to determine whether a

new trial should be granted, or direct the entry of judgment.”

GMS asks us to remand the case for a retrial of its claims, this time applying

Colorado law. Greer asks us to direct the entry of judgment in his favor.

We choose the Rule’s second option, and so vacate the judgment and remand to the

district court to determine whether a new trial should be granted. Though we acknowledge

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that Colorado’s statute of limitations may bar GMS’s Colorado trade secrets claim, we

leave it to the district court to decide the issue in the first instance.

And even if Colorado’s computer crimes law doesn’t provide a standalone civil

cause of action, as Virginia’s does, at least one court has held that a plaintiff can proceed

on a Colorado negligence per se claim by alleging a violation of Colorado’s computer

crimes law. See Integrity Applied Sci., Inc. v. Clearpoint Chems. LLC, No. 1:18-cv-02235,

, at *3 (D. Colo. Apr. 20, 2020). So even if GMS can’t bring a direct

claim for violating the Colorado statute, the district court should consider whether to grant

GMS leave to amend its complaint to add a Colorado negligence per se claim, if GMS so

desires. 2

VACATED AND REMANDED

2 We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before this court and argument would not aid the decisional process.

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