APPENDIX
`APPENDIX
`
`
`APPENDIX
`
`
`
`1a
`APPENDIX A
`_________
`
`UNITED STATES COURT OF APPEALS
`FOR THE SIXTH CIRCUIT
`_______
`
`IN RE: DAVID PETER BERGE,
`
`Debtor.
`
`_______
`
`MARKETGRAPHICS RESEARCH GROUP, INC.,
`Plaintiff-Appellant,
`
`v.
`DAVID PETER BERGE,
`Defendant-Appellee.
`
`_______
`
`No. 18-6177
`_______
`
`Appeal from the United States Bankruptcy Court for
`the Middle District of Tennessee at Nashville.
`Nos. 3:13-ap-90400; 3:13-bk-07626—Marian F.
`Harrison, Judge.
`_______
`
`Argued: June 19, 2019
`_______
`
`Decided and Filed: March 27, 2020
`_______
`
`
`
`2a
`Rehearing Denied: May 6, 2020
`_______
`
`Before MOORE, COOK, and READLER, Circuit
`Judges.
`_______
`
`OPINION
`_______
`
`CHAD A. READLER, Circuit Judge.
`litigation
`For
`the Berge
`family,
`federal
`unfortunately has become something of a family
`affair. David Berge and his parents, Don and
`Martha, were named as defendants in an unfair
`competition lawsuit brought by MarketGraphics
`Research Group, Inc., a company with which Don
`had
`previously
`been
`associated.
`Before
`MarketGraphics could proceed to judgment, Don and
`Martha filed for Chapter 7 bankruptcy. And when
`MarketGraphics ultimately obtained a judgment
`against David, he soon began pursuing Chapter 7
`proceedings of his own.
`David’s Chapter 7 filing made MarketGraphics a
`judgment creditor in David’s bankruptcy proceeding.
`MarketGraphics initiated adversary proceedings to
`assert that its claim should be exempted from
`discharge in accordance with 11 U.S.C. § 523(a)(6),
`which prevents a debtor from discharging claims for
`injuries he willfully and maliciously caused.
`According to MarketGraphics, the earlier judgment
`preclusively established such conduct on David’s
`part. The bankruptcy court disagreed and denied
`
`
`
`3a
`MarketGraphics’s request to exempt its claim from
`discharge.
`We agree with the bankruptcy court. Nothing in
`the record of these proceedings or the proceedings for
`the underlying judgment supports a finding that
`David acted with the requisite
`intent under
`§ 523(a)(6) to harm MarketGraphics. Nor do we
`accept MarketGraphics’s contention that we are
`precluded from reviewing that issue in the first
`instance. Accordingly, we AFFIRM the judgment of
`the bankruptcy court that David’s debts are
`dischargeable.
`I.
`BACKGROUND
`A.
`David Works For His Father, An
`Independent
`Contractor
`For
`MarketGraphics.
`MarketGraphics collects, analyzes, and distributes
`data related to residential housing markets. For the
`Memphis market, Don served for many years as
`MarketGraphics’s
`licensee. Working
`as
`an
`independent contractor, Don collected data and
`maintained the company’s local client relationships.
`To assist with data collection, MarketGraphics
`licensed its maps and other intellectual property to
`Don.
`From the time he was in high school, David often
`assisted his father in the business. Don and David
`would “driv[e] the market” to determine growth and
`collect data to generate reports for MarketGraphics.
`These efforts continued until 2012, when Don
`terminated his relationship with MarketGraphics to
`venture out into the industry on his own. David, who
`by that time was a real estate agent living in
`
`
`
`4a
`Nashville, agreed to help his father with his new
`endeavor.
`Don established a new business under the name
`Realysis. Realysis consisted of three single-member
`LLCs. Don made himself the sole member of Realysis
`of Jackson, made his wife, Martha, a teacher, the
`sole member of Realysis, and made David the sole
`member of Realysis of Memphis.
`MarketGraphics sent letters to its Memphis clients
`letting them know that Don retired and that the
`company would service their accounts directly.
`Despite non-compete and confidentiality provisions
`in Don’s independent contractor agreement with
`MarketGraphics, Realysis also wanted to service
`those clients. So Realysis wrote to MarketGraphics’s
`clients to “clear up the confusion” regarding the
`distinctions between MarketGraphics Research
`Group in Nashville and Realysis of Memphis, LLC as
`well as Don and David’s roles in MarketGraphics and
`Realysis, respectively. The letter stated that Don and
`David gathered all of
`the
`information
`for
`MarketGraphics for fifteen years, that David was
`now the sole owner of Realysis of Memphis, LLC, and
`that Realysis would produce reports every quarter
`going forward. The letter was sent under David’s
`name and from his Realysis email address. Realysis’s
`letter generated yet one more letter, this time one
`from MarketGraphics to Realysis reminding Realysis
`that Don had signed a contract with non-compete
`and
`confidentiality provisions. But Realysis
`continued to compete against MarketGraphics—and
`effectively so. In under a year, MarketGraphics lost
`75 percent of
`its Memphis-area customers to
`Realysis.
`
`
`
`5a
`B. MarketGraphics Sues The Berge
`Family And The Realysis Entities.
`In view of what MarketGraphics perceived as
`unfair competition by Realysis, MarketGraphics filed
`a twelve-count complaint in federal district court
`against Don, David, Martha, and the Realysis
`entities. MarketGraphics asserted a host of claims,
`including copyright and trademark infringement,
`unfair and deceptive trade practices under the
`Tennessee Consumer Protection Act (or TCPA), and
`violations
`of
`Tennessee
`common
`law.
`MarketGraphics successfully sought a preliminary
`injunction against all the defendants.
`Represented by the same counsel, the defendants
`filed an answer and responded to MarketGraphics’s
`interrogatory requests. MarketGraphics
`in turn
`moved for summary judgment and submitted an
`accompanying statement of facts. When none of the
`defendants responded to MarketGraphics’s motion,
`MarketGraphics provided the district court with a
`proposed judgment. But before the district court
`entered the proposed judgment, Don and Martha
`filed for Chapter 7 bankruptcy. The district court
`stayed the claims against David’s parents, leaving
`David as the sole remaining active individual
`defendant.
`court entered
`the district
`Soon
`thereafter,
`judgment against David and the Realysis entities.
`The
`judgment was
`identical to the proposed
`judgment
`that MarketGraphics
`submitted.
`It
`included several findings regarding David and
`Realysis,
`including that they: (1) “willfully or
`knowingly” violated the TCPA, (2) willfully infringed
`upon MarketGraphics’s copyrighted works, (3) acted
`
`
`
`6a
`in concert with Don to violate Don’s non-compete
`agreement with MarketGraphics, and (4) wrongfully
`impaired goodwill among Memphis customers and
`created unfair competition. The district court
`permanently enjoined David and the Realysis
`entities and awarded MarketGraphics $332,314.94 in
`damages.
`In
`C. David Seeks To Discharge
`Bankruptcy The Debt Associated With
`The District Court Judgment.
`Following the judgment, David joined his parents
`by filing Chapter 7 bankruptcy proceedings of his
`own.
`MarketGraphics responded by filing an adversarial
`complaint asserting that David’s judgment debt was
`non-dischargeable pursuant to 11 U.S.C. § 523(a)(6).
`To be non-dischargeable under § 523(a)(6), the prior
`judgment must be for a “willful and malicious”
`injury. MarketGraphics then moved for summary
`judgment. David opposed the motion, disputing the
`scope and nature of the district court’s findings as to
`willfulness and malice.
`The parties then spent the next four years
`litigating how to interpret the phrase “willful and
`malicious.” The parties debated whether § 523(a)(6)’s
`willful-and-malicious standard is a unitary or two-
`pronged test. And if it is a two-pronged test, the
`question remained how to define those respective
`terms (willful and malicious).
`the
`inquiry,
`With respect
`to
`the
`threshold
`bankruptcy court applied a two-pronged test, holding
`that for purposes of § 523(a)(6), the prior judgment
`must involve an injury shown to be both willful and
`
`
`
`7a
`malicious. As the district court in the earlier action
`did not address the “malicious” conduct prong, the
`bankruptcy court denied MarketGraphics’s request
`that the earlier judgment be given preclusive effect
`in the bankruptcy. The district court denied
`permission for an interlocutory appeal.
`The bankruptcy court then conducted a bench trial.
`Much of the trial’s focus was on David’s role in
`Realysis’s operations. Throughout his testimony,
`David disputed his degree of involvement in and
`knowledge of the Realysis enterprise. Both David
`and Don testified that Don was Realysis’s primary
`architect and
`operator. David
`claimed his
`participation in Realysis “was very, very limited.” To
`the extent he engaged with the new entity, it was
`simply to help his financially unstable, 70-year-old
`father. David testified that Don sent the solicitation
`letter to MarketGraphics’s clients using David’s
`name. While David reviewed and did not object to
`the contents of the letter before it was sent, including
`the use of his name, David believed, based upon
`Don’s representations, that neither he nor Don were
`subject to the non-compete provision.
`Following trial, the bankruptcy court dismissed
`MarketGraphics’s adversarial complaint. The lone
`“issue at trial,” the court explained, “was whether
`[David] acted with malice.” The bankruptcy court
`found that he did not. While Don had used his family
`to create an elaborate scheme to avoid liability,
`David, by comparison, was “very credible” and less
`culpable.
`The case then went back up to the district court,
`this time before Judge Crenshaw. Taking up the
`threshold legal issue, the district court found that
`
`
`
`8a
`“[t]he ‘willful and malicious’ standard in § 523(a)(6)
`ha[d] evolved” in the Sixth Circuit from a two-
`pronged approach to a unitary standard. The district
`court vacated the bankruptcy court’s judgment in
`part and remanded the case with instructions to
`decide the question of issue preclusion consistent
`with this unitary standard.
`Back down to the bankruptcy court, then, to
`examine the preclusive effect of the prior district
`court judgment. Assessing the earlier judgment, the
`bankruptcy court concluded that two of the key
`claims at issue there—the TCPA and Copyright Act
`claims, respectively—each defined “willful” more
`broadly than did § 523(a)(6). Thus, the bankruptcy
`court concluded, the willfulness issues litigated in
`the prior action were not identical to the issue before
`the bankruptcy litigation, namely, the application of
`§ 523(a)(6)’s “willfulness and malicious” standard. As
`to the common law claims, the earlier judgment set
`forth no undisputed facts or conclusions of law with
`respect to them, meaning they were neither essential
`to the judgment nor entitled to preclusive effect.
`Free to consider the § 523(a)(6) question anew, the
`bankruptcy court found that David did not have the
`level of intent required by the § 523(a)(6) unitary
`standard and again dismissed MarketGraphics’s
`adversarial complaint. Following that dismissal, we
`granted MarketGraphics’s petition for permission to
`file a direct appeal to this Court.
`II.
`ANALYSIS
`By and large, today’s case poses two questions.
`One, what is the proper standard to assess “willful
`and malicious injury” under § 523(a)(6)? Answering
`that question divided the courts below, as it has the
`
`
`
`9a
`circuit courts. Two, under whichever of those is the
`correct standard, is the earlier judgment against
`David entitled to preclusive effect in the present
`proceeding?
`A. MarketGraphics Must Show That
`Its
`Injury Was Both “Willful” And
`“Malicious” Under § 523(a)(6).
`Chapter 7 of the Bankruptcy Code offers a debtor a
`fresh financial start at the close of his bankruptcy
`proceeding. See Harris v. Viegelahn, 575 U.S. 510,
`135 S. Ct. 1829, 1835, 191 L.Ed.2d 783 (2015). To
`achieve that fresh start, the Bankruptcy Code allows
`the debtor to discharge in bankruptcy debts owed to
`his creditors. 11 U.S.C. § 727. And generally
`speaking, most debts are dischargeable. See FCC v.
`NextWave Pers. Commc’ns Inc., 537 U.S. 293, 306,
`123 S.Ct. 832, 154 L.Ed.2d 863 (2003).
`At issue here is one of the limited exceptions to the
`general rule favoring discharge. That exception,
`codified in § 523(a)(6) of the Bankruptcy Code,
`applies to instances of “willful and malicious injury
`by the debtor to another entity or to the property of
`another entity.” 11 U.S.C. § 523(a)(6). How to apply
`that standard, however, has been a point of
`disagreement among the circuits. As did the most
`recent district court decision below, some circuits
`have essentially collapsed the terms “willful” and
`“malicious,” applying a unitary test when assessing
`the applicability of § 523(a)(6). See, e.g., McClendon
`v. Springfield (In re McClendon), 765 F.3d 501, 505
`(5th Cir. 2014) (applying the unitary standard and
`“defining a willful and malicious injury as one where
`there is either an objective substantial certainty of
`harm or a subjective motive to cause harm”)
`
`
`
`10a
`(internal quotations omitted); Berrien v. Van Vuuren,
`280 F. App’x 762, 766 (10th Cir. 2008) (same). Other
`circuits utilize a two-pronged approach, where
`“willful” and “malicious” remain separate elements
`for the courts to review. See, e.g., Margulies v. USAA
`Cas. Ins. Co. (In re Margulies), 721 F. App’x 98, 101
`(2d Cir. 2018) (finding that “willful
`... means
`deliberate or intentional” and malicious means
`“wrongful and without just cause or excuse, even in
`the absence of personal hatred, spite, or ill-will”); see
`also First Weber Grp., Inc. v. Horsfall, 738 F.3d 767,
`774 (7th Cir. 2013); Fischer v. Scarborough (In re
`Scarborough), 171 F.3d 638, 641 (8th Cir. 1999);
`Petralia v. Jercich (In re Jercich), 238 F.3d 1202,
`1208–09 (9th Cir. 2001); Maxfield v. Jennings (In re
`Jennings), 670 F.3d 1329, 1334 (11th Cir. 2012).
`1. Against the backdrop of this deep circuit split,
`we have cited favorably to the two-pronged approach.
`See Doe v. Boland (In re Boland), 946 F.3d 335, 338
`(6th Cir. 2020) (“A debtor willfully and maliciously
`injures a creditor if, acting without just cause or
`excuse, he knows or is substantially certain that his
`actions will cause injury.”). Today, we explicitly
`adopt that test.
`As an initial matter, the two-pronged approach
`more squarely accords with customary rules of
`statutory interpretation. The statute itself invokes
`two concepts—”willful” and “malicious”—separated
`by the word “and,” which ordinarily suggests that
`both terms must be satisfied to exempt a debt from
`discharge. OfficeMax, Inc. v. United States, 428 F.3d
`583, 588 (6th Cir. 2005) (“ ‘[A]nd’ usually does not
`mean
`‘or.’ Dictionaries consistently
`feature a
`conjunctive definition of
`‘and’ as the primary
`
`
`
`11a
`meaning of the word.”). The use of “and” in
`§ 523(a)(6), moreover, seemingly was no accident.
`Compare § 523(a)(6) with § 1328(a)(4) in Chapter 13
`of the Bankruptcy Code. Both sections utilize the
`terms “willful” and “malicious” in describing injuries
`that can result in non-dischargeable debts. But
`§ 1328(a)(4), unlike § 523(a)(6), describes the
`qualifying injury as “willful or malicious.” 11 U.S.C.
`§ 1328(a)(4) (emphasis added); see Doe v. Boland (In
`re Boland), 596 B.R. 532, 546 n.10 (6th Cir. B.A.P.
`2019) (citing B.B. v. Grossman (In re Grossman), 538
`B.R. 34, 39 (Bankr. E.D. Cal. 2015)). The use of “or”
`in a parallel part of the Bankruptcy Code, and the
`use of “and” here, should be given meaning. See FDA
`v. Brown & Williamson Tobacco Corp., 529 U.S. 120,
`133, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000) (“It is a
`fundamental canon of statutory construction that the
`words of a statute must be read in their context and
`with a view to their place in the overall statutory
`scheme.”) (quotation omitted).
`2. To the same end, collapsing the terms “willful”
`and “malicious” ignores the fact that, ordinarily
`understood, those terms have separate meanings,
`and separate purposes. Start with “willful.” “Willful”
`conduct, for purposes of § 523(a) (6), requires “actual
`intent to cause injury,” “not merely a deliberate or
`intentional act that leads to injury.” Kawaauhau v.
`Geiger, 523 U.S. 57, 61, 118 S.Ct. 974, 140 L.Ed.2d
`90 (1998); see also In re Boland, 946 F.3d at 338 (“[A]
`debtor might act intentionally but simply not know
`that the act will cause injury.”) (emphasis added).
`In holding that a debtor must have “actual intent to
`cause injury” to have acted willfully, Geiger left
`unresolved how to measure that intent. Some
`
`
`
`12a
`circuits have resolved the question by taking a broad
`approach, utilizing both objective and subjective
`tests. Under that standard, a debtor acts willfully
`where his actions were objectively substantially
`certain to cause harm or, alternatively, where the
`debtor had a subjective motive to cause harm. See In
`re McClendon, 765 F.3d at 505. This Circuit, on the
`other hand, utilizes only a subjective standard,
`asking whether the debtor himself was motivated by
`a desire to inflict injury. See, e.g., Markowitz v.
`Campbell (In re Markowitz), 190 F.3d 455, 464 (6th
`Cir. 1999) (adopting the subjective approach, in
`which a debt is nondischargeable under § 523(a)(6)
`only if the debtor intended to cause harm or knew
`that harm was a substantially certain consequence of
`his or her behavior). Put differently, the debtor must
`“desire[ ] to cause consequences of his act, or ...
`believe[ ] that the consequences are substantially
`certain to result from it.” Id. (internal citations
`omitted). A debtor need not actually admit his intent;
`intent may be inferred from the circumstances of the
`injury. See, e.g., O’Brien v. Sintobin (In re Sintobin),
`253 B.R. 826, 831 (Bankr. N.D. Ohio 2000).
`3. Now
`the
`term
`“malicious.”
`In defining
`“willful,” In re Markowitz inferred that, in the
`§ 523(a)(6) setting, the term typically would be read
`to mean something different than “malicious”: “From
`the plain language of the statute, the judgment must
`be for an injury that is both willful and malicious.
`The absence of one creates a dischargeable debt.” 190
`F.3d at 463 (emphasis added). Likewise, in a case
`that pre-dates Geiger, we similarly suggested that
`the two terms are not synonymous. Wheeler v.
`
`
`
`13a
`Laudani, 783 F.2d 610, 615 (6th Cir. 1986) (citations
`omitted).
`With that understanding in mind, in Wheeler we
`defined “malicious,” for purposes of § 523(a)(6), to
`mean “in conscious disregard of one’s duties or
`without just cause or excuse ...” 783 F.2d at 615
`(citations omitted); see also Ball v. A.O. Smith Corp.,
`451 F.3d 66, 69 (2d Cir. 2006) (defining “malicious”
`as “wrongful and without just cause or excuse, even
`in the absence of personal hatred, spite, or ill-will”)
`(quotations omitted); Sells v. Porter (In re Porter),
`539 F.3d 889, 894 (8th Cir. 2008) (“Maliciousness is
`conduct targeted at the creditor ... at least in the
`sense that the conduct is certain or almost certain to
`cause
`... harm.”) (internal quotations omitted).
`Unlike willful conduct, malicious conduct typically
`does not require “a showing of specific intent to harm
`another ....” In re Jennings, 670 F.3d at 1334; see also
`Yeager v. Wilmers, 553 B.R. 102, 107 (S.D. Ohio
`2015), aff’d 553 B.R. 102 (6th Cir. 2016). And as to
`the requirement that malicious conduct be taken
`“without just cause,” Black’s Law Dictionary defines
`“just cause” as “[a] legally sufficient reason,” and
`“excuse” as “[a] reason that justifies an act or
`omission or that relieves a person of a duty.” Black’s
`Law Dictionary (11th ed. 2019); see also Murray v.
`Bammer (In re Bammer), 131 F.3d 788, 792 (9th Cir.
`1997) (en banc) (reading “just” to be synonymous
`with “honorable and fair in dealings and actions,
`consistent with moral right, and valid within the
`law”) (internal quotations and citations omitted).
`4. As text and precedent thus reflect, assessing
`whether an injury is “willful and malicious” under
`§ 523(a)(6) is a two-pronged inquiry. A creditor must
`
`
`
`14a
`prove both elements before the debt may be
`exempted from discharge. To be sure, in many cases,
`the same facts that support a finding of willful
`conduct under § 523(a)(6) will likewise support a
`finding that the debtor acted with malice. See
`Superior Metal Prods. v. Martin (In re Martin), 321
`B.R. 437, 442 (Bankr. N.D. Ohio 2004) (noting that
`in the “great majority of cases, the same factual
`events that give rise to a finding of ‘willful’ conduct,
`will likewise be indicative as to whether the debtor
`acted with malice”). But in other cases, for example,
`a debtor may act willfully, but not maliciously. See
`id. (“[A] debtor, in certain limited situations, may be
`found to have willfully converted a creditor’s
`property, but not to have acted in a malicious
`manner.”); see also Olmstead v. Newman (In re
`Newman), 385 B.R. 799 (6th Cir. B.A.P. 2008)
`(finding that debtor-employer, bought by another
`company, willfully refused to pay creditor-employee
`her vacation benefits, but did not act maliciously
`because it “earnestly believed” that the new owners
`were
`responsible
`for
`the
`creditor-employee’s
`benefits); Fleming Mfg. Co. v. Keogh (In re Keogh),
`509 B.R. 915, 939 (Bankr. E.D. Mo. 2014) (debtor
`willfully breached fiduciary duties as company
`president but did not act maliciously); In re Martin,
`321 B.R. at 442 (citing John Deere Credit Serv. v.
`McLaughlin (In re McLaughlin), 109 B.R. 14, 18
`(Bankr. D.N.H. 1989)
`(finding willful but not
`malicious conduct); then citing Rech v. Burgess
`(Matter of Burgess), 106 B.R. 612, 616–20 (Bankr. D.
`Neb. 1989) (same)). Lower courts thus must analyze
`independently whether a debtor has willfully, and
`also maliciously,
`injured
`the
`creditor before
`
`
`
`15a
`rendering a debt non-dischargeable in accordance
`with § 523(a)(6).
`B.
`The Underlying Judgment Did Not
`Preclude The Bankruptcy Court From
`Independently
`Analyzing Whether
`David’s Conduct Was Willful And
`Malicious.
`Having articulated the test in our Circuit for
`applying the discharge exception in § 523(a)(6), we
`must now consider whether the bankruptcy court
`was nevertheless precluded from applying that test
`in light of the judgment in the earlier unfair
`competition
`lawsuit
`against David, which
`MarketGraphics asserts carries preclusive effect.
`Issue preclusion prevents a party from relitigating
`issues of fact or law actually litigated and decided in
`a prior proceeding. In re Markowitz, 190 F.3d at 461–
`62. Neither the Supreme Court nor this Court has
`resolved whether federal or state issue-preclusion
`law governs a federal proceeding where a federal
`court exercises federal jurisdiction over the federal
`claims and supplemental jurisdiction over the state
`law claims. In a somewhat similar circumstance, the
`Supreme Court held that when a federal court
`exercises diversity jurisdiction over a state law
`claim,
`federal common
`law governs the
`issue
`preclusion analysis. Semtek Int’l v. Lockheed Martin
`Corp., 531 U.S. 497, 508, 121 S.Ct. 1021, 149 L.Ed.2d
`32 (2001).
`Whether Semtek suggests the same outcome when
`a federal court exercises supplemental jurisdiction
`was recently answered in the affirmative by the
`Fourth Circuit. Hately v. Watts, 917 F.3d 770, 777
`
`
`
`16a
`(4th Cir. 2019); see also Wu v. Lin (In re Qiao Lin),
`576 B.R. 32, 46 (Bankr. E.D.N.Y. 2017) (same);
`Marini v. Adamo (In re Adamo), 560 B.R. 642, 647
`(Bankr. E.D.N.Y. 2016). Both the Supreme Court
`and Fourth Circuit, in reaching those respective
`conclusions, emphasized that federal preclusion law
`directs courts to apply “the law that would be applied
`by state courts in the State in which the federal
`diversity court sits,” so long as the state rule is not
`“incompatible with federal interests.” Semtek, 531
`U.S. at 508–09, 121 S.Ct. 1021 (citations omitted);
`see also Hately, 917 F.3d at 777 (finding Semtek’s
`rationale “equally persuasive in cases in which
`federal courts exercise supplemental, as opposed to
`diversity, jurisdiction over state law claims”).
`We need not conclusively resolve this issue today.
`As both relevant cases were litigated in federal court
`in Tennessee, with claims raised under both
`Tennessee and federal law, either Tennessee or
`federal preclusion law would apply. And Tennessee
`preclusion law is compatible with federal interests
`(indeed, the respective preclusion rules are the
`same). So there is little if any difference in the
`preclusion analysis we might apply, and certainly no
`tension between the two.
`Whether we apply federal or Tennessee issue-
`preclusion law is thus of little practical concern in
`this case; the tests are nearly the same. That is, a
`party is barred from relitigating an issue already
`decided when: (1) the issues are identical;
`(2) the issue was actually litigated and decided
`previously;
`(3) the judgment in the earlier proceeding has
`become final (Tennessee’s rule) or resolution of the
`
`
`
`17a
`issue was necessary and essential to a judgment on
`the merits (our rule); (4) the party to be estopped was
`a party to the prior litigation; and (5) the party to be
`estopped had a full and fair opportunity to litigate
`the issue. Compare Mullins v. State, 294 S.W.3d 529,
`535 (Tenn. 2009), with Wolfe v. Perry, 412 F.3d 707,
`716 (6th Cir. 2005). Critical to our resolution here
`are the first two prongs of issue preclusion. That is,
`whether David’s subjective intent, a requirement for
`a finding of willfulness under § 523(a)(6), was
`actually litigated in the underlying district court
`proceedings, and, if so, whether the factual issue
`litigated there was identical to the issue resolved in
`the district court.
`1. For issue preclusion to apply for purposes of
`satisfying § 523(a)(6), the issue in question must
`have been “actually litigated and decided” in the
`earlier proceeding. See Wolfe, 412 F.3d at 716. With
`respect to § 523(a)(6)’s “willful and malicious”
`requirement, we have explained that assessing
`willful conduct requires examining the debtor’s
`subjective intent. For preclusion to apply here, then,
`the parties must have actually litigated and decided
`in the earlier proceeding that David acted with
`subjective intent to harm MarketGraphics, the same
`issue at play in the underlying proceedings here. See
`MarketGraphics Research Grp., Inc. v. Berge (In re
`Berge), No. 313-07626, 2018 WL 3219626, at *2
`(Bankr. M.D. Tenn. June 29, 2018) (“The issue is
`whether that judgment included a finding that the
`debtor intended harm to MarketGraphics or was
`substantially certain that harm would occur as
`required under 11 U.S.C. § 523(a) (6).”). Following its
`review of the underlying judgment, the bankruptcy
`
`
`
`18a
`court concluded that such evidence was absent from
`the earlier district court proceeding: “[T]here is no
`clear finding” that David “desired to cause the
`consequences of his act or believed that the injuries
`were substantially certain to result from it,” nor are
`there
`“factual allegations
`in
`the underlying
`complaint” to that effect. Id. at *3.
`We agree. The record in the district court litigation
`was sparse. The district court judgment included a
`determination that David and the Realysis entities
`“willfully or knowingly” violated the TCPA and
`willfully
`infringed
`upon MarketGraphics’s
`copyrighted works. But outside the judgment, the
`record contains no findings concerning David’s
`intent. Among other omissions, there is no indication
`that whether David participated in the creation and
`management of Realysis, and whether he did so with
`the intent to injure MarketGraphics, was actually
`litigated or decided in the district court.
`Nor did MarketGraphics present undisputed facts
`from the earlier district court proceeding that
`conclusively established David’s intent to injure. To
`be sure, as the earlier record reflects, David had a
`long history of supporting Don’s work, both with
`MarketGraphics and Realysis. And as to the latter,
`the record reveals that David was named as the sole
`member and officer or manager of Realysis of
`Memphis, LLC, one of three Realysis entities created
`by Don. But nothing in the district court record
`shows that David had a role in organizing the
`Realysis entities or that he knew that Realysis of
`Memphis was created in his name.
`Upon Realysis’s creation, emails and letters were
`sent from David’s Realysis email address, under his
`
`
`
`19a
`solicit
`to
`effort
`in a not-so-subtle
`name,
`MarketGraphics’s customers. Here again though, the
`letters primarily discussed Don’s
`(not David’s)
`relationship with MarketGraphics as well as Don’s
`knowledge of the industry. True, only David’s name
`was provided in response to an interrogatory request
`to “[i]dentify each person who has sold, or attempted
`to sell, goods or services related to the Memphis
`Metro Area on behalf of any Realysis Entity.” But in
`the statement of
`facts
`that MarketGraphics
`submitted when it moved for summary judgment, the
`company indicated that Realysis of Memphis, the
`entity in David’s name, had two offices: one at Don’s
`house and another in a space Don rented in his
`name. All of the data Realysis collected was in a
`computer
`at Don’s
`house. And,
`perhaps
`unsurprisingly, Realysis customers were more likely
`to call Don (rather than David) with questions
`regarding the Realysis business.
`Nor does the record contain factual findings
`describing whether David willfully, with subjective
`intent, infringed MarketGraphics’s copyrights. The
`defendants
`there
`rightly
`admitted
`that
`MarketGraphics’s works had been registered with
`the Register of Copyrights and contained some
`material subject to protection under the Copyright
`Act. Yet they also asserted that “[a]ll materials
`claimed by MarketGraphics are neither trade secrets
`nor copyrighted and exists [sic] in the public
`domain.” These latter assertions thus undermine any
`conclusion supporting a subjective intent to infringe
`upon MarketGraphics’s copyrights.
`Perhaps most revealing is the judgment submitted
`in the underlying litigation. MarketGraphics drafted
`
`
`
`20a
`and submitted the proposed judgment to the district
`court, and the district court adopted that order
`without change. MarketGraphics did so with the
`benefit of knowing that the judgment could be the
`subject of a bankruptcy proceeding; David’s parents,
`after all, had already filed for bankruptcy during the
`pendency of the district court action. Yet even armed
`with that knowledge, MarketGraphics did not
`include any findings in the judgment revealing
`David’s subjective intent to injure MarketGraphics.
`All told, to the extent David was involved in the
`Realysis enterprise, the factual findings and record
`in the district court action do not reflect a subjective
`intent on David’s part to injure MarketGraphics. For
`that reason, the prior judgment and the underlying
`record do not preclusively establish that David acted
`willfully, with subjective intent, as required to
`satisfy § 523(a)(6)’s discharge exception.
`2. Whatever the nature of the record and general
`findings in the earlier judgment, MarketGraphics
`responds that the ultimate finding in favor of the
`company on its TCPA and copyright-infringement
`claims proves David’s subjective intent to harm,
`thereby
`satisfying
`the willfulness prong
`of
`§ 523(a)(6). That argument, however, is at odds with
`case law interpreting those statutes. Neither the
`state nor
`federal
`law
`at
`issue
`required
`MarketGraphics to prove that David acted with
`subjective intent to harm the company.
`Start with the TCPA. The TCPA creates a private
`right of action for “[a]ny person who suffers an
`ascertainable
`loss of money or property, real,
`personal, or mixed, or any other article, commodity,
`or thing of value wherever situated, as a result of the
`
`
`
`21a
`use or employment by another person of an unfair or
`deceptive act or practice ....” Tenn. Code Ann. § 47–
`18– 109(a)(1). The TCPA’s scope is “much broader”
`than that of common law fraud and is “not limited to
`misrepresentations that are fraudulent or willful.”
`Tucker v. Sierra Builders, 180 S.W.3d 109, 115
`(Tenn. Ct. App. 2005). Thus, “[t]he defendant’s
`conduct need not be willful or even knowing.” Id. But
`if a defendant does willfully or knowingly violate the
`TCPA, the TCPA provides for treble damages. § 47–
`18– 109(a)(3); Tucker, 180 S.W.3d at 115–16. Here,
`the judgment against David was a treble damages
`award for a “willful or knowing violation” of the
`TCPA.
`MarketGraphics argues that a “willful or knowing”
`TCPA violation requires more than simply intending
`an act that violates the TCPA. Instead, a
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