On Monday the high court turned down TCS’s bid to overturn the $168 million it was ordered to pay DXC, putting a finality to an expensive loss for one of India’s premier IT firms. Now TCS is left with a very large US verdict to deal with in the life-insurance software space.
Why the refusal matters
It is a no-nonsense message to the rest of the industry: you can be on the hook for some stiff penalties in the US even if the plaintiff can’t put a finger on their own bottom line. The Fifth Circuit has its way, and with the Supreme Court out of the picture, we are left with a damages model hinging on what is claimed as unjust enrichment. DXC is walking away with $112 million in punitive and $56 million in compensatory damages. You can read the court’s mind in that ratio – they see this as serious business. It also puts a bit of heat on the outsourcers vying for the kind of insurance modernisation work where the stakes are high.
The legal fault line
Under US law, a plaintiff can go after both their own losses and what the defendant has made off with, or “unjust enrichment” as it is put. That was the basis for the whole of the award to DXC, and it is what TCS put to the Supreme Court in its petition. TCS made the case that you shouldn’t be handing out those kinds of damages without hard evidence of loss, and that the punitives were over the top. DXC had a different take, pointing to settled law and saying there was “nothing about the court of appeals’ fact-bound application” that needed a second look.
What each side says happened
You have to go back to the 1990s and CSC, which is now part of DXC, to find the roots of this. They had licensed some life-insurance software to Transamerica. Then in 2019, in a Dallas federal court, DXC made the claim that TCS had poached 2,200 of Transamerica’s people and used their inside track on CSC’s wares to build a rival product. TCS has been having none of it, saying the info in question wasn’t exactly a secret and they were within their rights to use the software. It was a matter of where your know-how in a client transition stops and you start misusing a trade secret.
How the damages took shape
Back in 2023 a jury put in an advisory verdict of $210 million, calling it willful theft. Of course, the judge has the last word on those things. Judge Brantley Starr of the U.S. District Court trimmed it down to $168 million in 2024. The 5th U.S. Circuit in New Orleans gave it a rubber stamp in 2025, and that was the end of the road for TCS’s appeal to the Supreme Court.
Strategic implications for IT services
This ruling means there will be more eyes on how you bring in talent from a client’s world and handle the move from old to new systems. For an insurer in the middle of a platform upgrade, you’ll be doing a lot more due diligence on who has access to what and how you document it.
When IP and your conversion plan are what make or break a deal, a misstep is pricier than ever. Clients are going to want to draw a hard line on what can be shared and they will want to see the paper trail during a transition. Some things to keep in mind whether you are the one providing the service or the one buying it: – You won’t be able to do a talent lift-out without some guardrails – Having access logs in order for an audit is the new normal – The threat of punitives is changing how risk is priced in – There will be more fine print in the contracts
What comes next
Now that the Supreme Court has passed, the Fifth Circuit’s word is law in this matter and the $168 million is coming. TCS has to turn its attention to showing it is in good standing with clients in tight-regulated fields like insurance. For the competition, it is a warning. The courts in the US are not going to be soft on the distinction between what you pick up by putting bodies in a room and the trade secrets that are part of an enterprise workflow.
