Legacy Data Access, LLC v. Mediquant, Inc.
| Decision Date | 04 December 2017 |
| Docket Number | DOCKET NO. 3:15-cv-00584-FDW-DSC |
| Court | U.S. District Court — Western District of North Carolina |
| Parties | LEGACY DATA ACCESS, LLC, Plaintiff, v. MEDIQUANT, INC., Defendant. |
THIS MATTER is before the Court upon the filing of several post-trial motions by Plaintiff and Defendant. Plaintiff has filed a Motion for Attorneys' Fees (Doc. No. 108), a Motion to Amend Judgment (Doc. No. 120), and a Motion for a Permanent Injunction (Doc. No. 123). Defendant has moved under Rule 59(a) for a new trial (Doc. No. 126), and in the alternative, moves under Rule 49(b) and 50(b) (Doc. No. 124). Defendant also seeks an amendment to the Judgment under Rule 59(e) (Doc. No. 126). All parties have responded to the pending motions, and they are now ripe for resolution. The Court addresses each motion but not necessarily in the order filed.
In the interests of judicial economy, the Court provides a general overview of the case here but summarizes the specific background relevant to the issues raised by the parties' motions in the analysis. This litigation stems from William Jesse Rowland's resignation and departure from his position with Plaintiff and the acceptance and commencement of work for Defendant. After a six day trial, the jury found Defendant liable for (i) wrongfully interfering with the non-disclosure and non-competition provisions of the Employment, Non-Disclosure, Non-Solicitation, and Non-Competition Agreement (the "Agreement") between Rowland and Plaintiff; (2) misappropriation of trade secrets; (3) unfair or deceptive trade practices, and (4) punitive damages. The jury found that Defendant was not liable for wrongfully interfering with prospective contracts between Plaintiff and Ascension Health, Greenville Health System, El Camino, and Eskenazi. The jury awarded Plaintiff (1) $1 for wrongful interference with the non-disclosure and non-competition provisions of the Agreement; (2) $600,000 in damages for misappropriation of trade secret(s); and (3) $1 for unfair or deceptive trade practices. The jury also awarded Plaintiff $100,000 in punitive damages.
Defendant moves for a new trial under Rule 59(a) on Plaintiff's claim for misappropriation of trade secrets and for punitive damages. "The grant or denial of a motion for new trial is entrusted to the sound discretion of the district court and will be reversed on appeal only upon a showing of abuse of discretion." Cline v. Wal-Mart Stores, 144 F.3d 294, 305 (4th Cir. 1998) (citing Gasperini v. Center for Humanities, Inc., 518 U.S. 415, 435 (1996)). A court may grant a new trial on some or all of the issues "for any reason which a new trial has heretofore been granted in an action at law in federal court[.]" Fed. R. Civ. P. 59(a)(1)(A). Acceptable reasons include: "(1) the verdict is against the clear weight of the evidence, or (2) is based upon evidence which is false, or (3) will result in a miscarriage of justice, even though there may be substantial evidence which would prevent the direction of a verdict." Cline, 144 F.3d at 301 (quoting Atlas Food Sys. & Servs., Inc. v. Crain Nat'l Vendors, Inc., 99 F.3d 587, 594 (4th Cir. 1996)). When making this determination, the court may weigh the evidence and consider the credibility of witnesses. Wilhelm v. Blue Bell,Inc., 773 F.2d 1429, 1433 (4th Cir. 1985) (citing Wyatt v. Interstate & Ocean Transport Co., 623 F.2d 888, 891-92 (4th Cir. 1980)).
Defendant also renewed its motion under Rule 50 of the Federal Rules of Civil Procedure and moves for judgment as a matter of law on many of the same issues raised in its post-trial motion under Rule 59(a). Accordingly, the Court considers each of these alleged errors under Rule 59(a) and Rule 50(b). A motion under Rule 50(b) "assesses whether the claim should succeed or fail because the evidence developed at trial was insufficient as a matter of law to sustain the claim." Belk, Inc. v. Meyer Corp., 679 F.3d 146, 155 (4th Cir. 2012). Upon a Rule 50 motion, the court cannot reweigh the evidence or consider the credibility of the witness and must view "all the evidence in the light most favorable to the prevailing party and draw all reasonable inferences in [the prevailing party's] favor." Konkel v. Bob Evans Farms, Inc., 165 F.3d 275, 279 (4th Cir. 1999). A jury's verdict will withstand a motion under Rule 50 unless the Court "determines that the only conclusion a reasonable trier of fact could draw from the evidence is in favor of the moving party." Tools USA and Equip. Co. v. Champ. Frame Straightening Equip., Inc., 87 F.3d 654, 656-57 (4th Cir. 1996) (quoting Winant v. Bostic, 5 F.3d 767, 774 (4th Cir. 1993)); see also Konkel, 165 F.3d at 279.
Defendant first argues that several of the Court's evidentiary rulings are grounds for a new trial. Errors in admitting or excluding evidence are not grounds for a new trial "[u]nless justice requires[.]" Fed. R. Civ. P. 61. An error is harmless and does not require a new trial if the court can "say 'with fair assurance, after pondering all that happened without stripping the erroneous action from the whole, that the judgment was not substantially swayed by the errors.'" Taylor v.Virginia Union Univ., 193 F.3d 219, 235 (4th Cir. 1999) (citations omitted). By focusing on "whether the error itself had substantial influence[,]" this analysis allows the court to distinguish between harmless errors and those impacting a substantial right. Id. As discussed herein, the Court concludes that the judgment was not substantially swayed by errors.
Defendant contends it was unfairly prejudiced by the admission of evidence at trial on trade secrets that were not identified in Plaintiff's response and supplementary responses to Defendant's interrogatories. However, Plaintiff disclosed in its response to interrogatory three its contention that Rowland, Defendant's employee, possessed Plaintiff's trade secrets and in response to interrogatory two in an attached exhibit listed the alleged trade secrets. This list enabled Defendant to know what it was accused of misappropriating. See e.g., Washburn v. Yadkin Valley Bank and Trust Co., 190 N.C. App. 315, 326, 660 S.E.2d 577, 585 (2008) (). Further, the answers of James Yuhas at his depositions reiterated that the trade secrets and proprietary information at issue was not just the MsToPg tool but included multiple categories of information believed to be on the SD card possessed by Defendant's employee Rowland. Therefore, any purported inadequacy of the identification of the trade secrets was not for lack of Plaintiff's disclosure. Admission of this evidence was not unfair. See Fed. R. Evid. 403.
Defendant also contends the Court erred by not excluding, on account of Plaintiff's alleged non-disclosure, testimony on damages sustained for misappropriation and testimony on damages from James Yuhas and Ankit Oza.1 However, Plaintiff disclosed in its interrogatory six the categories of damages it sought and identified Yuhas and Oza as potential witnesses with knowledge that could be contacted. Defendant served interrogatories and deposed individuals about their personal knowledge of damages, but Defendant did not seek identification of a deponent to address damages under Federal Rule of Civil Procedure 30(b)(6). Plaintiff contends that interrogatories to an entity are the functional equivalent of a Rule 30(b)(6) deposition, but a Fed. R. Civ. P. 30(b)(6) designee "must testify about information known or reasonably available to the organization" rather than merely answering an interrogatory furnishing "information available to the party[,]" Fed. R. Civ. P. 33(b)(1)(B). (Emphasis added). The burden on a Rule 30(b)(6) designee is therefore greater than an agent answering an interrogatory on behalf of an entity. See Wilson v. Lakner, 228 F.R.D. 524, 528 (D. Md. 2005) ; United States v. Taylor, 166 F.R.D. 356, 361 (M.D.N.C. 1996) ( . Thus, Defendant's decisionnot to employ Federal Rule of Civil Procedure 30(b)(6) created any purported disadvantage suffered by Defendant.
Further, Defendant's Motion in Limine only sought exclusion of testimony and evidence of Plaintiff's alleged lost profits (Doc. No. 71) and as clarified at trial the objection was limited to "the three or four or five million that their expert said they lost in profits because they lost customers." (Rough Trial Tr., July 17, 2017, 6:4-6).2 At trial, the jury found in favor of Defendant on all claims of wrongful interference with prospective contracts with customers. Therefore, even if the admission was wrongful, most if not all of the error was harmless.
Before this litigation began, Plaintiff sued Rowland in the Superior Court of Cobb County, Georgia. In that litigation, a superior court judge entered an Order denying Plaintiff's Emergency Motion for Temporary Restraining Order against Rowland (the "Georgia Order"). (Doc. No. 34-7). Defendant contends this Order supports its proposition that "Defendant acted reasonably when it continued to employ Rowland and cover his legal expenses" and argues the Court erred by excluding it....
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