Wal-Mart Stores, Inc. v. Cuker Interactive, LLC, CASE NO. 5:14-CV-5262
| Decision Date | 31 March 2018 |
| Docket Number | CASE NO. 5:14-CV-5262 |
| Parties | WAL-MART STORES, INC. PLAINTIFF/COUNTER-DEFENDANT v. CUKER INTERACTIVE, LLC DEFENDANT/COUNTER-CLAIMANT |
| Court | U.S. District Court — Western District of Arkansas |
Currently before the Court are:
For the reasons given below, Cuker's Motions for Sanctions and for Attorneys' Fees and Costs and Walmart's Motion for Judgment as a Matter of Law are GRANTED IN PART AND DENIED IN PART, Walmart's Motion for New Trial or Remittitur is DENIED, and Cuker's Motions to Withdraw are GRANTED.
As this Court explained more than a year ago:
On January 30, 2014, Walmart and Cuker signed a contract under which Walmart agreed to pay Cuker a fixed fee of $577,719, in exchange for Cuker's provision of certain services to help make the website for Walmart's "ASDA Groceries business" responsive, irrespective of the device on which it is being viewed, such as a desktop or a mobile phone [("the Contract")]. See Doc. 124-7, pp. 8, 17. Walmart was facing very tight internal deadlines for this project, and the contract-negotiation process was a very speedy one, taking merely a few weeks rather than the months that were more typical. See Doc. 121-1, p. 3. The project launched almost immediately in early February, and by the end of that month the parties were already experiencing fundamental disagreements on matters such as whether various milestones for performance were strict deadlines or mere aspirations, when interim fee payments were due, how many rounds of revisions Walmart could require Cuker to make to its deliverables, and whether particular demands by Walmart were outside of the scope of work that Cuker had contracted to deliver.
(Doc. 197, pp. 1-2). Eventually, in July 2014, Walmart won a race to the courthouse, and the following month this lawsuit was removed from the Circuit Court of Benton County tothis Court. The parties asserted various cross-claims against each other, and extremely heated and tortured litigation followed over the next several years.
On April 10, 2017, the case finally went to trial, which lasted two weeks. The jury returned a verdict against Walmart on its claim against Cuker for breach of contract, and in favor of Cuker on its claims against Walmart for breach of contract, unjust enrichment, and misappropriation of trade secrets. The jury awarded Cuker a total of $12,438,665 in damages. The Court subsequently reduced this amount to $10,197,065, and on July 28, 2017, entered Judgment in favor of Cuker, including injunctive relief. See Doc. 484. After the entry of Judgment, post-verdict motion practice ensued. The Court stayed execution on the money judgment, see Doc. 488, and stayed the injunction, see Doc. 503, pending resolution of the various post-trial motions.
This Opinion and Order resolves all pending motions in this case. The above-mentioned motions are all ripe for decision, and can be divided into three categories. First, Walmart has filed two motions concerning the evidence that came in at trial. Second, Cuker has filed two motions concerning attorney fees, costs, and sanctions that it seeks to recover from Walmart. And third, Cuker's attorneys have filed two motions seeking to withdraw from this case. Below, the Court will address those motions in the sequence just listed.
In this Section, the Court will first take up Walmart's Motion for Judgment as a Matter of Law under Rule 50(b). Then, the Court will turn to Walmart's Motion for New Trial or Remittitur under Rule 59.
"If a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue, the court may: (A) resolve the issue against the party; and (B) grant a motion for judgment as a matter of law against the party on a claim or defense that, under the controlling law, can be maintained or defeated only with a favorable finding on that issue." Fed. R. Civ. P. 50(a). "If the court does not grant a motion for judgment as a matter of law made under Rule 50(a)," then upon a timely renewal of that motion after the entry of judgment, the Court may allow judgment on the verdict, order a new trial under Rule 59, or direct the entry of judgment as a matter of law. See Fed. R. Civ. P. 50(b). "The law places a high standard on overturning a jury verdict because of the danger that the jury's rightful province will be invaded when judgment as a matter of law is misused." Bavlsik v. Gen. Motors, LLC, 870 F.3d 800, 805 (8th Cir. 2017) (quoting Hunt v. Neb. Pub. Power Dist., 282 F.3d 1021, 1029 (8th Cir. 2002)) (internal alterations omitted). Accordingly, when considering a renewed motion for judgment as a matter of law, the Court must:
(1) consider the evidence in the light most favorable to the prevailing party, (2) assume that all conflicts in the evidence were resolved in favor of the prevailing party, (3) assume as proved all facts that the prevailing party's evidence tended to prove, and (4) give the prevailing party the benefit of all favorable inferences that may reasonably be drawn from the facts proved. That done, the court must then deny the motion if reasonable persons could differ as to the conclusions to be drawn from the evidence.
Id. (quoting Ryther v. KARE 11, 108 F.3d 832, 844 (8th Cir. 1997) (en banc)).
Walmart has marshaled an enormous number of arguments in support of its Rule 50(b) Motion. As a consequence of some of the rulings herein, many of Walmart'sarguments will not need to be reached. But the arguments that will be reached are organized below as follows. First, the Court will address arguments concerning Cuker's claim for breach of contract. Second, the Court will turn to Cuker's claim for unjust enrichment. Third, the Court will take up Cuker's trade secret claims. Fourth, the Court will deal with Walmart's argument about Copyright Act preemption. And fifth, the Court will rule on Walmart's argument about capping Cuker's damages pursuant to a limitation-of-liability clause in the Contract.
The jury found for Cuker on its claim against Walmart for breach of contract. See Doc. 444, p. 5. Walmart argues that this verdict should be reversed because "Cuker failed to perform the contract according to its terms," and "introduced insufficient evidence of any facts that would excuse its non-performance of the contract." See Doc. 501, p. 82. Walmart's briefing on this issue focuses exclusively on alleged failures of performance by Cuker in the months of May and June of 2014. Specifically, Walmart argues that Cuker breached the contract by withholding the May 23 and June 25 code drops until July 17 despite having completed its work on them by June 2. See id. at 82-86. Walmart also points to Cuker's failure to deliver testing reports/issue resolution summaries by May 14 and June 13, and to Cuker's failure to provide 30 days of post-launch support for the website, as breaches excusing Walmart's performance under the contract. See id. at 86.
The Court instructed the jury that "a 'material breach' is a failure to perform an essential term or condition that substantially defeats the purpose of the contract for the other party," and that "[a] material breach by one party excuses the performance of the other party." See Doc. 434, p. 18. The Court also instructed the jury that "the law impliesa promise between the parties that they will not do anything to prevent, hinder, or delay the performance of the contract," and that the jury could "consider the alleged acts, hindrances, and delays of Walmart . . . as evidence of a breach of the contract." See id. at 17.
The Court disagrees with Walmart, and believes that Cuker did introduce sufficient evidence of facts from which a jury could reasonably find that Cuker's performance under the contract was excused. Aaron Cuker testified that on February 12, 2014, Walmart asked Cuker to design 80 wireframes—a number far in excess of the 13 templates required by the Contract—and then threatened to withhold approvals (and, consequently, payments) for within-scope work unless Cuker complied with this request. See Doc. 407, pp. 198-206, 295; Defendant's Exhibits 36, 39. And Nikolaj Baer testified that Walmart never provided a workable development environment as required by the Contract, thus requiring Cuker to create a development environment itself in order to perform its own obligations under the Contract. See Doc. 411, pp. 48-49, 76-82; Plaintiff's Exhibit 126, p. 15, row 5. The jury could credit this testimony, and could conclude that these demands, threats, and failures of performance by Walmart...
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