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Walmart, Inc. v. Cuker Interactive, LLC, 18-1959 (2020)

Court: Court of Appeals for the Eighth Circuit Number: 18-1959 Visitors: 16
Filed: Feb. 12, 2020
Latest Update: Mar. 03, 2020
Summary: United States Court of Appeals For the Eighth Circuit _ No. 18-1959 _ Walmart Inc., a Delaware corporation Plaintiff - Appellee v. Cuker Interactive, LLC, a California limited liability company Defendant - Appellant _ No. 18-2081 _ Walmart Inc., a Delaware corporation Plaintiff - Appellant v. Cuker Interactive, LLC, a California limited liability company Defendant - Appellee _ Appeals from United States District Court for the Western District of Arkansas - Fayetteville _ Submitted: September 2
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       United States Court of Appeals
                  For the Eighth Circuit
              ___________________________

                      No. 18-1959
              ___________________________

            Walmart Inc., a Delaware corporation

                            Plaintiff - Appellee

                              v.

Cuker Interactive, LLC, a California limited liability company

                        Defendant - Appellant
              ___________________________

                      No. 18-2081
              ___________________________

            Walmart Inc., a Delaware corporation

                           Plaintiff - Appellant

                              v.

Cuker Interactive, LLC, a California limited liability company

                          Defendant - Appellee
                        ____________

          Appeals from United States District Court
      for the Western District of Arkansas - Fayetteville
                       ____________
                           Submitted: September 25, 2019
                             Filed: February 12, 2020
                                  ____________

Before SMITH, Chief Judge, BEAM and ERICKSON, Circuit Judges.
                              ____________

ERICKSON, Circuit Judge.

       Walmart, Inc. (“Walmart”) and Cuker Interactive, LLC (“Cuker”) signed a
contract under which Walmart agreed to pay Cuker a fixed fee to make the website
for Walmart’s “ASDA Groceries business” accessible from desktop computers and
mobile devices. Shortly after the project launched, the parties experienced
fundamental disagreements over the terms of the contract that ultimately led to
protracted litigation. The jury returned a verdict in favor of Cuker on its claims
against Walmart for breach of contract, unjust enrichment, and misappropriation of
trade secrets. Pursuant to the contract’s limitation-of-liability clause, the district
court1 reduced the amount of damages awarded by the jury and entered judgment in
favor of Cuker. After the filing of extensive post-trial motions, the court further
reduced the damages awarded to Cuker on the ground that Cuker presented
insufficient evidence to demonstrate it undertook reasonable efforts to maintain the
secrecy of three of the four alleged trade secrets. The district court found in favor of
Cuker on all other issues. Both parties appeal. We affirm.

I.    Background

      Walmart’s UK subsidiary, ASDA Groceries, had an e-commerce website
accessible from desktop computers and another one accessible from mobile phones.


      1
      The Honorable Timothy L. Brooks, United States District Judge for the
Western District of Arkansas.

                                          -2-
Walmart understood that if it could make its desktop website “responsive” (accessible
from any device), it could eliminate the mobile-phone website. In January 2014, a
Walmart senior executive approached Cuker’s Chief Creative Officer and CEO about
making ASDA Groceries’ website responsive. Around the same time, Walmart was
also exploring opportunities to make its United States grocery website, Walmart2Go,
responsive.

       On January 30, 2014, Walmart and Cuker signed a consulting agreement
accompanied by a document entitled statement of work (“contract”) under which
Walmart agreed to pay Cuker a fixed fee of $577,719 in exchange for responsive
layouts for the ASDA website. Under the contract, Cuker was to design and build
thirteen templates for access by desktops, tablets, and smartphones, including a
homepage template, a top navigation template, a bottom navigation template, and ten
templates to be chosen by Walmart. Because of Walmart’s tight internal deadlines
for completion of the project, the contract was negotiated and signed in a matter of
weeks. Accordingly, the parties considered the contract a “working version” that
could be “refined” along the way.

       The project launched almost immediately in early February 2014. But, by the
end of the month, the parties disagreed over basic terms of the contract, including
whether various milestones for performance were strict deadlines or simply
aspirational, 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
perform. These disputes caused payment and delivery delays.

      Walmart won the initial race to the courthouse when it filed a breach-of-
contract lawsuit against Cuker in Arkansas state court in July 2014. Cuker removed
the action and filed counterclaims for breach of contract, unjust enrichment, and
misappropriation of four technologies it considered trade secrets. Following a

                                         -3-
two-week trial in April 2017, the jury awarded Cuker damages totaling $12,438,665.
The award consisted of $30,629 for breach of contract; $400,000 for unjust
enrichment; and a combined amount of $12,008,036 for misappropriation of the four
alleged trade secrets. The jury found that Walmart’s misappropriation of Cuker’s
trade secrets was “willful and malicious,” except with respect to a trade secret
identified as the “CMS Tweak Development Tool.”

       Following return of the verdict, the court ordered the parties to brief two issues:
(1) what impact the underlying contract’s limitation-of-liability clause had on the
jury’s award with respect to the CMS Tweak Development Tool, and (2) what
permanent injunctive relief, if any, Cuker was entitled to in light of the jury’s verdict.
The parties stipulated to the limitation-of-liability issue, reducing the award of
$2,788,690 for the CMS Tweak Development Tool to $547,090. They were unable
to reach an agreement on the issue of injunctive relief. The court determined that
although the contract did not entitle Cuker to injunctive relief, Ark. Code Ann. § 4-
75-604(a) gave the court discretion to authorize enjoinment of “[a]ctual or threatened
misappropriation” of trade secrets. Exercising its discretion, the court found the
evidence presented at trial established that Walmart had saved itself roughly six
months of development time by misappropriating Cuker’s trade secrets, and that
Cuker had satisfied its burden of showing it was entitled to injunctive relief against
Walmart.

       In summary, the court-ordered injunction (1) prohibited Walmart from utilizing
specific codes, files, and programmatic references from all websites, code platforms,
code repositories, and file repositories within its control, and required Walmart to
delete permanently these items; (2) mandated that Walmart provide written notice
instructing all third parties to whom it may have given any of Cuker’s trade secrets
to cease and desist from using Cuker’s trade secrets and to destroy any copies of
them; and (3) compelled Walmart to file an affidavit signed by a corporate officer
attesting to compliance with the court’s order.

                                           -4-
      After the court entered judgment in favor of Cuker, Walmart “marshaled an
enormous number of arguments” in support of its motion for judgment as a matter of
law under Fed. R. Civ. P. 50(b) and, in the alternative, for a new trial. The court
found that many of Walmart’s arguments did not need to be addressed because of the
evidence supporting the jury’s findings on Cuker’s breach of contract, unjust
enrichment, and trade secret claims.

        Evidence presented at trial established a rapid deterioration of the parties’
contractual relationship. Less than two weeks after the contract was signed, Walmart
began demanding additional work outside the scope of the contract and then
threatened to withhold approvals and thereby payments for completed within-scope
work. Cuker protested early and often. Walmart never provided a workable
development environment, as required under the contract, forcing Cuker to take on
this additional responsibility in order to perform the contracted work. The court
found that the evidence supported a finding that Cuker was compelled to choose
between two unacceptable options: (1) perform an enormous amount of extra work
that it never agreed to perform under the fixed-price contract and risk being unable
to meet the “milestone” dates set out in the contract for the work it was obligated to
do, or (2) refuse to do the additional work at the risk of not being paid for work it did
perform under the contract.

       Although the evidence was sufficient to sustain the jury’s finding that Walmart
breached the contract and was unjustly enriched, the district court found Cuker failed
to present sufficient evidence that it undertook reasonable efforts to maintain the
secrecy of three of the four alleged trade secrets, as required under Ark. Code Ann.
§ 4-75-601(4)(B). The court overturned the jury’s damages award regarding the three
trade secrets, and, of the $2,788,690 in damages awarded for the fourth trade secret,
the court upheld only a portion of it. The court found only $314,392 of the award
was supported by the evidence. The remainder was grounded in speculation or
without sufficient proximate cause. The court entered an amended judgment in favor

                                          -5-
of Cuker, reincorporating the terms of the injunction against Walmart, awarding
damages in the amount of $745,021, and imposing $2,664,262.44 in sanctions,
attorney fees, and taxable costs.

      Cuker appeals the district court’s decisions relating to misappropriation of its
trade secrets and the reduction in the jury’s award. Walmart cross-appeals the
injunction, the denial of a new trial, and the denial of its Rule 50(b) motion.

II.   Discussion

      1.     Motion for Judgment as a Matter of Law

      We review de novo a grant of judgment as a matter of law and apply the same
standard as the district court. Liberty Mut. Fire Ins. Co. v. Scott, 
486 F.3d 418
, 422
(8th Cir. 2007). When reviewing a grant of judgment as a matter of law, we (1)
resolve factual conflicts in the nonmovant’s favor, (2) take as true all facts supporting
the nonmovant that the evidence tends to prove, (3) construe all reasonable inferences
in the nonmovant’s favor, and (4) deny the motion if the evidence would allow
reasonable jurors to reach different conclusions. 
Id. We must
affirm the jury’s
verdict unless there is “a complete absence of facts” supporting the verdict,
Kartheiser v. Am. Nat. Can Co., 
271 F.3d 1135
, 1137-38 (8th Cir. 2001), so that no
reasonable jury could have found in the nonmoving party’s favor, Tedder v. Am.
Railcar Indus., Inc., 
739 F.3d 1104
, 1109 (8th Cir. 2014).

             A.     Cuker’s Trade Secrets

       The contract included the term “trade secret” within its definitions of
intellectual property and confidential information, but did not define the term or
identify information that constitutes a trade secret. In diversity cases, we look to state
law when a contract is silent on an issue and follow controlling decisions of the state

                                           -6-
Supreme Court. Jo Ann Howard & Assocs., P.C. v. Cassity, 
868 F.3d 637
, 650 (8th
Cir. 2017); Cont’l Cas. Co. v. Allsop Lumber Co., 
336 F.2d 445
, 458 (8th Cir. 1964).

        The Arkansas Trade Secrets Act (“ATSA”) defines trade secret as information
that:

        (A) Derives independent economic value, actual or potential, from not
        being generally known to, and not being readily ascertainable by proper
        means by, other persons who can obtain economic value from its
        disclosure or use; and

        (B) Is the subject of efforts that are reasonable under the circumstances
        to maintain its secrecy.

Ark. Code Ann. § 4-75-601(4). The Arkansas Supreme Court has set forth six factors
to consider when determining whether information is a trade secret: (1) the extent to
which it is known outside the business; (2) the extent to which it is known by
employees and others involved in the business; (3) the extent of measures taken by
the company to guard its secrecy; (4) its value to the company and competitors; (5)
the amount of effort or money the company expended in developing it; and (6) the
ease or difficulty with which others could properly acquire or duplicate it. Saforo &
Assocs., Inc. v. Porocel Corp., 
991 S.W.2d 117
, 120-22 (Ark. 1999). An alleged
trade secret must satisfy both the ATSA definition and all six Saforo factors to qualify
as a trade secret. Wal-Mart Stores, Inc. v. P.O. Mkt., Inc., 
66 S.W.3d 620
, 630 (Ark.
2002).

      It is undisputed that Cuker never told Walmart that the technologies at issue
were trade secrets. Walmart argues this failure necessarily means that Cuker failed
to reasonably protect the secrecy of the trade secrets. Cuker counters that
consideration of the Saforo factors governs the trade secret inquiry and that the
protective measures it undertook were reasonable under the circumstances. We


                                           -7-
conclude that the evidence in the record supports the jury’s finding that Cuker took
reasonable efforts to protect only one of the alleged trade secrets, the Adobe Source
Files. Because of Cuker’s failure to take reasonable efforts to protect the other
alleged trade secrets, the information is not subject to protection under the ATSA.

       The Arkansas Supreme Court has made plain that it is “incumbent” on the party
alleging trade secret misappropriation to “clearly identify what information it
considered to be a trade secret, as that is a legal status fixed by statute.” Tyson
Foods, Inc. v. ConAgra, Inc., 
79 S.W.3d 326
, 334 (Ark. 2002). The record
demonstrates a failure by Cuker to inform Walmart that the Phased Release Support
Technique, CMS Tweak Development Tool, or Zoning Tools contained information
it considered to be a trade secret at any time before the information was disclosed.
Cuker’s broad declaration that everything except the thirteen templates was its
exclusive property was insufficient as a matter of law to clearly identify these
technique or tools as trade secrets. Cuker’s misappropriation claim as to these alleged
trade secrets fails as a matter of law.

       In contrast, Walmart knew about the significance of obtaining Cuker’s Adobe
Source Files. No other client had ever asked for nor had Cuker ever turned over its
Adobe Source Files. Walmart’s own emails demonstrate that it knew its request for
the source files was “irregular.” Walmart searched for a way to “phrase” its request
so Cuker would not refuse. In another email, Walmart reached the conclusion that,
due to the sensitivity of the request, it was not “an appropriate request by email.”
Cuker’s damages expert testified that in his experience working with design firms,
requests for source files are “normally pretty firmly rejected.” A jury could
reasonably infer from the evidence that Walmart knew Cuker’s Adobe Source Files
contained confidential materials and trade secrets and that Cuker was unlikely to turn
that information over voluntarily.




                                         -8-
       Cuker took steps to protect its source files and did not acquiescence to
Walmart’s demands for them until compelled to do so. Cuker repeatedly declined
Walmart’s request to disclose the source files. It was not until Walmart made its
approval and thus payment contingent on receipt of the Adobe Source Files that
Cuker was forced to choose between two unacceptable options: (1) withhold the
information and forgo payment to the employees for the work they had done under
the contract, or (2) divulge confidential information that Walmart knew it was not
entitled to receive in order to get paid for its work. The evidence in the record
establishes that Cuker took reasonable steps to protect the secrecy of its Adobe
Source Files and that only after Walmart’s demands became unreasonable did Cuker
reluctantly disclose the information.

       It is indisputable on this record that Cuker’s Adobe Source Files have
economic value. Cuker described the Adobe Source Files as its “playbook” for
creating responsive websites, a “buildup of know-how” learned through trial and
error, a “proprietary way of laying out an optimized user experience for a Web page.”
Walmart’s repeated and persistent requests for the source files is indicative of their
value. Cuker’s Adobe Source Files derive independent economic value from not
being generally known or readily ascertainable, and others can obtain economic value
from their use or disclosure.

       Walmart’s own witnesses confirmed that Walmart turned around and used
Cuker’s Adobe Source Files and disclosed them to others. Walmart claimed that it
could not make the remaining templates match Cuker’s templates without utilizing
Cuker’s Adobe Source Files. Under the ATSA, misappropriation of a trade secret
occurs, in relevant part, when a person either (a) knows or has reason to know that the
trade secret was acquired by improper means, or (b) discloses or uses the trade secret
of another and knew or had reason to know that his knowledge of the trade secret was
derived from or through a person who had utilized improper means to acquire it or
acquired it under circumstances giving rise to a duty to maintain its secrecy or limit

                                         -9-
its use. Ark. Code Ann. § 4-75-601(2). “Improper means” includes, in part, theft,
bribery, or breach or inducement of a breach of a duty to maintain secrecy. 
Id. § 4-75-601(1).
Evidence in the record establishes that Walmart used improper means
to acquire Cuker’s Adobe Source Files and that it did so wilfully and maliciously.

      Cuker also challenges the district court’s reduction in damages, arguing that
recovery in a misappropriation case under an equitable theory does not require a
showing of proximate cause. Contrary to Cuker’s argument, Arkansas’ Model Jury
Instruction AMI 2600, titled “Claim for Damages Based upon Trade Secret
Misappropriation,” includes “proximate cause” as a requirement. Arkansas courts
presume the Model Jury Instructions to be a correct statement of law. State v. Sola,
118 S.W.3d 95
, 100 (Ark. 2003); accord Crayton v. State, 
543 S.W.3d 544
, 547 (Ark.
Ct. App. 2018). Cuker’s argument that a showing of proximate cause is not required
is unavailing.

      Although Cuker introduced evidence that it invested significantly in
developing the Adobe Source Files to secure a competitive advantage and that
Cuker’s code (not its Adobe Source Files) appeared in the ASDA and Walmart2Go
websites after its relationship with Walmart ended, it failed to provide any evidence
linking the misappropriated Adobe Source Files to either the ASDA website or the
Walmart2Go website. The record lacks evidence demonstrating that by obtaining
Cuker’s Adobe Source Files, Walmart’s ASDA or Walmart2Go websites were made
responsive any more quickly or less expensively than they otherwise would have
been. We can find no error in the district court’s analysis or conclusions on the
reduction in damages based on Cuker’s failure to establish proximate cause.

       We turn next to Walmart’s argument that the contract granted Walmart a
perpetual and irrevocable license to use, reproduce, distribute, and authorize others
to do any of these things with the Adobe Source Files because the Adobe Source Files
constituted “deliverables” subject to licensing under the terms of the contract. The

                                        -10-
district court interpreted the term “deliverables” as materials that Cuker “authored,
developed, conceived, or created for Walmart.” At trial, Cuker presented documents
and testimony demonstrating that the Adobe Source Files predated its relationship
with Walmart. They were not created for Walmart. Further, Cuker presented
evidence to refute Walmart’s claim that the Adobe Source Files were necessary to
receive benefit from Cuker’s services. Cuker had never before shared its Adobe
Source Files with a client. There was ample evidence for a jury to find that Walmart
did not need Cuker’s Adobe Source Files to utilize the templates Cuker designed
under the contract. Walmart’s claim that it received a perpetual and irrevocable
license to use, reproduce, or share Cuker’s Adobe Source Files is without merit.

        In conclusion, Cuker failed to present sufficient evidence to meet the statutory
requirements for three of its trade secret claims. Walmart is entitled to judgment as
a matter of law on Cuker’s trade secret claims relating to the Phased Release Support
Technique, CMS Tweak Development Tool, and Zoning Tools. Because sufficient
evidence was presented to support a claim for misappropriation of Cuker’s Adobe
Source Files, we affirm the district court’s decision. We also affirm the district
court’s reduction in damages based on Cuker’s failure to establish proximate cause
for all but $547,090 of the jury’s award.


             B.     Breach of Contract

       Walmart argues that Cuker’s continued performance and acceptance of
contractual benefits waived Walmart’s breach and that there is insufficient evidence
that Walmart’s breach excused Cuker’s performance. The district court instructed the
jury on material breach in a manner that almost identically follows the Arkansas
Supreme Court’s definition of material breach. See, e.g., Dye v. Diamante, 
510 S.W.3d 759
, 767 (Ark. 2017) (“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. A material breach excuses the performance of the other party.”). Although

                                         -11-
Arkansas recognizes that one party waives another’s breach by continuing to accept
contractual benefits, see DWB, LLC v. D & T Pure Tr., 
550 S.W.3d 420
, 426 (Ark.
Ct. App. 2018), the district court instructed the jury that it could consider either
party’s alleged acts, hindrances, or delays as evidence of breach. The court’s
instruction fairly and adequately stated Arkansas law.

      We are satisfied that the evidence in the record supports a finding that
Walmart’s acts, hindrances, or delays excused Cuker’s performance. Walmart failed
to make the second contract payment on time. It continually demanded that Cuker
take on additional tasks and threatened to withhold payment for in-scope work if
Cuker did not comply. Walmart’s failure to provide a development environment as
required by the contract also impeded Cuker’s ability to complete its contractual
responsibilities. There is more than sufficient evidence in this record from which a
reasonable jury could find that Walmart materially breached the contract and thereby
excused Cuker’s performance under the contract. Walmart is not entitled to judgment
as a matter of law on the breach of contract claim.

        Although there is a provision in the contract that limits Walmart’s damages to
the total contract price, we agree with the district court that the clause is exculpatory
and that there is sufficient evidence of intentional wrongdoing to avoid the liability
cap. Under Arkansas law, an exculpatory clause is “one where a party seeks to
absolve himself in advance of the consequences of his own negligence.”
Ingersoll-Rand Co. v. El Dorado Chem. Co., 
283 S.W.3d 191
, 195 (Ark. 2008)
(internal quotation marks omitted) (quoting Jordan v. Diamond Equip. & Supply Co.,
207 S.W.3d 525
, 530 (Ark. 2005)). Arkansas generally disfavors exculpatory clauses
“due to the strong public policy of encouraging the exercise of care,” and so, they are
to be limited to their exact language and “‘strictly construed against the party relying
on them.’” 
Id. (quoting Jordan,
207 S.W.3d at 530); W. William Graham, Inc. v.
City of Cave City, 
709 S.W.2d 94
, 96 (Ark. 1986).



                                          -12-
         As an exculpatory clause, the limitation-of-liability provision is to be strictly
construed against Walmart and is enforceable if Cuker (1) knew of the potential
liability that it released, (2) benefitted from the activity leading to the potential
liability that it released, and (3) the parties fairly entered into the contract. See
Ingersoll-Rand 
Co., 283 S.W.3d at 195
. According to Walmart’s argument, the
activity for which Cuker released liability was the out-of-scope work. We fail to see
how Cuker knew that it was releasing liability for out-of-scope work or that it
benefitted from performing uncompensated additional work. Cuker repeatedly
protested the additional work. It engaged in the project change procedure outlined
by the contract and negotiated a price for the additional work. Walmart is not entitled
to be released from liability for Cuker’s out-of-scope work.

        We are unpersuaded by Walmart’s follow up argument that, even if the
limitation-of-liability clause is an exculpatory clause, there is no evidence of
intentional wrongdoing. There is more than sufficient evidence to find that Walmart
intentionally demanded services that it knew were outside the scope of the contract
and compelled to perform under protest. Because the provision includes “costs” in
its damages cap, Walmart argues that the damages cap applies to attorney fees as a
subset of costs. While attorney fees may be a subset of costs, the contract also
explicitly indemnifies Walmart for “attorney[] fees and expenses” but not costs.
Consulting Agreement § 10. Reading these sections together, Walmart demonstrated
that it knew how to explicitly use the word “attorney fees” but chose not to in the
limitation-of-liability provision. We affirm the district court’s decision regarding the
contract’s limitation-of-liability provision.

             C.     Unjust Enrichment

       Walmart argues that the jury’s finding of unjust enrichment must be reversed
because (1) unjust enrichment is an equitable remedy that is unavailable if a contract
exists, (2) the performance-compelled-under-protest exception does not apply, and

                                          -13-
(3) there is insufficient evidence that it compelled Cuker to perform or that Cuker
protested. We are unpersuaded by Walmart’s arguments.

       In Arkansas, parties with an enforceable contract must proceed on the contract
in resolving their differences unless the “disputed performance is compelled under
protest.” QHG of Springdale, Inc. v. Archer, 
373 S.W.3d 318
, 325 (Ark. Ct. App.
2009). As previously noted, there is sufficient evidence to find Cuker protested early
and often and that Cuker eventually performed under compulsion. As early as
February 2014, Cuker objected to Walmart’s demands for work outside the scope of
the contract. Cuker’s objections were met with threats from Walmart to withhold
approvals and therefore payments. Walmart exploited Cuker’s financial vulnerability
by compelling work outside the contract’s scope. When Cuker raised with Walmart
the issue of the out-of-scope templates, Walmart insisted on receiving all of the
templates without paying extra and threatened to “destroy” Cuker with its legal team.
Because of Walmart’s demands, Cuker was compelled to choose between breaching
the contract or providing the extra templates and proprietary information requested
by Walmart for free.

       Walmart’s arguments to disavow the jury verdict or reverse the district court’s
Rule 50 decision are unavailing. The evidence presented at trial was sufficient to
establish Walmart was unjustly enriched.

             D.     Injunctive Relief

       Walmart challenges the district court’s injunction directing Walmart to delete
Cuker’s Adobe Source Files from its computers. We review for abuse of discretion
a district court’s decision to issue an injunction. Gerlich v. Leath, 
861 F.3d 697
, 710
(8th Cir. 2017). “An injunction must not be ‘broader than necessary to remedy the
underlying wrong.’” 
Id. (quoting Coca-Cola
Co. v. Purdy, 
382 F.3d 774
, 790 (8th
Cir. 2004)).

                                         -14-
       The ATSA authorizes injunctions for “[a]ctual or threatened misappropriation.”
Ark. Code Ann. § 4-75-604 (a). “Upon application to the court, an injunction shall
be terminated when the trade secret has ceased to exist; however, the injunction may
be continued for an additional reasonable period of time in order to eliminate
commercial advantage that otherwise would be derived from the misappropriation.”
Id. § 4-75-604(b).
Consistent with § 4-75-604(b), it was permissible for the district
court to order Walmart to delete Cuker’s Adobe Source Files. Cuker testified that the
Adobe Source Files are a years-long compilation of technical know-how from which
it continually draws. If allowed to keep the Adobe Source Files in its possession,
Walmart could use them, or share them, in connection with another project. There
is nothing to suggest that the Adobe Source Files’ usefulness to Walmart has expired
or will expire, and if it does, Walmart can apply to terminate the injunction. The
district court did not abuse its discretion.

      2.     Motion for a New Trial

       We review for abuse of discretion the denial of Walmart’s motion for a new
trial and “bear[] in mind that such motions ‘are generally disfavored and will be
granted only where a serious miscarriage of justice may have occurred.’” Keller
Farms, Inc. v. McGarity Flying Serv., LLC, 
944 F.3d 975
, 984 (8th Cir. 2019)
(quoting United States v. Petroske, 
928 F.3d 767
, 774 (8th Cir. 2019)). Walmart
contends that a new trial should be granted because of juror bias, erroneous
evidentiary rulings, and improper jury instructions.

       Walmart asserts that, during jury selection, a juror who was elected foreperson
concealed her immediate family’s involvement in ongoing litigation against Walmart
when asked whether any previous experience had left her with “a very positive or
negative feeling about Walmart that would have the effect of influencing [her] ability
to be fair.” In order to be entitled to a new trial based on concealed juror bias, one
element Walmart has to prove is that the juror answered the jury selection questions

                                        -15-
“dishonestly, not just inaccurately.” Manuel v. MDOW Ins. Co., 
791 F.3d 838
, 842
(8th Cir. 2015). Walmart’s evidence fails to show inaccuracy or dishonesty. It is
possible that the foreperson’s family’s litigation either did not affect her feelings
about Walmart or, if it did, the effect did not influence her ability to be fair. The
district court did not abuse its discretion in denying a new trial due to juror bias.

      Walmart also asserts as a basis for a new trial that the district court made
erroneous evidentiary rulings. We review evidentiary rulings for abuse of discretion,
giving “deference to the district judge who saw and heard the evidence.” Simpson
v. Cty. of Cape Girardeau, 
879 F.3d 273
, 277 (8th Cir. 2018) (internal quotations
marks omitted) (quoting United States v. Johnson, 
860 F.3d 1133
, 1139 (8th Cir.
2017)). “A new trial will be awarded only if an evidentiary ruling constituted a clear
and prejudicial abuse of discretion affecting a substantial right of the objecting party.”
Winter v. Novartis Pharm. Corp., 
739 F.3d 405
, 411 (8th Cir. 2014).

       Walmart contends the court should not have excluded its expert testimony
about whether, under the contract, items are “deliverables” or “work product” while
allowing Cuker’s expert to testify about whether items are “templates.” The district
court found that neither term “deliverable” nor “work product” was ambiguous. As
such, the court precluded either party from offering evidence contradicting those
definitions. We find no abuse of discretion, let alone clear and prejudicial abuse of
discretion affecting the substantial right of a party.

      With regard to the term “template,” the district court determined that the term
was not ambiguous but rather an industry-specific term in need of explanation by
witnesses with specialized knowledge. Federal courts routinely allow contract
experts to testify regarding the meaning of contract terms when the meaning depends
on trade practice. See, e.g., Soo Line R.R. Co. v. Fruehauf Corp., 
547 F.2d 1365
,
1375 (8th Cir. 1977) (finding expert testimony was properly admitted to interpret
technical construction specifications); Kona Tech. Corp. v. S. Pac. Transp. Co., 225

                                          -16-
F.3d 595, 611 (5th Cir. 2000) (finding expert testimony was properly admitted to
interpret industry-specific contract terms); WH Smith Hotel Servs., Inc. v. Wendy’s
Int’l, Inc., 
25 F.3d 422
, 429 (7th Cir. 1994) (same). The parties chose to frame the
scope of the contract in terms of number of templates. The court permitted expert
testimony to explain an industry-specific contract term. Walmart, like Cuker, could
have provided expert testimony on the meaning of “template.” Neither the admission
of Cuker’s expert testimony nor the exclusion of Walmart’s expert testimony was a
clear and prejudicial abuse of discretion affecting Walmart’s substantial rights.

       Walmart’s final argument for a new trial is that the district court improperly
instructed the jury on the meaning of “malice.” The district court instructed the jury
that Walmart acted wilfully and maliciously if it “contemplated the existence of the
trade secret and took actions in reckless disregard as to whether those actions would
constitute misappropriation of that trade secret.” Contrary to Walmart’s contentions,
“malice” does not always require actual intent under Arkansas law. See, e.g., Roeder
v. United States, 
432 S.W.3d 627
, 633-34 (Ark. 2014) (interpreting “malice” in an
Arkansas statute to not require intentional acts). The malice instruction did not
mislead the jury or have a probable effect on the verdict. See Dean v. Searcey, 
893 F.3d 504
, 521 (8th Cir. 2018) (ordering a new trial only if a jury instruction misleads
the jury or has a probable effect on the verdict).

III.   Conclusion

       Having carefully reviewed the arguments and the record, we affirm.
                       ______________________________




                                         -17-

Source:  CourtListener

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