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Wal-Mart Stores Inc. v. Cuker Interactive LLC

United States District Court, W.D. Arkansas, Fayetteville Division

April 5, 2017




         Currently before the Court are:

• Plaintiff Wal-Mart Stores, Inc.'s ("Walmart") Motion in Limine to Preclude Improper Statistical Expert Testimony (Doc. 306) and Memorandum in Support (Doc. 307-1), and Defendant Cuker Interactive, LLC's ("Cuker") Brief in Opposition (Doc. 365);
• Walmart's Motion in Limine to Exclude Evidence of Cuker's Damages in Excess of Contract Price (Doc. 257) and Memorandum in Support (Doc. 258-1); Cuker's Opposition (Doc. 262); and Walmart's Reply in Support (Doc. 270-1); and
• Cuker's Motion in Limine to Exclude Evidence and Argument that the Scope of Cuker's Services under the Contract Exceeds the Scope Defined by the Court (Doc. 323) and Brief in Support (Doc. 324), and Walmart's Memorandum in Opposition (Doc. 351-8).

         For the reasons given below, Walmart's motion regarding statistical testimony is GRANTED; Walmart's motion regarding damages limitation is DENIED; and Cuker's motion regarding the contractual scope is GRANTED.


         Walmart retained Cuker to help make Walmart's ASDA Groceries website responsive. The parties have counterclaims against each other for alleged breaches of this contract, but Cuker also has asserted claims against Walmart for unjust enrichment and misappropriation of Cuker's trade secrets. Among the incidents on which these latter two claims are premised, are allegations that Walmart improperly shared Cuker-authored code from the ASDA Groceries website with third-party vendors who were involved in making responsive one of Walmart's other groceries websites, called "Walmart2Go."

         Cuker's computer science expert, William C. "Chuck" Easttom, has submitted a supplemental expert report in support of Cuker's trade-secret claims against Walmart. See Doc. 365-1. In paragraphs 66-76 and 205 of that supplemental report, Mr. Easttom observes that there are many instances in which identical variable names are used in the ASDA and Walmart2Go code, and he employs a statistical technique known as the "product rule" to determine the likelihood that this occurred by coincidence. The product rule "states that the probability of the joint occurrence of a number of mutually independent events is equal to the product of the individual probabilities that each of the events will occur." People v. Collins, 68 Cal. 2d 319, 325 (1968) (emphasis in original). Mr. Easttom gives an example of five different possible names for one variable: "AislelD, aisleJD, aisle Identifier, aislenumber, [and] aisleNum, " see Doc. 365-1, pp. 36-37, ¶ 66, and although he contends that "[t]here are approximately 15 to 20 logical variations for any given variable, " id., he assumes for purposes of his statistical exercise that there are only five, see id. at pp. 37-38, ¶ 69. He then considers 12 instances of matching variable names (though he asserts that he actually found many more than 12 such instances), see Id. at p. 38, ¶ 70, and by finding the twelfth power of 0.2, concludes that there is only a 0.0000004096% chance (1 in 244, 140, 625) that all 12 variable names were identical merely by coincidence, see Id. at ¶ 71. He then opines that this is less likely that the odds of winning the California lottery while buying only 40 tickets, having 20 consecutive coin tosses turn up heads, winning an Olympic gold medal, being struck by lightning, becoming president, becoming an astronaut, or being sainted by the Catholic Church. Id.

         Walmart has moved to exclude Mr. Easttom's opinions to the extent they are premised on his use of the product rule, on the grounds that his methodology is flawed, misleading, and unreliable. One such flaw, according to Walmart, is that Mr. Easttom has committed what is sometimes called "the prosecutor's fallacy, " which occurs when one confuses the probability of a random match occurring with the probability that the match was not the result of a particular alleged cause. Cf. McDaniel v. Brown, 558 U.S. 120, 128 (2010) ("[l]f a juror is told the probability a member of the general population would share the same DNA is 1 in 10, 000 (random match probability), and he takes that to mean there is only a 1 in 10, 000 chance that someone other than the defendant is the source of the DNA found at the crime scene (source probability), then he has succumbed to the prosecutor's fallacy."). Here, Mr. Easttom would be committing the prosecutor's fallacy if he inferred from the above analysis that there is only a 1 in 244, 140, 625 chance that Walmart2Go authors did not copy these variable names from ASDA code. A second, closely related criticism that Walmart makes of Mr. Easttom's methodology, is that he is fallaciously applying the product rule to events that might not be independent. (As noted above, the product rule only yields valid joint probabilities when applied to separate events that are all mutually independent from each other.) Finally, Walmart argues that Mr. Easttom's unfavorable comparison of these odds to sensational events like winning the lottery, being struck by lightning, being sainted, etc. are likely to inflame the jury and compound the prejudicial effect of his purported errors.

         The Court believes Walmart's concerns here are legitimate, and it shares them. One especially salient fact illustrates why. The Court anticipates that Walmart will present testimony at trial that the Walmart2Go and ASDA websites shared a common code base until Walmart2Go was forked from ASDA in 2009 or 2010.[1] If that fact is true, then regardless of when or by whom these variable names were authored, there is a very significant likelihood that these naming events were not mutually independent. Perhaps the authors of the ASDA and Walmart2Go code both inherited many of the same preexisting variable names. Or perhaps they all independently authored many identical variable names because they all attempted to conform with the same preexisting naming conventions that they all observed within older pre-fork code. But whatever the case may actually be, the essential problem here is that not only does Mr. Easttom appear to have assumed the mutual independence of these naming events, in the absence of any evidence that such events were, in fact, independent; there also appears to be evidence that these events were not independent.[2]

         None of this is to say that it is irrelevant that Mr. Easttom found so many instances of matching variable names, or that it was unwarranted for these matches to have aroused his suspicions that copying might have occurred, or that it would be unreasonable for him to conclude generally that it is very unlikely these matches were mere random coincidences. But the Court will GRANT Walmart's Motion in Limine to Preclude Improper Statistical Expert Testimony (Doc. 306) by restricting Mr. Easttom's testimony in the following very specific senses: (1) the Court will not permit Mr. Easttom, during his testimony at trial, to employ the product rule as done in paragraphs 66-76 or as implied in paragraph 205 of his supplemental report; (2) the Court will not permit Mr. Easttom to opine at trial that the probability of a random match between the code or design of Walmart2Go and ASDA equals the probability that Walmart2Go's code or design was not copied from ASDA's code or design; and (3) the Court will not permit Mr. Easttom to offer testimony at trial that compares the probability of random matches between Walmart2Go and ASDA with the probability of sensational events occurring, such as winning the lottery, being struck by lightning, or being sainted. The Court is excluding such testimony because the Court finds that its probative value is substantially outweighed by a danger of unfair prejudice, confusing the issues, and misleading the jury as described above. See Fed. R. Evid. 403.


         Section 9 of the Consulting Agreement between the parties in this case ...

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