United States District Court, W.D. Arkansas, Fayetteville Division
WAL-MART STORES, INC. PLAINTIFF/COUNTER-DEFENDANT
CUKER INTERACTIVE, LLC DEFENDANT/COUNTER-CLAIMANT
OPINION AND ORDER
TIMOTHY L. BROOKS, UNITED STATES DISTRICT JUDGE
April 10, 2017, a 2-week jury trial commenced on Plaintiff
Wal-Mart Stores, Inc.'s ("Walmart") claim for
breach of contract against Defendant Cuker Interactive, LLC
("Cuker"), and on Cuker's counter-claims
against Walmart for breach of contract, unjust enrichment,
and misappropriation of trade secrets. On April 21, the jury
returned a verdict against Walmart and in favor of Cuker on
each count, see Doc. 445, awarding damages to Cuker
on its contract claim in the amount of $30, 629, id.
at 5, on its unjust enrichment claim in the amount of $400,
000, id. at 7, and on its trade-secret
misappropriation claim in the amount of $12, 008, 036,
see Id. at 9-12. The jury specifically found that
Walmart's misappropriation of Cuker's trade secrets
was "willful and malicious, " except with respect
to a trade secret known as the "CMS Tweak Development
Tool." See Id. On April 24, this Court entered
an Order requiring briefing on, inter alia, what
impact the underlying contract's limitation-of-liability
clause would have on the damages award with respect to the
CMS Tweak Development Tool, and what permanent injunctive
relief, if any, Cuker should be awarded in light of the
jury's verdict. See Doc. 450, pp. 5-6. The
parties filed a joint stipulation regarding the
limitation-of-liability issue on May 5, see Doc.
454, but they were unable to reach an agreement on the matter
of injunctive relief. They have provided adversarial briefing
on the latter issue, see Docs. 462, 463, 468, 470,
which is now ripe for decision.
Contractual Injunctive Relief
contends that the jury's verdicts entitle it to permanent
injunctive relief under Section 4 of its Consulting Agreement
with Walmart, see Doc. 124-7, pp. 3-4 ("the
Confidentiality Clause"), as well as under the Arkansas
Trade Secrets Act ("ATSA") at Ark. Code Ann. §
4-75-604. The decision whether to grant permanent injunctive
relief is committed to this Court's equitable discretion.
See eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388,
391 (2006). A claimant seeking a permanent injunction must
demonstrate four things:
(1) that it has suffered an irreparable injury; (2) that
remedies available at law, such as monetary damages, are
inadequate to compensate for that injury; (3) that,
considering the balance of hardships between the plaintiff
and defendant, a remedy in equity is warranted; and (4) that
the public interest would not be disserved by a permanent
Id. The proper interpretation of the parties'
contract and the scope of injunctive relief available under
the ATSA are both questions of Arkansas state law.
See Doc. 124-7, p. 7 ("This Agreement is
governed in all respects by the laws of Arkansas . . .
."); Sigma Chem. Co. v. Harris, 794
F.2d 371, 374 n.4 (8th Cir. 1986) (". . . trade secret
law is state law . . .") (quoting Am. Can Co. v.
Mansukhani, 742 F.2d 314, 334 n.24 (7th Cir. 1984)).
argues that the Consulting Agreement's Confidentiality
Clause protects a universe of "Confidential
Information" that extends beyond the trade secrets that
the jury found Walmart to have misappropriated, and it asks
the Court to enter "a forward-looking injunction
restricting Walmart's use of the broader universe of
Confidential Information." (Doc. 463, pp. 3-4). Walmart
counters that the Consulting Agreement does not authorize
injunctive relief for Cuker, because Section 12 of the
Consulting Agreement (which is helpfully entitled
"Injunctive Relief) only explicitly discusses
circumstances under which Walmart may be entitled to
injunctive relief. See Doc. 124-7, p. 6; Doc. 468,
p. 2 n.1. However, the Court believes there is no need to
decide whether the Consulting Agreement authorizes injunctive
relief for Cuker, because even if it does authorize such
relief, the Court lacks sufficient information to craft an
injunction enforcing it with any specificity beyond generic
language that simply instructs Walmart to comply with the
Federal Rules of Civil Procedure require that every
injunction this Court enters must "describe in
reasonable detail-and not by referring to the complaint
or other document-the act or acts restrained or
required." Fed.R.Civ.P. 65(d)(1)(C) (emphasis added).
Cuker's proposed injunctive language does not
specifically identify any particular Confidential Information
under the contract that Walmart should be enjoined from
misusing. See Doc. 470-1, pp. 2-3. Given the
enormous amount of information that the parties exchanged
during their performance of the Consulting Agreement and
during the litigation of this case, the Court believes far
greater detail than this is necessary to put Walmart on
reasonable notice of what conduct is being enjoined. Cf.
United States v. Articles of Drug, 825 F.2d 1238, 1247
(8th Cir. 1987) ("The injunction fails to identify the
specific drug products that Midwest is prohibited from
selling or marketing and fails to specify the marketing
techniques that Midwest may not employ. On remand the
district court should revise the injunction so that the
specific acts which are prohibited are clearly defined within
the order as required by Fed.R.Civ.P. 65(d).");
Calvin Klein Cosmetics Corp. v. Parfums de Coeur,
Ltd., 824 F.2d 665, 669 (8th Cir. 1987) ("Broad
language in an injunction that essentially requires a party
to obey the law in the future is not encouraged and may be
struck from an order for injunctive relief, for it is basic
to the intent of Rule 65(d) that those against whom an
injunction is issued should receive fair and precisely drawn
notice of what the injunction actually prohibits.").
Statutory Injunctive Relief
Court turns now to the issue of injunctive relief under the
ATSA, which authorizes enjoinment of "[a]ctual or
threatened misappropriation" of trade secrets. Ark. Code
Ann. § 4-75-604(a). At trial, Cuker put on proof that
Walmart saved itself roughly six months of development time
by misappropriating Cuker's trade secrets, and argued
that Cuker was entitled to disgorge the amount of money by
which this six-month head start unjustly enriched Walmart.
See Ark. Code Ann. § 4-75-606(b). The jury
agreed, and returned a verdict finding that Cuker was
entitled to recover the full amount of damages for
trade-secret misappropriation that it requested under this
theory. Cuker recognizes that "[t]he jury's award of
damages compensated Cuker for Walmart's past"
trade-secret misappropriation, but Cuker also seeks entry of
a permanent injunction prohibiting Walmart from further
future misappropriation of those same trade secrets.
See Doc. 463, pp. 1-2.
Court finds, as a threshold matter, that Cuker has shown all
four things it must demonstrate in order to be entitled to
injunctive relief. First, Cuker has shown irreparable harm by
Walmart's actual or threatened misappropriation of its
trade secrets, because the theory of misappropriation on
which Cuker prevailed at trial included disclosure of
Cuker's trade secrets to third parties. Cf. Sys.
Spray-Cooled, Inc. v. FCH Tech, LLC, 2017 WL 2124469, at
*13 (W.D. Ark. May 16, 2017) (Hickey, J.) ("Without
evidence that Defendants disseminated, disclosed or otherwise
irreparably diminished Systems' trade secrets, the Court
cannot presume that Systems has been irreparably
harmed."). Second, and consequentially, Cuker has shown
that remedies available at law, such as monetary damages, are
inadequate to fully compensate it for prospective injury.
See General Motors Corp. v. Harry Brown's, LLC,
563 F.3d 312, 319 (8th Cir. 2009) ("Irreparable harm
occurs when a party has no adequate remedy at law, typically
because its injuries cannot be fully compensated through an
award of damages."); see also Oglala Sioux Tribe v.
C & WEnters., Inc., 542 F.3d 224, 229 (8th Cir.
2008) (implicitly subsuming the factor of inadequate legal
remedies within the factor of irreparable harm). Third, Cuker
has shown that the balance of hardships between it and
Walmart weighs in favor of an injunction; not only is Walmart
many times larger than Cuker, but per the jury's verdict,
Walmart has only itself to blame for whatever hardships an
injunction may cause it. And fourth, the public obviously has an
interest in seeing the law enforced; at any rate, there is
nothing in the record showing that the public would be harmed
by entry of a permanent injunction.
Walmart opposes the entry of a trade-secrets injunction,
contending that any such injunctive relief would be
duplicative, given the theory of damages on which Cuker
prevailed at trial. Specifically, Walmart argues that
"[t]he situation here is directly analogous" to the
case of 3M v. Pribyl, 259 F.3d 587 (7th Cir. 2001),
in which the Seventh Circuit explained:
In this instance, the district court made a factual
determination that Accu-Tech would have been able to
independently develop 3M's trade secret in a period of
less than two years-a conclusion which 3M does not dispute.
... As such, by the time the district court was faced with
determining whether to enjoin Accu-Tech's use of 3M's
trade secret, the court believed that Accu-Tech would have
discovered 3M's trade secret. Hence, the district court
properly determined that once payment to 3M had been made to
alleviate any commercial ...