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Apprentice Information Systems, Inc. v. Datascout, LLC

Supreme Court of Arkansas

April 26, 2018



          Friday, Eldredge & Clark, LLP, by: William A. Waddell, Jr., and Robert S. Shafer, for appellants; and

          Ryan Owsley, for appellants.

          H. Clay Fulcher; The Lingle Law Firm, by: James G. Lingle; and Brian G. Brooks, Attorney at Law, PLLC, by: Brian G. Brooks, for appellee.


         Appellants Apprentice Information Systems, Inc., and David Randall Lamp (collectively, "AIS") appeal an interlocutory order granting a permanent injunction in favor of appellee, DataScout, LLC ("DataScout"). The circuit court concluded that AIS was liable to DataScout for violations of the Freedom of Information Act ("FOIA") and the Arkansas Deceptive Trade Practices Act ("ADTPA") and for tortious interference with a business expectancy and ordered a permanent injunction against AIS. DataScout filed a motion to dismiss this appeal. We deny the motion to dismiss and hold that granting the permanent injunction was an abuse of discretion and reverse.

         I. Facts

         AIS is an Arkansas corporation that provides electronic data storage and management. Roughly sixty-six county collectors and forty county assessors contract with AIS for data storage and software products for their day-to-day operations. In addition, AIS maintains a fee-based website that sells data, including real-estate and personal-property records and geographic-information system data.

         DataScout is AIS's competitor. DataScout provides similar data services to county officials. DataScout also gathers public data from counties and charges users a fee for access to public records and information on its website. DataScout had been obtaining the AIS-managed data it needed either individually or in small quantities directly from the counties or from AIS's website. In 2011, DataScout approached AIS about entering into a business arrangement in which AIS would provide bulk data-essentially all the counties' public data-directly to DataScout. The business relationship failed to evolve, however, and in 2013, DataScout issued a written FOIA request to AIS for several of the counties' bulk data that AIS possessed by virtue of its contracts with the counties. AIS responded in writing, explaining that AIS was not the "custodian" of any "public records".

         DataScout sued AIS alleging that it was taking public data and including it on its fee-based website without the county officials' knowledge. In addition, DataScout contended that county officials could not process a bulk-data FOIA request without AIS's assistance unless they had purchased AIS's bulk-data-extract function. Therefore, it argued, AIS was the de facto custodian of the public records, and AIS had systematically denied others access to bulk data by engaging in delay tactics, deception, and charging exorbitant fees for the data. In sum, DataScout alleged that AIS had manipulated the counties to gain exclusive access and control of the counties' data, used its control of the data for its own benefit, and prevented DataScout from obtaining bulk data in a timely fashion and for a reasonable cost.

         Following the liability trial, the circuit court concluded that AIS had violated FOIA, Ark. Code Ann. § 25-19-101 et seq., and the ADPTA, Ark. Code Ann. § 4-88-101 et seq., and had tortiously interfered with DataScout's business expectancy. The court held AIS was the custodian of the counties' electronic records unless the county possessed the bulk-data-extraction function. Further, the court determined that AIS had violated FOIA "by obstructing access and refusing to provide public data subject to its control, " and by providing "software which impedes 'public access to records in electronic form' in violation of A.C.A. § 25-10-105(g)."

         After determining liability on the above three grounds, the circuit court entered a permanent injunction that required AIS to "pay the same price for public data that other requestors pay, to provide all requestors with the same frequency of access to public data that [AIS] currently enjoy[s] and to prohibit AIS from charging a fee for the public data, unless [AIS] also pay[s] that same fee." AIS filed an interlocutory appeal to this court challenging the permanent injunction while awaiting the trial on damages.

         II. Jurisdiction and Standard of Review

         As this matter involves a permanent injunction, we have jurisdiction to review it at the interlocutory stage pursuant to Arkansas Rule of Appellate Procedure -Civil 2(a)(6). The circuit court granted a permanent injunction against AIS after the liability phase of the trial but before the trial on damages. After hearing the merits, a court may grant a permanent injunction. City of Dover v. City of Russellville, 363 Ark. 458, 215 S.W.3d 623 (2005). This court reviews matters that sound in equity, including permanent injunctions, de novo. United Food & Commercial Workers Int'l Union v. Wal-Mart Stores, Inc., 353 Ark. 902, 120 S.W.3d 89 (2003). We will reverse a decision on injunctive relief if the court abused its discretion. Id. However, we review the ...

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