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Apprentice Information Systems, Inc. v. Datascout, LLC

Supreme Court of Arkansas

April 26, 2018

APPRENTICE INFORMATION SYSTEMS, INC., AND DAVID RANDALL LAMP A/K/A RANDY LAMP APPELLANTS
v.
DATASCOUT, LLC APPELLEE

          APPEAL FROM THE BENTON COUNTY CIRCUIT COURT [NO. 04CV-13-1075-5] HONORABLE XOLLIE DUNCAN, JUDGE

          Friday, Eldredge & Clark, LLP, by: William A. Waddell, Jr., Robert S. Shafer, and Joshua C. Ashley, 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.

          ROBIN F. WYNNE, ASSOCIATE JUSTICE.

         Apprentice Information Systems, Inc., and David Randall Lamp (collectively, "AIS") appeal from a final judgment awarding damages to appellee DataScout, LLC. This appeal is a companion to two other appeals decided today, Apprentice Information Systems, Inc. v. DataScout, LLC, 2018 Ark. 284 (Case No. CV-16-575) (interlocutory appeal of injunction) and Apprentice Information Systems, Inc. v. DataScout, LLC, 2018 Ark. 280 (Case No. CV-17-514) (appeal of attorney-fee award). For the reasons that follow, we reverse.

         The trial in this case was bifurcated, and the facts leading to the finding of liability and the award of injunctive relief are recited in Case No. CV-16-575. Following the trial on liability, the circuit court entered its findings of fact and conclusions of law on May 23, 2016. The court found that AIS had violated the Freedom of Information Act (FOIA), Ark. Code Ann. §§ 25-19-101, et seq., and the Arkansas Deceptive Trade Practices Act (ADTPA), Ark. Code Ann. §§ 4-88-101 et seq., and had tortiously interfered with DataScout's business expectancy.

         A bench trial was held on the issue of damages on October 31, 2016. The circuit court entered its amended findings of fact and conclusions of law on January 26, 2017, [1]and its judgment on January 27, 2017.[2] The court awarded DataScout $632, 526 in compensatory damages for AIS's violation of the ADTPA and its intentional interference with a valid contractual relationship or business expectancy. The court awarded punitive damages in the amount of $1, 265, 052. AIS presents the following points on appeal: the circuit court clearly erred in (1) finding that AIS violated the ADTPA; (2) finding that AIS engaged in tortious interference with a valid business expectancy; (3) awarding punitive damages; (4) finding that AIS is an undeclared de facto custodian of records for the counties it serves; and (5) concluding that county officials are not indispensable parties to this case. AIS challenges the circuit court's findings on liability, and for the reasons set out in Case No. CV-16-575, we reverse the findings that AIS engaged in tortious interference with a valid business expectancy and that it violated FOIA.

         The remaining claim, violation of the ADTPA, is also reversed for the reasons that follow. The circuit court concluded that AIS had violated the ADTPA "by engaging in unconscionable, false or deceptive acts, in conducting its business with county collectors and assessors across the State of Arkansas." The court went on to find as follows:

AIS and Lamp have violated the Arkansas Deceptive Trade Practices Act and tortuously [sic] interfered with DataScout's business expectancy in the following ways:
(a) AIS knew that DataScout was a competitor in providing bulk data to companies and individuals;
(b) AIS knew that DataScout was a competitor in creating websites for Arkansas county officials that provided free public access to public data;
(c)AIS knew that DataScout's business model and business goal was to have a one-stop shop of public data available for paid subscribers and that to provide its services, DataScout required public data at a reasonable fee and ...

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