United States District Court, W.D. Wisconsin
OPINION AND ORDER
WILLIAM M. CONLEY District Judge
summary judgment, a 10-day trial, an order entering an
injunction, and an extensive opinion addressing remaining
post-trial motions, the court entered judgment in favor of
plaintiff Epic Systems Corporation in the amount of $420
million. In response, defendants Tata Consultancy Services
Limited and Tata America International Corporation
(collectively “TCS”), filed a sweeping motion
pursuant to Federal Rules of Civil Procedure 50(b) and 59,
largely repeating the same arguments previously raised in its
Rule 50(a) motion and previously rejected by the court. (Dkt.
#996.) In more cursory fashion, defendants also move for
reconsideration of the court's order granting
plaintiff's motion to dismiss defendants'
counterclaims. For the reasons that follow, the court will
deny both motions.
Challenges to Liability Findings
Rule 50, judgment may be granted as a matter of law where
there is no “legally sufficient evidentiary
basis” to uphold the jury's verdict on that issue.
Fed.R.Civ.P. 50(a). More specifically, the court is to
“examine the evidence presented, combined with any
reasonably drawn inferences, and determine whether that
evidence sufficiently supports the verdict when viewed in the
light most favorable to the non-moving party.”
E.E.O.C. v. AutoZone, Inc., 707 F.3d 824, 835 (7th
Cir. 2013). In doing so, the court is not to make credibility
determinations or weigh the evidence. Rather, the court must
assure that more than “a mere scintilla of
evidence” supports the verdict, Hossack v. Floor
Covering Assocs. of Joliet, Inc., 492 F.3d 853, 859 (7th
Cir. 2007), reversing “only if no rational jury could
have found for the prevailing party, ” AutoZone,
Inc., 707 F.3d at 835. Moreover, “[b]ecause the
Rule 50(b) motion is only a renewal of the preverdict motion,
it can be granted only on grounds advanced in the preverdict
motion.” Wallace v. McGlothan, 606 F.3d 410,
418 (7th Cir. 2010); see also Thompson v. Mem'l Hosp.
of Carbondale, 625 F.3d 394, 407 (7th Cir. 2010)
(refusing to consider the defendant's argument that
plaintiff failed to demonstrate that he suffered an adverse
employment action, in part, because the defendant did not
raise argument in Rule 50(a) motion); Fed.R.Civ.P. 50 cmt.
1991 Amendments (“A post-trial motion for judgment can
be granted only on grounds advanced in the pre-verdict
also move for a new trial under Rule 59, which “may be
granted only if the jury's verdict is against the
manifest weight of the evidence.” King v.
Harrington, 447 F.3d 531, 534 (7th Cir. 2006) (citing
ABM Marking, Inc. v. Zanasi Fratelli, S.R.L., 353
F.3d 541, 545 (7th Cir. 2003)). To meet this standard,
defendants must demonstrate that no rational jury could have
rendered a verdict against them. See King, 447 F.3d
at 534 (citing Woodward v. Corr. Med. Servs. of Ill.,
Inc., 368 F.3d 917, 926 (7th Cir. 2004)). Here, again,
the court must view the evidence in a light most favorable to
plaintiff, leaving issues of credibility and weight of
evidence to the jury. King, 447 F.3d at 534.
“The court must sustain the verdict where a
‘reasonable basis' exists in the record to support
the outcome.” Id. (quoting Kapelanski v.
Johnson, 390 F.3d 525, 530 (7th Cir. 2004)).
further context, during the course of this bifurcated trial,
defendants moved for judgment as a matter of law under Rule
50(a). The court implicitly denied these motions by allowing
both the liability and the damages phases to go to the jury.
After the verdict, the parties extensively briefed
defendants' arguments, with full knowledge of the
jury's verdicts, and the court ruled on that motion
before entering judgment. As such, it is odd for defendants
to file another motion, largely repeating verbatim their
prior arguments, without, for the most part, acknowledging
the court's prior rulings. Rather than repeat its prior
explanation for rejecting defendants' arguments, the
court, for the most part, will simply refer to its Rule 50(a)
opinion and order.
Proof of “Actual Damages”
argue that the court should enter judgment in their favor on
any claims that require a showing that Epic suffered
“actual damages” in the form of “losses or
other comparable harm.” (Defs.' Opening Br. (dkt.
#997) 18.) Defendants contend that plaintiff's sole
ground for compensatory damages was a disgorgement of benefit
theory in connection with its unjust enrichment claim. As
such, defendants argue, plaintiff failed to present evidence
of actual damages to support its breach of contract,
fraudulent misrepresentation, unfair competition, Computer
Fraud and Abuse Act (“CFAA”) and deprivation of
property / civil theft claims.
initial matter, defendants continue to blur the distinction
between a finding of injury, required for some but not all of
the claims, and a finding and measurement of damages. See
United States v. Sapoznik, 161 F.3d 1117, 1119 (7th Cir.
1998) (“But the question of causation is different, in
criminal as in civil law, from the question of
quantification. (In tort law the difference is between the
fact of injury and the amount of damages.)”). For
example, to prove a breach of contract claim under Wisconsin
law, the plaintiff need not prove any injury, as this court
previously explained. (See 3/2/16 Op. & Order
(dkt. #538) 46 n.36.) The fact that the jury found defendants
liable as to all of these claims does not mean the
jury was obligated to award damages on all claims. Indeed,
the actual damages award more likely reflects the finding of
liability on the unjust enrichment claim, and, specifically,
plaintiff's disgorgement of benefit theory. Regardless,
as plaintiff points out in its response, none of these claims
required proof of the type of damages defendants
contend is necessary for a finding of liability.
proof of damages specifically, while defendants are correct
that a plaintiff may recover out-of-pocket losses for its
fraudulent misrepresentation and unfair competition claims,
that is the not the sole available basis of
recovery. Instead, a plaintiff may seek damages in the form
of the value of the benefit received through the commission
of the tort, which is essentially the same as the unjust
enrichment disgorgement of benefits theory. See Pro-Pac
Inc. v. WOW Logistics Co., 721 F.3d 781, 786 (7th Cir.
2013) (damages for the “value of the benefit”
unjustly received are available for tort claims regardless of
whether the plaintiff formally alleged an unjust enrichment
claim). Similarly, plaintiff's deprivation of property /
civil theft claim under Wis.Stat. § 895.446 requires
that a person suffer “damage or loss, ” but the
statute provides that “actual damages” can
include the retail value of stolen property, which is
analogous with a damages claim premised on the value of the
trade secrets and confidential information taken by
challenge to an award on plaintiff's CFAA claim fails for
an additional reason. While the CFAA requires that a civil
plaintiff suffer “damage or loss, ” 18 U.S.C.A.
§ 1030(g), the term “loss” includes:
any reasonable cost to any victim, including the cost of
responding to an offense, conducting a damage assessment, and
restoring the data, program, system, or information to its
condition prior to the offense, and any revenue lost, cost
incurred, or other consequential damages incurred because of
interruption of service.
Id. at § 1030(e)(1). Here, defendants
stipulated to plaintiff's evidence of a $9, 277 loss.
(Pl.'s Opp'n (dkt. #1007) 26 (citing Trial Tr. (dkt.
#896) 89 (counsel for defendants stating that they are going
to “drop the whole matter of . . . the loss”
under CFAA claim and the court responding that it will delete
the instruction)).) Having stipulated to this loss,
defendants cannot now challenge plaintiff's failure to
prove “actual damages.”
Failure to Instruct on “Actual Damages”
related to the first challenge, defendants further argue that
the court should grant judgment in their favor on the
above-mentioned claims because the jury was never asked to
find, and never found, that Epic suffered “actual
damages.” Because the court has rejected
defendants' argument that such a finding was required as
to each of these claims, however, the court similarly rejects
any argument based on the court's failure to instruct the
jury or the lack of a jury finding. Critically, with respect
to the damages award, the jury was instructed properly that
they could award damages for “the value of the benefits
obtained by TCS because of TCS's wrongful conduct.”
(Damages Instr. (dkt. #872) 3.)
Misappropriation of Trade Secrets Claim
defendants again challenge the jury's finding of
liability as to the misappropriation of trade secrets claim,
Wis.Stat. § 134.90, on the basis that plaintiff failed
to demonstrate that it protected the secrecy of these alleged
trade secrets. The court previously considered and rejected
this argument, and defendants offer no meritorious basis for
revisiting it. (See 9/29/17 Op. & Order (dkt.
Unfair Competition and Unjust Enrichment Claims
offer three bases for judgment in their favor as to these
claims. First, Defendants contend that
plaintiff's unjust enrichment claim fails as a matter of
law because the contract between TCS and Epic bars such a
claim. Plaintiff contends that this challenge has been
waived, having failed to raise it in their original Rule
50(a) motion. However, where the challenge is purely a legal
challenge -- not a sufficiency of the evidence or a jury
instruction challenge -- the court agrees with defendants
that it need not be raised in a Rule 50(a) motion. See
Havco Wood Prod., LLC v. Indus. Hardwood Prod., Inc.,
No. 10-CV-566-WMC, 2013 WL 1497429, at *3 (W.D. Wis. Apr. 11,
2013) (explaining that where a matter of law is raised as a
basis for relief, there is no prejudice to the nonmovant)
(citing Warlick v. Cross, 969 F.2d 303, 308 (7th
so, this first challenge fails on its merits. The
parties' contract did not govern TCS's impermissible
access through the Epic UserWeb portal. Indeed, the record
demonstrates that TCS was denied direct access to the UserWeb
despite its repeated requests. (Trial Ex. 296 at 3
(TCS presentation explaining that because “TCS is not
an Epic partner . . . they are not allowed to access Epic
Systems Userweb Portal”); Trial Ex. 303 at 6 (TCS
acknowledging that because it “could not reach an
agreement with EPIC, ” TCS associates are not
“allowed to connect to the EPIC User Web”).)
Because of this, not only did the contract not cover
TCS's impermissible use, but there was no reason for Epic
to negotiate away a contractual remedy for unjust enrichments
arising out of a fundamental breach of that contract.
Regardless, even if recovery were only available as a breach
of contract damage, the jury found just such a breach and was
entitled to find the benefit conferred on defendants as a
result of that breach was the best measure of damages.
(See Damages Instr. (dkt. #872) 3 (instructing the
jury that they may award Epic “the value of ...