David v. Goliath (Gwen Moritz Editor’s Note)

It was nice to see Mark Henry’s face on the front page of Arkansas Business a couple of weeks ago — much better than seeing him in a deposition, as I did last year.

Henry is a Fayetteville attorney who works on patents and other intellectual property, and he represented a little 20-employee web design shop in California that won a $12.4 million verdict against Wal-Mart Stores Inc. (which, naturally, disagrees and may appeal).

Senior Editor Mark Friedman’s story on the case was just chock full of life lessons — clichés, really — whether you see yourself as David or Goliath.

• Haste makes waste. A middle manager for Wal-Mart’s British grocery subsidiary, ASDA, attended a panel discussion on responsive web design led by Aaron Cuker (pronounced “Sooker”), the CEO of Cuker Interactive LLC of San Diego, in January 2014. ASDA wanted a responsive website — one that adjusts automatically to be user-friendly on computer monitor, phone or tablet — and it wanted it in a hurry. A contract was signed by the end of that month, and the $600,000 design was to be ready to launch in June.

Cuker’s expert witness said the hurry-up contract was “the most vague, internally inconsistent, and poorly written software contract I have ever analyzed.” That might be hyperbole — he was paid by Cuker, after all — but there’s no question that the parties realized almost immediately that they didn’t agree on what they had agreed to.

• Be careful what you wish for. Knowing how it turned out, it was almost cringe-inducing to read an email that Cuker sent after a job with the biggest company in the world dropped on him as if from the clear blue sky: “I feel this is just the beginning of a successful long term partnership.” In an effort to go above and beyond, Cuker’s shop produced almost four times more templates than the contract required. ASDA wanted them all but didn’t want to pay any extra — in fact, it didn’t even pay the full amount of the contract.

• Bigger isn’t always better. This is not a knock on Wal-Mart in particular. It’s simply a fact that big companies have, by necessity, more layers of managers, and half of them are going to be below average. Needing to have a website for a major retailer ready to launch in five months seems like a management mistake — either too short a timeframe was given or someone procrastinated or made a false start and had to start over. “Failure to plan on your part does not constitute an emergency on my part,” or so the sign in the accounting office says — unless you sign a contract agreeing to provide an emergency response.

It turns out that another Wal-Mart website, Walmart2Go, also needed a rush job on a responsive web design. (Not coincidentally, the ASDA and Walmart2Go sites were overseen by the same “worldwide director of user experience.”)

• What’s good for the goose is good for the gander. After wrangling over payment for 47 templates, Wal-Mart sued Cuker Interactive, saying its coding and designs were useless. But litigating can be risky. Cuker didn’t just defend itself; it countersued, saying Wal-Mart seemed to have used the supposedly useless ASDA coding on the Walmart2Go website.

• You don’t mess around with Tim. Or, really, any federal judge. In this case, Wal-Mart spent months resisting U.S. District Judge Timothy Brooks’ order to turn over the Walmart2Go code for analysis, essentially asking Cuker to trust that the code wasn’t copied without being allowed to verify. Brooks enforced his order, as any observer of the federal justice system would have expected. Wal-Mart reluctantly turned over the code and — whattaya know? — Cuker’s expert witness persuaded the jury that both sites contained Cuker-authored codes.

The jury awarded Cuker more than 20 times the value of the original contract. And Wal-Mart, for its $1 million claim of breach of contract, got zip.

“The last thing that we wanted as a small business was to have a conflict with Wal-Mart,” Aaron Cuker testified. In his case, all’s well that ends well.

Mark Henry was an observer when I was deposed for the first time in almost 30 years. My company and I weren’t even parties to the suit, but we did publish some articles about the dispute, and one side had some questions to ask.

I came away with a whole lot more empathy for witnesses who, after a couple of years have passed, honestly have to answer, “I can’t remember.”

Gwen Moritz is editor of Arkansas Business. Email her at GMoritz@ABPG.com.