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Jury Awards Texas Company $115M in Lawsuit Against Walmart

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A Little Rock federal jury on Friday awarded $115 million to a Texas company and its subsidiary that accused Walmart of taking its technology. 

Ecoark Holdings Inc., formerly of Rogers and now of San Antonio, and its subsidiary accused Walmart of taking trade secrets for technologies used to manage the supply chain for fresh produce and meats.

The case was the subject of an article in the April 5 issue of Arkansas Business

“We are happy that we had our day in court and that the jury found that Walmart misappropriated our trade secrets and breached the agreement between the parties,” Randy May, CEO of Ecoark Holdings, said in a statement. “Intellectual property is key to America’s modern economy. The jury understood that protecting trade secrets is the right thing to do and critical to future business operations in Arkansas.”

Walmart said it plans to file post-trial motions and is considering its next steps in the verdict in favor of Ecoark and its subsidiary, Zest Labs Inc. of San Jose, California. (Ecoark moved to Texas in 2019.) 

“We believe the jury’s verdict is excessive, not supported by the facts and should be set aside,” Randy Hargrove, a Walmart spokesman, told Arkansas Business in a statement.

Ecoark’s case is one in a series of suits accusing Walmart of taking computer codes from vendor companies to help develop its own software.

“Walmart values its business relationships and respects the intellectual property rights of others,” Hargrove said. “We have policies in place to prevent the inappropriate use of third-party assets.” 

The jury found that Walmart misappropriated Zest Labs’ trade secrets and awarded it $60 million. The jury also awarded Zest $5 million for breach of a 2015 nondisclosure agreement. The jury added another $50 million in damages to punish Walmart. 

The plaintiffs were represented by Scott Richardson of the Little Rock firm McDaniel Wolff & Benca, and the law firms Williams Simons & Landis of Austin, Carmel Milazzo & DiChiara of New York and Robins Kaplan LLP of Minneapolis.

The jury’s ruling also allows the plaintiffs’ lawyers to bill Walmart for attorneys fees and costs in the lawsuit, which was filed in 2018 in U.S. District Court in Little Rock.

The two-week federal trial started March 29 before U.S. District Judge James M. Moody Jr.

“We do not believe Walmart has any basis to appeal the verdict and doing so will only confirm that the judgment was proper,” Ecoark’s May said. 

The plaintiffs also plan to appeal some of Moody’s pre-trial rulings “to make sure that Walmart is held fully accountable for its actions,” May said. “The appeal will allow Ecoark and Zest to seek additional liability and damages findings against Walmart to ensure that innovative businesses are protected from misappropriation of their technologies.”

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