Wal-Mart Stores, Inc. v. Cuker Interactive, LLC ( 2022 )


Menu:
  •                   United States Court of Appeals
    For the Eighth Circuit
    ___________________________
    No. 20-3308
    ___________________________
    Wal-Mart Stores, Inc., a Delaware corporation
    Plaintiff - Appellee
    v.
    Cuker Interactive, LLC, a California limited liability company
    Defendant - Appellant
    ____________
    Appeal from United States District Court
    for the Western District of Arkansas - Fayetteville
    ____________
    Submitted: January 13, 2022
    Filed: March 3, 2022
    ____________
    Before SMITH, Chief Judge, WOLLMAN and ERICKSON, Circuit Judges.
    ____________
    ERICKSON, Circuit Judge.
    After a contentious trial; extensive post-trial motions; a related-malpractice
    case; and previous appeals, this Court upheld the district court’s determination on
    damages and the issuance of a permanent injunction against Wal-Mart Stores, Inc.
    (“Walmart”). Walmart Inc. v. Cuker Interactive, LLC, 
    949 F.3d 1101
     (8th Cir.
    2020); see Henry Law Firm v. Cuker Interactive, LLC, 
    950 F.3d 528
     (8th Cir. 2020).
    The injunction required Walmart to delete Cuker Interactive, LLC’s (“Cuker”)
    Adobe Source Files from its computers and attest to compliance. Walmart, 949 F.3d
    at 1113. Based upon its belief that Walmart has failed to comply with the terms of
    the injunction, Cuker sought to initiate contempt proceedings against Walmart.
    Cuker also requested supplemental damages for Walmart’s post-verdict use of its
    trade secrets. The district court 1 denied Cuker’s requests. Finding no abuse of
    discretion, we affirm. 2
    In January 2014, Walmart and Cuker signed a contract in which Walmart
    agreed to pay Cuker a fixed fee to make its website for Walmart’s UK subsidiary,
    ASDA Groceries, “responsive” (i.e., accessible from any device). Around this same
    time, Walmart was also exploring ways to make its United States grocery website,
    Walmart2Go, responsive. In early 2014 the development of responsive websites
    was in its early days. Unlike today, most websites, like Walmart’s, were running
    two separate sites: one for mobile devices and one for desktops.
    According to the contract’s terms, Cuker agreed to design and build thirteen
    templates for access by desktops, tablets, and smartphones. The scope of the work
    was limited to providing responsive-design work, to be used in conjunction with
    Walmart’s existing code and design. Shortly after the project launched, however,
    the parties began to have fundamental disagreements over the terms of their contract,
    which ultimately led to this protracted litigation. At trial, Cuker presented evidence
    indicating that, by misappropriating Cuker’s trade secrets, Walmart saved itself
    about six months of development time in making its website fully responsive.
    The permanent injunction required Walmart to remove and permanently
    delete Cuker’s trade secrets from its systems, and to file an affidavit of compliance.
    Walmart filed two affidavits from its senior vice president of technology: the first
    1
    The Honorable Timothy L. Brooks, United States District Judge for the
    Western District of Arkansas.
    2
    Cuker has not appealed the district court’s decision related to supplemental
    damages.
    -2-
    one averred that Walmart had deleted Cuker’s trade secrets, and the second one
    stated that no third-party was using the fifteen specifically identified Adobe Source
    Files. Cuker was unconvinced. It believed that Walmart was continuing to utilize
    its trade secrets in thousands of pages of product displays each day. To support its
    claim, Cuker submitted a declaration from Dr. William C. Easttom II (Chuck
    Easttom), who noted that one could delete an Adobe file but continue to use the
    design. After performing several qualitative and quantitative analyses, Easttom
    opined that while the ASDA website landing page was redesigned, the individual
    product pages were not, and, in his opinion, Walmart was continuing to use trade
    secrets that are part of the injunction. Walmart countered Easttom’s opinions,
    affirming that it complied with the terms of the injunction and contending that
    Easttom’s visual examination of the website was insufficient to raise a good faith
    suspicion that Walmart lied about its compliance.
    The district court noted that Easttom had not been given access to the
    underlying codes powering Walmart’s websites so Easttom could neither confirm
    nor refute Walmart’s averment that the Adobe files in question have been deleted.
    The court suspected that if access was granted to Walmart’s proprietary databases,
    it would result in no more than a fishing expedition or a hunt for buried treasure.
    Authorization was not granted to examine the underlying codes because the district
    court found Cuker had failed to make a prima facie showing of disobedience of the
    injunction.
    Cuker contends the district court erred when it failed to consider all of its
    evidence before denying its request to commence contempt proceedings. Cuker also
    challenges the district court’s determination that it failed to make a prima facie
    showing of a violation of the injunction. In order to proceed with a contempt
    petition, a party must make a prima facie showing of a violation of, or refusal to
    follow, a court order. See Taylor v. Finch, 
    423 F.2d 1277
    , 1279 (8th Cir. 1970). To
    find contempt, the proponent bears the burden of proving, by clear and convincing
    evidence, there are facts warranting relief in the nature of civil contempt. Acosta v.
    La Piedad Corp., 
    894 F.3d 947
    , 951 (8th Cir. 2018) (quoting Jake’s, Ltd., Inc. v. City
    -3-
    of Coates, 
    356 F.3d 896
    , 899-900 (8th Cir. 2004)). We review the denial of a
    contempt order for abuse of discretion. F.T.C. v. Neiswonger, 
    580 F.3d 769
    , 773
    (8th Cir. 2009) (quoting Chaganti & Assocs., P.C. v. Nowotny, 
    470 F.3d 1215
    , 1223
    (8th Cir. 2006)).
    Cuker’s claim that the district court did not consider its arguments or evidence
    is belied by the record. As the trial judge, the court noted its familiarity with the
    technology and trade secrets at issue. The court recounted in its order that Cuker’s
    briefs and evidence consisted of over 70 pages. It expressly noted Easttom’s
    declaration and referenced portions of the declaration in its order. The district
    court’s refusal to open contempt proceedings was based on the sufficiency of
    Cuker’s evidence—the district court expressly found that Easttom’s “observations
    about how the website looks and feels to the public” combined with Easttom’s
    conclusion that “Cuker’s proprietary source code might still be embedded
    somewhere in Walmart’s website” was not enough to make a prima facie showing
    of a violation of the injunction. In essence, the district court reasoned that Cuker
    was required to do more than rely on Easttom’s “hunch.”
    Cuker appears to assume that everything on the website, even visual elements
    that pre-dated its involvement with Walmart, constitutes a trade secret. While
    Easttom asserts that he did more than a visual comparison, the methods and analyses
    relate to how the website looks and feels. For example, Easttom examined the layout
    of the product pages, and noted such things as where the “add” button is placed, the
    size of the button, the location placement for the price, the color scheme, and
    placement of descriptors such as price per weight. This analysis relates to the “look
    and feel” of the page and ignores the fact that the scope of Cuker’s engagement was
    to design templates that worked on top of Walmart’s existing codes and layout.
    Upon review of the record and Cuker’s arguments, Cuker’s challenges to the
    district court’s order go to the weight the court gave its evidence, not a failure to
    consider the evidence. We find no clear error in the district court’s factual findings
    and no abuse of discretion in declining to open contempt proceedings.
    -4-
    III.   CONCLUSION
    The judgment of the district court is affirmed.
    ______________________________
    -5-