SCOTUS Denies Cert on Appeal from $13 Million Verdict
The Supreme Court of the United States will not hear an appeal from a verdict for $13 million returned by a Putnam County jury against Emerson Electric Co. and two of its subsidiaries, Daniel Measurement Services, Inc. and Daniel Industries, Inc. The Court entered an order on Monday which denied DMS’ petition for a writ of certiorari, but which granted leave for the filing of several amici briefs on DMS’ behalf (page 12).
The case started in 1999 when, in response to DMS’ request for proposal, Eagle bid on a contract for the manufacture of a flow computer, which would identify what is flowing through a pipe and measure the substance’s pressure without having to open the pipe. As part of the bidding process, Eagle and DMS entered into a confidentiality agreement, whereby Eagle’s design could not be revealed. Eagle was the low bidder, and entered into a contract with DMS to manufacture 3,000 of the units.
Soon thereafter, Emerson bought DMS and obtained access to Eagle’s proprietary design information, which breached Eagle’s confidentiality agreement with DMS. After an Emerson employee disclosed the breach, Eagle filed suit in the Circuit Court of Putnam County against Emerson, DMS, and Daniel Industries. (I understand that that disclosure also resulted in a lawsuit by Emerson against the employee.)
Eagle claimed that Emerson’s conduct breached its confidentiality agreement with DMS. Following a two week trial in 2006, a jury returned a verdict in Eagle’s favor for $14.8 million, of which $10.5 million represented damages for breach of the confidentiality agreement.
The trial court reduced the verdict by $1.8 million, which the jury had awarded for Eagle’s lost profits on the sale of communications devices. Eagle filed a petition for appeal with the Supreme Court of Appeals of West Virginia from that ruling, which was accepted by a vote of 5-0, but which Eagle subsequently withdrew. DMS’ petition for appeal from the $13 million verdict was refused by the Supreme Court of Appeals by a vote of 3-2.
I have not been able to obtain the parties’ briefs before either appellate court, but from reviewing the amicus brief filed by the Washington Legal Foundation on behalf of DMS, I gather that DMS’ petition for cert alleged that the verdict violated the Due Process Clause of the Fourteenth Amendment because there was no evidence in the record to support the verdict and because there was insufficient post-trial or appellate review of the verdict.
(The WLF brief asserted that “the West Virginia courts provided no meaningful review of the jury’s award.” However, because the WLF, by its own admission, “regularly participates in tort reform efforts[,]” its view of the proceedings, particularly in West Virginia, the American Tort Reform Foundation’s “No. 1 Judicial Hellhole,” makes it difficult, if not impossible, to get an accurate understanding of the parties’ positions on appeal.)