PROFESSIONAL INVESTIGATING & CONSULTING AGENCY, INC., Plaintiff,
HEWLETT-PACKARD COMPANY, Defendant.
Submitted: January 29, 2015
On Defendant's Renewed Motion for Judgment as a Matter of Law DENIED
On Defendant's Motion for a New Trial or Remittitur DENIED
On Plaintiff's Motion for Exemplary Damages and Attorneys' Fees GRANTED IN PART, DENIED IN PART
On Plaintiff's Motion for Attorneys' Fees & Expenses GRANTED IN PART, DENIED IN PART
On Plaintiff's Motion for Costs & Interest GRANTED IN PART, DENIED IN PART
Blake A. Bennett, Esquire (Argued), Christopher H. Lee, Esquire, Gregory Fischer, Esquire, Cooch and Taylor, P.A., Attorneys for Plaintiff.
Michael P. Kelly, Esquire, Christopher A. Selzer, Esquire, McCarter & English, LLP, William J. Wade, Esquire, Travis S. Hunter, Esquire, Richards Layton & Finger, P.A., Jeffrey T. Thomas, Esquire (Argued), Joshua A. Jessen, Esquire, Gibson Dunn & Crutcher LLP, Attorneys for Defendant.
Honorable Mary M. Johnston, J.
FACTUAL & PROCEDURAL CONTEXT
Plaintiff Professional Investigating & Consulting Agency, Inc. ("PICA") is an Ohio corporation with its principal place of business in Ohio. Defendant Hewlett-Packard Company ("HP") is a Delaware corporation with its principal place of business in Palo Alto, California. PICA and HP filed their respective motions following the conclusion of a 12-day jury trial.
Jury selection for trial in the Superior Court began on October 6, 2014. During trial, PICA presented testimony from eight witnesses for its case-in-chief. Two were experts and four were read-in by deposition. HP presented testimony from seven witnesses for its case-in-chief, all of whom appeared in person, and two were experts.
At the close of trial, the jury was presented with four counts: (1) Count I- Misappropriation of Trade Secrets; (2) Count II-Intentional Interference with Employment Relationships; (3) Count III-Breach of Duty of Good Faith and Fair Dealing; and (4) Count IV-Defamation. The jury returned a verdict on October 27, 2014 ("Verdict").
For Count I, the jury found that PICA's Channel Management Program Proposal ("Channel Management Proposal") and PICA's Investigative Ways, Means, and Methods ("Ways, Means, & Methods") were trade secrets. With respect to the Channel Management Proposal, the jury found that HP willfully and maliciously misappropriated the proposal. The jury assessed PICA $300, 000 in damages for out-of-pocket expenses or lost profits, and $700, 000 in damages for HP's unjust enrichment.
The jury also found that HP misappropriated PICA's Ways, Means, & Methods, but that the misappropriation was not willful or malicious. The jury did not assess PICA any damages, finding that PICA did not suffer a loss of out-of-pocket expenses or lost profits, and that HP was not unjustly enriched by the misappropriation.
For Count II, the jury found that HP did not intentionally interfere with the employment relationship of any of PICA's employees. Therefore, the jury did not assess any damages.
For Count III, the jury found that HP breached the implied covenant of good faith and fair dealing, and that PICA had suffered damages as a result. The jury assessed PICA $18, 000 in damages.
For Count IV, the jury found that HP defamed PICA at the Costa Rica training session. As a result, the jury assessed PICA Humiliation Damages in the amount of $5, 500, 000.
Following trial, PICA and HP filed their respective motions. Oral argument for all motions was heard on January 29, 2015.
HP's Renewed Motion for Judgment as a Matter of Law and Motion for a New Trial or Remittitur
Pursuant to Superior Court Civil Rules 50 and 59, HP renewed its Motion for Judgment as a Matter of Law and filed a Motion for a New Trial or Remittitur. HP's general argument is that the Verdict was flawed on the issues of HP's liability and damages awarded on PICA's claims for defamation, misappropriation of trade secrets, and breach of the implied covenant of good faith and fair dealing.
While the standards for Rules 50 and 59 are different, they are sufficiently similar to allow the Court to discuss the motions together. Further, at oral argument, counsel argued the Rule 50 and 59 motions together, breaking the issues down by claim, then by liability and damages.
Standards of Review
Superior Court Civil Rule 50(b) permits a motion for judgment as a matter of law to be renewed after the entry of a judgment. "[B]arring exceptional circumstances, a trial judge should not set aside a jury verdict…unless...the evidence preponderates so heavily against the jury verdict that a reasonable jury could not have reached the result." Therefore, the Court must consider whether "under any reasonable view of the evidence the jury could have justifiably found for the non-moving party."
In contrast to Rule 50, when considering a Rule 59 motion for a new trial, the Court "weighs the evidence in order to determine if the verdict is one which a reasonably prudent jury would have reached." The Court should only set aside a verdict if it is clear that the "verdict was the result of passion, prejudice, partiality, corruption, or if it is clear that the jury disregarded the evidence or law." A jury's verdict with respect to damages is presumed to be correct, "unless it is so grossly disproportionate to the injuries suffered so as to shock the Court's conscience and sense of justice."
HP's Defamation Liability and PICA's Damages
HP contends that no reasonable jury could have found HP liable for defamation or awarded PICA $5.5 million in humiliation damages based on the evidence presented at trial. HP argues the statements about PICA's "poor performance" or being "poorly managed" at the ISMA/OSAC conference are constitutionally-protected statements of opinion because they cannot be objectively verified. HP also argues that the statement about the Latin America Region having the lowest return-on-investment ("ROI") in the world was at least substantially true, a defense to defamation, based on the evidence presented at trial. In addition, HP argues that PICA offered no evidence to support the jury's humiliation damages award of $5.5 million.
HP also contends that the jury's $5.5 million assessment for humiliation damages should shock the Court's conscience. HP argues that the jury's $5.5 million damages award was speculative, and must have been the result of the jury's sympathy for PICA and/or desire to punish HP, because there was no evidence to support that an award for that amount. HP asserts that the $5.5 million award represents a "notion that PICA was 'humiliated' in an amount thirty-five times its net income over a five year period [which] defies comprehension."
HP next argues that PICA did not present any evidence that HP's defamatory statements at the ISMA/OSAC conference actually diminished PICA's reputation, or caused humiliation. Alternatively, HP argues that if PICA had offered evidence of reputational damage, PICA did not present any evidence that any damage suffered was proximately caused by HP's statements in Costa Rica.
PICA contends that it was reasonable for the jury to find HP liable for defamation and assess $5.5 million in humiliation damages. PICA argues the testimony of Bob Cooper provides sufficient evidence to show that all the statements at the ISMA/OSAC conference-relating to poor performance, poor management, and lowest ROI-were objectively false. Specifically, PICA argues that HP's statements at the Costa Rica training about "poor performance" and "poor management" were not statements of opinion, and were false. PICA asserts that its performance and management were objectively verifiable under the metrics PICA was being judged on at that time. PICA also argues that HP's statement about ROI was not substantially true because it was not based on the metrics being used to judge PICA at that time.
PICA also contends that the jury's assessment of $5.5 million in humiliation damages does not shock the conscience. PICA argues the jury's assessment of $5.5 million was reasonable given HP's introduction of evidence that PICA had been paid $16 million for prior services rendered to HP. PICA also argues that the $5.5 million in damages was reasonable because PICA may never know the full extent of the damage caused by HP's defamation. PICA asserts it is the role of the jury to award damages that would reasonably compensate PICA from the wrong done to PICA's reputation and good name as the probable consequences of HP's defamation. Finally, PICA argues that $5.5 million in damages is reasonable because the jury could have concluded from the evidence that PICA was going to continue to make profits above its 2010 net income had HP not defamed PICA in Costa Rica.
The Court instructed the jury on defamation and humiliation damages. The instruction given was proposed by HP. The jury was told: "In deciding upon a reasonable sum, you must be governed by the evidence in the case and by the purpose of a damages award: fair and reasonable compensation for harm wrongfully caused by another. You may use your own experience and judgment in determining what is fair and reasonable. A person who has been defamed but who has not suffered any injury may recover nominal damages, usually in the amount of $1.00."
A statement maligning "one in a trade, business or profession" is slander per se, and is a category of defamation that is actionable without proof of special damages. Prior to post-trial motions, HP did not raise the issue of whether PICA, as a corporation, could recover humiliation damages. Therefore, the Court finds that HP's argument on this issue has been waived.
As required by Rule 50(b), the Court has reviewed the evidence to determine whether under any reasonable view, the jury could have justifiably found in favor of HP. Under Rule 59, the Court has weighed the evidence in order to determine whether the Verdict is one which a reasonably prudent jury could have reached. Further, the Court has examined the evidence in consideration of whether it is clear that the Verdict was the result of passion, prejudice, partiality, corruption, or in clear disregard of the evidence or the law. The Court viewed the damages award to determine whether it is so grossly disproportionate to the injuries suffered so as to shock the Court's conscience and sense of justice.
The Court finds that a reasonable jury could have found that HP's statements at the ISMA-OSAC conference were not merely statements of opinion. Rather, the statements could be found by a reasonable jury to be false, as objectively verifiable under the relevant metrics placed into evidence by PICA. Therefore, HP's defamatory statements were not pure expressions of opinion, protected under the First Amendment. To the extent HP's statements could, in part, be viewed as opinion, the Court finds that a reasonable ...