Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ared-4_18-cv-00500/USCOURTS-ared-4_18-cv-00500-2/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 18:1836(a) Injunction against Misappropriation of Trade Secrets

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IN THE UNITED STATES DISTRICT COURT 

 EASTERN DISTRICT OF ARKANSAS 

 CENTRAL DIVISION 

ZEST LABS, INC. and ECOARK 

HOLDINGS, INC. PLAINTIFFS 

V. 4:18CV00500 JM 

WALMART INC. DEFENDANT 

ORDER

At the conclusion of a ten-day trial, the jury found that Walmart willfully and maliciously 

misappropriated Zest’s trade secrets, breached the 2015 Nondisclosure Agreement with Zest 

Labs, that Denise Sharpe had authority to bind Walmart to the 2015 Nondisclosure Agreement, 

and that Walmart fraudulently induced Zest Labs to enter into the 2018 Statement of Work. 

Shortly after the verdict, the parties began filing post-trial motions. Walmart moved the 

Court to stay enforcement of the judgment pending appeal and renewed its motion1

 for judgment 

as a matter of law under Rule 50, or in the alternative remittitur. Plaintiffs filed a motion for 

attorneys’ fees and costs with billing records attached. 

After review of the Plaintiffs’ billing records, Walmart filed a motion for limited posttrial discovery on the issue of the timing of Plaintiffs’ knowledge of the Bohling patent 

application. Based upon certain billing entries, Walmart contends Plaintiffs knew Walmart filed 

the non-provisional Bohling patent application before the patent was published by the United 

States Patent and Trademark Office (“USPTO”) and took no action to stop it. Walmart contends 

that this evidence is contrary to statements made by Plaintiffs in response to motions and at trial. 

Walmart argues that this new evidence is critical because Plaintiffs had a duty to protect its trade 

1

 Walmart made a motion for judgment as a matter of law at the conclusion of Plaintiff’s case on day 7 of trial. 

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secrets and did not notify Walmart or the USPTO prior to publication that it believed the Bohling 

patent application contained Zest’s trade secrets. Further, Walmart argues that even if the 

evidence was not exculpatory, Walmart could have used it to argue for mitigation of damages. 

On July 28, 2021, the Court heard arguments from the parties on Walmart’s motion to 

conduct limited post-trial discovery. The motion was granted, and Plaintiffs’ attorneys were 

directed to produce their documents and emails dated February 28, 2019 through May 16, 2019 

which contained certain search terms. Plaintiffs provided the documents to the Court in camera. 

Over the course of several months, the Court reviewed the documents to determine whether they 

contained relevant information and the Court provided a list of relevant documents to Plaintiffs’ 

counsel. Plaintiffs object to the production of the documents. However, if the Court orders 

Plaintiffs to produce the documents, Plaintiffs seek to redact its privileged work-product 

materials before producing the documents to Walmart.2

 Plaintiffs have also requested that the 

Court certify the issues related to post-trial discovery for interlocutory appeal. 

At this point it is undisputed that Walmart provided the Bohling non-provisional patent 

application to Plaintiffs in a discovery production of 14,649 pages on February 28, 2019. 

Plaintiffs admit that its counsel found the patent application no later than May 8, 2019. (ECF No. 

460 at 4). Eight days later, the USPTO published the Bohling patent. The Court finds that the 

documents listed in the addendum to this Order are relevant to the issues of the timing of 

Plaintiffs’ knowledge, the number of lawyers involved, and the significance that the lawyers 

placed on the information. This issue is before the Court due to a declaration filed by Plaintiffs in 

response to Walmart’s motion for summary judgment. Specifically, Plaintiffs’ counsel stated on 

March 27, 2020 that he had not seen Walmart’s patent application. The emails produced by 

2

 The Court has ordered the Clerk to file Plaintiffs’ objections and request for certification under seal and ex parte. 

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Plaintiffs show that they may have been aware of the patent application earlier than May 8, 2019. 

The Court declines to certify the issue for interlocutory appeal. (ECF No. 461) 

The issues currently before the Court in Walmart’s renewed motion for judgment as a 

matter of law are (1) Zest failed to sufficiently identify its purported trade secret; (2) Zest’s 

damages theory lacked any relationship to the claimed misappropriation; (3) the jury’s award of 

exemplary damages was advisory, precluded by contract, and unreasonable; (4) the damages 

awarded to Zest by the jury on Zest’s contract claim are duplicative; (5) there was insufficient 

evidence that Walmart acted willfully and maliciously; and (6) there was insufficient evidence 

for the jury to rule against Walmart on Walmart’s counterclaim for breach of contract. The Court 

grants Walmart’s motion on issue four. The Court finds that the damages of $5,000,000 awarded 

to Zest by the jury on Zest’s contract claim are duplicative of the damages awarded to Zest on 

the misappropriation claim. The Court denies the remainder of Walmart’s arguments for 

judgment as a matter of law and remittitur. 

Plaintiffs are directed to produce the documents listed on the addendum to this Order no 

later than June 21, 2022. Walmart’s motion for judgment as a matter of law and remittitur (ECF 

No. 407) is GRANTED IN PART and DENIED IN PART. 

IT IS SO ORDERED this 15th day of June 2022. 

 ____________________________ 

 James M. Moody Jr. 

 United States District Judge 

 

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Addendum 

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VE0000001(5/8/19 only) 

VE0000437 

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VE0000869 

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VE0000871 

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VE0001351(item 59 only) 

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VE-WSL00004729 as redacted 

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