# U ni te d S ta te s Co ur t of A pp ea ls

For the Eig hth Circu it

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No. 1 3- 35 86

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Ham id Yazd ia np ou r; F ai sa l Al i M ou sa al Naq bi

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff s - Ap pe ll an ts

v.

Safe bl oo d Tec hn ol og ie s, In c.; J im Lim bi rd ; Ch arl es W or de n, J r.; C ha rle s Word en , Sr.

ll ll ll ll ll ll ll ll ll ll l Defe nd

an ts - App el le es

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No. 1 3- 36 32

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Ham id Yazd ia np ou r; F ai sa l Al i M ou sa al Naq bi

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff s - Ap pe ll ees

v.

Safe bl oo d Tec hn ol og ie s, In c.; J im Lim bi rd ; Ch arl es W or de n, J r.

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t s

Ch arl es W or de n, Sr

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an t - Ap pe ll an t__ __ __ __ __ __ __ __ __ __ __ __ __ _

No. 1 3- 36 39

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Ham id Yazd ia np ou r; F ai sa l Al i M ou sa al Naq bi

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff s - Ap pe ll ees

v.

Safe bl oo d Tec hn ol og ie s, In c.; J im Lim bi rd ; Ch arl es W or de n, J r.

ll ll ll ll ll ll ll ll ll ll l Defe nd

an ts - App el la nt

s

Ch arl es W or de n, Sr

.

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t

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App eal s fr om

Uni te d S ta te s Di st ric t Co ur t fo r th e Eas te rn Dis tri ct of Ark an sa s - Li tt le Ro ck

__ __ __ __ __ __

Su bm it te d: Decem

be r 9, 2 01 4
Fil ed : Fe br

ua ry 27 , 20 15

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Befo re WOL LMAN, COLLOTON , and BENTON, Circu it Ju dg es

.

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W OLLMAN, Circ ui t J ud ge

.

Ham id Y azd ia np ou r an d Fai sa l Ali Mo us a al Naq bi (Lic en se es ), al on g wit h

th e i r l i mi t ed li ab il it y co m pa ny (th e LLC), en te red in to a li cen si ng ag reem en t wit h

S afeb lo od Tech no lo gi es , In c. (Saf eb lo od Tech ) fo r th e ex cl us iv e rig ht s to m ark et

-2

-pa te nt ed te ch no lo gy ov ers eas

. Lice ns ees la te r su ed Safe bl oo d Tech fo r br each of

co nt ract

. Lice ns ees al so br ou gh t su it ag ai ns t Safe bl oo d Tech an d it s of fic ers Ch arl es

W or de n, Jr

. (Word en Jr .), an d Ji m Li mb i r d ( co ll ect iv el y , Safe bl oo d Gro up ) an d

ag ai ns t pa te nt in ve nt or Ch arl es W or de n, Sr. (Word en Sr.), fo r frau d, co ns tru ct iv e

frau d, an d vi ol at io ns of th e Ark an sa s Decep ti ve Trad e Prac ti ces Act (ADTPA), Ark

. Co de A n n

. §§ 4- 88 -1 01 to -1 15

. The di st ric t co ur t di sm is se d th e frau d cl ai m s at

su m m ary jud gm en t. The rem ai ni ng cl ai m s pr oc e e d e d t o tri al an d a jury fo un d fo r

Lice ns ees , award in g th em $7 86 ,00 0 in co nt ract da m ag es an d n o da m ag es fo r

vi ol at io ns of th e A D TP A

. The di st ric t co ur t award ed Lice ns ees an ad di ti on al

$1 44 ,15 0.4 0 i n p reju dg m en t i nt eres t.

Lice ns ees ap pe al

, arg ui ng th at th e di st ric t co ur t erre d in di sm is si ng th ei r frau d

cl ai m s at su m

m ary jud gm en t, th at a ju r y in st ru ct io n on th e ADTPA cl ai m was

erro ne o u s , a n d th at th e jury ret ur ne d an in co ns is te nt ve rd ic t on th e ADTPA c la im

. Safe bl oo d Gro up cro ss -ap pe al s, arg ui ng th at Lice ns ees la ck st an di ng , th at th e di st ric t

co ur t sh ou ld ha ve gr an te d jud gm en t as a m at te r of la w on th e ADTPA cl ai m an d th e 1

en ti re cas e, an d th at pr ejud gm en t in te res t sh ou ld no t ha ve be en award ed

. W or de n Sr.

fil ed a co nd it io na l cro ss -ap pe al

, arg ui ng th at th e d i st ric t co ur t sh ou ld ha ve gr an te d

hi s m ot io n fo r jud gme n t a s a m at te r of la w on th e ADTPA cl ai m

. W e rev ers e th e

gr an t of su m

m ary jud gm e n t o n th e co m m on -la w frau d cl ai m an d th e award of

pr ejud gm en t i nt eres t, an d we a ffi rm in all ot he r res pe ct s.

Safe bl oo d Gro up ’s ap pe al of th e di st ric t co ur t’s de ni al of su m m ary jud gm en t 1

on th e ADTPA cl ai m is im pr op erl y rai se d. See Orti z v. Jo rd an , 13 1 S. Ct

. 88 4, 89 1- 92 (2 01 1) ( “O rd in ari ly, or de rs de nyin g su m m ary jud gm en t do no t qu al ify as ‘fina l
de ci si on s’ su bjec t to ap pe al [u nd er 28 U.S.C. § 12 91 ]. ”); 28 U.S.C. § 2 1 0 7 ( a ) (req ui rin g ap pe al be fil ed wit hi n th irt y da y s aft er en try of t h e ju d gm en t or or de r

ap pe al ed fro m ).

-3

-I. Back gr ou nd

In Decem be r 20 09

, Lice ns ees m et wit h Lim bi rd

, W or de n Jr

., an d W or de n Sr.

to di sc us s acq ui rin g th e ex cl us iv e ri gh ts to m ark et cert ai n Safeb lo od Tech pr od uc ts

ov ers eas

. Dur in g th e m eet in g, W or de n Sr. to ld Lic e ns ees th at th e pr od uc ts us ed a

pa te nt ed fo rm

ul a th at he ha d in v e n t e d

. Safe bl oo d Tech an d Lice ns ees ev en tu al ly

en te red in to a li cen si ng ag reem en t. Alt ho ug h W or de n Sr.’s pa te nt was no t m en ti on ed

in th e or ig in al ag reem en t, th e pa rti es co nt em pl at ed th at th e pa te nt rig ht s wou ld be

as si gn ed to Lice ns ees , and th e ag reem en t was lat er am en de d t o m ak e th at ex pl ic it

.

Afte r si gn in g th e or ig in al li cen si ng ag reem en t, Yazd ia np ou r em ai le d Lim bi rd

,

as ki ng ab ou t W or de n Sr.’s rel at io ns hi p wit h an ot he r co m pa ny an d se e k i ng

cl ari fic at io n whe th er Lice ns ees wou ld be co mpet in g ag ai ns t th at ot he r co m pa ny.

Lim bi rd ex pl ai ne d th at W or de n Sr. ha d as si gn ed th e rig ht s to U.S. Pat en t 6,3 03 ,11 2
(“ th e pa te nt ”) to an ot he r co m pa ny in th e Uni te d St at es , bu t th at Lice ns ees wou ld ha ve

th e ex cl us i v e rig ht s to m ark et th e pa te nt ed te ch no lo gy in al l ot he r co un tri es

. Bo th

W or de n Sr. an d Lim

bi rd se nt em ai ls to Yazd ia np ou r ad vi si ng hi m th at t o r e c e i v e

pa te nt pr ot ect io n, Lice ns ees wou ld ne ed to reg is te r th e pa te nt in each co un try in

whi ch th ey pl an ne d to do bu si ne ss

. W or de n Sr. al so se nt Yazd ia np ou r an em ai l wit h

in st ru ct io ns fo r ch eck in g th e st at us of th e pa te n t o n t h e Uni te d St at es Pat en t an d

Trad em ark Offi ce (USPTO) web si te . Safeb lo od Grou p a nd W or de n S r. as se rt th at

, ha d Lice ns ees ch eck ed th e USPTO web si te

, it wou ld ha ve sh own th at W or de n Sr. ha d

as si gn ed an in te res t in th e pa te nt to th e ot he r co m pa ny in 19 99 an d th a t t h e ot he r

co m pa ny had gi ve n Word en Sr. a s ecu rit y in te res t i n t he pa te nt in 20 02

.

On Feb ru ary 15

, 20 10

, W or de n Sr. le arn ed fro m hi s at to rn ey th at it was to o la te

to reg is te r th e pa te nt in an y ot he r co un try an d th at th e pa te nt wou ld be le g a ll y

pr ot ect ed on ly in th e Uni te d St at es

. W or de n Sr. rel ay ed th is in fo rm at io n to Lim bi rd

, who th en in fo rm ed Wo r d e n J r. Nev ert he le ss , on Feb ru ary 18

, 20 10

, W or de n Sr.

ex ecu te d an ag reem en t gi vi ng S a f e bl oo d Tech th e ex cl us iv e rig ht s to th e pa te nt

-4

-ou ts id e th e Uni te d St at es

. On Mar ch 2, 20 10

, Safe bl oo d Tech as si gn ed th es e pa te nt

rig ht s to Lice ns ees , ame n d i n g th e or ig in al ag reem en t to pr ov id e Lice ns ees an d th e

LLC wit h t he ex cl us iv e ri gh ts to th e p at en t o ut si de th e Uni te d S ta te s.

L ic en se es pr oc eed ed wit h pl an s to di st rib ut e an d se ll th e pr od uc ts in th e Mi ddl e

East un ti l May 20 10

, whe n th ey di sc ov ered th at th ey wou ld no t be ab le to reg is te r th e

pa te nt in an y co un try. The reaf te r, Lice ns ees br ou gh t su it

, al le gi ng th e cl ai m s se t fo rth

ab ove. The di st ric t co ur t gr an te d su m m ary jud gm en t to Safe bl oo d Gro up an d W or de n

Sr. on th e frau d cl ai m s, ho ld in g th at Lice ns ees co ul d no t es ta bl is h jus ti fia bl e rel ia nc e

be cau se pu bl ic reco rd s av ai la bl e on th e USPTO web si te sh owe d th at Safe bl oo d Tech

di d no t own th e ex cl us iv e rig ht s to th e pa te nt ed te ch no lo gy. The rem ai ni ng cl ai m s

pr oc eed ed to tri al

, whe re a jury fo un d th at Safe bl oo d Tech ha d br each ed it s co nt ract

wit h Lice ns ees an d th at Safe bl oo d Gro up an d W or de n Sr. ha d vi ol at ed th e ADTPA.

Alt ho ug h Lice ns ees req ue st ed $8 25 ,16 9.7 0 in da m ag es , th e jury, as se t fo rth ab ov e,

award ed $7 86 ,00 0 fo r th e br each -o f-co nt ract cl ai m an d no da m ag es fo r th e ADTPA

cl ai m , fo ll owe d by th e di st ric t co ur t’s award of $1 44 ,15 0.4 0 in pr ejud gm en t in te res t.

A m ag is tra te jud ge rece iv ed th e jury’ s ve rd ic t in pl ace of th e di st ric t jud ge who

ha d pre si de d ov er the cas e. Afte r read in g th e ve rd ic t in to th e reco rd

, th e m ag is tra te jud ge di sm is se d th e jury an d st at ed th at th e di st ric t co ur t wou ld en te r jud gm en t ba se d

on th e jury verd ic t. Cou rt wa s t he n a djo ur ne d. Mo re t ha n a m on th lat er, Lic en se es

fil ed a br ie f ob

jecti ng to th e ADTPA ve rd ic t as in co ns is te nt

. Lice ns ees rai se d th e

in co ns is te nt -v erd ic t is su e ag ai n in th ei r m ot io n t o a mend th e jud gm en t, whi ch th e

di st ric t co ur t de ni ed

. Safe bl oo d Gro up an d W or de n Sr. di d no t fil e a po st ve rd ic t

m ot io n fo r jud gm en t as a m at te r of law o r fo r a n ew tr ia l.

II. St an di ng

As an in it ia l m at te r, we ho ld t h a t Li c en se es ha ve st an di ng to br in g su it

. Lice ns ees were pa rti es to th e c o n t r a ct th at Safe bl oo d Tech br each ed an d were th e

-5

-pa rti es al le ge dl y ha rm ed by th e vi ol at io n of the ADTPA an d th e de fen da nt s’ frau d.

D e s p i te Safe bl oo d Gro up ’s arg um en t to th e co nt rary, Lice ns ees ’ de ci si on no t t o

in cl ud e th e LLC as a pl ai nt iff di d no t de pr iv e th em of Arti cl e III st an di ng

. See ABF

F r e i g h t S y s., In c. v. In t’l Bh d. of Team st ers , 64 5 F.3 d 95 4, 95 9- 61 (8 th Ci r. 20 1 1 )
(h ol di ng th at a pl ai nt iff

who was a pa rty to a bre ach ed co nt ract ha d s ta nd in g)

.

III. Fra ud

Lice ns ees arg ue th at th e di st ric t co ur t erre d in gr an ti ng th e de fen da nt s’ m ot io ns

fo r su m m ary jud gm en t on th e co m m on -la w frau d cl ai m (h av in g ab an do ne d th ei r

co ns tru ct iv e frau d cl ai m). We r ev ie w de no vo a di st ric t co ur t’s gr an t of su m m ary jud gm en t an d it s in te rp ret at io n o f s t at e la w, vi ewin g th e fact s in th e li gh t m os t

fav or ab le to th e no nm ov an t. Dav id so n & Sch aaff

, In c. v. Lib ert y Nat’l Fi re In s. Co

., 69 F.3d 86 8, 8 70 (8t h C ir. 1 99 5)

.

Und er Ark an sa s l aw, th e el em en ts of f rau d a re:

(1 ) a fal se rep res en ta ti on of a m at eri al fact ; (2 ) kn owl ed ge th at th e

rep res en ta ti on is fal se or th at th ere is in su ffi ci en t ev id en ce up on whi ch

to m ak e th e rep res en ta ti on ; (3 ) in te nt to in du ce act io n or in act io n in
rel ia nc e up on th e rep res en ta ti on ; (4 ) jus ti fia bl e rel i a n c e on th e

rep res en ta ti on ; an d (5 ) da m ag e su ffer ed as a res ul t o f th e rel ia nc e.

Ty so n Fo od s, In c. v. Dav is

, 66 S.W .3d 56 8, 57 7 (Ark

. 20 02 ). Bec au se th e ve ry

rep res en ta ti on s rel i e d on can be wha t cau se fo rb eara nc e fro m fu rth er in qu iry i nt o a

st at em en t’s fal si ty, jus ti fia bl e rel ia nc e or di na ril y “ do es no t req ui re th e pa rty to te st th e

tru th of su ch rep res en ta ti on s whe re th ey are wit hi n th e kn owl ed ge of th e pa rty m ak in g

th em or whe re th ey are m ad e to in du ce th e ot he r pa rty to refr ai n fro m se ek in g fu rth er

in fo rm at io n.” Lan cas te r v. Sch il li ng Mo to rs , In c., 77 2 S.W .2d 34 9, 35 1 (Ark

. 19 89 )
(q uo ti ng Cl ay v. Bran d, 3 6 5 S

. W. 2d 25 6, 26 0 (Ark

. 19 63 )). A pa rty to a bu si ne ss

tra ns act io n is jus ti fie d in rel y in g on a m is rep res en ta ti on of fact wit ho ut in ve st ig at io n

-6

-“ no t on ly whe re an in ve st ig at io n wou ld in vo lv e an ex pe nd it ur e of effo rt an d m on ey

ou t of pr op or ti on to th e m ag ni tu de of th e tra ns act io n bu t al so whe re it co ul d be m ad e

wit ho ut an y co ns id erab le tro ub le or ex pe ns e.” Fau se tt & Co

. v. Bu ll ard

, 22 9 S.W .2d

49 0, 49 1- 92 (Ark

. 19 50 ) (q uo ti ng Res ta te m en t of Tort s § 54 0 (1 93 8) ). A pa rty m us t

in ve st ig at e an affi rm at iv e m is rep res en ta ti on —as op po se d to an un di sc lo se d

fact —o nl y whe n “ th e fact s sh ou ld be ap p a r e n t to on e of hi s kn owl ed ge an d

in te ll ig en ce fro m a cu rs or y gl an ce, or he ha s di sc ov ered so m et hi ng whi ch sh ou ld

se rv e as a warn in g th at he is be in g de cei ve d.” Lan cas te r, 77 2 S.W .2d at 35 1 (q uo ti ng

Pro ss er & Keet on on th e Law of Tort s § 10 8 (5 th e d

. 1 9 8 4) ); se e, e.g ., Bu rg es s v.

Fren ch

, 26 3 S.W .3d 57 8, 58 1- 82 (Ark

. Ct

. App

. 20 07 ) (h ol di ng th at a bu y er was no t jus ti fie d in rel y in g on a ho m e o wne r’s di sc lo su re fo rm st at in g th at th ere ha d ne ve r

be en an y pr ob le m s wit h th e ro of or wiri ng whe n th e bu y er sa w ex po se d el e c tri cal

wiri n g th ro ug ho ut th e ho us e an d was to ld by h is real es ta te ag en t th at sh e ha d se en

a pu dd le of wate r in th e li vi ng ro om ); see al so Res ta te m en t (Seco nd ) of Tort s § 54 1

cm t. a (1 97 7) (“ [T]he [d ut y -to -in ve st ig at e] ru le

. . . a p p li es on ly wh en th e reci pi en t

of th e m is rep res en ta ti on is cap ab le of ap pr eci at in g it s fal si ty at th e ti m e by th e us e of

hi s s en se s.”)

.

Safe bl oo d Gro up an d W or de n Sr. arg ue th at Lice ns ees can no t pr ov e jus ti fia bl e

rel ia nc e be cau se th e st at us of th e pa te nt was pu bl ic ly a va il ab le on th e USPTO

web si te

. Eve n if Lice ns ees co ul d eas il y ha ve ch eck ed th e st at us of th e pa te nt on th e

2

USPTO web si te

, th ey were no t req ui red to in ve st ig at e un le ss it was ap pa ren t th at th ey

were be in g d e c e i v e d

. Wo r d e n S r

. a n d Safe bl oo d Gro up arg ue th at

Lice ns ees —s op hi st ic at ed bu si ne ss m en —h ad a du ty to in ve st ig at e fu rth er whe n th ey

Safe bl oo d Gro up an d W or de n Sr. rel y on W an la ss v. Gen eral Elec tri c Co

., 14 8 2

F.3 d 1 3 3 4 ( F e d

. C i r. 19 98 ). In W an la ss , th e is su e was whe n th e pl ai nt iff kn ew or sh ou ld ha ve kn own of th e de fen da nt ’s pa te nt in f r i n g e m en t. Id

. at 13 37 -3 9. As

W an la ss de al t wit h co ns tru ct iv e kn ow l e d g e f or pu rp os es of a la ch es de fen se , it is
in ap po si t e t o th e is su e whe th er Lice ns ees can es ta bl is h jus ti fia bl e rel ia nc e fo r

pu rp os es of a frau d c la im un de r Ark an sa s l aw.

-7

-le arn ed th at W or de n Sr. ha d ha d pr evio us de al in gs wit h an ot he r co m pa ny wit h res pe ct

to th e pa te nt

. Ru m or s, ho wev er, do no t ne ces sa ril y m ak e it ap pa ren t “ fro m a cu rs or y gl an ce” th at on e is be in g de cei ve d

. Mo reo ve r, whe n Lice ns ees le arn ed of W or de n

Sr.’s pr ev io us de al in gs wit h th e ot he r co m pa ny, Yazd ia np ou r in ve st ig at ed fu rth er by

qu es ti on in g Lim

bi rd

, who as su red hi m th at th e ot he r co m pa ny own ed th e rig ht s to th e

pa te nt ed te ch no lo gy o n ly in th e Uni te d St at es an d th at Lice ns ees wou ld be ab le to

reg is te r th e pa te nt in ot he r c o u n t r i e s

. A reas on ab le jury co ul d fin d th at Lice ns ees

were no t requ ire d to “ te st th e tru th ” of fact s with in Lim bi rd ’s kn owl ed ge by fu rth er

in ve st ig at io n of th es e rep res en ta ti o n s

. Thu s, vi ewed in th e li gh t m os t fav or ab le to

Lice ns ees , th ere is a di sp ut ed is su e of m at eri al fact whe th er th ey jus ti fia bl y rel ie d on

th e rep res en ta ti on s m ad e b y th e d efen da nt s.

W or de n Sr. arg ue s ad di ti on al ly th at Lice ns ees can no t pr ov e th at he pe rs on al ly

m ad e a fal se st at em en t of fact

. The fact s vi ewed in th e li gh t m os t fav or ab le to

Lice ns ees es ta bl is h th at W or de n Sr. to ld Lice ns ees th at he o w n e d t h e rig ht s to th e

pa te nt ed te ch no lo gy ou ts id e th e Uni te d St at es , whe n in fact it was to o la te to reg is te r

th e pa te nt ov ers eas

. Fu rth erm or e, th ere is ev id en ce th at aft er W or de n S r

. l e a r ne d

fro m hi s at to rn ey th at th e pa t e n t c o ul d no t be reg is te red ov ers eas , he ne ve rth el es s

ex ecu te d an ag reem en t as si gn in g Safe bl oo d Tech th e ex cl us i v e rig ht s to th e pa te nt

ou ts id e th e Uni te d St at es

. A jury co ul d in fer th at W or d e n S r

. k n e w th at th is

as si gn m en t wou ld be sh own to Lice ns ees to c o n v in ce th em th at Safe bl oo d Tech

own ed th e rig ht s to th e pa te nt ou ts id e th e U n i t e d S ta te s. Acco rd in gl y , be cau se

Lice ns ees pr od uc ed su ffi ci en t ev id en ce th at W or de n Sr. m ad e a fal se st at eme nt of

fact

, th e di st ric t co ur t erre d in gr an ti ng su mm a r y ju d g m en t to W or de n Sr. an d

Safe bl oo d Gro up on Lice ns ees ’ frau d c la im

.

IV. ADTPA Jur y

Ins tru ct io n

Lice ns ees arg ue th at th e di st ric t co ur t erre d in in st ru ct in g th e ju ry th at

“ [p ]la i n t i f

f s may n ot reco ve r [u nd er th e ADTPA] if th e on ly i nju ry th ey su ffer ed is

-8

-th e di m in ut io n in va lu e of th e pr od uc t.” W e rev ie w a di st ric t co ur t’s jury in st ru ct io ns

fo r ab us e of di sc ret io n. Bro wn v. San da ls Res or ts In t’l, 28 4 F.3 d 94 9, 95 3 (8 th Ci r.

20 02 ). “ Our rev ie w is li m it ed to whe th er th e jury in st ru ct io ns , ta ke n as a who le

, ‘fairl y an d ad eq ua te ly rep res en t th e ev id en ce an d ap pl ic ab le la w in li gh t of th e is su es

pr es en te d to th e jury in a pa rti cu la r cas e.’” Id

. (q uo ti ng Fo rd v. GACS, In c., 26 5 F.3 d

67 0, 67 9 (8 th Ci r. 20 01 )). “ The jury sh ou ld rece iv e in st ru ct io ns on is su es su pp or te d
by com pe te nt ev id en ce i n t he reco rd .” Id

.

Und er Ark an sa s la w, a p l a i n t i f f br in gi ng a pr iv at e cau se of act io n un de r th e

A D TP A mu st pr ov e bo th a vi ol at io n of th e ADTPA an d act ua l da m ag e or in jury.

Sk al la v. Ca ne pa ri, 4 30 S.W .3d 72 , 82 (Ark . 20 13 ). Actu al da m ag e or in jury is n ot

sa ti sf ie d by m ere di m in ut io n in va lu e o f a p r o du ct

. W al li s v. Fo rd Mo to r Co

., 20 8

S.W .3d 15 3, 16 1 (Ark

. 20 05 ) (“ W he re th e on ly a l l e g e d i nju ry is th e di m in ut io n in

va lu e of th e pr od uc t, a pr iv at e cau se of act io n is no t co gn iz ab le un de r th e ADTPA.”).

W al li s in vo lv ed a p l a i n t i f f who cl ai m ed th at th e m an uf act ur er of hi s car ha d

co nc eal ed de si gn pr ob le m s th at co ul d cau se th e car to ro ll ov er. Id

. at 15 4. The so le

in jury th e pl ai nt iff cl ai m ed was th at th e de si gn de fect “ su bs ta nt ia ll y di m in is he d” th e

va lu e of hi s car; he di d no t al le ge th at he ha d be en ph y si cal ly i n ju r e d

, t h a t he ha d

su st ai ne d pr op ert y da m ag e, or th at hi s car ha d m al fu nc ti on ed in an y way

. Id

. at 15 4-

55

. The Su pr em e Co ur t o f Ark an sa s h el d t ha t t he pl ai nt iff ha d n ot su ffer ed “ act ua l

da m ag e or in

jury” as req ui red to br in g a pr iv at e cau se of a ct io n un de r th e ADTPA.

Id . at 1 61 -6 2; see als o Ark . Cod e Ann . § 4 -8 8- 11 3( f).

Lice ns ees arg ue th at be cau se th ey pr ov id ed su ffi ci en t ev id en ce th at th ey ha d

rece iv ed a pr od uc t th at was co m pl et el y di ffer en t fro m th e pr od uc t fo r whi ch th ey ha d

ba rg ai ne d, th e di st ric t co ur t sh ou ld no t ha ve gi ve n th e di m in ut io n in s t r uc ti on

. W e

di sa gr ee. The jury co ul d ha ve reas on ab ly fo un d th at Lice ns ees ’ in juri es am ou nt ed to

no m or e th an a di m in ut io n i n v al ue of t he Safe bl oo d Tec h p ro du ct s t he y co nt ract ed

to m ark et

. Lice ns ees co ul d ha ve pr oc eed ed wit h pl an s to m ark et th e Safe bl oo d Tech

pr od uc ts in th e Mi dd le East

, al be it wit ho ut pa te nt pr ot ect io n. And al t h o u g h th e

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-pr od uc ts wou ld ha ve be en m or e va lu ab le wit h pa te nt pr ot ect io n, th e jury co ul d ha ve

fo un d th at th e pr od uc ts st il l ha d va lu e ev en wit ho ut pa te nt pr ot ect io n an d th at

Lice ns ees th us su ffer ed on ly a di m in ut io n in va lu e of th e pr od uc ts

. Acco rd in gl y , th e

di st ric t co ur t di d no t ab us e it s di sc ret io n whe n it ga ve th e jury th e di m in ut io n

in st ru ct io n. 3

V. Inco ns is te nc y of t he Verd ic t

Lice ns ees waiv ed th ei r i n co ns is te nt -v erd ic t arg um en t by fai li ng to rai se th is

ob jecti on be fo re th e ju r y w a s d is ch arg ed

, se e Parr is h v. Luc ki e, 96 3 F.2 d 20 1, 20 7
(8 th Ci r. 19 92 ), an d th ey ha ve no t co nv in ced us th at we sh ou ld ex cu se th at fai lu re in

th is cas e. Fi rs t, de s p i t e Lice ns ees ’ arg um en t to th e co nt rary, it is irr el ev an t th at a

m ag is tra te jud ge rece iv ed th e jury’ s ve rd ic t in s t e a d of th e di st ric t jud ge who

ot he rwis e pr es id ed ov er th e cas e. Lice ns ees co ul d ha ve rai se d th ei r ob jecti on to th e

m ag is tra te jud ge , an d th ey ha d be en in st ru ct ed th at th e di st ric t jud ge was av ai la bl e by

te le ph on e if ne ces sa ry

. Mo reo ve r, ev en if, as Licen se es arg ue , th ere was no ti m e to

ob ject to th e ve rd ic t befo re the m ag is tra te jud ge rel eas ed th e jury, Lice ns ees wait ed

m or e th an a m on th to rai se th e i r o b je c t i on

. To ho ld th at Lice ns ees ’ in co ns is te nt

4

ve rd ic t ob

jecti on was no t waiv ed wou ld co nf li ct wit h th e pu r p o s e of th e waiv er

ru le —n am el y , “ to al lo w th e or ig in al jury to el im in at e an y in co ns is te nc ie s wit ho ut th e

ne ed to pr es en t th e ev id en ce to a ne w jury” an d to “ pr ev en t[] a di ss at is fie d pa rty fro m

Lice n s e es al so arg ue th at th e in st ru ct io n was in ap pr op ria te be cau se th e 3

Ark an sa s Mo de l J u r y I n st ru ct io ns fo r ADTPA cl ai m s do no t in cl ud e a di m in ut io n in st ru ct io n, bu t th e di st ric t co ur t is no t bo u nd to fo ll ow th e m od el in st ru ct io ns . S ee Bad y v. Mu rp hy-Kjos, 6 28 F.3d 10 00 , 10 04 (8t h C ir. 2 01 1)

.

The fact s of th is cas e are read il y di st in gu is ha bl e fro m Hun dl e y v. D.C., 4 94 4

F.3 d 10 97

, 11 03 (D.C. Ci r. 20 07 ), whi ch he ld th at th e waiv er ru le di d no t ap pl y whe n

a pa rty ob jecte d to a writ te n in te rro ga to ry as li ke ly to cau se an in co ns is te nc y be fo re th e cas e was su bm it te d t o t h e ju ry , bu t fai le d to ob ject aft er th e jury ret ur ne d an in co ns is te nt ve rd ic t as pre di ct ed

. -1 0-m is us in g pr oc ed ur al ru le s an d ob ta in in g a ne w tri al fo r an as se rte d in co n s i s te nt

v e r di ct .” Loc ka rd v. Mo

. Pac. R.R. Co

., 89 4 F.2 d 29 9, 30 4 (8 th Ci r. 19 90 ).

Acco rd in gl y , we de cl in e to reac h th e m eri ts of Lice ns e e s ’ in co ns is te nt -v erd ic t

arg um en t.

VI. Mo ti on for Ju dg m en t as a Mat te r of Law

W or de n Sr. an d Safe bl oo d Gro up cro ss -ap pe al fro m th e di st ric t co ur t’s de ni al

of th ei r m ot io ns fo r jud gm en t as a m at te r of la w , a r g u i n g t ha t th e co nv ey an ce of

pa te nt ed te ch no lo gy is no t a “ co ns um er-o rie nt ed act or pr act ic e” fo r pu rp os es of th e

ADTPA. Safe bl oo d Gro up arg ue s ad di ti on al ly th at al l cl ai m s ag ai ns t it sh ou ld ha ve

be en di sm is se d as a m at te r of la w be cau se th e cas e was br ou gh t in th e na m es of

Yazd ia np ou r an d al Naq bi

, an d no t th e LLC. The le ga l ba si s fo r th is arg um en t is no t

en ti rel y cl ear, bu t it se em s to be a su ffi ci en cy -o f

- t he -ev id en ce arg um en t: be cau se

Lice ns ees of

fere d on ly ev id en ce of da m ag es su ffer ed by th e LLC, whi ch is no t a pa rty

to th e la wsu it

, Lice ns ees di d no t of fer su ffi ci en t pr oo f o f in

jury. Safe bl oo d Gro up

an d W or de n Sr. rai se d th es e arg um en ts whe n th ey m ov ed fo r jud gm en t as a m at te r of

la w un de r Fed eral Ru le of Ci vi l Pro ced ur e 50 (a), bu t di d no t ren ew th ei r m ot io ns aft er jud gm en t un de r Ru le 50 (b ). “ [T]he pr eci se su bjec t m at te r o f a p a r t y’ s Ru le 50 (a)

m ot io n— na m el y , it s en ti tl em en t to jud gm en t as a m at te r of la w—ca nn ot be ap pe al ed

un le ss th at m ot io n is ren ewed pu rs ua nt to Ru le 50 (b ).” Uni th erm Fo od Sy s., Inc. v.

Swif t-Ec kr ic h, In c., 54 6 U.S. 39 4, 40 4 (2 00 6)

. Bec au se Safe bl o o d G r o up an d

W or de n Sr. fai le d to ren ew th ei r m ot io ns fo r jud gm en t as a m at te r of la w un de r Ru le

50 (b ), th ere is no ba si s fo r us to rev ie w th ei r su ffi ci en cy -o f-t he -ev id en ce arg um en ts

. See i d. at 40 7; se e al so Lin de n v. CNH Am

., LLC, 67 3 F.3 d 82 9, 83 2- 33 (8 th Ci r.

20 12 ).

VII. Preju dg m en t In te res t

Safe bl oo d Gro up arg ue s th at th e di st ric t co ur t erre d whe n it award ed Lice ns ees $1 44 ,15 0.4 0 in pr ejud gm en t in te res t. “ W e rev ie w th e award of pr ejud gm en t in te res t

-1 1-fo r ab us e of di sc ret io n, ap p l yi ng Ark an sa s la w.” Ferr el l v. W . B en d Mu t. In s. Co

.,

39 3 F .3d 78 6, 7 97 (8t h C ir. 2 00 5)

.

Und er Ark an sa s la w, “ [p ]rejudg m en t in te res t is al lo wab le whe re th e am ou nt

of da m ag es is de fin it el y as cert a i n a bl e by m at he m at ic al co m pu ta ti on , or if th e

ev id en ce fu rn is he s da ta th at m ak e it po ss ib le to co m pu te th e am ou nt wit ho ut rel ia nc e

on op in io n or di sc ret io n.” W o o d l i n e M o t or Frei gh t, In c. v. Trou tm an Oil Co ., 9 38

S.W .2d 56 5

, 5 6 8 ( A r k

. 19 97 ). “ [I]f th e da m ag es are no t by th ei r na tu re cap ab le of

exa ct de te rmi na ti on , bo th in ti me an d amo un t

, pr ejud gm en t in te res t is no t an it em of

reco ve ry .” Mi tc ha m v. Fi rs t St at e Ban k of Cro ss et t, Ark

., 97 0 S.W .2d 26 7, 26 9 (Ark

. 19 98 ). Preju dg m en t in te res t is ap pr op ria t e “ if a m et ho d ex is ts fo r fix in g th e ex act

va lu e of a cau se of act io n at th e ti m e of th e oc cu rren ce of th e ev en t th at gi ve s ris e to

th e cau se of a ct io n.” Sim s v . Mo se r, 28 4 S .W .3d 50 5, 5 19 (Ark . 20 08 ).

Lice ns ees di d no t cl ai m da mag e s t h at were cal cu la te d by a m at he m at ic al

fo rm ul a se t fort h in th e co nt ract

. Ins te ad , th ey so ug ht to reco ve r bu si ne ss ex pe ns es

in cu rred in rel ia nc e on th e co nt ract

, a s w e l l as th e m on ey pa id to Safe bl oo d Tech

un de r th e co nt ract

. Lice ns ees req ue st ed $8 25 ,16 9.7 0 in da m ag es , of feri ng as

ev id en ce a sp read sh eet pr ep ared by th ei r acco un ta nt th at li st ed bu si ne ss ex pe ns es

su ch as “ Bu si ne ss tri p to USA,” “ Offi ce Fu rn it ur e,” an d “ Payroll fo r May 10 .” As se t

fo rth earl ie r, th e jury award ed Lice ns ees $7 86 ,00 0 in da m ag es fo r br each of co nt ract

.

Safe bl oo d Gro up arg ue s th at be cau se th e jury ha d to rel y on op in i o n or

di sc ret io n to de te rm in e th e am ou nt of da m ag es , pr ejud gm en t in te res t was

in ap pr op ria te

. W e ag ree. In S i ms , t h e Ark an sa s Su pr em e Co ur t affi rm ed th e tri al

co ur t’s de ni al of pr ejud gm en t in te res t whe n th e pl ai nt iff an d de fen da nt ha d ag reed to

sh are bu si ne ss ex pe ns es an d “ se tt le up ” at th e e n d o f t he y ear, an d th e pl ai nt iff

req ue st ed an d was award ed $4 9,0 95 .15

. Id

. at 51 9- 20

. The Ark an sa s Su pr em e Co ur t

he ld th at th e tri al co ur t, aft er a be nc h t ria l, “ ha d t o u se it s d is cret io n i n de te rm in in g

whi ch ex pe ns es [th e de fen da nt ] was res po ns ib le in rei m bu rs in g [th e pl ai nt iff

] fo r, an d

whe th er [th e pl ai n t i f

f ’s ] do cu m en ts an d te st im on y refl ect ed rel ia bl e an d fai r do ll ar

-1 2-a mo un ts .” Id

. Si m il arl y he re, th e jury h ad to us e it s di sc ret io n to de te rm in e wh i c h

ex pe ns es to rei m

bu rs e Lice ns ees fo r—a nd in de ed

, th e jury di d no t award Lice ns ees

al l of th e ex pe ns es th at th ey req ue st ed as da m ag es

. The fact th at th e jury award ed a

le ss er am ou nt th an req ue st ed is no t ne ces sa ril y di sp os it iv e, bu t it is un cl ear he re ho w

th e jury de te rm in ed whi ch ex pe ns es sh ou ld be award ed as da m ag es an d ho w th e jury

arri ve d at th e to ta l da m ag es am ou nt

. See Acev a Te c h

., LLC v. Ty so n Fo od s, In c.,

42 9 S.W .3d 35 5, 36 6 (Ark

. Ct

. App

. 20 13 ) (h ol di n g t ha t award in g pr ejud gm en t

in te res t was ap pr op ria te whe n it was cl ear th at th e jury award ed da m ag es fo r th ree ou t

of fiv e o f th e req ue st ed ex pe ns es ).

It is al so un cl ear whe n th e br each of co nt ract oc cu rred

. In Si m s, th e Ark an sa s

Su pr em e Co ur t reas on ed th at de nyin g pr ejud gm en t in te res t was ap pr op ria te be cau se

“ th ere was no t a sp eci fic oc cu rren ce or da te of a n oc cu rren ce th at ga ve ris e to th is

cau se of act io n.” 28 4 S .W .3d at 5 20 . The pl ai nt iff in Si m s po in te d to th e da te th at

th e co nt ract was fo rm ed

, bu t th e A r k a n sa s Su pr em e Co ur t he ld th at th e ag reem en t

it se lf was no t wha t le d to th e cl ai m

. Id

. Here, Lice ns ees arg ue th at it was th e la st da y

on whi ch th ey in cu rred ex pe ns es in rel ia nc e on th e co nt ract th at ga ve ris e to th e cau se

of act io n. Thi s is no t su ffi ci en tl y de fin it e in ti m e, ho wev er, be cau se Lice ns ees co ul d

ha ve es se nt ia ll y ch os en an y da y ov er th e co ur se of th ei r de al in gs wit h de fen da nt s as

th e da te th at ga ve ris e to th e cau se of act io n. In de ed

, al th ou gh Lice ns ees di sc ov ered

in May 20 10 th at th ey wou ld no t be ab le to reg is te r th e pa te nt

, th ey cl ai m ed da m ag es

fro m as la te as May 2 01 1. B e c a u s e t h e fact s he re are in di st in gu is ha bl e fro m Si m s,

we co nc lu de th at th e di st ric t co ur t ab us ed it s di sc ret i o n whe n it award ed Lice ns ees

pr ejud gm en t i nt eres t o n t he ir b reac h- of -co nt ract cla im

.

VIII. Co nc lu si on

W e affi rm th e jury’ s ve rd ic t on th e ADTPA an d br each -o f-c o n t ract cl ai m s,

rev ers e th e di sm is sa l of Lice ns ees ’ frau d cl ai m an d th e di st ric t c o u r t ’s award of

pr ejud gm en t i nt eres t, an d re m an d t he frau d c la im to th e d is tri ct co ur t fo r tr ia l.

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __

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