Scienton Technologies, Inc. et al v. Computer Associates International Inc.
MEMORANDUM AND ORDER - Plaintiff's motion for a new trial on compensatory damages only is DENIED. (Docket Entry 551.) The Court invites Plaintiff to file a revised prejudgment interest calculation. So Ordered by Judge Joanna Seybert on 9/29/2017. C/ECF (Valle, Christine)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
SCIENTON TECHNOLOGIES, INC.,
-againstCOMPUTER ASSOCIATES INTERNATIONAL,
MEMORANDUM & ORDER
Alexander Orlowski, Esq.
Dennis P. Stolle, Esq.
Lynn C. Tyler, Esq.
Matthew S. Barr, Esq.
Robert Dean MacGill, Esq.
Barnes & Thornburg LLP
11 South Meridian Street
Indianapolis, Indiana 46204
Panagiota Betty Tufariello, Esq.
The Law Offices of P.B. Tufariello, P.C.
25 Little Harbor Road
Mt. Sinai, New York 11766
Jonathan N. Francis, Esq.
Michael D. Schissel, Esq.
Anthony D. Boccanfuso, Esq.
Carmela T. Romeo, Esq.
Erik Christopher Walsh, Esq.
Pamela Addison Miller, Esq.
Arnold & Porter LLP
399 Park Avenue
New York, New York 10022
Kevin Patrick Mulry, Esq.
Sarah M. Baird, Esq.
John P. McEntee, Esq.
Farrell Fritz, P.C.
1320 RXR Plaza
Uniondale, New York 11556
SEYBERT, District Judge:
In the fall of 2015, a jury delivered a verdict in favor
of Scienton Technologies, Inc. (“Scienton” or “Plaintiff”) finding
Computer Associates International, Inc. (“CA” or “Defendant”)
misappropriation of an idea for two CA products, eTrust 20/20
(“20/20”) and eTrust Security Command Center (“SCC”).
then entered judgment in favor of CA and against Scienton for lack
of subject matter jurisdiction based on standing arguments.
Second Circuit Court of Appeals entered a mandate that, among other
consideration of Scienton’s Motion for New Trial on Compensatory
(Docket Entry 551.)
For the following reasons, the
Court DENIES Scienton’s motion.
The Court assumes the parties’ familiarity with the
facts chronicled in previous orders.
Order, Docket Entry 573.)
(See generally May 17, 2016
Pertinently, the jury awarded Scienton
$956,000 in damages for both 20/20 and SCC.
Exs., Docket Entry 547, at 1-8.)
(Verdict Sheet, Court
Scienton’s expert, Mohan Rao,
Ph.D, calculated $60,803,997 in damages for both products, (Rao’s
Approach, Docket Entry 553-1, at 2), and CA’s expert, Larry
Johnson, calculated $1,933,564 in damages for both products based
on a two-year head start and an adjusted profit margin, (Johnson’s
Approach, Docket Entry 553-2).
In light of the disparity between
the jury’s verdict and the expert calculations, Scienton argues
that the jury’s verdict was “arbitrary” and “against the weight of
(Pl.’s Br., Docket Entry 552, at 2–5.)
requests a two-day trial involving two witnesses: Dr. Rao and Mr.
(Pl.’s Aug. 2017 Ltr., Docket Entry 585, at 2.)
As the Second Circuit has explained, a jury verdict
should stand unless it was “seriously erroneous or a miscarriage
Raedle v. Credit Agricole Indosuez, 670 F.3d 411,
417–18 (2d Cir. 2012) (internal quotation marks and citation
In making this inquiry, the Second Circuit accords a
“high degree of deference . . . to the jury’s evaluation of witness
credibility,” id., and “‘considerable deference to the factual
findings of . . . [the] jury,’” Zeno v. Pine Plains Cent. Sch.
Dist., 702 F.3d 655, 671 (2d Cir. 2012) (quoting Blissett v.
“calculation of damages is the province of the jury,” Ismail v.
Cohen, 899 F.2d 183, 186 (2d Cir. 1990), so “the jury’s verdict
[must] stand unless it was palpably and grossly inadequate,” Rivera
v. City of N.Y., 594 F. App’x 2, 7 (2d Cir. 2014); ; see also DLC
Mgmt. Corp. v. Town of Hyde Park, 163 F.3d 124, 134 (2d Cir. 1998)
(“A court considering a Rule 59 motion for a new trial . . . should
only grant such a motion when the jury’s verdict is egregious.”)
(internal quotation marks and citation omitted).
With this steep
standard, the Second Circuit advises that “jury verdicts should be
disturbed with great infrequency.”
Raedle, 670 F.3d at 418.
document requests and (2) the Court’s jury instructions.
during deliberations, the jury requested no documents on Dr. Rao’s
(See generally Court Exs. at 10–17; Pl.’s Ex. List,
Docket Entry 537-1, at 12 (listing Dr. Rao’s admitted exhibits as
exhibit numbers 1002 through 1008).)
Instead, the jury requests
documents only relating to Mr. Johnson.
(Court Exs. at 10–17;
Def.’s Ex. List, Docket Entry 537-2, at 1–2 (listing Mr. Johnson’s
admitted exhibits as exhibit numbers EA, EB, EC, ED, and EE).)
fact, Mr. Johnson’s exhibits were the last ones the jury requested
before reaching their verdict.
(Courts Exs. at 10.)
Second, the Court charged the jury to consider whether
Scienton failed to mitigate its damages and whether only a portion
of CA’s profits were attributable to Scienton’s idea:
I also note that a party claiming damages as
a result of an alleged wrongful act on the
part of another has a duty under the law to
mitigate those damages, that is, to take
advantage of any reasonable opportunity the
party may have had under the circumstances to
reduce or minimize the damage. If you find
that the defendant has proven that the
plaintiff failed to seek out or take advantage
of business or employment opportunities that
were reasonably available, then you should
reduce the amount of the plaintiff’s damages
by the amount that the plaintiff could
reasonably have realized if it
advantage of such opportunity.
If the idea accounts for only a portion of the
profits earned by the defendant, you should
only award that portion of the profits that
are attributable to the idea. In other words,
if the plaintiff has offered evidence that the
defendant was unjustly enriched, the defendant
may then introduce evidence of that the
profits are attributable to other factors.
(11/9/15 Tr., Docket Entry 576-8, 2373:22–2374:8, 2374:23–2375:4.)
On the mitigation point, Scienton’s star witness, Predrag Zivic,
testified that after its relationship with CA ended, Scienton made
no effort to develop its idea despite options to do so.
Tr., Docket Entry 562, 459:7–19.)
On the profits point, the Court
recalls that CA’s witnesses described their own work in developing
Patrick Lee, the developer of SCC, had no knowledge
of Scienton, NI Group Inc., or Secure-IT Inc. before this lawsuit
(11/2/15 Tr., Docket Entry 576-3, 1278:24–1279:3,
The same is true of Howard Abrams, the developer of
20/20, and Steve Firestone, the general manager of CA’s security
business unit, who oversaw the development of both products.
(11/4/15 Tr., Docket Entry 576-5, 1709:10–23, 1752:21–1753:11;
1777:18–23, 1815:9–1818:2, 1819:1–16.)
Putting all that together,
it is a reasonable inference that the jury gave greater weight to
Mr. Johnson’s calculation of $1.9 million and then reduced that
figure based on the jury instructions.
In other words, the jury’s
verdict was not “seriously erroneous or a miscarriage of justice,”
and the Court DENIES Scienton’s for a new-trial.
See Raedle, 670
F.3d at 417–18 (internal quotation marks and citation omitted).
On two final points, the Second Circuit remanded only
“for consideration of the motion for a new trial on damages,” (2d
Cir. Mandate, Docket Entry 584, at 9), but CA had open issues in
its motion for judgment as a matter of law--that is, arguments
outside of the standing issue.
Nevertheless, CA has requested
that the Court decide the new-trial motion first, so “the parties
may be in a better position to assess what portions, if any, of
CA’s outstanding motions should be litigated further in light of
the long-standing nature of the case and time and effort required
by further litigation.” (Def.’s Aug. 2017 Ltr., Docket Entry 586,
at 2 n.3.)
Thus, the Court need not address whether it would
violate the mandate rule by considering Rule 50(b) arguments not
addressed on appeal.
Scienton states that it “will provide revised prejudgment interest
calculations from Dr. Rao.” (Pl.’s Aug. 2017 Ltr. at 3 n.1.)
damages only is DENIED.
(Docket Entry 551.)
The Court invites
Plaintiff to file a revised prejudgment interest calculation.
/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
September __29__, 2017
Central Islip, New York
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