throbber
Case 2:04-cv-02652-JS-ARL Document 589 Filed 09/29/17 Page 1 of 7 PageID #: 15283
`
`MEMORANDUM & ORDER
`04-CV-2652(JS)(ARL)
`
`
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
`---------------------------------------X
`SCIENTON TECHNOLOGIES, INC.,
`
`
`
`
`
`Plaintiff,
`
`
`-against-
`
`
`
`COMPUTER ASSOCIATES INTERNATIONAL,
`INC.,
`Defendant.
`
`
`
`
`
`---------------------------------------X
`APPEARANCES
`For Plaintiff:
`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
`For Defendant:
`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
`
`

`

`Case 2:04-cv-02652-JS-ARL Document 589 Filed 09/29/17 Page 2 of 7 PageID #: 15284
`
`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”)
`liable on Scienton’s claims for unfair competition and
`misappropriation of an idea for two CA products, eTrust 20/20
`(“20/20”) and eTrust Security Command Center (“SCC”). The Court
`then entered judgment in favor of CA and against Scienton for lack
`of subject matter jurisdiction based on standing arguments. The
`Second Circuit Court of Appeals entered a mandate that, among other
`things, reversed this ruling and remanded the case for
`consideration of Scienton’s Motion for New Trial on Compensatory
`Damages Only. (Docket Entry 551.) For the following reasons, the
`Court DENIES Scienton’s motion.
`BACKGROUND
`The Court assumes the parties’ familiarity with the
`facts chronicled in previous orders. (See generally May 17, 2016
`Order, Docket Entry 573.) Pertinently, the jury awarded Scienton
`$956,000 in damages for both 20/20 and SCC. (Verdict Sheet, Court
`Exs., Docket Entry 547, at 1-8.) 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
`
`2
`
`

`

`Case 2:04-cv-02652-JS-ARL Document 589 Filed 09/29/17 Page 3 of 7 PageID #: 15285
`
`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
`the evidence.” (Pl.’s Br., Docket Entry 552, at 2–5.) Scienton
`requests a two-day trial involving two witnesses: Dr. Rao and Mr.
`Johnson. (Pl.’s Aug. 2017 Ltr., Docket Entry 585, at 2.)
`DISCUSSION
`As the Second Circuit has explained, a jury verdict
`should stand unless it was “seriously erroneous or a miscarriage
`of justice.” Raedle v. Credit Agricole Indosuez, 670 F.3d 411,
`417–18 (2d Cir. 2012) (internal quotation marks and citation
`omitted). 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.
`Coughlin, 66 F.3d 531, 536 (2d Cir. 1995)). Indeed, the
`“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.”)
`
`3
`
`

`

`Case 2:04-cv-02652-JS-ARL Document 589 Filed 09/29/17 Page 4 of 7 PageID #: 15286
`
`(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.
`Two facts are very important here: (1) the jury’s
`document requests and (2) the Court’s jury instructions. First,
`during deliberations, the jury requested no documents on Dr. Rao’s
`opinion. (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).) In
`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
`
`4
`
`

`

`Case 2:04-cv-02652-JS-ARL Document 589 Filed 09/29/17 Page 5 of 7 PageID #: 15287
`
`reasonably have realized if it had taken
`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. (10/22/15
`Tr., Docket Entry 562, 459:7–19.) On the profits point, the Court
`recalls that CA’s witnesses described their own work in developing
`the products. Patrick Lee, the developer of SCC, had no knowledge
`of Scienton, NI Group Inc., or Secure-IT Inc. before this lawsuit
`was filed. (11/2/15 Tr., Docket Entry 576-3, 1278:24–1279:3,
`1319:14–21.) 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
`
`5
`
`

`

`Case 2:04-cv-02652-JS-ARL Document 589 Filed 09/29/17 Page 6 of 7 PageID #: 15288
`
`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.
`Moreover, Scienton previously filed a motion for
`prejudgment interest. Following this Memorandum and Order,
`Scienton states that it “will provide revised prejudgment interest
`calculations from Dr. Rao.” (Pl.’s Aug. 2017 Ltr. at 3 n.1.)
`
`6
`
`

`

`Case 2:04-cv-02652-JS-ARL Document 589 Filed 09/29/17 Page 7 of 7 PageID #: 15289
`
`CONCLUSION
`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.
`
`
`
`
`
`
`
`
`
`
`
`September __29__, 2017
`Central Islip, New York
`
`Dated:
`
`
`
`/s/ JOANNA SEYBERT______
`Joanna Seybert, U.S.D.J.
`
`7
`
`

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