Westlaw News

Walmart hit with $115 million verdict over food-waste trade secrets

Zest Labs Inc won $115 million from Walmart Inc in Arkansas federal court on its claims that Walmart stole a trade secret related to technology for reducing fresh food waste.

A jury awarded Zest $60 million for trade secret misappropriation in a Friday verdict in the U.S. District Court for the Eastern District of Arkansas, and an additional $50 million because the misappropriation was “willful and malicious.”

The jury also awarded Zest $5 million for Walmart’s breach of a non-disclosure agreement.

District Judge James Moody presided.

Zest and parent company Ecoark Holdings Inc’s lead attorney Michael Simons of Williams Simons & Landis said Zest was “pleased” with the verdict, and that the jury was “exceptionally attentive and worked very hard to consider all the facts in this case.”

Zest CEO Peter Mehring said he was “grateful that the jury understood and acknowledged the evidence that (stet) supported Zest’s claims,” and that the verdict “underscores the strength of our intellectual property.”

Ecoark CEO Randy May said the company planned to appeal some of Moody’s pretrial rulings to “seek additional liability and damages findings” and “make sure that Walmart is held fully accountable for its actions.”

“We believe the jury’s verdict is excessive, not supported by the facts and should be set aside,” Walmart spokesman Randy Hargrove said. “We plan to file post-trial motions and are considering our next steps.”

Zest sued Walmart in 2018 for allegedly copying its Zest Fresh technology, which tracks produce freshness from farms to stores. Zest said it worked with Walmart and shared proprietary information with the retail giant until late 2017.

Zest estimated in its complaint that Walmart would save more than $15 billion over the next 10 years from the misappropriation.

Walmart denied the allegations, and countered that Zest breached a contract by developing a freshness-monitoring tool for it that was “essentially useless.” The jury found Friday that Zest wasn’t liable for a breach because Walmart fraudulently induced it into entering the agreement.

The case is Zest Labs Inc v. Wal-Mart Inc, U.S. District Court for the Eastern District of Arkansas, No. 4:18-cv-00500.

For Walmart: John Keville, Robert Green and Chante Westmoreland of Winston & Strawn; John Tull and Ryan Younger of Quattlebaum, Grooms & Tull

For Zest: Michael Simons, Todd Landis and Fred Williams of Williams Simons & Landis