ACI Worldwide Corp. v. Baldwin Hackett & Meeks
296 Neb. 818
| Neb. | 2017Background
- ACI sued BHMI (and principals) alleging BHMI misappropriated ACI’s middleware trade secrets (XPNET) after BHMI developed competing middleware (TMS) for MasterCard; most other ACI claims were dismissed pretrial and the trade‑secret claim went to a 2014 jury that ruled for BHMI.
- BHMI counterclaimed for breach of a nondisclosure agreement (NDA), tortious interference, and violations of Nebraska’s Junkin Act (state antitrust law).
- Pretrial, the district court repeatedly denied ACI’s motions to compel BHMI’s source code and manuals until ACI pursued more non‑trade‑secret discovery (depositions, third‑party documents). The court required ACI to identify trade secrets with particularity before risking disclosure.
- After the 2014 trial, ACI obtained email attachments from MasterCard in separate federal litigation that it claimed supported its misappropriation theory and moved to vacate/reopen; the district court denied relief.
- A 2015 jury found for BHMI on its counterclaims, awarding ~$43.8 million; the court awarded BHMI ~$2.73 million in attorney fees and costs. ACI appealed, challenging discovery rulings, admissibility, sufficiency of evidence, application of Noerr‑Pennington, and the attorney‑fee award.
Issues
| Issue | Plaintiff's Argument (ACI) | Defendant's Argument (BHMI) | Held |
|---|---|---|---|
| Whether denial of trade‑secret discovery (source code/manuals) before extensive non‑trade discovery warranted vacatur of 2014 verdict | Denial prevented ACI from proving misappropriation; court should have compelled BHMI’s trade secrets earlier | Court properly balanced ACI’s need against BHMI’s need to protect secrets and required particularized non‑trade discovery first | Court did not abuse discretion; requiring non‑trade discovery before source‑code disclosure was reasonable |
| Whether Noerr‑Pennington immunity precluded BHMI’s Junkin Act and tort claims | Noerr‑Pennington immunizes petitioning conduct (filing suit); thus BHMI’s claims based on ACI’s lawsuit are barred | Noerr‑Pennington is an affirmative defense and ACI waived it by not pleading it timely; moreover, sham‑suit exception applies where appropriate | ACI waived Noerr‑Pennington by failing to plead it as an affirmative defense; court properly rejected the argument |
| Sufficiency of evidence for BHMI’s Junkin Act and breach of NDA claims | BHMI lacked proof of antitrust injury and of use of confidential information; damages were speculative | BHMI presented evidence of market impact, lost contracts (e.g., FNBO), and that ACI used BHMI’s confidential materials contrary to the NDA | Evidence was sufficient: jury could find antitrust injury (reduced output/higher price/quality loss) and breach of NDA; verdict not clearly wrong |
| Adequacy of BHMI’s damages proof and Jack’s testimony as expert | Jack lacked formal qualifications; lost‑profit calculus omitted development/overhead costs and lacked supporting business records | Jack had 30 years’ experience managing BHMI finances; overhead need not be deducted where fixed and not incremental; contracts and testimony supported projections | Court did not abuse discretion admitting Jack’s testimony; damages evidence allowed reasonable estimation of lost profits |
| Whether exclusion/nonuse of email attachments from federal discovery prejudiced ACI or required vacatur | Attachments showed ACI had basis for suit and would have refuted sham/Noerr‑Pennington claims | Attachments were obtained after ACI filed suit and were not offered at trial; ACI waived/abandoned motions to admit them; exclusion caused no unfair prejudice | No record of offering attachments at trial; no prejudicial error shown; motions to admit were waived/abandoned |
| Attorney fees: whether award and multiplier were unsupported | Fee award excessive; BHMI failed to produce invoices supporting multiplier | BHMI submitted detailed affidavits listing hours/rates and case was novel, complex, protracted, and produced exceptional results | Fee affidavit sufficed; court reasonably applied factors and did not abuse discretion in awarding fees |
Key Cases Cited
- Eastern R.R. Conference v. Noerr Motors, 365 U.S. 127 (1961) (establishes petitioning immunity from antitrust liability absent sham litigation)
- United Mine Workers v. Pennington, 381 U.S. 657 (1965) (extends Noerr doctrine to governmental petitioning and related conduct)
- Professional Real Estate Investors, Inc. v. Columbia Pictures Indus., 508 U.S. 49 (1993) (defines "sham" litigation exception requiring objective baselessness and subjective bad faith)
- Eastman Kodak Co. v. Image Technical Services, 504 U.S. 451 (1992) (monopoly/market power principles relevant to monopolization analysis)