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Will the U.S. Chamber of Commerce fight for West Virginia small business? Based on their past behavior, don’t count on it!Eagle Research Corp. is a local Putnam County industrial flow computer manufacturer that was recently involved with a long legal battle with Emerson Electric and its Texas-based subsidiary Daniel Measurement Services.Both parties were members of the U.S. Chamber of Commerce, and both paid their dues to the organization. However, during this case, the U.S. Chamber took sides.
The case involved two contracts. In one, DMS promised to purchase 3,000 flow computers from Eagle. In the other, DMS promised to keep safe Eagle’s technology, even from DMS’s parent company, Emerson. Emerson builds a rival computer.Eagle sued DMS for breach of both contracts, saying DMS took Eagle secrets and gave them to Emerson in violation of the confidentiality agreement.
Last year in Putnam County Circuit Court, Emerson argued that they were entitled to look at Eagle’s technology despite the contrary language of the confidentiality agreement!There can be no free pass for large corporations that feel they can take what they want with impunity.
Eagle prevailed with a verdict against Daniel Measurement for $14.5 million.DMS appealed to the West Virginia Supreme Court and U.S. Supreme Court.
During the appeal, I received a call from a law firm located in Washington D.C. representing the U.S. Chamber of Commerce stating that they intended to file a friend-of-the-court brief on behalf of DMS.
The U.S. Chamber chose sides. Guess which side they chose.
Eagle is a small West Virginia company. It earned $6 million in revenue in 2006 and employs dozens of people. Eagle makes computers for industrial use, mainly in the gas industry. This high-tech company is a great example of West Virginia ingenuity and high-tech sophistication. Eagle has been a member of the U.S. Chamber of Commerce for many years.
Emerson, with its subsidiaries and divisions, is a multibillion-dollar company with political connections.
The U.S. Chamber of Commerce chose Emerson over Eagle. They chose to insert themselves into a contractual and legal dispute between two of its members, a conflict of interest.
The U.S. Chamber chose sides without even considering the evidence presented and testimony of whistle-blowers who testified about stolen technology. The U.S. Chamber ignored the compelling testimony from engineering professor Roy Nutter of West Virginia University, who said that Emerson’s new computers copied the Eagle system architecture.
In response, James Butch, President of Eagle, instructed Eagle’s accounting department to stop payment of their annual dues. Eagle also asked to have their name removed from the U.S. Chamber’s members list immediately. Butch also contacted the local Putnam County Chamber, and they were not pleased. In fact, the local Putnam County Chamber no longer pays dues to the U.S. Chamber because this is not the first time the national chamber has taken sides over local small businesses.
Every small West Virginia business should think about this when the U.S. Chamber rep comes knocking at your door asking for financial and political support. Ask yourself, when they fight against tort reform, will they fight for your right to seek the protections of the court system? Be sure to ask them, will they be there for you? Will they choose sides if you have a dispute with a bigger, wealthier member? Based on this experience, every small business in West Virginia and across the United States should be very concerned.
Thankfully, the jury system and the West Virginia judiciary saved the day.
Recently, the American Tort Reform Foundation cited this case as one of its justifications for identifying West Virginia as a judicial “hell hole.” The American Tort Reform Association joined with the U.S. Chamber in filing an amicus brief at the U.S. Supreme Court in support of DMS. They notably failed to mention in their brief and in their “Judicial Hell Hole Report” that this case was won in part because former corporate officers of DMS testified against them and helped expose the improper technology transfer in violation of the confidentiality agreement. The jury found DMS breached their promise to Eagle to safeguard its technology.
If the U.S. Chamber of Commerce wants small business members, it must support them, not fight against them. All small business in our area should know what the U.S. Chamber of Commerce has done.
Incidentally, the U.S. Supreme Court recently denied DMS’s petition for appeal. Eagle prevailed again despite the pressure of big business against the little guy.
Charleston Gazette Op-Ed
Decanio, a lawyer with the Sutter Law Firm in Charleston, was the attorney for the Eagle Research Corp. and is a candidate for the House of Delegates in Kanawha’s 30th District.
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