Eagle Research Corporation 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 (DMS) over breach of contract and breach of confidentiality agreement issues.
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 chose to support the billion dollar, politically connected Emerson and DMS over Eagle despite both companies were members of the U.S. Chamber of Commerce and despite the mountain of evidence in favor of Eagle over Emerson and DMS.
Eagle and DMS entered into two contracts, one promising to purchase 3,000 flow computers from Eagle, the other promising to keep safe Eagle's technology, even from their parent company, Emerson, because Emerson builds a rival competing computer. Eagle sued DMS for breach of both contracts. DMS took Eagle secrets and gave them to Emerson in violation of a confidentiality agreement that prohibited such disclosure.
Last year, Eagle took this battle to Putnam Circuit Court. Emerson argued at trial that 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 representing the U.S. Chamber of Commerce stating that they intended to file an Amicus Brief to the U.S. Supreme Court on behalf of DMS in their appeal despite the fact that Eagle was also one of their members.
The U.S. Chamber chose sides over two of its members. Guess which side they chose. Eagle is a small West Virginia Company located in Putnam County. 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, its subsidiaries and divisions is a multi-billion dollar company with political connections.
They chose Emerson over Eagle. They chose to insert themselves in a contractual and legal dispute between two of its members. That is a conflict of interest.
In response, Eagle President James Butch 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 pay dues to the U.S. Chamber because this is not the first time the national chamber has choose sides over small local businesses.
The U.S. Chamber chose sides without even taking into the consideration the evidence presented and testimony of whistle blowers that testified about stolen technology. The U.S. Chamber ignored the compelling testimony from Roy Nutter, a West Virginia University professor of engineering that testified that the Emerson's new computers copied the Eagle system architecture.
DMS promised to keep Eagle's system secret. Instead, they gave it to their parent company, Emerson. That is what a Putnam County jury found.
This should all be a very unpleasant thought that every small West Virginia business should think about 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, more wealthy member?
Based on this experience, I think 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 ...
If the U.S. Chamber of Commerce wants small business members, they 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' petition for appeal. Eagle prevailed again despite the pressure of big business against the little guy.
(Editor's Notes: Decanio works for The Sutter Law Firm in Charleston, and The West Virginia Record is owned by the U.S. Chamber of Commerce.)
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