US court halves fine on TCS in Epic Systems lawsuit to $140 million

Directs Trial Court to reassess; TCS to exploring legal options as it believes there is no evidence of misuse of Epic information

An appeals court in the US has upheld that the punitive damages of $280 million against Tata Consultancy Services (TCS) in a trade secret theft lawsuit, involving medical software company Epic Systems, were ‘excessive’. The court halved the damages to $140 million. 

In a regulatory filing, the company on Friday said the US Court of Appeals, 7th Circuit, Chicago, returned this verdict on the appeal filed by TCS. “The court held that the punitive damages award of $280 million is constitutionally excessive and directed the trial court to reassess the punitive damages. The court upheld the compensatory damages award of $140 million.” a statement said. It added, “TCS is exploring the options available to it, as it believes that there is no evidence of misuse of EPIC information by TCS.”

The matter relates to a US grand jury order that slapped two Tata Group companies — TCS and Tata America International Corp.—with a $940 million fine in a trade secret lawsuit filed against them by the Wisconsin-based health care software firm in 2016. 

The tussle dates back to a 2014 lawsuit when Epic alleged that the software firm (TCS) had relocated its employees as consultants at Kaiser Permanente Sunnyside Medical Center in Portland. The employees were tasked to implement Epic’s health care software. Epic alleged that these employees downloaded around 6,000 documents and 1,600 unique files containing “detailed information on features and functionalities of its software” by creating a fake ID. This may have been used to benefit the IT firm’s own health care software, Med Mantra, it added. 

However, the punitive damages were reduced to $420 million from $940 million by a US court in October 2017. In January 2018, TCS said it made a $440 million letter of credit available to Epic Systems.