In Detail PRN’s Dispute With Walmart

Adrian J Cotterill, Editor-in-Chief

Late on Thursday we wrote ‘You Are Being Sued By Plaintiff PRN‘ which was the first public mention of their case against Wal-Mart Stores Inc. that WAS in front of San Francisco’s superior court.

It’s worth repeating what we said yesterday that we don’t think that PRN would have filed suit unless they REALLY felt betrayed by Wal-Mart and on reading the court paper through a couple of times now you definitely get that impression – PRN felt betrayed.

In some detail then, the actual complaint is for: –

  1. promissory estoppel
  2. quantum meruit/unjust enrichment
  3. unfair business practices

I don’t have a clue what that means in ‘legalese’ but basically the complaint is that Walmart’s Smart Network is, we quote from the court papers “the result of millions of dollars in research and development by PRN” and PRN want it (the money) back (and it seems future media sales revenue that they were allegedly promised – a whopping 25% as we shall see later).

We’ve picked up some of the more interesting points below (though the whole document is actually quite a good read).

Point 7. One of the keys to the dispute, and again we quote “For over a decade, PRN has worked with Walmart to deliver the retailer’s in-store media network and programming. The networks PRN developed for Walmart evolved over time culminating in the much anticipated and highly successful Smart Network….. “ … (it goes on)

Point 8 “Of course it took years on the part of PRN to develp this type of network for use in Walmart stores” – another key claim “the discussion between Walmart and PRN regarding a new network began as early as 2006, more than 2 years before the first Smart Network screens were installed …. In sum, the Smart Network is the result of millions of dollars in research and development by PRN”

Two documents shown to the court ‘The Walmart Smart Network Summary of Terms’ (August 2008) and a ‘Purchasing Agent Agreement’ a contract allegedly agreed a month or so later are also mentioned. The former document is really interesting (and useful).

In December 2008 it is said that the parties agreed that PRN would receive 25% of all advertising sales and point 14 claims “Walmart ultimately breached its promises to PRN, but only after PRN had invested millions of dollars and thousands of employee hours in the Smart Network, all of which benefited Walmart substantially”

It goes on (its 33 pages long so forgive us) and on.

Point 35 “It was not until March 2009, years after PRN first began developing what is now referred to as the Smart Network and months after it received a promise from Walmart that Walmart attempted to materially change the terms of the promise”

Point 40 asks for the court to award PRN damages – no mention is made of a specific sum though it does say “in excess of the jurisdictional minimum of the Court for consideration of the promise, the value of which is the benefit of the bargain which would amount to all sums to be earned pursuant to the Summary of Terms to PRN”

This is obviously going to be the millions lost in development and the 25% of future media sales earnings (at least for four years or so) and associated costs.

Exhibit A is a very interesting document that it would be worth many getting their hands on – it’s the summary of terms outlining “PRN’s proposal for design, development, deployment and operation of the Walmart Smart Network” – it’s 11 pages long on its own and its something we would like to cover in a separate story later if possible. Really interesting.

6 Responses to “In Detail PRN’s Dispute With Walmart”

  1. Ooh-tv: USA: Walmart vs PRN – Dismissal of Entire Action With Prejudice Says:

    […] DailyDooh broke the news first – last June, PRN filed suit against Walmart on the following grounds, expressed in legal language as: […]

  2. Ken Goldberg Says:

    Dismissal sounds like an out of court settlement was agreed to. Which also means you won’t get any info or comments from either party to the suit. An interesting but not surprising saga.

  3. Annonymous Says:

    It has been dismissed. Additionally, Thompson announced that they have reached a multi-year agreement with Walmart.–thomson-maintains-its,1009356.shtml

  4. Corporate Citizen Says:

    Any business executive that has had significant dealings with Wal-Mart (which I have at three different companies) knows that they will stop at nothing to exert their will, even to the point of unethical business acts. Such acts have been in the press in the past, but they outspend and bully companies into submission when challanged. It sure appears PRN is yet another large victim of this giant company that can and will act badly at times. I hate to see global leading company like Wal-Mart tarnish all big businesses, but they do. Since several executives at our company have had similiar experiences, we have chosen not to do business with them.

  5. Anonymous Says:

    This comes from someone who knows. Here’s the facts. Richard Fisher and Natalie Egleston distroyed that company over the last year. Wal-mart fired them because they followed thru with nothing they promised while winning the RFP. Richard and Natalie now have completely distroyed any relationship hope that was left by filing this lawsuit and trying to force Wal-mart to work with them. PRN has laid off most of thier employees, forced them to sign confidentiality agreements or lose their severence, and used terrorist tactics to try and distroy all the real work Wal-mart and their partners have put in to building the Smart Network. PRN will spin this in many ways but here is the truth; Wal-mart fired them because they couldn’t deliver. They are a company that will not survive by servicing check out screens in grocery stores. PRN and the people that work there are failures in every sense of that word. Anyone wanting to get in bed with these folks should think long and hard about it and ask for complete transparency. PRN’s insistance in keeping anyone from looking under the hood should be reason enough.

  6. Corporate Citizen Says:

    Sure sounds like you have the facts. Given your inside knowledge, it sure looks like PRN deserves what happened. It is good to know Wal-Mart may have cleaned up their act. Looks like I assumed guilt becasue of past acts, not this specific situation with PRN. As they say, wonders never cease! It truly can be a strange (business) world out there.

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