author: Donald L. Corbin, Justice.

text:
    Roy Lee THOMAS v. STATE of Arkansas
    CR 01-974
    79 S.W.3d 347
    Supreme Court of Arkansas
    Opinion delivered June 27, 2002

      Cymber L. Tadlock, Public Defender, for appellant.

      Mark Pryor, Att’y Gen., by: Clayton K. Hodges, Ass’t Att’y Gen., for appellee.
   Donald L. Corbin, Justice.

Appellant Roy Lee Thomas appeals the judgment of the Jefferson County Circuit Court, Second Division, convicting him of sexual solicitation of a child, a Class D felony, and sentencing him to six years’ probation, a $6,000 fine, a $350 public defender fee, various court costs, 120 hours of community service, and counseling. For reversal, Thomas argues that the trial court erred in excluding relevant testimony of the victim’s family life and background. The State has filed a cross-appeal from the sentencing order, asserting that the trial court erred by placing Thomas on probation after the jury had rejected any alternative sentence and fixed a sentence of imprisonment. As this case involves an appeal by the State, our jurisdiction is pursuant to Ark. Sup. Ct. R. 1-2(a)(8) and Ark. R. App. P. — Crim. 3. We affirm the trial court’s judgment.

Because Thomas does not challenge the sufficiency of the evidence to convict him, we will only discuss those facts pertinent to the issues raised. We first address Thomas’s argument that evidence of the victim’s background and family life was relevant to the issue of the victim’s credibility. Thomas asserts that he should have been allowed to question the victim’s grandmother, Lillie Hunter, about the victim’s relationship with her estranged mother. We note at the outset that the decision to admit or exclude evidence is within the sound discretion of the trial court. Flores v. State, 348 Ark. 28, 69 S.W.3d 864 (2002); McFerrin v. State, 344 Ark. 671, 42 S.W.3d 529 (2001). We will not reverse a trial court’s evidentiary ruling absent an abuse of discretion. Id. Nor will we reverse absent a showing of prejudice. Id. With this standard in mind, we review Thomas’s argument.

The record reflects that Thomas was charged with having committed the offense of sexual abuse in the first degree by engaging in sexual contact with the victim, who was ten years old at the time. The charge stemmed from an incident that occurred on November 30, 1999, in which the victim went to Thomas’s house to collect money that Thomas owed her for doing some work around his house. According to the victim, Thomas had told her that the money was in the bedroom on his dresser, and he instructed her to come in there to get it. At the time, Thomas was only wearing a robe. Once she went into the bedroom, Thomas began to remove the girl’s clothes. He then laid her on the bed, took off his robe, laid on top of her, and rubbed his penis on the outside of her vagina.

The victim’s grandmother, Ms. Hunter, testified on behalf of the State. During her cross-examination, it was revealed that the victim had come to live with Ms. Hunter when she was one-and-a-half years old. Ms. Hunter explained that the victim’s mother was unfit, and that she had agreed to take care of the child to keep her from being placed in a foster home. Defense counsel asked Ms. Hunter if the child’s mother came around often. Ms. Hunter stated that she did not. Defense counsel then asked Ms. Hunter when the victim had last seen her mother. The State objected to the question as being irrelevant. The trial court agreed and sustained the objection. At that point, defense counsel ended her cross-examination of Ms. Hunter.

Thomas now argues that the trial court erred in sustaining the State’s objection and excluding the testimony, because the victim’s family life and background were such that she could have had a motivation to he about Thomas’s actions. He contends that the jury could have used that information in assessing the credibility of the victim’s testimony. The State contends that this argument is procedurally barred because Thomas never made the argument below, nor did he proffer the substance of the testimony that he wished to elicit from the witness.

We agree with the State that this point is barred because Thomas failed to apprise the trial court of the evidence that he now claims was relevant. Our rules of evidence require that when challenging the exclusion of evidence, a party must make a proffer of the excluded evidence at trial so that this court can review the decision, unless the substance of the evidence is apparent from the context. See Halford v. State, 342 Ark. 80, 27 S.W.3d 346 (2000); Goff v. State, 341 Ark. 567, 19 S.W.3d 579 (2000); Ark. R. Evid. 103(a)(2). Thomas did not proffer the particular evidence that he now claims is relevant, and its substance is not apparent from the context of the questions. Moreover, we are at a loss as to how the fact that the victim’s mother had abandoned her at a young age was in any way relevant to the victim’s credibility as a witness. We are not aware of any direct correlation between a child’s difficult or unstable background and her ability to tell the truth. Not surprisingly, Thomas cites no authority for this novel theory. Accordingly, we affirm the trial court’s ruling on this issue.

Cross-Appeal

For its cross-appeal, the State argues that the trial court erred in placing Thomas on probation after the jury had already rejected probation and fixed his punishment at six years’ imprisonment, the maximum prison sentence for a Class D felony. The State contends that the trial court exceeded its statutory authority in reducing Thomas’s sentence, as it contends that Acts 535 and 551 of 1993 placed that authority solely in the jury. The State does not challenge the actual terms of the sentence, only the trial court’s authority to make any reduction in the jury’s sentence. Before we address the merits of this issue, we must first determine that we have jurisdiction of the State’s appeal.

The State’s ability to appeal is not a matter of right; rather, it is limited to those cases described under Ark. R. App. P. — Crim. 3. See State v. Pruitt, 347 Ark. 355, 64 S.W.3d 255 (2002); State v. Howard, 341 Ark. 640, 19 S.W.3d 4 (2000). Under Rule 3, we accept appeals by the State when our holding would establish important precedent or would be important to the correct and uniform administration of the criminal law. See State v. Osborn, 345 Ark. 196, 45 S.W.3d 373 (2001); State v. Stephenson, 340 Ark. 229, 9 S.W.3d 495 (2000). Sentencing and the manner in which statutory punishment provisions may be imposed arise in every criminal case where a conviction is obtained; hence, the application of our statutory sentencing procedures requires uniformity and consistency. Id. The issue raised by the State in this case concerns the trial court’s authority to reduce a sentence fixed by a jury. Resolution of this issue will undoubtedly affect every criminal case tried before a jury. Accordingly, we have jurisdiction of the State’s appeal.

The record reflects that the jury returned its verdict at the trial on September 26, 2000. The trial court did not pronounce sentence on Thomas at that time; rather, the trial court only addressed Thomas’s right to appeal and the need for an appeal bond. Two days later, the State filed a motion asking the trial court to hold a sentencing hearing within thirty days. No action was taken on the motion. On November 15, 2000, the State filed a second motion to set a sentencing hearing. Again, no action'was taken. Finally, on December 5, 2000, without a hearing or notice to the State or the victim, the trial court entered an order sentencing Thomas to six years’ probation and a $6,000 fine, plus costs, counseling, and 120 days of community service. The State filed a motion for reconsideration of the sentence, but that motion was subsequently denied. Thereafter, the State timely filed a notice of cross-appeal.

For reversal, the State contends that the trial court lacked authority to reject the sentence fixed by the jury and impose an alternative sentence of probation. The State contends that the power afforded to the jury to fix punishment in criminal cases tried to a jury, pursuant to Ark. Code Ann. §§ 5-4-103 (Repl. 1997) and 16-97-101 (Supp. 2001), conflicts with the authority given to the trial judge to reduce a jury’s sentence, pursuant to Ark. Code Ann. § 16-90-107(e) (1987). Because sections 5-4-103 and 16-97-101 were enacted after section 16-90-107(e), the State contends that section 16-90-107(e) has been repealed by implication. We disagree.

It is well settled that statutes relating to the same subject should be read in a harmonious manner, if possible. Wells v. State, 337 Ark. 586, 991 S.W.2d 114 (1999); Reed v. State, 330 Ark. 645, 957 S.W.2d 174 (1997). All legislative acts relating to the same subject are said to be in pari materia and must be construed together and made to stand if they are capable of being reconciled. Id. It is also well settled that repeal by implication" is not favored. See Manatt v. State, 311 Ark. 17, 842 S.W.2d 845, cert. denied, 507 U.S. 1005 (1992); Uilkie v. State, 309 Ark. 48, 827 S.W.2d 131 (1992); Watson v. State, 71 Ark. App. 52, 26 S.W.3d 588 (2000). Repeal by implication is only recognized in two situations: (1) where the statutes are in irreconcilable conflict, and (2) where the legislature takes up the whole subject anew, covering the entire subject matter of the earlier statute and adding provisions clearly showing that it was intended as a substitute for the former provision. Uilkie, 309 Ark. 48, 827 S.W.2d 131.

Section 5-4-103 (a) provides: “If a defendant is charged with a felony and is found guilty of an offense by a jury, the jury shall fix punishment in a separate proceeding as authorized by this chapter.” Subsection (b) then provides five instances in which the court shall fix punishment, none of which is relevant to this case. Section 5-4-103 was originally enacted in Act 280 of 1975, which created our comprehensive Criminal Code. It was subsequently amended by Acts 535 and 551 of 1993. The 1993 amendment added the language “charged with a felony” and “in a separate proceeding” to subsection (a). The 1993 amendment also added to subsection (b) an additional situation in which the court may fix punishment.

Like section 5-4-103, section 16-97-101 also provides for the procedure for sentencing in jury trials. First enacted in Acts 535 and 551 of 1993, section 16-97-101 made changes in the procedures governing jury trials by providing for separate consideration of guilt and sentencing, commonly known as bifurcated proceedings. Travis v. State, 328 Ark. 442, 944 S.W.2d 96 (1997); Hill v. State, 318 Ark. 408, 887 S.W.2d 275 (1994). Section 16-97-101 provides in pertinent part:

The following procedure shall govern jury trials which include any felony charges:
(1) The jury shall first hear all evidence relevant to every charge on which a defendant is being tried and shall retire to reach a verdict on each charge.
(2) If the defendant is found guilty of one (1) or more charges, the jury shall then hear additional evidence relevant to sentencing on those charges. Evidence introduced in the guilt phase may be considered, but need not be reintroduced at the sentencing phase.
(3) Following the introduction of additional evidence relevant to sentencing, if any, instruction on the law, and argument, the jury shall again retire and determine a sentence within the statutory range.
(4) The court, in its discretion, may also instruct the jury that counsel may argue as to alternative sentences for which the defendant may qualify. The jury, in its discretion, may make a recommendation as to an alternative sentence. However, this recommendation shall not be binding on the court.

Section 16-90-107(e), on the other hand, was originally enacted in Act 440 of 1907 and was first codified as Rev. Stat. ch. 45, § 179 (1837). It provides:

•The court shall have power, in all cases of conviction, to reduce the extent or duration of the punishment assessed by a jury if, in the opinion of the court, the conviction is proper and the punishment assessed is greater than, under the circumstances of the case, ought to be inflicted, so that the punishment is not, in any case, reduced below the limit prescribed by law in such cases. [Emphasis added.]

This section plainly authorizes the trial judge to reduce a defendant’s sentence if, in the trial judge’s opinion, the jury’s sentence was too harsh under the circumstances of the case. Indeed, this court has consistently recognized the authority of the trial court to reduce a defendant’s sentence, pursuant to this provision, after the jury has returned a verdict of punishment. See, e.g, Riggins v. State, 329 Ark. 171, 946 S.W.2d 691 (1997); Richards v. State, 309 Ark. 133, 827 S.W.2d 155 (1992); Walker v. State, 309 Ark. 23, 827 S.W.2d 637 (1992); Rogers v. State, 265 Ark. 945, 582 S.W.2d 7 (1979); Collins v. State, 261 Ark. 195, 548 S.W.2d 106, cert. denied, 434 U.S. 878 (1977). This court explained in Collins:

In practice we have regarded this statute as giving the trial judge an opportunity to review the sentence, from his superior ability to evaluate facts, afforded by seeing and hearing the parties and witnesses and knowing the trial atmosphere, as he would weigh the evidence in considering a motion for new trial.

Id. at 209, 548 S.W.2d at 114.

We conclude that section 16-90-107(e) does not conflict with sections 5-4-103 and 16-97-101, both of which provide that the jury shall “fix” or “determine” punishment. Section 16-90-107(e) does not authorize the trial judge to “fix” or “determine” punishment or in any way interfere with the jury’s right to do so. Rather, it merely allows the judge to reduce the punishment assessed by the jury if, under the circumstances, the judge considers the punishment excessive. In this respect, section 16-90-107(e) is a safety net of sorts, placing discretion with the trial judge to check jury sentences that are excessive or unduly harsh under the particular circumstances of a case. It is harmonious with, and complementary to, the jury’s power to fix punishment found in sections 5-4-103 and 16-97-101. Because these statutes are not in conflict, there is no repeal by implication. See Manatt, 311 Ark. 17, 842 S.W.2d 845; Watson, 71 Ark. App. 52, 26 S.W.3d 588.

Furthermore, contrary to the State’s argument, Acts 535 and 551 did not take up the whole subject of sentencing such that they clearly show that the legislature intended the Acts to be a substitute for section 16-90-107(e). Insofar as they pertain to the sentencing authority provided in sections 5-4-103 and 16-97-101, Acts 535 and 551 merely altered the timing and procedure for sentencing in felony jury trials. Under those Acts, the jury fixes guilt or innocence in the first stage; if a verdict of guilt is rendered, the jury then hears any additional evidence relevant to sentencing before again retiring to determine punishment. Prior to those Acts, the jury made both guilt and punishment determinations simultaneously. See Rush v. State, 324 Ark. 147, 919 S.W.2d 933 (1996); Hill, 318 Ark. 408, 887 S.W.2d 275. Those Acts, however, did not broaden the authority already given to the jury to fix punishment.

The jury has been empowered to fix punishment in all criminal cases tried before the jury since the passage of Act 280 of 1975. Section 802(1) of Act 280 provided: “If a defendant is found guilty of an offense by a jury, the jury shall fix punishment as authorized by this Article.” That provision is now codified as section 5-4-103(a). Acts 535 and 551 did nothing to alter the jury’s sentencing authority. In fact, the only substantive change to section 5-4-103 made by the Acts actually broadened the circumstances in which the court may fix punishment, by adding a provision to subsection (b) allowing the court to fix punishment where the prosecution and defense agree. Thus, Acts 535 and 551 did not broaden the jury’s sentencing authority or reduce the trial court’s sentencing authority.

In sum, the power of the jury to fix punishment has coexisted for many decades with the power of the trial judge to reduce any sentence assessed by the jury that the judge believed was too harsh or excessive under the circumstances of the case. Acts 535 and 551 did nothing to alter the balance of power previously allocated by the legislature. Had the legislature intended to strip the trial judge of the long-established discretion to reduce a defendant’s sentence, we have no doubt that such an intention would have been stated clearly. Because it is not apparent that the legislature intended Acts 535 and 551 to be a substitute for section 16-90-107(e), there is no repeal by implication.

Finally, we address the State’s alternative argument that the trial court’s authority to reduce a sentence under section 16-90-107(e) may be exercised only when a request for leniency has been made by the defendant. The State contends that no such request was made here and that the trial court exceeded its authority by reducing the sentence sua sponte. The State relies on language from Riggins, 329 Ark. 171, 946 S.W.2d 691, wherein this court observed that the trial court in that case could have honored a request for leniency pursuant to section 16-90-107(e). We are hard pressed to see how such an observation could be construed as adding an element to the statute that simply is not there. In short, the statute does not condition the trial court’s power to reduce a sentence upon a request for leniency being made by the defendant, and we will not read any such additional element into it.

Accordingly, we conclude that the trial court acted within its statutory power in reducing the sentence fixed by the jury. Notwithstanding this conclusion, we modify that part of the judgment that reflects that Thomas was sentenced pursuant to Act 346 of 1975, better known as the Arkansas First Offender Act. See Lewis v. State, 336 Ark. 469, 986 S.W.2d 95 (1999). Under Act 346, an accused enters a plea of guilty or nolo contendere prior to an adjudication of guilt, and the circuit court, without entering a judgment of guilt and with the consent of the defendant, may defer further proceedings and place the defendant on probation for a period of not less than one year. See Ark. Code Ann. § 16-93-303(a)(1)(A) (Supp. 2001); Baxter v. State, 324 Ark. 440, 922 S.W.2d 682 (1996). Thereafter, upon fulfillment of the terms and conditions of probation, the defendant shall be discharged without court adjudication of guilt, and the court shall enter an order discharging the defendant and expunging the record. See Ark. Code Ann. § 16-93-303(b) (Supp. 2001)..

Section 16-93-303(a) was amended by Act 1407 of 1999 to provide that “no person who pleads guilty, nolo contendere, or is found guilty of a sexual offense as defined by Chapter 5, Title 14, Arkansas Code of 1987 Annotated where the victim was under the age of eighteen (18) years shall be eligible for expungement of the record under this sub-chapter[.]” Thomas was convicted of the crime of sexual solicitation of a child, in violation of Ark. Code Ann. § 5-14-110 (Repl. 1997). He is therefore not eligible to have his record expunged under Act 346.

We are mindful of the fact that the State has not challenged this part of Thomas’s sentence. Notwithstanding, this court views an issue of a void or illegal sentence as being an issue of subject-matter jurisdiction, in that it cannot be waived by the parties and thus may be addressed for the first time on appeal. See, e.g., Flowers v. Norris, 347 Ark. 760, 68 S.W.3d 289 (2002); Bangs v. State, 310 Ark. 235, 835 S.W.2d 294 (1992); Lambert v. State, 286 Ark. 408, 692 S.W.2d 238 (1985). A sentence is void or illegal when the trial court lacks authority to impose it. Id. Under the circumstances of this case, the trial court lacked the authority to sentence Thomas under Act 346. That portion of the sentence is therefore illegal. This court may correct this error without reversing and remanding for resentencing. See Renshaw v. Norris, 337 Ark. 494, 989 S.W.2d 515 (1999); Roberts v. State, 324 Ark. 68, 919 S.W.2d 192 (1996). Accordingly, we modify Thomas’s sentence to reflect that his probation is not pursuant to Act 346 and that he is not entitled to the expungement provisions therein.

Affirmed on appeal; affirmed as modified on cross-appeal.

Imber, J., not participating.

       Acts 535 and 551 of 1993 are identical pieces of legislation. See Watkins v. State, 320 Ark. 163, 895 S.W.2d 532 (1995).

       The offense is now titled “Sexual indecency with a child.” See Ark. Code Ann. § 5-14-110 (Supp. 2001).


source: Caselaw Access Project

author: Robert L. Brown, Judge.

license: Public Domain

text:
    Gary MONTGOMERY v. Jade BOLTON
    01-827
    79 S.W.3d 354
    Supreme Court of Arkansas
    Opinion delivered June 27, 2002

      Leverett & Watts, PLLC, by: Rosalyn A. Watts, for appellant.

      Friday, Eldredge & Clark, LLP, by: Barry E. Coplin, for appellee.
   Robert L. Brown, Judge.

This is an appeal from an order of child support. The issue is whether a railroad employee, appellant Gary Montgomery, may deduct Tier II' railroad-retirement withholdings from gross income under Arkansas Supreme Court Administrative Order Number 10 for the purpose of determining child support. The trial court concluded that he could not. Montgomery appeals on the basis that the trial court erred in denying the Tier II deduction. We agree, and we reverse and remand.

On December 28, 1993, Montgomery and appellee Jade Bolton, formerly Montgomery, divorced. Custody of the couple’s two minor children was awarded to Bolton with visitation rights awarded to Montgomery, who was ordered to pay child support. On July 20, 2000, Montgomery filed a Motion for Contempt and for Change in Custody, and Bolton counterclaimed, requesting an increase in the amount of child support she received. On February 28, 2001, the trial court held a hearing in the matter which resulted in an order filed on April 6, 2001. In that order, the trial court found that both visitation and child support required modification. The order set forth Montgomery’s visitation schedule which was decided by the agreement of the parties. The court then noted that the only disagreement between the parties was whether Montgomery was entitled to deduct his Tier II railroad-retirement withholdings in calculating his net income for child-support purposes. The trial court ruled, in pertinent part:

The only disagreement between the parties with regard to increasing the defendant’s child support obligation is whether he is entitled to deduct his Tier II railroad retirement withholdings in calculating his net income for child support purposes. The social security equivalent of railroad retirement is Tier I. Tier II is a retirement benefit more like a pension plan, and it is not deductible in calculating net income for child support purposes. The defendant is entitled to deduct his Tier I but not Tier II railroad retirement withholdings. Based upon the defendant’s net W-2 income for 2000 from the railroad, his net semi-monthly pay for child support purposes is $1,233.22. That figure is derived by allowing deductions for federal and state taxes, Tier I (but not Tier II) railroad retirement withholdings, medicare equivalent payments, and child support payments made under court order in another case. The defendant’s child support obligation to the plaintiff is $144.00 per week or $312.00 per semi-monthly pay period, subject to abatement by one-half during his summer visitation with thé children.

Montgomery now appeals this ruling.

Montgomery first claims on appeal that, as a railroad employee, his income is subject to certain mandatory payroll deductions, namely Tier I and Tier II retirement deductions, and that he should be able to deduct these amounts from his income in determining child support. He also asserts that the Arkansas Court of Appeals’ decision in Waldon v. Waldon, 34 Ark. App. 118, 806 S.W.2d 387 (1991), controls in that the court held that a federal employee’s automatic and involuntary contributions to a mandated retirement program were deductible because they were similar to those deductions allowed under the social security system or railroad retirement system. Montgomery points out that his Tier II deductions are also automatic and involuntary, as well as non-refundable. For these reasons, he urges that inclusion of the Tier II withholdings would not accurately reflect his disposable income and should not have been considered by the trial court in determining child support. Montgomery also contends that the trial court erred by failing to adhere to the plain language of Administrative Order No. 10. He submits that Administrative Order No. 10’s use of the term “railroad retirement,” in its ordinary and usually accepted meaning, encompasses both Tier I and Tier II railroad retirement benefits. He concludes that because Administrative Order No. 10 did not disallow Tier II deductions as proper deductions, it was error for the trial court to disallow these deductions for purposes of determining child support.

Bolton responds by noting that Tier II benefits are divisible as marital property in some jurisdictions and by asserting that because Administrative Order No. 10 does not afford a deduction for pension plan contributions, it should not afford one for Tier II railroad-retirement withholdings either. Bolton directs our attention to the Supreme Court Committee on Child Support’s petition to revise the guidelines in 1997 and our resulting 1997 per curiam. She concludes that the word “equivalent” following railroad retirement was struck in that per curiam from Section II of Administrative Order No. 10 without explanation. She observes, however, that the word was not struck from the corresponding language in the Affidavit of Financial Means. Bolton further asserts that the fact that the word “equivalent” was retained in the affidavit “clearly indicates that no change was intended” and that dropping the word in Section II was inadvertent. As to Waldon, supra, Bolton counters Montgomery’s argument by emphasizing that that opinion is not clear about which retirement-plan with-holdings are deductible by the noncustodial parent. She adds that because the deduction at issue in Waldon was a minimum of seven percent, which is approximately the level of social security taxes, the Waldon case does not support the proposition that Tier II withholdings are deductible in addition to Tier I withholdings.

We most recently set out our standard of review in child-support cases in McWhorter v. McWhorter, 346 Ark. 475, 58 S.W.3d 840 (2001):

We review chancery cases de novo on the record, and we will not reverse a finding of fact by the chancery court unless it is clearly erroneous. Ark. R. Civ. P. 52(a); Myrick v. Myrick, 339 Ark. 1, 2 S.W.3d 60 (1999). In reviewing a chancery court’s findings, we give due deference to that court’s superior position to determine the credibility of the witnesses and the weight to be accorded to their testimony. Hunt v. Hunt, 341 Ark. 173, [15 S.W.3d 334]. As a rule, when the amount of child support is at issue, we will not reverse the chancellor absent an abuse of discretion. Scroggins v. Scroggins, 302 Ark. 362, 790 S.W.2d 157 (1990). However, a chancellor’s conclusion of law is given no deference on appeal. City of Lowell v. M & N Mobile Home Park Inc., 323 Ark. 332, 916 S.W.2d 95 (1996).

McWhorter, 346 Ark. at 480, 58 S.W.3d at 843 (quoting Kelly v. Kelly, 341 Ark. 596, 599, 19 S.W.3d 1, 3 (2000)). At issue in the case at hand is the meaning of the term “railroad retirement” for purposes of a deduction from income in determining child support. This court has held that the family-support chart in Administrative Order No. 10 is, in essence, a rule promulgated by our court, and, as such, it is to be construed using the same canons of construction that are used to interpret statutes. See Smith v. Smith, 341 Ark. 590, 19 S.W.3d 590 (2000). In Faulkner v. Arkansas Children’s Hosp., 347 Ark. 941, 69 S.W.3d 393 (2002), we set out our rules regarding statutory construction:

The first rule in considering the meaning and effect of a statute is to construe it just as it reads, giving the words their ordinary and usually accepted meaning in common language. Raley v. Wagner, 346 Ark. 234, 57 S.W.3d 683 (2001); Dunklin v. Ramsay, 328 Ark. 263, 944 S.W.2d 76 (1997). When the language of a statute is plain and unambiguous, there is no need to resort to rules of statutory construction. Stephens v. Arkansas Sch. for the Blind, 341 Ark. 939, 20 S.W.3d 397 (2000); Burcham v. City of Van Buren, 330 Ark. 451, 954 S.W.2d 266 (1997). Where the meaning is not clear, we look to the language of the statute, the subject matter, the object to be accomplished, the purpose to be served, the remedy provided, the legislative history, and other appropriate means that shed light on the subject. Stephens v. Arkansas Sch. for the Blind, supra (citing State v. McLeod, 318 Ark. 781, 888 S.W.2d 639 (1994)).

Faulkner, 347 Ark. at 952-53, 69 S.W.3d at 400.

Section II of Administrative Order No. 10 sets forth the following definition of “income” for purposes of determining child support:

Income means any form of payment, periodic or otherwise, due to an individual, regardless of source, including wages, salaries, commissions, bonuses, worker’s compensation, disability, payments pursuant to a pension or retirement program, and interest .less proper deductions for:
1. Federal and state income tax;
2. Withholding for Social Security (FICA), Medicare, and railroad retirement;
3. Medical insurance paid for dependent children, and
4. Presently paid support for other dependents by Court order.

Administrative Orders of the Supreme Court, No. 10, § II (2001). This version of the definition was adopted by per curiam order effective October 1, 1997. See In re: Administrative Order Number 10: Arkansas Child Support Guidelines, 329 Ark. 668 (1997). Prior to the 1997 per curiam, subsection 2 of Section II referred to “railroad retirement equivalent” instead of “railroad retirement.” The word “equivalent” was dropped in 1997.

We have said that the definition of “income” included in Section II of Administrative Order No. 10 “is intentionally broad and designed to encompass the widest range of potential income sources for the support of minor children.” Davis v. Office of Child Supp. Enforcem’t, 341 Ark. 349, 358, 20 S.W.3d 273, 278 (2000). However, we have also said that determining expendable income is the ultimate objective of the trial courts in fixing child support. See McWhorter v. McWhorter, supra. Moreover, we have declined to limit the types of income or permissible deductions to only those listed in Section II of Administrative Order No. 10. See id. Neither list, we have said, is exhaustive or exclusive. See id.

Accordingly, our first step is to construe the words just as they read, giving “railroad retirement” its ordinary and usually accepted meaning. Tier I and Tier II benefits of the Railroad Retirement Act were discussed by the United States Supreme Court in Hisquierdo v. Hisquierdo, 439 U.S. 572 (1979), in the context of divorce proceedings and the division of property:

[The Railroad Retirement Act] provides two tiers of benefits. The upper tier, like a private pension, is tied to earnings and career service. . . . The lower, and larger, tier of benefits corresponds exactly to those an employee would expect to receive were he covered by the Social Security Act. 45 U.S.C. § 231b(a)(1).

Hisquierdo, 439 U.S. at 574-75. As we read it, the term “railroad retirement” in Section II of Administrative Order No. 10 is not limited to any particular Tier or to a social security equivalent. Thus, the term appears to incorporate any and all railroad-retirement programs.

Also relevant is the fact that the Tier II railroad-retirement withholding is mandatory. As a mandatory deduction, it falls within the reasoning of Waldon v. Waldon, supra. In Waldon, the court of appeals examined automatic deductions like taxes and social security for purposes of identifying what is disposable income. That is precisely the situation we have in the case before us. Tier II benefits are a mandatory withholding as conceded by Bolton in her arguments before the trial court. It is the mandatory nature of the Tier II withholdings that distinguishes them from typical pension plan withholdings, which, ordinarily, are not mandatory or deductible. Using the reasoning of Waldon, any inclusion of the amounts mandatorily withheld into income would not accurately reflect Montgomery’s disposable income.

Bolton argues vigorously that this court “inadvertently” or “erroneously” deleted the word “equivalent” in its 1997 changes to Administrative Order No. 10. We disagree. We have said that “when the construction of a statute is at issue, we will presume that the General Assembly, in enacting it, possessed the full knowledge of the constitutional scope of its powers, full knowledge of prior legislation on the same subject, and full knowledge of judicial decisions under preexisting law.” R.N. v. J.M., 347 Ark. 203, 211, 61 S.W.3d 149, 153 (2001) (quoting Davis v. Old Dominion Freight Line, 41 Ark. 751, 756, 20 S.W.3d 326, 329 (2000)). The same holds true for this court. Clearly we can presume that in adopting the revision of Administrative Order No. 10 in 1997, and, specifically, the deletion of the word “equivalent,” we acted with full knowledge of what we were doing. Merely because the deletion of the word “equivalent” was not explained or addressed in our per curiam does not mean that we acted inadvertently or erroneously. It is true that the Affidavit of Financial Means in Administrative Order No. 10 in 1997 did retain the term “equivalent” foEowing “raüroad retirement.” However, in our 2002 per curiam, In re: Administrative Order Number 10: Arkansas Child Support Guidelines, 347 Ark. Appx. (Jan. 31, 2002), this court again amended Administrative Order No. 10. In that revision, the word “equivalent” remained struck after “railroad retirement” in Section II and was also struck from the Affidavit of Financial Means.

Finally, Bolton contends that because Tier II benefits are divisible as marital property in property settlements in other jurisdictions, withholdings for Tier . II plans should not be deducted for purposes of determining disposable income for child support. Again, we disagree. This court’s goal should be to determine what constitutes disposable income of the support obligor. See McWhorter v. McWhorter, supra. As matters stand today, Montgomery has not received his Tier II benefits. Instead, his employer is withholding a certain amount from his paycheck for purposes of allowing him eventual Tier II pension benefits.

We hold that the mandatory Tier II withholdings do not form part of disposable income under the clear terms of Section II of Administrative Order No. 10 and that Tier II withholdings are part of “railroad retirement” deductions. We, therefore, reverse the order of the trial court and remand for an order to be entered consistent with this opinion.

Reversed and remanded.

Glaze, J., concurs, see In Re: Guidelines for Child Supp. Enforcem’t, 301 Ark. 627 (1990) (Glaze, J., concurring). See also, In Re: Guidelines for Child Supp. Enforcem’t, supra (Hickman, J., dissenting).

Imber, J., not participating.

       Arkansas courts have not specifically addressed whether Tier II benefits are divisible as marital property.


author: Robert L. Brown, Justice. Ray Thornton, Justice,

text:
    TYSON FOODS, INC. v. CONAGRA, INC., and ConAgra Poultry Co.
    01-737
    79 S.W.3d 326
    Supreme Court of Arkansas
    Opinion delivered June 27, 2002

      Conner & Winters, P,LLC, by: William B. Putman and Ruth A. Wisener; and Quattlebaum, Grooms, Tull & Burrow, PLLC, by: Leon Holmes, for appellant.

      McGrath, North, Mullin & Kratz, P.C., by: Leo A. Knowles and Patrick E. Brookhouser, Jr., and Cypert, Crouch, Clark & Harwell, by: James E. Crouch, for appellee Con Agra, Inc.

      Everett Law Firm, by: John C. Everett and Jason H. Wales, for appellee ConAgra Poultry Co.
   Robert L. Brown, Justice.

Appellant Tyson Foods, Inc., appeals the granting of a motion for judgment notwithstanding the verdict in favor of appellees ConAgra, Inc., and ConAgra Poultry Co. (both companies referred to collectively in this opinion as ConAgra). Tyson essentially mounts two arguments in its appeal: (1) that Arkansas law does not invariably require employers to enter into postemployment confidentiality agreements with departing employees for company information to qualify as a trade secret, and (2) Tyson’s nutrient profile qualifies as a trade secret. We affirm the trial court’s order granting the motion for judgment notwithstanding the verdict, but we do so for reasons other than those stated by the trial court in its order.

In 1984, David Purtle began his employment with Tyson. At the time of his resignation from Tyson in 1999, Purtle held the position of Senior Vice-President in charge of Retail Poultry. In 1997, he directed Dr. Roy Brister, Vice-President of Nutrition Research at Tyson, to develop two nutrient profiles (described as “normal” and “reduced”) for use in formulating Tyson’s poultry feed to avoid having different nutrient profiles at each Tyson complex. Dr. Brister did so. The two profiles were compiled into a single document, the “nutrient profile,” which Tyson used to formulate feed for its chickens, based on varying combinations and levels of amino acids. In June 1999, Purtle left Tyson and began his employment with ConAgra, because he had become unhappy with a reorganization of management at Tyson. Soon after he began work with ConAgra, Purtle gave ConAgra the Tyson nutrient profile, which ConAgra then implemented.

That same year, Tyson initiated trade-secret litigation against ConAgra in which it contended that ConAgra had “raided” Tyson and hired away four top management executives, including Purtle, and that those executives would inevitably divulge or had divulged trade secrets to ConAgra. Tyson’s prayer for relief included an injunction against disclosure of Tyson’s trade secrets and damages for misappropriation of the same. Allegations against Purtle were severed, because it was alleged that he had actually given trade secrets to ConAgra. The trial of the remaining three executives proceeded. The trial court in that trial found that certain pricing information and marketing strategies were trade secrets, and it enjoined the three former Tyson executives from revealing those trade secrets for a period of one year. This court reversed and held that the trial court erred in granting the injunction, because Tyson had made no efforts to restrain disclosure of information postemployment. See ConAgra, Inc. v. Tyson Foods, Inc., 342 Ark. 672, 30 S.W.3d 725 (2000) (Tyson I).

The case involving Purtle was tried in October 2000, and a jury was impaneled, though the matter was in chancery court. Evidence was presented on (1) whether the nutrient profile was a trade secret; (2) whether it was misappropriated; and (3) what damages may have resulted from a misappropriation. Following a trial on liability, the trial court found that the “nutrient profile” was a trade secret under Arkansas law and was misappropriated. The trial court so instructed the jury, and the matter of damages was submitted to a jury. The jury returned a verdict in favor of Tyson for trade secret misappropriation in the amount of $20,094,531. On October 26, 2000, the trial court entered a judgment in the amount of $20,094,531 against ConAgra.

On November 8, 2000, ConAgra filed a Motion for Judgment Notwithstanding the Verdict, or Alternatively, Motion for Remittitur or New Trial. On December 7, 2000, the trial court entered its Order Regarding Trade Secret Misappropriation, which included the following findings:

1. That Tyson’s nutrient profile (the “Profile”) is a formula, and
2. The Profile has independent economic value from not being generally known; and
3. The Profile is not readily ascertainable because it is not readily available on the open market and it is not capable of being reverse engineered; and
4. Tyson took reasonable efforts to protect the secrecy of the Profile by instituting Tyson’s Code of Conduct and Compliance Policy that contains a confidentiality provision, by having verbal understandings with its employees and by taking other measures that are equivalent to those standards in the industry.

Also on December 7, 2000, and because of this court’s decision in Tyson I, which was handed down on November 16, 2000, the trial court granted the motion for judgment notwithstanding the verdict and concluded that Tyson I “appears to require a written contract prohibiting postemployment disclosure of information and upon no other grounds.”

On December 29, 2000, the trial court entered an Order of Modification nunc pro tunc, adding two additional findings to the December 7, 2000 Order Regarding Trade Secret Misappropriation:

5. The Profile constitutes a trade secret under the ATSA.
6. Because David Purtle supplied the Profile to ConAgra which immediately implemented it without the knowledge or permission of Tyson, the Profile was misappropriated pursuant to the ATSA.

It is from the order of December 7, 2000, granting the motion for judgment notwithstanding the verdict and the modification order of December 29, 2000, that Tyson appeals. However, we note that the December 7, 2000 Order Regarding Trade Secret Misappropriation, as modified, was favorable to Tyson. The second December 7, 2000 order was the grant of the motion for a judgment notwithstanding the verdict. Tyson urges that this court reverse the trial court’s order granting the motion for judgment notwithstanding the verdict and reinstate the jury’s original damage award. ConAgra filed a notice of cross-appeal and in its brief argued before this court that Tyson’s proof could not support the verdict and judgment.

We first admit to some confusion over the postjudgment relief requested by ConAgra in the form of a judgment notwithstanding the verdict or, alternatively, motion for remittitur or new trial. Part of our confusion may relate to impaneling a jury in chancery court. It appears clear to us that it was the trial court that first concluded that the nutrient profile was a trade secret that was misappropriated by Purtle and so instructed the jury. The trial court then submitted the issue of damages to the jury. The jury found that Tyson had been damaged and in what amount. This all seems akin to a judge directing a verdict in favor of a plaintiff with the jury fixing damages. In effect, ConAgra’s post-trial motion was a motion for the trial court to reconsider its December 7, 2000 Order Regarding Trade Secret Misappropriation in light of this court’s decision in Tyson I. Thus, we will treat the motion for judgment notwithstanding the verdict as one for reconsideration of the trial court’s original order based on our decision in Tyson I.

The question then becomes: what is this court’s standard of review for the trial court’s order granting ConAgra’s motion for judgment notwithstanding the verdict? The trial court read our decision in Tyson I as requiring a reversal of its initial ruling as a matter of law. The trial court reversed itself solely for the reason that it believed it was mandated to do so by Tyson I, due to the absence of a postemployment confidentiality agreement.

Our standard of review in chancery cases is de novo. See Tyson I; Ferguson v. Green, 266 Ark. 556, 587 S.W.2d 18 (1979). As we said in Tyson I:

All of the issues raised in the court below are before the appellate court for decision and trial de novo on appeal in equity cases involves determination of fact questions as well as legal issues. The appellate court reviews both law and fact and, acting as judges of both law and fact as if no decision had been made in the trial court, sifts the evidence to determine what the finding of the chancellor should have been and renders a decree upon the record made in the trial court. The appellate court may always enter such judgment as the chancery court should have entered upon the undisputed facts in the record.

342 Ark. at 677, 30 S.W.3d at 728-29 (quoting Ferguson, supra, 266 Ark. at 564, 587 S.W.2d at 23 (1979) (citations omitted)). We have further stated that we do not reverse a chancery court’s findings of fact unless we conclude the chancery court has clearly erred. See Tyson I; Bendinger v. Marshalltown Trowell Co., 338 Ark. 410, 994 S.W.2d 468 (1999). Accordingly, our standard of review in this case is de novo, but we will apply the clearly-erroneous standard to any findings of fact made by the trial court.

a. Postemployment confidentiality agreement.

Turning to the merits, we first consider whether the trial court erred in concluding that this court held in Tyson I that a postemployment confidentiality agreement be signed in all instances as an absolute prerequisite for trade-secret status and protection. We hold that the trial court did err in this regard. Our decision in Tyson I was not limited to the failure to have a postemployment contract. Rather, we concluded:

As best we can tell, there were no efforts on Tyson’s part to restrain disclosure of information postemployment. And that distinguishes the facts in this case from the facts in Cardinal Freight. Obviously, the failure of a business to protect against the disclosure of information it considers to be secret following employment is critical to our analysis and ultimate decision regarding whether the information is in fact a trade secret.
Accordingly, we conclude that the trial court was clearly erroneous in finding that the information at issue qualified as a trade secret. We reverse the decree of the trial court ordering the one-year injunctions and remand for an order to be entered forthwith voiding the injunctions.

Tyson I, 342 Ark. at 680, 30 S.W.3d at 730-31 (emphasis added).

In holding as we did, we relied on our opinion in Cardinal Freight Carriers, Inc. v. J.B. Hunt Transp. Serv., Inc., 336 Ark. 143, 987 S.W.2d 642 (1999). In Cardinal Freight, we alluded to a post-employment confidentiality agreement for one year as being one way a company could protect trade secrets. We also emphasized measures taken by the company during the employee’s employment to protect the secrecy of its information. J.B. Hunt, in that case, had passwords and passcodes in place to protect trade-secret information and had adopted a “loose-lips” policy to restrict public disclosure of confidential information.

In short, we did not specifically require in Cardinal Freight or in Tyson I that a postemployment confidentiality contract be entered into in all instances to identify trade secrets and to protect them. That was simply one measure to which we referred that could be taken by the company to assure trade-secret protection postemployment. However, as we made clear in Tyson I, no efforts had been taken by the company to restrain the disclosure of information postemployment. And that was determinative.

b. Trade-Secret Protection.

Having concluded that a postemployment confidentiality agreement is not an absolute requirement in all instances for trade-secret protection, we now consider whether the trial court was right to rule in favor of ConAgra on its motion for judgment notwithstanding the verdict, albeit for the wrong reason. See Norman v. Norman, 347 Ark. 682, 66 S.W.3d 635 (2002); Ouachita Trek & Dev. Co. v. Rowe, 341 Ark. 456, 17 S.W.3d 491 (2000); Malone v. Malone, 338 Ark. 20, 991 S.W.2d 546 (1999). In this regard, we examine what steps Tyson took both during Purtle’s employment and postemployment to identify the nutrient profile as a trade secret and to protect it. Tyson urges that it did take pains to protect its confidential information and points to its Corporate Code of Conduct and Compliance Policy (Corporate Code) as evidence of that fact.

As we noted in Tyson I, Tyson adopted the Corporate Code in the mid-to-late 1990s as an outgrowth of the special prosecutor’s investigation into the affairs of Michael Espy and Tyson. The Corporate Code includes various legal and ethical principles, and its purpose, according to its foreword written by Tyson’s then chairman and CEO, is “to help us at Tyson Foods make ethical business decisions.” The Corporate Code deals with Conflicts of Interest, Confidential Information, Corporate Records, Relationships with Government Personnel, Political Contributions, International Transactions, Antitrust Compliance, Environmental Compliance, and Reporting of Violations. Employees were asked to read the code and then sign a statement to the effect that they had done so. They further attend a class every year in which the Code is discussed. No contractual agreement was required between the company and its employees mandating that the employees would keep certain information confidential.

The pertinent provision of the Corporate Code for our purposes is the section entitled “Confidential Information”:

1. Proprietary Information
All Tyson Foods’ employees are required to safeguard the Company’s confidential business and technical information and use such information only for Company purposes. Failure to observe this duty of confidentiality may additionally result in a conflict of interest or a violation of securities, antitrust, or employment laws. Confidential information, whether Tyson Foods’ information or the information of others, may further be subject to agreements Tyson Foods has with other companies, trade secret statutes, or other laws for the protection of such information. In addition to protecting its own trade secrets, it is the policy of Tyson Foods to respect the trade secrets of others. Tyson Foods will not tolerate the violation of confidentiality or secrecy agreements or the improper acquisition of protected information. If a Tyson Foods’ employee is furnished with information or becomes aware of information which may have been misappropriated from another party, the employee must immediately contact the Legal Department.

It is clear from a reading of this language that Tyson did not necessarily equate confidential information to a trade secret. More was required under our trade-secret statutes.

We turn then to an examination of our trade-secret law. Section 4-75-601(4) of Arkansas’s Unfair Practices Code defines a “trade secret” as:

(4) “Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
(A) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and
(B) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Ark. Code Ann. § 4-75-601(4) (Repl. 2001).

In addition to the statute, this court has endorsed a six-factor analysis in determining whether information qualifies as a trade secret: (1) the extent to which the information is known outside the business; (2) the extent to which the information is known by employees and others involved in the business; (3) the extent of measures taken by the company to guard the secrecy of the information; (4) the value of the information to the company and to its competitors; (5) the amount of effort or money expended by the appellee in developing the information; and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others. See Tyson I. See also Weigh Sys. S., Inc. v. Mark’s Scales & Equip., Inc., 347 Ark. 868, 68 S.W.3d 299 (2002); Wal-Mart Stores, Inc. v. P.O. Market, Inc., 347 Ark. 651, 66 S.W.3d 620 (2002); Saforo & Assocs., Inc. v. Porocel Corp., 337 Ark. 553, 991 S.W.2d 117 (1999); Restatement of Torts § 757, cmt. b. As to the third factor, which is the extent of measures taken by the company to guard the secrecy of the information, this court held in Tyson I that “the failure of a business to protect against the disclosure of information it considers to be secret following employment is critical to our analysis and ultimate decision regarding whether the information is in fact a trade secret.” Tyson I, 342 Ark. at 680, 30 S.W.3d at 731. Here, Tyson maintains that it took reasonable efforts to guard the secrecy of its nutrient profile. We disagree.

Tyson specifically argues that Purtle admitted that he considered the nutrient profile to be confidential and that he instructed others that it was. Further, Tyson claims that Purtle knew of his obligation to keep such information secret because of the Corporate Code. Tyson also asserts that the nutrient profile was an internal document and was not part of any third-party customer contract. Moreover, it contends that, according to Dr. Brister, only five people at Tyson retained a hard copy of the nutrient profile. ConAgra counters this by urging that while Purtle thought the nutrient profile was confidential, he testified that he never considered it to be a trade secret. ConAgra also points to Purtle’s testimony that hundreds of Tyson managers in the field were given a hard copy of the nutrient profile, without an admonition of confidentiality, which undercuts any notion that the profile was a trade secret.

We turn then to an examination of the efforts taken by Tyson to keep the nutrient profile secret, both during Purtle’s employment and after he left to join ConAgra. Certainly, covenants not-to-compete and confidentiality agreements would have been active efforts on the part of Tyson to protect proprietary information it considered to be a trade secret. See Weigh Sys. S., Inc. v. Mark’s Scales & Equip., Inc., supra; Tyson I, supra. However, those steps are not the only options available to a company. Melvin F. Jager, in his treatise, Trade Secrets Law, sets out other options, in addition to publishing corporate ethical principles, which would be acceptable measures for a company to institute to protect secret information. Those measures include detailed record-keeping procedures, physical security, confidentiality agreements, vendor and supplier confidentiality agreements, use of confidential stamps and legends, computer security measures like passwords, and the use of entrance and exit interviews. See 1 Melvin F. Jager, Trade Secrets Law § 5.05[2][c] (2001).

The treatise, Milgrim on Trade Secrets, details a variety of precautionary steps that have been implemented by trade-secret owners to protect secret information: use of techniques to put employees on notice of the trade-secret status of the matter on which they are working; posting of warning or cautionary signs or use of document legends; restricting visitors; maintaining internal secrecy by dividing the process into steps and separating the various departments working on the several steps; using unnamed or coded ingredients; keeping secret documents under lock; and limiting access to computer materials by use of passwords to prevent unauthorized access and keeping magnetic tapes, flow charts, symbolics and source codes under lock and key when not in use. See 1 Roger M. Milgrim, Milgrim on Trade Secrets § 1.04 (2001).

The South Dakota Supreme Court has also discussed reasonable precautions for maintaining secrecy when a feed supplement was at issue:

In addition, there was no substantial evidence showing Weins took reasonable efforts to maintain his product’s secrecy. SDCL 37-29-1 (4)(ii). Secrecy is fundamental to the existence of a trade secret. Pioneer Hi-Bred Int’l, 35 F.3d at 1235. Although the secrecy is not required to be absolute, reasonable precautions must be taken. Id. Regarding such precautions, the Appellate Court of Illinois held:
[N]o evidence exists to show that plaintiff took any affirmative measures to keep its [product] secret. No evidence was presented regarding internal or external physical security; that confidentiality agreements or understanding existed among those having access to plaintiffs [product]; that plaintiff’s [product] contained confidentiality stamps or [was] kept under lock and key; or that employees received entrance and exit interviews imparting the importance of confidentiality. Consequently, we conclude that plaintiff failed to produce sufficient evidence to prove that under [the relevant section] of the [Trade Secrets] Act, its [product] was the subject of reasonable efforts designed to protect its secrecy.
Gillis Associated Indus. v. Cari-All, 206 Ill. App.3d 184, 151 Ill. Dec. 426, 431, 564 N.E.2d 881, 886 (1990) (applying the same subsection as SDCL 37-29-1 (4)(ii)).

Weins v. Sporleder, 569 N.W.2d 16, 27 (S.D. 1997).

Tyson failed to take any precautionary measures to protect its nutrient profile. The Corporate Code at Tyson, for example, hardly qualifies as an agreement between Tyson and Purtle not to disclose the nutrient profile. Nor were any other measures, such as those listed above, implemented. Donald “Buddy” Wray, the former President of Tyson, and a current member of its Board of Directors, summarized Tyson’s efforts:

Counsel: I had forgotten to ask. you a question. Oh, I want to go back to the issue of Tyson’s code of conduct — Corporate Code of Conduct. Do you remember the question about the Corporate Code of Conduct?
Wray: Yes, sir.
Counsel: Did Tyson d° anything else or rely upon anything else, other than the Corporate Code of Conduct, with respect to keeping the confidentiality of its proprietary information or alleged trade secrets?
Wray: I "don’t think Tyson would be any different than anyone else. You can have a signed document, but you have to trust your people and believe in their honesty and in their integrity.
Counsel: Have you heard Mr. Manuel comment one way or another as to what he believes the standard in the industry is with respect to maintaining confidentiality of proprietary information and alleged trade secrets?
Wray: I think his words were that they had to depend on the honesty or the character and integrity of their people.

Wray also testified that Tyson’s Corporate Code did not list items like the nutrient profile it considered to be confidential in the Corporate Code. Finally, Wray admitted that there was no time for an exit interview with Purtle. Of course, an exit interview could have been used to discuss matters Tyson believed were proprietary.

Dr. Roy Brister, Vice President of Tyson’s Nutrition Research, testified that only five employees had a hard copy of the nutrient profile, but he admitted that many other Tyson employees had seen it on an overhead projector because the nutrient profile was used as a tool to educate the upper management of Tyson’s complexes. Apparently, one reason for showing the nutrient profile was so the managers could choose between the normal or the reduced profile. Dr. Brister could not say whether those managers were told about the confidential nature of the profile. Purtle added that these meetings with Tyson managers out in the field probably involved a total of four hundred to four hundred and fifty people. He contradicted Dr. Brister’s testimony and stated that most of the field managers were given a hard copy of the nutrient profile.

Tyson bears down hard on the fact that Purtle admitted that he knew the nutrient profile was confidential. The fact that Purtle himself believed the nutrient profile to be confidential, however, as well as the fact that Dr. Brister testified that Purtle told him he thought the profile possessed economic value do not decide the issue for us. Purtle also testified that he did not believe the nutrient profile was a trade secret. We believe that it was incumbent on Tyson to clearly identify what information it considered to be a trade secret, as that is a legal status fixed by statute. Moreover, we draw a clear distinction between actions taken by Tyson to protect trade secrets on the one hand and understandings of individual officers like Purtle in determining whether information was confidential and had value on the other. As discussed above, the six Saforo factors contemplate that it is the efforts taken by the company to safeguard the information that is critical, not the perception of individual officers. Absent clear corporate action to protect the nutrient profile as a trade secret, a subjective belief of an individual employee that the information is confidential or even had value seems largely irrelevant in our analysis. We note once more that even the Corporate Code distinguished confidential information from a trade secret.

In sum, the efforts taken by Tyson to safeguard the information comes down to (1) the Corporate Code and Tyson's directive to its employees that the Code be read, and (2) the company's faith in the integrity of its employees. Yet, hundreds of Tyson managers were educated about the nutrient profile and there was no proof that Tyson took any steps to swear them to secrecy, or warn them of the confidential nature of the profile. Relying on an ethical guide like the Corporate Code, which fails to identif~r what is a trade secret or to mention the nutrient profile, is simply not enough for Tyson to invoke trade-secret protection.

We hold that the trial court clearly erred in finding that the nutrient profile was a Tyson trade secret and that the trial court was correct to reverse itself by granting the motion for judgment notwithstanding the verdict, albeit the court's reason for doing so was erroneous. Because we affirm the order granting the motion for judgment notwithstanding the verdict, ConAgra's cross-appeal on damages is moot.

Affirmed.

THORNTON, j., dissents.

Ray Thornton, Justice,

dissenting. The trial court found that Tyson Food's nutrient profile was a trade secret belonging to Tyson Foods and that David Purtle, Senior Vice-President in charge of Retail Poultry at Tyson, misappropriated the secret formula when he left the company. A few days after Mr. Purtle left Tyson, the former senior vice-president delivered the secret formula to Tyson’s competitor, ConAgra, of which company he had just been named President of Retail Sales. Mr. Purtle gave the confidential profile to Dr. Dorr, the nutritionist for ConAgra, and told him to “implement this,” and Dr. Dorr immediately took steps to implement the Tyson nutrient formula at ConAgra.

The question of damages to Tyson by ConAgra’s use of the nutrition formula was fixed by the jury at more than twenty million dollars, and ConAgra sought a remittitur to reduce the judgment to the 1.3 million dollars, which was the amount that ConAgra testified they saved by using Tyson’s nutrient profile.

Notwithstanding its findings of fact and the verdict of the jury, the trial court granted ConAgra’s motion for a JNOV based upon a misinterpretation of our holding in Conagra, Inc. v. Tyson Foods, Inc., 342 Ark. 672, 30 S.W.3d 725 (2000), (hereinafter Tyson I). The trial court erroneously concluded that an action for damages for the misappropriation of a trade secret could not be maintained unless the company had implemented written post-employment, non-competition agreements. The trial court reaffirmed all its findings as to the existence of a trade secret and its misappropriation but set aside the jury verdict and consequent damages on the sole ground that our decision in Tyson I required that extraordinary action.

I agree with the majority’s conclusion that a JNOV was not required by our decision in Tyson I and that the trial court erred in setting aside the verdict on the basis of its erroneous interpretation of our Tyson I decision.

The conclusion by the majority that a JNOV was not required should have the effect of reinstating the earlier findings by the trial court and the verdict by the trial court and the jury unless, in our de novo review we determined that the earlier findings by the trial court were clearly erroneous. These earlier findings were specifically repeated when the trial court erroneously reversed itself based on its misinterpretation of the legal principals articulated in our Tyson I opinion. We do not reverse a finding of fact by the chancery court unless it is clearly erroneous. Weigh Systems South v. Mark’s Scales & Equipment, Inc., 347 Ark. 868, 68 S.W.3d 299 (2001). A finding of fact by the chancery court is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed. Id.

While I agree with the majority that the trial court erred in its application of Tyson I, I believe the effect of that conclusion necessitates the reinstatement of the trial court’s earlier findings and the jury verdict. However, I disagree with the majority’s conclusion that a review of the evidence supporting the findings made by the trial court reflect that those findings were clearly erroneous, and I respectfully dissent. I believe that each of the trial court’s findings was based upon convincing evidence and that the trial court’s findings were not clearly erroneous.

In my analysis of the issues before the trial court, I will first address whether the trial court’s finding that the nutrient profile was a trade secret was clearly erroneous. Next, I will consider whether the trial court’s finding that the trade secret was misappropriated and that damages resulted from the misappropriation was clearly erroneous. Finally, I will consider whether the jury’s determination that Tyson suffered damages as a result of the misappropriation and conversion of its nutrient formula was clearly erroneous.

Was the trial court clearly erroneous in finding that the nutrient profile formula is a trade secret?

I. Saforo Analysis

In Tyson I, this court listed the six factors from Saforo & Assoc. Inc., v. Porocel Corp., 337 Ark. 553, (1999) to be used to determine whether company information qualifies as a “trade secret”: (1) the extent to which the information is known outside the business; (2) the extent to which the information is known by employees and others involved in the business; (3) the extent of measures taken by the company to guard the secrecy of the information; (4) the value of the information to the company and to its competitors; (5) the amount of effort or money expended by the appellee in developing the information; and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others. Id. See, Ark. Code Ann. § A-75-601(A).

In interpreting this statute we have listed six factors to be considered. Saforo, supra. I will examine each of the six criteria presented in Soforo, Id.

The first factor is the extent to which the information is known outside the business. There was no evidence that the Tyson nutrient profile was known by anyone outside of Tyson until David Purtle took a copy of the profile from his desk at Tyson and shared that copy with ConAgra. Mr. Purtle testified that as an officer of Tyson, he instructed the nutritionists of Tyson to develop the formula and to keep it confidential because it gave Tyson a competitive advantage in the cost of feeding chickens.

The testimony of Dr. Brister, the Tyson nutritionist who led the development of the formula, was that there were only five hard copies of the nutrition formula, and that they were treated as confidential by the five nutritionists who used them in developing appropriate feed mixes. It is true that the existence of the confidential formula was disclosed by means of an overhead projector to other Tyson employees, all of whom had signed a confidentiality agreement. There is no evidence that the confidential nutritional formulas had been seen or discovered by anyone other than a Tyson employee until Mr. Purtle took his copy from his desk at Tyson and delivered it to ConAgra with instructions to implement it for that company’s benefit.

The trial court’s finding relating to the first Saforo factor that the information was not known outside of Tyson is certainly not clearly erroneous.

The second factor of the Saforo test is the extent to which the information is known by employees and others involved in the business. Here, the development of the confidential nutritional formula was accomplished by five Tyson nutritionists who were instructed to keep the formula confidential by Mr. Pur tie. Furthermore, Dr. Roy Brister, Tyson’s nutritionist, stated that Tyson has between 65,000 and 70,000 employees but that “I would say five people have a copy of this sheet [the formula].” Dr. Brister further stated, “if there is one document in the nutrition department I could protect from disclosure, it would be our nutrient profile.”

The trial court was not clearly erroneous in concluding that the evidence showed that the confidential formula was closely guarded, satisfying this element of the Saforo criteria.

The third factor in the Saforo analysis is to examine the extent of the measures taken by the company to guard the secrecy of the information. This third factor was given particular emphasis by this court in Tyson I, a case that related to price lists that were generally available to any purchaser. We stated:

Though reasonable efforts to protect the secrecy of certain information is only one of the factors we look to in determining the status of a trade secret, it is a prominent one. To reiterate in part, § 4-75-601 (4)(B) requires that for information to qualify as a trade secret, it must be “the subject of efforts that are reasonable under the circumstances to maintain its secrecy. And in Saforo & Assoc., Inc. v. Porocel Corp., supra, we listed as a factor the extent of measures taken by the company to guard the secrecy of the information. As best we can tell, there were no efforts on Tyson’s part to restrain disclosure of [price list] information post-employment. And that distinguishes the facts in this case from the facts in Cardinal Freight. Obviously, the failure of a business to protect against the disclosure of information it considers to be secret following employment is critical to our analysis and ultimate decision regarding whether the information is in fact a trade secret.

Tyson I, supra. By no means did this court hold in Tyson I that simply because there was no written post-employment agreement of confidentiality or covenant not to compete, there could be no trade secret. We considered that factor as a part of our analysis of whether or not Tyson took steps to keep price lists a secret.

In the case before us, while there was no covenant not to compete, or a post-employment agreement not to divulge trade secrets, there were valid measures taken by Tyson to guard the secrecy of the nutrient profile. First, unlike the price lists involved in Tyson I, the nutrient profile was not made public. Next, the corporate code of conduct required current employees to guard the secrecy of Tyson’s confidential information. This code of conduct was a means by which Tyson instructed its employees that certain information was meant to be kept secret. Post-employment confidentiality contracts are only one way in which to indicate to employees that information should be kept confidential, and even Tyson I does not hold that post-employment contracts are necessary to support a finding that there was a trade secret. Here the court considered convincing evidence that Mr. Purtle knew the nutrition profile was confidential, instructed the nutritionists to safeguard the information, and signed the corporate code of conduct protecting confidential information. The trial court’s finding that this prong of the Saforo test was met, and that there were sufficient measures taken by Tyson to guard the secrecy of the information was not clearly erroneous.

The fourth factor in determining whether the information is a trade secret is the value of the information to the company and to its competitors. The value of the nutrient profile to the company was shown by ConAgra’s reduced costs due to the implementation of the nutrient profile. ConAgra testified that it saved 1.3 million dollars by using the nutrient profile. Purtle told Dr. Dorr at ConAgra to implement the nutrient profile, and therefore the trial court was not clearly erroneous in finding that ConAgra implemented the profile because it was useful and valuable. Indeed, it is ConAgra who asks this court for a remittitur of the damages to the 1.3 million dollar amount that they admit they saved as a result of implementing the nutrient profile. However, ConAgra argues that because it no longer uses the profile, it does not remain valuable. The fact remains that ConAgra used the nutrient profile and saved substantial costs for a period of time, and that is sufficient to support the trial court’s finding that the fourth Saforo factor was satisfied as to the value of the secret. Certainly, the trial court’s finding was not clearly erroneous.

The trial court next weighs the amount of effort or money expended by the appellee in developing the information to determine if there is a trade secret. With respect to the fifth Saforo factor, the testimony is not controverted that Tyson invested much time, money, and effort in developing the confidential nutritional profile. Tyson presents evidence that the effort in developing the nutrient profile involved years of private research by nutritionalists and chemists at Tyson. ConAgra argues that Tyson received this nutrient profile from its acquisition of Holly Farms, and spent no more than a few hours developing the information. Dr. Roy Brister testified that the tests had been under development since 1993. Even if ConAgra is correct in its assertion that the nutrient profile was first developed at Holly Farms, Tyson expended resources acquiring that company and its profile, and that is part of its expenditure in developing the secret formula. Again, I would not characterize the trial court’s finding on this Scforo factor as being “clearly erroneous.”

The sixth element of the Saforo test is the ease or difficulty with which the information could properly be acquired or duplicated by others. Tyson argues that though the nutrient levels of a sample of feed could be ascertained from a sample, the samples of feed vary so much that it would be difficult, if not impossible to reverse engineer from a sample, as Dr. Brister testified: “My opinion is absolutely not. I say that for all the reasons we’ve talked about and because it is based on Tyson data from our thirty-one complexes, years of information . . . Looking at our history, it would take fifteen years or more [for ConAgra to develop the same nutrient profile.]

Furthermore, getting the percentages of supplemental nutrients exactly right is key to saving the money that ConAgra saved. Dr. Brister testified: “A one-hundredth of a percent change in Lysine for Tyson is nearly five-million dollars. Even on these concepts, the last hundredth decimal place can be millions of dollars from Tyson’s standpoint.”

Dr. Brister put it very succinctly: "Based on the variations I have discussed, it is my opinion that neither ConAgra nor another poultry company could determine Tyson’s nutrient profile by reverse engineering. Even if ConAgra or another competitor knew the amino acid levels in all of Tyson’s five feeds, they could not recreate the information on this chart.” Certainly the trial court was not clearly erroneous in concluding that this sixth Saforo factor supported the existence of a trade secret.

Everyone agrees that the nutritional profile was confidential. Whether this confidential information should be treated as a trade secret should be subject to a Saforo analysis. The findings by the trial court that each of the Saforo factors was satisfied and that the nutrient profile is a trade secret are based upon convincing evidence. The trial court’s findings are not clearly erroneous. Thus, the judgement based upon those findings should be affirmed, and the granting of a JNOV on a misinterpretation of law should be reversed.

Was the trial court clearly erroneous in finding that the nutrient profile formula was misappropriated?

II. Misappropriation of a Trade Secret

Where a trade secret is at issue, we must next determine whether ConAgra misappropriated the secret. Misappropriation of a trade secret is defined at Ark. Code Ann. § 4-75-601 as:

(A) Acquisition of a trade secret of another by a person who knows or who has reason to know that the trade secret was acquired by improper means; or
(B) Disclosure of use of a trade secret of another without express or implied consent by a person who:
(i) used improper means to acquire knowledge of the trade secret; or
(ii) at the time of disclosure or use, knew or had reason to know that his knowledge of the trade secret was:
(a) derived from or through a person who had utilized improper means to acquire it;
(b) acquired under circumstances giving rise to a duty to maintain its secrecy or limits its use; or
(c) derived from or through a person who owed a duty to. the person seeking relief to maintain its secrecy or limits its use; or
(iii) Before material change of his position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake.

Id.

ConAgra’s actions clearly constitute misappropriation of a trade secret. Purtle knew or had reason to know that giving the confidential nutrient profile to ConAgra constituted a conversion of the trade secret for ConAgra’s benefit by improper means. Fie understood the nutrient profile to be “confidential” and in limited distribution within Tyson, but still gave it to ConAgra nutritionists for use in order to reduce costs. Purtle’s misappropriation of the nutrient formula was a breach of his agreement with Tyson to keep that information confidential. His former position at Tyson as the Senior Vice-President of Retail Sales at Tyson gave him access to confidential trade secrets. He handed over those trade secrets to ConAgra immediately after being hired, a blatant misappropriation and abuse of his former position at Tyson.

It seems clear to me that the trial court’s findings that the nutrient profile was a trade secret, that the trade secret was misappropriated and delivered to a competitor, and that this misappropriation of a trade secret damaged Tyson in a substantial amount are all supported by the evidence. I cannot find an instance where those findings were “clearly erroneous.”

For that reason, I believe we should reverse the trial court on its erroneous interpretation of the principles of law articulated in our decision in Tyson I, and reinstate the trial court’s findings and the jury verdict. Because the majority concludes otherwise, the majority did not discuss the issue of a possible remittitur, and I will also refrain from addressing that issue.

I respectfully dissent.

         Purtle had been employed by Tasty Bird, which was acquired by Tyson in 1984.

       “Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
      (A) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (B) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.