## Facts

- M & H Drugs, Inc. operated a pharmacy (“Super D”) in Oxford, Mississippi; Fred’s Stores of Mississippi, Inc. and Fred’s, Inc. operated a competing pharmacy in the same market.
- Super D maintained an internal “I.R.S. list,” periodically printed, used to answer customer inquiries about annual prescription expenditures.
- The list compiled customer-identifying and contact data (name, address, phone) and non-public purchasing data (number of prescriptions and annual prescription spending).
- The list was stored in the pharmacy area, sometimes on the counter during frequent use; access to the pharmacy space was limited to designated pharmacy personnel and certain store employees when necessary.
- Erik Broome, Super D’s pharmacist/manager, accepted employment to manage Fred’s new Oxford pharmacy, gave notice, and later returned to the Super D pharmacy to collect personal items.
- During that return visit, Broome took the I.R.S. list and delivered it to Fred’s management.
- Fred’s used the list to mail promotional solicitations to roughly 1,000 Super D pharmacy customers.
- Super D asserted the list had independent economic value because the compiled prescription-volume and spending information could not be obtained through proper means and could be monetized for targeted marketing.

## Issues

1. Whether the I.R.S. list qualified as a “trade secret” under Mississippi’s trade secret statute.
2. Whether Broome’s removal of the list and Fred’s use of it to solicit Super D customers constituted misappropriation attributable to Fred’s.
3. Whether compensatory and punitive damages were supported by the evidence in a bench trial.

## Decision

- The Mississippi Supreme Court affirmed the judgment for M & H Drugs.
- The Court held the I.R.S. list was a protectable trade secret because it contained non-public, economically valuable compilation data and was subject to reasonable secrecy measures.
- The Court held Fred’s misappropriated the trade secret through Broome’s improper acquisition and Fred’s knowing use of the list to target Super D customers.
- The Court upheld compensatory and punitive damages, concluding the trial court’s findings were not manifestly wrong or clearly erroneous.

## Legal Principles

- A customer list may constitute a trade secret when it includes non-public, value-bearing compilation data (beyond readily ascertainable identities) and the owner uses reasonable measures to maintain secrecy.
- “Reasonable efforts” to maintain secrecy are assessed in context; imperfect handling practices do not necessarily defeat trade-secret status when access is materially restricted and the information is used internally.
- Misappropriation includes acquisition by improper means and use by a competitor with actual or constructive knowledge of the improper acquisition.
- Punitive damages may be sustained in a trade-secret case when the fact-finder can infer intentional, deceptive, or malicious conduct in the taking and use of the protected information.

## Conclusion

The court treated Super D’s detailed customer prescription-spending compilation as a trade secret and held that a competitor that obtained and used the list through a departing employee’s improper taking could be liable for both compensatory and punitive damages.


Fred's Stores of Miss., Inc. v. M & H Drugs, Inc., 725 So. 2d 902 (Miss. 1998)