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TCS shares up 1% after US court halves penalty charges to $140 million in Epic Systems case

TCS shares up 1% after US court halves penalty charges to $140 million in Epic Systems case

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By CNBCTV18.com  IST (Published)

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Shares of Tata Consultancy Services (TCS) gained over 1 percent in trade on Tuesday after the IT services company said that the the punitive damages levied on the company in the Epic Systems Corporation case in the US has been lowered to $140 million.

Shares of Tata Consultancy Services (TCS) gained over 1 percent in trade on Tuesday after the IT services company said that the the punitive damages levied on the company in the Epic Systems Corporation case in the US has been lowered to $140 million.
The upward movement in the stock comes as good news for the company which has been seeing a constant dip in the market. The IT major had earlier slumped 11 percent and hit a 52-week low of Rs 3,023.35  in the second week of June.
“TCS is legally advised that it has strong arguments in its favor before the Appeal Court and the Order on the punitive damages is not supported by the facts presented by TCS before the Trial Court. We have been advised that the Order and the Judgement (when issued) is appealable to the US Court of Appeals, 7th Circuit Chicago," TCS said in an exchange filing.
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What was the Epic Systems case?
In 2014, Epic Systems accused TCS of stealing its intellectual property and developing its own product. Epic won a jury award of $940 million in 2016. Epic had alleged that TCS, which had been hired to implement healthcare software stole 6,000 files with a fake ID by posing as a staff member rather than a consultant.
In 2017, the Wisconsin court judge lowered the compensatory and punitive damages amount to $420 million. The punitive damages were then held to be excessive after TCS appealed it with the US Court of Appeals, 7th Circuit, Chicago, and the trial court was told to reassess it.
A US Court of Appeals determined in August 2021 that the $280 million ($2,098 crore) punitive damages award was "constitutionally disproportionate" and lowered damages to $140 million. According to the company's statement, this ruling has now been officially formalised.
Epic Systems is a private firm, headquartered in Wisconsin's Verona. The company is a top supplier of medical records software used in hospitals and other healthcare facilities around the United States.
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