A California federal judge has dismissed a lawsuit by the olive oil distributor Veronica Foods against a former employee and the rival company he went to work for, citing a lack of evidence that its trade secrets were taken or, for that matter, secret.
Veronica Foods‘ allegations of the particular trade secrets that defendants misused are largely conclusory — an everything-but-the-kitchen-sink assertion.
Veronica Foods, which supplies more than 800 specialty shops across North America, according to its complaint, alleged that former employee, Kurt Ecklin, shared trade secrets in the form of customer lists, confidential business information, and supplier lists with his new employer (and co-defendant), MillPress Imports in violation of both the U.S. Defend Trade Secrets Act, and the California Uniform Trade Secrets Act.
Millpress Imports and Ecklin moved to have the case dismissed for failure to provide sufficient evidence to support Veronica’s claims. On June 29, U.S. Magistrate Judge Joseph C. Spero accepted the motion to dismiss but gave Veronica Foods until July 31, 2017 to amend their complaint for a second time.
While the June 29 decision deals only with the question of whether to accept the motion to dismiss, it contains a detailed (some might say long-winded) analysis of the facts in the case and whether the material in question did constitute trade secrets, given that much of the information is publicly available.
In his criticism of the action as filed, Judge Spero said, “Here, Veronica Foods‘ allegations of the particular trade secrets that defendants misused are largely conclusory — an everything-but-the-kitchen-sink assertion that defendants ‘have made improper and unauthorized use of Veronica Foods’s customer list, supplier list, and confidential business information’ to solicit customers…. Such ‘naked assertions’ and ‘conclusions’ are not the sort of factual allegations that the court must accept as true at the pleading stage.”
The judge gave Veronica Foods until July 31 to file a second amended complaint, saying “the mere fact that MillPress began selling oil and vinegar to stores previously supplied by Veronica Foods is to be expected from a new wholesaler entering the market,” and is not in and of itself evidence of trade secret violation.