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Canandaigua Wine Co. v. Moldauer

June 2, 2009


The opinion of the court was delivered by: Oliver W. Wanger, United States District Judge



Before the court for decision is Plaintiff Canandaigua Wine Company's motion for voluntary dismissal pursuant to Federal Rule of Civil Procedure 41(a)(2). Doc. 87. Defendant opposes dismissal. Doc. 96.


It is undisputed that Plaintiff and its parent company, Constellation Brands, are involved in the grape business and produce wine and non-alcoholic grape juice concentrate. In September 2000, Mr. Moldauer began working as a financial analyst at the Mission Bell Winery owned by Plaintiff. In connection with his employment at Plaintiff's facility, Plaintiff informed the Immigration and Naturalization Service ("INS") that it was Defendant's employer. In early 2002, Defendant was terminated for, according to Plaintiff, his "continuing pattern of insubordination." Doc. 88 at 1.

It is undisputed that two months after his dismissal, Mr. Moldauer posted accusations of accounting fraud and retaliatory termination in a series of messages on an electronic "bulletin board" hosted by Yahoo!, Inc., that covers Plaintiff's parent company, Constellation Brands. For example, on December 5, 2002, Mr. Moldauer posted the following message:

Re: cooking the books???

I hear that their west coast operation is cooking the after questioning certain practices. books according to a former analyst that was fired

See Doc. 88 at 2.

In early December 2002, someone anonymously sent Plaintiff's confidential price and customer lists to Plaintiff's principal competitor. Evidence gathered during the course of an investigation by the Madera County Sheriff's Department ("MCSD"), including a video-surveillance tape showing Mr. Moldauer at a Kinko's copy shop in Fresno at the time the price and customer lists were faxed from that shop to Plaintiff's competitors, confirmed that Mr. Moldauer was responsible for the anonymous dissemination. Based on evidence seized from Mr. Moldauer's apartment, and other information gathered by MCSD, a criminal complaint was filed by the Madera County District Attorney's office on December 31, 2002, and a warrant issued for Mr. Moldauer's arrest. However, Mr. Moldauer left the country on December 11, 2002. The criminal complaint remains pending.

On December 19, 2002, Plaintiff filed this lawsuit against Mr. Moldauer, asserting claims for theft and dissemination of trade secrets, as well as for damages caused by the defamatory internet postings. Based on Plaintiff's evidentiary showing, a temporary restraining order issued on the same day the lawsuit was filed: (1) prohibiting further dissemination of Plaintiff's confidential business information; (2) directing the United States Marshall to seize Mr. Moldauer's computers; and (3) directing Mr. Moldauer to disclose the details of all trade secret disclosures and to respond to certain specified discovery propounded by Plaintiff. Doc. 10.

To date, Mr. Moldauer has refused to provide any of the information required by the December 19, 2002 order, nor has he responded any subsequent discovery requests propounded by Plaintiff. Instead, Mr. Moldauer has invoked the Fifth Amendment.*fn1

Although Plaintiff maintains that "Mr. Moldauer's responsibility for the tortious and criminal conduct alleged in the Complaint is beyond serious dispute," Plaintiff believes it is "now obvious that no useful purpose will be served by further prosecution of this lawsuit [because] Mr. Moldauer will continue to ignore plaintiff's rights, this Court's directives, and applicable rules of procedure[]." Doc. 88 at 4. Moreover, "papers filed in connection with Mr. Weisberg's recent motion to withdraw confirm that Mr. Moldauer was unwilling and/or unable to pay his legal fees." Id. Plaintiff questions "the odds that plaintiff would ever see a single dime of any judgment entered against Mr. Moldauer in this case." Id.

Plaintiff endeavored to obtain a stipulation of dismissal regarding this lawsuit, but not the criminal complaint. Defendant rejected Plaintiff's proposal, stating in a letter:

I read the contents of FRCP 41 made available to me. The Rule generally requires that a Judge approve a dismissal. Given the Judge's recent interest in me that the Judge should be the person who decides upon "getting to the bottom" of the dispute, it appears to the fate of this action.


dismissal is appropriate...

Accordingly, I do not believe that a stipulated Doc. 88, Ex. B.

Defendant does not dispute any of the background facts set forth above. Instead, he provides an alternative explanation for his termination, asserting that his employment relationship with Plaintiff soured when he reported accounting irregularities in Plaintiff's concentrate business that distort the allocation of costs between wine and concentrate, resulting in over-stated income and/or understated inventory. Defendant asserts that the Constellation Group then "set Defendant up for dismissal" as follows:

An inquiry by an internal team from New York found no 'Final warning'. Defendant did not violate that final to terminate Defendant without cause, but delivered a irregularity. The Constellation Group claimed a right warning, but Plaintiff told the INS that the employment had been ...

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