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North American Lubricants v. Shane A. Terry

January 13, 2012

NORTH AMERICAN LUBRICANTS COMPANY, PLAINTIFF,
v.
SHANE A. TERRY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Gregory G. Hollows United States Magistrate Judge

ORDER

Presently before the court is plaintiff's motion to withdraw admissions, which was filed on December 1, 2011 and came on regularly for hearing on January 12, 2012. (Dkt. No. 42.) On January 5, 2012, the parties filed their joint statement regarding the discovery disagreement pursuant to E.D. Cal. L.R. 251 (dkt. nos. 63, 64*fn1 ), along with declarations by counsel (dkt. nos. 62, 66).

At the hearing, Robert Weems appeared on behalf of plaintiff, and Matthew Ruggles and Eric Ostrem appeared on behalf of defendants. Having reviewed the parties' joint statement, the court's record in this matter, and the applicable law, the court now issues the following order.

BACKGROUND

Facts Giving Rise to the Litigation

The background facts are taken from the operative complaint filed on May 13, 2011. (Dkt. No. 1.) Plaintiff North American Lubricants Company ("NALC") is a manufacturer and wholesale distributor of lubricating oils, primarily passenger car motor oil in the "do it for me" market. (See Complaint, Dkt. No. 1 ["Compl."] ¶ 31.) NALC services its customers through a network of authorized blenders, distributors and/or dealers of its products and services. (Compl. ¶ 44.) These customers market, sell, install, and maintain plaintiff's products for their customers, but these entities may also market, sell, install, and maintain products manufactured by plaintiff's competitors. (Id.)

Defendant Shane Terry was the president of NALC from November 2005 until he resigned on January 26, 2011 and formed a new company, defendant United Petroleum Company, LLC ("UPC"), which offers products and/or services that compete with NALC. (Compl. ¶¶ 8, 45, 45, 47, 49.) At least two of NALC's former national account sales managers, defendants Goldman and Hensing, also joined UPC in the first half of 2011. (Compl. ¶¶ 10, 11.) The remaining defendants are other executives, members, and/or directors of UPC. (Compl. ¶¶ 13-16.)

In this action, NALC alleges that defendants committed a variety of wrongful conduct, including defendants Terry, Goldman, and Hensing accessing and transmitting NALC's confidential information to one or more of defendants before leaving their employment with NALC; soliciting NALC's employees and customers; using NALC's customer contact information, customer account information, and sales and pricing data; and using logos, advertising, and trade dress for UPC products that are confusingly similar to NALC's trademark and advertising. (Compl. ¶¶ 47-48, 59, 99-101, 109, 116.) NALC asserts the following causes of action: (1) violation of the Computer Fraud and Abuse Act; (2) violation of the Arizona Trade Secrets Act; (3) misappropriation/conversion; (4) breach of contract; (5) breach of implied covenant of good faith and fair dealing; (6) tortious interference with contract; (7) unfair competition (Lanham Act sections 32 and 43(A)); (8) unfair competition (common law); (9) unfair business practices; and (10) breach of fiduciary duty by corporate officers/managers. (Compl. ¶¶ 94-172.)

The parties have already held the Fed. R. Civ. P. 26(f) conference and commenced discovery.

Facts Related to the Discovery Dispute On October 13, 2011, defendants served plaintiff with its Requests for Admission, Set One, ("RFAs") by mail, containing the following 13 requests:

1. The identities of the customers YOU allege are YOUR trade secret are READILY ASCERTAINABLE BY PROPER MEANS.

2. The identities of the suppliers that YOU allege are YOUR trade secret are READILY ASCERTAINABLE BY PROPER MEANS.

3. No DEFENDANT MISAPPROPRIATED any information YOU contend is a TRADE ...


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