Meyn America, LLC v. Tarheel Distributors, Inc.

36 F. Supp. 3d 1395, 2014 WL 3824313, 2014 U.S. Dist. LEXIS 106256
CourtDistrict Court, M.D. Georgia
DecidedAugust 4, 2014
DocketCivil Action No. 5:14-CV-41(MTT)
StatusPublished
Cited by4 cases

This text of 36 F. Supp. 3d 1395 (Meyn America, LLC v. Tarheel Distributors, Inc.) is published on Counsel Stack Legal Research, covering District Court, M.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Meyn America, LLC v. Tarheel Distributors, Inc., 36 F. Supp. 3d 1395, 2014 WL 3824313, 2014 U.S. Dist. LEXIS 106256 (M.D. Ga. 2014).

Opinion

ORDER

MARC T. TREADWELL, District Judge.

This is a diversity case in which the Plaintiff alleges violations of the Georgia Trade Secrets Act of 1990, O.C.G.A. §§ 10-1-760 et seq. (“the Act” or “GTSA”), and related claims arising out of the Defendants’ acquisition of drawings the Plaintiff uses to manufacture parts for poultry processing machines. Defendant Joseph P. Zajac moves to dismiss (Doc. 15) the Plaintiff’s amended complaint (Doc. 14) under Fed.R.Civ.P. 12(b)(2) for lack of personal jurisdiction. Both Defendants also argue the Plaintiff has failed to state a claim for relief under Fed.R.Civ.P. 12(b)(6). For the following reasons, the motion is GRANTED in part and DENIED in part.

I. FACTS

A. The Parties

The Plaintiff is a Georgia limited liability company with its principal place of business in Ball Ground, Georgia. (Doc. 14, ¶ 10). It is a wholly-owned subsidiary of Meyn LLC, also a Georgia limited liability company. Meyn LLC is a wholly-owned subsidiary of Meyn Beheer BV, a company that is incorporated and has its principal place of business in the Netherlands. Meyn Beheer BV is owned by yet another Dutch company, Meyn Holdings BV, which also is incorporated and has its principal place of business in the Netherlands. (Doc. 14, ¶¶ 19-20). The Plaintiff, like the other Meyn companies, manufactures, sells, and services poultry processing machines and parts. (Doc. 14, ¶¶ 11, 21).

Tarheel Distributors Inc. is a North Carolina corporation with its principal place of business in Sanford, North Carolina. (Doc. 14, ¶ 12). The company was founded in 1991 and specializes in aftermarket replacement parts for manufacturing industries. Although it initially targeted the textile industry, in recent years it has turned its focus to poultry processors. (Doc. 14, ¶ 13). Zajac is the president of Tarheel and is its primary decision maker. He is a Raleigh, North Carolina resident. (Doc. 11, ¶ 1; Doc. 14, ¶¶ 15-16). He does not personally transact business in Georgia, nor does he own or possess personal or real property in Georgia. (Doc. 11, ¶¶ 5-7). His only travel to Georgia since 2008 has consisted of “a few connecting flights” at the Hartsfield-Jackson Atlanta International Airport and one day at a poultry trade show. Otherwise, he has not traveled to Georgia for purposes of marketing or selling Tarheel’s replacement parts. (Doc. 11, ¶ 4).

[1400]*1400B. Background Events

In June 2006, Meyn Holding BV purchased Systemate Group, BV, a company that also made and sold poultry processing machines and parts. (Doc. 14, ¶ 23). Systemate owned Dapec Inc., and on the date it was purchased, Systemate sold all of Dapec’s stock to Meyn Beheer BV, which in turn passed the stock to Meyn LLC, the sole owner of the Plaintiff. (Doc. 14, ¶ 24). In October 2006, Dapec was merged into the Plaintiff so that the Plaintiff was the only surviving entity. At that point, the Plaintiff owned all of Da-pec’s assets, which included a number of drawings for machine parts as well as drawings indicating how the parts fit together into machines. The drawings had Systemate’s name on them. (Doc. 14, ¶¶ 25, 26).

In 2008, the Plaintiff began to “adapt” the Systemate drawings for Dapec machines and parts. A former Dapec employee, Doug Lee, who had become an employee of the Plaintiff after the merger, worked on the project. (Doc. 14, ¶¶ 28-29). Lee’s work gave him access to the drawings, which provide the blueprint the Plaintiff uses to make the parts and machines it sells to customers. (Doc. 14, ¶¶ 4, 29). The Plaintiff took steps to ensure the drawings remained confidential by storing them on a password-protected computer system. (Doc. 14, ¶33). If the drawings had to be disclosed, the Plaintiff deleted certain information so they could not be used to make the depicted part. In other circumstances, the Plaintiff required the recipient to sign a nondisclosure agreement. (Doc. 14, ¶ 34). The Plaintiff did not sell the drawings or make them available as a collection to third parties. (Doc. 14, ¶35). In the hands of a third party, the drawings would enable a competitor to undercut the Plaintiff by selling the parts at a lower price because the competitor would not incur research and development expenses associated with designing and testing the parts. (Doc. 14, ¶ 37).

In 2009, as the project to adapt the drawings was ending, the Plaintiff fired Lee. (Doc. 14, ¶ 31; Doc. 12, ¶ 5). Before leaving his job, Lee signed an agreement in which he promised he had returned all of the Plaintiff’s confidential information or other property. (Doc. 14, ¶ 32; Doc. 1-1). He further promised he would not personally or on behalf of another company use or disclose “any trade secrets, confidential or competitive business information [he] may have acquired during [his] relationship with [the Plaintiff].” (Doc. 1-1 at 3). Lee then began looking for work elsewhere in the industry and discovered Ta-rheel. (Doc. 12, ¶ 5).

At that time, Tarheel’s aftermarket replacement parts business model involved obtaining sample parts from end-users. Tarheel then sent the part to a Taiwanese company, O E Co., Ltd., which would try to reverse engineer it. If successfully reverse engineered, Tarheel could then make and sell the part for replacement in Dapec equipment. In 2009, Tarheel offered some 60 Dapec replacement parts. (Doc. 14, ¶¶ 5-6, 40).

After speaking by phone with Zajac, Lee traveled to North Carolina in August 2009 for two in-person interviews. (Doc. 12, ¶ 5). While interviewing, Zajac asked Lee whether he had entered into any agreements with the Plaintiff that would restrict his employment with Tarheel. Lee said he had not. Nor during the interview, according to Lee and Zajac, did they discuss the drawings.1 (Doc. 11, ¶ 9; Doc. 12, ¶ 6). [1401]*1401However, after he was hired and started working at Tarheel, Lee showed Zajac some of the drawings. Both men assert that Lee told Zajac the drawings were not a trade secret or in any way confidential. (Doc. 11, ¶ 10; Doc. 12, ¶ 7). Lee says he believed this to be true. (Doc. 12, ¶ 7). Lee also met with the principal of O E Co., Webster Huang. Following this meeting, which also included Zajac, Zajac informed Tarheel employees that Lee had brought with him the drawings for every Dapec part. (Doc. 14, ¶ 42). Zajac later told employees and contractors that Tarheel was now able to make any Dapec replacement part because of the drawings it had acquired from Lee, and that Tarheel was going to “make a lot of money” off the drawings. (Doc. 14, ¶ 43).

In the years that followed, Lee sent emails to Huang attaching the Plaintiffs drawings so that Huang could manufacture the depicted parts without having to reverse engineer them. ,Zajac was routinely copied on the emails. (Doc. 14, ¶ 44). Sometimes Lee sent the drawings to Huang immediately after a Tarheel salesperson had let him know a customer needed the replacement part. (Doc. 14, ¶ 45). Meanwhile, the frequency of Tarheel’s reverse engineering requests to Huang declined. (Doc. 14, ¶ 46).

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36 F. Supp. 3d 1395, 2014 WL 3824313, 2014 U.S. Dist. LEXIS 106256, Counsel Stack Legal Research, https://law.counselstack.com/opinion/meyn-america-llc-v-tarheel-distributors-inc-gamd-2014.