United States District Court, W.D. Arkansas, Fayetteville Division
MEMORANDUM OPINION AND ORDER
TIMOTHY L. BROOKS UNITED STATES DISTRICT JUDGE.
before the Court are Defendants United Industries, Inc.'s
("United") and Wesley Paulin's Motion for
Partial Summary Judgment (Doc. 34), Brief in Support (Doc.
35), and Statement of Material Facts Not In Dispute (Doc.
36); Plaintiff 3A Composites USA, Inc.'s ("3A")
Brief in Opposition (Doc. 46) and Statement of Disputed
Material Facts (Doc. 47); and the Defendants' Reply (Doc.
51). For the reasons given below, the Defendants' Motion
the second lawsuit in this Court between these parties. As
this Court recounted in the previous lawsuit:
and United are competing manufacturers of graphic arts
polystyrene display board ("Board"). 3A is
headquartered in Statesville, North Carolina, and employs
roughly 2, 700 people. United is headquartered in
Bentonville, Arkansas, and employs roughly 100 people.
One of the raw components of Board is something called
"thick foam." Until nearly 2007, both 3A and United
purchased thick foam from outside suppliers. However, at some
point around a decade and a half ago, 3A began exploring the
feasibility of producing thick foam in-house.
In 2005, 3A formally launched a project to develop its own
thick foam production line. 3A retained an outside consultant
named Ed LeDucto help with the project. The parties disagree
somewhat on the scope of Mr. LeDuc's oversight, but there
is no doubt that he played a critical role in the line's
development and had a significant amount of responsibility.
The project development team also had members who were 3A
employees- one of whom was Mr. Paulin: 3A's Product
Development Manager. Mr. Paulin was the "startup
manager" of this particular project.
In December 2006, 3A successfully produced its desired
quality of thick foam and began selling thick foam to United.
From then until 2013, 3A was United's primary supplier of
thick foam. During this period, Mr. LeDuc continued providing
ad hoc assistance to 3A with refinement or
troubleshooting of its thick foam line. Mr. Paulin remained
employed at 3A until his resignation in December 2008.
In 2011, United began exploring the possibility of developing
its own thick foam line. United's President, John Ferm,
met with Mr. LeDuc several times that year and ultimately
decided to retain Mr. LeDuc as a consultant for that project.
Mr. LeDuc played essentially the same role in the development
of United's thick foam line as he had played in the
development of 3A's thick foam line, and the two foam
lines were essentially identical, albeit with minor
differences. In June 2012, after learning that United was
developing a thick foam line, 3A issued notice to United that
it was cancelling their thick foam supply agreement. In late
2012, United hired Mr. Paulin on Mr. LeDuc's
recommendation for the position of extrusion manager. Upon
his hiring, Mr. Paulin began assisting Mr. LeDuc in the
development of United's thick foam line.
On February 1, 2013, United received a cease-and-desist
letter from 3A, in which 3A informed United that Mr. Paulin
owed a duty of confidentiality to 3A pursuant to a contract
he had signed while employed there ("Confidentiality
Agreement"). This was the first time that United learned
of the existence of Mr. Paulin's Confidentiality
Agreement. 3A also asserted that Mr. LeDuc owed 3A a duty of
confidentiality. 3A contended that the technology and
processes associated with its thick foam line were trade
secrets, and demanded that United, Mr. LeDuc, and Mr. Paulin
cease their efforts at copying its thick foam line. United
countered that the information at issue was neither
confidential nor a trade secret, that no one was violating
any legal duties, and that it would not stop developing its
own thick foam line. Mr. Paulin remains employed in the same
role at United today.
3A Composites USA, Inc. v. United Indus., Inc. ("3A
Composites /"), 2015 WL 5437119, at *1-*2 (W.D.
Ark. Sep. 15, 2015).
filed the first lawsuit against United and Mr. Paulin on May
31, 2013, in the United States District Court for the Western
District of North Carolina. Id. at *2. In that
lawsuit, 3A brought claims for breach of contract against Mr.
Paulin, tortious interference with contract against United,
misappropriation of trade secrets against both Defendants,
and deceptive trade practices against both Defendants.
Id. Venue was transferred to this Court on May 15,
September 15, 2015, this Court entered an Order in 3A
Composites I, granting the Defendants summary judgment
on 3A's claims for tortious business interference and
deceptive trade practices, but permitting 3A's contract
and trade secrets claims to proceed to trial. See
Id. at *8. Then on November 12 of that year-four days
before trial was set to begin-3A moved to dismiss its
remaining claims without prejudice. 3A Composites I,
Case No. 5:14-cv-5147, Doc. 136. The reason 3A gave for
filing that motion at such a late date was that 3A's
executives had only recently learned of new allegedly
actionable activities by the Defendants. See Id. at
Doc. 132, ¶ 2. 3A maintained that its executives were
prevented from learning this information earlier, because the
Defendants had produced it in discovery subject to an
"Attorneys' Eyes Only" designation. See
Id. at Doc. 133, p. 1. The Court granted 3A's motion
pursuant to the Defendants' stipulation, with certain
conditions. See Id. at Doc. 136. The general thrust
of the conditions was that the new case must be filed in this
Court, and that while there would necessarily be a great deal
of overlap in the two cases' claims, great care should be
taken to avoid duplicative discovery and motion practice.
opened this new case by filing its Complaint (Doc. 1) on
January 27, 2016. 3A's new Complaint reasserted its old
claims for breach of contract, tortious interference with
contract, and misappropriation of trade secrets, but in
addition to 3A's old factual predicate regarding thick
foam, it contained additional allegations regarding a 3A
product called "Gatorfoam, " which 3A contends is
"the industry's leading heavy-duty foam board,
" and is "comprised of Graphic Arts Thick Foam
bonded between two resin-impregnated paper facers."
See Doc. 1, ¶ 25. As with its older allegations
regarding thick foam, 3A alleges that United induced ...