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Innovation Ventures, L.L.C. v. Custom Nutrition Laboratories, L.L.C.

United States District Court, E.D. Michigan, Southern Division

April 6, 2017

INNOVATION VENTURES, L.L.C. f/d/b/a/ LIVING ESSENTIALS, Plaintiff/Counter-Defendant,
v.
CUSTOM NUTRITION LABORATORIES, L.L.C., Defendant, and NUTRITION SCIENCE LABORATORIES, LLC, and ALAN JONES, Defendants/Counter-Plaintiffs.

          ORDER GRANTING PLAINTIFF'S MOTION (DKT. 317) TO DISMISS DEFENDANT NSL'S AND DEFENDANT JONES'S COUNTERCLAIMS (DKTS. 188 & 189)

          TERRENCE G. BERG, UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         This is breach of contract case that involves the liquid energy supplement 5-hour ENERGY®. Plaintiff Innovation Ventures, the manufacturer of 5-hour ENERGY®, alleges that, among other things, Defendants Custom Nutrition Laboratories (“CNL”), Nutrition Science Laboratories (“NSL”), and Alan Jones breached an agreement with Plaintiff not to produce energy shots containing ingredients from the Choline Family. Defendants NSL and Jones have asserted counterclaims alleging that Plaintiff has violated federal antitrust laws; that Plaintiff's formula is not confidential; that the restrictive covenant in the agreement Defendants allegedly breached is an illegal restraint on trade; and that Plaintiff is wrongly attempting to hold NSL liable for CNL's obligations. Plaintiff has moved to dismiss NSL's and Jones's counterclaims. NSL and Jones oppose the motion. For the reasons below, Plaintiffs motion is GRANTED and the counterclaims are DISMISSED.

         II. BACKGROUND

          The parties have a long and acrimonious history that need not be recounted in detail here. It is enough to note that Plaintiff makes 5 Hour Energy, Dkt. 219, Pg. ID 9, 179, and CNL is a Texas company that Plaintiff hired to produce its energy shot. Dkt. 219, Pg. ID 9, 180. Defendants NSL and Jones assert in their counterclaims that Defendant CNL developed the first formula that Plaintiff used for the shot. They make a number of other counter-allegations as well, including that Plaintiff allegedly:

■ Obtained the original formula by falsely claiming it needed the formula for insurance purposes;
■ Claimed that it owned the formula;
■ Signed a contract with CNL for the long-term production of the shot;
■ Went behind CNL's back and found another supplier;
■ Sent a representative to CNL's production facility to learn CNL's production process;
■ Gave CNL's formula to the other supplier;
■ Told the other supplier how CNL produced the shot;
■ Placed several large orders with CNL;
■ Caused CNL to create a large inventory;
■ Terminated its contract with CNL;
■ Refused to pay for the inventory CNL had produced (which meant CNL was left with almost no money because it had spent most of it producing the inventory);
■ Forced CNL to go to court in Texas to attempt to recover its money;
■ Ran up litigation costs to the point that CNL was near ...

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