B&P Littleford, LLC v. Prescott Machinery, LLC

          ORDER GRANTING MOTION FOR SUMMARY JUDGMENT

          THOMAS L. LUDINGTON UNITED STATES DISTRICT JUDGE.

         On May 7, 2018, Plaintiff B&P Littleford, LLC (“B&P”) filed a nine-count complaint against Defendants Prescott Machinery, LLC (“Prescott”) and Ray Miller. On April 24, 2019, a stipulation was entered that dismissed Counts 2 and 4 through 9 of Plaintiff's Complaint. The stipulation further granted Plaintiff leave to file an Amended Complaint to include only Count 1 (Violation of the Federal Defend Trade Secrets Act) and Count 3 (Violation of the Michigan Uniform Trade Secrets Act) of the initial Complaint. ECF No. 44 at PageID.981.

         I.

         A.

         According to its Complaint, Plaintiff designs and manufactures “a wide variety of highly engineered mixers, dryers, extruders, compounders, kneaders, reaction vessels, Podbielniak Centrifuges, and centrifugal separation equipment for manufacturing applications.” ECF No. 1 at PageID.3. From 1911 to 1987, Plaintiff B&P was incorporated as Baker Perkins, Inc. ECF No. 45 at PageID.984. In 1987, Baker Perkins merged with APV Chemical Machinery and became known as “APV”. Id. Defendant Miller was APV's General Manager until 1995 when APV sold its chemical division to an entity newly formed by Miller and others, B&P Process Equipment and Services, LLC (“B&P”). Id.

         Miller was employed at B&P in various capacities, including as a board member and B&P's President and Chief Executive Officer. ECF No. 1 at PageID.4. Miller's employment gave him access to B&P's confidential and trade secret information. Id. at PageID.5. In 2008, Miller's employment at B&P ended. Id. According to Plaintiff, Miller was terminated “after some questionable activities.” ECF No. 78-2 at PageID.2785. More specifically, because he “breached his fiduciary, contractual and other duties to B&P, caused B&P to write checks to a company in which Miller had an interest…, misappropriated opportunities of B&P, and engaged in other wrongful actions and inactions.” Id. at PageID.2794-2795. As part of his termination, he entered into a confidential settlement and release agreement with Plaintiff in which he represented

Since July 31, 2008, [Miller] has not had and does not have physical possession of or access to any customer lists, software, records, manuals, equipment, drawings, blue prints, or confidential proprietary information of or about B&P, whether hard copy or electronic. Nor has Miller given any such materials or information to any other person for any purpose other than to advance the business interests of B&P.

         ECF No. 1 at PageID.6. Soon after ending his employment with Plaintiff in 2008, Miller started the company Prescott Machinery, LLC where he currently serves as its president. Id.

         B.

         A few years after Miller stopped working for Plaintiff, Plaintiff learned that Miller had misappropriated a number of Plaintiff's trade secrets. In 2012, Plaintiff's Director of Engineering, Timothy Coughlin, prepared an affidavit in which he compared two drawings from Prescott (Exhibits 1 and 2) with two drawings from B&P (Exhibits 3 and 4). Coughlin testified that:

Exhibits 1 and 2 were generated from B&P drawings of Exhibits 3 and 4…[I]t is difficult to believe that Exhibits 1 and 2 could have been specified, engineered and detailed without using B&P prints as a source of such information…[M]y reasons are as follows:

• The parts are nearly identical. Where they differ are in seemingly unimportant details that would generally be overlooked during modeling;

• That the location of most dimensions and notes are nearly identical;

• That the wording of individual notes is nearly identical;

• That tolerances are identical;

• That there is generally no technique to reverse-engineer tolerances;

• That surface finishes are identical;

• That the material call-out and coating call-out are very specific and used for only one process;

• That the material call-outs are identical to the B&P material call-outs; …

[T]he similarities in these exhibits clearly indicate that B&P digital information was utilized by Prescott Machine, to produce the drawings provided to B&P's vendor, who subsequently provided such drawings to B&P;

That I have been advised that Ray Miller is a principal of Prescott;

That I am advised that Ray Miller was previously CEO of B&P and had access to B&P's confidential information, including access to digital data from which B&P drawings could be reproduced.

         ECF No. 78-2 at PageID.2837-2838.

         Plaintiff consulted with the FBI on several occasions in 2013, 2014, and 2015 regarding Plaintiff's suspicions of Miller's misappropriation of trade secrets. ECF No. 84 at PageID.3271. It provided a list of at least eight incidents of misappropriation since 2012 in a complaint that it later filed with the FBI. It provided:

1. In 2012 Ray Miller requested a quote from a B & P Vendor for a funnel support…This occurred again with Metaltek in 2014.

2. In 2013 Ray Miller and Robin Aurs rebuilt a B & P machine for Dow. They indicated that they could provide spare parts and bring the machine to OEM specifications. This could not be done without B & P drawings.

3. In 2013 there was evidence that Cygnys had drawings from Prescott Machinery. These drawings were not shared with B & P because the President of Cygnys indicated that he had a non-disclosure agreement with Prescott.

4. In November of 2013, Robin Aurs of Prescott Machine contacted a customer indicating that he could repair B & P gear boxes. This particular customer has had gear boxes from B & P. Mr. Aurs also indicated that ...