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