Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 1 of 47
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE MIDDLE DISTRICT OF GEORGIA
`COLUMBUS DIVISION
`
`Plaintiff,
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`
`REFRESCO BEVERAGES US INC.,
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`
`
`vs.
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`CALIFORMULATIONS, LLC, SYMRISE
`INC., THE GREEN ORGANIC
`DUTCHMAN HOLDINGS LTD., 6003
`HOLDINGS LLC, EDMUND O’KEEFFE,
`TYRONE POLHAMUS, KHANH LY,
`JASON PONTES, DANA KLAYBOR,
`WANDA JACKSON, and KALEENA GEE,
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`
`
`Defendants.
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`*
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`*
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`*
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`CASE NO. 4:20-CV-181 (CDL)
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`O R D E R
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`Lawyers sometimes make matters unnecessarily complicated.
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`The Complaint in this action exceeds 600 paragraphs and 90 pages.
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`The briefing on the pending motions to dismiss, which required the
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`analysis of no evidence and should have been restricted to the
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`four corners of the complaint, consumed over 200 pages. Yet the
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`theory of the case that will necessarily be whittled down to its
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`essentials if and when it is presented to a lay jury is relatively
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`simple. Plaintiff (“Refresco”) maintains that its former
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`employees, while employed by Refresco’s predecessor-in-interest,
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`plotted with one of Refresco’s competitors to join this competitor
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`after the termination of their employment with Refresco’s
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`predecessor-in-interest and in violation of their employment
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`
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE MIDDLE DISTRICT OF GEORGIA
`COLUMBUS DIVISION
`
`Plaintiff,
`
`
`REFRESCO BEVERAGES US INC.,
`
`
`
`vs.
`
`CALIFORMULATIONS, LLC, SYMRISE
`INC., THE GREEN ORGANIC
`DUTCHMAN HOLDINGS LTD., 6003
`HOLDINGS LLC, EDMUND O’KEEFFE,
`TYRONE POLHAMUS, KHANH LY,
`JASON PONTES, DANA KLAYBOR,
`WANDA JACKSON, and KALEENA GEE,
`
`
`
`Defendants.
`
`*
`
`*
`
`*
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`*
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`*
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`*
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`*
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`*
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`CASE NO. 4:20-CV-181 (CDL)
`
`
`
`
`O R D E R
`
`Lawyers sometimes make matters unnecessarily complicated.
`
`The Complaint in this action exceeds 600 paragraphs and 90 pages.
`
`The briefing on the pending motions to dismiss, which required the
`
`analysis of no evidence and should have been restricted to the
`
`four corners of the complaint, consumed over 200 pages. Yet the
`
`theory of the case that will necessarily be whittled down to its
`
`essentials if and when it is presented to a lay jury is relatively
`
`simple. Plaintiff (“Refresco”) maintains that its former
`
`employees, while employed by Refresco’s predecessor-in-interest,
`
`plotted with one of Refresco’s competitors to join this competitor
`
`after the termination of their employment with Refresco’s
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`predecessor-in-interest and in violation of their employment
`
`
`
`
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 2 of 47
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`agreements with the intention of using the predecessor-in-
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`interest’s proprietary information for the benefit of that
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`competitor and future employer.1 According to Refresco’s
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`Complaint, this conduct gives rise to various claims against the
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`competitor, its affiliated investors, and the former employees.
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`These claims include misappropriation of trade secrets under
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`federal and state law, breach of contract, tortious interference
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`with contract and business relations, breach of fiduciary duty,
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`conversion, and theft of property.
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`Unable to resist what this Court has on occasion described as
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`the Twombly/Iqbal compulsion, Defendants filed an expansive motion
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`to dismiss every claim instead of targeting those that are truly
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`vulnerable to summary dismissal.2 For the reasons explained in
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`the remainder of this order, Defendants’ motions to dismiss (ECF
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`Nos. 46, 48, & 49) are denied as to Refresco’s claims for trademark
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`misappropriation, usurpation of corporate opportunity, breach of
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`the duty of loyalty, aiding and abetting, tortious interference
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`with contract, tortious interference with business relationships,
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`breach of contract as to all employees except Pontes and Ly, and
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`granted as to Refresco’s claims for breach of contract against
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`
`1 The preceding sentence shares some of the characteristics of the
`Complaint and briefing in this action. It is long and complicated.
`Whether it is unnecessarily so is subject to reasonable disagreement.
`As to the complaint and briefing, such a conclusion is doubtful.
`2 For a discussion of the Twombly/Iqbal compulsion, see Barker v. Columbus
`Regional Healthcare System, Inc., 977 F. Supp. 2d 1341, 1345-46 (M.D.
`Ga. 2013).
`
`2
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 3 of 47
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`Pontes and Ly, violations of the Georgia RICO Act, civil
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`conspiracy, violations of the Computer Fraud and Abuse Act, and
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`computer theft and trespass under O.C.G.A. § 16-9-93 et seq.
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`MOTION TO DISMISS STANDARD
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`“To survive a motion to dismiss” under Federal Rule of Civil
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`Procedure 12(b)(6), “a complaint must contain sufficient factual
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`matter, accepted as true, to ‘state a claim to relief that is
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`plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
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`(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
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`(2007)). The complaint must include sufficient factual
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`allegations “to raise a right to relief above the speculative
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`level.” Twombly, 550 U.S. at 555. In other words, the factual
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`allegations must “raise a reasonable expectation that discovery
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`will reveal evidence of” the plaintiff’s claims. Id. at 556. But
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`“Rule 12(b)(6) does not permit dismissal of a well-pleaded
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`complaint simply because ‘it strikes a savvy judge that actual
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`proof of those facts is improbable.’” Watts v. Fla. Int’l Univ.,
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`495 F.3d 1289, 1295 (11th Cir. 2007) (quoting Twombly, 550 U.S. at
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`556).
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`FACTUAL ALLEGATIONS
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`In deciding the pending motions to dismiss, the Court accepts
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`as true the following facts alleged by Refresco in its complaint.
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`3
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 4 of 47
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`I.
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`The Players
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`The Plaintiff in this action, Refresco Beverages US Inc.
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`(“Refresco”), is the successor-in-interest to Cott Beverages LLC
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`(“Cott Beverages”), which it acquired from Cott Holdings Inc. on
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`February 8, 2019. Compl. ¶ 27, ECF No. 1. No one seriously disputes
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`that Refresco has standing to assert claims that belonged to Cott
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`Beverages prior to this acquisition. Like Cott Beverage’s previous
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`operations, Refresco formulates, produces, manufactures, packages,
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`and distributes beverages and concentrates in the United States.
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`Id. ¶ 48. Also like Cott Beverages, Refresco offers various
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`“beverage-related services,” which include “developing new tastes
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`and flavors, formulation, product development and manufacturing
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`for delivery to retail locations.” Id. ¶ 49. Before acquiring
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`Cott Beverages, Refresco purchased the shares of another Cott
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`subsidiary, Cott Beverages Inc. (“Cott BI”), from Cott Corporation
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`on January 30, 2018.3 Id. ¶ 26. Between January 30, 2018 and
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`February 8, 2019, when Refresco acquired Cott Beverages, Cott
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`Beverages acted as an independent entity. Id.
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`One of Refresco’s competitors and a defendant in this action,
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`Symrise Inc., specializes in “developing and selling flavors and
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`scents, including flavors and scents for beverages.” Id. ¶ 1. In
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`3 Cott’s corporate structure is unclear from the parties’ briefing.
`After clarification during the Court’s hearing on the pending motions,
`the parties clarified that Cott BI and Cott Beverages were two wholly-
`owned subsidiaries of Cott Corporation, which changed its name to Cott
`Holdings prior to Refresco’s acquisition of Cott Beverages.
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`4
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 5 of 47
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`November 2017, Symrise launched what it described as a “beverage
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`incubator,” which it called Califormulations. Id. ¶¶ 1-2.
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`Califormulations was trumpeted as “an entirely new concept
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`offering a dedicated suite of product development services to
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`beverage entrepreneurs.” Id. ¶ 1. A business entity,
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`Califormulations, LLC, was formed in March 2019 by Symrise, The
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`Green Organic Beverage Corp. (“TGOBC”), and 6003 Holdings LLC to
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`implement this beverage incubator vision. Id. ¶ 53. Symrise owned
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`34% of Califormulations, LLC, which became a competitor of
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`Refresco.
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`Another defendant in this action, The Green Organic Dutchman
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`Holdings Ltd. (“TGOD”), was instrumental in the formation of
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`Califormulations. TGOD is a Canadian producer of organic cannabis
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`products.4 Id. ¶ 263. Its subsidiary, TGOBC, eventually became a
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`15% owner of Califormulations, LLC, and TGOD had a representative
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`on the Califormulations, LLC board. Id. ¶ 21. Before
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`Califormulations was formed, TGOD began communicating in 2018 with
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`Edmund O’Keeffe and Tyrone Polhamus, who were high level Cott
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`Beverages executives at the time and are defendants in this action,
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`about investing in a venture described at that time as
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`NewCo/Califormulations. Id. ¶¶ 10-13. O’Keeffe was the President
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`4 TGOD filed a separate motion to dismiss for lack of personal
`jurisdiction. The Court deferred ruling on this motion and ordered
`jurisdictional discovery. See Order (June 25, 2021), ECF No. 80. Thus,
`the issues raised in TGOD’s motion (ECF No. 54) will not be addressed
`in today’s ruling.
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`5
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 6 of 47
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`of Cott Beverages in 2018 but was terminated when Refresco
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`purchased Cott Beverages in 2019. Id. ¶¶ 393, 396. Polhamus was
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`the Vice President of Technical Services & Operations for Cott
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`Beverages but was terminated when Refresco purchased Cott
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`Beverages. Id. ¶¶ 399, 402. After their employment with Cott
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`Beverages ended, O’Keeffe became Chairman of the Board of
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`Califormulations, LLC and Polhamus became its President. Id. ¶¶
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`398, 403. Before departing Cott Beverages, Polhamus had access to
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`a safe deposit box holding Cott Beverages’s trade secrets. Id. ¶
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`400.
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`Five other former Cott Beverages employees who went to work
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`for Califormulations are also named as defendants in this action.
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`Three of them, Jason Pontes, Khanh Ly, and Wanda Jackson, joined
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`O’Keefe and Polhamus to form 6003 Holdings, which eventually
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`obtained a 51% ownership stake in Califormulations, LLC. Id. ¶¶
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`46-47. These former Cott Beverages employees had valuable
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`information and experience from their tenure at Cott Beverages.
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`Khanh Ly was a top research and development scientist for Cott.
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`Id. ¶ 404. In this role, Ly “gained a deep knowledge of the
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`company’s manufacturing infrastructure,” “developed significant
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`relationships with the company’s customers and suppliers,” and
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`“had access to and used confidential information and trade secrets”
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`such as beverage formulae and laboratory processes and procedures.
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`Id. ¶ 405. After Refresco acquired Cott Beverages in 2019, Ly
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`6
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 7 of 47
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`resigned from Refresco and began working for Califormulations.
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`Id. ¶¶ 406-07.
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`Jason Pontes was a plant manager for Cott Beverages. In this
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`role, Pontes was “responsible for plant management, concentrate
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`supply, and procurement activities of ingredients for the
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`facilities.” Id. ¶ 409. Pontes “developed significant
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`relationships with the company’s suppliers” and “had access to and
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`used confidential information and trade secrets.” Id. Pontes
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`resigned from Refresco in April 2019 and later joined
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`Califormulations. Id. ¶¶ 410-11.
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`Wanda Jackson was a material planner for Cott Beverages. Id.
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`¶ 416. She was responsible for “working with the company’s
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`suppliers to have sufficient inventory of raw materials at the
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`Columbus facility to meet production requirements” and had access
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`to and used confidential information. Id. ¶ 417. Jackson resigned
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`from Refresco in April 2019 and joined Califormulations, LLC. Id.
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`¶ 418.
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`The two other former Cott Beverages employees named as
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`defendants, Dana Klaybor and Kaleena Gee, had valuable experience
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`from their employment at Cott Beverages, but they had no ownership
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`interest in Califormulations, LLC. Klaybor started at Cott
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`Beverages as a senior laboratory technician and worked her way up
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`to Director of Lab Services. Id. ¶ 412. Klaybor was “responsible
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`for carrying out ingredient evaluations driven by supply issues
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`7
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 8 of 47
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`and/or cost reduction, providing plant quality support and product
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`development support, and formula management.” Id. ¶ 413. Klaybor
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`also developed significant expertise in areas important to Cott
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`and Refresco’s operations, including optimizing beverage formulas
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`in a plant setting, and had access to and used confidential
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`information about Cott and Refresco trade secrets. Id. ¶ 414.
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`Klaybor resigned from Refresco in April 2019. Id. ¶ 415.
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`Gee began working for Cott Beverages as a flavor development
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`expert and was later promoted to beverage scientist. Id. ¶ 419.
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`Gee oversaw flavor selection, evaluation, and beverage application
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`development. She also had access to confidential information and
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`trade secrets and “often used laboratory equipment and conducted
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`testing on ingredients, concentrates, syrups, and beverages.” Id.
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`¶ 420. Gee resigned from Refresco in April 2019 and joined
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`Califormulations. Id. ¶¶ 422-23.
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`O’Keeffe, Polhamus, and each of the other individual
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`defendants signed a “Confidentiality Undertaking and Restrictive
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`Covenants” agreement with Cott Beverages. Id. ¶¶ 369-75.
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`II. The Game
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`The Califormulations beverage incubator concept needed
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`partners. Cott Beverages was a natural prospect. But instead of
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`looking for a strategic partner, Refresco claims the
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`Califormulations allies had something more devious in mind.
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`A.
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`The Non-Disclosure Agreement between Cott and Symrise
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`8
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 9 of 47
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`Paul Graham and Michael Falkenberg, the President and Senior
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`Category Director of Symrise, began scouting for business
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`opportunities after Symrise launched the Califormulations beverage
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`incubator in November 2017. Id. ¶¶ 58-59. Graham contacted
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`O’Keeffe in 2017, before Refresco’s acquisition of Cott BI, to
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`discuss possible collaborations between Cott Beverages and
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`Symrise. Id. ¶ 61. After Refresco acquired Cott BI in 2018,
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`Graham and Falkenberg continued
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`discussing
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`a possible
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`collaboration with Cott Beverages, which remained independent and
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`was not sold to Refresco at that time. Id. ¶ 68. During this
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`time, O’Keeffe reported his contacts with Symrise executives to
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`his superiors at Cott Beverages. Id. By August 2018, O’Keeffe
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`and Polhamus knew that Refresco intended to purchase Cott Beverages
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`and that they likely would not be retained in their positions
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`following the acquisition. Id. ¶ 79.
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`Symrise and Cott Beverages eventually executed a non-
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`disclosure agreement in September 2018 to “protect information
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`disclosed by Cott Beverages and/or Symrise . . . in connection
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`with the consideration of a possible business relationship where
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`Cott Beverages LLC may provide services to [Symrise].” Id. ¶ 89.
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`The NDA stipulated that confidential information “will be used by
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`the Receiving Party solely for the purposes of evaluating whether
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`the Services will be provided, and if so, performing the Services
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`. . . and not for any other purpose.” Id. ¶ 91. A “Receiving
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 10 of 47
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`Party” could not disclose confidential information to third
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`parties. Id. ¶ 92. The NDA did not reference a “Project Road
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`Runner” or any work Cott Beverages would do for Symrise on behalf
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`of Symrise’s clients. Id. ¶¶ 94-95.
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`B.
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`NewCo and “Project Road Runner”
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`Soon thereafter, in October 2018, Falkenberg contacted
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`O’Keeffe and Polhamus to request help with a project for one of
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`Symrise’s customers. Id. ¶ 102. Polhamus forwarded this email to
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`Ly and Pontes. Id. ¶ 103. On November 12, 2018, O’Keeffe and
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`Polhamus participated in a conference call with Falkenberg and
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`Graham to discuss Califormulations and the possibility of creating
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`a new beverage company, which they initially called “NewCo.”5 Id.
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`¶¶ 104, 107. They also discussed Project Road Runner, which was
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`a code name for a beverage that one of Symrise’s customers (“Client
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`A”) wished to develop and for which Graham and Falkenberg wanted
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`O’Keeffe and Polhamus’s help. Id. ¶ 108. O’Keeffe did not report
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`this conference call to his Cott superiors. Id. ¶ 110. O’Keeffe
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`later prepared a “Concept to Shelf” memo with a “short overview on
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`the concept and strategic positioning of Newco,” which he described
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`as being founded by “beverage industry insiders with deep sector
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`experience.” Id. ¶¶ 111-12. O’Keeffe sent this memo to Falkenberg
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`and Graham in November 2018 from his personal email. Id. ¶ 114.
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`5 NewCo would eventually become Califormulations. Compl. ¶ 341.
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`10
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 11 of 47
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`O’Keeffe and Polhamus agreed to help Symrise on Project Road
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`Runner by developing a beverage formulation for the project to
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`benefit Client A, Symrise’s customer. Id. ¶¶ 122-23. Falkenberg
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`sent O’Keeffe and Polhamus documents from Client A, including a
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`development timeline, in connection with this project. Id. ¶ 120.
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`O’Keeffe and Polhamus recruited Ly for this project and used
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`employees, time, lab equipment, and materials of Cott Beverages to
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`develop the Project Road Runner beverage formulation. Id. ¶¶ 124-
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`25. Ly directly oversaw work done on Project Road Runner and
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`recruited Gee and a temporary employee, Michelle McGuire, to work
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`with him. Id. ¶¶ 126-27.
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`Ly deliberately concealed the work on Project Road Runner
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`from Jennifer Joiner, who assigned staffing on Cott’s research
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`projects, because he did not want Cott to learn about the work he
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`was doing. Id. ¶ 128. McGuire eventually began to fall behind on
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`her work for Cott. Id. ¶ 129. When Joiner inquired, McGuire said
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`she was working on a new beverage formulation and that “Ly had
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`told her . . . not to tell Joiner about Project Road Runner.” Id.
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`On January 30, 2019, Ly sent an email to Symrise which stated:
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`“Please find attached the formulations for the items that shipped
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`today for evaluation along with the supplier information. For
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`bulk materials we have multiple suppliers qualified, whereas the
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`unique ingredients are still work in process for qualifications of
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`suppliers and product evaluations.” Id. ¶ 136. Symrise, in turn,
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 12 of 47
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`provided these formulations to Client A. Id. ¶ 139. Ly, O’Keeffe,
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`and Polhamus knew this formula was developed “for the benefit of
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`Symrise and NewCo, not Cott Beverages.” Id. ¶ 135. Symrise never
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`paid Cott for this work. Id. ¶ 133.
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`C.
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`Project Shawshank and the “Secret Oils”
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`Meanwhile, O’Keeffe and Polhamus planned their exit from Cott
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`to NewCo/Califormulations with Symrise executives. Graham
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`solicited an outside consultant to develop a comprehensive
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`proposal for NewCo, the “Newco Slide Deck,” which was shared with
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`other Symrise executives and eventually forwarded to O’Keeffe and
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`Polhamus in December 2018. Id. ¶¶ 145-50. O’Keeffe began scouting
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`possible locations for a NewCo site in Columbus, Georgia, and
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`planned an in-person meeting with Polhamus, Graham, and Falkenberg
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`for January 3-4, 2019. Id. ¶¶ 163, 165. In an agenda for this
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`meeting, Polhamus referenced a “Project Shawshank.”6 Id. ¶ 167.
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`“Shawshank” and “NewCo” were used interchangeably to refer to the
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`plan to create a new beverage company. Id. ¶ 169.
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`During this time, Polhamus accessed some of Cott’s most
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`valuable trade secrets. Cott Beverages kept its ingredient lists,
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`formulas, and costing information for its most popular and
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`successful beverages within a safe deposit box in a bank in
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`Columbus, Georgia. Id. ¶¶ 224, 230. These formulations, known as
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`6 Refresco believes that Project Shawshank was named after “The Shawshank
`Redemption,” a film about a man’s plot to break out of prison.
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`12
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 13 of 47
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`the “Secret Oils Formulations,” are the “single-most valuable
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`category of beverage-related trade secrets possessed by Cott
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`Beverages, and later Refresco Beverages US.” Id. ¶ 226. There
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`was no ongoing business need to access the physical copy of the
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`Secret Oils Formulations in the safe deposit box because relevant
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`portions of the formulations, which could not be used to replicate
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`the formulations but could be used to produce them in the ordinary
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`course of business, were available on a Cott Beverages server.
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`Id. ¶ 233. Despite this, Polhamus accessed the safe deposit box
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`on November 29, 2018, only two weeks after Polhamus and O’Keeffe
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`“shared their Concept to Shelf memo with Symrise.” Id. ¶¶ 236-
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`37. Polhamus accessed the safe deposit box again on December 17,
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`2018. Id. ¶ 238. Polhamus accessed the safe deposit box for a
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`final time on December 19, 2018, only two days before Polhamus
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`emailed Symrise executives the agenda for Project Shawshank. Id.
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`¶ 242. Polhamus did not tell his Cott superiors that he would be
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`accessing the safe deposit box on any of these occasions. Id. ¶¶
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`240, 243.
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`The Symrise and Cott Beverages employees involved with NewCo
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`continued to solicit clients for NewCo. Client A selected NewCo
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`to develop a new beverage for it, and another Symrise client
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`expressed interest in retaining NewCo’s services. Id. ¶¶ 172,
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`182. In January 2019, Graham and Polhamus discussed a potential
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`hot chocolate beverage formulation, which was not reported to Cott
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`13
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 14 of 47
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`Beverages superiors. Id. ¶¶ 197-98. O’Keeffe and Polhamus added
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`pages to the NewCo Slide Deck indicating that various key employees
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`from Cott Beverages, such as Pontes, Ly, and Polhamus, would have
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`prominent positions in NewCo. Id. ¶ 189. At all times during
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`these discussions, Symrise executives knew that O’Keeffe,
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`Polhamus, Pontes, and Ly were still employed by Cott Beverages and
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`even identified possible legal action by Refresco due to Symrise’s
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`pursuit of these employees as a concern in the NewCo Slide Deck.
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`Id. ¶¶ 208, 212-15.
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`D.
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`Forming Califormulations, LLC
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`Symrise, O’Keeffe, and Polhamus determined that NewCo needed
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`another investor and shared the NewCo proposal with TGOD in 2018.
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`Id. ¶¶ 262-63. O’Keeffe and Polhamus sent Michael Gibbons, a TGOD
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`executive, the Concept to Shelf memo previously provided to
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`Symrise. Id. ¶¶ 264, 268. In November 2018, TGOD knew that
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`O’Keeffe and Polhamus were employees of Cott Beverages, that
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`Refresco intended to purchase Cott Beverages, and that Refresco
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`would likely not retain O’Keeffe and Polhamus following this
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`acquisition. Id.
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`TGOD expressed interest in the NewCo proposal and continued
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`to communicate with O’Keeffe and Polhamus about possible benefits
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`TGOD could enjoy from investing in NewCo. They discussed a
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`potential lab for Prem Virmani, a research scientist, in Columbus,
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`Georgia. Id. ¶¶ 278, 280. O’Keeffe and Polhamus sent TGOD
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`14
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 15 of 47
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`executives copies of presentations they worked on for Symrise, and
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`TGOD created an internal presentation of the “NewCo Opportunity”
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`which indicated that TGOD would have a 20% ownership in NewCo.
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`Id. ¶¶ 322, 326. After Refresco purchased Cott Beverages, Matt
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`Schmidt, TGOD’s Vice President of Business Development, asked
`
`O’Keefe if his “key guys” were “good to go” and indicated that
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`TGOD’s involvement “needs to be contingent on the top R&D guy
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`joining,” which Refresco believes to mean Ly. Id. ¶¶ 286, 336,
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`339-40.
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`In February 2019, Symrise and TGOD, along with Cott employees
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`O’Keeffe, Polhamus, Ly, Pontes, Gee, and Jackson formed
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`Califormulations, LLC under Delaware law. Id. ¶ 341. The Cott
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`employees held their interest in Califormulations via 6003
`
`Holdings, a company formed by LLCs that the Cott employees owned.
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`TGOD’s 15% interest was held by its subsidiary, TGOBC. Refresco
`
`contends that this subsidiary was formed solely to hold TGOD’s
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`interest in Califormulations. Id. ¶ 21. Refresco further argues
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`that Symrise, TGOD, and 6003 Holdings formed Califormulations and
`
`recruited former Cott employees O’Keeffe, Polhamus, Ly, Pontes,
`
`Gee, Jackson, and Klaybor despite knowing that the employees had
`
`signed employment agreements containing restrictive covenants.
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`Id. ¶¶ 384-92. Finally, Refresco alleges that, in early 2019,
`
`Polhamus and Pontes each sent themselves emails from their Cott
`
`15
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 16 of 47
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`
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`emails to their personal emails containing confidential
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`information. Id. ¶¶ 447-48.
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`DISCUSSION
`
`Refresco brings claims for misappropriation of trade secrets
`
`under federal and Georgia law, as well as a variety of state law
`
`claims arising from Defendants’ alleged breach of duty and breach
`
`of contract.7 Defendants move to dismiss Refresco’s complaint in
`
`its entirety. The Court discusses each of these claims in turn.
`
`I.
`
`Misappropriation of Trade Secrets
`
`Refresco contends that Symrise, Califormulations, O’Keeffe,
`
`Polhamus, Ly, and Gee violated the Defense of Trade Secrets Act,
`
`18 U.S.C. § 1836 et seq. (the “Federal Act”), and the Georgia Trade
`
`Secrets Act, O.C.G.A. § 10-1-760 et seq. (the “Georgia Act”),
`
`because
`
`Defendants
`
`misappropriated
`
`(or
`
`encouraged
`
`the
`
`misappropriation of) Refresco’s proprietary trade secrets.
`
`Specifically, Refresco alleges that Defendants misappropriated the
`
`Road Runner beverage formulation, that Polhamus took the Secret
`
`Oils Formulations from the safe deposit box and made them available
`
`to the other Defendants, and that Pontes and Polhamus sent
`
`themselves confidential information in last-minute emails to their
`
`personal email accounts. Defendants respond that Refresco cannot
`
`
`7 Refresco also brought claims under the federal Computer Fraud and Abuse
`Act, 18 U.S.C. § 1030(g), but it conceded at the hearing that these
`claims must be dismissed in light of the Supreme Court’s recent decision
`in Van Buren v. United States, 141 S. Ct. 1648 (2021).
`
`16
`
`
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 17 of 47
`
`
`
`recover under either Act because Refresco has not identified
`
`protectable trade secrets, has not adequately alleged that
`
`Defendants misappropriated trade secrets, and is barred from
`
`recovery under the doctrine of in pari delicto.
`
`A.
`
`The Protected Trade Secrets
`
`Under the Federal Act, a trade secret is information that
`
`“derives independent economic value, actual or potential, from not
`
`being generally known to, and not being readily ascertainable
`
`through proper means by, another person who can obtain economic
`
`value from the disclosure or use of the information” and that “the
`
`owner . . . has taken reasonable measures to keep . . . secret.”
`
`18 U.S.C. § 1839(3). The Georgia Act defines a trade secret in an
`
`essentially identical manner. See O.C.G.A. § 10-1-761(4) (defining
`
`trade secret).
`
`
`
`Here, Refresco alleges that the Road Runner formulation was
`
`created with equipment, materials, and employees of Cott Beverages
`
`during Cott work hours and at Cott facilities. Compl. ¶¶ 124-39.
`
`Refresco thus sufficiently alleges that the Road Runner
`
`formulation was Cott property. Refresco plausibly alleges that
`
`this information derives value from not being generally known
`
`because beverage formulations allow companies to create unique
`
`products not offered by competitors. Refresco also alleges that
`
`it took reasonable measures to keep the Road Runner formulation
`
`secret. Although Refresco was unaware of the Road Runner
`
`17
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`
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 18 of 47
`
`
`
`formulation’s existence, it is reasonable to infer that its
`
`predecessor-in-interest, Cott Beverages, would have taken measures
`
`to keep it secret but for its misappropriation by certain
`
`employees. Refresco’s detailed protective measures for trade
`
`secrets, which it described extensively in its Complaint, would
`
`undoubtedly have applied to the unique Road Runner formulation.
`
`
`
`The Court finds Defendants’ contention that the formula did
`
`not contain unique ingredients unpersuasive. Refresco plausibly
`
`alleges that the formula was unique enough to be a protectable
`
`trade secret, which is enough for present purposes. The Court
`
`rejects Defendants’ reliance upon one email arguably taken out of
`
`context, particularly when all reasonable inferences are construed
`
`in Refresco’s favor. Refresco has alleged a protectable trade
`
`secret.
`
`B.
`
`Misappropriation
`
`In addition to alleging a protectable trade secret, Refresco
`
`must allege facts demonstrating that the trade secret was
`
`misappropriated. Misappropriation may be shown by demonstrating
`
`that Defendants acquired the trade secret and knew or had reason
`
`to know it was acquired by improper means. O.C.G.A. § 10-1-
`
`761(2)(A); 18 U.S.C. § 1839(5)(A). Alternatively, Refresco may
`
`show that Defendants disclosed or used the trade secret without
`
`express or implied consent, knowing or having reason to know “at
`
`the time of disclosure or use the trade secret was acquired under
`
`18
`
`
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 19 of 47
`
`
`
`the circumstances giving rise to a duty to maintain its secrecy or
`
`limit its use.” Penalty Kick Mgmt. Ltd. v. Coca Cola Co., 318
`
`F.3d 1284, 1292 (11th Cir. 2003).
`
`
`
`Refresco has clearly carried its pleading burden.
`
`Defendants’ attempt to seek safe harbor behind the NDA is
`
`unavailing. The NDA was intended to “protect information disclosed
`
`. . . in connection with the consideration of a possible business
`
`relationship where Cott Beverages LLC may provide services to
`
`[Symrise].” Compl. ¶ 89. It specifically forbade disclosing any
`
`confidential information to third parties. Refresco alleges that
`
`several Cott employees conspired with Symrise for their own
`
`personal gain and that Symrise disclosed the Road Runner
`
`formulation to Client A, who was not party to the NDA. Refresco
`
`thus sufficiently alleges that Defendants’ acquisition and
`
`disclosure of the Road Runner formulation fell outside of the scope
`
`of the NDA.
`
`
`
`Defendants also misunderstand Twombly/Iqbal when it argues
`
`that Refresco has not plausibly alleged that Symrise acquired the
`
`Secret Oils Formulations because Refresco qualifies its
`
`allegations with the phrase “on information and belief.” First,
`
`the Court cannot conceive of how an honest plaintiff could allege
`
`such facts under these circumstances without candidly
`
`acknowledging that they are alleged based on the plaintiff’s
`
`“information and belief.” Refresco specifically alleges that
`
`19
`
`
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 20 of 47
`
`
`
`Polhamus accessed the safe deposit box containing the Secret Oils
`
`Formulations three times while engaging in business discussions
`
`with Symrise about forming a competitor business to Cott Beverages.
`
`Refresco further alleges that Polhamus never accessed the safe
`
`deposit box prior to this time and did not report this access to
`
`his direct superiors. Finally, Refresco alleges that Polhamus
`
`had no legitimate reason to access the box because parts of the
`
`Secret Oils Formulations necessary for production were available
`
`in a secure location on a Cott Beverages server, thus making access
`
`to the entire formula in the safe deposit box unnecessary.
`
`Refresco clearly alleges that Polhamus accessed the Secret Oils
`
`Formulations and transmitted them to Symrise for no legitimate
`
`business purpose of Cott Beverages. This is enough.
`
`C.
`
`In Pari Delicto
`
`
`
`Although it unclear whether Defendants acknowledge that “in
`
`pari delicto” is an affirmative defense, they apparently argue
`
`that Refresco must allege facts negating the elements of such a
`
`defense. “Generally, the existence of an affirmative defense will
`
`not support a motion to dismiss,” but “a complaint may be dismissed
`
`under Rule 12(b)(6) when its own allegations indicate the existence
`
`of an affirmative defense, so long as the defense clearly appears
`
`on the face of the complaint.” Quiller v. Barclays Am./Credit,
`
`Inc., 727 F.2d 1067, 1069 (11th Cir. 1984). A party asserting an
`
`in pari delicto defense “must show that ‘the plaintiff bears at
`
`20
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`
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`Case 4:20-cv-00181-CDL Document 94 Filed 09/22/21 Page 21 of 47
`
`
`
`least substantially equal responsibility for the violations [it]
`
`seeks to redress.” Bailey v. TitleMax of Ga., Inc., 776 F.3d 797,
`
`801 (11th Cir. 2015) (quoting Lamonica v. Safe Hurricane Shutters,
`
`Inc., 711 F.3d 1299, 1308 (11th Cir. 2013)). Defendants assert
`
`that in pari delicto applies because top Cott Beverages management
`
`sanctioned the exchange of information between Cott Beverages and
`
`Symrise pursuant to the parties’ NDA. But, as previously
`
`explained, the NDA did not authorize the conduct alleged in
`
`Refresco’s complaint. Thus, Defendants’ motion to dismiss based
`
`on in pari delicto must be denied.
`
`II. Breach of Contract – Symrise
`
`Refresco claims that Symrise breached the NDA. The parties
`
`agree that Delaware law applies to this claim. Under Delaware
`
`law, the essential elements of a breach of contract claim are:
`
`“(a) the existence of a contract; b) the breach of an obligation
`
`imposed by that contract; and c) resulting damages to the
`
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