Lawsuit filed by Tennessee furniture maker Billy Joe Griggs

7/28/2019 Lawsuit filed by Tennessee furniture maker Billy Joe Griggs

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IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF

TENNESSEE AT NASHVILLE

BILLY JOE GRIGGS; and )ASHLEY BLAIRE CO., INC. d/b/a )EVOLUTION, INC., a Tennessee Corporation; )

)Plaintiffs, )

v. ) CASE NO. ______________)

LF PRODUCTS PTE LTD d/b/a TRUE )INNOVATIONS, a Foreign Corporation; ) JURY DEMAND

)Defendant. )

COMPLAINT

COMES NOW Plaintiffs Billy Joe Griggs and Ashley Blaire Co., Inc. d/b/a Evolution,

Inc. (collectively, Plaintiffs), for their causes of action against Defendant LF Products PTE

LTD d/b/a True Innovations (LF), respectfully states to this Court as follows:

I. PARTIES

1. Billy Joe Griggs (Griggs) is an individual and citizen of the State of Tennessee,residing at 3030 Minor Hill Highway, Pulaski, TN 38478.

2. Ashley Blaire Co., Inc. d/b/a Evolution, Inc. (Evolution), is a for profitcorporation organized and existing under the laws of the State of Tennessee, with its principal

place of business located at 3030 Minor Hill Highway, Pulaski, TN 38478.

3. Upon information and belief, LF Products PTE LTD d/b/a True Innovations(LF) is a for profit corporation organized and existing under the laws of Singapore, China,

with its principal place of business located in Singapore, China.

Case 1:12-cv-00193 Document 1 Filed 12/21/12 Page 1 of 16 PageID #: 1


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II. JURISDICTION AND VENUE

4. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. 1332, as there is complete diversity between the parties, and the amount in dispute exceeds

$75,000, exclusive of interest and costs.

5. Venue in this Court is proper pursuant to 28 U.S.C. 1391(b)(2) because asubstantial part of the events giving rise to the claims asserted herein occurred in Tennessee and

the continued misappropriation of confidential, proprietary, and trade secret information that

Plaintiffs seek to enjoin has occurred, and inevitably will occur, in Tennessee. Venue also is

proper pursuant to 28 U.S.C. 1391(b)(3) because defendants are subject to personal

jurisdiction in Tennessee, and pursuant to 28 U.S.C. 1391(c) because the Defendant is an

alien.

6. Upon information and belief, this Court has personal jurisdiction over LF basedupon LFs continuous and systematic minimum contacts with residents of Tennessee through

the offering of its services and/or products and involvement with residents of Tennessee, within

this judicial district, and elsewhere.

7. Further, this Court has personal jurisdiction under Tenn. Code Ann. 20-2-201 etseq., because (1) LF has transacted business in Tennessee; (2) the tortious acts or omissions

occurred in Tennessee; (3) the damages occurred in Tennessee; and (4) jurisdiction based on

LFs contacts with Tennessee is not inconsistent with the Constitution of the State of

Tennessee or the Constitution of the United States.



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III. FACTUAL BACKGROUND

8. Griggs is a professional and innovator in the furniture industry, and is theinventor of numerous inventions covered by several patents and patent applications directed to

furniture products and methods.

9. Evolution is a Tennessee corporation incorporated by Griggs that develops andsells furniture products. Griggs is the President of Evolution, and is an owner of the stock of

Evolution.

10. Through years of experience in the furniture industry, Griggs has successfullydeveloped significant improvements in furniture manufacturing and design. Evidence of

Griggs success is demonstrated, inter alia, by U.S. Letters Patent No. 7,744,162, which was

granted June 29, 2010.

11. Evolution, as a recognized innovator and leader in the furniture industry, enteredinto a license agreement with Albany Industries of New Albany MS (Albany), whereby

Albany would assist in the production and use of certain of Evolutions unique and innovative

furniture and methods created by Griggs, including the manufacture and shipping of ready-to-

assemble upholstered sofas.

12. In December 2011, Griggs, Evolution, and Albany entered into negotiations withLF for LF to become a licensed manufacturer and authorized seller of the same products,

including without limitation Evolutions innovated ready-to-assemble upholstered sofas.

During these negotiations, and during subsequent discussions and agreements with LF, Griggs

was acting on behalf of Evolution in his capacity as President of Evolution.

13. After commencing negotiations of a possible license agreement with LF, LFretained Mr. Alan True and his associates to act on LFs behalf during the negotiations.



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14. In February 2012, LF prepared an Agreement for the Exchange of ConfidentialInformation (the Agreement), and presented the Agreement to Griggs for execution.

15. On February 9, 2012, Griggs, acting in his capacity as President of Evolution,authorized Mr. Timothy A. Stump, a business associate and representative of Plaintiffs, to

execute the Agreement as agent for Plaintiffs. Mr. Stump executed the Agreement on February

9, 2012.

16. On February 12, 2012, Mr. Mukhtar Ahmed, a Director of LF, executed theAgreement. A true and correct copy of the Agreement, as executed, is attached hereto as

EXHIBIT A.

17. The Agreement states in Paragraph 2 that:Each partys Confidential Information shall remain its personalproperty. Each party shall maintain confidentialInformation of theother party in strict confidence and shall protect such ConfidentialInformation of the party with the same degree of care as itexercised in safeguarding its own Confidential Information.Neither party shall disclose any Confidential Information of theother party to any third part [sic] or copy or use the same for anypurpose other than in connection with a the Purpose set forth inthis agreement. . . .

18. The Agreement states in Paragraph 3 that:Each party will restrict access to the Confidential Information ofthe other party to its authorized employees who require access tosuch Confidential Information in connection with the Purpose setforth in this Agreement and will ensure that each of its employeesto whom Confidential Information of the other party is disclosed ormade available is informed of the terms of this Agreement and thatall such employees agree to be bound by the terms hereof.

19. The Agreement states in Paragraph 5 that:User shall not make, or permit to be made, copies of any or all ofthe Confidential Information unless Company has given its prior



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written consent. Any such copies shall be subject to all provisionsof this Agreement.

20. The Agreement states in Paragraph 6 that:Company may at any time request User to promptly return toCompany or to destroy any or all documents or other materialscontaining Confidential Information, and User shall immediatelycomply with any such request.

21. The Agreement states in Paragraph 10 that:Each party to this Agreement agrees to reimburse, indemnify andhold harmless the other party and its affiliates, employees, andagents and representatives from any damage, loss or expenseincurred by them as a result of the use of the Confidential

Infom1ation by it or its nominees contrary to the terms of thisAgreement. It is understood and agreed that money damages wouldnot be a sufficient remedy for any breach of terms of thisAgreement and that the other party shall be entitled to specificperformance and injunctive or other equitable relief as a remedy forsuch breach. Such remedy shall not be deemed to be the exclusiveremedy for any such breach but shall be in addition to all otherremedies available at law or equity to the other party. lt is furtherunderstood and agreed that no failure or delay by the other party inexercising any right, power or privilege hereunder shall operate as awaiver thereof, nor shall any single or partial exercise thereof

preclude any other or further exercise thereof or the exercise of anyother right, power or privilege under this Agreement or otherwise.

22. After executing the Agreement, Plaintiffs initiated and engaged in numerousdetailed written and telephonic communications with LF through LFs representatives, Kevin

Gallagher and his immediate superior Dan Tacheny, regarding the residential upholstery

market and Evolutions plans for sourcing in China.

23. During these communications between Plaintiffs and LFs representatives, andpursuant to the Agreement and its confidentiality provisions contained therein executed

between the parties, LF received Plaintiffs confidential and proprietary information, including,

but not limited to: Plaintiffs confidential and proprietary manufacturing, construction, and



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shipping methods for ready-to-assemble upholstered sofas; the design, appearance and

customer assembly of Plaintiffs products not yet introduced into the marketplace; samples of

products made pursuant to Plaintiffs confidential and proprietary methods, including without

limitation, wood frames and sofas; videos that detail such confidential and proprietary

information, including without limitation Plaintiffs confidential and proprietary method for

making a certain wood frame for sofas; and designs, drawings, and specifications containing

such confidential and proprietary information, including without limitation Plaintiffs

confidential and proprietary method for making a certain wood frame for sofas (collectively,

Confidential Information).

24. Plaintiffs Confidential Information derives independent economic value fromnot being generally known, or readily ascertainable by proper means by persons a part from

Plaintiffs who can obtain economic value from its disclosure or use.

25. Plaintiffs expend reasonable efforts to maintain the secrecy of its ConfidentialInformation.

26. Plaintiffs Confidential Information was made by and/or on behalf of Plaintiffs inTennessee, and were sent by Plaintiffs to LF in China pursuant to confidentiality provisions

contained in the Agreement.

27. On or around March 12, 2012, Griggs sent to LF a wood frame for a sofa usingPlaintiffs Confidential Information, which was manufactured in Tennessee and sent to LF in

China pursuant to the confidentiality provisions contained in the Agreement.

28. On or about April 19-20, 2012, representatives for both Plaintiffs and LF met atthe High Point furniture market in High Point, N.C.



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29. During this meeting in High Point, Plaintiffs disclosed additional confidential andproprietary information belonging to Plaintiffs to LF.

30. In May 2012, Kevin Gallagher, on behalf of LF, and Richie McLarty of Albany,traveled to China where they visited affiliated factories in the Guangdong and Zhejiang

provinces.

31. During this May 2012 visit to China, McLarty, at the direction of Plaintiffs, andsubject to the terms and conditions of the Agreement, provided to LF a sample of a sofa built

based on Plaintiffs innovative design. The sample sofa was sent by air to LFs office in

Hangzhou, China. This sample sofa was not publicly available, and was subject to the

confidentiality provisions of the Agreement.

32. From the time period between the providing of the sofa in May 2012 to June2012, Plaintiffs and LF engaged in negotiations regarding the licensing of Plaintiffs innovative

sofa designs. During the time period of negotiations, Albany, on behalf of Plaintiffs, continued

to instruct and educate LF about packaging platforms for the ready-to-assemble upholstered

sofa market utilizing Plaintiffs Confidential Information, all of which LF agreed to keep

confidential, not disclose, and most importantly, not use without Plaintiffs permission,

pursuant to the Agreement.

33. In June 2012, LF abruptly walked away from the license negotiations withoutpurchasing a license to use Plaintiffs Confidential Information.

34. On information and belief, LF never intended to purchase a license fromPlaintiffs, and the negotiations were a pre-text to obtain the Plaintiffs confidential and

proprietary information before any of Plaintiffs products were introduced into the market, and

gain an unfair competitive advantage thereby.



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35. On information and belief, and in direct violation of the Agreement, LF andothers whom LF has assisted have been and are using Plaintiffs confidential and proprietary

information to make packaging platforms and ready-to-assemble upholstered sofas utilizing

Plaintiffs methods, processes and specifications. LF neither asked for nor received permission

to use Plaintiffs confidential and proprietary information for this or any other purpose.

36. On information and belief, LF retained Mengnu, a factory in Haining, China, tomanufacture sofa samples using key parts of Plaintiffs Confidential Information (the Mengnu

sofa samples). LF sent employees, representatives and agents to the Mengnu factory to assist

Mengnu in this manufacturing. These Mengnu sofa samples were and are being manufactured

without Plaintiffs permission and in direct violation of the Agreement.

37. These Mengnu sofa samples were presented by LF at a meeting with Sams Clubin Dongguan in August 2012 in an effort to secure Sams Club as an LF customer. At the time

LF presented the sofa to Sams Club, LF knew that Sams Club was an existing customer of

Plaintiffs. This was done without the permission of Plaintiffs, and is a violation of the

Agreement.

38. These Mengnu sofa samples also were presented by LF at a furniture show inShanghai on or about August 24, 2012, and were shown to other customers of Plaintiffs in an

effort by LF to secure Plaintiffs customers as customers of LF. This was done without the

permission of Plaintiffs, and is a violation of the Agreement.

39. In September 2012, LF shipped a Mengnu sofa sample to American Signature,Inc. in the United States in an effort to secure American Signature, Inc. as an LF customer. At

the time LF shipped the sofa to American Signature, Inc., LF knew that American Signature,



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Inc. was an existing customer of Plaintiffs. This was done without the permission of Plaintiffs,

and is a violation of the Agreement.

40. In September 2012, LF shipped a Mengnu sofa sample to Big Lots, Inc. in aneffort to secure Big Lots, Inc. as an LF customer. At the time LF shipped the sofa to Big Lots,

Inc., LF knew that Big Lots, Inc. was an existing customer of Plaintiffs. This was done

without the permission of Plaintiffs, and is a violation of the Agreement.

41. Sams Club, American Signature, Inc. and Big Lots, Inc. provide several hundredthousand dollars of business to Plaintiffs every year.

42.

On September 28, 2012, counsel for Plaintiffs sent Muhktar Ahmed at LF a letter

demanding that LF cease and desist from engaging in the activities described above, and

demanding that LF either destroy or return the confidential and proprietary information

provided to LF by Plaintiffs pursuant to Paragraph 6 of the Agreement. A true and correct

copy of this letter is attached hereto as EXHIBIT B.

43. LF acknowledged receipt of the above letter in a response dated October 5, 2012.44. After receiving no further response from LF, counsel for Plaintiffs sent a second

letter on October 22, 2012. A true and correct copy of this letter is attached hereto as

EXHIBIT C.

45. On information and belief, LF continues to use and retain copies Plaintiffsconfidential and proprietary information in violation of the Agreement. LF also has not

returned or destroyed all of Plaintiffs confidential and proprietary information.



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IV. CAUSES OF ACTION

COUNT IBREACH OF CONTRACT

46.

Plaintiffs hereby incorporate and re-allege Paragraphs 1 through 45 as if fully set

forth herein.

47. As described above, Plaintiffs and LF entered into the Agreement.48. The Agreement is a valid and enforceable contract supported by sufficient

consideration.

49. Through its actions alleged herein, LF has materially breached the obligations itundertook under the terms of the Agreement.

50. LFs past and continuing, unauthorized and willful use of Plaintiffs ConfidentialInformation in manufacturing, displaying, selling, and attempting to sell sofas and other forms

of furniture as described above constitutes a material breach of the Agreement.

51. LFs past and continuing breaches of the Agreement has and will damagePlaintiffs in an amount to be determined at trial.

52. LFs continuing breach of the Agreement, unless restrained by this Court, willcause Plaintiffs irreparable injury. Plaintiffs have no adequate remedy at law for LFs

continuing breach of the Agreement, and injunctive relief is specifically provided for in the

Agreement.

COUNT II

VIOLATION OF UNIFORM TRADE SECRETS ACT T.C.A. 47-25-1701, et seq. -

MISAPPROPRIATION OF PROPRIETARY INFORMATION

53. Plaintiffs hereby incorporate and re-allege Paragraphs 1 through 52 as if fully setforth herein.



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54. Plaintiffs Confidential Information described above constitutes a trade secretunder T.C.A. 47-25-1702, as it derives independent value from not being generally

known, or readily ascertainable by other persons apart from Plaintiffs, including, but not

limited to LF, and Plaintiffs expend reasonable efforts to protect the secrecy of its Confidential

Information.

55. Plaintiffs trade secret information was provided to LF in confidence under theAgreement and the confidentiality provisions contained therein.

56. Upon information and belief, through their actions alleged herein, LF hasmisappropriated and disclosed, and continues to use and disclose, Plaintiffs trade secret

information to other brokers and/or buyers, among others, and continues to use this information

with authorization or consent of Plaintiffs.

57. LFs past and continuing actions, including without limitation its use ofPlaintiffs Confidential Information in furtherance of its competitive enterprise, constitute a

violation of T.C.A. 47-25-1701 et seq.

58. LFs past and continuing violation of T.C.A. 47-25-1701 et seq. has and willdamage Plaintiffs in an amount to be determined at trial.

59. As a result of LFs willful and malicious misappropriation, Plaintiffs are entitledto recover its damages resulting therefrom pursuant to Tenn. Code Ann. 47-25-1704,

including, but not limited to: actual damages; LFs profits; reasonable royalties; and exemplary

damages.

60. LFs continuing breach of T.C.A. 47-25-1701 et seq., unless restrained by thisCourt, will cause Plaintiffs irreparable injury for which Plaintiffs are entitled to injunctive

relief. Plaintiffs have no adequate remedy at law for LFs continuing violation.



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61. Plaintiffs are entitled to recover its reasonable attorneys fees pursuant to Tenn.Code Ann. 47-25-1705.

COUNT III

TORTIOUS INTERFERENCE WITH BUSINESS RELATIONS


63. Plaintiffs have existing business relationships on a world-wide basis withfurniture buyers, including but not limited to Sams Club, American Signature, Inc. and Big

Lots, Inc. Plaintiffs also continue to develop prospective relationships with new buyers in the

marketplace.

64. LF, based on the extensive contact and negotiations with Plaintiffs describedabove, had actual knowledge that Plaintiffs had established business relationships with the

above buyers, among others.

65. LF, with full knowledge of the actual relationships established by Plaintiffs,willfully and purposefully approached these furniture buyers in attempt to sell sofas

manufactured and designed based upon Plaintiffs Confidential Information.

66. Further, the quality of the sample sofas that LF has manufactured and designed isinferior in quality. LFs introduction of inferior product of this type into the marketplace has

already had and will continue to have a substantial adverse impact on Plaintiffs business

relationships with existing customers and potential new customers. LF, in approaching

furniture buyers on a world-wide scale, has caused and continues to cause damage to Plaintiffs

in both potential lost sales, and destruction of market potential by presenting inferior goods in

the field of ready-to-assemble upholstered sofas.



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67. LFs past and continuing actions constitute tortious interference with businessrelations under Tennessee law.

68. LFs past and continuing tortious actions has and will damage Plaintiffs in anamount to be determined at trial.

69. LFs continuing tortious actions, unless restrained by this Court, will causePlaintiffs irreparable injury for which Plaintiffs are entitled to injunctive relief. Plaintiffs have

no adequate remedy at law for LFs continuing actions.

COUNT IV

BREACH OF COVENANT OF GOOD FAITH AND FAIR DEALING


71. The Plaintiffs and LF entered into an agreement by which LF agreed to keepconfidential the information provided to it by Plaintiffs. The Agreement was prepared by LF.

72. In reliance upon LFs representations in the Agreement, Plaintiffs disclosed theirConfidential Information to LF. LF, however, breached the Agreement and deprived Plaintiffs

of the benefits of the Agreement.

73. On information and belief, LF misrepresented its intentions to Plaintiffsregarding its intentions to honor the Agreement and use Plaintiffs Confidential Information in

considering entering into a license agreement with Plaintiffs. Instead, LF intended to use the

Confidential Information to try to beat Plaintiffs to the market and cut Plaintiffs out of future

transactions with furniture buyers.

74. LFs actions constitute a breach of the covenant of good faith and fair dealing,which is present in every contract.



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75. LFs past and continuing breach has and will damage Plaintiffs in an amount tobe determined at trial.

76. LFs continuing breach, unless restrained by this Court, will cause Plaintiffsirreparable injury for which Plaintiffs are entitled to injunctive relief. Plaintiffs have no

adequate remedy at law for LFs continuing breach.

PRAYER FOR RELIEF

WHEREFORE, based upon the foregoing, Plaintiffs pray for judgment that:

1. Process issue and be served upon LF requiring it to answer this Complaint withinthe time and manner prescribed by law;

2. The Court enter a judgment in favor of Plaintiffs against LF as to each of theabove respective Counts;

3. The Court enter a preliminary injunction and permanent injunction pursuant toFed. R. Civ. P. 65 that:

a. Enjoins and restrains LF, and its officers, agents, servants, employees,parent corporations, and affiliates, and any person in active concert or participation with

any of the foregoing, from (i) recording, copying, or taking any of Plaintiffs Confidential

Information; or (ii) directly or indirectly, using or disclosing or furnishing to any person,

company, or other entity any of Plaintiffs Confidential Information;

b. Enjoins and restrains LF, and its officers, agents, servants, employees,parent corporations, and affiliates, and any person in active concert or participation with

any of the foregoing, from the use, importation, offer for sale, or sale of any furniture

product manufactured through or incorporating any of Plaintiffs Confidential

Information;



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c. Enjoins and restrains LF, and its officers, agents, servants, employees,parent corporations, and affiliates, and any person in active concert or participation with

any of the foregoing, from any further misappropriation of Plaintiffs Confidential

Information.

4. The Court direct LF to file with this Court and serve on Plaintiffs within ten (10)days after the entry of a preliminary injunction, reports in writing under oath, setting forth in

detail the manner and form in which LF has complied with the preliminary injunction;

5. The Court direct LF to file with this Court and serve on Plaintiffs within thirty(30) days after the entry of a permanent injunction, reports in writing under oath, setting forth in

detail the manner and form in which LF has complied with the permanent injunction;

6. The Court direct LF, and its officers, agents, servants, employees, parentcorporations, and affiliates, and any person in active concert or participation with any of the

foregoing, to immediately return to Plaintiffs all of Plaintiffs property and Confidential

Information provided to LF by Plaintiffs under the Agreement that are in their possession,

custody, and control;

7. The Court order that Plaintiffs be awarded a money judgment and award fordamages, including exemplary damages, arising out of LFs continued activities, with interest;

8. The Court order for disgorgement of any and all profits received by LF due to itscontinued activities through which LF has been unjustly enriched as a result of their wrongful

actions, with interest;

9. The Court enter an award to Plaintiffs of their attorneys fees, costs and expensesin this action;



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10. The Court enter an award of prejudgment interest at the highest rate prescribed bylaw;

11. A trial by jury of all issues so triable; and12. Such other and further relief as this Court deems equitable and just.

Respectfully Submitted,

Billy Joes Griggs, andAshley Blaire Co., Inc. d/b/a Evolution, Inc.by their attorneys

s/W. Edward RamageW. Edward Ramage (TN Bar No. 16261)Maia T. Woodhouse (TN Bar No. 30438)BAKER, DONELSON, BEARMAN,

CALDWELL & BERKOWITZ, P.C.211 Commerce Street, Suite 800Nashville, TN 37201(615) 726-5771 (telephone)(615) 744-5771 (facsimile)[email protected]@bakerdonelson.com

Lawsuit filed by Tennessee furniture maker Billy Joe Griggs

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