General Motors Corp. v. Ignacio Lopez De Arriortua, 96-71038.
| Decision Date | 26 November 1996 |
| Docket Number | No. 96-71038.,96-71038. |
| Parties | GENERAL MOTORS CORPORATION and Adam Opel AG, Plaintiffs, v. Jose IGNACIO LOPEZ DE ARRIORTUA, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
Eugene Driker, Detroit, MI, for plaintiffs.
James P. Denvir, Larry S. Gondelman, Anthony T. Pierce, Akin, Gump, Strauss, Hauer & Feld, L.L.P., Washington, DC, Howard J. Trienens, David T. Pritikin, Thomas D. Rein, Sidley & Austin, Chicago, IL, William A. Sankbeil, Kerr, Russell & Weber, P.L.C., Detroit, MI, for defendants.
This matter came before the court at a hearing on October 16, 1996 on the following motions: Defendants' motions to dismiss for lack of personal jurisdiction; Defendants' joint motion to dismiss based on forum non conveniens or to stay pending resolution of a civil suit in Germany; and Defendants' joint motion to dismiss for lack of standing or in the alternative to join indispensable parties. For the reasons set forth below, Defendants' motions to dismiss are denied.
Plaintiffs, General Motors Corporation ("GM") and Adam Opel AG ("Opel"), brought suit against Defendants alleging theft of trade secrets and conspiracy. GM is an American corporation and Opel is a German corporation wholly owned by GM. Defendants include:
1. Volkswagen AG, a German corporation ("VW")
2. Volkswagen of America, Inc., wholly owned by Volkswagen AG ("VWOA")
3. The "Lopez Group," including the following individuals who worked at GM or its subsidiaries until March of 1993 when they left and joined VW:
Jose Ignacio Lopez, a former executive at GM Espana, Opel, and GM (Europe) AG. On February 1, 1993 he became group vice president of GM. Subsequently, on March 10, 1993, he resigned from GM and moved to Germany. On March 16, he joined VW and was appointed to its management board.
Jose Manuel Gutierrez, executive director of purchasing with GM Espana (based in Spain). He quit on March 22, 1993. He moved to Germany and joined VW as a division head.
Jorge Alvarez, a platform manager for the S-Car and the O-Car for Opel when he quit on March 22, 1993. He then joined VW's subsidiary SEAT, in Spain, as a purchasing director.
Rosario Piazza, a sourcing specialist for Opel when he quit on March 22, 1993. He then joined VW in Spain as head of forward sourcing.
Hugo Van der Auwera, executive director of worldwide purchasing, metallic commodity group, for GM Continental (based in Belgium) when he quit on March 22, 1993. He joined VW as a division head.
Francisco Garcia-Sanz, executive director of worldwide purchasing, electrical commodity group, for GM when he quit on March 22, 1993. He joined VW as a division head.
Andries Versteeg, manager-European liaison, advance purchasing and global sourcing, for GM when he quit on March 22, 1993. He joined VW as a division head.
Willem Admiraal, an employee of GM when he quit on March 22, 1993. He then joined VW. He is married to Lopez's daughter, Irene.1
4. The "VW Group" including:
Ferdinand Piech, the chairman of the board of VW;
Jens Neumann, a member of VW's management board and member of the VWOA board;
Jaero Wicker, a VW employee in Wolfsburg and later, when Lopez was hired by VW, an administrative assistant to Lopez; and
H.W. Lytle, executive director of human resources for VWOA.
Plaintiffs allege that at least as early as August 1992 until March 1993, while Lopez was a high level GM executive, Lopez secretly communicated with VW representatives and agreed to leave GM and join VW. He agreed to bring confidential business plans and trade secret information with him. Lopez worked with the other Lopez Group Defendants to secretly collect confidential documents, transparencies, and computer diskettes including: listings of GM and Opel components by worldwide supplier, price, terms, conditions, and delivery schedules (including a copy of GM's Product Purchasing System (PPS) and GM Europe's European Purchasing Optimization System (EPOS)); plans for "Plant X," the factory of the future; future auto plans to the year 2003; and future strategies for purchasing.
In March of 1993, the Lopez Group Defendants all left GM and Opel to join VW where they were paid significantly higher salaries. They allegedly took over 20 cartons of stolen documents with them. Plaintiffs allege that the Lopez Group immediately copied the documents and entered them into VW computers, a process which took almost a month. To cover up the theft, the Defendants then shredded the documents with a shredder borrowed from VW's plant in Kassel.
In June of 1993, German police discovered four boxes of trade secret documents in the home of Lopez's associates. German police also found GM and Opel documents at Lopez's home and at VW. Complaint para. 202-211. For example, German police seized documents coded "Plant B" from various VW locations. These documents were identical to Opel's confidential Plant X material, except that the Opel logo was removed and the VW logo was inserted. Complaint para. 195.
On July 9, 1993, Alvarez sent a letter to Gutierrez suggesting that they come up with an explanation for having the documents. Paragraph 198 of the complaint quotes the letter (translated from Spanish) as follows:
Dr. V. Hulsen [VW's general counsel] is of the opinion that we should have an explanation for this matter.... Of the documents found, there are some that I would have no reason to possess, which could get us into trouble.... [I]f we take the offensive by saying that some documents weren't in the box, and it winds up that the prosecutor's office plans to say that the documents found aren't secret ... it would wind up that someone would have had to put the nonsecret documents in the boxes, something pretty strange. On the other hand, if it winds up that the business about the prosecutor's office saying that there weren't any secrets is all a hoax and they charge us, we should already have stated that some of the documents had been placed in my house by Opel. If we say it only after the prosector's office charges us, it will be a little late.
The complaint alleges that Defendants falsely stated that they did not possess any documents. Lopez told reporters at a news conference on June 14, 1993, that the Lopez Group did not take anything. Complaint para. 196. On July 17, 1993, Piech also denied that the Lopez Group had taken anything. Complaint para. 195 & 197. On or around July 28, 1993, Piech publicly claimed that the documents the German police found in Alvarez's home had been planted by Opel. Complaint para. 199.
On August 13, 1993, VW hired KPMG Peat Marwick, the German branch of the accounting firm, to conduct an investigation of the activities of the Lopez Group. In October of 1993, KPMG delivered a report to VW. VW requested that the report be abridged, and the abridged version was released on November 26, 1993. VW claimed that the report exonerated VW. Plaintiffs claim that the report, both in its complete and abridged forms, confirms Plaintiffs' allegations of wrongdoing. The report states that GM documents were brought to VW, copied, and shredded. Complaint para. 214-219.
These circumstances resulted in both a criminal case and a civil case against the Defendants in Braunschweig, Germany. The German civil case was initiated by VW and the Lopez Group to enjoin GM, Opel, and GM Espana from interfering with VW's employment of GM's former employees. GM, Opel, and GM Espana counterclaimed,2 based on the actions which are the basis of the complaint here. The counterclaim seeks information regarding the documents taken and seeks the return of the documents. It also requests injunctive and declaratory relief relating to the employment by VW of the Lopez Group. The counterclaim also requests a declaratory judgment that VW and the Lopez Group are liable for any damage that arises from VW's employment of the Lopez Group and use of GM and Opel trade secrets. That is, the counterclaim seeks a declaratory judgment of liability, not damages.3 The German civil case is currently stayed, at the request of GM, pending the investigation of the German criminal action.
On March 7, 1996, Plaintiffs filed this U.S. civil suit. Their complaint alleges the following counts (against all Defendants unless otherwise specified):
1. Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1962(c) & 1964(c), based on the predicate violations of wire fraud, 18 U.S.C. § 1343; interstate and foreign travel to aid racketeering, 18 U.S.C. § 1952; tampering with witnesses, 18 U.S.C. § 1512; transportation and receipt of stolen goods, 18 U.S.C. §§ 2314 & 2315
2. Conspiracy to Violate RICO, 18 U.S.C. §§ 1962(d) & 1964(c)
3. Lanham Act, 15 U.S.C. § 1126
4. Copyright Act, 17 U.S.C. § 101 et seq.
5. Fraud, against the Lopez Group Defendants
6. Breach of Fiduciary duty, against Lopez Group Defendants (excluding Lopez)
7. Conversion
8. Misappropriation of Trade Secrets
9. Conspiracy
10. Unjust Enrichment, against VW and VWOA.
Defendants' actions allegedly caused Plaintiffs enormous damage. GM and VW are the two largest car sellers in the Western European market. VW allegedly has used and continues to use the trade secret information to reduce its costs substantially and to increase its market share.
Four motions to dismiss for lack of personal jurisdiction were filed on behalf of the following groups of Defendants: 1) Lopez; 2) Garcia-Sanz, Van der Auwera, Admiraal, Gutierrez; 3) Piech and Neumann; and 4) VW. Defendants also filed a joint motion to...
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