John Bean Techs. Corp. v. B GSE Grp., LLC
| Decision Date | 13 August 2020 |
| Docket Number | Case No. 1:17-cv-142-RJS-DAO |
| Citation | 480 F.Supp.3d 1274 |
| Parties | JOHN BEAN TECHNOLOGIES CORPORATION, Plaintiff, v. B GSE GROUP, LLC and Bryan Bullerdick, Defendants. |
| Court | U.S. District Court — District of Utah |
David P. Billings, Robert G. Crockett, Fabian Vancott, Salt Lake City, UT, Heather L. Kramer, Edward S. Weil, Pro Hac Vice, Matthew T. Hays, Steven McMahon Zeller, Pro Hac Vice, Dykema Gossett PLLC, Chicago, IL, for Plaintiff.
Patrick E. Johnson, Paul T. Moxley, Cohne Kinghorn PC, Salt Lake City, UT, Edward B. Davis, Joshua B. Durham, Pro Hac Vice, Bell Davis Pitt, Charlotte, NC, for Defendants.
ROBERT J. SHELBY, United States Chief District Judge Plaintiff John Bean Technologies (JBT) is a major player in the aviation industry for ground support equipment. Ground support equipment refers to the array of equipment required to maintain commercial and military aircraft, ranging from cables and hoses to power converters and axle jacks. Relevant here are preconditioned air (PC Air) units that cool aircraft and ground power units (GPUs) that power this equipment.
In 2011, JBT sought to enter the niche market to supply ground support equipment—primarily PC Air units and GPUs—for the United States military's latest fighter aircraft, the F-35. Because F-35s utilize modern, advanced technology, they usually required construction of new hangars supplied with specialized PC Air Units and GPUs. The military worked through general and sub-contractors to source this equipment from manufacturers like JBT. To help it through the bidding process and to win these government contracts, JBT hired Defendant Bryan Bullerdick. Bullerdick left JBT after about three years, however, to become the head and majority shareholder of Defendant B GSE Group, LLC (BGSE). BGSE initially acted as JBT's designated distributor of ground support equipment for F-35 hangars. After the parties’ one-year distributorship agreement ended, BGSE continued informally to source JBT's equipment for several years as a reseller.
Unbeknownst to JBT, while BGSE's and JBT's informal relationship was ongoing, Bullerdick began representing to industry contacts, primarily contractors and sub-contractors, that BGSE was the designer of several of JBT's products and that JBT was merely the manufacturer of BGSE's designs. During the same period, Bullerdick transmitted some of JBT's proprietary information to one of its competitors, Twist, Inc. (Twist), to help Twist develop a competing PC Air unit. BGSE later began competing directly with JBT to win F-35 projects by supplying products manufactured by Twist and others.
After learning of Bullerdick's conduct, JBT brought this action for, among other things, misappropriation of trade secrets, unfair competition and trademark violations under the Lanham Act, and breach of contract.1 Defendants assert several counterclaims, including tortious interference, negligent misrepresentation, and defamation.2 Defendants’ claims stem primarily from JBT's efforts to inform industry contacts of its lawsuit against BGSE and Bullerdick. Before the court are the parties’ cross-motions for summary judgment on JBT's affirmative claims3 and JBT's Motion for Partial Summary Judgment on Defendants’ Counterclaims.4 For the reasons given below, the court grants in part and denies in part JBT's First Motion, grants in part and denies in part Defendants’ Motion, and grants in part and denies in part JBT's Second Motion.5
Both JBT and Defendants operate in the specialized ground support equipment industry.7 Ground support equipment refers to the products and equipment needed to service and maintain commercial and military aircraft.8 Two essential components of ground support equipment are PC Air units and GPU systems.9 Since at least 2003, JBT has manufactured and sold PC Air units under its Jetaire brand and GPU systems under its Jetpower brand.10 JBT sells these products for commercial and military aircraft, both domestically and internationally.11
Among the products JBT sells is the Jetaire HPCF 3000 (the HPCF 3000), a fixed, high-pressure PC Air unit that JBT designed and manufactures.12 JBT also sells the Jetpower III 270VDC GPU (the 270VDC).13
In 2011, JBT began bidding on projects to supply ground support equipment for the United States Department of Defense's next generation strike aircraft deployed by the Navy, Air Force, and Marines.14 In most instances, this aircraft, the F-35, has required construction of new, specially designed maintenance hangars at military bases in the United States and abroad.15 These F-35 hangars require specialized PC Air units and GPU systems.16 JBT won several government contracts to supply ground support equipment for these hangars.17
In 2011, JBT hired Bullerdick as a sales manager to assist JBT in its efforts to win government contracts for F-35 hangar projects.18 Prior to joining JBT, Bullerdick had worked for two companies that sold ground support equipment,19 and in 2010, Bullerdick formed his own company, Bullerdick GSE, LLC.20 JBT hoped Bullerdick could expand JBT's market share in the PC Air unit and GPU systems space.21
Bullerdick's primary responsibilities at JBT related to its efforts to sell equipment for F-35 hangars on United States and foreign military installations.22
As a condition of his employment, Bullerdick signed JBT's Confidential Information and Inventions Agreement (the 2011 Confidentiality Agreement).23 The 2011 Confidentiality Agreement required that Bullerdick "agree to maintain in confidence all information pertaining to [JBT's] business" to which he had access, including "information related to [JBT's] products, inventions, trade secrets, know-how, systems, formulae, [and] processes."24 The Confidentiality Agreement further required that Bullerdick "agree not to use, communicate or disclose ... such information orally, in writing or by publication either during [his] employment or thereafter."25
Bullerdick resigned from JBT in April 2014.26 Following his resignation, Bullerdick began running BGSE full-time.27
Around the time it hired Bullerdick, JBT formed a business relationship with BGSE, a distributor focused on ground support equipment for military projects.28 On November 11, 2011, the two companies signed a Mutual Non-Disclosure Agreement (the NDA).29 The NDA required the party receiving "Confidential Information" to keep the information "in confidence."30 Additionally, the party receiving Confidential Information "agree[d] to refrain from the use of the Confidential Information for any purpose other than in furtherance of the Disclosure Purpose."31 The confidentiality provisions remained in force for five years from the time the receiving party obtained the Confidential Information.32
On January 18, 2012, JBT and BGSE entered into a one-year Distributorship Agreement (the 2012 Distributorship Agreement).33 This agreement gave BGSE exclusive rights to distribute JBT products to United States military air bases for projects that had small business set aside requirements.34 Under the 2012 Distributorship Agreement, BGSE was required to "retain [JBT confidential information] in confidence and not to use it, or disclose it, except as expressly agreed ...."35 The 2012 Distributorship Agreement further required that "within thirty (30) days after the effective date of termination of [the] Agreement"—i.e., on or around February 18, 2013—BGSE was required "to remove all reference" to JBT from its "letterhead, business forms, advertising literature and place of business," and to refrain from using "any name or trademark suggesting" BGSE "has any relationship" with JBT.36
JBT and BGSE attempted to negotiate an extension of the 2012 Distributorship Agreement in late 2012 before it expired, again in 2014 shortly after Bullerdick resigned, and yet again in 2015, but the companies could not reach an agreement.37 Specifically, JBT refused to accept BGSE's primary demands—exclusivity beyond projects with small business set-aside requirements and a term for more than one year.38 The 2012 Distributorship Agreement expired on January 18, 2013.39
After the contract expired, the parties continued to work together under the same terms.40 JBT continued to sell its products to BGSE for resale as late as March 2017.41 Over the course of the parties’ approximately five-year relationship, BGSE purchased around $7.7 million worth of equipment from JBT.42
To obtain contracts to supply equipment for U.S. military projects, manufacturers and distributors generally submit quotes to contractors or sub-contractors, who in turn submit bids to the government.43 Once a project is awarded, the prevailing manufacturer or distributor is required to provide a "submittal."44 Project submittals—often referred to as "post-award submittals"—are the "final technical documents to get approval from the government to proceed to make [the proposed] product."45
At times, JBT—sometimes acting on its own and sometimes working through BGSE—responded directly to military project solicitations.46 For instance, in September 2013, the U.S. Navy solicited proposals for equipment for its Shipboard Mobile Electric Power Plant (SMEPP).47 BGSE and JBT initially worked together to submit a qualifying proposal from BGSE, but the Navy ultimately rejected BGSE's SMEPP submittal in February 2014.48 The Navy cancelled the solicitation "due to the fact that no acceptable small business proposals were received."49
After the Navy reissued the SMEPP solicitation in March 2014, JBT submitted an independent proposal and also joined BGSE's proposal.50 In February 2015, the Navy awarded the SMEPP contract to JBT.51
From 2015 to 2017, BGSE independently submitted several bids to sub-contractors to...
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