Titan Int'l Inc. v. Bridgestone Firestone North Am. Tire Llc

• Decision Date: 29 January 2010
• Docket Number: No. 4:07–cv–00087–JEG.,4:07–cv–00087–JEG.
• Citation: 752 F.Supp.2d 1032
• Parties: TITAN INTERNATIONAL, INC., an Illinois Corporation, Plaintiff,v.BRIDGESTONE FIRESTONE NORTH AMERICA TIRE, LLC, a Delaware Corporation; Kenneth Allen, an Individual; and Timothy Ohrt, an Individual, Defendants.
• Court: U.S. District Court — Southern District of Iowa

752 F.Supp.2d 1032

TITAN INTERNATIONAL, INC., an Illinois Corporation, Plaintiff,
v.
BRIDGESTONE FIRESTONE NORTH AMERICA TIRE, LLC, a Delaware Corporation; Kenneth Allen, an Individual; and Timothy Ohrt, an Individual, Defendants.

No. 4:07–cv–00087–JEG.

United States District Court, S.D. Iowa, Central Division.

Jan. 29, 2010.

[752 F.Supp.2d 1035]

Kirk Wayne Bainbridge, Brent B. Green, Duncan Green Brown & Langeness P.C., Des Moines, IA, Robert E. Boston, Waller Lansden Dortch & Davis, Nashville, TN, for Defendant.Gene R. La Suer, Deborah M. Tharnish, Davis Brown Koehn Shors & Roberts P.C., David A. Tank, Dorsey & Whitney LLP, Des Moines, IA, Daniel R. Rosenberg, Briggs & Morgan P.A., Minneapolis, MN, for Plaintiff.

ORDER JAMES E. GRITZNER, District Judge.

This matter comes before the Court on a Motion for Summary Judgment by Defendants Bridgestone Firestone North America Tire, LLC (BFNA); ¹ Kenneth Allen (Allen); and Timothy Ohrt (Ohrt) (collectively, Defendants). Plaintiff Titan International, Inc. (Titan) resists. During the briefing of this motion, Defendants filed a motion to strike the affidavit of Titan's CEO, Maurice Taylor (Taylor). The Court denied the motion to strike but allowed the parties additional time to conduct the depositions of Taylor and Titan President, William Campbell (Campbell), and to supplement the record accordingly. The parties have not requested a hearing, and the Court does not find a hearing is necessary in the resolution of this motion. The matter is fully submitted and ready for disposition.²

I. FACTUAL BACKGROUND

The following facts are either not in dispute or viewed in the light most favorable to the nonmoving party. Baker v. Silver Oak Senior Living Mgmt. Co., L.C., 581 F.3d 684, 685 (8th Cir.2009).

Allen began working for Armstrong Rubber Company (Armstrong) in 1981 as an industrial engineer and later as an account manager in the “original equipment manufacturer” (OEM) sales division. Armstrong was purchased by Pirelli Tire in 1988, which was in turn purchased by Titan Tire in 1994. Under Titan's ownership, Allen worked as an OEM sales account manager and later became Titan's Director of Marketing. Allen did not sign an employment or confidentiality agreement with Titan; however, Allen did receive a Titan employee handbook that listed types of conduct Titan deemed inappropriate and could lead to discipline if an employee engaged in such conduct. Such behavior included “[b]reach of ethics concerning confidentiality of [Titan] or employee information or improper disclosure of trade secrets or confidential information.”

[752 F.Supp.2d 1036]

Titan's App. 17, 20. In his deposition, Allen acknowledged knowing he had a responsibility to keep certain Titan information confidential. Allen resigned from Titan effective June 14, 2002. In the two years preceding his resignation from Titan, Allen did not have direct contact with OEM sales with the exception of two Titan OEM customers located in Mexico that Allen retained because of his Spanish-speaking skills. Titan did not object when Allen resigned.

After resigning from Titan, Allen entered employment negotiations with BFNA and told BFNA that he “did not want to have any kind of fingerprint immediately with North American ... trade customers” and did not want them “to think that any strategies that Titan had were being infiltrated.” Titan's Resp. to SUF ¶ 12; Defs.' App. 43, Allen Dep. 41:16–42:3. Allen accepted an export position with BFNA that involved “sales, logistics, compliance with anything related to activity of customers outside of the U.S. and Canada for agricultural tires.” Titan's Resp. to SUF ¶¶ 12, 14; Defs.' App. 43. Although BFNA sells more than eight thousand different types and sizes of tires, and is an industry leader in manufacturing, marketing, and selling agricultural tires, BFNA does not compete in the wheel business; whereas Titan is active in the wheel business. Allen held the export position with BFNA for approximately three years.

Ohrt began working in the tire industry as an extruder supervisor for Armstrong in 1981. He later became an OEM salesmen for Armstrong and then for Armstrong–Pirelli. Under Titan's employ, Ohrt's responsibilities consisted primarily of handling OEM sales. The major OEMs Ohrt serviced for Titan were Case New Holland (CNH) and AGCO. CNH was consistently the largest client Ohrt serviced.

After Titan bought out Armstrong–Pirelli, Ohrt was required to sign a document entitled “Confidential Information Agreement and Non–Compete” (the Agreement). The Agreement set out several provisions, including employee confidentiality, employee conduct, reasons for termination, and employment restrictions following termination. Titan did not provide any new consideration beyond continued employment in exchange for signing the Agreement and informed its employees that any employee who did not sign the Agreement would be subject to termination.

Ohrt was informed at the time he signed the Agreement that those who failed to sign the Agreement would lose their job. While Ohrt did sign the Agreement on August 20, 2004, in addition to writing in the margins of the Agreement that he wanted the terms “Conflicting Organization” and “Conflicting Product” clarified, he attached a memorandum to the Agreement setting out several areas of concern he had about the Agreement. Ohrt concluded the memorandum stating, “Please don't misunderstand me in all my questions. As I mentioned I am committed to Titan and plan to work for Titan the rest of my career.” Defs.' App. 23; Titan's App. 26; Titan's Resp. to SUF ¶¶ 30, 77. Ohrt was advised that either Titan's legal department or Taylor would respond to Ohrt's questions and concerns; however, as Titan admits, no one at Titan ever responded to Ohrt's concerns.

Sometime in the first quarter of 2004, Ohrt heard from CNH employee Bob Merritt that a position at BFNA would soon be available due to an upcoming retirement. Ohrt submitted a resume for the position, and BFNA invited Ohrt for an interview. Allen, who was then employed by BFNA, was on Ohrt's interview panel. Ohrt denies having discussed the BFNA position with Allen prior to the interview. There is no record of discussions during Ohrt's interview

[752 F.Supp.2d 1037]

regarding the customers that Ohrt serviced while a Titan employee. Titan insists such discussions were unnecessary because Allen was already aware of the customers that Ohrt serviced for Titan based on Allen's prior employment relationship with Titan and because Ohrt listed his Titan customers on his resume.³

Ohrt accepted a position with BFNA as a manager of OEM sales, and BFNA assigned Ohrt to work with existing BFNA customer accounts. Ohrt resigned from Titan in April 2006 without objection from Titan. Titan asserts that it did not object to Ohrt's departure because Ohrt misrepresented the nature of the job that he was taking with BFNA.

Defendants admit Ohrt serviced AGCO as an employee of both Titan and BFNA but argue that BFNA realigned the responsibilities of its account executives in order to avoid potential conflicts for Ohrt upon his arrival. After he commenced employment with BFNA, Ohrt was assigned to work with BFNA's forestry products division. It is undisputed that Titan did not trade in forestry products at that time. Ohrt's top two OEM clients for BFNA were Unverferth and Kubota. Although Ohrt denies any business relationship with either of these customers prior to his employment with BFNA, Titan asserts Ohrt called upon Unverferth while employed by Titan.⁴ Nonetheless, Ohrt contends that he has never shared Titan's confidential information with BFNA or his current clients.

Titan filed this diversity action against Defendants alleging claims for (1) misappropriation of trade secrets under the Iowa Uniform Trade Secrets Act, (2) misappropriation of trade secrets under Iowa Common Law, and (3) breach of contract against Ohrt. Defendants move for summary judgment on all claims, which Titan resists.

II. DISCUSSIONA. Standard for the Motion

“Summary judgment is proper if, after viewing the evidence and drawing all reasonable inferences in the light most favorable to the nonmovant, no genuine issue of material fact exists and the movant is entitled to judgment as a matter of law.” Christoffersen v. Yellow Book USA, 536 F.3d 947, 949 (8th Cir.2008). “A dispute is genuine if the evidence is such that it could cause a reasonable jury to return a verdict for either party.” Miner v. Local 373, 513 F.3d 854, 860 (8th Cir.2008) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). On a motion for summary judgment, the Court views the evidence and inferences in the light most favorable to the nonmovant. Id. The nonmovant “must set forth specific facts sufficient to raise a genuine issue for trial” and “may not rest upon mere denials or allegations in the pleadings.” Id. (citing Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).

B. Misappropriation of Trade Secrets Claims

Defendants argue Titan cannot prove the existence of a trade secret, and therefore

[752 F.Supp.2d 1038]

Titan's claims of misappropriation of a trade secret fail under both the Iowa Uniform Trade Secrets Act and the Iowa common law.

1. Iowa Uniform Trade Secrets Act

Under the Iowa Uniform Trade Secrets Act,

“trade secret” means information, including but not limited to, a formula, pattern, compilation, program, device, method, technique, or process that is both of the following:

a. Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by a person able to obtain economic value from its disclosure or use.

b. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Iowa Code § 550.2(4)(a)-(b); see also Econ. Roofing & Insulating Co. v. Zumaris, 538 N.W.2d 641, 646 (Iowa 1995).

Whether...