CleanFish seeks USD 1 million in updated trade secrets lawsuit

Published on
August 8, 2019

Seafood supplier CleanFish’s trade secrets lawsuit against its former co-founder, Dale Sims, continues after CleanFish filed additional allegations and asked for USD 1 million (EUR 892,000) in punitive damages.

In the amended complaint, CleanFish alleges that Sims - now founder of Buena Vista Seafood in San Francisco, California - and Island Sea Farms’ theft of its customer lists and proprietary information has cost it approximately 15 percent of its overall business.

In its original complaint, filed in late June, CleanFish alleged that Sims supplied CleanFish’s customer list to Island Sea Farms and “embarked in a concerted effort, together with at least one of the plaintiff’s suppliers, to build his new business off of the list of customers and suppliers now owned by his former enterprise, as well as its purchasing data, sales figures, and other analysis,” the complaint stated.

By supplying customer lists and other information, Sims’ “divert[ed] business away” from CleanFish and caused its revenue to drop “precipitously,” according to the complaint.

In the amended complaint, CleanFish makes similar allegations, and says that Sims’ use of the company’s proprietary information goes against a confidentiality agreement he signed and is disloyal to the company he owns a 5 percent interest in. 

CleanFish is “unable to comment on ongoing legal matters,” Alisha Lumea, director of marketing and communications for CleanFish, told SeafoodSource.

Sims told SeafoodSource he does not own a stake in CleanFish. 

“I have text messages … showing that I kept asking for a 5 percent stake in CleanFish LLC, but I was never given it,” he said. “Where are my stock certificates or ownership documents?”

In addition, CleanFish claims that the confidentiality agreement he signed with CleanFish Inc. in 2007 did not carry over to CleanFish LLC, the new company formed after Sea2050 acquired CleanFish.

Sims believes CleanFish is persisting with the lawsuit because “they are trying to bleed me dry - my lawyer fees are now in excess of USD 30,000 (EUR 27,000) - but they are not going to be successful.”

In addition, the other defendants in the lawsuit, which include British Columbia, Canada-based Island Sea Farm; Paul Simpson, Island Sea Farms’ owner; and Nanci Dixon, an Island Sea Farm employee; intend to file a motion to dismiss CleanFish’s amended complaint by 16 August.

“Plaintiff’s amended complaint remains insufficient to state a cause of action against the [Island Sea Farm] defendants for trade secret misappropriation. Furthermore, the court continues to lack personal jurisdiction over the [Island Sea Farm] defendants,” Island Sea Farm said in documents filed in U.S. District Court in California.

The amended complaint asserts that in the final weeks of his employment, and continuing after his resignation, Sims acted with Island Sea Farms, Nanci Dixon, and Paul Simpson to misappropriate Plaintiff’s confidential data to fulfill orders to CleanFish’s customers in California and elsewhere. 

The orders were fulfilled by Island Sea Farms, “in furtherance of their conspiracy,” CleanFish said.

“Continuing after his resignation, Sims used the confidential data in contacting customers and suppliers of plaintiff in an effort to divert business away from plaintiff and to his new, competing entity, Buena Vista Seafood,” the complaint stated. 

On 31 May, before Sims’ resignation, another CleanFish employee took incoming orders written on a legal pad. However, after Sims told the employee that Island Sea Farms would no longer supply mussels to CleanFish, and he planned to resign at the end of the day, Sims asked for the hand-written orders. The employee, Karim Machi, refused.

On 1 June, CleanFish executives found a document (in hard-copy) titled “BUENA VISTA SEAFOOD – CUSTOMER LIST.” 

“Importantly, when the list of Plaintiff’s May 31st orders (taken by Karim) is compared with the Buena Vista Seafood Customer List, it is clear that Sims and Buena Vista not only stole the plaintiff’s customers, but the actual Friday orders (including the specific pound and unit amounts), as well,” CleanFish stated. “By Sims’ and Island Sea Farms’ premeditated action of waiting until 1 p.m. to disclose that mussels would not be sold to the plaintiff, the defendants were able to capture all of plaintiff’s Friday sales and customers.” 

CleanFish is also asking Sims to turn over a company-owned laptop that Sims says he released to a tech company that his attorney recommended. Sims “rebooted” his computer in an effort to destroy and spoil evidence, the complaint stated.

Photo courtesy of CleanFish

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