The allegations in a recent trade secrets lawsuit filed by CleanFish against its former co-founder Dale Sims and a Canadian mussel supplier are “groundless,” Sims told SeafoodSource.
Soon after Sims resigned from CleanFish and formed his own seafood importing firm, Buena Vista Seafood in San Francisco, California, U.S.A., sustainable wholesaler CleanFish, also based in San Francisco, filed a lawsuit in federal court in California.
CleanFish alleges that Sims, as well as Island Sea Farms in Salt Spring Island, British Columbia; Paul Simpson, Island Sea Farms’ owner; and Nanci Dixon, an Island Sea Farm employee; conspired to steal trade secrets. 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. CleanFish lost a contract with Island Sea Farms worth around USD 1.5 million (EUR 1.3 million) in revenue annually.
“In the short period of time between April 2018 when Sims’ sold the assets of CleanFish to the plaintiff and his employment changed from owner and operator of CleanFish, Inc. to an employee of plaintiff, and his subsequent sudden and unexpected resignation on May 31, 2019, Sims embarked in a concerted effort, together with at least one of the plaintiff’s suppliers, to misappropriate trade secrets in the form of, inter alia, confidential, proprietary, and trade secret information, including but not limited to, (i) detailed customer lists, purchasing data, sales figures and other analysis, and (ii) detailed supplier lists, sales data and other analysis belonging to plaintiff,” the complaint said.
However, Sims said that Island Sea Farms opted to stop doing business with CleanFish prior to Sims’ departure, due to slow payments by CleanFish.
“They are not the only company that has terminated a relationship with CleanFish [because of slow payments],” Sims said.
In addition, Sims said he attempted to broker a deal to get CleanFish and Island Sea Farms back together prior to leaving the company.
Sims also denies supplying customer lists to Island Sea Farm. Instead, he shared packing lists, he said.
“Everything that was put forth in their complaint was denied by the judge,” Sims said.
Federal Judge Haywood S. Gilliam denied CleanFish’s temporary injunction against Buena Vista Seafood and Island Sea Farms in late July, noting that CleanFish’s case is not likely to be successful because “on the record presented, Plaintiff has not met its burden of identifying and establishing the existence of any trade secret,” Gilliam wrote. “While courts have held that customer lists may be considered trade secrets, they do not per se qualify as such.”
However, CleanFish is pursuing the lawsuit because “it has become a real emotional issue on their side,” Sims said. “I’m sorry to see that happen. I wish everyone well there. Cleanfish was my baby; I gave birth to it, I would love for CleanFish to be the most successful on the planet.”
“Hopefully, at some point, sanity will replace emotion and we can all go our separate ways, so we can do what our companies should be doing - sourcing top quality seafood in the U.S.,” Sims said.
SeafoodSource reached out to CleanFish’s new managing director, Mike Moniz, to respond to Sims’ claims.
"I am unable to comment on the pending legal matter involving Dale Sims and Island Sea Farms, Inc, and anything further is simply fake news,” Moniz told SeafoodSource.
Sims said he left CleanFish, the company he founded in 2008, because he had “become unhappy there” after Sea2050’s acquisition of the company in April 2018.
“Some of it had to do with slow payments to vendors and I was uncomfortable with the management style,” Sims said. “I had been promised a certain amount of ownership in CleanFish LLC that never materialized.”
Part of his decision to leave was based on the departure of Anna McFarlane – the former CEO of Wulf’s Fish, also owned by Sea2050 – in March.
“She was going to be managing director of CleanFish LLC. I had looked forward to working with her,” Sims said.
