Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_08-cv-01880/USCOURTS-casd-3_08-cv-01880-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

WORKFLOW SOLUTIONS, LLC, dba

WORKFLOWONE,

Plaintiff,

v.

GEORGE RIFFEL,

Defendant.

 

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Civil No. 08-1880-IEG(LSP)

ORDER TO RESPOND TO

PLAINTIFF’S EX PARTE

APPLICATION

On October 16, 2008, Plaintiff Workflow Solutions (“Plaintiff”) filed an Ex Parte Application for An Order To, inter alia,

Expedite Discovery (“Ex Parte App.”) On November 5 and 12, 2008, the

Court held a Status Conference and Settlement Conference in this

action. 

The Court, having reviewed Plaintiff’s Ex Parte App., and

GOOD CAUSE APPEARING, HEREBY ORDERS Defendant George Riffel

(“Defendant”) to respond in detail under penalty of perjury to each

contention alleged in Plaintiff’s Ex Parte App. Riffel’s response

shall be annotated to all documents, including e-mails, which

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substantiate his position. Riffel’s response shall be filed with

the Court and served on opposing counsel on or before January 12,

2009. With regard to 4 (a)-(e) below, all documents responsive to

Plaintiff’s requests shall be produced to the Court in unredacted

and unedited form. Responses shall be filed and served to the

following:

1. Pre-Settlement Improper Disclosures/Use of Confidential Information

1(a). Plaintiff alleges that in April 2008, prior to the

settlement of the underlying case, Defendant disclosed the 7%

pricing discount he had offered on behalf of Defendant to Brookstone

“2 weeks before (he was) downsized.” Defendant then incorporated

the same 7% discount in Smart Source’s agreement with Brookstone,

which enabled Smart source to match Brookstone’s pricing discount,

(Ex. G to Ex Parte App.)

1(b). In April 2008, Defendant improperly obtained confidential information about Brookstone’s on-going product orders from

Defendant’s customer service representative Anna Ching (“Ching”).

Defendant used that information as a basis for telling Scott Alton

(“Alton”) to limit the orders from Defendant and reduce overall

product inventory with Defendant, which thereafter Brookstone did.

(Ex. F to Ex Parte App.)

1(c). In April 2008, Defendant disclosed confidential

information about Plaintiff’s plans to move inventory to another

warehouse in a few days. Defendant then advised Alton to demand that

“all inventory stays put until Father’s Day.” (Ex. F to Ex Parte

App.)

1(d). After the settlement of the underlying case Defendant

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gave Alton confidential information about Plaintiff’s pricing and

profit margins: “The bag and battery profits have traditionally

funded this program in the most part so losing margin here would

really hurt the health of the program.” (Ex. H to Ex Parte App.)

1(e). Defendant asked Alton to get him the user name and

password to access Plaintiff’s confidential customer website. (Ex.

I to Ex Parte App.)

2. Targeting Plaintiff’s Employees

2(a). Defendant assured Alton that, as of May 22, 2008, “we

have everything lined up and ready to go, including support

personnel.” (Ex. L to Ex Parte App.)

2(b). On July 29, 2008, Ching announced her plan to resign

from Plaintiff, after receiving a telephone call from Alton.

(Declaration of Bob Abbonzio in support of Ex Parte App.) Until

Ching was on board at Smart Source, Defendant was expected to manage

the new Brookstone account. (Ex. P to Ex Parte App.)

2(c). Defendant called Defendant’s Account Executive Dave

Hunt, told Hunt that the Brookstone account was moving to Smart

Source, and asked about Hunt’s plans and options after a recent

change to Hunt’s compensation plan at Plaintiff. Smart Source was

actively recruiting Hunt, who was Plaintiff’s lead account executive

for Brookstone. (Declaration of Bob Abbonzio in support of Ex Parte

App.)

3. False, Misleading, Disparaging Statements about Plaintiff

3(a). Defendant told Alton and Brookstone that Plaintiff

had decided to “exit the vertical retail market” business model and

revert to a “manufacturing mentality.” (Ex. S to Ex Parte App.)

Defendant claimed that Plaintiff had terminated the employment of

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nearly every employee who was part of the vertical retail market

team, beginning with himself. These statements were false. Plaintiff

terminated Defendant’s employment because Defendant misappropriated

money through false business expenses. Plaintiff did not terminate

Ching’s employment and did not terminate others identified by

Defendant.

3(b). Prior to settlement of the underlying case, on 

April 17, 2008, Defendant told Alton that Plaintiff had “down sized”

him. Defendant did not tell Alton that his employment was terminated due to Defendant’s misappropriation of money through false

business expenses.

3(c). On June 8, 2008, Defendant wrote to Alton and

reasserted that he was “down sized” by Plaintiff, and that “the

expense account was the vehicle they used as only an excuse.” (Ex.

R to Ex Parte App.) Alton apparently had learned that Defendant had

misled him about the true reason for Defendant’s termination from

Plaintiff.

3(d). On June 8, 2008, Defendant told Alton that Plaintiff

would now “run the accounts until the profit margins suffer and they

completely abandon the vertical.” (Ex. R to Ex Parte App.) This

statement was untrue.

3(e). On July 24, 2008, after the settlement of the

underlying case, Defendant gave Alton “reasons to move” from

Brookstone:

1. Defendant claimed a “change in Plaintiff’s business

model from vendor neutral distribution model to manufacturing

mentality” and “loss of retail vertical market focus.”

2. Defendant claimed an unspecified “High level

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management change and culture change.”

3. Defendant claimed “Recent price increases on

shopping bags” - which Alton recognized as “bum” information.

(Ex. S to Ex Parte App.)

3(f). On August 10, 2008, Defendant prepared talking

points for Smart Source’s meeting with Brookstone after Brookstone

apparently began to question whether Defendant and Alton had worked

out an “inappropriate” deal.

1. Defendant claimed that “(Plaintiff) will try

anything to prevent the loss of the Brookstone account to SS or GR.

Even though they are for sale and exiting the retail vertical market

they will stop at nothing to prevent the account from joining SS.”

(Ex. T to Ex Parte App.)

2. Defendant claimed that the 7% discount Smart

Source gave Brookstone was “far more grater[sic] than what would

have occurred had they stayed with Plaintiff.” In fact, Defendant

had offered the same 7% discount on behalf of Plaintiff two weeks

before Plaintiff terminated Defendant’s employment. (Ex. F to Ex

Parte App.)

3. Defendant claimed that Plaintiff would “institute

release charges, line item charges and storage charges soon,” when

his interference with the Brookstone account, causing a huge loss,

is what led to the need for such charges. (Ex. T to Ex Parte App.)

4. Defendant claimed that “SS has hired the account

management team and a few members of the retail vertical market

team” In fact, Defendant had been trying to help Smart Source hire

these people, but did not succeed.

5. Defendant claimed that “(Plaintiff) has terminated

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all the members of the retail vertical market team except for one.”

In fact, Plaintiff had terminated Defendant. Plaintiff did not

terminated Ching’s employment, nor Ed Violoria’s employment.

4. Selective Production and Withholding Records

4. When Plaintiff and Defendant tried to resolve the 

current dispute, Defendant selectively produced some documentation

that Plaintiff requested. 

4(a). Plaintiff refused to produce his complete business

plan from March 2008. (Ex. K to Ex Parte App.)

4(b). Defendant had communications through other email

addresses, but he did not produce any such communications. (Ex. V to

Ex Parte App.)

4(c). Defendant had communications using Yahoo! Messenger,

but did not produce any such communications. (Exs. W, L to Ex Parte

App.)

4(d). Defendant withheld 2 pages of unspecified information. (Ex. X to Ex Parte App.)

4(e). Defendant withheld at least 55 pages of “intro

letters,” a “brochure,” power point materials and other unspecified

documents, which he apparently used in connection with a sales

presentation to Plaintiff’s customer, Perfumania. (Ex. Y to Ex Parte

App.)

DATED: December 19, 2008

Hon. Leo S. Papas

U.S. Magistrate Judge

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