UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

PEOPLEFLO MANUFACTURING,

INC.,

Plaintiff,

v.

SUNDYNE, LLC, ACCUDYNE

INDUSTRIES LLC, DXP 

ENTERPRISES, INC., and 

PUMPWORKS, LLC,

Defendants.

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PUMPWORKS, LLC,

Counter-Plaintiff,

v.

PEOPLEFLO MANUFACTURING, 

INC.,

Counter-Defendant.

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No. 20 CV 3642

Magistrate Judge Young B. Kim

May 9, 2022

MEMORANDUM OPINION and ORDER

Before the court are Defendants Sundyne, LLC’s (“Sundyne”) and 

PumpWorks, LLC’s (“PumpWorks”) motions for sanctions against Plaintiff 

PeopleFlo Manufacturing, Inc (“PeopleFlo”) under Federal Rule of Civil 

Procedure 37(b)(2)(A). (See R. 184, Sundyne’s Mot.; R. 188, PumpWorks’s Mot.) 

Through its motion Sundyne seeks entry of an order dismissing PeopleFlo’s claims 

for breach of a non-disclosure agreement and misappropriation of trade secrets

(Counts IV and V). In the alternative, Sundyne asks the court to appoint a Special 

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Master to determine whether PeopleFlo’s allegedly protected information qualifies 

as a trade secret and, if so, whether Sundyne misappropriated that information.

PumpWorks similarly asks the court to strike from the amended complaint 

PeopleFlo’s allegations relating to misappropriation of trade secrets. Although 

PeopleFlo does not directly charge PumpWorks with a trade secret 

misappropriation claim, PumpWorks asserts that PeopleFlo “backdoors” trade 

secret allegations against PumpWorks through its breach of contract claim. 

PumpWorks also alleges that PeopleFlo seeks damages for PumpWorks’s supposed

conspiracy to cover up trade secret misappropriation. For the following reasons, the 

motions are denied:

Procedural History

This diversity case stems from PeopleFlo’s efforts to find a large industry 

partner that could help bring its novel sealless pump design to market. PeopleFlo 

negotiated with Sundyne and its affiliate Accudyne, LLC (“Accudyne”), as well as 

DXP Enterprises, Inc. (“DXP”) and its subsidiary PumpWorks, before finally 

reaching a deal with PumpWorks. This business relationship did not go smoothly. 

PeopleFlo alleges that PumpWorks failed to uphold its end of the bargain, that DXP 

and Sundyne sabotaged the deal, and that Accudyne and Sundyne used PeopleFlo’s

trade secrets collected during negotiations to develop and market a competing 

product. PeopleFlo brings a variety of claims against Defendants under Illinois law 

stemming from these allegations. In turn, PumpWorks countersues PeopleFlo, 

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alleging that PeopleFlo breached their agreement by failing to timely deliver 

working products and return advance payments made for those products.

Fact discovery in this case began in July 2020. (R. 125.) In September 2020,

Sundyne served its first set of interrogatories to PeopleFlo, asking it in part to:

9. Identify all products manufactured or sold by Sundyne that 

misappropriate any aspect of PeopleFlo’s technology, and for each such 

product, identify: (a) the product name; (b) what aspect or feature of 

the product that PeopleFlo contends that Sundyne misappropriated; 

and (c) whether, to PeopleFlo’s knowledge, the design feature or 

technology existed prior to the date that PeopleFlo first used it, and if 

so, where said technology was used.

(R. 184, Sundyne’s Mot. Ex. 2 at 10.) PeopleFlo responded a month later, and

Sundyne challenged the lack of specificity in its response. (See id. at 2.) Thereafter, 

PeopleFlo twice supplemented its answer to Interrogatory (“INT”) No. 9. However, 

the first supplemental response did not address INT No. 9(b) or 9(c) and only 

identified “categories” of information misappropriated, rather than the actual trade 

secret information that Sundyne allegedly stole, and the second failed to address 

INT No. 9(c). (See R. 170.) In December 2021 Sundyne moved to compel PeopleFlo 

to provide more details to its answer. (R. 139, Sundyne’s Mot. to Compel.)

The court granted Sundyne’s motion to the extent Sundyne sought the 

supplementation of PeopleFlo’s response to INT No. 9(c) and denied it to the extent

Sundyne sought information not requested in INT No. 9. (R. 170.) The court also 

cautioned PeopleFlo that it would “be barred from using or relying on any 

responsive technical information it fails to disclose” and that “[a]s such, a detailed 

narrative answer, combined with the identification of documents reflecting such 

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information, is crucial.” (Id.) In February 2022 PeopleFlo supplemented its 

response to INT No. 9(c). (R. 184, Sundyne’s Mot. Ex. 4.) But Sundyne contends 

that PeopleFlo failed “to conduct a good faith investigation to determine whether its 

claimed ‘confidential information,’ was actually known to third persons” before 

PeopleFlo used that technology. (Id. at 4-5.) Sundyne asks the court to sanction

PeopleFlo for failing to comply with the court’s order by dismissing certain claims. 

(Id.)

For its part, PumpWorks served PeopleFlo with its first set of interrogatories 

in June 2021, asking it in part to:

16. Identify all trade secrets you claim have been misappropriated 

by Sundyne or Accudyne with sufficient particularity to distinguish 

such trade secret from public domain information and information 

disclosed in one or more of the published patent applications filed by 

you or on your behalf that were or could have been observed by Jim 

Hook when he visited PeopleFlo or Sundyne.

(R. 189, PumpWorks’s Mem. at 2-3.) PumpWorks claims that PeopleFlo did not 

identify any trade secrets in response to INT No. 16. (Id. at 3 (citing PeopleFlo’s 

supplemental answer to INT No. 16).) As a result, in December 2021 PumpWorks

moved to compel PeopleFlo to supplement its response. (R. 144, Def. PumpWorks’s

Mot. to Compel.) 

The court granted PumpWorks’s motion to compel as to INT No. 16, finding 

that although PeopleFlo argued it could not answer the interrogatory, allegations in 

its amended complaint suggested otherwise. (R. 168 at 6-7.) Specifically, while 

PeopleFlo conceded it was not present during a June 2019 visit to Sundyne’s plant

by Jim Hook, a DXP regional vice president, PeopleFlo alleges in its amended 

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complaint that PumpWorks observed PeopleFlo’s “concept, confidential information 

and trade secrets” during that visit. (Id. (citing R. 77, Amend. Compl. at 16).) In 

light of this allegation, the court ordered PeopleFlo to “provide a narrative answer 

to No. 16 and detail the trade secrets PumpWorks was able to observe Sundyne 

using as of June 2019, answer ‘unknown,’ or withdraw the allegation.” (Id. at 7.) 

The court further ordered PeopleFlo to “explain whether any of the trade secrets 

identified in answer to No. 16 have ever been disclosed in connection with any 

patent prosecutions.” (Id.)

In response to the court’s order, PeopleFlo supplemented its answer to 

INT No. 16 by stating that its knowledge of PumpWorks’s alleged conspiracy was 

based on information DXP and PumpWorks representatives communicated to 

PeopleFlo after Hook’s visit. (R. 189, PumpWorks’s Mem. at 3-4.) PumpWorks

asserts that PeopleFlo’s response violates the court’s order because it does not 

provide a narrative answer and is “indecipherably vague” or “simply parrot[s]” 

information that is publicly available. (Id. at 4.) PumpWorks further contends that 

PeopleFlo “referenc[ed] 52 documents containing 481 pages without providing any 

pinpoint citations to distinguish which of these materials” constitute its trade 

secrets and which, “if any, disclose . . . material comprising unprotectable third 

party content or public domain materials.” (Id. at 8.) PumpWorks thus asks the 

court to sanction PeopleFlo by striking all trade secret claims and allegations 

related to misappropriation of trade secrets by PumpWorks from the amended 

complaint.

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Analysis

PeopleFlo brings its misappropriation of trade secrets claim pursuant to the 

Illinois Trade Secrets Act (“ITSA”), 765 ILCS 1065/1. (R. 77, Amended Compl. 

¶¶ 182-88.) ITSA requires a plaintiff to establish that: “(1) the information at issue 

was a trade secret; (2) . . . it was misappropriated; and (3) it was actually used in 

the defendant’s business.” In re Adegoke, 632 B.R. 154, 165 & n.8 (Bankr. N.D. Ill. 

2021). A trade secret is defined under ITSA as “information, including but not 

limited to, technical or non-technical data, a formula, pattern, compilation, 

program, device, method, technique, drawing, process, financial data, or list of 

actual or potential customers or suppliers.” 765 ILCS 1065/2(d). To prevail on a 

trade secret claim, a plaintiff must “identify specific trade secrets subject to 

protection.” Vendavo, Inc. v. Long, 397 F. Supp. 3d 1115, 1130 (N.D. Ill. 2019). It is 

not enough for a plaintiff to assert that “general categories of information are trade 

secrets.” Id. (stating that “lack of specificity greatly reduces [a plaintiff’s] chances of 

demonstrating that a defendant has misappropriated its trade secrets”). 

Furthermore, a plaintiff must show that the information sought to be protected is 

not “generally known or understood within an industry” or to the public and that 

the plaintiff “has taken ‘affirmative measures’ to prevent others from using the 

information.” Adegoke, 632 B.R. at 166 (citing Gen. Elec. Co. v. Uptake Techs., Inc., 

394 F. Supp. 3d 815, 831 (N.D. Ill. 2019)).

As explained, Sundyne and PumpWorks move for sanctions under Federal 

Rule of Civil Procedure 37(b)(2)(A) based on PeopleFlo’s alleged failure to comply 

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with discovery orders requiring it to identify its trade secrets and disclose whether 

any part of the protected information is publicly available. Rule 37(b)(2)(A) allows a 

court to enter “just orders” for failing to obey a discovery order, including 

prohibiting that party from “supporting or opposing designated claims or defenses,” 

striking or staying proceedings, dismissing the action, and entering a default 

judgment. A court also has “inherent authority to manage judicial proceedings and 

to regulate the conduct of those appearing before it, and pursuant to that authority 

may impose appropriate sanctions to penalize and discourage misconduct.” 

Ramirez v. T&H Lemont, Inc., 845 F.3d 772, 776 (7th Cir. 2016). Under the latter 

authority, sanctions are justified only “if the offender willfully abuses the judicial 

process or litigates in bad faith.” Donelson v. Hardy, 931 F.3d 565, 569 (7th Cir. 

2019). Where sanctions are appropriate, the court must ensure they are

proportional to the circumstances. Id.; see also Ebmeyer v. Brock, 11 F.4th 537, 547 

(7th Cir. 2021).

Sundyne and PumpWorks contend that PeopleFlo has failed to comply with 

discovery orders and impeded discovery regarding its asserted trade secrets, 

thereby stymying their ability to defend against such allegations. (R. 184, 

Sundyne’s Mot.; R. 189, PumpWorks’s Mem.) Sundyne and PumpWorks also 

submit evidence in the public domain that they say precludes them from 

understanding what “concrete secrets” PeopleFlo accuses them of misappropriating. 

(R. 189, PumpWorks’s Mem. at 6, 9-18; see also R. 184, Sundyne’s Mot. at 6-12.) 

Based on PeopleFlo’s alleged misconduct, Sundyne and PumpWorks ask the court to 

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sanction PeopleFlo by dismissing or striking PeopleFlo’s claim for or allegations 

relating to breach of a non-disclosure agreement and misappropriation of trade 

secrets (Counts IV and V) or, in the alternative, the appointment of a Special 

Master.

PeopleFlo responds that it has answered Sundyne’s INT No. 9(c) and 

PumpWorks’s INT No. 16 as ordered by the court and, as such, the current motions 

should be denied. (R. 202, Pl.’s Resp. at 1; R. 208, Pl.’s Resp. at 1-2.) PeopleFlo also 

argues that Sundyne and PumpWorks are using their sanctions motion to dismiss 

claims in lieu of filing a motion for summary judgment, which PeopleFlo says is a 

non-starter because of genuine issues of material fact.1 (R. 202, Pl.’s Resp. at 1; 

R. 208, Pl.’s Resp. at 3-4.)

The court agrees with PeopleFlo that sanctions are not warranted here, at 

least not at this juncture. In trade secret cases “parties often clash, and courts 

disagree” about when and to what extent trade secrets must be identified. Joseph 

Loy, Kirkland & Ellis, Trade Secret Rulings May Guide on Disclosure in Litigation, 

May 14, 2020, https://www.kirkland.com/publications/article/2020/05/trade-secretrulings-guide-disclosure-litigation (last visited May 9, 2022). A plaintiff may 

attempt to delay articulating with particularity its trade secrets to avoid limiting 

the scope of its claim, while a defendant may seek an early, detailed identification 

to pinpoint the trade secret information being asserted. Id. Given the parties’ 

1 PeopleFlo further argues that PumpWorks lacks standing to bring the current 

motion because PeopleFlo did not charge PumpWorks with misappropriating 

PeopleFlo’s trade secrets. (R. 208, Pl.’s Resp. at 2.) Because the court denies the 

current motions on other grounds, it declines to also address this argument.

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divergent interests, determining whether a plaintiff has satisfied its burden of 

adequately disclosing its trade secrets can be “particularly fact-intensive.” Id.

The parties here are engaged in this clash, and through written discovery

and motions to compel, Sundyne and PumpWorks have sought, and pursuant to 

court orders received, supplemental responses from PeopleFlo with more specificity 

regarding the subject trade secrets. (See R. 168; R. 170; R. 184, Sundyne’s Mot. 

Ex. 4; R. 189, PumpWorks’s Mem. Ex.3 at 3-5.) While Sundyne and PumpWorks

are not satisfied with the responses secured, they have not demonstrated that 

PeopleFlo disobeyed any court orders in violation of Rule 37(b)(2)(A). Nor have they 

established that the court’s admonition—that PeopleFlo would “be barred from 

using or relying on any responsive technical information it fails to disclose,” 

(R. 170)—is insufficient to protect Sundyne and PumpWorks from defending 

themselves against what they perceive to be poorly identified trade secrets.

As PeopleFlo points out, Sundyne and PumpWorks do not deny that 

PeopleFlo responded to written discovery as ordered by the court. (R. 202, Pl.’s 

Resp. at 12.) They instead argue that the responses provided are unclear or can be 

rejected based on information publicly available. Through the current motions, 

Sundyne and PumpWorks seek to prove that the trade secrets PeopleFlo identified 

are not protectible, providing detailed analysis of public sources for support. 

(R. 186, Sundyne’s Mot. at 6-12 (sealed); R. 192, PumpWorks’s Mem. at 9-18 

(sealed).) PeopleFlo responds with its own detailed description of what it asserts 

are its protectible trade secrets. (R. 203, Pl.’s Resp. at 15-27 (sealed).) But a 

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sanctions motion is not the proper vehicle to resolve the substantive merits of the 

case—including what information, if any, relating to PeopleFlo’s asserted trade 

secrets is protectible. See M.H. Eby, Inc. v. Timpte Indus., Inc., No. 19-386, 2019 

WL 6910153, at *8 (E.D. Pa. 2019) (declining to address whether alleged “knowhow” qualified as trade secret because to rule on such issues “at an early stage . . . 

would require the court to wade into the substantive merits of the parties’ dispute”). 

This case is still in the fact discovery stage, and key depositions on these issues 

have not yet occurred. Thus, it would be premature—and inappropriate in response 

to requests for sanctions—to wade into the merits as to the protectability of the 

asserted trade secrets. See id.

Moreover, Sundyne and PumpWorks fail to establish that any sanction—let 

alone the severe sanction of dismissal of the trade secrets claim and related 

allegations—is warranted at this time.2 In TNS Media Research, LLC v. Tivo 

Research & Analytics, Inc., the Federal Circuit rejected a request for a similar 

sanction where the plaintiff, in describing its trade secrets, “merely listed several 

hundred documents, without explaining how these documents demonstrated the 

existence of trade secrets.” 629 Fed. Appx. 916, 928 (Fed. Cir. 2015). The Federal 

Circuit reasoned that it found “no indication that [the plaintiff] purposefully shirked 

its discovery obligations” or violated any court order in waiting until after discovery 

2 As PeopleFlo points out, Sundyne has not provided legal authority or other 

support for its alternative sanction request for the appointment of a Special Master. 

(R. 203, Pl.’s Resp. at 28.) Regardless, because Sundyne has not shown that 

PeopleFlo violated a discovery order, the court denies the request to appoint a 

Special Master.

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to narrow the description of its asserted trade secrets, and that even if it had, other 

sanctions would have sufficed, such as “preclusion of omitted information” not 

supplemented in a timely manner pursuant to Federal Rule of Civil 

Procedure 26(e). Id. at 929-30; see also Nationwide Sales & Servs., Inc. v. 

Envirocare Techs. Int’l, Ltd., No. 16-6617, 2018 WL 2436969, at *7 (E.D.N.Y. May 

30, 2018) (citing TNS and noting need to “exercise . . . caution before . . . impos[ing] 

the extreme sanction of dismissal based on a failure to adequately identify trade 

secrets”).

As in TNS, neither Sundyne nor PumpWorks has established that PeopleFlo 

disobeyed a discovery order. See Lynchval Sys., Inc. v. Chi. Consulting Actuaries, 

Inc., No. 95 CV 1490, 1996 WL 735586, at *7 (N.D. Ill. Dec. 19, 1996) (“Rule 37(b)(2) 

only authorizes a court to impose a sanction if the party fails to comply with a 

discovery order.”). Sundyne and PumpWorks may not like PeopleFlo’s answers, but 

they did receive them. They also have not shown that “preclusion of omitted 

information” is an insufficient remedy for untimely supplementation of PeopleFlo’s 

trade secrets. TNS, 629 Fed. Appx. at 929-30. Nonetheless, because PumpWorks 

alleges in its motion that PeopleFlo has now produced so much information that it 

cannot determine what actually constitutes PeopleFlo’s trade secrets, (R. 189, 

PumpWorks’s Mem. at 8), the court expands its admonition to PeopleFlo to make 

clear that it will be barred from using or relying on any responsive technical 

information it fails to disclose or identify with reasonable particularity, as required 

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by Rule 26(e). This will be especially true if “such failure results in prejudice to” 

Sundyne or PumpWorks. TNS, 629 Fed. Appx. at 929-30.

Conclusion

For the foregoing reasons, the motions for sanctions are denied.

ENTER:

____________________________________

Young B. Kim

United States Magistrate Judge

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