Court Opinion

ID: 3196843
Source: CourtListenerOpinion
Date Created: 2016-04-22 15:01:07.027796+00
Date Added: 2024-06-11T14:37:03.294819
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                             File Name: 16a0220n.06

                                               Case No. 15-1728

                              UNITED STATES COURT OF APPEALS
                                   FOR THE SIXTH CIRCUIT

                                                                                                 FILED
NEDSCHROEF DETROIT CORPORATION,                              )                             Apr 22, 2016
NEDSCHROEF HERENTALS N.V., and                               )                        DEBORAH S. HUNT, Clerk
KONINKLIJKE NEDSCHROEF HOLDING                               )
B.V.,                                                        )
                                                             )
        Plaintiffs-Appellees,                                )        ON APPEAL FROM THE UNITED
                                                             )        STATES DISTRICT COURT FOR
v.                                                           )        THE EASTERN DISTRICT OF
                                                             )        MICHIGAN
BEMAS ENTERPRISES LLC, MARC A.                               )
RIGOLE, and BERNARD E. LEPAGE,                               )
                                                             )
        Defendants-Appellants.                               )

        BEFORE: BOGGS and KETHLEDGE, Circuit Judges; STAFFORD, District Judge.*

        PER CURIAM. Marc A. Rigole and Bernard E. LePage had been long-time employees

of Nedschroef Detroit Corporation when they formed—under their wives’ names—Bemas

Enterprises LLC (“Bemas”). Nedschroef Detroit is a Michigan corporation that was formed in or

about 1991 to service and provide replacement parts for fastener machines that were

manufactured by Nedschroef Herentals H.V.1 in Europe but used in North America. Without

Nedschroef’s knowledge, Rigole and LePage formed Bemas in 2011 to also service and provide

        *
            The Honorable William H. Stafford, Jr., Senior United States District Judge for the Northern District of
Florida, sitting by designation.
        1
           Nedschroef Detroit Corporation and Nedschroef Herentals N.V. (a Dutch affiliate of Nedschroef Detroit)
are subsidiaries of Nedschroef Holding B.V. (hereinafter, collectively “Nedschroef”).
Case No. 15-1728, Nedschroef Detroit Corp. v. Bemas Enterprises LLC

replacement parts for Nedschroef machines in North America. During all times material to this

case, Rigole was the manager of Nedschroef Detroit, the highest ranking Nedschroef employee

in North America. LePage was a project and service engineer. Both had the authority to issue

quotations, order replacement parts from suppliers, enter into contracts, and access Nedschroef’s

passcode-protected trade secrets.

       Nedschroef fired Rigole and LePage in 2013, after learning about the competing

operations of Bemas. Nedschroef thereafter filed suit against Bemas, Rigole, and LePage

(collectively “Defendants”), seeking damages and injunctive relief. The district court granted

summary judgment in Nedschroef’s favor on nine counts: breach of the duty of loyalty, breach of

fiduciary duty and misappropriation of corporate opportunities, violation of the Michigan

Uniform Trade Secrets Act, conversion, statutory conversion, unfair competition, tortious

interference, unjust enrichment, and civil conspiracy. The district court awarded Nedschroef

$3,680,344.18 in damages and permanently enjoined Defendants from providing replacement

parts or services for Nedschroef machines in North America. This appeal followed.

                                                 I
       We review the district court’s grant of summary judgment de novo. United Rentals

(N. Am.), Inc. v. Keizer, 355 F.3d 399, 405 (6th Cir. 2004). Because the parties and their counsel

are familiar with the facts of this case, those facts need not be recounted at length in this

unpublished opinion.

                                                 II
       The district court entered summary judgment on the nine counts after finding no genuine

issues of material fact. Defendants assert on appeal that there were at least two disputed issues of

fact, making summary judgment as to all claims inappropriate.

                                                 2
Case No. 15-1728, Nedschroef Detroit Corp. v. Bemas Enterprises LLC

       Defendants first point to what they say is the “crux of much of the case”—whether

Rigole and LePage, while employed by Nedschroef, formed and operated Bemas as a competing

business. According to Defendants, Bemas was not competing with Nedschroef but was rather

“filling a gap” for customers “who were not going to use Nedschroef.” In Defendants’ words:

“[There was testimony in the record] that Bemas would only provide parts and/or services to

Nedschroef machines if customers previously requested a quote for the same part or service from

Nedschroef and the quote was rejected by the customer.” Defendants thus suggest that, contrary

to the finding of the district court, there was a dispute of fact as to whether Bemas and

Nedschroef were true competitors. Defendants do not dispute, however, that: (1) prior to the

formation of Bemas, Nedschroef was the exclusive supplier of replacement parts to North

American owners of Nedschroef machines; (2) Bemas and Nedschroef sold the same

replacement parts and offered the same services for Nedschroef machines; and (3) virtually all of

Bemas’s customers who purchased goods and services for Nedschroef machines were originally

customers of Nedschroef. To suggest that Bemas was not directly competing with Nedschroef is

to ignore both common sense and the undisputed evidence in the case. The district court did not

err in finding, as an undisputed fact, that Rigole and LePage formed and operated Bemas as a

competitor of Nedschroef while they remained employees of Nedschroef.

       Defendants also challenge the district court’s finding that Defendants misappropriated

Nedschroef’s proprietary secrets, including Nedschroef’s drawings of replacement parts, access

to which was limited and which contained the following warning language: “These drawings are

property of Nedschroef and Machienefabriek Herentals. No reproductions without written

permission.” Defendants claim that there was a question of fact regarding whether they obtained

drawings from Nedschroef for use in manufacturing parts for Bemas. While Rigole and LePage

                                               3
Case No. 15-1728, Nedschroef Detroit Corp. v. Bemas Enterprises LLC

conceded that they had passcode-protected access to Nedschroef’s drawings while they were

employed at Nedschroef, they denied that they obtained any drawings from Nedschroef for use

in manufacturing and selling parts for Bemas. They instead explained that Bemas’s customers

sent them drawings that were then sent to Bemas’s suppliers for “reverse engineering” of parts

for use on Nedschroef machines. Nedschroef’s expert, on the other hand, testified (without

rebuttal) that:

        [I]t is clearly evident that the Bemas drawings were copied directly from the
        Nedschroef drawings. This conclusion is supported by the comparison or drawing
        schemes (projection and views), dimensions and tolerances, surface finish
        specifications, and hardness/heat treatment specifications. The fact that there are
        virtually no differences between the drawings (and in many case, they are
        photocopies) eliminates any possibility that the Bemas drawings were created
        through reverse engineering or any other legitimate means.

Document production from Bemas’s suppliers, moreover, showed that these suppliers received

photocopies of Nedschroef drawings from Bemas, with all references to Nedschroef removed,

including the warning not to reproduce the drawings. Steve Woloszyk, a Nedschroef employee

until 2013, testified that while he worked at Nedschroef, his boss, Marc Rigole, gave him

original Nedschroef drawings and instructed him to reproduce the drawings as “Bemas” part

drawings, despite the text on the drawings forbidding reproduction.

        The district judge recognized the factual issue presented by the parties’ opposing

submissions and accepted as true Defendants’ assertion that Bemas obtained some of

Nedschroef’s proprietary drawings from Bemas’s customers (i.e., former Nedschroef customers).

Rigole admitted that, while employed by Nedschroef, both he and LePage on occasion gave

Nedschroef suppliers Nedschroef’s confidential, passcode-protected drawings. The district judge

concluded, however, that regardless of the source from which Defendants obtained the drawings,

Defendants in fact acquired Nedschroef’s confidential drawings through breach of a duty to

                                                4
Case No. 15-1728, Nedschroef Detroit Corp. v. Bemas Enterprises LLC

maintain their secrecy, then used those drawings to manufacture and sell parts in direct

competition with Nedschroef. The district court did not err in this regard.

       Defendants state in the conclusion to their appellate brief that “numerous, significant, and

key questions of fact are in dispute which should have precluded summary judgment.” Other

than the two purported disputes of fact already mentioned, we find nothing else addressed in the

brief that requires discussion.

                                                III
       After careful review of the record and the parties’ arguments on appeal, we are satisfied

that the district court properly granted summary judgment as well as a permanent injunction in

favor of Nedschroef. We AFFIRM.

                                                 5