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Assa Abloy Sales and Marketing Group, Inc. v. Task, Fcz

United States District Court, D. Connecticut

February 2, 2018

TASK, FCZ, Defendant.


          Jeffrey Alker Meyer United States District Judge

         This is a lawsuit about one company's theft of trade secrets from another. In 2014, defendant TASK, Fcz filed an arbitration claim for breach of contract against a corporate sibling of plaintiff Assa Abloy Sales and Marketing Group, Inc. Defendant brought this arbitration claim against plaintiff on the basis of information it learned only as a result of misappropriating a USB drive that belonged to plaintiff. Defendant lost its breach-of-contract arbitration claim, and plaintiff has now brought this federal diversity lawsuit under the Connecticut Uniform Trade Secrets Act and Connecticut computer crimes laws, principally seeking damages for the legal fees that it incurred to defend against the arbitration.

         Following a bench trial and consideration of all the evidence, I conclude that plaintiff has proven its claims by a clear preponderance of the evidence. Plaintiff is entitled to compensatory damages in the amount of $1, 146, 489.55, as well as punitive damages in the amount of $2, 292, 979.10, and an award of costs and attorney's fees. Defendant is further ordered to return the USB drive to plaintiff and to destroy all copies of the information from that drive remaining in its possession, and enjoined from any future use of that information.

         Findings of Fact

         The Court heart trial testimony over a period of just one day on July 31, 2017, from the following individuals called by plaintiff:

• Ted Yong (general manager for Assa Abloy Americas International)
• L. Page Heslin (general counsel and secretary for Assa Abloy Americas)

         Defendant did not present any witnesses. Based on the testimony, documentary exhibits, and stipulated facts, I make the following findings of fact.[1]

         Plaintiff Assa Abloy Sales and Marketing Group, Inc. (“Sales and Marketing Group”) is a Delaware corporation with its principal place of business in New Haven, Connecticut. Plaintiff is a corporate subsidiary of the Assa Abloy Group, a leading manufacturer of doors and related products. Specifically, plaintiff is part of Assa Abloy Americas, which also included the Assa Abloy Door Group, LLC (“Door Group”). Plaintiff provided sales and marketing services to other corporate subsidiaries of Assa Abloy Americas, including the Door Group. Assa Abloy Americas International was an operating company within the Sales and Marketing Group, and Ceco Door Products (“Ceco”) was an operating company within the Door Group. Ceco, located in Milan, Tennessee, manufactured hollow metal doors.

         Defendant TASK, Fcz (“TASK”) is a company owned by Shafaqat Santrampurwala and Kashmira Shafaqat, organized under the laws of the United Arab Emirates (“UAE”), with its principal place of business in Sharjah, UAE. Defendant is in the business of distributing, manufacturing, and selling doors and locks. Defendant entered into two contracts with Ceco: a Distribution Agreement in 1995 and a License Agreement in 2003. The former agreement allowed TASK to sell door products manufactured by Ceco in America. This eventually proved too expensive a business model, and so it was replaced by the latter agreement, which permitted TASK to manufacture Ceco products itself in the UAE, in exchange for royalty payments to Ceco. But Ceco terminated its relationship with TASK in 2012, after concerns about the quality of TASK-manufactured products and delinquent royalty payments.

         The events at issue in this case chiefly arose from the activities of Jim Peairs, a business development manager for the Sales and Marketing Group who was responsible for the TASK/Ceco account. As such, Peairs would travel to the UAE several times in a given year, and on one of his trips to the UAE in late September 2012 he misplaced a USB drive.[2] This was shortly after TASK's relationship with Ceco had been terminated. Around that time Peairs became sick with pneumonia, and in late November 2012 he died of cancer.

         After Peairs lost the USB drive, Tariq Shafaqat, son of the owners of TASK, found it. Thereafter, Ms. Shafaqat printed the entire contents of the drive, over 1, 100 pages, a print job that took almost an entire day. The documents from the USB drive, which were introduced into evidence as Plaintiff's Exhibit #2, include numerous sales and financial records from Ceco, as well as copies of Peairs' passport, driver's license, insurance, and credit cards.

         Ms. Shafaqat testified at the arbitration hearing that Peairs gave her permission to access and print the contents of the USB drive, but the arbitrator found this claim incredible, and I agree. The evidence at trial did not support any plausible reason why Peairs would have given TASK permission to access a drive containing so much of his personal information, especially since this would have been a flagrant violation of his professional obligations to Assa Abloy, which had just terminated its business relationship with TASK.

         Armed with the information from the USB drive, defendant filed a claim against Ceco for breach of contract before the American Arbitration Association on March 20, 2014. This case was based in substantial part on the documents from the USB drive, and in fact defendant would not have brought the case without those documents. Defendant stated as much in its Statement of Claim. Plaintiff's Ex. #1 at 5 (“TASK did not discover that Ceco violated the Distribution Agreement and License Agreement until June 2012, when TASK discovered a USB drive in one of its vehicles. . . . TASK would not have been able to detect these breaches of contract otherwise.”). Defendant did not just rely on these documents, however, but altered several of them to bolster its case against Ceco.

         The arbitrator ultimately rejected defendant's claims against Ceco, and imposed sanctions of $274, 257.24 against TASK for the fraudulent alteration of evidence. See Plaintiff's Ex. #5. Plaintiff's total legal expenses incurred in defending the arbitration claims were $1, 156, 424.66.

         Plaintiff filed the instant lawsuit on May 1, 2015, alleging violations of the Connecticut Uniform Trade Secrets Act (“CUTSA”), Conn. Gen. Stat. § 35-50, et seq., and Connecticut computer crime laws. Conn. Gen. Stat. § 53a-251; Conn. Gen. Stat. § 52-570b.


         I will first address several threshold arguments made by defendant for why I should not reach the merits of plaintiff's claims. Then I will ...

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