Judge Steelman Running For Re-Election To NC COA

COA Judge Steelman announced he's running for re-election. Read more here, where you can also see the results of an interesting poll indicating that while most folks know little at best about judicial elections, they still want to be able to elect their judges.

Idaho Health and Home Products Company Sues Former Employees For Trade Secret Theft - And Ubiquitous News Stories Abound Regarding Longevity Payments

The Associated Press is reporting that an Idaho health and home products company Melaleuca Inc. accuses a Utah company of raiding some of its top sales staff, infringing on company trade secrets and competing unfairly.

Idaho Falls-based Melaleuca filed a lawsuit in federal court Monday against Max International, its top sales executive and dozens of former Melaleuca sales executives.

The complaint seeks more than $10 million in damages and asks a judge to issue an injunction that would stop future sales staff raids. The lawsuit also seeks to cancel a meeting scheduled for Saturday that's described as another attempt by Max International to lure away top Melaleuca sales talent and their customer data.

"Already attempting to piggyback off of Melaleuca's success by duplicating key portions of its business model, Max now seeks to swell the ranks of its (sales) associates by raiding Melaleuca's marketing executives," the lawsuit states.

Max International, a Salt Lake City-based company, was incorporated in 2006 and produces and sells health and wellness products directly to customers.

Melaleuca, founded in 1985, sells about 350 nutritional and household products, including lotions, detergents and powdered drinks. It employs about 3,400 workers worldwide and has 700,000 customers that buy products from sales executives.

Under the company's operating guidelines, sales executives earn commissions on customer sales or by training and motivating other sales staff in gathering new customers. Each sales representative is required to maintain an extensive database, called a business report, of customer contact information and other sales executives they support. The company considers this catalog of information a trade secret.

The lawsuit accuses Max of luring Melaleuca sales staff with lucrative payments and using information from those Melaleuca business reports, causing former Melaleuca employees to violate noncompete agreements that are designed to prevent workers from using inside knowledge to benefit a direct competitor.

The lawsuit accuses Max of attracting at least eight of Melaleuca's best sales staff in the last year and encouraging each to recruit Melaleuca customers, sales staff and others.

Melaleuca is asking for a jury trial and for a judge to issue a restraining order barring Max from recruiting more Melaleuca sales staff. It also seeks a restraining order on a sales presentation planned by Max on Nov. 21 in Atlanta because it "promises to be another unlawful raid of Melaleuca marketing executives."

NOW, we're scratching our heads here in North Carolina - does anyone find it ironic that just two days ago numerous local news oranizations ran these "stories": http://www.localnews8.com/Global/story.asp?S=11526543 or http://www.trib.com/news/state-and-local/article_4d5763f8-b9c8-54ab-ad23-4806f807c95b.html and http://www.nwcn.com/news/business/Idaho-Falls-based-Melaleuca-gives-employees-longevity-payments-70199037.html and http://www.idahobusiness.net/archive.htm/2009/11/16/Melaleuca-issues-checks-to-longterm-employees.

Just wonderin' about the timing of these "news" stories . . . .

COA Opinions Today

Today the Court of Appeals published 13 cases, 9 of them civil. More on these cases later today.

Senate Confirms Andre Davis For 4th Circuit

Last night, the senate confirmed Andre Davis, making him the newest judge on the 4th Circuit Court of Appeals. Read more at the NY Times here.

NC Supreme Court Publishes 2 Today

The NC Supreme Court published only 2 cases today, NC DOT v. Blevins, affirming a COA evidence opinion, and State v. Philip Morris, addressing tobacco company payment obligations to certain farmers under a trust agreement.

COA Gives Green Light To Corporate Veil Piercing Claim

The NC COA reversed a trial court's dismissal of a corporate veil piercing claim. The case is Fischer Inv. Capital, Inc. v. Catawba Dev. Corp.

In Fischer, the trial court dismissed the creditor plaintiff's claim, among other things, for piercing the corporate veil of defendant Catawba Development Corporation. The plaintiff alleged Catawba was dominated and controlled by defendant Mark Lewis, who was in default on debt to the plaintiff. The plaintiff alleged that Lewis, through Catawba, fraudulently transfered property to escape creditors, including the plaintiff. The trial court dismissed for failure to state a claim, and the COA reversed.

The COA held that the complaint alleged all the necessary elements for piercing the corporate veil: 1) complete domination and control such that the corporate entity is merely an alter-ego; 2) use of that control for an improper purpose; and 3) proximate cause of the plaintiff's injuries.

The court rejected the defendants' theory that NC law doesn't support corporate veil piercing outside the personal jurisdiction context. The court also rejected the defendants' theory that because Catawba was not a party to the debt transcation, it could not be held liable for the debt to plaintiff; the court noted that Lewis was a party to the transaction, he was allegedly Catawba's dominator, and, if Catawba were pierced, Lewis would be on the line.

No Parent Liability In Wrongful Death Suit

Hamby v. Profile Products, a 2007 NC Supreme Court case, didn't create per se immunity from workplace injury liability for parent corporations of employers. Under the good samaritan doctrine, an employer's parent company may be liable for workplace injuries. But not where the parent isn't extensively involved in workplace safety and undertakes nothing beyond minimal contact about safety matters. So held the NC COA in Edwards v. GE Lighting Sys., Inc., published yesterday.

It's Official: Wynn and Diaz Nominated to 4th Circuit

As we've noted before, Judge Wynn sits on the NC COA, Judge Diaz on the Mecklenburg Superior bench. More at the N&O here and at the Washington Post here.

NC COA Opinions Today

Good morning. Busy day at the Court of Appeals, which published 35 cases today, 21 of them civil. More on these later today.