Allied Feather and Down Corp. v. Down-lite International, Inc., No. 1:2020cv00516 - Document 57 (S.D. Ohio 2020)
Court Description: ORDER denying 53 Motion for Judgment on the Pleadings. Signed by Judge Susan J. Dlott on 11/16/2020. (wam)
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Altbaier Lawsuit on February 27, 2020. (Doc. 13-3.) Significantly, the Court concluded that Down-Lite established that it had protectable interests in its relationships with its outdoor apparel customers, but not in its customer lists, supply chain information, or pricing information. (Id. at PageID 299.) Accordingly, the Court found that it “would be unreasonable to broadly prohibit Altbaier from working for a competitor in these circumstances.” (Id. at PageID 303.) The Court exercised its authority under Raimonde v. Van Vlerah, 42 Ohio St. 2d 21, 325 N.E.2d 544 (1975), to modify the restrictive covenant in the Shareholder Agreement to make it reasonable. The Court only enjoined Altbaier “through August 31, 2020 from soliciting, directly or indirectly, or otherwise diverting away from Down-Lite, the sale of down insulation to companies who were DownLite’s existing outdoor apparel customers as of June 30, 2019.” (Id. at PageID 307.) The Preliminary Injunction Order did not resolve the Altbaier Lawsuit. Claims for damages remained pending. However, the parties agreed to settle and filed a Stipulation for Entry of Consent Decree and Order on September 17, 2020. (No. 1:19-cv-627, Doc. 114.) The parties executed a Settlement Agreement and Release, the terms of which were not disclosed to the Court, and then entered into the Consent Decree and Order. (No. 1:19-cv-627, Doc. 115.) In the Consent Decree and Order, Altbaier agreed that he would not “on or before December 31, 2020, have any communication in any regard (text, email, phone, Whatsapp messages, social media direct messages, Facebook posts, or other), directly or indirectly, with any Outerwear Representative of the entities identified in the [Settlement] Agreement.” (Id. at PageID 2192.) 2. Effect of the Altbaier Lawsuit on this Action Down-Lite mistakenly argues that, in the Preliminary Injunction in the Altbaier Lawsuit, this Court enforced restrictive covenants in the Shareholder Agreement that prohibited Altbaier 5 Case: 1:20-cv-00516-SJD Doc #: 57 Filed: 11/16/20 Page: 6 of 7 PAGEID #: 1079 from working for a competitor such as Allied. It did not. The Preliminary Injunction Order enforced a narrower restriction upon Altbaier than the Shareholder Agreement purported to impose. The Court found that Down-Lite’s only protectible interest was in its customer relationships, so the Court enjoined only to whom Altbaier could solicit the sale of down insulation. The Preliminary Injunction did not restrict by what company Altbaier could be employed. It would not have barred this Court from determining that Allied could employ Altbaier. More fundamentally, the Preliminary Injunction Order is no longer applicable. It expired by its terms on August 31, 2020. Altbaier and Down-Lite now have agreed to be bound by a Settlement Agreement, but the terms of their private agreement are not binding upon Allied. The Court also has entered a Consent Decree and Order in the Altbaier Lawsuit by which Altbaier has agreed not to communicate with certain outerwear representatives of the entities identified in the Settlement Agreement. The Court does not know the names of the entities listed in the Settlement Agreement. Regardless, the Consent Decree and Order also is not binding upon Allied. Moreover, the restriction upon Altbaier in the Consent Decree and Order will expire on December 31, 2020. By contrast, the deadline for discovery in this case between Allied and Down-Lite is not until May 3, 2021. Down-Lite has not established as a matter of law that the Court will have to deny declaratory relief to Allied. 6 Case: 1:20-cv-00516-SJD Doc #: 57 Filed: 11/16/20 Page: 7 of 7 PAGEID #: 1080 IV. CONCLUSION For the foregoing reasons, Down-Lite’s Motion for Judgment on the Pleadings (Doc. 53) is DENIED. IT IS SO ORDERED. Dated this 16th day of November, 2020. BY THE COURT: S/Susan J. Dlott Susan J. Dlott United States District Judge 7
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