PruvIT Ventures, Inc. v. Elevacity, LLC et al

Amended Comlaint filed in State Court, #

Eastern District of Texas, txed-4:2018-cv-00119

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4 PageID #: 142 Lynne Finley District Clerk Collin County, Texas By Tatiana Ortega Deputy Envelope ID: 22223383 CAUSE NO. 296-00472-2018 PRUVIT VENTURES, INC., § IN THE DISTRICT COURT § § Plaintiff, § § v. § 296th JUDICIAL DISTRICT § ELEVACITY, LLC and ROBERT § OBLON, § § § Defendants. § COLLIN COUNTY, TEXAS PLAINTIFF'S FIRST AMENDED PETITION AND APPLICATION FOR TEMPORARY RESTRAINING ORDER, TEMPORARY AND PERMANENT INJUNCTION Plaintiff Pruvit Ventures, Inc. ("Plaintiff") files this First Amended Petition and Application for Temporary Restraining Order, Temporary and Permanent Injunction against Defendants Elevacity, LLC ("Elevacity") and Robert Oblon ("Oblon") (collectively, the "Defendants"). In support thereof, Plaintiff respectfully shows the Court the following: I. DISCOVERY LEVEL AND RULE 47 STATEMENT 1. Plaintiff pleads for discovery under Level 3, pursuant to TEXAS RULE OF CIVIL PROCEDURE 190.4. Plaintiff seeks damages in an amount within the jurisdictional limits of this Court. More specifically, Plaintiff seeks monetary relief of more than $200,000 and non-monetary relief. PLAINTIFF'S FIRST AMENDED PETITION AND APPLICATION FOR INJUNCTIVE RELIEF PAGE 1 CaseCase 4:18-cv-00119-ALM-KPJ 4:18-cv-00119 Document Document 1-2 Filed 1-5 Filed 02/21/18 02/21/18 PagePage 22 of 285 ofPageID 94 PageID #: 29 #: 143 II. PARTIES 2. Plaintiff is Pruvit Ventures, Inc. ("Plaintiff"), a corporation authorized to conduct business in the state of Texas with a place of business located in Collin County, Texas at 901 Sam Rayburn Hwy, Melissa, Texas 75454. 3. Defendant, Elevacity, LLC ("Elevacity"), is a Texas limited liability company that can be served with process through its registered agent, Frank Walters at 11109 New Orleans Drive, Frisco, Texas 75035, or wherever he may be found. 4. Defendant, Robert Oblon ("Oblon"), is an individual residing in Collin County, Texas that can be served with process at 7805 Pirates Cove, Plano, Texas, 75025 or wherever he may be found. III. JURISDICTION AND VENUE 5. This Court has jurisdiction over the subject matter herein as the amount in controversy is within the jurisdictional limits of the Court. This Court has personal jurisdiction over Defendants because Elevacity is a Texas limited liability company authorized to conduct business in the State of Texas, and Defendant Oblon is a Texas resident. 6. Venue is proper in Collin County, Texas pursuant to §15.002(a)(1) & (2) of the Texas Civil Practices & Remedies Code as all or substantially all of the events giving rise to Plaintiff's causes of action arose in Collin County and Defendants reside in Collin County, Texas. PLAINTIFF'S FIRST AMENDED PETITION AND APPLICATION FOR INJUNCTIVE RELIEF PAGE 2 CaseCase 4:18-cv-00119-ALM-KPJ 4:18-cv-00119 Document Document 1-2 Filed 1-5 Filed 02/21/18 02/21/18 PagePage 23 of 385 ofPageID 94 PageID #: 30 #: 144 IV. STATEMENT OF FACTS 7. Plaintiff is a worldwide leader in ketone technology and a pioneer in selling ketone products. Plaintiff is a direct sales community based company that has representatives throughout the country to promote, market, and sell its unique products. 8. Plaintiff holds an exclusive sub-license to market keto products that utilize the combination of BHB salts with MCT oils in the network marketing space. For years, Plaintiff has actively marketed and sold a product line that utilizes this keto technology. 9. In order to protect this license, the technology, Plaintiff's customers, and its Pruver promoters, Plaintiff requires each promoter to execute a Pruvit Pruver Agreement (the "Agreement"). The Agreement, in part, prohibits a Pruvit promoter, during the term of the Agreement and for a six (6) month period of time following separation from Plaintiff, from the following: (1) recruiting Plaintiff's promoters for another direct sales or network marketing business; (2) recruiting Plaintiff's customers for another direct sales or network marketing business; (3) selling, or enticing others to sell products or services that compete with products and services offered by Plaintiff. See Exhibit B, section 3.6, Solicitation for Other Companies or Products (pp. 11-12). 10. Additionally, the Agreement prohibits Plaintiff's promoters during the term of the Agreement and for a two (2) year period following a promoter's separation from Plaintiff, from: (1) using Plaintiff's confidential and proprietary PLAINTIFF'S FIRST AMENDED PETITION AND APPLICATION FOR INJUNCTIVE RELIEF PAGE 3 CaseCase 4:18-cv-00119-ALM-KPJ 4:18-cv-00119 Document Document 1-2 Filed 1-5 Filed 02/21/18 02/21/18 PagePage 24 of 485 ofPageID 94 PageID #: 31 #: 145 trade secret information to compete with Plaintiff or for any purpose other than promoting Plaintiff; and (2) disclosing to any person or entity any of Plaintiff's confidential and proprietary trade secret information in another network marketing company. Plaintiff's trade secrets specifically include its business reports, lists of customer and promoter names and contact information and any other information, which contain financial, scientific or other information both written or otherwise circulated by Plaintiff or pertaining to the business of Plaintiff. See Exhibit B, section 12.0, Proprietary Information & Trade Secrets (pp. 34-35). 11. Defendant Elevacity is a new multi-level marketing company founded by Defendant Oblon. On or about January 25, 2018, Elevacity began actively marketing and selling a keto-coffee creamer product called KETO CRE that directly competes with many of Plaintiff's keto products, including Plaintiff's KETO//KREME. The full extent of ingredients in Defendants' KETO CRE are not yet known, it is believed such product may utilize the above-referenced BHB salts and in turn violate Plaintiff's exclusive license to sell products containing such technology in the multi-level marketing and network marketing space. 12. Worse yet, Elevacity has also begun to actively cross-recruit many of Plaintiff's own promoters with extensive knowledge of Plaintiff's keto product line to become promoters for Elevacity. Elevacity and Oblon have specifically targeted numerous long time Plaintiff promoters as such individuals have larger marketing downlines, and prior access to Plaintiff's confidential or proprietary information. PLAINTIFF'S FIRST AMENDED PETITION AND APPLICATION FOR INJUNCTIVE RELIEF PAGE 4 CaseCase 4:18-cv-00119-ALM-KPJ 4:18-cv-00119 Document Document 1-2 Filed 1-5 Filed 02/21/18 02/21/18 PagePage 25 of 585 ofPageID 94 PageID #: 32 #: 146 13. Defendants are aware that the individuals they are recruiting from Plaintiff are subject to and bound by non-competition and confidentiality clauses in the Agreement. First, anyone including Defendants can view the referenced restrictive covenant terms on Pruvit's website, www.pruvitnow.com, under the Policies and Procedures link. Moreover, Defendant Oblon has been in the direct sales industry for many years and is well aware such cross-recruiting and solicitation are prohibited industry-wide. 14. Furthermore, Defendants have recently unsuccessfully recruited some of Plaintiff's promoters that have reported back on Defendant's improper interference. Specifically, Defendants recently sought a secret conference call with Plaintiff promoter Rob DeBoer to recruit him to Elevacity. See Affidavit of Rob DeBoer, attached as Exhibit A. 15. Despite such awareness, Defendants have proceeded to actively recruit Plaintiff's promoters and encourage them to violate their Agreements by soliciting Pruvit's customers and recruiting their fellow promoters to sell the competing keto products. Additionally, since being recruited by Defendants, many of the former promoters have begun a pattern of disparaging Plaintiff and its products in favor of Elevacity's keto products. 16. Indeed, due to the tortious and other improper conduct of Defendants, Plaintiff has identified at least one hundred (100) of its promoters who are now actively promoting products on behalf of Elevacity, over sixty (60) of which have been suspended by Plaintiff for improperly: (1) soliciting Plaintiff's other promoters; PLAINTIFF'S FIRST AMENDED PETITION AND APPLICATION FOR INJUNCTIVE RELIEF PAGE 5 CaseCase 4:18-cv-00119-ALM-KPJ 4:18-cv-00119 Document Document 1-2 Filed 1-5 Filed 02/21/18 02/21/18 PagePage 26 of 685 ofPageID 94 PageID #: 33 #: 147 (2) selling competing products on behalf of Elevacity; (3) selling competing products to Plaintiff's customers; and/or (4) using/disclosing Plaintiff's confidential and trade secret information for the benefit of Elevacity. 17. Defendants' conduct constitutes tortious interference with Plaintiff's contracts, specifically the Agreements with Plaintiff's promoters, and current and future customers, as well as misappropriation of Plaintiff's confidential information and trade secrets. 18. Due to Defendants' wrongful conduct made a subject herein, Plaintiff seeks the Court immediately enjoin Defendants from further harming Plaintiff, and award Plaintiff injunctive relief and all damages related to the improper conduct of Defendants. V. CAUSES OF ACTION 19. The factual allegations set forth in the foregoing paragraphs are incorporated herein by reference for all purposes as if set forth in full: COUNT 1—TORTIOUS INTERFERENCE 20. As detailed above, Plaintiff is a party, or was a party, to valid contracts with its promoters and third parties; or had a reasonable probability that the Plaintiff would have entered into a business relationship with third parties. 21. Defendants willfully interfered with those contracts or potential contracts, intentionally encouraging current promoters and customers of Plaintiff to cease doing business with Plaintiff. Defendants' interference with Plaintiff's PLAINTIFF'S FIRST AMENDED PETITION AND APPLICATION FOR INJUNCTIVE RELIEF PAGE 6 CaseCase 4:18-cv-00119-ALM-KPJ 4:18-cv-00119 Document Document 1-2 Filed 1-5 Filed 02/21/18 02/21/18 PagePage 27 of 785 ofPageID 94 PageID #: 34 #: 148 contracts and relationships proximately caused disruption to Plaintiff's business and irreparable harm for which injunctive relief is appropriate. COUNT 2—MISAPPROPRIATION OF TRADE SECRETS 22. Plaintiff has a possessory right to its trade secret and confidential information. Specifically, Plaintiff has a possessory right to its licensed ketone technology and intellectual property, Plaintiff's sales and marketing processes, promoter training processes, Plaintiff's lists of customer and promoter names and contact information, product ingredient and formulae information, and other company information, which contains financial, scientific, or other information both written or otherwise. Defendants have wrongfully acquired access to this information from Plaintiff's former promoters and representatives, and are using such information to directly compete with Plaintiff and to gain a business advantage for itself and usurp business opportunities belonging to Plaintiff. 23. Defendants misappropriated Plaintiff's confidential information by using and/or disclosing it without Plaintiff's consent even though Defendants knew at the time that the information was acquired under improper and unlawful circumstances. In fact, Defendants are known to have hired a former Pruvit spokesperson, Toney Freeman, to assist in the design, formulation and marketing of the Defendants' competing product. As Plaintiff's spokesperson, Mr. Freeman had access to some of Pruvit's confidential information including formulas and mixes used to manufacture Pruvit products including the previously referenced KETO//KREME. It is believed Defendants and Freeman conspired to disclose this PLAINTIFF'S FIRST AMENDED PETITION AND APPLICATION FOR INJUNCTIVE RELIEF PAGE 7 CaseCase 4:18-cv-00119-ALM-KPJ 4:18-cv-00119 Document Document 1-2 Filed 1-5 Filed 02/21/18 02/21/18 PagePage 28 of 885 ofPageID 94 PageID #: 35 #: 149 information to Defendants in exchange for interests in Elevacity and for a distr