innovation ventures v rosenblum complaint

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l P ) ~ ( r n r r W ~ l I Dll~ J UN 13 2 0 1 3 J 1 l )Mario n County C ircuit Court

IN THE CIRCUIT COURT OF THE STATE OF OREGONFOR THE COUNTY OF MARION

6 INNOVATION VENTURES, LLC, aMichigan Limited Liability Company7 and LIVING ESSENTIALS, LLC, aMichigan Limited Liability Company,89 Plaintiffs,10 vs.

HARRANG LONG GARYRUDNICK P.c.

360 Ea st 10th AvenueSuite 300

Eugene, OR 97401-3273P hone 541.485.0220

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ELLEN F. ROSENBLUM, in her officialcapacity as Attorney General for theState of Oregon,

Defendant.

Plaintiffs allege:PARTIES

Case No. \'~\lDlv'COMPLAINT(DECLARATORY JUDGMENTAND PROTECTIVE ORDER)CLAIM NOT SUBJECT TOMANDATORY ARBITRATIONFILING FEE AUTHORITY: ORS21.135(1)(g)

1.Living Essentials, LLC and Innovation Ventures, LLC (collectively "LE" or

"plaintiffs") are privately held companies organized and existing under the laws of theState of Michigan with their principal place of business in Farmington Hills, Michigan.

2.Ellen F. Rosenblum is the Attorney General for the State of Oregon, head of the~- ..

Oregon Department of Justice and the chief law officer for the State of Oregon and all ofits departments.IIII

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H AR RA NG L ON G G A RYRUDNICK P.C.

360 E as t 1Dth AvenueSu ite 300

Eugene, OR 97401-3273Phone 541.485.0220

JURISDICTION AND VENUE3.

This Court has jurisdiction over Attorney General Rosenblum because she is anofficial of the State of Oregon. This Court has jurisdiction over the subject matter of thisaction pursuant to ORS 28.010 et seq.

Venue is appropriate in Marion County because the defendant's principal office islocated in this county. ORS 14.060.

FACTUAL BACKGROUND4.

Plaintiffs manufacture and sell the leading energy shot on the market, 5-hourENERGY. 5-hour ENERGY shots were introduced in 2004, and now over ninemillion bottles of 5-hour ENERGY are sold every week. Numerous competitors areseeking to emulate the success of 5-hour ENERGY shots, in particular, by attemptingto replicate LE's proprietary formula. The formula for the energy shot 5-hourENERGY is a trade secret, which is one ofLE's most valuable assets.

5.This dispute arises out of a Civil Investigative Demand ("CID") issued by the

Civil Enforcement Division of the Department of Justice ("DOJ") on January 16, 20l3.Oregon is one of five states that comprise the Executive Committee of a multi stateinvestigation regarding certain issues relating to the advertising of 5-hour ENERGYshots. There are currently thirty-three (33) states participating in the multistateinvestigation. Defendant, acting by and through Assistant Attorney General David Hart,represents Oregon on the Executive Committee.

6.The multi state investigation initially focused narrowly on an-advertisement

campaign that ran for approximately three months ending in October 2012 related to

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1 surveys of doctors. The Executive Committee subsequently expanded its investigation to2 include an inquiry into a claim of "no crash" associated with 5-hour ENERGY shots.

4 Plaintiffs are not seeking to quash or modify the CID. In fact, plaintiffs have5 been providing rolling productions of documents and working collaboratively with DO]6 and representatives of the other states participating in the multi state investigation to7 comply with the CID and similar requests from other states. LE advised DO] that8 production of documents was completed as of May 31, 2013, with written responses and9 a privilege log to follow shortly thereafter. These productions of documents and10 information provide DO] and all of the other participating states with all non-privileged11 documents and information responsive to the CID, with one narrow exception that is the12 subject of this Complaint.13 8.14 CID request #31 states: "Provide all correspondence between You and the15 National Advertising Division ["NAD"] of the Council of Better Business Bureaus that16 refer or relate to a 'crash' following use of 5-hour ENERGY." In response to this17 request, LE produced copies of materials provided to NAD in 2007 in connection with a18 self-regulatory proceeding. These materials included a cover letter and a scientific19 literature review ("Literature Review") that referenced the amounts of specific20 ingredients related to the 5-hour ENERGY products. NAD is a private entity, not21 subject to any public records law or Freedom of Information Act. Because the specific22 amounts of ingredients in the 5-hour ENERGY products are highly confidential and.23 proprietary trade secrets, LE redacted only the amounts - not the ingredients - listed in24 the copies of these two documents that it produced to DOl.25 II26 II

HARRANG LONG GARYRUDNICK P .c.

360 East 10th AvenueSuite 300

Eugene, OR 97401-3273Phone 541.485.0220



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2 On April 17, 2013, Assistant Attorney General Hart requested that LE produce3 un-redacted copies of these two documents so that the specific amounts of ingredients in4 the 5-hour ENERGY shots would be contained in the records of every state5 participating in the multi state investigation. Mr. Hart originally expressed concern that6 "Redaction of this information makes it difficult, if not impossible, to evaluate the7 strength of the experts' opinions." In response, LE offered to provide specific8 information that would assist Mr. Hart's review of the Literature Review. LE voluntarily

9.

9 disclosed to Mr. Hart the amount of caffeine in 5-hour ENERGY, which LE also10 recently released to the public. LE further offered to provide Mr. Hart with a limited11 range of the amounts of the ingredients, as a reasonable balance between DOl's stated12 need for the information, and LE's imperative business need to keep this highly sensitive13 information strictly confidential.14 10.15 Mr. Hart, however, declined LE's offer and continues to seek unredacted copies16 of the two documents. Mr. Hart did not state why LE's offer was insufficient, and he has17 refused to negotiate with LE regarding means by which LE can assist his review of the18 Literature Review without disclosing one of LE' s most valuable assets. Mr. Hart advised19 LE that he would seek to compel production of unredacted documents that reveal the20 specific amounts of ingredients in the formula for 5-hour ENERGY, and on June 11,21 2013, DOJ provided LE with a formal notice of civil investigative demand enforcement.22 11.23 The CID did not request the production of information related to the formula for24 5-hour ENERGY products, nor are the specific amounts of ingredients necessary for25 DOJ to understand the disclosed documents. As noted, that information was included in26 documents responsive to CID Request #31. The ranges offered by LE would provide

H AR R AN G L ON G G AR YRUDNICK P.C.


Eugene, OR 97401-3273Phone 541 .485.0220



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HARRANG LONG GARYRUDNICK P .C .


Eugene, OR 97401-3273Phone 541.485.0220c eav "111 RR.!=;F;'\Rd

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2more than adequate specificity and all of the necessary information for an in-depthscientific review while avoiding the wholly unnecessary and unfair risk of disclosure ofthe specific formula. DOJ cannot articulate any legitimate need for an unredacted copiesof these documents that would outweigh LE's need to maintain the secrecy ofthe precisecomponents of its formula. Further, LE has clarified on labels and advertising that "nocrash" means "no sugar crash" because 5-hour ENERGY contains no sugar. One needonly look to the label to verify this claim - sugar is not in the product. There is no needto look at the exact amount of ingredients in the energy blend to confirm this simple

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truth.12.

LE and DOJ are parties to a Confidentiality Agreement dated February 26,2013,that provides certain protections for confidential information that LE produces.However, those protections are inadequate in light of the highly sensitive informationrelating to the formula for the 5-hour ENERGY products and the incalculable andirreparable harm that would result from public disclosure of this information. TheConfidentiality Agreement does not restrict the ability ofDOJ to disclose confidentialinformation to an unlimited number of its own staff and employees, other state or federalinvestigatory agencies, third parties such as witnesses in the investigation, or to generalmembers ofthe public in connection with a public records request made pursuant to ORS192.410 to 192.505. ORS 192.420( 1) provides that "[e]very person has a right to inspectany public record of a public body in this state, except as otherwise expressly provided byORS 192.501 to 192.505." In this electronic age, one person can irrevocably destroy theprivacy of information by posting content to the internet, whether acting innocently,negligently, or intentionally. Any public disclosure of these highly confidential tradesecrets poses a significant threat to LE.II


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1 13.2 The disclosure exemptions provided in the Oregon Public Records Law, ORS3 Chapter 192, for trade secrets do not alleviate the risk of exposure and irreparable harm to4 LE. LE has no assurance that DOJ would agree that the formula-related information is a5 trade secret or that it is exempt from disclosure under the Oregon Public Records Law.6 Additionally, the trade secret exemption can be overridden if "the public interest requires7 disclosure in the particular instance." ORS 192.501. LE has no assurance that DOJ8 would conclude that the public interest does not require disclosure. Further, because DOJ9 has the ability to disclose LE's trade secret information to the attorneys general of the

10 other states involved in the multistate investigation, LE would be exposed to defending11 against public records requests and other attempts to access its proprietary information in12 thirty-three (33) states across the nation.13 FIRST CLAIM FOR RELIEF14 (Declaratory Judgment)15 14.16 LE realleges paragraphs 1 through 14.17 15.18 This is an action for declaratory judgment pursuant to ORS Chapter 28.19 16.20 An actual and justiciable controversy has arisen between plaintiffs and defendant21 because defendant, acting by and through Assistant Attorney General David Hart,22 contends that it can compel LE to disclose confidential trade secret information relating23 to the formula for 5-hour ENERGY products, the confidentiality of which is critical to24 LE's ongoing business operations, and LE contends that it is entitled to redact that25 information from documents produced in response to defendant's CID.26 II

HARRANG LO NG G AR YRUDNICK P .C .


Eugene, OR 97401-3273Phnne'i41.485.0220



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HARRANG LO NG G AR YRUDNIC K P.C.


Eugene, OR 97401-3273Phone 541.485.0220

17.2 LE will suffer irreparable injury, including the irreparable loss of its competitive

business advantage, if it is compelled to disclose its highly confidential formula-relatedinformation for 5-hour ENERGY shots. LE invested a substantial amount of time andmoney to develop the formula for the 5-hour ENERGY products, and LE derivessignificant economic value from the fact that the formula is not generally known to thepublic. The disclosure of the formula-related information regarding the 5-hourE1\TERGYproducts would destroy the economic value of LE's innovative efforts anddeprive LE of the benefits of its innovation, and discourage future innovative efforts.

18.Plaintiffs therefore are entitled to a declaration that defendant is not entitled to

compel plaintiffs to disclose plaintiffs' proprietary formula information related to the 5-hour ENERGY products.

SECOND CLAIM FOR RELIEF(protective Order)

19.LE realleges paragraphs 1 through 14.

20.ORCP 36(C)(7) permits a court to issue a protective order to prevent disclosure of

a trade secret.21.

LE's formula for 5-hour ENERGY products is a highly confidential trade secret.Disclosure of information relating to the formula would subject LE to significanthardship.

22.The burden and potential for harm resulting from disclosure ofLE's highly



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confidential trade secrets to DOJ outweighs any claim of need for the information. This2 is particularly true here because LE has offered to make more limited disclosures that will3 fully satisfy DOJ's need for information to evaluate the claim under review.4 23.5 Plaintiffs therefore are entitled to a protective order stating that LE is not required6 to provide information to DOJ relating to the specific amounts of ingredients in 5-hour7 ENERGY products.8 PRAYER FOR RELIEF9 WHEREFORE, plaintiffs pray for judgment in their favor and the following10 relief:11 1. A declaration that information relating to specific amounts of ingredients12 in 5-hour ENERGY products is a trade secret;13 A declaration that the Department of Justice is not entitled to disclosure of.14 the specific amounts of the ingredients in 5-hour ENERGY products;15 Issuance of a protective order providing that plaintiffs are not required to.16 provide information regarding the specific amounts of ingredients in 5-hour ENERGY17 products to DOJ; and18 4. An order granting such other and further relief as the Court may deem just19 and proper.20212223242526

HARRANG LONG GARYRUDNICK P.C.


Eugene, OR 97401-3273Phone 541.485.0220

DATED this lihday of June, 2013.

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HARRANG LONG GARYPage 9-

RUDNICK P .C .360 East 10th Avenue

S uite 300Eugene, OR 97401-3273

Milton k Marquis (pro h ac v ic e p en din g)Dickstein Shapiro [email protected]: 202-420-2659Facsimile: 202-420-2201Alana Brown (pro hac vice pending)Dickstein Shapiro [email protected]: 212-277-6763Facsimile: 212-277-6501For Plaintiffs Innovation Ventures, LLCand Living Essentials, LLC

COMPLAINT (DECLARATORY JUDGMENT AND PROTECTIVEORDER)

innovation ventures v rosenblum complaint

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