Passport Foods Alleges Food Companies Misappropriated Trade Secrets

Plaintiff Passport Foods, LLC filed suit against defendants Culinary International, LLC and Simple Foods, LLC on Monday in the Central District of California. The complaint for misappropriation of trade secrets, breach of contract, and intentional interference with contractual relations comes after the defendants allegedly stole the recipe for the plaintiff’s successful chicken flautas product.

Passport said it has been a provider of “unique and quality foods for restaurants, schools, on-site dining rooms and cafeterias, and for retail sale” since 1978, this longstanding business has led the plaintiff to develop a well-regarded reputation in the food service industry, they claimed.

One of the plaintiff’s brand names is Sofia’s Kitchen. The plaintiffs produces and markets one of their products, Organic Chicken Flautas, under this brand name. The flautas product, which is sold in California and Texas, has been in production and on the market since 2017.

The complaint explains that the organic food retail market is competitive in nature. Passport states that they are able to produce the flautas in a way that “results in a cost-efficient, high-quality product that is desired by consumers and retail vendors and that surpasses its competition.” The plaintiff limits who has access to the flautas recipes in the interest of protecting the trade secrets.

In 2020, the plaintiff engaged Culinary in discussions where Culinary would become a co-packer for Passport food products. Specifically, Culinary’s duties would be to “assist with processing, manufacturing, packaging, and palletizing certain Passport products according to the formulas, specifications, processes, and procedures owned by Passport.”

The two companies entered into a Mutual Confidentiality and Non-Disclosure Agreement where all of Passport’s information was agreed to be kept strictly confidential. Confidential information was defined in the agreement as “any and all trade secrets and other confidential information obtained from or disclosed by [Passport]…”

After the agreement was signed, the plaintiff said they began to disclose confidential and trade secret information to Culinary regarding the manufacturing processes of their flautas product. One of the plaintiff’s competitors, Simple Foods, regularly operates out of the Culinary warehouse and is believed by the plaintiff to be an affiliate of Culinary. In August of 2021, defendant Simple Foods launched a chicken flautas product in competition with Passport’s chicken flautas product. Simple Foods’ products allegedly “resembles and is largely identical to Passport’s [chicken flautas] product.”

The counsel for the plaintiff, Troutman Pepper Hamilton Sanders LLP, conducted food testing of the two products in a third-party laboratory, the complaint said. The tests indicated that Simple Foods’ flautas were “copied from the confidential filling ingredient quantities supplied by Passport to Culinary under the NDA.”

The plaintiff contends that the defendants misappropriated their trade secrets and confidential information by commercializing the information for their own benefit and to the detriment of Passport.

The complaint cites misappropriation of trade secrets, breach of written contract, and intentional interference with economic relations. Passport is seeking preliminary and permanent injunctive relief, actual, compensatory, special, and consequential damages, litigation fees, pre- and post-judgment interest, and any other relief deemed just by the Court.