Valassis, Sunflower in Discovery: Sunflower denies all claims in sampling suit.
A lawsuit filed by Valassis Communications, Livonia, MI, charging rival sampler Sunflower Group with unfair competition and misappropriation of confidential information (April promo) is in the discovery stage with a trial date set for May 15, 2000, according to information obtained by promo.
Valassis filed suit in February in Michigan’s Third Circuit Court, alleging that representatives of Overland Park, KS-based Sunflower “induced” employees at Valassis’s Mexicali, Mexico, fulfillment plant to provide the names of potential sampling clients.
Sunflower issued a counter-claim in March denying the allegations. It also asked the court for $75,000 in punitive damages stemming from alleged defamatory statements made by Valassis in connection with the suit.
In a statement filed May 19, Valassis asked the court to compel Sunflower to turn over e-mails and other documents dating back to 1997 that it believes will support its allegations. Valassis claims to have obtained “a copy of a Sunflower e-mail of `hot prospects’ [which] contains information known only to Valassis. Some of the names on the list were not actively involved in the sampling business and had never sampled before. Indeed, Valassis was marketing these specific companies due to personal quirky relationships,” the court request states.
Sunflower called Valassis’s request “a fishing expedition… designed to obtain confidential business information that is not relevant to the specific allegations,” according to the company’s response filed with the court.
Valassis declined to explain its “personal quirky relationships,” citing restrictions on publicly discussing an ongoing lawsuit. The company also would not say what action it has taken against the employees who allegedly took bribes from Sunflower representatives in exchange for information on Valassis customers and prospects.
Valassis told the court it wants to contact terminated Sunflower employees to ask them how Sunflower may have obtained and used confidential information from Valassis.
Sunflower will provide information, including a list of employees it terminated in ’98, execs there said. “We vigorously deny all the claims of their lawsuit,” says Sunflower president Dennis Garberg. “We are certain that the ongoing discovery process will show the lack of merit of their baseless allegations and we will be vindicated.”
In June 1994, Valassis agreed to pay $14 million to Sullivan Marketing to settle a defamation suit Sullivan had filed against it.
Sampling revenue at Valassis jumped 79 percent to $28.3 million in ’98, nearly four-fold the 20-percent increase it projected. Total ’98 revenue rose 9.8 percent to $741.4 million, per the company’s annual report.
Sunflower projects ’99 revenues of $80 million, mostly from sampling, a 20 percent increase over ’98, the company reports.
