A federal judge denied a Chinese toy manufacturer’s partial motion to dismiss four counts in a $40 million lawsuit filed against it by a Rogers company.
Redman & Associates originally filed a lawsuit alleging breach of contract, tortiuous interference and misuse and misappropriation of trade secrets against Sales Chief Ent. (Hong Kong) Co. LTD in early September, then re-filed an amended complaint in February in which R&A asked for $20 million in punitive damages and $20 million in compensatory damages.
U.S. District Judge Timothy Brooks wrote that he “finds its factual allegations to be sufficiently detailed so as to state claims on all Counts and put Sales Chief on notice of the claims alleged.”
Both sides met in Brook’s courtroom Thursday morning, setting a trial date for May 16, 2016. In papers filed with the court, both sides agreed they would need eight months for fact discovery and two months for expert discovery. They expect a trial to last two weeks.
Redman & Associates and Sales Chief attempted to negotiate a settlement in February and now view an agreement unlikely. Redman & Associates has asked for a jury trial.
The dispute stems from the breakdown in the business relationship between Sales Chief, which manufactures battery-operated ride-on toy cars, and R&A, which acted as Sales Chief’s vendor for putting the toys in Walmart stores. The partnership fell apart after R&A announced it would use is Nuvzn Technologies LLC to begin manufacturing the toy cars as part of a 3-year, $70 million contract with Wal-Mart as part of the retail giant’s Made in USA initiative.
R&A CEO Mel Redman said Sales Chief engaged in an “underhanded strategy” to undermine the agreement, which resulted in Wal-Mart canceling the contract and Nuvzn laying off 14 employees. Sales Chief, in court filings, said Redman was a failed businessman who didn’t uphold his contract with Sales Chief.
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