Stallone Maintains Proof in the Pudding

A judge's removal of Sylvester Stallone and another man from a lawsuit alleging they misappropriated trade secrets in marketing a unique pudding for bodybuilders was a recipe for reversal, an appellate panel has ruled.

The three-justice panel of the 2nd District Court of Appeal unanimously agreed that Los Angeles Superior Court Judge William F. Highberger erred when he dismissed Stallone and John Arnold as defendants in the lawsuit brought by William Brescia, who created the high-protein, low-carbohydrate dessert.

Stallone and Arnold maintained that the proof is in the pudding itself; namely, that there was nothing special about it and that Brescia's legal team did not show how it differs from the general knowledge of those in the same field as the plaintiff.

Six months ago, the nutrition supplements company Instone was found jointly liable with two other men, Keith Angelin and Christopher Scinto, in a $4.9 million jury award to Brescia.

The 62-year-old Stallone, who was once chairman of Instone's board of directors, is no longer affiliated with the company.

Brescia filed his suit against against Instone and other defendants in Los Angeles Superior Court in November 2004, but did not name Stallone and Arnold, the company's chief executive officer, until June 2007.

He alleged various causes of action, including misappropriation of trade secrets and breach of contract.

Three months later, Highberger threw out the portion of the case against Stallone and Arnold.

Justice Thomas L. Willhite Jr., who authored the appellate panel's 29-page opinion, said that despite Highberger's findings to the contrary, "there is no question that Brescia's August 2007 trade secret designation was sufficient" and that the case should have gone forward.

"Brescia's ... trade secret designation meets the reasonable particularity standard ...," Willhite wrote. "He particularly described the details of his pudding ... listing the 15 specific ingredients by common name and the percentage in the total pudding."

Willhite also found that Brescia's lawyers described each step in the mixing, testing and code-marketing of the product.

With the available information, lawyers for Stallone and Arnold could have investigated Brescia's claims and prepared a defense, the appellate panel found.

Brescia's legal action was actually a countersuit after he was sued for defamation by Angelin, a marketing executive. Angelin claimed Brescia defamed him by claiming he stole his pudding idea and made it available to Instone.

Brescia's attorney, John A. Marder, praised the appellate court panel for its ruling and said it was unusual for it to be handed down just five days after the justices heard oral arguments.

A jury will now be allowed to determine if Stallone and Arnold knew or should have known the pudding was a trade secret, according to Marder.

The decision is timely given that it illustrates the importance of protecting trade secrets in order to keep the United States competitive with other countries in the midst of the current economic downturn, Marder said.

Laura E. McSwiggin, a lawyer for Stallone and Arnold, was not immediately available for comment on the appellate court decision.

According to Brescia's suit, he began developing his idea for his pudding in 1999.

"No such product was on the market at the time, although the demand for high protein snack foods was increasing," according to his court papers.

Brescia later paid $100,000 to a laboratory to develop a working formula for his product and in July 2003 signed a contract with a company, Performance World Wide, to license and market the pudding, according to his court papers.

Among the people Brescia dealt with at Performance were Angelin, the company's director of marketing who also controlled business affairs, and Scinto, a food scientist hired by the plaintiff to further develop and improve the pudding, Brescia's court papers state.

In January 2004, Angelin and Scinto left Performance and formed their own venture, Freedom Foods. That same month, Instone signed contracts with both Brescia and Freedom Foods "to evaluate and consider for distribution a unique product that was substantially similar," according to Brescia's court papers.

To persuade Angelin and Scinto to deliver their alleged misappropriated product, Stallone "promised to use his significant financial resources to market and produce the product and to place his company's distinctive name ... on the label," Brescia alleges.

Ads for the pudding referred to it as "Sylvester Stallone Low Carb Pudding," according to Brescia's court papers.

In their Sept. 12 verdict, jurors found Instone, Angelin and Scinto liable for breach of contract and breach of confidence. The same panel rejected Angelin's defamation claim.

The case was tried before Judge Mary H. Strobel, who inherited it when Highberger left for another assignment. Strobel also will preside over the part of the case involving Stallone and Arnold.

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