A Vermont soup company filed a complaint in U.S. District Court in Texas Tuesday against its Mexican supplier, alleging the company broke its contract and stole trade secrets.
The complaint filed in Houston by New England Country Foods (NECF) LLC claims that Mexico-based Empacadora Frape and several of the company’s executives failed to deliver on a contract for packaged beef chili ordered by Texas prison commissaries.
NECF also claims Empacadora Frape’s executives — Pedro Barboglio Jones, Pedro Barboglio Murra and Luis Arratia Diaz — held its raw goods “hostage” in Mexico after it became clear Empacadora Frape couldn’t manufacture and export the finished product from Mexico to the U.S. and “instead used the company’s trade secret recipes to pursue other customers.”
NECF is based in Manchester, Vermont, and is the parent company of New England Country Soup.
NECF began negotiations with Empacadora Frape in 2016 to fulfill a contract with the Texas Department of Criminal Justice to supply a line of chili to its facilities.
In May 2017, NECF signed a contract with Empacadora Frape to produce chili and other items to be manufactured and packaged in Mexico and exported across the U.S.-Mexico border.
Empacadora Frape opened a new production facility in the Mexican city of Torreón in 2017, where it would manufacture and package the products. Torreón is located about 340 miles from Laredo, Texas.
According to the complaint, NECF provided Empacadora Frape with its recipes as well as nutritional information and packaging instructions.
“It was understood by all parties that such information disclosed by NECF to defendants were NECF’s trade secrets,” said the filing.
NECF alleges that the defendants failed to perform and provide the manufacturing services as agreed and retained the raw materials provided by NECF.
NECF also alleges that Empacadora Frape failed to provide NECF adequate accounting relating to the raw materials, packaging components or finished goods and has refused it access to the Torreón manufacturing facility.
According to the filing, Empacadora Frape released some finished goods to NECF but did not follow the labeling instructions required by the contract and they were refused entry at the U.S.-Mexico border.
Empacadora “knew or should have known of their inability to provide the manufacturing services based upon the specifications, formulations and volume requirements provided by [NECF] but chose to lure NECF into the agreement by delay, subterfuge, outright misrepresentations and fraud,” the filing states.
NECF is seeking an unspecified amount for damages, as well as to be granted judgment for no less than $120,000 for attorney’s fees through the time of trial, according to the court filing.
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