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DISTRICT OF OREGON
(Portland Division)
CATALINBREAD, LLC,
Case No.: 3:18-cv-1795-HZ
Plaintiff,
v.
DEFENDANTS MILLER, GEE, AND
SCOTT MILLER, HOWARD GEE, BORIS LUTSKOVSKY’S ANSWER TO SECOND
LUTSKOVSKY, and MICHAEL AMENDED COMPLAINT AND
ERICKSON, AFFIRMATIVE DEFENSES
Defendants.
Amended Complaint, Defendants Scott Miller (“Miller”), Howard Gee (“Gee”), and Boris
Lutskovsky (“Lutskovsky”), collectively, the “Defendants,” admit, deny, and allege as follows:
INTRODUCTION
PARTIES
2. Defendants admit the allegations in paragraph 2, except to the extent that the
Catalinbread’s Director of Sales and Marketing and that following Nicholas Harris’s death,
Miller took on additional management responsibilities that he performed in good faith to the
best of his abilities. Defendants further admit that after Mary Burkett (“Burkett”) assumed
ownership of the company, she created a toxic and hostile work environment by among other
things micro-managing Miller, making unilateral and bad management decisions, and taking
tens of thousands of dollars out of the company, which led to production delays even during
a period of market excitement for a new product Catalinbread had just released called the
Belle Epoch Deluxe. Burkett’s bizarre and reckless actions caused distress and anxiety
among Catalinbread employees, including Defendants, who felt that Burkett was intent on
ruining the company. Ultimately, Miller felt he had no option but to resign, which he did on
October 19, 2017. Except as expressly admitted herein, Defendants deny the allegations in
paragraph 3.
pedals for Catalinbread, that he was a close friend of Nicholas Harris, the public face of the
company, the product visionary and video personality for Catalinbread, and a key factor in
the marketing of the Catalinbread brand and products. Defendant Gee further admits that due
to his significant contribution to the success of Catalinbread, Gee and Mr. Harris had entered
into a verbal agreement that would have made Gee a part owner in the company. Despite
Gee’s obvious importance to the success of Catalinbread, during the entire period after
Burkett assumed control of Catalinbread, she refused to recognize Gee for his efforts and
importance to the company’s success, let alone the ownership agreement that Gee had with
Mr. Harris. Like Miller and other employees, Burkett’s hostile and reckless behavior forced
Gee to submit his letter of resignation on Oct. 19, 2017. Except as expressly admitted herein,
development of guitar pedals, that he was a close friend of Mr. Harris, and that Burkett
terminated his employment. Except as expressly admitted herein, Defendants deny the
allegations in paragraph 5.
allegations in paragraph 6.
JURISDICTION
7. Defendants admit that this Court has subject matter jurisdiction over Plaintiff’s
8. Defendants admit that the Court has personal jurisdiction over the parties.
11. As to the allegations in paragraph 11, Defendants admit that they were employees
through 6, above. Except as expressly admitted herein, Defendants deny the allegations in
paragraph 11.
12. Defendants admit the allegations in paragraph 12, except to the extent the
allegations imply that Catalinbread has protectable trade secrets. Defendants further admit
that they were proud of Catalinbread’s reputation, which they worked hard to create.
13. Defendants deny the allegations contained in paragraphs 13 and 14. During
protect the confidentiality of any purported trade secrets. In fact, quite the contrary was true.
The guitar pedal business is (and is widely known to be) a “copycat” industry, in which
information is regularly shared and imitated among developers, and pedals are frequently
(and easily) reverse engineered and modified to meet a particular interest – and several do-it-
yourself forums routinely reverse-engineered Catalinbread pedals and publicly posted the
acknowledge the “open source” nature of the pedal business. Catalinbread did so by
sometimes offering its customers the schematics related to a pedal, and allowing its staff to
openly and freely work on their own personal guitar-pedal projects using company resources,
while disclaiming any right to the resulting pedals. In fact, Catalinbread encouraged Gee to
teach an initiative called “Fuzz Lab” using company resources, in which the company gave
employees breadboards and associated parts and Gee taught the basics of “breadboarding.”
14. As to the allegations in paragraph 15, Defendant Miller admits that he wrote the
quoted language, but denies any legal significance implied by his statement. Defendant
Miller further admits that his sole motivation for making the statement, which is best
described as hyperbole, was to get the attention of the company’s then-current attorney Pay
Bryson to stop Burkett from acting recklessly and in a manner that was potentially
detrimental to the company. Except as expressly admitted herein, Defendants deny the
15. As to the allegations in paragraph 16, Defendants admit that Catalinbread had a
password-protected wifi and that its employees used passwords for their computers.
However, Defendants deny that Catalinbread took those steps to protect “valuable trade
secrets.” In fact, beyond those basic measures, Catalinbread took no meaningful steps to
secure its purported computer network. For example, the wifi password was displayed on a
whiteboard and employees routinely shared their computer passwords and often wrote them
on sticky notes, all of which were accessible to anyone. Also, Catalinbread employees
further admit that at or immediately following the end of their employment, they returned all
drives with company files and information, materials, and breadboards. Burkett received all
of these items, which collectively constitute the entirety of Catalinbread property that had
been Defendants’ possession. Except as expressly admitted herein, Defendants deny the
16. As to the allegations in paragraph 17, Defendants admit that Nicholas Harris
(“Harris”) died unexpectedly on March 9, 2016, when his vehicle was struck by a tree felled
in a windstorm. Defendants further admit that Melissa Palmer (“Palmer”) was selected to
administer Harris’ estate and that ownership of Catalinbread passed to Burkett after probate.
Defendants lack sufficient information to form a belief regarding the remaining allegations of
17. Defendants deny the allegations in paragraph 18. Defendants further allege that
after Burkett assumed control of Catalinbread, she recklessly ordered that production be
limited to Monday through Thursday only and to furlough all production workers, without
pay, on Fridays. Burkett also ordered that there would be no full-time production until
further notice, while at the same time she began unilaterally and recklessly withdrawing large
to limit production, Miller worked hard to maintain and even increase production to meet
anticipated market demand for Catalinbread’s newest pedal – the Belle Epoch Deluxe.
18. As to the allegations in paragraph 19, Defendants admit that following Harris’s
and that he performed these functions to the best of his ability and with Catalinbread’s best
interest in mind. Miller further admits that after Burkett took over the company, she began
emailing Miller excessively, and that the emails frequently included profanity such as: “Sales
have fucking sucked. . .” and “What’s going on? This sucks balls.” Defendant Miller admits
that he did not always respond to those often bizarre and inappropriate emails because
constantly responding to them would have interfered with his ability to perform his job
duties. Except as expressly admitted herein, Defendants deny the allegations in paragraph 19.
19. As to the allegations in paragraph 20, Defendants admit that starting roughly in
2015, Lutskovsky set up a Slack account (which was free and had no message-retention
policy) to efficiently communicate with Gee and Mr. Harris because Lutskovsky worked
mostly from home. Over the years, the user group expanded to some other Catalinbread
employees and some non-employees. Defendants further admit that beginning in August
2018, Miller and Gee made a good faith effort to purchase Catalinbread through their former
attorney Bruce Weinsoft. Mr. Weinsoft summarized Miller’s and Gee’s intentions in a letter
Howard [Gee] and Scott [Miller] would like to honor the vision and dream that
Nicholas Harris had when he founded the company. They would like Mary
Burkett to know that is a major factor in their desire to acquire the business
assets described above and to carry on the business that was so important to
Nicholas during his lifetime.
Defendants further admit that their good faith efforts to acquire Catalinbread stalled after Burkett
retained her current attorney Aaron Cronan (“Cronan”) and her behavior toward Defendants
became increasingly erratic and hostile. Except as expressly admitted herein, Defendants deny
around October 13, 2017, Burkett arrived in Portland with a “one-way ticket,” which they
understood to mean that she was going to be staying in Portland and directly running the
company. Defendants further admit that as a result, they and other employees became
concerned about their ability to continue to work for Catalinbread. On or about October 18,
2017, Burkett, Cronan, a computer hacker (whose first name Defendants believe to be
“Earnest”) and a locksmith arrived at Catalinbread. At that time, Cronan and Burkett called
meetings with several Catalinbread employees under the auspices of discussing a pay raise.
Once at the meetings, Cronan aggressively demanded that the employees sign a non-
sign the agreement would be considered an indication that the employee no longer wished to
work for Catalinbread. None of the Defendants signed Cronan’s agreement, nor did they ever
sign any other agreement not to compete with Catalinbread. Also, Lutskovsky admits that on
the same day, he learned from an on-site employee that “Earnest” had installed spyware on
their computers under the pretense of patching a vulnerability in Catalinbread’s wifi. After
learning of that deception, Lutskovsky shut down the Slack account and launched a script
designed to delete Slack conversation threads. Lutskovsky did so to keep Burkett from
reading personal insults that he and others had made against her. Lutskovsky denies doing so
after being notified of the likelihood of litigation, denies that any of the deleted conversations
contained any “trade secrets” or other valuable business information and denies that
Catalinbread lost any relevant information due to the deletion. Except as expressly admitted
21. As to the allegations contained in paragraph 22, Defendants admit that in August
2017, Miller and Gee made a good faith offer to purchase Catalinbread through counsel,
consistent with the excerpt from Mr. Weinsoft’s letter quoted in paragraph 19, above. Except
22. As to the allegations contained in paragraph 23, Defendants admit that between
August and October 2017, the work environment at Catalinbread had become so openly
hostile due to Burkett and Cronan’s actions that Defendants considered leaving the company
and continuing their passion for developing unique guitar pedals through a separate venture.
Defendants further admit that around October 18, 2017, Lutskovsky created a web domain
www.kittycasterfx.com (which has since lapsed and not been renewed) as a symbolic gesture
future after leaving the toxic environment at Catalinbread. Except as expressly admitted
23. As to the allegations contained in paragraph 24, Defendants admit that they
worked at Catalinbread and used their best efforts in service to the company until the end
Defendants admit that they discussed, among several other possibilities, forming a guitar
pedal business after leaving Catalinbread, but deny that they used Catalinbread time or
denied herein, Defendants lack information sufficient to form a belief regarding the
24. As to the allegations contained in paragraph 25, Defendants admit that in response
to the hostile environment created by Burkett, they occasionally vented their frustration about
Burkett on Slack, and that some of these conversations were probably deleted. Miller admits
that he had requested the removal of Mr. Harris’s Slack account many months after his
passing and of Ms. Palmer’s account sometime after probate closed, and that Miller made
those requests solely because there was no business reason to maintain those accounts.
Except as expressly admitted herein, Defendants deny the allegations in paragraph 25.
25. Gee and Lutskovsky deny that the allegations in paragraph 26.
26. As to the allegations contained in paragraph 27, Defendants admit that, consistent
with past practice, there were plans to attend the NAMM show on Catalinbread’s behalf and
to promote Catalinbread products. Lutskovsky admits that he paid for his own ticket to attend
NAMM because he was going to visit a friend during the conference. Except as expressly
27. As to the allegations contained in paragraph 28, Defendants admit that during
October 2017, and for many years before, Gee and Lutskovsky almost always worked from
home in a manner that was appropriate and consistent with their longstanding practice.
Defendants further admit that during Harris’s lifetime and in the wake of his death, it was a
widely known and accepted (even encouraged) practice for Catalinbread employees to work
on independent creative projects on their own time. That said, Gee admits that any and all
Except as expressly admitted herein, Defendants deny the allegations in paragraph 28.
29. As to the allegations contained in paragraph 32, Defendants admit that they
their respective departures from the company. Defendants further admit that in several
instances Burkett specifically acknowledged receipt of these items (including data files
Plaintiff claims were misappropriated) and that their return was directly coordinated by
Cronan. Except as expressly admitted herein, Defendants deny the allegations in paragraph
32.
30. As to the allegations contained in paragraph 33, Lutskovsky admits that he sent
the quoted message attributed to him. However, he denies that he ever removed from the
company or deleted any of the items listed in his quote. Except as expressly admitted herein,
31. As to the allegations contained in paragraph 34, Gee admits that employee morale
was very low during this time period due to Burkett’s actions. Gee further admits that he
may have sent the quoted message attributed to him, though he does not recall doing so.
However, Gee specifically denies having the intent or taking any action to lower
Catalinbread’s value. Except as expressly admitted herein, Defendants deny the allegations in
paragraph 34.
32. As to the allegations contained in paragraph 35, Miller denies writing and/or
sending the quoted message attributed to him. Except as expressly admitted herein,
33. As to the allegations contained in paragraphs 36, Defendants admit that Bryan
2017. Defendants further admit, on information and belief, that Lundstrom resigned in direct
admission in his answer to Plaintiff’s Second Amended Complaint, Defendants admit that he
34. As to the allegations contained in paragraphs 37, Defendants admit that in the
course of their employment with Catalinbread, they routinely kept (and were authorized to
keep) various pieces of Catalinbread property at their homes, including among other things,
breadboards and other development parts. Gee and Lutskovsky do not recall writing the
quoted language in paragraph 37, but they admit that they may have done so. Defendants
further admit that they returned all Catalinbread property in their possession, at or
immediately following the end of their respective terms of employment. As previously stated,
Burkett acknowledged and, in the case of Gee, signed for receipt of this property. Cronan
was directly involved in recovering this property. Indeed, as early as October 19, 2017, Mr.
Weinsoft stated in an email to Cronan that “[Gee and Miller] will make arrangements to
timely return to Catalinbread LLC any company property in the possession of each,” which is
exactly what was done. Except as expressly admitted herein, Defendants deny the
35. Defendants deny the allegations in paragraph 38. To the contrary, on October 18,
2017, Burkett surreptitiously installed spyware on Defendants’ electronic devices under the
pretense of installing a wifi patch, had a locksmith changing the locks as she met with
duress, and had a former employee who had been laid-off for poor performance show up and
return to work.
damage that Burkett had done and was continuing to do to the company. Except as expressly
protected Catalinbread computer systems for any purpose at any time after their respective
employments ended. As to the allegedly missing files, Defendants reiterate that they timely
returned all Catalinbread property that was in their possession, and have offered their
assistance in locating any files that Burkett, Cronan, or Catalinbread are unable to locate, or
believe were destroyed. Except as expressly admitted or denied herein, Defendants deny the
40. As to the allegations contained in paragraphs 45, Defendants deny that Plaintiff
owns any trade secrets. Defendant lacks sufficient information to form a belief regarding
what Plaintiff believes or with whom it has communicated, and on that basis denies the
response is required. To the extent a response is required, Defendants deny the same.
47. Defendants deny that Catalinbread is entitled to the relief sought in paragraph 75.
To the extent paragraph 75 contains factual allegations that require a response, Defendants
48. Paragraphs 76 and 77 contain legal conclusions and assertions that do not require
54. Defendants deny that Plaintiff is entitled to the relief sought in paragraph 92.
Defendants further note that subsections (c) and (d) of paragraph 92 seek a punitive
injunction barring Defendants from participating in their chosen trade that is anticompetitive,
violates public policy, and on that basis should be stricken as a matter of law.
56. Defendants admit that for a period of time Catalinbread misclassified Lutskovsky
as an independent contractor. Gee and Miller resigned on October 19, 2017, and Lutskovsky
was terminated without cause by Burkett six days later. Except as expressly admitted herein,
105. In response to the allegations contained in paragraph 105, Defendants admit that
GENERAL DENIAL
106. Except as expressly admitted herein, Defendants deny each and every allegation
AFFIRMATIVE DEFENSES
107. Plaintiff has failed to state a claim upon which relief can be granted.
avoid losses.
109. Plaintiff’s claims are barred in whole or part by its own unclean hands.
110. Plaintiff’s claims against Defendants must be barred, in whole or part, because a
COUNTERCLAIMS
111. Defendants incorporate the above paragraphs as though fully set forth herein.
112. The Court has jurisdiction over Defendants’ counterclaims pursuant to 28 U.S.C. §§
113. Plaintiff’s claim of trade secret misappropriation under the Defend Trade Secrets
Act against Gee, Miller and Lutskovsky is made in bad faith. Gee, Miller and Lutskovsky
are therefore entitled to recover their attorneys’ fees under 18 U.S.C. § 1836(b)(3)(D).
125. Plaintiff’s claim of trade secret misappropriation under the Oregon Uniform Trade
Secrets Act against Gee, Miller and Lutskovsky is made in bad faith. Gee, Miller and
Lutskovsky are therefore entitled to recover their attorneys’ fees under ORS § 646.467(1).
1. Plaintiff’s claims be dismissed in their entirety and that Plaintiff take nothing thereby;
3. For such other relief as the Court deems just and proper.
s/Christopher Lundberg
Christopher Lundberg, OSB No. 941084
Attorneys for Defendants Miller, Gee, and
Lutskovsky
CERTIFICATE OF SERVICE
I hereby certify that on the 14th day of May, 2019, I served the foregoing
Aaron J. Cronan
Cronan Law LLC
4207 SE Woodstock Blvd., No. 440
Portland, OR 97206
aaron@aaroncronanlaw.com
Jon P. Stride
Megan K. Houlihan
Tonkon Torp LLP
888 SW Fifth Avenue, Ste. 1600
Portland, OR 97204
jon.stride@tonkon.com
meg.houlihan@tonkon.com
by mailing and emailing a full, true and correct copy thereof in a sealed first-class
postage prepaid envelope, addressed to the foregoing attorney at the last known office
address of the attorney, and deposited with the United States Post Office at Portland,
Oregon on the date set forth above.
by causing a full, true and correct copy thereof to be hand delivered to the attorney at the
last known address listed above on the date set forth above.
by faxing a full, true and correct copy thereof to the attorney at the fax number shown
above, which is the last-known fax number for the attorney’s office on the date set forth
above.
by transmitting full, true and correct copies thereof to the attorneys through the court’s
Cm/ECF system on the date set forth above.
s/Christopher Lundberg
Christopher Lundberg, OSB No. 941084
Attorneys for Defendants Miller, Gee, and Lutskovsky