Clayton Thomas ordered to pay $222K to Metron Nutraceuticals
Two lawsuits filed by Metron Nutraceuticals against Root Wellness founder Clayton Thomas have resolved.
In the first lawsuit, following jail time for contempt, Clayton Thomas was ordered to pay $222,360.
The second lawsuit resulted in a double KO, with neither party prevailing on their respective claims.
Metron Nutraceuticals’ first lawsuit was filed in 2016, after Thomas and partner Christina Rahm Cook allegedly began marketing products derived from confidential information and trade secrets.
A settlement was reached between the parties in June 2017.
As per the settlement, Thomas (right) was supposed to return 2,616 bottles of unlawfully retained Metron Nutraceuticals’ product.
Thomas failed to adhere to the terms of the settlement, prompting the court to hold Thomas in contempt of the agreed upon settlement in November 2021.
The court finds from the argument in the brief and evidence presented at the hearing, by clear and convincing evidence, that none (zero) of the 2,616 bottles were returned to Metron.
The court agrees that Metron should be compensated for the fair market value of the 2,616 bottles.
The court sanctions Mr. Thomas in the amount of $222,360 for violation of the settlement agreement.
Metron Nutraceuticals’ second lawsuit essentially alleges the Thomas and Cook launched Root Wellness with products “based on Metron’s trade secrets”.
Metron’s lawsuit was initially filed at the state-level in Cuyahoga County Court. In August 2020 the case was moved to the Northern District of Ohio.
Named defendants in the case include: Clayton, Cook, DC2 Holdings LLC, Root Wellness LLC, Simply Wholeistic Inc., Dr. Christina Rahm LLC, Dr. Christina Rahm Ventures Incorporated, Cure the Causes Inc., Merci Dupre LLC, Mark E. Adams, Entox Solutions LLC and Top Partners Management LLC.
Cook filed a counterclaim against Metron in September 2020.
Following an unsuccessful motion for a preliminary injunction, Metron filed a renewed injunction motion in April 2022.
The Defendants meanwhile filed a Joint Motion for Summary Judgment in October 2022.
Metron filed its opposition and own Motion for Summary Judgment in November 2022.
The double KO occured on July 18th, by way of the court
- granting the Defendant’s motion for summary judgment (killing Metron’s case and motion for summary judgment); and
- granting Cook’s own motion to dismiss her counterclaim.
There appears to have been some agreement reached between Cook and Metron, as Metron also agreed to dismiss all but two counts with respect to EnTox Solutions, Dr. Christina Rahm LLC, Dr. Christina Ventures Incorporated, Cure the Causes Inc., Merci Dupre LLC, CD2 Holdings LLC, DC2 Healthcare LLC and Simply Wholeistic Inc.
Metron’s remaining claims were dismissed due to the “Ohio Uniform Trade Secrets Act preempt(ing Metron’s) breach of contract claim”, a Statue of Limitations time-bar and failure to prove the existence of a trade secret.
The OUTSA decision is particularly legal jargon heavy but, if I’m understanding correctly, relates to Metron incorrectly asserting their claim.
There also seems to be some unresolved ambiguity with respect to the Ohio Uniform Trade Secrets Act and the Ohio Supreme Court.
The Statute of Limitations came into play on the basis Metron knew about the alleged misappropriation prior to July 2016. This was determined by Metron’s previous lawsuit against Clayton Thomas.
In short, Plaintiff’s litigiousness gives rise to the time-bar defense that Ms. Cook and Mr. Thomas successfully advance.
The record demonstrates its willingness to use and abuse the legal system.
Finally Metron’s failure to provide the existence of a trade secret, as determined by the court, resulted in claims pertaining to misappropriation of trade secrets being dismissed.
With all counts in Metron’s second case ruled on, the court also ordered the case closed on July 18th.
One final point of interest was an April 2022 filing from Metron, detailing notice of a subpoena received by the SEC.
Now comes Plaintiff, Metron Nutraceuticals, LLC, by and through undersigned counsel, and hereby gives notice to the Court and all counsel of receipt of the attached subpoena from the United States Securities and Exchange Commission (SEC).
The SEC’s subpoena required production of “the depositions of Christina Cook and Clayton Thomas”.
Whether the subpoenaed depositions were of use to the SEC or not isn’t known, but the SEC did go on to charge Thomas with securities fraud in May 2023.
Rather than defend himself, Thomas settled the SEC’s case for $844,706 last month.