VBI Group LLC vs. Spartan Automotive Technology Providers Inc., et al

Case Background

On June 18, 2021, VBI Group LLC, a leading innovator in telematics software and GPS tracking technology, filed a lawsuit in the Texas District Court for Tarrant County, alleging the theft of its trade secrets. The case, numbered 017-325961, was brought against Spartan Automotive Technology Providers, Inc., along with individuals Peter Hoa Nguyen, Thi H. Nguyen, and Lawrence P. West. VBI Group accused the defendants of unlawfully accessing and misappropriating its proprietary information, including valuable trade secrets such as advanced software, customer lists, and technological platforms.

Cause

VBI Group LLC, a premier innovator in telematics software and GPS tracking technology, took legal action against Spartan Automotive Technology Providers, Inc., Peter Hoa Nguyen, Thi H. Nguyen, and Lawrence P. West. VBI Group alleged that Peter Hoa Nguyen, while employed as an information technology specialist, and Lawrence West, who worked closely with VBI’s management team, accessed and misappropriated confidential trade secrets. These trade secrets included proprietary software, customer lists, and advanced technological platforms—all of which VBI Group had developed through significant financial investment and expertise. The defendants allegedly conspired to form Spartan Automotive Technology Providers, a competing entity, using stolen trade secrets to damage VBI Group’s business operations. Their actions were intentional, aimed at undermining VBI’s reputation and financial stability in the highly competitive telematics industry.

Injuries

The defendants’ deliberate actions caused severe harm to VBI Group. By exploiting their positions of trust within the company, they gained access to proprietary information, including trade secrets, and used it to establish Spartan Automotive Technology Providers as a direct competitor. Their misconduct resulted in the theft of critical trade secrets and customer relationships that VBI Group had carefully cultivated over the years. Furthermore, the defendants solicited VBI’s employees, encouraging them to leave their positions and join Spartan. They also spread false and disparaging information about VBI Group’s financial health, casting doubt on its stability and ability to meet customer needs. These actions disrupted VBI’s operations, harmed its reputation, and caused substantial economic loss.

Damages

The damages suffered by VBI Group were both extensive and measurable. The company lost significant revenue due to the misappropriation of its trade secrets and the theft of proprietary customer information. VBI also incurred additional costs to protect its trade secrets and repair its damaged reputation in the automotive telematics industry. The false statements made by the defendants led to lost business opportunities, diminished goodwill, and a decrease in the company’s overall market value. The interference with VBI’s contracts and business relationships only worsened these losses. VBI Group’s legal filing claimed actual, special, and consequential damages exceeding $1,000,000, in addition to exemplary damages for the defendants’ willful and malicious conduct.

Key Arguments and Proceedings

Legal representation

  • Plaintiff(s): VBI Group LLC
    • Counsel for Plaintiff: Joseph D. Austin | Marcus Fettinger | Jeff Whitfield
  • Defendant(s): Peter Hoa Nguyen | Thi H. Nguyen | Spartan Automotive Technology Providers Inc.
    • Counsel for Defendants: Matthew J. Altick | Jeremy T. Brown | Steven E. Clark | Patrick D. Keating

Claims

Misappropriation of Trade Secrets:

VBI Group asserted that the defendants violated the Texas Uniform Trade Secrets Act by unlawfully using and disclosing its proprietary software, customer lists, and technological platforms. This misappropriation of trade secrets provided Spartan Automotive Technology Providers with an unfair competitive advantage.

Breach of Fiduciary Duty:

VBI claimed that Peter Nguyen and Lawrence West, as employees, owed the company a fiduciary duty of loyalty and integrity. Instead, they breached this duty by misusing VBI’s confidential resources, including its trade secrets, to establish a competing business for personal gain.

Business Disparagement:

VBI Group alleged that the defendants deliberately spread false information about the company’s financial standing, harming its reputation and driving customers away. These falsehoods were intended to benefit Spartan Automotive Technology Providers at VBI’s expense.

Tortious Interference:

VBI Group stated that the defendants interfered with its existing contracts and potential business relationships. By leveraging stolen trade secrets, the defendants unlawfully diverted business to Spartan Automotive Technology Providers.

Civil Conspiracy:

The defendants worked together to form Spartan Automotive Technology Providers with the shared goal of harming VBI Group. They acted in a coordinated effort to misappropriate trade secrets, disparage the company, and interfere with its business operations.

Defense

The defendants—Spartan Automotive Technology Providers, Inc., Peter Hoa Nguyen, Thi H. Nguyen, and Lawrence P. West—denied the allegations and asserted their defense vigorously. They claimed they acted lawfully and did not misappropriate any trade secrets or proprietary information belonging to VBI Group. Peter Nguyen and Lawrence West argued that the knowledge and skills they used to establish Spartan Automotive were derived from their general expertise and industry experience, which they developed independently over their careers.

The defendants contended that VBI Group failed to adequately protect its alleged trade secrets, making the claims of misappropriation invalid. They maintained that VBI did not meet the legal standard to prove that the information qualified as trade secrets under the Texas Uniform Trade Secrets Act. The defendants also asserted that VBI Group could not demonstrate direct harm or financial loss due to their actions.

Additionally, the defendants rejected the claims of breach of fiduciary duty, arguing that they fulfilled their professional obligations during their employment with VBI Group. They claimed their departure to form Spartan Automotive was a lawful exercise of their right to pursue business opportunities and that no contractual or legal obligation prevented them from doing so. Furthermore, the defendants denied the accusations of business disparagement, insisting that any statements made about VBI Group were truthful and within their rights to share as competitors.

The defendants argued that VBI Group’s lawsuit was an attempt to stifle legitimate competition and protect its market share by unfairly targeting them. They requested the court dismiss the allegations, arguing that VBI’s claims lacked sufficient evidence and were without merit. They also sought relief for damages caused by the legal proceedings, asserting that their actions were lawful and in accordance with applicable business practices.

Jury Verdict

On November 18, 2024, after carefully reviewing the evidence, the jury returned a verdict in favor of VBI Group LLC. The jury unanimously found that Spartan Automotive Technology Providers, Inc., Peter Hoa Nguyen, Thi H. Nguyen, and Lawrence P. West had willfully and maliciously misappropriated VBI Group’s trade secrets. The jury determined that the defendants intentionally violated the Texas Uniform Trade Secrets Act by stealing and using VBI Group’s proprietary software, customer lists, and technological platforms to form Spartan Automotive Technology Providers as a competing business.

 

The jury awarded VBI Group $5,000,000 in actual damages for the misappropriation of trade secrets. Additionally, the jury imposed exemplary damages of $10,000,000 against Spartan Automotive Technology Providers, $4,000,000 against Peter Hoa Nguyen, $4,000,000 against Thi H. Nguyen, and $4,000,000 against Lawrence P. West. These amounts reflected the jury’s finding that the defendants’ conduct was willful, malicious, and intended to harm VBI Group’s business.

The jury also held Peter Hoa Nguyen liable for breaching his fiduciary duty to VBI Group, awarding $135,000 in disgorgement damages to recover the financial benefits he unlawfully gained. The court further ordered attorneys’ fees and pre-judgment interest totaling $1,386,301.37, with daily interest accruing until the judgment is fully satisfied.

In total, the jury awarded VBI Group $32,521,301.37 in damages, encompassing actual damages, exemplary damages, disgorgement, and additional costs.

Court Documents:

Documents Available for Purchase upon Request