ST. LOUIS (CN) – NorthPole, a camping-products manufacturer, claims Dick’s Sporting Goods defrauded it and hurt its reputation by selling defective products – after NorthPole had paid Dick’s to destroy it, to keep it out of the marketplace.
In its federal complaint, NorthPole says its agreement with Dick’s called for Dick’s to destroy all returned or damaged NorthPole products, which NorthPole would repurchase.
“NorthPole is bringing this lawsuit to recover damages and other losses caused by
Dick’s and its confederates, who participated in a scheme to defraud NorthPole and to violate its trademark rights,” the complaint states. “In reliance of [sic] Dick’s false information and intentional misrepresentations, NorthPole paid Dick’s millions of dollars to repurchase from Dick’s goods with manufacturing defects, shipping damage, or that had been used by retail customers and returned to Dick’s stores (the ‘Returned Goods’). Although Dick’s represented that it had destroyed the Returned Goods, Dick’s actually resold these goods to discount outlets and salvage dealers (the ‘Resellers’), which in turn sold them to the public.”
NorthPole says the scheme hurt its reputation, violated its trademark, and cost it money in warrant claims “from consumers that purchased Returned Goods fraudulently put into the stream of commerce.”
The complaint continues: “NorthPole made direct efforts to curtail Dick’s fraudulent activities and received assurances from Dick that they had stopped, when, in fact, they continued unabated. Given Dick’s fraudulent course of conduct over many years and its false assurances, which were intended to lull NorthPole into inaction, Dick’s fraudulent behavior was both willful and intentional.”
NorthPole adds: “NorthPole was willing to pay Dick’s to destroy its returned goods because doing so kept the products from finding their way into the marketplace and causing irreparable harm to NorthPole’s reputation as a provider of high-quality camping gear. It also avoided the need to provide warranty repair support for those goods.”
NorthPole says it learned what Dick’s was doing through a spike in customer warranty repair requests. It says it asked Dick’s and the resellers, to stop it. NorthPole claims that Dick’s admitted what it was doing, and promised to stop.
However: “In the months that followed, however, customers continued to return goods to NorthPole and request warranty repairs on Dick’s brand products purchased from sources other than Dick’s. From these requests, NorthPole concluded that, despite Dick’s assurances, Dick’s was again selling NorthPole’s Returned Goods to Resellers rather than destroying them as it had promised to do.
“Despite NorthPole’s efforts to stop these practices, Dick’s refused to do so and continued to put NorthPole’s Returned Goods into the hands of Resellers. …
“As a result of Dick’s wrongful use of NorthPole’s trademarks, NorthPole has suffered and will continue to suffer damage to its business, goodwill, reputation, profits and the strength of its trademarks. The injury to NorthPole is ongoing and irreparable, NorthPole lacks adequate remedy at law, and an award of monetary damages alone cannot fully compensate NorthPole for its injuries.”
NorthPole seeks punitive damages for trademark violations, false designation of origin, conspiracy to commit fraud, fraudulent misrepresentation, negligent misrepresentation, consumer law violations, conversion, breach of contract, and unjust enrichment. It also seeks an accounting, disgorgement, an injunction, and destruction of any of its returned goods.
NorthPole is represented by David Harlan with Armstrong Teasdale.