SLATE CRAFT GOODS INC v. HORSESHOE BEVERAGE COMPANY LLC LLC (2025)

DECISION AND ORDER DENYING PLAINTIFF'S MOTION FOR A PRELIMINARY INJUNCTION

This action arises out of a failed business venture between Plaintiff Slate Craft Goods, Inc., and Defendants Horseshoe Beverage Company, LLC, and Horseshoe's parent company, Trilliant Food and Nutrition, LLC. Slate creates and sells prepackaged, protein-packed, lactose-free ultrafiltered milk shakes and iced coffees in aluminum cans. In early 2023, Slate began outsourcing the production of its beverages to Horseshoe, a manufacturer for hire for various beverage companies. Slate alleges that, in late-November 2023, it approached Horseshoe with a confidential business opportunity—to manufacture a new lactose-free ultrafiltered protein drink that Slate had developed at the request of Costco Wholesale Club, Inc. Slate contends that, rather than working with Slate to manufacture the new product, Defendants stole Slate's confidential business plan, appropriated Slate's intellectual property, developed a similar version of Slate's new product that they called “Nurri,” usurped the Costco opportunity from Slate, and launched Nurri with Costco.

Slate asserts claims of misappropriation of trade secrets in violation of the Defend Trade Secrets Act, 18 U.S.C. § 1836, et seq., and the Wisconsin Uniform Trade Secrets Act, Wis. Stat. § 134.90; breach of contract; breach of the covenant of good faith and fair dealing; tortious interference; conversion; unjust enrichment; and civil conspiracy in violation of Wis. Stat. § 134.01. It seeks money damages as well as declaratory and injunctive relief. The court has jurisdiction over Slate's federal law claim pursuant to 28 U.S.C. § 1331 and supplemental jurisdiction over its state law claims pursuant to 28 U.S.C. § 1367.

Presently before the court is Slate's motion for a preliminary injunction. Dkt. No. 16. Slate requests that the court issue a preliminary injunction that Defendants (1) cease use of Slate's confidential and proprietary information and trade secrets and return all such information to Slate and/or certify the destruction of such information; (2) cease manufacture, advertising, sale, and distribution of any Nurri products or other lactose-free ultrafiltered milk-based products marketed and sold by Trilliant and/or Horseshoe; and (3) take all actions to ensure that any Nurri products already into the stream of commerce are returned to Defendants and/or are not advertised or sold to consumers or any third party.

After allowing expedited discovery and enlarging the briefing schedule, the court held a hearing on Slate's motion on May 22, 2025. The parties offered argument at the hearing but did not introduce evidence beyond that already in the record. Based on the briefs, the parties’ argument, and the current record, the court concludes that Slate has failed to show that the extraordinary equitable remedy it seeks is appropriate. Slate's motion for a preliminary injunction will therefore be denied.

BACKGROUND

Slate was founded in 2018 by Manny Lubin and Josh Belinsky. The company creates and sells prepackaged, protein-packed, lactose-free ultrafiltered milk shakes and iced coffees in aluminum cans. Initially, all of Slate's protein drinks were made with ultrafiltered and lactose-free milk, contained 20g of protein and 1g of sugar, and were available in a variety of flavors. Slate began selling its products to customers in late 2019.

Slate outsources the production of its beverages to “co-manufacturers,” one of which was Horseshoe. Horseshoe and Trilliant are affiliates that develop and manufacture beverages. They operate manufacturing facilities in Little Chute and Neenah, Wisconsin, and they share corporate offices and warehouse facilities. Trilliant was established in 1979 as Victor Allen's Coffee, and Horseshoe was established in 2017 to expand operations and focus on liquid beverage manufacturing. Defendants are vertically integrated, which allows them to research, develop, manufacture, and package shelf-stable, ready-to-drink beverages. In addition to co-manufacturing products for other companies, Defendants manufacture products under their own label (e.g., Victor Allen's) and private label (e.g., Kirkland Signature for Costco Wholesale Club, Inc.).

Slate and Horseshoe entered into a Manufacturing Agreement, effective January 1, 2023. Under the agreement, Horseshoe agreed to serve as one of Slate's non-exclusive co-manufacturers and produce, package, and ship Slate's 20g protein beverages. In exchange, Slate agreed to provide Horseshoe with the formula to produce the protein beverages and to purchase a certain amount of product from Horseshoe each year. Horseshoe was prohibited from disclosing Slate's “confidential information” to persons other than those agents or individuals at its affiliates who were actively and directly participating in the performance of obligations under the agreement. Although Slate contends that it never had any relationship—contractual or otherwise—with Trilliant, the record reflects that Slate's employees regularly communicated over email with individuals that used an “@trilliantfood.com” email address. It would thus seem that Horseshoe and Trilliant were treated by all parties as one in the same. Accordingly, at least for purposes of this motion, the court will treat Horseshoe and Trilliant as one entity, except where context warrants otherwise.

In June 2023, Costco US began placing orders for Slate's 20g of protein, lactose-free ultrafiltered milk shake. Also in June 2023, Costco US requested that Slate create a new milk shake product that contained 30g of protein to meet Costco US's unmet demand for such a product. Slate began confidential development of the new product in August 2023. In addition to increasing the amount of protein and making flavor changes, Slate decided that it would increase the quantities of several vitamins and minerals in the new product. By early-November 2023, Slate had achieved the desired flavor (chocolate) and acceptable taste for the new product.

In November 2023, Defendants were pursuing their own opportunity with Costco Canada. On November 9, 2023, Defendants’ employees met with representatives from Costco Canada at Costco's Ontario, Canada office to discuss Trilliant's capabilities to manufacture coffee pods. Defendants contend that, during this meeting, Costco Canada expressed difficulty with keeping high-protein beverages in stock due to customer demand and asked whether Trilliant had the capability to produce a milk-based protein beverage. The specific national brands of milk-based protein beverages that Costco referenced were Ensure and Fairlife. Fairlife's high-protein beverage is sold in an 11.5oz plastic bottle, contains 30g of protein, and is made using Fairlife's proprietary ultrafiltered milk. Ensure's high-protein beverage is sold in an 8oz plastic bottle and contains 16g of protein but is not made with ultrafiltered milk. Defendants contend that, within hours of the meeting, Defendants began working on a protein beverage to meet Costco's specifications. Defendants explain that with their in-house capabilities and experience dating back to at least 2018 developing an ultrafiltered milk protein shake called Foundation Fitness for Walmart, they were able to develop a preliminary sample of the new product within weeks.

In the meantime, on November 28, 2023, Defendants’ representatives met with Slate's representatives to discuss pathways for Slate to meet its purchase minimums. At the end of this meeting, Slate shared a sample beverage in a “soup can”—a generic metal can with no labeling or nutritional information—with Defendants’ representatives for tasting. Slate contends that, at this meeting, it told Horseshoe about Costco's request for the new product, details about the formulation and samples of the new product, Slate's plans to produce the product for Costco, and the immense upside of the opportunity. Within days of the meeting, Slate asserts that Defendants advised that Horseshoe was interested in manufacturing the new product and supporting Slate's plans with Costco. According to Slate, at a December 4, 2023 meeting, Slate provided Defendants with more details about the new product; specifically, that Costco US approached Slate to develop a lactose-free ultrafiltered milk beverage containing 30g of protein and packaged in a recyclable aluminum can. While Defendants do not dispute that Slate presented Trilliant representatives with the sample beverage at the November 28, 2023 meeting, Defendants assert that they do not recall Slate discussing the idea of selling a 30g protein milk shake beverage at Costco or sharing any information about its product ideas at either meeting.

Defendants explain that, on December 6 and 7, 2023, Costco visited Defendants’ facilities and requested that Trilliant work on a product to compete with Fairlife's “Nutrition Plan,” a lactose-free drink made with ultrafiltered Grade A milk and containing vitamins, minerals, and 30g of protein. By January 1, 2024, Defendants had developed “Fairlife Solution” samples for Costco to taste. On January 9, 2024, Defendants’ representatives travelled to meet with Costco Canada's representatives. At the meeting, Costco tasted Defendants’ samples, asked that Trilliant provide a quote based on those samples, and advised that it was operating under an expedited timeline.

In the interim, on January 10, 2024, Slate emailed Defendants, announcing that Slate was ready to pilot its new “SLATE NUTRITION SHAKE which will have an increased protein content with 30g protein/11oz, and added vitamins and minerals” and indicating that Slate had a formula ready for the chocolate flavor. Dkt. No. 59-29 at 2. The parties agree that there were significant delays in getting Slate's new beverage through “commercialization” but have different perspectives on what caused the delay.

According to Slate, at the end of January 2024, Horseshoe asked Slate for the formula and formulation of the new product so it could conduct a lab trial to attempt to recreate the samples Slate had previously created. Slate sent Horseshoe the information and told Horseshoe—confidentially—that Slate's goal was to get a sample to major customers within the first quarter of 2024 and launch the new product for retail sale in the summer of 2024. Horseshoe performed several lab trials in February and March 2024, but the trials were a failure, as Horseshoe's trial samples did not come anywhere close to the beverages that Slate had previously made successfully. Slate explains that the sample-to-sample differences in Defendants’ trials were not something Slate had ever observed across a single batch. Faced with Horseshoe's failed lab trials, Slate spent additional time and resources consulting its ingredient suppliers and tweaking the formula for its new product. Slate created new samples of the product and sent the revised formula and formulation to Horseshoe in June 2024. Once again, Horseshoe's trial failed; the flavor and viscosity of the samples remained inexplicably and significantly inconsistent and failed to meet Slate's expectations for the product.

Defendants, on the other hand, contend that the sampling process was stymied due to Slate's lack of in-house capabilities and technical experience. After months of trial and error, Slate sent the new product, which contained 32g of protein, to Defendants on June 10, 2024. Defendants assert that Slate never approved a sample of its new higher protein product and never provided Defendants with feedback on the final samples they provided to Slate in July 2024.

In the meantime, while Slate was working with Defendants to commercialize its new product, Defendants continued conversations with Costco Canada and made introductions with Costco US representatives. In late January 2024, Defendants’ talks with Costco Canada hit a snag: Costco Canada was unwilling to import milk from the United States and Defendants were unable to make sourcing Canadian milk cost efficient. Consequently, Defendants’ deal with Costco Canada died. On January 25, 2024, Defendants hosted a Costco US representative “to discuss a coffee opportunity.” Dkt. No. 59-31 at 2. Following this connection, Defendants met with Costco US representatives regarding Defendants’ Fairlife Solution. Defendants’ Fairlife Solution sample received positive feedback, and Costco US indicated that it was hoping to bring the product to retail in June or July 2024.

Throughout the spring of 2024, Slate and Defendants continued developing their respective 30g beverages. Both parties struggled to achieve a preferred consistency. Defendants turned the corner after developing an innovative solution to the viscosity issues they were encountering. That innovative solution is now the subject of a patent application. As spring turned to summer, Defendants and Costco US worked through the consumer testing stage. Costco approved Defendants’ beverage formulation on June 6, 2024, and on July 10, 2024, Costco officially gave approval to sell Defendants’ Fairlife Solution, which was to be branded as “Nurri.” Nurri launched in Costco US's retail stores in September 2024, beating Slate's new product to the shelves. Nurri sales at Costco US in 2024 were north of $20 million and it is expected that Nurri sales for 2025 will top $190 million. Nurri has expanded into other retailers and Defendants plan on expanding its flavor offerings as well as adding caffeine to the product.

Slate ultimately terminated its relationship with Defendants and took its formula to a different co-manufacturer where it was able to commercialize a successful product on its first attempt. In September 2024, approximately six months behind the schedule Slate had laid out for Horseshoe, Slate met with Costco to present samples of its new product. During that meeting, Costco told Slate that a new high-protein, lactose-free ultrafiltered milk beverage had just entered the market and that it would compete with Slate's product. Costco stated that the new product's proposed price was less than Slate's proposed price for its new product.

On September 12, 2024, Slate learned that Costco began selling Nurri and that Horseshoe manufactured Nurri for Trilliant. Slate's new product is sold in an aluminum can, contains 32g of protein, is made with ultrafiltered milk, and is lactose-free. Slate's 32g beverage is sold on Amazon and at BJ's Wholesale Club and other retailers.

ANALYSIS

Slate moves for a preliminary injunction as to its breach of contract, trade secret misappropriation, and conversion claims. Preliminary injunctive relief is an “extraordinary equitable remedy that is available only when the movant shows clear need.” Turnell v. CentiMark Corp., 796 F.3d 656, 661 (7th Cir. 2015). The party seeking preliminary injunctive relief must show that it has “(1) some likelihood of succeeding on the merits, and (2) that it has ‘no adequate remedy at law’ and will suffer ‘irreparable harm’ if preliminary relief is denied.” Cassell v. Snyders, 990 F.3d 539, 544–45 (7th Cir. 2021) (citation omitted). If these threshold factors are met, “the court proceeds to a balancing analysis, where the court must weigh the harm the denial of the preliminary injunction would cause the plaintiff against the harm to the defendant if the court were to grant it.” Mays v. Dart, 974 F.3d 810, 818 (7th Cir. 2020) (citation omitted). “This balancing process involves a ‘sliding scale’ approach: the more likely the plaintiff is to win on the merits, the less the balance of harms needs to weigh in his favor, and vice versa.” Id. (citation omitted). The balancing approach seeks to “minimize the cost of a wrong decision.” Korte v. Sebelius, 735 F.3d 654, 665 (7th Cir. 2013).

A. Success on the Merits

“The first step in the analysis requires a plaintiff to demonstrate that [his] claim has some likelihood of success on the merits, not merely a better than negligible chance.” Doe v. Univ. of S. Ind., 43 F.4th 784, 791 (7th Cir. 2022) (internal quotation marks and citation omitted) (alteration in original). In assessing the merits of the plaintiff's claims, the court does not accept the plaintiff's allegations as true, nor does it give the plaintiff “the benefit of all reasonable inferences in his favor.” Id. (citations omitted). Slate asserts that it is likely to succeed on the merits of its breach of contract, trade secret misappropriation, and conversion claims.

Slate argues that Horseshoe breached the confidentiality protections of the Manufacturing Agreement and that Defendants misappropriated Slate's trade secrets by using Slate's beverage formula, supplier information, know-how, and business plan to accelerate the production of Nurri, undercut Slate's intended price point, and usurp Slate's business opportunity with Costco. It asserts that Horseshoe used and told Trilliant about three general categories of Slate's confidential information: (1) formulas, technical specifications, recipes, and know-how; (2) names and terms of arrangements with vendors or suppliers; and (3) business plans, financial information, pricing strategies, marketing plans, and research and consumer insights. Dkt. No. 17 at 16. As for its trade secrets, Slate argues that Defendants misappropriated the following technical trade secrets related to Slate's 20g beverage: (1) ultrafiltered milk, (2) ultrafiltered milk supplier, (3) lactose-free designation for products, (4) lactose testing machine, (5) ingredient costs, (6) stabilizers, and (7) sweetener systems. It also contends that Defendants misappropriated trade secrets related to the business plan that spurred the development of Slate's 30g beverage. Slate concedes that Defendants’ product is not identical to Slate's but argues that Defendants got a “head start” by using Slate's confidential, trade secret information to gain the “first mover” advantage and beat Slate to market.

Slate relies on affidavits, emails, and other documentation to create a timeline that shows Defendants were using its trade secrets, formulas, and confidential information to develop the product and that Defendants did not meet with Costco until after they learned of Slate's new product. But Defendants’ explanation of the emails and documents put them in a different context, resulting in competing inferences from the same evidence. Defendants assert that the information Slate calls confidential and a trade secret is sufficiently obvious and ascertainable by anyone in the beverage formulation business, is generally available to the public, or was available to Defendants or their affiliates on a nonconfidential basis prior to Slate's disclosure. Slate did not offer expert testimony that would counter Defendants’ contention that what it called confidential information/trade secret was generally known in the industry. In any event, Defendants deny that they used Slate's confidential information to create Nurri. They note that Nurri is fundamentally different in its chemical structure from Slate's products and contend that they began developing Nurri for Costco before Slate told Defendants about its higher protein product.

The court is faced with two versions of events: one version is based on inferences that Slate asks that the court draw in its favor and the other is Defendants’ completely contradictory version. There are disputes about whether the information relied upon was generally known or based on confidential information or trade secrets. These credibility issues and factual disputes will have to be resolved by a factfinder. Although there is a possibility that Slate may ultimately prevail on a more developed record, the disputes of fact and conflicting inferences that can be drawn from the evidence of record prevent the court at this stage from making a finding that Slate has a likelihood of success on the merits of its claims sufficient to warrant the extraordinary relief it is requesting.

B. Irreparable Harm and Inadequate Remedies at Law

“The Seventh Circuit teaches that ‘only if the movant will suffer irreparable harm in the interim—that is, harm that cannot be prevented or fully rectified by the final judgment after trial—can he get a preliminary injunction․ The question is whether the movant will be made whole if he prevails on the merits and is awarded damages.’ ” Danaher Corp. v. Gardner Denver, Inc., No. 19-CV-1794-JPS, 2020 WL 2557744, at *4 (E.D. Wis. May 20, 2020) (quoting Roland Mach. Co. v. Dresser Indus., 749 F.2d 380, 386 (7th Cir. 1984)) (cleaned up). Generally, where a plaintiff's harm is “purely financial, easily measured, and readily compensated,” there is no irreparable harm. Praefke Auto Elec. & Battery Co. v. Tecumseh Prods. Co., 255 F.3d 460, 463 (7th Cir. 2001).

The court concludes that Slate has not shown that it is likely to suffer irreparable harm. To be sure, the majority of Slate's asserted harms—loss of sales, customers, and contacts—are quantifiable and can be adequately remedied by money damages. Life Spine, Inc. v. Aegis Spine, Inc., 8 F.4th 531, 546 (7th Cir. 2021); Hess Newmark Owens Wolf, Inc. v. Owens, 415 F.3d 630, 632 (7th Cir. 2005). Slate also complains of certain intangible harms like the loss of the first-mover advantage, brand recognition, and consumer visibility. But even though not susceptible to precise measurement, damages can also be awarded for these types of harms. Expert testimony can assist a jury in assessing the economic losses that Slate claims it has and will suffer as a result of the advantages Slate claims Defendants wrongfully obtained.

In any event, the true first mover in the lactose-free ultrafiltered milk 30g protein drink market was Fairlife; Nurri is more accurately described as the “first disruptor.” Either way, the perceived first-mover benefits cannot now be recaptured by enjoining Defendants. As for brand recognition and customer visibility, “it is well established that the loss of goodwill and reputation,” arguably analogous intangibles, “if proven, can constitute irreparable harm.” Life Spine, Inc., 8 F.4th at 546 (citing other sources). But Slate's only evidence of harm to brand recognition and consumer visibility is a single instance of brand confusion on the Amazon platform. This is insufficient to vault Slate's speculation about future irreparable harm to the level of likely irreparable harm. See E. St. Louis Laborers’ Loc. 100 v. Bellon Wrecking & Salvage Co., 414 F.3d 700, 705–06 (7th Cir. 2005) (“[A] plaintiff cannot obtain a preliminary injunction by speculating about hypothetical future injuries.”). Regardless, a damage award, as noted above, is not limited to mere lost profits but can encompass these other facets of loss. Slate has failed to make the threshold showing that it is likely to suffer irreparable harm.

One final issue warrants comment. Slate has made an additional, last-minute allegation that Defendants have decided to exercise their option to purchase ultrafiltered milk in quantities that will reduce or eliminate Slate's milk supply. It requests that the court enjoin Defendants from exercising an option to purchase large amounts of ultrafiltered milk from Michigan Milk Producers Association or any other supplier. Given the court's inability to find a likelihood of success on the merits, the court is unable to grant such relief. And if Slate ultimately succeeds on the merits, the court is satisfied that any such harm can also be addressed in the form of monetary damages.

C. Balance of Harm

Turning to the balancing phase, the court must weigh the harm Slate faces if its requested injunction is erroneously denied against the harms Defendants face if it is erroneously granted. The balance of harms does not tip decidedly in Slate's favor. As Slate acknowledges, Defendants have converted a substantial portion of their core business to manufacturing Nurri. And while Defendants would likely be able to pivot to another opportunity if Slate's preliminary injunction motion was granted, doing so would require significant time and expense. In short, an erroneously granted preliminary injunction here would result in significant harm to Defendants.

What is more, were the court to grant Slate's preliminary injunction motion, Costcos nationwide would be stripped of product. Slate speculates that Costco would fill the empty shelves with its beverage, but this is uncertain. At the very least, there would likely be a delay in getting Slate's beverage stocked. More to the point, it is unclear whether Slate would be able to keep pace with Costco's velocity requirements were its product to perform well as, unlike Defendants who were able to free up their own manufacturing space, Slate would be required to find ready, willing, and able co-manufacturers. In short, if the court were to erroneously grant Slate's motion, neither Defendants nor Slate would reap the benefits of a highly profitable market. Indeed, such a scenario could deprive Slate of a potentially larger damage award in the event it ultimately prevails on its claims.

CONCLUSION

The court's decision is largely reflective of the heavy burden a plaintiff bears in moving for a preliminary injunction. To be sure, evidence exists within the record which calls into question Defendants’ version of events and from which a reasonable jury may ultimately find in favor of Slate. But at this stage, the disputes of fact and conflicts over inferences to be drawn from the evidence are such that the court is unable to find that Slate is likely to succeed on the merits. Aside from this problem, Slate has also failed to establish irreparable harm. There is no reason to believe that Slate's losses, if shown to be the result of a breach of contract or tortious conduct by Defendants, cannot be remedied by an award of damages. Finally, balancing the likely loss to Defendants if the preliminary relief Slate has requested is granted against the possible loss to Slate if it is not, the court is satisfied that Slate's motion should be denied. Viewing the record as a whole and for the reasons above, the court concludes that Slate has not carried its burden. Accordingly, Slate's motion for a preliminary injunction (Dkt. No. 16) is DENIED. The clerk is directed to set the matter on the court's calendar for a Rule 16 telephone scheduling conference.

SO ORDERED at Green Bay, Wisconsin this 4th day of June, 2025.

William C. Griesbach, United States District Judge