Jury Finds LoneStar Farms, LLC, "d/b/a" Sweet Sensi Committed Constructive Fraud Against CenTex CBD

CenTex CBD beat back a claim by LoneStar Farms LLC, better known as Sweet Sensi, and their lawyer, Lisa Pittman, of misappropriation of trade secrets and intellectual property and allegations of unethical conduct. 

This ruling of Constructive Fraud and other claims against Sweet Sensi will have significant implications for the rapidly growing and changing hemp industry in Texas.

During the case, Greg Autry of Sweet Sensi attacked Wyatt Larew of Wyatt Purp and the Texas Hemp Reporter in an advertisement published in the Austin Chronicle on October 25, 2024. The jury verdict completely vindicated Larew and the Texas Hemp Reporter. 

“Sweet Sensi tried to cover up its bad behavior and questionable business practices by attacking me. I am grateful that the jury ruled in CenTex’s favor and vindicated me. I am disappointed in my former attorney, Lisa Pittman, who took a contradictory position after providing a legal opinion for me. Justice is the winner this week. Also, Hemp businesses in Texas won because bad actors need to be exposed, and ethical standards must be respected,” said Larew.

The conduct of Sweet Sensi’s lawyer, Pittman, has come into question. During the legal process, Pittman moved the case to District court from small claims court, which allowed Sweet Sensi to counter-sue for $250k-1 million in damages. While the trial was progressing, CenTex asked the judge to sanction Pittman. The judge agreed and sanctioned her. Additionally, the judge found it necessary to remind Pittman of her Fifth Amendment right against self-incrimination, raising the concern that her actions could be viewed as criminal, not just unethical.

“The Texas Hemp Reporter bases our reporting on court filings and public documents. Factual court reporting does not require commentary for the parties involved to “spin” us with their interpretation of court proceedings,” said Russell Dowden, Publisher of the Texas Hemp Reporter.

In this case, the jury ruled that Sweet Sensi did not own certain trade secrets, which contradicts what Autry of Sweet Sensi said in his paid advertisement.

“In my opinion, the jury did a good job seeing through the thinly veiled arguments presented by Sweet Sensi attempting to misuse trade secrets and the patent process. Hemp businesses must maintain their integrity so we can continue to supply products for the people who need them the most,” said David Sergi, Attorney for Wyatt Purp and other hemp-related businesses.

​​According to the Judge’s jury instructions, the Court has found that the "Non-Compete" and "Non-Solicitation" provisions of LoneStar's Proprietary Information Non-Disclosure Agreements ("NDAs") are unenforceable and unlawful provisions. Thus, the covenants (promises) not to compete with LoneStar and not to solicit LoneStar's customers have no effect, are not binding, and do not apply to CenTex or others who may have used the same clauses.  

Additionally, the Court has determined that the Manufacturing Services Agreement for the gumdrop order was ambiguous because it is missing material terms and contains terms that are reasonably susceptible to more than one meaning. The Jurors were instructed to interpret the ambiguous language against LoneStar because LoneStar drafted the agreement.

Finally, the jury found that Sweet Sensi committed constructive fraud. The jury returned unanimous verdicts, finding that Sweet Sensi engaged in false, misleading, deceptive, and unconscionable actions and that it had no trade secrets in its manufacturing process. 

 Specifically, the jury answered the following questions.

 

• Did LoneStar engage in any false, misleading, or deceptive act or practice that CenTex relied on to its detriment and that was a producing cause of damages to CenTex? Jury said Yes.
 

• Did LoneStar engage in any unconscionable action or course of action that was a producing cause of damages to CenTex? Jury said Yes.
 

• Did CenTex and LoneStar agree that CenTex's cherry limeade gumdrops ordered from LoneStar would come with red sugar and contain approximately 15 mg of Delta 8 per gumdrop? Jury said Yes.

• Did CenTex and LoneStar agree that LoneStar would provide shelf-ready/consumer-ready gumdrops to CenTex? Jury said Yes.

• Did LoneStar fail to comply with its agreement with CenTex, if any? Jury says Yes.

• Did CenTex substantially rely to its detriment on LoneStar's promises), if any, and, if so, was CenTex's reliance foreseeable by LoneStar? Jury said Yes.
 

• Did LoneStar obtain a benefit from CenTex by fraud or the taking of an undue advantage? Jury said Yes.
 

• Did LoneStar fail to comply with the Manufacturing Service Agreement? Jury said Yes.
 

• Did LoneStar own a trade secret in the formula, pattern, compilation, program, method, technique, process, or list of actual or potential customers listed below? 

• 1. The rosin-based process used to design and manufacture LoneStar's rosin-based products. Jury said No.

• 2. The process for designing and manufacturing LoneStar's rosin base. Jury said No.

• 3. The process for designing and manufacturing LoneStar's rosin-based products. Jury said No.

• 4. The process for designing and manufacturing LoneStar's vape cartridges and gummy products. Jury said No.

In addition to these findings, LoneStar Farms LLC dba Sweet Sensi must pay monetary damages to CenTex CBD. 

Additional steps related to the people and businesses involved in this case will be taken in the coming weeks. We will continue to inform the public about any developments.

For media interviews. Please contact Kevin Lampe at (312) 617-7280 or [email protected].

LoneStar Does Not Own Trade Secrets Listed in Court Filings