Legal Exercise
When he saw Oprah Winfrey complaining about how she was “duped” on her January 26 show, Greg Sanders felt exactly the same way. Winfrey was castrating author James Frey over his fabricated memoir of drug addiction, A Million Little Pieces. Meanwhile, Olathe entrepreneur Sanders was himself feeling duped — by Winfrey’s exercise guru, Bob Greene.
Now Sanders and his company are suing Greene and Greene’s associates, alleging that they ripped off his plan for a new dietary and fitness program that Sanders created through his company, Vertical Market Applications.
“If they are interested in the truth, will Mr. Greene fall under the same scrutiny as Mr. Frey?” Sanders asks. “Does truth really matter? If it does, then let’s get it all out in the open.”
Sanders first began talks with Greene in January 2003.
At the time, Sanders felt good. He’d lost 55 pounds the previous year through strict dieting and exercise. Poking at the screen of his Palm Pilot one afternoon, he came up with a simple idea that could help dieters. “I said, ‘It would be nice if I could keep track of what I eat.'”
Sanders spent a year planning a new fitness program around wireless systems. He lined up investors and found programmers to code software that could link diet and fitness information among handheld devices, cell phones, personal computers and the Internet. One key element helped dieters keep track of calorie counts from different foods, then figure out how much they needed to exercise if they wanted to avoid gaining weight. Sanders says nobody had put together a multimedia program like that before. He filed a patent application for a Palm Pilot bar-code scanner that would transfer nutrition information on food packages into the workout program.
The only problem, Sanders says, was that his company didn’t have the marketing savvy to promote his invention.
Inspired by Winfrey’s decades-long battle against weight gain, Sanders says he sent a Palm Pilot with his program to her offices in Chicago. A couple of weeks later, in January 2003, he saw Greene touting his own fitness and dieting techniques on Oprah.
Sanders says he immediately contacted Greene’s agent, William Stankey of Westport Entertainment Associates in Fairfield, Connecticut, a firm that represents dozens of celebrities. Sanders told Stankey that VMA had sent a prototype to Winfrey. “They advised us to quit working with Oprah, saying, ‘We do all the personal fitness stuff,'” Sanders recalls. “I said, ‘We’d love to work with you guys. We’ve got the technology and expertise.'”
The relationship was friendly in the beginning. Sanders tells the Pitch that Stankey signed his e-mails “Stankey Boy.” Greene, Sanders says, wrote e-mails to Sanders chronicling trips he’d taken with Winfrey.
In January 2003, Greene and Stankey signed a nondisclosure agreement pledging to keep all of VMA’s trade secrets confidential.
But Stankey and VMA were still negotiating to determine how they would split any profit. Sanders’ camp wanted as much as 40 percent from the new program; Stankey pushed for Greene to receive 80 percent.
Around March 2003, as negotiations continued, Sanders says Greene asked him to get the program ready for a demonstration on Oprah sometime between April and August. Sanders says Greene told him to prepare the Web site first, so VMA programmed and personalized www.bobgreene.com and other tools to Greene’s liking while readying for the launch.
Stankey came to Kansas City the next month. Over dinner at McCormick & Schmick’s, Sanders demonstrated how the diet and fitness information would flow from the various devices. Then, Sanders recalls, “Stankey gets up at the end of dinner and says, ‘Now that we have all your information, what’s to stop us from going out and doing it ourselves?’ All of our jaws dropped down to the ground.”
The next day, Sanders sent an e-mail to Stankey reminding him of the nondisclosure agreement protecting VMA. A few days later, he called Westport Entertainment. “Stankey said, ‘We don’t want to work with you.’ And they had the elements, A to Z — the business plans, pricing, how to get the Web site done, how to get a palm device done.”
In January 2004, Greene appeared on Oprah. “Bob, you have certainly grown,” Winfrey told him.
“I have,” Greene said, smiling.
Winfrey then offered everyone in the audience a free subscription to Greene’s online fitness boot camp.
“That was the final breach that I could handle,” Sanders says. “I was steaming at that point.”
In the following weeks, Sanders filed suit against Greene and Stankey, alleging breach of contract, trade-secret misappropriation, unfair competition and fraud, among other unfair bus- iness practices.
“For us, it’s just a matter of these guys thinking they could come here from the East Coast and take away from the small, cow-town folks. I think they thought they could just do it and nothing would be done,” says Sanders’ attorney, Kevin Baldwin.
“Bob Greene uses Oprah, his access to Oprah, the fact that he’s in the inner circle…. The guy kept invoking Oprah: We’ll get you on the Oprah show. We’re going to push this through Oprah. He invokes that contact with Oprah as kind of a hallmark of trust. And it’s just not so. They just took his idea and left him high and dry,” Baldwin says.
Michael Belancio, the Kansas City attorney representing Greene and Stankey, did not return calls requesting comment.
But the Pitch was able to reach Stankey by phone in late January. Asked about the dinner with Sanders at which he allegedly threatened to take the technology and run, Stankey said, “I don’t particularly care what they are saying. We’ll move forward with the case as we have to move forward with the case.”
The case is scheduled to be settled in Connecticut this spring. The nondisclosure agreement stipulates that Greene and VMA will settle disputes in arbitration (thereby avoiding a public trial).
Contacted by the Pitch, Greene acknowledged having had talks with the Olathe group in 2003. But, he said, “We’re pretty much informed that the arbitration should speak for itself, and it’s probably not a smart thing for me to grant an interview.”
