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Friday, January 2, 1998

Friendship goes bad over cheese

By GEORGE FLYNN / The Houston Chronicle

Until two weeks ago, Maria Castro had used her mother's secret recipe and 25 years of hard work to turn Mexican cheese into an all-American success story.

Castro Cheese Co. was created in the kitchen of her house, where her husband would bring home discarded milk lots from his job as a dairy laborer. Her production outgrew the kitchen's capacity, so she relocated it to the family garage.

Now, the business is run from a full-fledged factory on Campbell Road. But potential crisis struck less than two weeks ago, when Castro saw a similar-looking fresh Mexican cheese begin competing with her established La Vaquita brand.

The rival manufacturer turned out to be the man she had shared her secrets with two years ago, so he could build processing equipment for Castro Cheese.

That conflict now has become the battle of La Vaquita vs. Jaimito, the product of Cheesemakers Inc. of Cleveland, Texas.

On Tuesday, the dispute went to court, where state District Judge Richard Hall set a Jan. 22 hearing on a temporary injunction sought in a lawsuit filed by Castro, 48.

She wants Cheesemakers and its head, James Keliehor of Cleveland, barred from allegedly using her confidential process to produce his Jaimito cheeses. She accuses him and his other company, Custom Food Equipment Co., of misappropriating her trade secrets and packaging.

Castro attorney Christopher Benson and Keliehor attorney Scott Funk reached a preliminary agreement to speed the exchange of evidence for a quick hearing on the matter.

Funk said the allegations are unfounded, saying Keliehor has an unblemished career in the food processing business. He had been making cheese long before the equipment contract with Castro, Funk said.

"All of the information, processes and equipment being used to make his cheeses are not proprietary in any way. He is not using her processes, and he has researched his information from other sources," Funk said. "This case is not as Ôjuicy and flavorful' as it would look to be at first glance."

The lawsuit says Castro learned her art of cheese-making as a child helping her mother on their farm in Mexico.

And Benson said she carefully had protected those secrets. Castro and her family require all factory visitors -- including Keliehor -- to first sign agreements not to disclose what they see and learn of the process.

Grocery shoppers may recognize the final product on dairy shelves, as loosely wrapped 8-ounce ovals of semi-soft white Mexican cheese. Diners may have consumed it inside restaurant enchiladas or chiles rellenos, or crumbled atop refried beans.

In nearly 25 years of marketing, its popularity has spread into the mainstream markets in several states surrounding Texas. The suit said the posh Four Seasons Hotel even developed and published recipes that call for La Vaquita by name.

Humble beginnings preceded the profits. Castro migrated to the United States from a farm in the San Luis Potos state of Mexico. She and her husband were raising three daughters on his meager salary as a laborer at Schepps Dairy 28 years ago.

They said they were appalled that the dairy would throw out 5-gallon bags of milk if they leaked. He took them home, where she began trying to use the pasteurized milk to duplicate her mother's fresh cheese.

After more than a year of intense experimentation, Castro was satisfied she found the secrets in processing and ingredients, and that elusive crumbling texture.

Friends clamored for her cheese, and then she began walking -- sometimes miles -- to deliver it to other groups of Hispanic workers.

Demand expanded the operation into the garage. They opened their factory on Campbell Road in 1976. It was that same demand that led them in 1994 to increase the output through automation.

The suit said Keliehor visited their office and told of his own successes in equipping large food-processing operations such as Tyson Foods and Land O' Lakes.

After Keliehor signed the confidentiality agreement, Castro taught him her techniques. Rather than any exact curing time or speed formula, the process still was largely controlled through the "feel" of the operator about when curd was ready, the suit said.

"He repeatedly asked to feel for consistency," the suit said. An assistant was brought along to help in the design of the equipment. They wanted mixers that could deliver 350-pound batches of cheese curd, up from the current 175 pounds, every 10 minutes.

By late 1995, Keliehor asked for and received several 400-pound batches of cheese to test the system and design. The $75,000 system was installed in June, but the suit said it was plagued by problems in being cleaned and maintained to Castro's standards. Keliehor said later that he was busy with other projects and would not be available to make further modifications, the suit said.

Then Castro saw the alleged results of one of those projects -- Jaimito cheese.

Funk said it was hardly a case of someone "all of the sudden making cheese because they were aware of a secret process."

"Contrary to their allegations, he's been involved in food processing and equipment for a long time," Funk said. "He has a lot of experience and background in the process of making cheese."