Kate Hudson sued for fraud, exposing trade secrets

"Fool's Gold" star Kate Hudson has been sued by a firm that says hair care products she developed with hair stylist-to-the-stars David Babaii are based on ideas for using volcanic ash that the firm developed.

But Hudson, 29, and Babaii on Tuesday said through representatives the lawsuit, which was filed by a California corporation called 220 Laboratories Inc, is "without merit."

Hudson and Babaii are partners in the company David Babaii for WildAid, a hair care products company that donates 10 percent of profits to WildAid, a wildlife conservation group.

In the lawsuit, which was filed on Friday in Los Angeles Superior Court, 220 Laboratories said it entered into an "oral contract" with Babaii to develop and manufacture hair care products in 2006. The idea for the product was to use volcanic ash from the Vanuatu Islands of the South Pacific.

But Babaii went on to use a company called Universal Packaging Systems Inc to develop the products -- using the volcanic ash component. Hudson promoted the product in a 2007 interview with Vogue magazine and said she was one of the developers, the lawsuit states.

Brad Cafarelli, a spokesman for Hudson, said in an e-mail that the claims by 220 Laboratories are baseless.

"Kate does not know the plaintiffs and has never met with them or spoken with them," Cafarelli said.

In its lawsuit, 220 Laboratories' allegations against Hudson, Babaii and Universal included misappropriation of trade secrets, fraud and breach of contract. The company is seeking an injunction to block David Babaii for WildAid from using its "trade secrets" in the sale of hair care products.

The company said it also seeks damages in an amount to be proven at trial.

Hudson is the daughter of Oscar-winning actress Goldie Hawn. She has appeared in the movies "You, Me and Dupree," "Almost Famous" and "Fool's Gold."