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Plc Trenching Co., LLC v. Gary Newton

May 10, 2011

PLC TRENCHING CO., LLC, PLAINTIFF,
v.
GARY NEWTON, JR.; CABLE SYS. INSTALLATION LLC; AND CABLE SYS. INSTALLATIONS CORP., DEFENDANTS.



APPEARANCES: OF COUNSEL: SCHNADER HARRISON SEGAL & LEWIS, LLP CYNTHIA A. MURRAY, ESQ. Counsel for Plaintiff THEODORE L. HECHT, ESQ. 140 Broadway, Suite 3100 New York, NY 10005-9998

The opinion of the court was delivered by: Hon. Glenn T. Suddaby, United States District Judge

DECISION and ORDER

Currently before the Court, in this misappropriation-of-trade-secrets action is a motion for a temporary restraining order ("TRO") and preliminary injunction filed by PLC Trenching Co., LLC ("Plaintiff") against Gary Newton, Jr., Cable System Installation LLC, and Cable System Installations Corp. ("Defendants"). (Dkt. No. 5.) For the reasons stated below, Plaintiff's motion for a temporary restraining order is granted; decision on Plaintiff's motion for a preliminary injunction is reserved; and the parties are directed to appear before this Court at 3:00 p.m. on May 17, 2011, for oral argument on the issue of whether the TRO should be converted to a preliminary injunction and/or revoked.

I. RELEVANT BACKGROUND

A. Plaintiff's Complaint

On May 5, 2011, Plaintiff filed its Complaint in this action. (Dkt. No. 1.) Generally, in its Complaint, Plaintiff alleges that it is in certain and imminent danger of being irreparably harmed by a former employee (Defendant Gary Newton, Jr.) who (1) on February 14, 2011 surreptitiously and wrongfully appropriated thousands of Plaintiff's confidential and unique engineering drawings, mechanical designs and installation techniques, (2) on February 18, 2011, voluntarily left Plaintiff's employment and went to work for a competing construction company owned by Cable System Installation, LLC, and Cable System Installations Corp. (collectively "CSI"), which, like Plaintiff, performs trenching and underground utility installations, and (3) subsequently has, upon Plaintiff's information and belief, transferred that information to CSI. (Id.)*fn1 Based on these factual allegations, Plaintiff's Complaint asserts the following five claims against Defendants: (1) misappropriation of trade secrets; (2) violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030; (3) violation of the Store Communications Act, 18 U.S.C. § 2701; (4) breach of fiduciary duties; and (5) unfair competition. (Id.)

B. Plaintiff's Motion for a Temporary Restraining Order

On May 6, 2011, Plaintiff filed a motion for a TRO and preliminary injunction. (Dkt. No. 5.) Generally, in its motion for a TRO, Plaintiff seeks to enjoin Defendants from doing any of the following, pending a hearing and decision on Plaintiff's motion for a preliminary injunction: (1) directly or indirectly manufacturing, using, exploiting, selling, transferring, copying, secreting or otherwise employing, retaining possession or exerting any right over Plaintiff's trade secrets and proprietary information in connection with any of their business of personal activities; and (2) directly or indirectly erasing, deleting, destroying or otherwise disposing of any date, files, records, memoranda, or information improperly obtained by Defendant Gary Newton, Jr., while he was employed by Plaintiff and which is now believed to be in the possession of Defendants. (Id.)

In addition, in its motion for a TRO, Plaintiff seeks to an Order from the Court doing the following, pending a hearing and decision on Plaintiff's motion for a preliminary injunction: (1) ordering Defendants to return all copies of digital computer files, physical and other representational or intellectual embodiments of Plaintiff's trade secrets and proprietary information which were improperly obtained by Defendant Gary Newton, Jr., while he was employed by Plaintiff and are now in the possession of Defendants, (2) allowing Plaintiff to inspect and perform a forensic investigation of Defendants' computer systems to independently monitor Defendants' business activities, at Defendants' sole cost and expense (both jointly and severally), to ensure that Defendants are not manufacturing, using, exploiting, selling, transferring, copying, secreting or otherwise employing, retaining possession or exerting any right over Plaintiff's trade secrets or proprietary information, and (3) maintaining the status quo until the hearing and decision on Plaintiff's motion for a preliminary injunction. (Id.)

II. LEGAL STANDARD GOVERNING ISSUANCE OF A TEMPORARY RESTRAINING ORDER

Pursuant to the well-known legal standard governing motions for temporary restraining orders,*fn2 a party seeking such relief must establish two things. First, the party must establish a likelihood of irreparable harm if the requested relief is denied. Second, the party must establish either (a) a likelihood of success on the merits of its case, or (b) sufficiently serious questions going to the merits to make them a fair ground for litigation, and a balance of hardships tipping decidedly in its favor.

III. ANALYSIS OF PLAINTIFF'S MOTION FOR A TEMPORARY RESTRAINING ORDER

A. First Requirement--Likelihood of Irreparable Harm

After carefully reviewing Plaintiff's motion papers, the Court finds that Plaintiff has adduced sufficient evidence that it will suffer irreparable harm if the requested temporary restraining order is not issued. In particular, the Court reaches this conclusion based on the affidavit testimony of David L. Critelli, Michael E. Lopata, and Casey Tyoe, and exhibits thereto. (Dkt. Nos. 8-10.) For example, the Court notes that Plaintiff has adduced testimony that (1) the information in question took years to develop, provided Plaintiff with a substantial advantage over its competitors, and was kept confidential, (2) Defendants' use of this information would harm Plaintiff in a way that cannot be easily measured in dollars, (3) Defendant Newton obtained this information in a way that indicates a scheme to harm Plaintiff, and indeed has reportedly already used certain of this information (i.e., regarding how to adapt "cup cutters" to the Rivard trencher, used by both Plaintiff and Defendants) to increase the productivity at one ...


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