United States District Court, S.D. New York
OPINION & ORDER
G. SCHOFIELD, DISTRICT JUDGE.
action concerns alleged violations of the Defend Trade
Secrets Act (“DTSA”) and various New York state
law claims. Plaintiff ExpertConnect, LLC timely filed an
application to extend a preliminary injunction first issued
on July 26, 2018, against Defendants Mayokia Fowler, Dipali
Parmar and Strafluence, LLC. Plaintiff also seeks to expand
the preliminary injunction's scope and to obtain the
injunction pursuant to its claims for unfair competition and
tortious interference. For the following reasons,
Plaintiff's applications are denied.
8 and 28, 2018, a hearing was held on Plaintiff's motion
for preliminary injunction. At the hearing, Plaintiff offered
credible evidence that Defendants Fowler and Parmar accessed
ExpertConnect's proprietary information and, in close
proximity, accessed personal computer storage drives. This
“very powerful circumstantial evidence of
misappropriation of trade secrets” was sufficient to
deem that Plaintiff was likely to succeed on the merits.
Irreparable harm was presumed, and it was held in the public
interest to issue an injunction that protects a company's
proprietary information from employees who violate
nondisclosure agreements covering that information.
Accordingly, Plaintiff's motion was granted.
filed a motion for reconsideration, arguing that irreparable
harm should not be presumed. Though the motion was granted,
Defendants application to reverse the preliminary injunction
was denied. The basis for finding irreparable harm, upheld by
the Second Circuit, was that Defendants' actions would
impair ExpertConnect's goodwill and reputation. See
ExpertConnect, LLC v. Parmar, 773 Fed.Appx. 651, 653 (2d
direction from the Second Circuit to ensure that the
injunction complies with Federal Rule 65(d), the injunction
was re-issued on August 15, 2019, stating that “the
restrictions, prohibitions, and mandatory conditions set
forth in the preceding paragraphs of this Order (injunctive
relief) shall expire on November 30, 2019 (the end date of
the non-disclosure agreement that Defendants each entered
with Plaintiff, see at Dkts. 9-2 and 9-3), but this
temporal limitation, is applied without prejudice to an
extension (upon Plaintiff's motion).” The
parties' knowledge of the facts is otherwise assumed for
purposes of this Opinion.
injunctions are categorized as prohibitory or mandatory.
“Prohibitory injunctions maintain the status quo
pending resolution of the case; mandatory injunctions alter
it.” N. Am. Soccer League, LLC v. United States
Soccer Fed'n, Inc., 883 F.3d 32, 36 (2d Cir. 2018).
The relief Plaintiff seeks is in part the continuation of a
mandatory injunction, as the requested relief includes
enjoining Defendants from continuing to solicit or accept
business from Plaintiff's clients. A party seeking a
mandatory preliminary injunction must show (1) “a clear
or substantial likelihood of success on the merits”;
(2) “a strong showing of irreparable harm”; and
(3) “that the preliminary injunction is in the public
interest.” New York ex rel. Schneiderman v. Actavis
P.L.C., 787 F.3d 638, 650 (2d Cir. 2015) (internal
quotation marks omitted). The motion must be denied if
Plaintiff fails to meet any of the three elements.
Demonstrates a Clear or Substantial Likelihood of Success on
state a claim for trade secret misappropriation under the
DTSA, a plaintiff must plausibly allege that (1) it possessed
a trade secret, and (2) the defendant misappropriated the
trade secret. 18 U.S.C. § 1836(b)(1). The submissions do
not appear to refute that Plaintiff's information was a
trade secret when the non-disclosure agreement was in effect.
offers testimony that Defendants misappropriated
ExpertConnect's trade secrets, specifically its data and
research on existing and prospective clients and on experts.
The testimony notes that the information Defendants possess
is nearly identical to ExpertConnect's information. And
the testimony asserts -- building on evidence from the June
2018 hearing --that Defendants Parmar and Fowler extracted
this information from ExpertConnect's computers before
leaving the company. Plaintiff also offers documentary
evidence showing that Strafluence's client list includes
information that ExpertConnect also possesses, and that
Defendants solicited ExpertConnect clients.
evidence that Defendants possess information nearly identical
to Plaintiff's trade secrets reinforces the “very
powerful circumstantial evidence of misappropriation”
established at the June 2018 hearing. Defendants'
evidence, which suggests that some of Strafluence's
information on clients and experts could have come from
public resources, does not overcome the circumstantial
evidence that suggests that this information came from
Fails to Demonstrate Irreparable Harm
satisfy the irreparable harm requirement, plaintiff must
demonstrate that absent a preliminary injunction [it] will
suffer an injury that . . . cannot be remedied if a court
waits until the end of trial to resolve the harm.”
Faiveley Transp. Malmo AB v. Wabtec Corp., 559 F.3d
110, 118 (2d Cir. 2009). “A showing of irreparable harm
is the single most important prerequisite for the issuance of
a preliminary injunction.” Id. (internal
quotation marks omitted). “[W]here there is no danger
that a misappropriator will disseminate proprietary
information, the only possible injury that the plaintiff may
suffer is a loss of sales to a competing product which should
be fully compensable by money damages.” Id. at
119 (internal quotation omitted); see also Espiritu Santo
Holdings, LP v. L1bero Partners, LP, 19 Civ. 3930, 2019
WL 2240204, at *21 (S.D.N.Y. May 14, 2019) (“Where a
misappropriator seeks only to use those secrets- without
further dissemination or irreparable impairment of value-in
pursuit of profit . . . an award ...