Next It Corporation v. Roy et al, No. 2:2005cv00380 - Document 15 (E.D. Wash. 2005)
Court Description: ORDER GRANTING TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE; SETTING FURTHER STATUS CONFERENCE FOR HEARING ON PLAINTIFF'S MOTION FOR EXPEDITED DISCOVERY AND ESTABLISHING SCHEDULE FOR HEARING ON PRELIMINARY INJUNCTION; Granting in part (TR O and OSC) and deferring in part (expedited discovery request) 2 Motion for Temporary Restraining Order; A telephonic hearing will be held on 12/7/05 at 2:00 pm to establish a time and place of the preliminary injunction hearing and to hear portions of Plaintiff's motion requesting expedited discovery. Plaintiff shall post a security in the amount of $2,000 no later than 12/5/05 at 5:00 pm. The TRO shall expire on 12/15/05 at 5:00 pm, unless otherwise ordered by the Court or stipulation of the parties. Signed by Judge Lonny R. Suko. (cc: all counsel that appeared at TRO hearing on 12/2/05) (CV, Case Administrator)
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Next It Corporation v. Roy et al Doc. 15 Case 2:05-cv-00380-LRS Document 15 Filed 12/02/2005 1 2 3 4 5 6 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 7 8 NEXT IT CORPORATION, a Washington Corporation, 9 Plaintiff, 10 11 12 13 NO. CV-05-380-LRS v. SHANTANU ROY and JENNIFER ROY, husband and wife; JOSH KNOWLES, a single person, and NDALL SOLUTIONS, LLC, an Idaho corporation, 14 Defendants. ORDER GRANTING TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE; SETTING FURTHER STATUS CONFERENCE FOR HEARING ON PLAINTIFF’S MOTION FOR EXPEDITED DISCOVERY AND ESTABLISHING SCHEDULE FOR HEARING ON PRELIMINARY INJUNCTION 15 16 17 18 19 20 21 22 23 24 25 Plaintiff is a Washington corporation in the business of software development and services. Plaintiffs have filed a Verified Complaint(Ct. Rec. 1), seeking a preliminary and permanent injunction and other relief, including redress for misappropriation of trade secrets and breach of contract associated with the defendants’ alleged creation of a competing enterprise and taking of plaintiff’s proprietary information. BEFORE THE COURT is Plaintiffs’ Motion for Temporary Restraining Order, Expedited Discovery and Order to Show Cause filed December 1, 2005 (Ct. Rec. 3). On December 2, 2005, a telephonic hearing was held. Todd Reuter participated on behalf of the Plaintiff, John Guin participated on behalf 26 ORDER ~ 1 Dockets.Justia.com Case 2:05-cv-00380-LRS Document 15 Filed 12/02/2005 1 of Defendants Roy and Ndall, Mike McMahon participated on behalf of 2 Defendant Knowles, and Rob Grier participated on behalf of third-party 3 Delex. 4 The Court has reviewed all pleadings contained in the Court file, 5 including the verified complaint and exhibits thereto, the memorandum 6 filed in support of Plaintiff’s motion, the Affidavit of Jim Hereford and 7 the motion. 8 produced at the time of the hearing, including the Declaration of Garnett 9 “Sandy” Clark (Ct. Rec. 12) and the declaration of Defendant Josh In addition, the Court has reviewed the declarations 10 Knowles. 11 argument and being advised in the premises finds that: 12 13 14 a. Having considered these pleadings and now having received oral This Court has jurisdiction of the subject matter of this case and of all the named parties. b. The Plaintiff has demonstrated a reasonably sufficient 15 likelihood of ultimate success in establishing that the Defendants have 16 engaged, and are continuing to engage, in acts and practices that violate 17 state and federal law, as well as the parties employment and non-compete 18 agreements. 19 c. There is good cause to believe that an immediate irreparable 20 injury, loss, or damage will result to the Plaintiff, to wit, the loss 21 of trade secrets and proprietary information, as well as the potential 22 loss of customers and future business contracts, unless Defendants are 23 immediately restrained and enjoined by order of this Court. 24 secrets and proprietary information includes a valuable computer source 25 code, which is the product of extensive research and development efforts 26 of the Plaintiff. The Defendants have had access to this information and ORDER ~ 2 The trade Case 2:05-cv-00380-LRS Document 15 Filed 12/02/2005 1 appear poised to take and use that information, thus causing immediate 2 and irreparable injury, loss or damage to plaintiff. 3 d. Weighing the equities and considering the Plaintiff’s 4 likelihood of ultimate success, a temporary restraining order would be 5 in the public interest. 6 e. Though the Defendants were all contacted in advance of the 7 hearing and participated in the hearing, counsel had very little time to 8 consider the Plaintiff’s pleadings by the time of the hearing. The Court 9 considers this Order as granted without meaningful notice because the 10 injury complained of appears imminent and irreparable. The Individual 11 Defendants had access to key source code and customers. They have the 12 expertise to use that code and have formed a competing enterprise for the 13 apparent purpose of doing so. 14 loss of customers cannot be fully compensated for with money damages. 15 Further, Plaintiff has or will post bond to protect the interests of the 16 Defendants in an amount the parties have expressly agreed to. The loss of control over that code and the 17 Based upon the above considerations, 18 IT IS THEREFORE ORDERED , that Plaintiff’s Motion for Temporary 19 Restraining Order, Expedited Discovery, and Order to Show Cause (Ct. Rec. 20 3) is GRANTED IN PART . That portion of Plaintiff’s motion requesting 21 Expedited Discovery shall be DEFERRED until Wednesday, December 7, 2005. 22 IT IS FURTHER ORDERED, 23 that the Defendants and each of them, including all persons in 24 active concert and participation with them, are hereby: 25 26 ORDER ~ 3 Case 2:05-cv-00380-LRS 1. 1 Document 15 Filed 12/02/2005 Enjoined from using, disclosing or transferring any Next IT 2 proprietary information, trade secrets, or other confidential business 3 information obtained during the Defendants’ employment with Next IT; 2. 4 Enjoined from soliciting, calling on or providing competing 5 services for any person or entity for whom Next IT provided services 6 during Defendant’s term of employment with Next IT, said services to 7 include the design, coding, testing, installation, service or maintenance 8 of products in Next IT’s commercial space, including agent technology, 9 indexing, web 10 intelligence; 11 3. scraping, Enjoined from web applications, soliciting, security, calling or and artificial providing competing 12 services for any person or entity whose name Defendant became aware of 13 during their employment with Next IT; 4. 14 Enjoined from directly or indirectly recruiting or encouraging 15 any 16 relationship with an employer, person or entity other than Next IT; 17 employee 5. of Next Enjoined IT from to accept destroying, employment altering, or other erasing, business deleting, 18 fragmenting, disposing or otherwise spoiling any documents, electronic 19 data, computer and related equipment, materials, or other vehicle for 20 information storage that may be relevant to the determination of the 21 issues presented in this lawsuit; and, is further ordered to preserve all 22 written, electronic or other tangible communications created or received 23 during the period Jan. 1, 2004 to present; 24 6. Ordered to appear before this court at the time and place to be 25 ordered 26 preliminary injunction should not be entered pending final judgment of by ORDER ~ 4 the Court in a following order and show cause why a Case 2:05-cv-00380-LRS Document 15 Filed 12/02/2005 1 the court in this action. 2 of the preliminary injunction hearing at a follow up telephonic hearing 3 on WEDNESDAY, DECEMBER 7, 2005 AT 2:00 P.M. 4 Court’s public conference line (509-376-1330) at the time of the hearing. At 5 that time the The Court will establish the time and place parties shall be The parties shall call the prepared to discuss the 6 Plaintiff’s motion for expedited discovery and the need to preserve all 7 relevant evidence for use in this action. 8 possible, submit a joint proposed scheduling order in advance of the 9 hearing which addresses pre-hearing deadlines including, but not limited 10 to, the filing of any cross-motions and briefing for the preliminary 11 injunction hearing, the exchange of witness and exhibit lists, and the 12 submission of Proposed Findings of Fact and Conclusions of Law. The parties shall also, if 13 IT IS FURTHER ORDERED that in accordance with the representations 14 made by counsel for third-party Delex, Delex is ordered to comply with 15 paragraph numbers one, five and six set forth above. 16 IT IS FURTHER ORDERED that Next IT shall post security in the amount 17 of $2,000 for the payment of Defendants’ costs and damages that may be 18 incurred in the event Defendants are found to be wrongfully enjoined or 19 restrained by this Order. 20 MONDAY, DECEMBER 5, 2005 at 5:00 p.m.. 21 /// 22 /// 23 /// 24 /// 25 /// 26 /// ORDER ~ 5 Such security shall be posted no later than Case 2:05-cv-00380-LRS 1 Document 15 Filed 12/02/2005 The Temporary Restraining Order shall expire on December 15, 2005 2 at 5:00 p.m., unless otherwise Ordered by the Court. The parties may 3 stipulate to extend this TRO without filing a motion with this Court, but 4 shall notify chambers of any change. 5 IT IS SO ORDERED. 6 The District Court Executive is directed to file this Order and 7 8 provide copies to counsel. DATED this 2nd day of December, 2005 at 5:22 p.m.. 9 s/Lonny R. Suko 10 LONNY R. SUKO UNITED STATES DISTRICT JUDGE 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 ORDER ~ 6
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