citing, e.g., Pyromatics, Inc. v. Petruziello, 454 N.E.2d 588, 592 (Ohio Ct. App. 1983)
How later courts described this case
- citing, e.g., Pyromatics, Inc. v. Petruziello, 454 N.E.2d 588, 592 (Ohio Ct. App. 1983)
Written by the judges who cited it.
The opinion
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
MESA INDUSTRIES, INC.,
Plaintiff,
Case No. 1:22-cv-160
v. JUDGE DOUGLAS R. COLE
CHARTER INDUSTRIAL
SUPPLY, INC., et al.
Defendants.
OPINION AND ORDER
This matter comes before the Court on Plaintiff Mesa Industries, Inc.’s Verified
Complaint (Doc. 1) and Motion for a Temporary Restraining Order and/or
Preliminary Injunction (Doc. 2). For the reasons below, the Court GRANTS Mesa’s
Motion for a Temporary Restraining Order (Doc. 2) pending completion of a
Preliminary Injunction Hearing and as further detailed below.
BACKGROUND
This action arises out of Mesa Industries, Inc.’s (“Mesa”) allegations of trade
secret misappropriation, breach of contract, and other misdeeds by its former
employees, Defendants Alejandro Espinoza and Kyle King, and the individual
Defendants’ new employer, Defendant Charter Industrial Supply, Inc. (“Charter”).
According to the Verified Complaint, Espinoza began working for Mesa at
Mesa’s California location as a “Quality Control/Design Drafter” in 2012. (Compl.,
Doc. 1, #6). In that position, he maintained and updated drawings for manufactured
equipment and managed quality control standards. (Id.). Espinoza transferred to
Mesa’s Cincinnati location in 2016 and continued working there until his resignation
in January 2020. (Id. at #9). Defendant Kyle King worked for Mesa in Cincinnati from
2016 to 2018. (Id. at #10).
In 2012, at the outset of his employment, Espinoza signed a Non-Compete and
Non-Disclosure Agreement (“NC/ND”). (Id. at #6). Pursuant to that agreement,
Espinoza agreed:
not to give, divulge, offer or promise (directly or indirectly) to any other
company, organization or institution anything of value to Mesa which
includes, Trade Secrets and Propriety Information such as formulas,
processes, materials specifications and designs (current and prototype),
pricing information, customer lists, supplier/sub-contractor vendor list,
business plans or any other information that is not readily available
from published articles and brochures.
(Id. at #6–7).
Both Espinoza and King also executed “Employee Handbook Acknowledgment
forms,” by which they acknowledged the Non-Disclosure Policy included in Mesa’s
Employee Handbook. (Id. at #7, 10). That policy states, in pertinent part:
During the term of employment with Mesa Industries, employees may
have access to and become familiar with information of a confidential,
proprietary, or secret nature, which is or may be either applicable or
related to the present or future business of Mesa Industries, its research
and development, or the business of its customers. For example, trade
secret information includes, but is not limited to, devices, inventions,
processes and compilations of information, records, specifications, and
information concerning customers or vendors. Employees shall not
disclose any of the above-mentioned trade secrets, directly or indirectly,
or use them in any way, either during the term of their employment or at
any time thereafter, except as required in the course of employment with
Mesa Industries.
(Id. at #7 (emphasis added)).
Separately, Espinoza also signed in 2013 a Nondisclosure Agreement (“NDA”)
with an Ohio choice of law provision. (Id. at #7, 9). In doing so, Espinoza agreed to
protect Mesa’s “Confidential Information” from “disclosure to any person other than
to persons having a need for disclosure in connection with [Espinoza’s] authorized use
of the Confidential Information with [Mesa’s] prior written authorization,” as well as
to take reasonably necessary steps to protect the secrecy of the Confidential
Information and to prevent it from becoming public or falling into the hands of
“unauthorized persons.” (Id. at #8).
That NDA further defined “Confidential Information” broadly to include,
among other things, information about Mesa’s customers and potential customers, as
well as Mesa’s:
trade secrets, technologies, engineering or operation methods or
techniques, research data, formulas, test results, samples of materials
and results of any analysis of such samples, marketing plans, service
plans, patent applications, patents pending, names of customers or
potential customers, customer files, vendor lists, vendor files, [and]
contracts ….
(Id. at #7–8). Indeed, that agreement provided that “all information disclosed by
Company to Promisor during the term of his/her employment shall be deemed the
confidential and proprietary information of Company, irrespective of the source or
true ownership of such information.” (Id. at #8 (emphasis added)). In paragraph 6 of
the NDA, Espinoza agreed to return or destroy any of Mesa’s Confidential
Information within 15 days of his termination. (Id. at #8–9).
Mesa alleges that these measures were necessary because, in the course of his
employment, Espinoza accessed and used various materials that Mesa now contends
are trade secrets. (See id. at #9, 10 (noting that Espinoza and King were “provided
access to valuable confidential … information, including … the AST Database, [and]
Application Drawings”)). As pertinent to this Opinion, the confidential information
Mesa identifies as “trade secrets” falls into two categories. First, Mesa maintains an
Above-Ground Storage Tank Database (“AST Database”) which has “detailed
information about its customers’ tanks, their components, technical specifications,
service history, pricing and other information.” (Id. at #5). The AST Database is a
compilation of thirty years of data, which Mesa says is not publicly available and
could not be replicated without substantial time and effort. (Id.). Second, Mesa
maintains “Application Drawings” regarding each tank in the AST Database. (Id.).
Application Drawings “provide additional critical information regarding the use of
specific products in specific tanks and allow for efficient servicing of tanks without
the need to re-engineer products.” (Id. at #5). This gives Mesa a competitive
advantage because having advance knowledge of a tank’s specifications and past
service allows it to anticipate customers’ needs, prepare parts and components in
advance, and eliminate or minimize engineering issues. (Id. at #6).
Mesa says it relies upon its AST Database and Application Drawings, among
other confidential information, to compete for business. It also says it has taken
measures to maintain the confidentiality of this information, including by way of the
ND/NC and NDA agreements outlined above. In addition, the Database and
Drawings “are not publicly available and are maintained by [Mesa] in confidentiality,
with limited access granted only to employees who have a job related need to access
the AST Database and/or Application Drawings.” (Id. at #5).
In 2020, Mesa learned that Espinoza, despite telling Mesa he was accepting
another position in Cincinnati, had gone to work with Defendant Charter in
California. (See id. at #9). Mesa sent a letter to Espinoza, copying Charter, reminding
Espinoza of his legal obligations regarding Mesa’s confidential information and trade
secrets. (Id.). Espinoza responded that he had not “used and [would] not use any of
Mesa’s confidential or trade secret information in any manner including in [his]
employment with Charter.” (Id. at #10).
According to Mesa, however, that assurance was false, and Espinoza was, in
fact, using Mesa’s confidential information. (Id.). In January 2022, William
Dominguez, another former Mesa employee who later went to work for Charter (but
is not a party to this action), contacted Mesa about potential use of Mesa’s trade
secrets by Defendants. (Id. at #12). According to Dominguez, Espinoza has a copy of
Mesa’s AST Database and Application Drawings on a USB thumb drive that he
shares with King and Charter. (Id.). Dominguez also sent screenshots of texts
between Espinoza, King, and others at Charter in which they make reference to
specific tanks owned by Mesa customers and identify ASTs by the numbers that Mesa
assigned to those ASTs in Mesa’s AST Database. (Id.; see also Text Message
Screenshots, Compl. Ex. C, Doc. 1-3). The messages allegedly include pictures of Mesa
Application Drawings and other materials, such as Mesa’s chemical compatibility
chart. (Compl., Doc. 1, #12–13).
Mesa filed a verified, eight-count Complaint (Doc. 1) on March 29, 2022. In that
Complaint, Mesa asserts claims for: breach of contract and breach of the duty of
loyalty against Espinoza, tortious interference with contract against Charter, and
trade secret misappropriation under both federal and Ohio law against all
Defendants. The same day, Mesa filed a Motion for a Temporary Restraining Order
and/or Preliminary Injunction (Doc. 2). That Motion is now before the Court.
LAW AND ANALYSIS
Mesa seeks a temporary restraining order preventing any of the Defendants
from “accessing, disclosing, and/or using” materials obtained by Espinoza from Mesa,
including Mesa’s Application Drawings, Above-Ground Storage Tank Database, and
any printouts or copies of either, in whatever media they may be stored. Before
determining whether Mesa is entitled to such relief, however, the Court must first
address a preliminary issue. Specifically, Defendants have raised concerns about
whether the Court has personal jurisdiction over them. Thus, the Court starts with
that question, before turning to the merits of Mesa’s request.
A. The Court Concludes That Personal Jurisdiction Exists For Purposes
Of Considering A TRO, But Does So Without Prejudice To Defendants’
Ability To Re-Raise That Issue.
A court must have personal jurisdiction over the parties before it entertains
the merits or quasi-merits of a case, and that includes issuance of a temporary
restraining order. RPB SA v. Hyla, Inc., No. LA CV20-04105 JAK (SKx), 2020 WL
12187801, at *4 (C.D. Cal. June 9, 2020) (citing Ruhrgas AG v. Marathon Oil Co., 526
U.S. 574, 584 (1999)). Although Defendants have not yet formally objected to personal
jurisdiction, they raised concerns along those lines during telephonic conferences to
discuss the pending Motion (Doc. 2), and they have represented to the Court that they
intend to file a motion challenging both personal jurisdiction and venue.
Notwithstanding those concerns, however, the Court concludes that it may exercise
personal jurisdiction for purposes of entering the instant temporary restraining
order.
A court may determine the issue of jurisdiction on the basis of pleadings and
affidavits alone. Malone v. Stanley Black & Decker, Inc., 965 F.3d 499, 505 (6th Cir.
2020) (quoting Serras v. First Tenn. Bank Nat. Ass’n, 875 F.2d 1212, 1214 (6th Cir.
1989)). If it does so, a plaintiff need only make a prima facie showing of personal
jurisdiction. Id. (quoting Schneider v. Hardesty, 669 F.3d 693, 697 (6th Cir. 2012)).
Moreover, in evaluating whether the plaintiff has met this “relatively slight” burden,
the court “must consider the pleadings and affidavits in the light most favorable to
the plaintiff.” Am. Greetings Corp. v. Cohn, 839 F.2d 1164, 1169 (6th Cir. 1988)
(quoting Welsh v. Gibbs, 631 F.2d 436, 439 (6th Cir. 1980)).
Where, as here, the Court’s subject-matter jurisdiction is based on a federal
question, the exercise of personal jurisdiction over a defendant is proper if it is “both
authorized by the forum State’s long-arm statute and in accordance with the Due
Process Clause of the Fourteenth Amendment.”1 AlixPartners, LLP v. Brewington,
1 Ohio’s legislature recently amended the State’s long-arm statute, and there is now some
question whether a court must separately analyze the jurisdictional exercise under both the
long-arm statute and the Due Process Clause, or whether these inquiries have merged.
Compare C.T. v. Red Roof Inns, Inc., No. 2:19-CV-5384, 2021 WL 2942483, at *10 (S.D. Ohio
July 1, 2021) (“Thus, even if the TVPRA does not confer nationwide service of process, this
Court could still exercise jurisdiction over a suit if it comported with Ohio’s long-arm statute
836 F.3d 543, 549 (6th Cir. 2016) (citing Bird v. Parsons, 289 F.3d 865, 871 (6th Cir.
2002), in turn quoting Mich. Coal. of Radioactive Material Users, Inc. v. Griepentrog,
954 F.2d 1174, 1176 (6th Cir. 1992)). Ohio’s long-arm statute confers personal
jurisdiction over, among others, anyone “[c]ausing tortious injury in [Ohio] to any
person by an act outside [Ohio] committed with the purpose of injuring persons, when
the person might reasonably have expected that some person would be injured
thereby in [Ohio].” Ohio Rev. Code § 2307.382(A)(6). The Due Process inquiry,
meanwhile, asks “whether … the non-resident defendant possesses such minimum
contacts with the forum state that the exercise of jurisdiction would comport with
traditional notions of fair play and substantial justice.” Beydoun v. Wataniya Rests.
Holding, Q.S.C., 768 F.3d 499, 505 (6th Cir. 2014) (quoting Theunissen v. Matthews,
935 F.2d 1454, 1459 (6th Cir. 1991) (internal quotation marks omitted)).
Based on the limited materials before the Court at this juncture—that is,
Mesa’s Verified Complaint (Doc. 1)—the Court concludes, at least preliminarily, that
the exercise of personal jurisdiction over the Defendants is proper in this case. Mesa
alleges that the individual Defendants, Espinoza and King, worked for Mesa at its
Cincinnati, Ohio, location for a number of years, and that Ohio is where Espinoza
misappropriated the allegedly confidential materials now at issue. Mesa also alleges
and the U.S. Constitution, which are now coextensive.”), with Premier Prop. Sales Ltd. v.
Gospel Ministries Int’l, Inc., 539 F. Supp. 3d 822, 828 n.2 (S.D. Ohio 2021). (“This
interpretation does not, however, collapse the long-arm statute’s specific jurisdiction test into
the Federal standard. Plaintiffs … asserting that a court has specific jurisdiction over a
defendant must still demonstrate their claim arose from one of the enumerated factors.”).
The Court does not address that question here, however, because it concludes that
jurisdiction is proper under both Ohio’s long-arm statute and the Due Process clause
separately; thus, the same result would obtain either way.
that Espinoza, King, and Charter have all used that information to their competitive
benefit—and to the competitive detriment of Mesa, which is allegedly headquartered
in Ohio—despite knowledge of its confidential nature. In the absence of any
conflicting accounts of the salient facts, the Court concludes that this connection
suffices both under Ohio’s long-arm statute and the Due Process Clause. The Court
specifically notes, though, that its conclusion is preliminary, and in no way prejudices
Defendants’ ability to formally raise this issue in the future on a more fully developed
factual record.
B. Mesa Has Established That It Is Entitled To A Temporary Restraining
Order.
Turning to the merits of the Motion for TRO, “[a] temporary restraining order
is an extraordinary remedy that should only be granted if the movant can clearly
show the need for one.” Kendall Holdings, Ltd. v. Eden Cryogenics LLC, 630 F. Supp.
2d 853, 860 (S.D. Ohio 2008) (citing First Tech. Safety Sys., Inc. v. Depinet, 11 F.3d
641, 650 (6th Cir. 1993)). Ultimately, “the purpose of a TRO under Rule 65 is to
preserve the status quo so that a reasoned resolution of a dispute may be had.” Procter
& Gamble Co. v. Bankers Tr. Co., 78 F.3d 219, 226 (6th Cir. 1996)).
Mesa bears the burden of establishing entitlement to a temporary restraining
order. See Jones v. Caruso, 569 F.3d 258, 265 (6th Cir. 2009) (citations omitted). To
satisfy this burden, Mesa must establish its case by clear and convincing evidence.
Hartman v. Acton, No. 2:20-cv-1952, 2020 WL 1932896, at *2 (S.D. Ohio Apr. 21,
2020) (quoting Marshall v. Ohio Univ., No. 2:15-CV-775, 2015 WL 1179955, at *4
(S.D. Ohio Mar. 13, 2015), in turn citing Overstreet v. Lexington-Fayette Urb. Cnty.
Gov’t, 305 F.3d 566, 573 (6th Cir. 2002)).
The question of whether a movant is entitled to this extraordinary relief is
guided by the same four factors as are considered for a preliminary injunction:
(1) whether plaintiff has a substantial likelihood or probability of success on the
merits; (2) whether plaintiff will suffer irreparable injury if the relief is not granted;
(3) whether the injunctive relief would unjustifiably harm a third party; and
(4) whether the public interest would be served by issuing the injunctive relief.
Frisch’s Rest., Inc. v. Shoney’s Inc., 759 F.2d 1261, 1263 (6th Cir. 1985); Am. Family
Life Ins. Co. v. Hagan, 266 F. Supp. 2d 682, 687 (N.D. Ohio 2002). This test is a
flexible one—the factors are not prerequisites to be met, but considerations that must
be balanced against each other. Leary v. Daeschner, 228 F.3d 729, 736 (6th Cir. 2000)
(citing cases); In re DeLorean Motor Co., 755 F.2d 1223, 1229 (6th Cir. 1985).
1. Mesa Has Established A Substantial Likelihood Of Success On
Its Trade Secret Misappropriation Claims.
First, the Court concludes that Mesa has established a substantial likelihood
of success on the merits, at least as to its trade secret claims. With respect to its Ohio
Uniform Trade Secrets Act (“OUTSA”) claim, Mesa “must prove: (1) the existence of
a trade secret; (2) the acquisition of a trade secret as a result of a confidential
relationship; and (3) the unauthorized use of a trade secret.” Coda Dev. s.r.o. v.
Goodyear Tire & Rubber Co., No. 5:15-CV-1572, 2021 WL 4477913, at *8 (N.D. Ohio
Sept. 30, 2021) (quoting Advance Wire Forming, Inc. v. Stein, No. 1:18-cv-723, 2020
WL 5026523, at *19 (N.D. Ohio Aug. 25, 2020)).
OUTSA defines “trade secret” as “information” that both (1) “derives
independent economic value” from not being generally known to or readily
ascertainable by competitors, and (2) is the subject of efforts to maintain its secrecy
that are “reasonable under the circumstances.” Ohio Rev. Code § 1333.61(D). The
Ohio Supreme Court has articulated six factors, none of which is dispositive, for
determining whether information constitutes a trade secret under OUTSA:
(1) The extent to which the information is known outside the business;
(2) the extent to which it is known to those inside the business, i.e., by
the employees; (3) the precautions taken by the holder of the trade secret
to guard the secrecy of the information; (4) the savings effected and the
value to the holder in having the information as against competitors;
(5) the amount of effort or money expended in obtaining and developing
the information; and (6) the amount of time and expense it would take
for others to acquire and duplicate the information.
State ex rel. The Plain Dealer v. Ohio Dep’t of Ins., 687 N.E.2d 661, 672 (Ohio 1997)
(citing, e.g., Pyromatics, Inc. v. Petruziello, 454 N.E.2d 588, 592 (Ohio Ct. App. 1983));
Hance v. Cleveland Clinic, 172 N.E.3d 478, 486 (Ohio Ct. App. 2021) (“No single factor
is dispositive.”) (citation omitted).
Here, Mesa advances two potential “trade secrets.” First, Mesa offers its AST
Database, which is a thirty-year working compilation of “detailed information about
its customers’ tanks, their components, technical specifications, service history,
pricing and other information” that Mesa says is not otherwise available and would
be very difficult to replicate. Second, Mesa points to its “Application Drawings,” which
it maintains for each tank in the AST Database. Application Drawings “provide
additional critical information regarding the use of specific products in specific tanks
and allow for efficient servicing of tanks without the need to re-engineer products,”
which give a competitive advantage because having advance knowledge of a tank’s
specifications and past service allows Mesa to anticipate customers’ needs, prepare
parts and components in advance, and eliminate or minimize engineering issues.
The Court concludes, crediting the verified allegations, that Mesa is likely to
prove that this information constituted “trade secrets” as defined by OUTSA. The
AST Database and Application Drawings “are not publicly available and are
maintained by [Mesa] in confidentiality, with limited access granted only to
employees who have a job related need to access” them. (Compl., Doc. 1, #5). Mesa
also alleges that it has taken significant time and effort to compile this information,
and that the information allows Mesa to diagnose and resolve customer needs more
quickly and accurately. Although the existence of a trade secret is generally a
question of fact, Wellington Res. Grp. LLC v. Beck Energy Corp., No. 2:12-CV-104,
2013 WL 5325911, at *5 (S.D. Ohio Sept. 20, 2013), Mesa has at least shown a
substantial likelihood that the AST Database and Application Drawings qualify.
Mesa is also substantially likely to succeed in showing that Espinoza gained
the information at issue by virtue of a confidential relationship. Where an express
agreement bars disclosure of trade secrets, the defendant acquires trade secrets
through a confidential relationship. See MEMC Elec. Materials v. Balakrishnan, No.
2:12-CV-344, 2012 WL 3962905, at *7 (S.D. Ohio Sept. 11, 2012). In this regard, Mesa
alleges that Espinoza gained access to and copies of the AST Database and
Application Drawings while he was working for Mesa. During that time, Mesa alleges
Espinoza signed multiple agreements that referenced “trade secrets,” “proprietary
information,” and “confidential information.” The AST Database and Application
Drawings at least arguably fall under the definition of “Confidential Information” in
Espinoza’s NDA, which includes, among other things, Mesa’s “technologies,
engineering or operation methods or techniques, research data, [and] formulas.”
These agreements made clear Espinoza’s obligations not to disclose Mesa’s
confidential information, and yet Mesa alleges Espinoza took with him when he left
a USB drive containing the AST Database and Application Drawings. Likewise, Both
Espinoza and King acknowledged the Non-Disclosure Policy in the Mesa Employee
Handbook. That is enough, at least for present purposes.
Finally, assuming the verified allegations are true, Mesa is likely to prove the
unauthorized use of a trade secret. Under the OUSTA, “misappropriation” includes:
(1) Acquisition of a trade secret of another by a person who knows or has
reason to know that the trade secret was acquired by improper
means; [or]
(2) Disclosure or use of a trade secret of another without the express or
implied consent of the other person by a person who did any of the
following:
(a) Used improper means to acquire knowledge of the trade secret;
(b) At the time of disclosure or use, knew or had reason to know
that the knowledge of the trade secret that the person acquired
was derived from or through a person who had utilized improper
means to acquire it, was acquired under circumstances giving rise
to a duty to maintain its secrecy or limit its use, or was derived
from or through a person who owed a duty to the person seeking
relief to maintain its secrecy or limit its use;
(c) Before a material change of their position, knew or had reason
to know that it was a trade secret and that knowledge of it had
been acquired by accident or mistake.
Ohio Rev. Code § 1333.61(B). “Improper means” include “theft, bribery,
misrepresentation, breach or inducement of a breach of a duty to maintain secrecy,
or espionage through electronic or other means.” Id. § 1333.61(A); see also Kendall
Holdings, Ltd. v. PHPK Techs., 521 F. App’x 453, 456–57 (6th Cir. 2013).
Here, Mesa attached to its Verified Complaint reproductions of text messages
among and between current and former Charter employees, including Espinoza and
King, that appear to refer to above-ground storage tanks owned by Mesa customers
and to identify those tanks by the numbers assigned in Mesa’s AST Database. (See
generally Text Message Screenshots, Compl. Ex. C, Doc. 1-3, #31–43). The texts also
appear to include screenshots of Mesa’s Applications Drawings, as well as references
to Mesa’s chemical compatibility chart. (Id.). There is, ostensibly, “use.”
As for the “unauthorized” part, Mesa alleges that Espinoza and King, at the
time of their disclosure of Mesa’s alleged trade secrets, knew that they had acquired
the information “under circumstances giving rise to a duty to maintain its secrecy or
limit its use”—i.e., their acknowledgment of the Non-Disclosure Policy in the Mesa
Employee Handbook. See Ohio Rev. Code § 1333.61(B)(2)(b). And Charter, in
receiving the alleged trade secrets, knew or had reason to know that the information
was disclosed in breach of at least Espinoza’s obligation to secrecy, because Mesa
alleges it sent a letter detailing those obligations to Charter and Espinoza in 2020.
(Compl., Doc. 1, #9).
In sum, Mesa has established a likelihood—though not a certainty—of success
with respect to its OUTSA claim. And, because “the requirements for establishing
misappropriation of trade secrets are largely the same under Ohio and federal law,”
Aday v. Westfield Ins. Co., 486 F. Supp. 3d 1153, 1160 (S.D. Ohio 2020), aff’d in part,
rev’d in part on other grounds, No. 21-3115, 2022 WL 203327 (6th Cir. Jan. 24, 2022),
the Court applies this conclusion to Mesa’s federal Defend Trade Secrets Act claims,
as well. See also PUI Audio, Inc. v. Van Den Broek, No. 3:21-CV-284, 2021 WL
4905461, at *5 n.5 (S.D. Ohio Oct. 21, 2021) (noting the “definition of ‘trade secret’
and ‘misappropriation’ in the OUTSA and the DTSA are similar” and comparing Ohio
Rev. Code §§ 1333.61(B) and (D) with 18 U.S.C. §§ 1839(3) and (5)).
Because the Court concludes that Mesa has established a likelihood of success
on its trade secret misappropriation claims, and because the requested TRO is
directed to enjoining the continuing use of those alleged trade secrets, the Court need
not, and does not, decide the likelihood of success with respect to Mesa’s other claims:
breach of contract and breach of the duty of loyalty against Espinoza, and tortious
interference with contract against Charter.
2. Mesa Has Established That It Will Suffer Irreparable Harm In
The Absence Of Temporary Injunctive Relief.
The irreparable harm factor also weighs in favor of Mesa, if ony marginally.
Harm is irreparable if it cannot be fully compensated by monetary damages.
Overstreet, 305 F.3d at 578. Here, as explained above, Mesa has established a
likelihood that Charter, Espinoza, and King are engaging in the unauthorized use of
Mesa’s trade secrets. This amounts to a kind of unfair competition for customers, and
the Sixth Circuit has held that the loss of “fair competition” can irreparably harm a
business. Basicomputer Corp. v. Scott, 973 F.2d 507, 512 (6th Cir. 1992) (citation
omitted). Although Basicomputer considered “unfair competition” in the context of an
employee’s breach of his non-compete agreement, the same notion may be applied to
unfair competition in the non-disclosure context. Indeed, it is directed at the very
same fear: that a former employee will use information gleaned from his former
employer to interfere with that employer’s customer relationships. See Certified
Restoration Dry Cleaning Network, L.L.C. v. Tenke Corp., 511 F.3d 535, 550 (6th Cir.
2007). That is, the improper use of this confidential information could undercut a
competitive edge that Mesa had developed in the marketplace. This is the kind of
harm the Sixth Circuit has considered “difficult to calculate.” See id.
At the same time, during the conferences the Court held on the TRO, Mesa was
unable to establish any specific upcoming harms likely to result from the alleged
ongoing use here. For example, it did not point to any particular projects as to which
the two entities were currently competing. Nor is this a cyclical business where the
time period between now and when the Court could schedule a hearing on the Motion
is of particular importance.
As such, this factor weighs in favor of granting temporary injunctive relief, but
only slightly.
3. Neither The Harm To Third Parties Nor Service Of The Public
Interest Weighs Strongly Against Granting Temporary
Injunctive Relief.
Neither of the third or fourth prongs of the TRO inquiry weigh heavily in either
direction. “The third and fourth prongs of the [temporary restraining order] analysis”
require “assessing the harm to the opposing party and weighing the public interest.”
Kohler v. City of Cincinnati, No. 1:20-CV-889, 2021 WL 761630, at *13 (S.D. Ohio
Feb. 27, 2021), report and recommendation adopted, No. 1:20-CV-889, 2021 WL
1558334 (S.D. Ohio Apr. 21, 2021).
Although Charter may suffer some harm should a temporary restraining order
be improvidently granted, the Court notes that the very narrow construction of the
TRO the Court is issuing (more on that below) significantly mitigates that harm, in
that it specifically restrains Charter only from accessing Mesa’s Application
Drawings and AST Database, while disclaiming any restraint on the use of
information included in those materials that is available from outside sources. As to
the fourth prong, the public interest, Mesa suggests that a TRO in this case would
serve the public because the public has an interest in “fair competition in business.”
(TRO/PI Mot., Doc. 2, #58 (citing ALTA Analytics, Inc. v. Muuss, 75 F. Supp. 2d 773,
786 (S.D. Ohio 1999)). Although such an interest is only vaguely stated, the Court
agrees that Ohio’s trade secret law embodies a public policy in favor of “maintain[ing]
the standards of commercial ethics and the encouragement of invention, as well as
the protection of the substantial investment of employers in their proprietary
information.” ALTA Analytics, 75 F. Supp. 2d at 786 (quotation omitted).
In sum, while the latter three factors of the temporary restraining order
inquiry do not weigh overwhelmingly in favor of granting such an order, neither do
they detract from Mesa’s established likelihood of success on its trade secret claims.
As such, the Court considers Mesa to have carried its burden, and therefore GRANTS
Mesa’s Motion for a Temporary Restraining Order and/or Preliminary Injunction
(Doc. 2) as detailed below.
C. The Court’s Order Will Be Narrowly Circumscribed And Sufficiently
Specific To Afford Defendants Notice Of What Is And Is Not Permitted.
Finally, when a court decides to fashion a TRO, the court must ensure that the
TRO is neither “impermissibly vague,” nor “overly broad.” Union Home Mortg. Corp.
v. Cromer, No. 21-3492, 2022 WL 1022050, at *4 (6th Cir. April 6, 2022). “To that end,
an injunction must be couched in specific and unambiguous terms, such that ‘an
ordinary person reading the court’s order [is] able to ascertain from the document
itself exactly what conduct is proscribed.’” Id. (quoting Scott v. Schedler, 826 F.3d
207, 211 (5th Cir. 2016)) (additional citations omitted). In fashioning the Order here,
the Court has endeavored to be mindful of that requirement.
CONCLUSION
Accordingly, for the foregoing reasons, the Court hereby ORDERS as follows:
1. Defendants and their agents shall be restrained and enjoined from accessing,
disclosing, and/or using the following:
a. Plaintiff’s Application Drawings (defined immediately below) obtained
from Plaintiff by Defendant Espinoza;
i. Plaintiff’s Application Drawings are a set of drawings created by
Plaintiff in either AutoCAD or Autodesk Inventor depicting
Plaintiff’s products in individual files (one per drawing), with
each drawing saved in its own file in various formats, including
PDF (.pdf), AutoCAD (.dwg) and Autodesk Inventor (.ipt, .iam,
.idw); and
b. Plaintiff’s Above-Ground Storage Tank Database (defined immediately
below) obtained from Plaintiff by Defendant Espinoza;
i. Plaintiff’s Above-Ground Storage Tank Database is a set of data
regarding above ground storage tanks compiled by Plaintiff into
a single database in MS Access stored in a single MS Access file
(.mdb); and
c. Any printouts or copies, whether electronic or otherwise, of Plaintiff’s
Application Drawings and Above-Ground Storage Tank Database
obtained from Plaintiff by Defendant Espinoza and stored on any media.
2. Nothing in this Order prevents Defendants from accessing, disclosing, and/or
using information that happens to be included in Plaintiff’s Application
Drawings and Above-Ground Storage Tank Database, provided that the
Defendants obtain that information from sources other than copies of
Plaintiff’s Application Drawings and Above-Ground Storage Tank Database.
Furthermore, it is not a violation of this Order for the Defendants to use
Plaintiff’s Application Drawings if the Defendants obtained those drawings
from customers in hard copy or PDF format.
3. Based on the facts of this case, the Court hereby exercises its discretion to
waive the posting of any security pursuant to Fed. R. Civ. P. 65(c). In
particular, given the narrow scope of the relief that the Court is providing, the
Court concludes that Defendants are unlikely to suffer any compensable harm
as a result of this Order.
4. Although Fed. R. Civ. P. 65(b)(2) provides that a TRO will expire no later than
14 days after entry, it also provides that such an expiration may be extended
if the “adverse party consents to a longer extension.” The Court raised the issue
of expiration at a telephonic conference on the instant Motion. While
Defendants did object to the entry of a TRO, when asked about expiration they
did not object to the TRO remaining in effect until the Court enters an Order
on Plaintiff’s motion for preliminary injunction. Thus, this Temporary
Restraining Order is effective immediately and shall remain in effect until the
Court enters an Order on Plaintiff’s motion for a preliminary injunction
following the conclusion of the preliminary injunction hearing, which is
currently scheduled for May 17–18, 2022. That said, Defendants did not have
an occasion to consider the expiration issue in depth. Thus, the Court’s
determination regarding the duration of the TRO is without prejudice to
Defendants’ ability to re-raise that issue should they elect to do so.
5. Similarly, as the Court already told the parties, nothing in this Order
precludes Defendants from challenging the Court’s personal jurisdiction over
any Defendants, nor does it preclude Defendants from challenging venue. Any
such challenge(s) shall be filed and briefed on the following schedule:
a. Defendants’ Motion(s) and Memoranda in Support April 13, 2022
b. Plaintiff’s Response(s) April 20, 2022
c. Defendants’ Replies April 25, 2022
SO ORDERED.
April 7, 2022
DATE DOUGLAS R. COLE \.
UNITED STATES DISTRICT JUDGE
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