Limelight Trading Cards, LLC v. Fye

UNITED STATES DISTRICT COURT May 28, 2025

Nathan Ochsner, Clerk

SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

Limelight Trading Cards, LLC §

Plaintiff, §

§

v. § Civil Action 4:25-cv-1562

§

David Fye, Logan Cox, and Black §

Label Breaks LLC, §

Defendants. §

MEMORANDUM AND RECOMMENDATION

This case has been referred to the undersigned magistrate

judge pursuant to 28 U.S.C. § 636(b)(1). ECF No. 3. Plaintiff

Limelight Trading Cards, LLC (Limelight) moved for a

preliminary injunction to require Defendant David Fye (Fye) to

return to Limelight control over a WhatNot1 account, a Facebook

Group, and certain “redemption” cards. ECF No. 1. On April 30,

2025, the undersigned held a hearing on the motion. Based on the

evidence and testimony presented at the hearing, the court enters

the following findings of fact2 and conclusions of law.

The court recommends that the request for preliminary

injunction be GRANTED in part as to the Fye Sports Cards

Facebook Page, the Fye Sports Cards Whatnot account, and any

redemption cards that Fye Sports Cards, LLC acquired during its

existence. The request for preliminary injunction should be

DENIED in part as to the BLB Group.

1 “Whatnot” is an online marketplace, similar to a “live” version of eBay. Sellers can use

Whatnot to auction cards. ECF No. 26 at 76.

2 To the extent that there is a conflict in the evidence, the factual conclusions herein reflect

the court’s credibility determinations.

1. Background

A. David Fye and Fye Sports Cards

David Fye is a baseball card enthusiast. ECF No. 26 at 128.

In February 2020, Fye created a Facebook group called Black

Label Breaks (BLB) which advertises itself to be “a sports card

group helping bring the hype back to the hobby!”

ECF No. 24-2 at 3. BLB is a private group, meaning that only

members of the group can see what is posted within the group. Id.

at 4. As of April 2025, BLB had 6,066 members. Id. Fye is currently

an administrator of the BLB group.

On January 19, 2021, Fye formed Fye Sports Cards, LLC.

ECF No. 24-1 at 8. The following year, in August 2022, Fye opened

a sports card and rare sports collectible brick-and-mortar retail

outlet, Fye Sports Cards, in Colleyville, Texas. ECF No. 26 at 128.

Fye Sports Cards possessed a Whatnot account. Id. at 75. In

December 2023, Fye Sports Cards was experiencing financial

difficulties. Id. at 131. Fye blames those difficulties on the expense

of running a sports card and collectible business, as well as his

decision to take out a “bad loan” which “ate away” at the cash flow

of his business. Id. To resolve those financial problems, Fye was

faced with a choice—take out a $250,000 loan or find a financial

partner. Id.

B. The Bankruptcy and the Asset Purchase Agreement

Fye did not take out the $250,000 loan. ECF No. 26 at 131.

Instead, he turned to his “buddy,” Dave Wallace (Wallace) Id.

Wallace is the president of Plaintiff Limelight Trading Cards,

LLC, which is a trading card and sports memorabilia business. Id.

at 10. Starting in January 2023, Wallace and his son became

customers at Fye Sports Cards in Colleyville, Texas. They

purchased cards there frequently and considered Fye their friend.

ECF No. 1-1 at 2; ECF No. 26 at 24. Wallace also joined the BLB

Group in February or March 2023. ECF No. 26 at 39.

In December 2023, Fye asked Wallace for a personal loan of

$30,000 to help save his business. Id. at 25. Wallace refused

because he was concerned about the financial health of Fye Sports

Cards. Id. Instead, Wallace consigned to Fye several sports card

from Limelight Trading Cards, LLC and his personal collection. Id.

at 26. Under that arrangement, Fye Sports Cards possessed,

marketed, and sold the cards, and the proceeds would be split

between the two businesses. Id.

On April 10, 2024, possibly at Wallace’s suggestion, Fye

Sports Cards, LLC, filed for bankruptcy. ECF No. 24-1 at 8; ECF

No. 26 at 133. Neither Wallace nor Limelight were named as

creditors in Fye Sports Cards, LLC’s bankruptcy. ECF No. 26

at 28. However, Limelight was interested in purchasing Fye

Sports Cards’ assets. Id.

Fye Sports Cards, LLC, and Limelight Trading Cards, LLC,

entered into an Asset Purchase Agreement which was approved by

the Bankruptcy Court on September 27, 2024. ECF No. 24-1 at 2,

4, 36. The Asset Purchase Agreement required the Seller, i.e., Fye

Sports Cards LLC, to “sell, transfer, assign, convey, and deliver, or

cause to be delivered” to Limelight the “assets.” Id. at 40. Those

assets included “all right, title, and interest of Seller . . . of certain

tangible property, including but not limited to those assets

described . . . within Schedule I.” Id. Section 4.03 of the Asset

Purchase Agreement defines an “asset” to include “all of the

tangible and intangible assets and property of Seller, wherever

located including but not limited to intellectual property, whether

or not specifically scheduled.” Id. at 42. Schedule I does not

reference the BLB Group or the WhatNot account. Id. at 48–52.

The Asset Purchase Agreement does not purport to transfer any of

Fye’s personal property. It transfers only Fye Sports Cards, LLC’s

property. Id. at 38.

Wallace testified that he understood Section 4.03 to include

“all physical assets, all intangible assets, everything related to

marketing and selling the cards, and the customer lists.”

ECF No. 26 at 35. Wallace understood the customer lists to include

the members of the BLB Group. Id. at 31. Wallace testified that,

under the Asset Purchase Agreement, Limelight purchased the

BLB Group, the Fye Sports Cards Facebook Page, and the Fye

Sports Cards WhatNot account. Id. at 36. Wallace explained that

he believed that Limelight had purchased the BLB Group because,

prior to Limelight’s purchase of the Fye Sports Cards assets, Fye

Sports Cards was the only entity posting in the BLB Group. Id.

at 38. As such, he assumed that the BLB Group was an asset that

belonged to Fye Sports Cards. Id. However, Wallace admitted that

the acquisition of the BLB Group was not a “highlight” of

conversations between Wallace and Fye. Id.

Fye testified that when Limelight and Fye Sports Cards

negotiated the asset purchase, there were no discussions regarding

the BLB Group because it was separate from Fye Sports Cards.

ECF No. 26 at 143. Fye stated that the BLB Group was never part

of Limelight’s purchase of assets. Id. at 144. Fye stated, however,

that the Fye Sports Cards Facebook Page as well as the Fye Sports

Card Whatnot account were transferred to Limelight pursuant to

the Asset Purchase Agreement. Id. at 150.

C. Fye, Limelight, and the BLB Group

Following Limelight’s purchase of Fye Sports Cards’ assets,

on November 26, 2024, Fye Sports Cards announced on its

Facebook page (separate from the BLB Group) that it was now

Limelight Trading Cards. ECF No. 24-8 at 2; see also ECF No. 26

at 43. Fye Sports Cards also changed the logo on its Facebook page

to reflect “Limelight Trading Cards.” ECF No. 24-8 at 3–4. Fye

himself made these changes and additionally changed the name of

the Whatnot account from “Fye Sports Cards” to “Limelight

Trading Cards.” ECF No. 26 at 36, 51. With Fye Sports Cards

dissolved, Fye began working with Limelight to market and sell

trading and sports cards. Fye and Wallace disagree about Fye’s

specific role within Limelight. Wallace maintained at the hearing

that Fye was an employee, first as a manager and then as a

purchasing manager. ECF No. 26 at 48, 75. Fye stated that he

believed he was a partner. Id. at 135. Fye added that Limelight

provided him with a Form 1099 rather than a W-2. Id. at 156. Fye

also testified that taxes were never deducted from the checks

Limelight gave him each week. Id.

Regardless of Fye’s specific role within Limelight, he began

using the BLB Group to market and sell trading and sports cards

on behalf of Limelight. ECF No. 26 at 63. After the Asset Purchase

Agreement was executed, Fye granted the Limelight Trading

Cards Facebook Page, and Limelight personnel, administrator-

level access to the BLB Group. Id. at 70. Wallace testified that,

while Fye Sports Cards was the only entity posting within the BLB

Group before Limelight’s acquisition of Fye Sports Cards,

Limelight was the only entity posting in the BLB Group after the

acquisition. ECF No. 26 at 49. When Limelight would post in the

BLB Group, it made sure that the poster was “Limelight Trading

Cards” rather than any individual person, so that members of the

BLB Group could see that the sales were associated with

Limelight. Id. at 50. In fact, Limelight was the only entity—person

or business—posting within the BLB Group while Fye worked with

Limelight. Id. at 84. Wallace testified that 60% to 65% of its weekly

sales occurred on the BLB Group. Id. at 93.

Though Fye used the BLB Group to advance Limelight’s

business, he was reluctant to change the name or logo of the BLB

Group to reflect Limelight Trading Cards’ logo or ownership of the

group. Prior to Fye Sports Cards’ announcement that it had

become Limelight Trading Cards, Wallace employed the

marketing firm, Ill Fusion, to help rebrand Fye Sports Cards. ECF

No. 26 at 57. Wallace, Fye, and representatives from Ill Fusion

attended several discussions regarding the rebranding. Id.

Wallace explained that one area of discussion during meetings

that Fye attended was the need to rebrand the BLB Group to

reflect Limelight’s acquisition of Fye Sports Cards. Id. at 57–58.

Wallace recalled that Fye seemed resistant, raising concerns about

confusing members of the BLB Group. Id. at 58. However, Wallace

stated that Fye never mentioned that these discussions should not

happen or that the BLB Group was never transferred to Limelight.

Id. at 58–59. Fye, however, recalls stating during one of these

marketing meetings that the BLB Group did not belong to

Limelight and that Wallace disagreed with that statement.

Id. at 145.

D. Dissolution of Relationship between Fye and

Limelight

On or about February 13, 2025, Limelight management met

with Fye to discuss his job performance with Limelight. ECF No.

1-1 at 4. Prior to the meeting, Fye had approached Wallace about

his status within Limelight. ECF No. 26 at 145. Fye recalls that

Wallace made it clear to Fye that he was not a partner. Id. On

February 13, 2025, Limelight management presented Fye with

several disciplinary writeups stating that Fye had violated various

Limelight protocols. Id; see also ECF No. 1-1 at 4. During the

February 13, 2025 meeting, Fye resigned. ECF No. 26 at 145.

On February 14, 2025, after his resignation, Fye began

posting in the BLB Group on his own behalf. ECF No. 26 at 84. Fye

also removed moderator and administrator privileges to the BLB

Group for all of Limelight’s personnel. Id. at 81–82. Wallace

testified that up to this point, only Limelight had posted in the

BLB Group. Id. at 84. After Fye began posting in the BLB Group

as himself, at least some of the members mistook Fye as posting

on behalf of Limelight. ECF No. 24-6 at 2 (showing a post-

resignation post from Fye within the BLB Group and a member

commenting on the post referencing a Limelight credit system); see

also ECF No. 26 at 89–90.3 On February 18, 2025, Fye removed

Limelight and Limelight personnel from the BLB Group entirely.

ECF No. 1-1 at 5.

Wallace testified that, in addition to removing Limelight

from the BLB Group, Fye has also failed to return certain

“redemption” cards to Limelight. ECF No. 26 at 95. Redemption

cards are trading cards that have not yet been made by the

manufacturer. Id. at 94. A redemption card effectively represents

a promise from the manufacturer that once it has made the card,

the purchaser can submit the redemption card to the manufacturer

for the actual trading card. Id. at 94–95. Redemption cards can be

extremely valuable. Id. at 95. Before Fye’s resignation, the

shipping address for many of these redemption cards was set to

Fye’s personal home address rather than the shop address in

Colleyville, Texas. Id. Wallace testified that Fye has not changed

the address to have the cards shipped directly to Limelight. Id. Fye

testified that he has no objection to returning the redemption

cards, the Limelight Trading Cards (formerly Fye Sports Cards)

Facebook Page,4 or the WhatNot account to Limelight.

ECF No. 139.

Wallace testified that Limelight experienced a significant

decrease in sales following Limelight’s ouster from the BLB Group.

3 The court notes that Fye immediately corrected the member’s confusion, stating “hey buddy,

I’m no longer w/Limelight, this is completely separate so I wouldn’t be able to use the

consignment balance you have available with them. If you’d still like the spots, send me

message w/your phone number & address!!”

4 The court refers to this Facebook page as the Fye Sports Cards Facebook page.

ECF No. 26 at 94. Wallace explained that Limelight suffered a 60%

decrease or more in sales and that Limelight is losing $50,000 per

week. Id. Wallace also explained that customers are refusing to do

business with Limelight because of the way that Fye departed. Id.

at 108. Wallace explained that Limelight was also experiencing

long term effects including having its reputation tarnished and

experiencing a significant decrease in foot traffic at its retail store

in Colleyville, Texas. Id.

E. The Present Suit

On April 4, 2025, Limelight sued Fye, Black Label Breaks

LLC (Fye’s new business), and Logan Cox. ECF No. 1. Limelight

makes several claims against the Defendants, including for

trademark infringement, false designation of origin and unfair

competition, violation of the Bankruptcy Court’s Confirmation

Order, breach of fiduciary duty, tortious interference with existing

and prospective relations, and theft. Id. Limelight requested a

temporary restraining order which the court denied. ECF No. 4.

Limelight now seeks a preliminary injunction to require

Defendants to transfer the WhatNot account, the redemption

cards, and the BLB Group to Limelight. ECF No. 1. On April 30,

2025, the undersigned conducted a preliminary injunction hearing.

2. Preliminary Injunction Standard

“A preliminary injunction’s purpose is to preserve the status

quo, prevent irreparable injury to the parties, and ‘preserve the

court’s ability to render a meaningful decision’ after a trial on the

merits.” Hardy Way, LLC v. TM Perfumes Wholesale, Inc., No. CV

H-10-2735, 2010 WL 11579798, *2 (S.D. Tex. Aug. 31, 2010)

(quoting Meis v. Sanitas Serv. Corp., 511 F.2d 655, 656 (5th Cir.

1975)). A request for preliminary relief that “goes well beyond

simply maintaining the status quo . . . is particularly disfavored,

and should not be issued unless the facts and law clearly favor the

moving party.” Martinez v. Matthews, 544 F.2d 1233, 1243 (5th

Cir. 1976).

To secure a preliminary injunction, a plaintiff must

establish:

(1) a substantial likelihood of success on the merits, (2) a

substantial threat of irreparable injury if the injunction is

not issued, (3) that the threatened injury if the injunction

is denied outweighs any harm that will result if the

injunction is granted, and (4) that the grant of an

injunction will not disserve the public interest.

Janyey v. Alguire, 647 F.3d 585, 595 (5th Cir. 2011) (quoting

Byrum v. Landreth, 556 F.3d 442, 445 (5th Cir. 2009)). “The failure

to meet even one of the four elements requires the Court to deny

the requested injunctive relief.” Williams v. Catoe, No. 6:17-CV-

627, 2020 WL 6948996, at *1 (E.D. Tex. Sept. 29, 2020) (citing

Enter. Int’l, Inc. v. Corporacion Estatal Petrolera Ecuatoriana, 762

F.2d 464, 472 (5th Cir. 1985)), adopted by No. 6:17-CV-627-JDK-

KNM, 2020 WL 6940925 (E.D. Tex. Nov. 24, 2020).

3. Preliminary Injunction Analysis—BLB Group and

BLB Name

A. Substantial Likelihood of Success on the Merits

While a preliminary injunction does not require a plaintiff

“to prove its entitlement to summary judgment in order to

establish ‘a substantial likelihood of success on the merits[,]’”

Byrum, 566 F.3d at 446 (quoting ICEE Distribs., Inc. v. J&J Snack

Foods Corp., 325 F.3d 586, 596 n.34 (5th Cir. 2003)), he must

“identify an enforceable right that a preliminary injunction might

safeguard.” Humana Ins. Co. v. Tenet Health Sys., No. 3:16-CV-

2919-B, 2016 WL 6893629, at *13 (N.D. Tex. Nov. 21, 2016) (citing

Sepulvado v. Jindal, 729 F.3d 413, 420 (5th Cir. 2013)). To

determine the likelihood of success on the merits, a court must look

to the standards provided by the substantive law at issue. Valley

v. Rapides Parish Sch. Bd., 118 F.3d 1047, 1051 (5th Cir. 1997).

At the center of this dispute is the Black Label Breaks

Facebook Group and the names “Black Label Breaks” and “BLB”

(both of which are referred to as BLB). Limelight’s theory is that

Fye Sports Cards, LLC owned the BLB Group and the BLB name,

which Limelight purchased pursuant to the Asset Purchase

Agreement. Defendants’ position is that the BLB Group and name

were not Fye Sports Cards, LLC’s assets, that they belonged to Fye

personally, and that they did not transfer to Limelight under the

Asset Purchase Agreement.

The court offered the parties an opportunity to conduct

discovery before the hearing. ECF No. 12 at 41. Both parties chose

not to conduct discovery. Id. As such, the court has none of Fye

Sports Cards, LLC’s books or records. Other than the statements

and filings made in the Bankruptcy Court, which do not name BLB

or Black Label Breaks, the court has no records showing Fye

Sports Cards, LLC’s assets, liabilities, or income sources. There

are no records of how or by whom the BLB Group was formed.

Accordingly, there is no documentary evidence that Fye Sports

Cards, LLC owned the BLB Group.

On the other hand, the evidence presented at the hearing

suggests that Fye Sports Cards, LLC did not own the BLB Group

or name. The BLB Group was not mentioned in the Confirmation

Order or the Asset Purchase Agreement. ECF No. 24-1. There is

no evidence that the phrases “BLB” or “Black Label Breaks” were

mentioned in any document filed in the Bankruptcy Court. It also

appears that the BLB Group’s monetary value was not accounted

for in the Confirmation Order. Wallace testified at the hearing that

he estimated the value of the BLB Group to be $2.5 million, ECF

No. 26 at 116, but the Confirmation Order valued Fye Sports

Cards’ assets at $56,669.08. ECF No. 24-1 at 8.

Not only were the BLB Group and name excluded from any

mention in the Bankruptcy Court, but they were also largely

excluded from the negotiations leading to the Asset Purchase

Agreement. Wallace could not recall with any specificity discussing

Limelight’s purchase of the BLB Group or name pursuant to the

Asset Purchase Agreement. ECF No. 26 at 38. Wallace agreed, in

response to the undersigned’s question, that the BLB Group was

not a “highlight” of discussion between himself and Fye when

Limelight was purchasing Fye Sports Cards, LLC’s assets. Id. Yet,

according to Wallace, the BLB Group is many orders of magnitude

more valuable than all of Fye Sports Cards, LLC’s other assets

combined.

The court also notes that Fye’s conduct after the Asset

Purchase Agreement was executed is consistent with his current

position that the BLB Group and name were not transferred under

the Asset Purchase Agreement. As mentioned above in connection

with Ill Fusion’s efforts to market Limelight’s products, Fye

resisted changing any characteristic of the BLB Group to avoid

confusing customers. Id. at 58. Fye testified that he specifically

informed Wallace that Limelight had not purchased the BLB

Group. Id. at 145.

Absent credible evidence to the contrary, on the current

record before the court, the court concludes that the BLB Group

and name were not Fye Sports Cards, LLC’s assets. Because only

Fye Sports Cards, LLC’s assets were transferred to Limelight

pursuant to the Asset Purchase Agreement, neither the BLB

Group nor the BLB name were transferred to Limelight. To the

extent that Limelight has no rights to either the BLB Group or the

BLB name, Limelight cannot satisfy its burden on any of the

causes of action it brings.5 For the sake of completeness, however,

the court will address each of Limelight’s causes of action.

5 Of course, this could change after discovery is conducted. The court’s ruling at this early

stage, at the insistence of both parties, could very well change once documents and other

discovery are exchanged and the court has a more fulsome record to evaluate.

i. False Designation of Origin and Unfair

Competition (Fye and Black Label Breaks LLC)

Limelight asserts a claim for false designation of origin and

unfair competition under Section 43(a) of the Lanham Act. ECF

No. 1 at 9. That provision creates a cause of action against a person

who, in connection with goods or services,

uses in commerce any word, term, name, symbol, or device,

or any combination thereof or any false designation of

origin, false or misleading description of fact, or false or

misleading representation of fact, which . . . is likely to

cause confusion, or to cause mistake, or to deceive as to the

affiliation, connection, or association of such person with

another person, or as to the origin, sponsorship, or approval

of his or her goods, services, or commercial activities by

another person[.]

Nola Spice Designs, LLC v. Haydel Enters., Inc., 783 F.3d

527 (5th Cir. 2015) (citing 15 U.S.C. § 1125(a)(1)(A)). Limelight

asserts that it owns a common law trademark in the name “Black

Label Breaks” because it purchased all of Fye Sports Cards, LLC’s

assets, which it argues included the BLB Group. ECF No. 1 at 10.

Limelight argues that Fye’s and Black Label Breaks’ (Fye’s new

company) use of the BLB Group—which Limelight maintains it

now owns—has caused confusion in the marketplace as evidenced

by customers mistakenly paying Limelight for purchases made

from Fye and Black Label Breaks.

As discussed above in Part 3, the evidence does not support

Limelight’s theory. Limelight has not shown that it owns either

the BLB Group or name. Thus, Limelight has not shown that Fye’s

use of the BLB Group and name are in violation of the statute.

Limelight has failed to demonstrate that it has a substantial

likelihood of success on this claim.

ii. Trade Secret Misappropriation—Defend Trade

Secrets Act and Texas Uniform Trade Secrets Act

(Fye and Black Label Breaks LLC)

Limelight argues that, to the extent that the BLB Group

constitutes a trade secret, Fye and Black Label Breaks, LLC,

misappropriated it by using the BLB Group to make sales. ECF

No. 1 at 11–12. Limelight has presented no evidence concerning

whether the BLB Group constitutes a trade secret. The court does

not understand how a Facebook group, whose members are known

to one another, could qualify as a trade secret. More importantly,

however, Limelight has failed to prove that it owns the BLB Group

and thus any corresponding trade secrets. Limelight has failed to

show it has a substantial likelihood of success on this claim.

iii. Violation of the Confirmation Order (All

Defendants)

Limelight argues that the Defendants violated the

Bankruptcy Court’s Confirmation Order, ECF No. 24-1, by failing

to transfer the BLB Group as part of Limelight’s acquisition of Fye

Sports Cards’ assets. ECF No. 1 at 12. For Limelight to establish

a violation of the Confirmation Order, it must show by clear and

convincing evidence that a court order was in effect, that the order

required certain conduct by the respondent, and that the

respondent failed to comply with the court’s order. Am. Airlines,

Inc. v. Allied Pilots Ass’n, 228 F.3d 574, 581 (5th Cir. 2000).

The Bankruptcy Court entered its “Order Confirming

Debtor’s Amended Plan of Reorganization” on September 27, 2024.

ECF No. 24-1 at 2. The order required Fye Sports Cards to “take

any action necessary or appropriate to implement, effectuate, and

consummate the Plan and any transactions contemplated thereby

or by this Order, including . . . the Asset Purchase Agreement[.]”

Id. at 3. According to the Asset Purchase Agreement, Fye Sports

Cards was required to “sell, transfer, assign, convey, and deliver,

or cause to be delivered, to the Buyer . . . the Assets.” Id. at 40. Fye

Sports Cards’ “assets” included all tangible and intangible assets

and property . . . including but not limited to intellectual property,

whether or not specifically scheduled.” Id.

Again, Fye asserts that the BLB Group was not an “asset” of

Fye Sports Cards, LLC as it belonged to him personally. ECF No.

26 at 144. Wallace, on the other hand, asserts that he understood

“assets” to include all assets in their “entirety,” including all assets

that were necessary to market and sell cards. Id. at 35. He stated

that this included “customer lists,” which included the members of

the BLB Group. Id. at 31. Again, the evidence at this stage of the

case does not support Limelight’s contention. Because Limelight

has failed to prove that the BLB Group was a Fye Sports Cards,

LLC asset, it has failed to prove that control over the group had to

be transferred under the Confirmation Order. Also, because the

evidence does not establish that Fye Sports Cards, LLC violated

the Confirmation Order, it follows that the evidence does not

establish that Defendants Cox and Black Label Breaks, LLC aided

Fye Sports Cards in violating the Confirmation Order. Limelight

has failed to prove it has a substantial likelihood of success on this

claim.

iv. Common Law Misappropriation and Unfair

Competition (Fye and Black Label Breaks LLC)

Limelight brings a claim of “common law misappropriation”

against Fye and Black Label Breaks, LLC. ECF No. 1 at 12. To

prevail on a claim for common law misappropriation, the plaintiff

must show “(1) the creation of [plaintiff’s] product through

extensive time, labor, skill, and money; (2) defendants’ use of that

product in competition with [plaintiff], thereby gaining a special

advantage in that competition because defendants were burdened

with little or none of the expense incurred by [plaintiff]; and (3)

commercial damage to [plaintiff].” Dresser-Rand Co. v. Virtual

Automation, Inc., 361 F.3d 831, 839 (5th Cir. 2004).

Limelight asserts that “Fye misappropriated the BLB Group

from Limelight, after Limelight had lawfully purchased it from

Fye Sports Cards.” ECF No. 1 at 13. For the reasons described

above, the evidence does not show that Limelight purchased the

BLB Group from Fye Sports Cards, LLC. This claim fails at this

point.

v. Breach of Fiduciary Duty (Fye)

Limelight argues that Fye breached his fiduciary duty to

Limelight. ECF No. 1 at 13. To prove breach of fiduciary duty, a

movant must show that a fiduciary relationship existed between

the plaintiff and defendant; that the defendant breached his duty

to the plaintiff; and that the defendant’s breach resulted in injury

to the plaintiff or benefit to the defendant. Pfeiffer v. Ajamie PLLC,

469 F. Supp. 3d 752, 761 (S.D. Tex. 2019).

Limelight asserts that Fye was its employee and argues that

Fye breached his fiduciary duty to Limelight by using the BLB

Group, which allegedly belonged to Limelight, for his own financial

purposes. See ECF No. 1 at 13 (citing Texas cases establishing that

former employees are precluded from using material, confidential

information, or trade secrets imparted to them by the former

employer or developed on behalf of that employer). Again, for the

reasons described above, the evidence does not support Limelight’s

position. The evidence shows that Fye had and continues to have

the right to operate the BLB Group. Limelight does not have a

substantial likelihood of success on the merits of this claim at this

stage of the case.

vi. Tortious Interference with Existing and

Prospective Relations (All Defendants)

Limelight accuses the Defendants of tortiously interfering

with their existing and prospective relations. ECF No. 1 at 14.

Texas law recognizes two types of tortious-interference claims: one

based on an existing contract and one based on interference with

a prospective business relationship. El Paso Healthcare Sys., Ltd.

v. Murphy, 518 S.W.3d 412, 421 (Tex. 2017). For both claims, a

plaintiff must prove (1) a willful and intentional act of interference

with the contract or prospective business relationship; (2) that

proximately caused the plaintiff’s injury; and (3) caused actual

damages or loss. See Prudential Ins. Co. of Am. v. Fin. Rev. Servs.,

Inc., 29 S.W.3d 74, 77 (Tex. 2000) (interference with existing

contract); see also WickFire, LLC v. Woodruff, 989 F.3d 343, 356

(5th Cir. 2021) (interference with prospective business

relationship).

Limelight accuses the Defendants of interfering with its

existing and prospective relationships by disparaging Limelight,

excluding Limelight from access to the BLB Group, and using

Limelight’s intellectual property to compete with Limelight. ECF

No. 1 at 14. Again, the evidence does not support Limelight’s

claims. If the BLB Group belonged to Fye exclusively, Fye, as the

owner and administrator of the BLB Group, had the right to

remove anyone from the group at will. Similarly, because Fye has

rights to the BLB name, he cannot have committed a tort by using

the BLB name. Moreover, in its motion, Limelight seeks only

transfer of control of the BLB Group. To the extent that the instant

claim is based on disparagement, it is not clear how the requested

relief would provide Limelight with a remedy. On the record before

the court, Limelight is not entitled to transfer of the BLB Group,

and Limelight has not requested any relief specific to its claims of

disparagement. Limelight has failed to show a substantial

likelihood of success on this claim.

vii. Texas Theft Liability Act (Fye)

Limelight accuses Fye of theft under the Texas Theft

Liability Act (“TTLA”). Under the TTLA, a “person who commits

theft is liable for the damages resulting from the theft.” Tex. Civ.

Prac. & Rem. Code § 134.002(2), 134.003(a). Section 31.03(a) of the

Penal Code defines theft as “unlawfully appropriate[ing] property

with intent to deprive the owner of property.” Tex. Penal Code §

31.03(a).

Limelight accuses Fye of unlawfully appropriating

Limelight’s property, including the BLB Group and the WhatNot

Account. Fye has already agreed to grant Limelight access to the

WhatNot account. ECF No. 26 at 139. Regarding the BLB Group,

however, the evidence adduced to date does not support a theft

claim. It appears that Fye may still own the BLB Group. He cannot

be liable for theft on the current record before the court. The

undersigned cannot say that Limelight has a substantial

likelihood of success on this claim.

B. The Remaining Factors

In addition to likelihood of success on the merits, in

evaluating whether to issue a preliminary injunction, courts

generally also consider whether a substantial threat of irreparable

injury if the injunction is not issued, whether the threatened injury

if the injunction is denied outweighs any harm that will result if

the injunction is granted, and whether the grant of an injunction

will not disserve the public interest. See Part 2, supra. However,

“failure to meet even one of the four elements requires the Court

to deny the requested injunctive relief.” Williams, 2020 WL

6948996, at *1. Because Plaintiff cannot establish a likelihood of

success on the merits, the court need not address the remaining

factors.

4. The Fye Sports Cards’ WhatNot Account, Facebook

Page, and Redemption Cards

The evidence and testimony presented at the hearing shows

that: Fye Sports Cards possessed a Whatnot account prior to

Limelight’s acquisition of Fye Sports Cards’ assets, ECF No. 26 at

75; that Fye changed the name of the Whatnot account to reflect

Limelight’s ownership after the Asset Purchase Agreement, ECF

No. 26 at 36; that Fye agreed that the Fye Sports Cards Facebook

Page and Whatnot account were transferred to Limelight pursuant

to the Asset Purchase Agreement, ECF No. 26 at 150; and that Fye

does not object to transferring to Limelight control over the

Facebook Page, the Whatnot account, and the redemption cards,

ECF No. 26 at 109, 139. Accordingly, there is no dispute for the

court to resolve. All of the preliminary injunction factors weigh in

favor of granting a preliminary injunction. Therefore, the court

recommends that Fye be ordered to transfer to Limelight all

control over the Fye Sports Cards’ Facebook page and Whatnot

account and that Fye take all steps to transfer to Limelight all of

the redemption cards Fye Sports Cards, LLC acquired during its

existence.

5. Conclusion

At this preliminary stage and on this record, the court

recommends that Limelight’s motion for preliminary injunction be

GRANTED in part as to the Fye Sports Cards Facebook Page, the

Whatnot account, and the redemption cards, and DENIED in part

as to the BLB Group.

The parties have fourteen days from service of this

Memorandum and Recommendation to file written objections. 28

U.S.C. § 636(b)(1)(C); Fed. R. Civ. P. 72. Failure to timely file

objections will preclude appellate review of factual findings or legal

conclusions, except for plain error. See Thomas v. Arn, 474 U.S.

140, 147-49 (1985); Rodriguez v. Bowen, 857 F.2d 275, 276-77 (5th

Cir. 1988).

Signed at Houston, Texas on May 28, 2025.

Peter Bray 7

United States Magistrate Judge

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