# Limelight Trading Cards, LLC v. Fye

> District Court, S.D. Texas · May 28, 2025

URL: https://www.frixlaw.com/law-library/cases/11085867

## Case

- **Court:** District Court, S.D. Texas
- **Decided:** May 28, 2025
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

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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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11085867. Public record. Not legal advice.