The opinion
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8 UNITED STATES DISTRICT COURT
9 FOR THE EASTERN DISTRICT OF CALIFORNIA
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11 GOLD STANDARD DIAGNOSTICS, No. 2:26-cv-01403-DAD-CSK
LLC,
12
Plaintiff,
13 ORDER DENYING PLAINTIFF’S MOTION
v. FOR A TEMPORARY RESTRAINING
14 ORDER
CLEAR PATH DIAGNOSTICS LLC et
15 al., (Doc. No. 5)
16 Defendants.
17
18 This matter is before the court on plaintiff’s motion for a temporary restraining order.
19 (Doc. No. 5.) The motion was taken under submission at the conclusion of the April 16, 2026
20 hearing, at which counsel for the parties appeared and argued. (Doc. No. 24.) For the reasons
21 explained below, plaintiff’s motion will be denied.
22 BACKGROUND
23 On April 7, 2026, plaintiff filed a complaint initiating this action. (Doc. No. 1.) Therein,
24 plaintiff asserts the following causes of action: (1) Misappropriation of trade secrets in violation
25 of 18 U.S.C. § 1832 et seq., the Defend Trade Secrets Act (“DTSA”); (2) Misappropriation of
26 trade secrets in violation of California Civil Code § 3426 et seq., the California Uniform Trade
27 Secrets Act (“CUTSA”); (3) Intentional interference with contractual relations; (4) Breach of the
28 /////
1 duty of loyalty against defendant Gerrit Mueller (“defendant Gerrit”);1 (5) Aiding and abetting the
2 breach of the duty of loyalty against defendants Clear Path Diagnostics LLC (“Clear Path”) and
3 Iva Mueller (“defendant Iva”); (6) Conversion; and (7) Violation of California Business and
4 Professions Code §§ 17200 et seq., the California Unfair Competition Law. (Id. at ¶¶ 75–135.)
5 On April 8, 2026, plaintiff filed the pending motion for temporary restraining order. (Doc. No.
6 5.) On April 14, 2026, defendants filed an opposition. (Doc. No. 19.) On April 16, 2026,
7 plaintiff filed a reply thereto. (Doc. No. 23.)
8 Plaintiff alleges2 as follows. Plaintiff sells medical diagnostic equipment and testing kits.
9 (Doc. No. 1 at ¶ 2.) As a player in this market, plaintiff must maintain strict compliance with
10 various regulations and standards promulgated by the “Federal and Drug Administration” 3, the
11 European Union’s In Vitro Diagnostic Regulation, International Standards Organization, and the
12 Medical Device Single Audit Program. (Id. at ¶ 3.) To ensure that it maintains compliance with
13 those regulations and standards, plaintiff has spent “millions of dollars” to develop a Quality
14 Management System (“QMS”), which plaintiff defines as “a formalized framework of policies,
15 processes, procedures, and responsibilities that governs every aspect of Gold Standard’s
16 operations including product design and development, verification and validation testing,
17 complaint handling and manufacturing controls and documentation.” (Id. at ¶ 4; Doc. No. 5-2 at
18 ¶ 5.) Plaintiff also maintains confidential client information on Zoho, a third-party platform.
19 (Doc. No. 1 at ¶ 55; Doc. No. 5-2 at ¶ 10.) Plaintiff “goes to extraordinary lengths” to maintain
20 the secrecy of this information by restricting access to limited personnel with unique user
21 credentials, maintaining all information on password-protected computers and encrypted
22 /////
23
24 1 Because Gerrit Mueller and his wife Iva Mueller are named defendants in this action, the court
refers to them by first name in this order only for the sake of clarity.
25
2 In this regard, the court refers to both the factual allegations of plaintiff’s complaint as well as
26
the declarations submitted by plaintiff in support of the pending motion, including those of its
27 Vice-President for Research and Development, Frank Lagattuta.
28 3 The court construes this allegation as referring to the “Food and Drug Administration.”
1 networks, and securing its facilities with keycard-controlled access security measures. (Doc. No.
2 1 at ¶ 5.)
3 Defendant Gerrit was plaintiff’s employee for more than 15 years, starting as an intern,
4 serving as plaintiff’s primary IT resource for approximately nine years, and ending his tenure
5 with plaintiff as director of project management on January 30, 2026. (Id. at ¶¶ 7, 9.) In his final
6 role, defendant Gerrit had access to the QMS, proprietary product development information,
7 formulations, regulatory strategies, customer and pricing data, and quality system documents.
8 (Id. at ¶ 8.) Defendant Gerrit signed a form acknowledging that he had read and agreed to the
9 employee handbook which detailed the provisions with which employees must abide both during
10 and after employment, including, but not limited to, refraining from using or disclosing
11 confidential information during their employment, and refraining from “copying, transmitting, or
12 preserving” plaintiff’s information for their own personal use upon separation from the company.
13 (Id. at ¶¶ 6, 29–30, 38.) In the months leading up to his final day of employment, defendant
14 Gerrit took various actions that cannot be explained by his job duties. (Id. at ¶ 16.)
15 For example, defendant Gerrit accessed Greenlight Guru, a platform that hosts the QMS,
16 at a substantially higher rate than he had previously. (Id. at ¶ 52.) Between October 23, 2025 and
17 January 30, 2026, defendant Gerrit also accessed Zoho and reviewed client information at an
18 unusual rate. (Doc. No. 5-2 at ¶ 45; Doc. No. 5-4 at ¶ 11.) His activity on Zoho was particularly
19 high in the two weeks leading up to his last day of employment with plaintiff. (Doc. No. 5-2 at
20 ¶ 45.) Defendant Gerrit saved various files and folders from his laptop onto a USB drive and a
21 file path location labeled “//NASG” (“NASG”). (Id. at ¶ 47; Doc. No. 5-4 at ¶¶ 9, 13.) Some of
22 the files and folders saved onto the USB include the label “Titer” which is associated with files on
23 which plaintiff maintains confidential and proprietary information. (Doc. No. 5-2 at ¶ 47.) The
24 NASG is “a separate physical device [that defendant Gerrit] accessed from” the work laptops that
25 plaintiff issued him during his employment and is “not a device or location that is within”
26 /////
27 /////
28 /////
1 plaintiff’s network environment, but “is, or was at the time of this activity, in [defendant] Gerrit’s
2 possession.”4 (Doc. No. 5-4 at ¶¶ 9, 13.) Between 10 and 11 p.m. on January 29, 2026, the night
3 before his final day of employment, defendant Gerrit accessed 47 QMS documents including
4 plaintiff’s quality manual, quality system procedures, standard operating procedures for product
5 development, other product development information, diagnostic test kits and instructions, and kit
6 labels. (Doc. Nos. 1 at ¶ 54; 5-2 at ¶ 33, 39.) Documents that he accessed from the QMS
7 included: (1) a quality manual which sets forth plaintiff’s quality system; (2) standard operating
8 procedures; (3) product development procedures; (4) verification and validation policies; and (5)
9 complaint policies. (Doc. No. 5-2 at ¶ 50.) Among the documents that he purportedly accessed
10 and transferred to the NASG on that night was a document containing plaintiff’s quality policy
11 that it “uses in the operation of its business.” (Id. at ¶¶ 41–43.)5 On the last day of his
12 employment, defendant Gerrit erased the browser history on one of his laptops, which he had no
13 reason to do. (Id. at ¶ 48.) Plaintiff alleges that defendants either currently possess or has used
14 information related to plaintiff’s QMS, standard operating procedures, customer information, and
15 other information that plaintiff uses to run its business. (Id. at ¶ 50.)
16 On February 12, 2026, defendants Gerrit and Iva filed Articles of Organization for Clear
17 Path with the California Secretary of State. (Doc. Nos. 1 at ¶ 12; 5-2 at 13.) Shortly thereafter,
18 Clear Path secured active FDA registration as an “initial distributor/importer[.]” (Doc. No. 1 at
19 ¶ 12.) Establishing a company that is authorized to sell medical devices in the United States is a
20 process that takes months or years, not days or weeks as defendants have done. (Id. at ¶¶ 65, 67.)
21 Plaintiff alleges that, because Clear Path has apparently cleared the “significant obstacles” that
22
23 4 The nature of the NASG is presently unclear to the court. The above characterization comes
from the declaration of James Vaughn, a digital forensics expert retained by plaintiff. However,
24 plaintiff contends that the NASG is a file structure that plaintiff previously maintained, no longer
uses, and has served as a vehicle for defendant Gerrit to transfer documents across different
25
networks, including, one over which he has full control. (Doc. No. 5-2 at ¶ 36.) Defendant Gerrit
states that the NASG is merely his private home server. (Doc. No. 19-2 at ¶ 14.)
26
27 5 In its reply brief, plaintiff further states that the quality policy “specifically relates to a formal,
top-level statement issued by executive management that defines the organization’s commitment
28 to quality, regulatory compliance, and continuous improvement.” (Doc. No. 23-1 at ¶ 17.)
1 medical device companies face in obtaining the necessary approval to sell these products in such
2 a short period of time, the only conclusion that can be reached is that Clear Path has used and
3 continues to use plaintiff’s trade secret information. (Doc. No. 5-2 at ¶ 52.)
4 In March 2026, one of plaintiff’s key suppliers, Bordier Affinity Products SA (“Bordier”),
5 suddenly terminated its business relationship with plaintiff and signed on with Clear Path after
6 Bordier had previously used plaintiff as its exclusive distributor in the United States and Canada
7 for over 10 years. (Id. at ¶ 20–21, 23.) Plaintiff believes that Clear Path has solicited other
8 suppliers and customers of plaintiff because “[s]ome customers have reached out to Gold
9 Standard to advise that they have been approached by Clear Path.”6 (Id. at ¶ 53.) However, as
10 acknowledged by plaintiff’s Vice President of Research and Development, it was the case starting
11 in October 2025, that plaintiff and Bordier began to have a dispute regarding how to allocate the
12 additional costs that came with the tariffs imposed by the Trump administration. (Id. at ¶ 22.)
13 LEGAL STANDARD
14 The standard governing the issuing of a temporary restraining order is “substantially
15 identical” to the standard for issuing a preliminary injunction. See Stuhlbarg Int’l Sales Co. v.
16 John D. Brush & Co., 240 F.3d 832, 839 n.7 (9th Cir. 2001). “The proper legal standard for
17 preliminary injunctive relief requires a party to demonstrate ‘that he is likely to succeed on the
18 merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the
19 balance of equities tips in his favor, and that an injunction is in the public interest.’” Stormans,
20 Inc. v. Selecky, 586 F.3d 1109, 1127 (9th Cir. 2009) (quoting Winter v. Nat. Res. Def. Council,
21 Inc., 555 U.S. 7, 20 (2008)); see also Ctr. for Food Safety v. Vilsack, 636 F.3d 1166, 1172 (9th
22 Cir. 2011) (“After Winter, ‘plaintiffs must establish that irreparable harm is likely, not just
23 possible, in order to obtain a preliminary injunction.’”); Am. Trucking Ass’n, Inc. v. City of Los
24 Angeles, 559 F.3d 1046, 1052 (9th Cir. 2009). A plaintiff seeking a preliminary injunction must
25 make a showing on all four of these prongs. All. for the Wild Rockies v. Cottrell, 632 F.3d 1127,
26
6 In its motion, plaintiff represents that “at least one” customer has reached out, not that “some
27 customers have reached out.” (Doc. No. 5-1 at 16.) At the hearing, plaintiff’s counsel clarified
that plaintiff had lost all customers who were purchasing Bordier products through plaintiff,
28 which counsel estimated had comprised approximately 25% of plaintiff’s entire business.
1 1135 (9th Cir. 2011). The Ninth Circuit has also held that “[a] preliminary injunction is
2 appropriate when a plaintiff demonstrates . . . that serious questions going to the merits were
3 raised and the balance of hardships tips sharply in the plaintiff’s favor.” Id. at 1134–35 (citation
4 omitted). The party seeking the injunction bears the burden of proving these elements. Klein v.
5 City of San Clemente, 584 F.3d 1196, 1201 (9th Cir. 2009); see also Caribbean Marine Servs. Co.
6 v. Baldrige, 844 F.2d 668, 674 (9th Cir. 1988) (citation omitted) (“A plaintiff must do more than
7 merely allege imminent harm sufficient to establish standing; a plaintiff must demonstrate
8 immediate threatened injury as a prerequisite to preliminary injunctive relief.”). Finally, an
9 injunction is “an extraordinary remedy that may only be awarded upon a clear showing that the
10 plaintiff is entitled to such relief.” Winter, 555 U.S. at 22.
11 DISCUSSION
12 A. Likelihood of Success on the Merits
13 1. Trade Secret Claims Under the DTSA and CUTSA
14 “California has adopted the Uniform Trade Secrets Act (“UTSA”) which codifies the
15 basic principles of common law trade secret protection.” MAI Sys. Corp. v. Peak Comput., Inc.,
16 991 F.2d 511, 520 (9th Cir. 1993) (citing Cal. Civ. Code §§ 3426–3426.10). Courts analyze
17 DTSA and CUTSA claims together “because the elements are substantially similar.” InteliClear,
18 LLC v. ETC Glob. Holdings, Inc., 978 F.3d 653, 657 (9th Cir. 2020). “To succeed, the moving
19 party must prove (1) that the plaintiff possessed a trade secret, (2) that the defendant
20 misappropriated the trade secret; and (3) that the misappropriation caused or threatened damage
21 to the plaintiff.” Sharif v. Dawson, No. 26-cv-00965-LL-JLB, 2026 WL 616493, at *4 (S.D. Cal.
22 Mar. 4, 2026) (internal quotation marks and citation omitted).
23 “The definition of a ‘trade secret’ is extremely similar under the DTSA and CUTSA.”
24 Genasys Inc. v. Vector Acoustics, LLC, 638 F. Supp. 3d 1135, 1150 (S.D. Cal. 2022). “To prove
25 ownership of a trade secret, plaintiffs must identify the trade secrets and carry the burden of
26 showing they exist.” InteliClear, 978 F.3d at 658 (internal quotation marks and citation omitted).
27 “Plaintiffs may not simply rely upon ‘catchall’ phrases or identify categories of trade secrets they
28 intend to pursue at trial.” Id. “Although a plaintiff need not spell out the details of the trade
1 secret,” they must provide “sufficient particularity to separate it from matters of general
2 knowledge in the trade or of special knowledge of those persons skilled in the trade . . . [and]
3 must clearly refer to tangible trade secret material instead of referring to a system which
4 potentially qualifies for trade secret protection.” E. W. Bank v. Shanker, No. 20-cv-07364-WHO,
5 2021 WL 3112452, at *8 (N.D. Cal. July 22, 2021) (internal quotation marks and citations
6 omitted). With respect to misappropriation:
7 The DTSA and CUTSA both define “misappropriation” to include
“acquisition of a trade secret of another by a person who knows or
8 has reason to know that the trade secret was acquired by improper
means.” Both statutes also define “improper means” to include
9 “theft, bribery, misrepresentation, breach or inducement of a breach
of a duty to maintain secrecy, or espionage through electronic or
10 other means . . . .”
11 Comet Techs. United States of Am. Inc. v. Beuerman, No. 18-cv-01441-LHK, 2018 WL 1990226,
12 at *4 (N.D. Cal. Mar. 15, 2018) (internal citations omitted).
13 a. Existence of Trade Secrets
14 Here, plaintiff contends that the trade secrets at issue are, “documents and information
15 comprising Gold Standard’s quality management system and customer information.” (Doc. No.
16 5-1 at 12.) Plaintiff argues that all of this information is both generally unknown to the public
17 and something that plaintiff derives significant economic value from maintaining its secrecy
18 because plaintiff invested millions of dollars and a significant amount of resources “over many
19 years to develop its quality management system and broader business infrastructure, including the
20 systems required for regulatory compliance.” (Id. at 12–13.) Plaintiff also contends that it
21 expended “significant time and resources” and kept its trade secrets “confidential to maintain its
22 competitive advantage.” (Id. at 12.)
23 In opposition, defendants contend that there is nothing novel about plaintiff’s QMS
24 because it merely documents plaintiff’s compliance with FDA regulations (Doc. No. 19 at 8–9),
25 and plaintiff’s customer contact information is not a trade secret under either the DTSA (because
26 they are readily ascertainable by proper means, i.e., conducting searches on Google and Microsoft
27 CoPilot), or under the CUTSA (because plaintiff’s customers are well known among
28 competitors). (Id. at 18–20). Moreover, defendants argue that there is “a complete absence of
1 any evidence that Clear Path used or is using any customer list or pricing information to solicit”
2 clients. (Id. at 19–20.)
3 As noted above, plaintiff characterizes the QMS as a “framework of policies, processes,
4 procedures, and responsibilities that governs every aspect of Gold Standard’s operations,
5 including product design and development, verification and validation testing, complaint handling
6 and manufacturing controls and documentation.” (Doc. No. 5-2 at ¶ 5.) At the hearing on the
7 pending motion, the court inquired about the boundaries of plaintiff’s claimed trade secrets. In
8 the court’s view, plaintiff’s counsel responded simply by reiterating that those trade secrets
9 consist of the various standard operating procedures, including packaging and storing of products,
10 delivery logistics, managing customer complaints, labeling, and serving, that are implemented in
11 running plaintiff’s business. For purposes of resolving the present motion only, the court finds
12 that these “catch-all” descriptions are too “vague, conclusory, and insufficient to allege a trade
13 secret.” Rescue 1 Fin., LLC v. Complete Debt Relief, LLC, No. 23-cv-00982-CJC-KES, 2023 WL
14 6373884, at *3–4 (C.D. Cal. Aug. 24, 2023) (collecting cases), opinion clarified, No. 23-cv-
15 00982-CJC-KES, 2024 WL 3081923 (C.D. Cal. Jan. 29, 2024); see also Five Star Gourmet
16 Foods, Inc. v. Fresh Express, Inc., No. 19-cv-05611-PJH, 2020 WL 513287, at *7 (N.D. Cal. Jan.
17 31, 2020) (concluding that descriptions such as “product composition, packaging and
18 manufacturing logistics are all too vague to adequately allege a trade secret claim.”).7
19 However, plaintiff also contends that its customer information is entitled to trade secret
20 protection and has been misappropriated by defendants. As to its customer information, plaintiff
21 contends that it is maintained through Zoho, a customer relationship management system, and
22 consists of: (1) plaintiff’s customers contact information; (2) the business that plaintiff has
23 historically done and is doing with those customers; (3) pricing information; (4) volumes; (5)
24 profitability analyses; and (6) “a host of other information that is highly confidential and would
25 7 Because the court concludes that plaintiff has failed to establish the existence of a trade secret
and therefore fails on the first Winter factor as to the QMS, the court will not consider the other
26
Winter factors as to plaintiff’s QMS based claim in resolving the motion. California v. Azar, 911
27 F.3d 558, 575 (9th Cir. 2018) (“Likelihood of success on the merits is ‘the most important’ factor;
if a movant fails to meet this ‘threshold inquiry,’ we need not consider the other factors.”)
28 (quoting Disney Enters., Inc. v. VidAngel, Inc., 859 F.3d 848, 856 (9th Cir. 2017)).
1 be of great value to any competitor.” (Doc. No. 5-2 at ¶ 10.) Plaintiff also represents that it
2 maintains customer and supplier contact information, preferences, projects, and pricing data. (Id.
3 at ¶ 11.) Plaintiff further avers that competitors and other intermediaries, including Clear Path,
4 would profit from the use and disclosure of this customer information (Doc. No. 1 at ¶¶ 44, 47),
5 and that having it would allow competitors to directly solicit plaintiff’s customers without having
6 to go through the time-consuming process of identifying them. (Doc. No. 5-1 at 12.)
7 The court notes that customer names are generally found not to constitute trade secrets
8 because such information is often publicly available. Probo Med., LLC v. Heart Med., LLC, No.
9 24-cv-00433-BAS-VET, 2024 WL 3557458, at *4 (S.D. Cal. July 26, 2024). Nonetheless,
10 customer information can constitute trade secret “if it includes nonpublic information that
11 provides a ‘substantial business advantage’ to competitors.” Pollara v. Radiant Logistics, Inc.,
12 650 F. App’x 372, 373 (9th Cir. 2016)8 (quoting Morlife, Inc. v. Perry, 56 Cal. App. 4th 1514,
13 1522 (1997). Here, as noted above, plaintiff asserts that its customer information also includes
14 the details of their customers’ prior purchases and projects as well as preferences. This specific
15 customer information falls squarely within the categories that courts have recognized as
16 protectable trade secrets. See e.g., Henry Schein, Inc. v. Cook, 191 F. Supp. 3d 1072, 1077 (N.D.
17 Cal. 2016) (“Customer information such as sales history and customer needs and preferences
18 constitute trade secrets.”); Chartwell Staffing Servs. Inc. v. Atl. Sols. Grp. Inc., No. 8:19-cv-
19 00642-JLS-JDE, 2019 WL 2177262, at *6–7 (C.D. Cal. May 20, 2019) (finding that a similar
20 customer database possessed independent economic value).
21 Plaintiff keeps all of its confidential information, including customer information, on
22 secured platforms that require user credentials to access, and is used by limited personnel. (Doc.
23 No. 5-2 at ¶ 13.) Plaintiff’s facility is secured through keycard access and its computers and
24 networks are both encrypted and password protected. (Id.). These reflect reasonable efforts
25 undertaken by plaintiff to preserve the secrecy of this information. Chartwell, No. 8:19-cv-
26 00642-JLS-JDE, 2019 WL 2177262, at *6 (C.D. Cal. May 20, 2019) (finding password-protected
27
8 Citation to this unpublished Ninth Circuit opinion is appropriate pursuant to Ninth Circuit Rule
28 36-3(b).
1 databases and employment agreements prohibiting disclosure of information reasonable efforts);
2 Alpha Cap., LLC v. Khanukov, No. 3:23-cv-1265-JES-DEB, 2023 WL 4721109, at *4 (S.D. Cal.
3 July 21, 2023) (deeming password protection and limiting access on limited basis reasonable
4 efforts). Accordingly, the court concludes that plaintiff has made a showing, with respect to its
5 customer information, that it possesses a protectable trade secret.
6 b. Misappropriation and Resulting Harm
7 At this early stage of the litigation, plaintiff is relying upon circumstantial evidence in
8 support of its contention that its trade secret protected customer information has been
9 misappropriated. “[C]ircumstantial evidence of misappropriation frequently must be balanced
10 against testimony from defendants who directly deny” every allegation of misconduct. JBF
11 Interlude 2009 Ltd, v. Quibi Holdings LLC, No. 2:20-cv-02250-CAS-SK, 2020 WL 9311954, at
12 *22 (C.D. Cal. Dec. 30, 2020) (internal quotation marks and citation omitted). Plaintiff has
13 proffered evidence that defendant Gerrit accessed customer information at an unusual frequency
14 in the final months and weeks of his employment. (Doc. No. 5-2 at ¶ 45.) Further, at his exit
15 interview on March 28, 2026, defendant Gerrit stated that he was leaving the industry altogether
16 to take an IT position with the State of California. (Id. at ¶ 18.) Defendant Gerrit argues that his
17 activity on Zoho can reasonably be explained by his job duties. (Doc. No. 19-2 at ¶ 16.)
18 Specifically, he contends that, as products manager, he regularly had to access the customer
19 database to resolve customer complaints that were escalated to him by plaintiff’s customer
20 support team. (Id.) However, in its reply brief, plaintiff counters that there are specific instances
21 where defendant Gerrit accessed customer information that simply cannot be explained by his job
22 duties. (Doc. No. 23-1 at ¶ 8.) For example, defendant Gerrit accessed information regarding
23 one of plaintiff’s clients on January 30, 2026, and plaintiff has confirmed that it has never
24 received any complaints from that customer. (Id. at ¶¶ 10–11.) Faced with similar facts, another
25 district court concluded that the plaintiffs seeking a preliminary injunction had established trade
26 secret misappropriation pursuant to CUTSA, explaining:
27 To begin with, Fontenot refused to disclose to Shippers that he was
leaving his employment to join AtMet, a direct competitor, instead
28
1 claiming that he had no immediate plans for new employment and
that he expected to take some time off after his departure.
2
Fontenot then spent his final month at Shippers rummaging through
3 Prairie Tools, Shippers’ proprietary customer database, to obtain
sensitive information regarding Shippers’ clients, including contact
4 persons, “ship to” names, “bill to” names, addresses, telephone
numbers, and pricing and order history. Fontenot conducted 494
5 inquiries in Prairie Tools during his last month, a vast increase from
his regular use of the database. Indeed, Fontenot’s searches included
6 285 pricing queries, more than twice as many as conducted by any
other Shippers sales representative during the same time period.
7 Most suspiciously, the overwhelming majority of Fontenot’s
searches targeted customers located outside of his sales territory.
8
Although Fontenot provides a benign explanation for his conduct, the
9 Court finds that Fontenot’s account is not credible in light of the
contradictory evidence in the record. First, Fontenot’s supervisor,
10 Doug Bank (“Bank”), has testified that he does not believe Fontenot
had any legitimate business reason to run so many searches. Bank
11 opined that it was highly unlikely that a sales representative would
use Prairie Tools to verify his commissions in this manner. Second,
12 Shippers’ IT consultant, David Petschulat (“Petschulat”), who
designed the Prairie Tools database, filed a declaration with the Court
13 indicating that most of Fontenot’s searches would not have yielded
information sufficient to allow him to verify his commissions.
14
* * *
15
At the hearing on the preliminary injunction, the Court expressed
16 some concern that Shippers has not produced direct evidence that
Fontenot or AtMet have actually relied on Shippers confidential
17 information to solicit clients, including the four customers that
AtMet allegedly lured away from Shippers before this suit was filed.
18 Although such direct evidence would have been even more
persuasive, the Court nonetheless finds that the circumstantial
19 evidence presented here is sufficient to establish that Shippers is
likely to succeed on its misappropriation of trade secrets claim.
20
21 Shippers, a Div. of Ill. Tool Works, Inc. v. Fontenot, No. 13-cv-01349-JLS-MDD, 2013 WL
22 12092056, at *4–5 (S.D. Cal. Sept. 23, 2013) (footnote omitted) (internal citations omitted).
23 The reasoning of the district court in Fontenot is equally applicable here and concludes that the
24 circumstantial evidence presented by plaintiff is sufficient to show that it is likely to succeed on
25 its claim that defendant Gerrit misappropriated its customer information.
26 Finally, with respect to the third element, “[c]ourts generally presume harm when
27 proprietary information is misappropriated.” Implicit Conversions, Inc. v. Stine, No. 24-cv-
28 03744-WHO, 2024 WL 4112335, at *10 (N.D. Cal. Sept. 6, 2024) (collecting cases).
1 Accordingly, the court concludes plaintiff is likely to succeed on its trade secret
2 misappropriation claim to the extent that claim is premised on protected customer information
3 related to its customers’ prior purchases and projects as well as preferences. Because the court
4 concludes that plaintiff is likely to succeed on the merits of one aspect of its trade secret claims,
5 the court need not address the remaining claims that plaintiff raises under the first Winter factor.
6 All. For Wild Rockies, 632 F.3d at 1139 (declining to address remaining claims after finding that
7 the plaintiff established that there were serious questions going to the merits of one claim). The
8 court next turns to address whether plaintiff has sufficiently demonstrated it will suffer irreparable
9 harm if a temporary restraining order is not issued as to this aspect of its trade secret claims.
10 B. Irreparable Harm
11 To establish irreparable harm, plaintiff must “demonstrate that irreparable injury is likely
12 in the absence of an injunction.” Winter, 555 U.S. at 22 (collecting cases). “Those seeking
13 injunctive relief must proffer evidence sufficient to establish a likelihood of irreparable harm.”
14 Herb Reed Enters., LLC v. Fla. Ent. Mgmt., Inc., 736 F.3d 1239, 1251 (9th Cir. 2013); see also
15 Luminate Home Loans, Inc. v. Better Mortg. Co., No. 24-cv-02251-BAS-MSB, 2025 WL
16 437903, at *4 (S.D. Cal. Feb. 7, 2025) (applying this approach in the trade secret context).
17 “Evidence of loss of control over business reputation and damage to goodwill could constitute
18 irreparable harm.” Herb Reed Enters., 736 F.3d at 1250. However, such a finding must not be
19 “grounded in platitudes rather than evidence[.]” Id. Conclusory affidavits that lack “sufficient
20 support in facts” are inadequate to establish irreparable harm. Am. Passage Media Corp. v. Cass
21 Commc’ns, Inc., 750 F.2d 1470, 1473 (9th Cir. 1985).
22 Plaintiff argues that, without injunctive relief, it will suffer: (1) disclosure or use of trade
23 secrets and confidential information; (2) acceleration of competitiveness against the party who
24 suffered misappropriation; (3) interference with client relationships; and (4) loss of business
25 goodwill. (Doc. No. 5-1 at 20–22.) According to plaintiff, without the granting of a temporary
26 restraining order, other employees will be encouraged to do as defendant Gerrit did without fear
27 of consequences for violating their confidentiality obligations. (Id. at 22–23.) In opposition,
28 defendant argues that plaintiffs’ claims in this regard are baseless because defendants have
1 forensically preserved ESI, have agreed not to use any records originating from plaintiff,9
2 customers are “well-known among numerous competitors, and thus are not entitled to protection
3 as a ‘trade secret[,]’” and that any alleged loss of goodwill may adequately be compensated
4 through the award of monetary damages if plaintiffs were to prevail. (Doc. No. 19 at 21–22.)
5 Certainly, under some circumstances the risk of losing established customers in the future
6 as a result of a defendant’s action “can create lasting, irreparable harm.” Byrd v. Barbieri, No.
7 2:25-cv-03091-DC-CKD, 2025 WL 3211801, at *4 (E.D. Cal. Nov. 18, 2025) (internal quotation
8 marks and citation omitted). But where “relationships are already ‘irreparably damaged,’ it is
9 unclear what further harm, if any, will result absent injunctive relief.” Id. In support of its
10 contention that defendants are soliciting other of its customers, plaintiff offers only the
11 declaration of its Vice President for Research and Development stating in conclusory fashion that
12 “some customers have reached out to Gold Standard to advise that they have been approached by
13 Clear Path.” (Doc. No. 5-2 at ¶ 53.) This showing falls short of satisfying plaintiff’s burden in
14 this regard. Garfield Beach CVS LLC v. Mollison Pharmacy, No. 17-cv-00879-AJB-MDD, 2017
15 WL 2505124, at *3 (S.D. Cal. June 9, 2017) (concluding that a declaration consisting of hearsay
16 without “something more, like third party, or first-hand evidence corroborating” the statements
17 failed to show that defendants were actively targeting or soliciting customers or that plaintiff lost
18 business). The only other evidence cited by plaintiff is that relating to defendant Gerrit’s actions
19 taken in the months leading up to his departure which strongly suggests that he was accessing the
20 customer information for purposes other than the performance of his job. See JEB Grp., Inc. v.
21 San Jose, No. 19-cv-04230-CJC-AGR, 2019 WL 8645651, at *3 (C.D. Cal. May 22, 2019)
22 /////
23
9 Defendants’ counsel contends that upon his entering this case, defendants sought to cooperate
24 with plaintiff by imposing a litigation hold, having forensic experts preserve defendants’
electronically stored information (“ESI”), agreeing that none of plaintiff’s information would be
25
used by defendants, and offering to have plaintiff’s forensic experts wipe plaintiff’s information
from defendants’ ESI, all in an attempt to avoid having the present motion heard. (Doc. Nos. 19
26
at 5; 19-1 at 2–3.) According to defendants, this proposal was rejected. At the hearing on the
27 present motion, plaintiff’s counsel confirmed that, under the circumstances, plaintiff was not
amenable to entering an agreement with defendants as proposed and instead believed that only the
28 issuance of a temporary restraining order would adequately address its concerns.
1 (concluding that evidence of past misappropriation is insufficient to show future threat of future
2 harm).
3 As noted above, when the court inquired at the hearing on the pending motion whether
4 plaintiff had additional evidence of lost customers, plaintiff’s counsel responded only that
5 plaintiff had lost approximately 25 percent of its entire customer base because those customers
6 only purchased Bordier products which plaintiff can no longer offer. This also does not
7 demonstrate irreparable harm for several reasons. First, the loss of customers who were
8 purchasing Bordier products is an injury that has already incurred and is a quantifiable economic
9 injury that can be remedied through the award of damages should plaintiff prevail in this action.
10 KWB & Assocs., Inc. v. Marvin, No. 18-cv-00289-DMG-KK, 2018 WL 5094927, at *7 (C.D. Cal.
11 Apr. 18, 2018) (holding that the harm incurred from lost clients “that has already occurred . . . is
12 precisely the type of harm compensable through money damages.”); BrightView Landscapes,
13 LLC v. Stowell, No. 17-cv-08317-FMO-GJS, 2017 WL 10511569, at *3 (C.D. Cal. Dec. 11,
14 2017) (finding no irreparable harm for injuries from customers that both was quantifiable and had
15 already occurred); see also Sampson v. Murray, 415 U.S. 61, 90 (1974) (“Mere injuries, however
16 substantial, in terms of money, time and energy necessarily expended in the absence of a stay, are
17 not enough. The possibility that adequate compensatory or other corrective relief will be
18 available at a later date, in the ordinary course of litigation, weighs heavily against a claim of
19 irreparable harm.”). All that plaintiff has shown at this early stage of the litigation is that it stands
20 to lose its client base that purchases Bordier products. Moreover, plaintiff has made no showing
21 that Bordier terminated its relationship with plaintiff because of defendants’ alleged conduct.
22 Rather, plaintiff appears to concede that its relationship with Bordier had soured prior to
23 defendant Gerrit’s departure. Finally, if defendants are interrupting plaintiff’s existing
24 relationships, plaintiff’s claims appear limited to the loss of current customers to defendants, not
25 to other competitors or with respect to potential customers. PlanMember Fin’l Corp. v. Young,
26 No. 23-cv-03119-GW-AFM, 2023 WL 4291481, at *1 (C.D. Cal. Apr. 28, 2023) (“There does
27 not appear to be any suggestion of a fear about the loss of customers to others in the industry, or
28 to a loss of potential customers (because Defendants are, for instance, badmouthing Plaintiffs,
1 | ie., harming Plaintiffs’ goodwill). As a result, the Court believes it is likely that any harm
2 | traceable to any loss of customers to Defendants will be compensable in damages.”).
3 Accordingly, the court concludes that plaintiff has failed to make an adequate showing
4 | that, absent the granting of a temporary restraining order, it will suffer irreparable harm. Because
5 | plaintiff has failed to establish irreparable harm as to its trade secret claims based upon
6 | misappropriation of its protected customer information, the court need not address the remaining
7 | Winter factors. All. for the Wild Rockies, 632 F.3d at 1135.
8 CONCLUSION
9 For the reasons explained above,
10 1. Plaintiff's motion for temporary restraining order (Doc. No. 5) is DENIED without
11 prejudice to plaintiffs filing of a properly noticed motion for preliminary
12 injunction; and
13 2. The parties are directed to meet and confer and, if possible, submit a joint
14 proposed briefing schedule and hearing date with respect to any motion for a
15 preliminary injunction no later than fourteen (14) days after the date of entry of
16 this order.
7 IT IS SO ORDERED.
| Dated: _ April 20, 2026 Da A. 2, □□□
19 DALE A. DROZD
50 UNITED STATES DISTRICT JUDGE
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