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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
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`CASE NO. C24-93
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`ORDER DENYING MOTION FOR
`TEMPORARY RESTRAINING
`ORDER
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`PLINTRON TECHNOLOGIES USA
`LLC,
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`v.
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`Plaintiff,
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`JOSEPH PHILLIPS, RICHARD
`PELLY, THOMAS MATHEW, GREG
`MCKERVEY, and DESIREE
`MICHELLE GRAY,
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`
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`Defendants.
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`This matter comes before the Court on Plaintiff’s Motion for Temporary Restraining
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`Order and Preliminary Injunction. (Dkt. No. 11.) Having reviewed Defendants Responses (Dkt.
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`Nos. 20, 25), and having held oral argument on February 6, 2024, the Court DENIES the Motion
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`for a Temporary Restraining Order.
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`ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER - 1
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`Case 2:24-cv-00093-MJP Document 36 Filed 02/12/24 Page 2 of 11
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`BACKGROUND
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`This case arises out of Defendants employment with Plaintiff Plintron Technologies USA
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`LLC (“Plintron”). Defendants are all former employees of Plintron who resigned or were
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`terminated in the last four months. (Complaint ¶¶ 13-17.) Plintron alleges Defendants breached
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`their contract and fiduciary duties, committed fraud and misappropriated trade secrets. (Id. at ¶¶
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`137-222.)
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`Plintron USA is an offshoot of Plintron Global, a telecommunications company based in
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`India. (Response at 1.) Plintron Global expanded into the United States in 2012. (Compl. ¶ 31.)
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`When it did, it hired Phillips to serve as Chief Executive Office, manage US operations, onboard
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`new MVNOs and manage Plintron’s commercial relationships and contract with T-Mobile. ( Id.
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`at ¶¶ 31-32.) Phillips in turn hired Defendant Richard Pelly to act as Chief Operating Officer and
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`Defendant Thomas Mathew to serve as Executive Vice President. (Id. at ¶ 2.) Phillips also hired
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`Defendant Greg McKervey as Plintron’s Senior Director of IT Operations and Defendant Desiree
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`Michelle Gray as an administrative assistant. (Id.)
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`Defendants all left or were terminated by Plintron in October and early November 2023.
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`(Compl. ¶¶ 13-17.) Plintron brings the following ten causes of action against Defendants: (1)
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`Misappropriation of Trade Secrets (“DTSA”) (Federal); (2) Misappropriation of Trade Secrets
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`(State); (3) Breach of Contract against Phillips; (4) Breach of Fiduciary Duties; (5) Unfair
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`Competition; (6) Tortious Interference with Contract against Phillips, Pelly, and Mathew; (7)
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`Tortious Interference with Business Relationships or Expectancy against Phillips, Pelly and
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`Mathew; (8) Fraud; (9) Defamation against Phillips, Pelly, and Mathew; and (10) Conversion.
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`Plintron now moves for a Temporary Restraining Order (“TRO”) on its DTSA claims, its
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`contract claim against Phillips, and its conversion claim. Plintron alleges that Defendants Pelly,
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`ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER - 2
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`Case 2:24-cv-00093-MJP Document 36 Filed 02/12/24 Page 3 of 11
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`Mathew, and Phillips failed to return their Plintron computers and that all Defendants failed to
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`return documents and material containing trade secrets that belong to Plintron. (Mot. at 4.) The
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`main allegation has to do with Phillips and the return of his computer. Phillips refused to return
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`his Plintron computer because it contains sensitive personal information. (Mot. at 5.) Instead,
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`Phillips deposited the computer with a third party pending the duration of this aspect of the
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`litigation. (Id.) At the time of oral argument all Defendants except Phillips had returned the
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`materials requested. (See Response by Greg, Mathew, McKervey, Pelly (Dkt. No. 25).) Counsel
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`indicated they could cooperate to have a neutral remove any personal data from Phillips’
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`computer. Plintron alleges all the Defendants had access to Plintron’s trade secrets through the
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`course of their employment and a TRO is required to preserve the status quo and prevent any
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`actual or threatened misappropriation. (Id. at 7 -9.)
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`ANAYLSIS
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`A.
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`Legal Standard
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`A temporary restraining order is “an extraordinary remedy that may only be awarded
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`upon a clear showing that the plaintiff is entitled to such relief.” Winter v. Nat. Res. Def.
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`Council, 555 U.S. 7, 22 (2008). The purpose of a preliminary injunction is to preserve the status
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`quo and the rights of the parties until a final judgment on the merits can be rendered. U.S. Philips
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`Corp. v. KBC Bank N.V., 590 F.3d 1091, 1094 (9th Cir. 2010).
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`TROs are governed by the same standard applicable to preliminary injunctions. Stuhlbarg
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`Int’l Sales Co. v. John D. Brush & Co., Inc., 240 F.3d 832, 839 n. 7 (2001) (noting that
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`preliminary injunction and temporary restraining order standards are “substantially identical”).
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`To obtain a TRO, Plintron must show it is (1) likely to succeed on the merits, (2) likely to suffer
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`irreparable harm in the absence of preliminary relief, (3) the balance of equities tips in its favor,
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`ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER - 3
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`Case 2:24-cv-00093-MJP Document 36 Filed 02/12/24 Page 4 of 11
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`and (4) an injunction is in the public interest. Stormans, Inc. v. Selecky, 586 F.3d 1109, 1127
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`(9th Cir. 2009). The purpose of a TRO is to preserve the status quo and prevent irreparable harm
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`until a hearing can take place on the propriety of a preliminary injunction. Reno Air Racing
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`Assoc., Inc v. McCord, 452 F.3d 1126, 1131 (9th Cir. 2006).
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`B.
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` Balancing the Winter Factors
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`1.
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`Likelihood of Success
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`Likelihood of success on the merits is the “threshold inquiry” and “the most important
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`factor” in determining whether interim, injunctive relief is warranted. Envtl. Prot. Info. Ctr. V.
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`Carlson, 968 F.3d 985, 990 (9th Cir. 2020). If the moving party fails to show a likelihood of
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`success on the merits, the court “need not consider the remaining three [elements].” Garcia v.
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`Google, Inc., 786 F.3d 733, 740 (9th Cir. 2015) (internal citation omitted).
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`a.
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`Breach of Contract
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`Plintron brings a breach of contract claim only against Phillips. Though the complaint
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`contains numerous allegations of breach, the pertinent allegation for the purposes of Plintron’s
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`motion is Plintron’s allegation that Phillips breached his contract by not returning Plintron
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`property. (Mot. at 10.) The Court is not persuaded of Plintron’s success on the merits for this
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`aspect of its breach of contract claim.
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`In order to prevail on a breach of contract claim, a party must establish that (1) a duty
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`imposed by the contract (2) was breached, with (3) damages proximately caused by the breach.
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`Nw. Indep. Forst Mfrs. V. Dep’t of Labor & Indus., 78 Wn. App. 707, 712 (1995).
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`Plintron alleges Phillips breached the “Return Upon Termination” clause of his
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`employment contract, which required Phillips to return “all of [Plintron USA]’s property,
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`including but not limited to intellectual property, trade secrets, information, customer lists,
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`operation manuals, Executive handbook, records and accounts, materials subject to copyright,
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`Case 2:24-cv-00093-MJP Document 36 Filed 02/12/24 Page 5 of 11
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`trademark, or patent protection, customer and Employer information, credit cards, business
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`documents, reports, automobiles, keys, passes, and security devices.” (Mot. at 10.) (alteration in
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`original). Plintron alleges that after Phillips left Plintron, Phillips refused to return the domain
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`name, email system, the “Paychex” payroll system, and the computer he used. (Mot. at 10.)
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`Plintron acknowledges that since the filing of its complaint, Philips returned all but the computer.
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`(Id.) Plintron claims that Phillips’ continued withholding of the computer and potential use of
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`trade secrets is preventing Plintron from fully maintaining business operations.
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`Plintron’s arguments are unpersuasive. Though Plintron can demonstrate it has met the
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`first two elements of the breach of contract claim, its argument as to damages is conclusory.
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`Plintron not only fails to explain how Phillips’ retention of the computer and his potential use of
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`trade secrets has hindered its business operations, but it provides no evidence for this argument.
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`And Plintron does not claim any part of its operations have ceased or left it unable to do business
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`because of Phillips’ failure to return the computer. Because of this failure, Plintron cannot meets
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`its burden to demonstrate success on the merits of this claim.
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`b.
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`Defend Against Trade Secrets Claim
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`Plintron brings both federal and state trade secret claims, and is unlikely to succeed on
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`both of them.
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`The elements of a DTSA and UTSA claim are substantially similar. Compare 18 U.S.C. §
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`1839(5), with RCW 19.108.010(2). A plaintiff asserting a DTSA or UTSA claim must establish
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`(1) that it possessed a trade secret; (2) that defendant misappropriated the trade secret; and (3) the
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`“misappropriation caused or threatened damage to the plaintiff.” InteliClear, LLC v. ETC Glob.
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`Holdings, Inc., 978 F.3d 653-657-58 (9th Cir. 2020). Under the DTSA and UTSA a trade secret
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`is information that: (a) derives independent economic value, actual or potential, from not being
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`generally known to, and not being readily ascertainable by proper means by, other persons . . .;
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`Case 2:24-cv-00093-MJP Document 36 Filed 02/12/24 Page 6 of 11
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`and (b) the owner of the information has taken reasonable measures to keep such information
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`secret. 18 U.S.C. § 1839(3); RCW § 19.108.010(4)(a)-(b). Courts may grant an injunction to
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`protect against the threat of disclosure or use of trade secret information. 18 U.S.C. §
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`1836(b)(3)(A); RCW 19.108.020.
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`Plintron fails to demonstrate that it is likely to succeed on the merits of its DTSA and
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`UTSA claims. The main issue with Plintron’s argument is the threat of trade secret disclosure is
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`entirely speculative. In the three months since Defendants have ceased working for Plintron,
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`Plintron cannot point to any trade secret disclosure and has no evidence to support its assertion
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`there is a threat of trade secret disclosure. Plintron asserts Defendants may use Plintron trade
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`secrets in the course of their new employment, and points to the loss of business since
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`Defendants left Plintron as support. (Mot. at 13.) But loss of business does not inherently
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`indicate a trade secret has been misappropriated. And critically, Plintron argues the loss was
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`calculated before Defendants left Plintron when they allegedly deleted the exclusivity clause in
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`customers contracts. (Id.) This argument undermines Plintron’s position there is a threat of trade
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`secret misappropriation as deleting the exclusivity clause is not trade secret misappropriation.
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`Because Plintron has no evidence of trade secret misappropriation or the threat of trade
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`secret disclosure, the Court finds Plintron has failed to demonstrate a likelihood of success on the
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`UTSA and DTSA claims.
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`c.
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`Conversion Claim
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`Plintron’s conversion claim against Defendants lies solely in Phillips’ retention of his
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`Plintron computer. The other Defendants state they do not have Plintron devices or materials in
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`their possession, with the exception of McKervey, who still retains some mobile phones and sim
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`cards he tested while at Plintron. (Response by Pelly, Mathew, McKervey, and Gary at 3, 7.)
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`Case 2:24-cv-00093-MJP Document 36 Filed 02/12/24 Page 7 of 11
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`McKervey claims none of them were used and do not have any Plintron information on them and
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`he is willing to turn them over to Plintron. (Id. at 3.)
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`With regard to Phillips’ computer, the computer contains Phillips’ personal data which
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`needs to be removed before it can be returned to Plintron. The Court discussed this issue with
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`counsel during oral argument and counsel indicated they could work together to find a neutral
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`third-party to review the data and remove any personal information, after which the computer
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`could be returned. Because this matter can be resolved without the need for the Court’s ruling,
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`the Court declines to analyze this claim under the Winter factors.
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`2.
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`Irreparable Injury
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`Plintron only argues irreparable injury as it applies to its trade secrets claims and its
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`conversion claim. Plintron’s delay in waiting three months to file a TRO, along with its failure to
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`allege a change in circumstances that would now warrant a TRO, undermines its argument that a
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`TRO is necessary to preserve the status quo and prevent irreparable harm.
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`The Ninth Circuit makes clear that a showing of immediate irreparable harm is essential
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`for prevailing on a TRO. See Caribbean Marine Servs. Co. v. Baldrige, 844 F.2d 668, 674 (9th
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`Cir. 1988) (“Speculative injury does not constitute irreparable injury sufficient to warrant
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`granting a preliminary injunction.”). The Ninth Circuit has also found that a long delay before
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`seeking a preliminary injunction implies a lack of urgency and irreparable harm. Oakland Trib.,
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`Inc. v. Chron. Pub. Co., 762 F.2d 1374, 1377 (9th Cir. 1985).
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`Because there is no longer a need for a conversion claim, as discussed above, the Court
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`turns to Plintron’s trade secrets claim, Plintron’s argument that irreparable injury will occur is
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`based solely on the threat of potential disclosure of these trade secrets. (Mot. at 15.) As discussed
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`above, the problem with this is Plintron’s claim is entirely speculative. Plintron’s argument
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`Case 2:24-cv-00093-MJP Document 36 Filed 02/12/24 Page 8 of 11
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`consists of string cites to other district court decisions wherein the court found irreparable injury
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`for the threatened disclosure of a trade secret. While the courts in those cases may be correct,
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`Plintron fails to submit any evidence of a threat to disclose trade secrets. Absent any evidence
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`there is nothing to suggest, or for the Court to rely on, that irreparable injury would occur if the
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`Court does not issue a TRO.
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`Lastly, Plintron claims Defendants activities have caused and will continue to cause
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`Plintron irreparable harm due to its loss of customers and goodwill. (Mot. at 16.) But again,
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`Plintron does nothing more than cite to various court decisions where loss of goodwill is found
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`and then concludes that the same type of harm is occurring here. That is insufficient to
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`demonstrate that an immediate, irreparable harm is impending, and a TRO is warranted.
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`3.
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`Balance of Equities
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`The Court finds the balance of equities shows no clear favor. Plintron argues the balance
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`of equities tips in its favor because a TRO would prohibit Defendants from misappropriating
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`trade secrets and provide Plintron access to its rightful property. (Mot. at 17-18.) Defendants, on
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`the other hand, deny they have trade secrets. The Court finds the equities here do not strongly
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`favor either party.
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`4.
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`Public Interest
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`Lastly, the Court is not convinced there is a strong public interest in the granting of a
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`TRO. Though the Court acknowledges that the public interest is benefitted through the
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`enforcement of contractual provisions, and in the prevention of the theft of trade secrets, the
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`Court is not convinced a TRO here is necessary to protect these interests. Plintron has continued
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`to do business in the three months since Defendants left without any harm to the company as a
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`result of trade secret misappropriation or Phillips’ refusal to return the computer pursuant to his
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`ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER - 8
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`Case 2:24-cv-00093-MJP Document 36 Filed 02/12/24 Page 9 of 11
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`contract. Plintron argues the public interest is served by protecting companies’ property rights
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`and economic interests. But this argument requires the Court to then find that companies’
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`property rights and economic interests are more important than private, personal information,
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`including health information. On balance, the Court finds these factors do not weigh strongly in
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`favor of either party.
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`5.
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`The Court’s Balancing of the Winter Factors
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`Mindful that a temporary restraining order is an “extraordinary remedy that may only be
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`awarded upon a clear showing that the plaintiff is entitled to such relief,” Winter, 555 U.S. at 22,
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`the Court finds that the record before it weighs against entry of such an order. The Court does
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`not find Plintron has made a clear showing that it will succeed on its claims or that it will suffer
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`irreparable harm in the absence of a TRO. Additionally, the Court does not find that the balance
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`of equities or the public interest favor Plintron. The Court finds an insufficient basis on which to
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`grant the TRO and DENIES the Motion.
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`C.
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`Plintron’s Request for Expedited Discovery
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`Plintron seeks expedited discovery to serve third party subpoenas on Bank of America,
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`Paychex, and Microsoft Corp. (Mot. at 20-21.)
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`Federal Rule of Civil Procedure 26(d) bars parties from seeking “discovery from any
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`source before the parties have conferred as required by Rule 26(f), except in a proceeding
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`exempted from initial disclosure under Rule 26(a)(1)(B), or when authorized by these rules, by
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`stipulation, or by court order.” Fed. R. Civ. P. 26(d)(1). Courts may permit expedited discovery
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`before the parties’ Rule 26(f) conference only upon a showing of good cause. See Am. LegalNet,
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`Inc. v. Davis, 673 F. Supp. 2d 1063, 1066 (C.D. Cal. 2009). “Good cause may be found where
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`the need for expedited discovery, in consideration of the administration of justice, outweighs the
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`prejudice to the responding party.” Semitool, Inc. v. Tokyo Electron Am., Inc., 208 F.R.D. 273,
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`276 (N.D. Cal. 2002). “Factors commonly considered in determining the reasonableness of
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`expedited discovery include, but are not limited to: (1) whether a preliminary injunction is
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`pending; (2) the breadth of the discovery requests; (3) the purpose for requesting the expedited
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`discovery; (4) the burden on the defendants to comply with the requests; and (5) how far in
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`advance of the typical discovery process the request was made.” Am. LegalNet, 673 F. Supp. 2d
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`at 1067 (internal quotation marks omitted). But at a minimum, the moving party must
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`demonstrate adequate diligence and good faith to satisfy the “good cause” standard. See Johnson
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`v. Mammoth Recreations, Inc., 975 F.2d 604, 609l (9th Cir. 1992); see also Amazon.com, Inc. v.
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`Yong, No. 21-170RSM, 2021 WL 1237863, at *1 (W.D. Wash. Apr. 2, 2021).
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`Plintron seeks to subpoena (1) Bank of America for information on Stratabites; (2)
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`Paychex for information pertaining to its account; and (3) Microsoft for “backup” copies of
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`Plintron’s Microsoft accounts. (Mot. at 20-21.) Plintron argues good cause exists for Bank of
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`America because Stratabites recently deleted information. (Id. at 20.) And Plintron claims good
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`cause exists for Paychex and Microsoft because that data is only held pursuant to the companies’
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`retention policies, which are unknown to Plintron. (Id. at 21.)
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`The Court is not convinced good cause exists. The need for expedited discovery is
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`undermined by Plintron’s delay in commencing litigation. Now that the parties have entered into
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`litigation and should be proceeding with a discovery conference shortly, it is unclear how many
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`extra days Plintron would actually get from expedited discovery. Further, Plintron’s claims
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`regarding Stratabites deletion of information is unconvincing because Plintron seeks to subpoena
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`documents about Stratabites, not from Stratabites. In addition, Defendants have asked that this
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`ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER - 10
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`case be handled through alternate dispute resolution, thus a ruling by the Court runs the risk of
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`conflicting rulings in each forum.
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`Because Plintron has not demonstrated the diligence necessary to satisfy good cause, the
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`Court DENIES Plintron’s Request for Expedited Discovery.
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`CONCLUSION
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`Having reviewed the record as presented and heard oral argument, the Court finds
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`Plintron has not sufficiently supported its request for a Temporary Restraining Order. The Court
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`therefore DENIES the TRO. The Court similarly finds that Plintron has not demonstrated good
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`cause to warrant expedited discovery. The Court DENIES Plintron’s request as to Expedited
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`Discovery.
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`The clerk is ordered to provide copies of this order to all counsel.
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`Dated February 12, 2024.
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`A
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`Marsha J. Pechman
`United States Senior District Judge
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`ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER - 11
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