Case 2:24-cv-00093-MJP Document 36 Filed 02/12/24 Page 1 of 11
`
`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
`
`CASE NO. C24-93
`
`ORDER DENYING MOTION FOR
`TEMPORARY RESTRAINING
`ORDER
`
`PLINTRON TECHNOLOGIES USA
`LLC,
`
`
`
`
`
`v.
`
`Plaintiff,
`
`JOSEPH PHILLIPS, RICHARD
`PELLY, THOMAS MATHEW, GREG
`MCKERVEY, and DESIREE
`MICHELLE GRAY,
`
`
`
`Defendants.
`
`
`
`
`
`This matter comes before the Court on Plaintiff’s Motion for Temporary Restraining
`
`Order and Preliminary Injunction. (Dkt. No. 11.) Having reviewed Defendants Responses (Dkt.
`
`Nos. 20, 25), and having held oral argument on February 6, 2024, the Court DENIES the Motion
`
`for a Temporary Restraining Order.
`
`ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER - 1
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`
`
`

`

`Case 2:24-cv-00093-MJP Document 36 Filed 02/12/24 Page 2 of 11
`
`
`
`BACKGROUND
`
`This case arises out of Defendants employment with Plaintiff Plintron Technologies USA
`
`LLC (“Plintron”). Defendants are all former employees of Plintron who resigned or were
`
`terminated in the last four months. (Complaint ¶¶ 13-17.) Plintron alleges Defendants breached
`
`their contract and fiduciary duties, committed fraud and misappropriated trade secrets. (Id. at ¶¶
`
`137-222.)
`
`Plintron USA is an offshoot of Plintron Global, a telecommunications company based in
`
`India. (Response at 1.) Plintron Global expanded into the United States in 2012. (Compl. ¶ 31.)
`
`When it did, it hired Phillips to serve as Chief Executive Office, manage US operations, onboard
`
`new MVNOs and manage Plintron’s commercial relationships and contract with T-Mobile. ( Id.
`
`at ¶¶ 31-32.) Phillips in turn hired Defendant Richard Pelly to act as Chief Operating Officer and
`
`Defendant Thomas Mathew to serve as Executive Vice President. (Id. at ¶ 2.) Phillips also hired
`
`Defendant Greg McKervey as Plintron’s Senior Director of IT Operations and Defendant Desiree
`
`Michelle Gray as an administrative assistant. (Id.)
`
`Defendants all left or were terminated by Plintron in October and early November 2023.
`
`(Compl. ¶¶ 13-17.) Plintron brings the following ten causes of action against Defendants: (1)
`
`Misappropriation of Trade Secrets (“DTSA”) (Federal); (2) Misappropriation of Trade Secrets
`
`(State); (3) Breach of Contract against Phillips; (4) Breach of Fiduciary Duties; (5) Unfair
`
`Competition; (6) Tortious Interference with Contract against Phillips, Pelly, and Mathew; (7)
`
`Tortious Interference with Business Relationships or Expectancy against Phillips, Pelly and
`
`Mathew; (8) Fraud; (9) Defamation against Phillips, Pelly, and Mathew; and (10) Conversion.
`
`Plintron now moves for a Temporary Restraining Order (“TRO”) on its DTSA claims, its
`
`contract claim against Phillips, and its conversion claim. Plintron alleges that Defendants Pelly,
`
`ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER - 2
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`
`
`

`

`Case 2:24-cv-00093-MJP Document 36 Filed 02/12/24 Page 3 of 11
`
`
`
`Mathew, and Phillips failed to return their Plintron computers and that all Defendants failed to
`
`return documents and material containing trade secrets that belong to Plintron. (Mot. at 4.) The
`
`main allegation has to do with Phillips and the return of his computer. Phillips refused to return
`
`his Plintron computer because it contains sensitive personal information. (Mot. at 5.) Instead,
`
`Phillips deposited the computer with a third party pending the duration of this aspect of the
`
`litigation. (Id.) At the time of oral argument all Defendants except Phillips had returned the
`
`materials requested. (See Response by Greg, Mathew, McKervey, Pelly (Dkt. No. 25).) Counsel
`
`indicated they could cooperate to have a neutral remove any personal data from Phillips’
`
`computer. Plintron alleges all the Defendants had access to Plintron’s trade secrets through the
`
`course of their employment and a TRO is required to preserve the status quo and prevent any
`
`actual or threatened misappropriation. (Id. at 7 -9.)
`
`ANAYLSIS
`
`A.
`
`Legal Standard
`
`A temporary restraining order is “an extraordinary remedy that may only be awarded
`
`upon a clear showing that the plaintiff is entitled to such relief.” Winter v. Nat. Res. Def.
`
`Council, 555 U.S. 7, 22 (2008). The purpose of a preliminary injunction is to preserve the status
`
`quo and the rights of the parties until a final judgment on the merits can be rendered. U.S. Philips
`
`Corp. v. KBC Bank N.V., 590 F.3d 1091, 1094 (9th Cir. 2010).
`
`TROs are governed by the same standard applicable to preliminary injunctions. Stuhlbarg
`
`Int’l Sales Co. v. John D. Brush & Co., Inc., 240 F.3d 832, 839 n. 7 (2001) (noting that
`
`preliminary injunction and temporary restraining order standards are “substantially identical”).
`
`To obtain a TRO, Plintron must show it is (1) likely to succeed on the merits, (2) likely to suffer
`
`irreparable harm in the absence of preliminary relief, (3) the balance of equities tips in its favor,
`
`ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER - 3
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`
`
`

`

`Case 2:24-cv-00093-MJP Document 36 Filed 02/12/24 Page 4 of 11
`
`
`
`and (4) an injunction is in the public interest. Stormans, Inc. v. Selecky, 586 F.3d 1109, 1127
`
`(9th Cir. 2009). The purpose of a TRO is to preserve the status quo and prevent irreparable harm
`
`until a hearing can take place on the propriety of a preliminary injunction. Reno Air Racing
`
`Assoc., Inc v. McCord, 452 F.3d 1126, 1131 (9th Cir. 2006).
`
`B.
`
` Balancing the Winter Factors
`
`1.
`
`Likelihood of Success
`
`Likelihood of success on the merits is the “threshold inquiry” and “the most important
`
`factor” in determining whether interim, injunctive relief is warranted. Envtl. Prot. Info. Ctr. V.
`
`Carlson, 968 F.3d 985, 990 (9th Cir. 2020). If the moving party fails to show a likelihood of
`
`success on the merits, the court “need not consider the remaining three [elements].” Garcia v.
`
`Google, Inc., 786 F.3d 733, 740 (9th Cir. 2015) (internal citation omitted).
`
`a.
`
`Breach of Contract
`
`Plintron brings a breach of contract claim only against Phillips. Though the complaint
`
`contains numerous allegations of breach, the pertinent allegation for the purposes of Plintron’s
`
`motion is Plintron’s allegation that Phillips breached his contract by not returning Plintron
`
`property. (Mot. at 10.) The Court is not persuaded of Plintron’s success on the merits for this
`
`aspect of its breach of contract claim.
`
`In order to prevail on a breach of contract claim, a party must establish that (1) a duty
`
`imposed by the contract (2) was breached, with (3) damages proximately caused by the breach.
`
`Nw. Indep. Forst Mfrs. V. Dep’t of Labor & Indus., 78 Wn. App. 707, 712 (1995).
`
`Plintron alleges Phillips breached the “Return Upon Termination” clause of his
`
`employment contract, which required Phillips to return “all of [Plintron USA]’s property,
`
`including but not limited to intellectual property, trade secrets, information, customer lists,
`
`operation manuals, Executive handbook, records and accounts, materials subject to copyright,
`
`ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER - 4
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`
`
`

`

`Case 2:24-cv-00093-MJP Document 36 Filed 02/12/24 Page 5 of 11
`
`
`
`trademark, or patent protection, customer and Employer information, credit cards, business
`
`documents, reports, automobiles, keys, passes, and security devices.” (Mot. at 10.) (alteration in
`
`original). Plintron alleges that after Phillips left Plintron, Phillips refused to return the domain
`
`name, email system, the “Paychex” payroll system, and the computer he used. (Mot. at 10.)
`
`Plintron acknowledges that since the filing of its complaint, Philips returned all but the computer.
`
`(Id.) Plintron claims that Phillips’ continued withholding of the computer and potential use of
`
`trade secrets is preventing Plintron from fully maintaining business operations.
`
`Plintron’s arguments are unpersuasive. Though Plintron can demonstrate it has met the
`
`first two elements of the breach of contract claim, its argument as to damages is conclusory.
`
`Plintron not only fails to explain how Phillips’ retention of the computer and his potential use of
`
`trade secrets has hindered its business operations, but it provides no evidence for this argument.
`
`And Plintron does not claim any part of its operations have ceased or left it unable to do business
`
`because of Phillips’ failure to return the computer. Because of this failure, Plintron cannot meets
`
`its burden to demonstrate success on the merits of this claim.
`
`b.
`
`Defend Against Trade Secrets Claim
`
`Plintron brings both federal and state trade secret claims, and is unlikely to succeed on
`
`both of them.
`
`The elements of a DTSA and UTSA claim are substantially similar. Compare 18 U.S.C. §
`
`1839(5), with RCW 19.108.010(2). A plaintiff asserting a DTSA or UTSA claim must establish
`
`(1) that it possessed a trade secret; (2) that defendant misappropriated the trade secret; and (3) the
`
`“misappropriation caused or threatened damage to the plaintiff.” InteliClear, LLC v. ETC Glob.
`
`Holdings, Inc., 978 F.3d 653-657-58 (9th Cir. 2020). Under the DTSA and UTSA a trade secret
`
`is information that: (a) derives independent economic value, actual or potential, from not being
`
`generally known to, and not being readily ascertainable by proper means by, other persons . . .;
`
`ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER - 5
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`
`
`

`

`Case 2:24-cv-00093-MJP Document 36 Filed 02/12/24 Page 6 of 11
`
`
`
`and (b) the owner of the information has taken reasonable measures to keep such information
`
`secret. 18 U.S.C. § 1839(3); RCW § 19.108.010(4)(a)-(b). Courts may grant an injunction to
`
`protect against the threat of disclosure or use of trade secret information. 18 U.S.C. §
`
`1836(b)(3)(A); RCW 19.108.020.
`
`Plintron fails to demonstrate that it is likely to succeed on the merits of its DTSA and
`
`UTSA claims. The main issue with Plintron’s argument is the threat of trade secret disclosure is
`
`entirely speculative. In the three months since Defendants have ceased working for Plintron,
`
`Plintron cannot point to any trade secret disclosure and has no evidence to support its assertion
`
`there is a threat of trade secret disclosure. Plintron asserts Defendants may use Plintron trade
`
`secrets in the course of their new employment, and points to the loss of business since
`
`Defendants left Plintron as support. (Mot. at 13.) But loss of business does not inherently
`
`indicate a trade secret has been misappropriated. And critically, Plintron argues the loss was
`
`calculated before Defendants left Plintron when they allegedly deleted the exclusivity clause in
`
`customers contracts. (Id.) This argument undermines Plintron’s position there is a threat of trade
`
`secret misappropriation as deleting the exclusivity clause is not trade secret misappropriation.
`
`Because Plintron has no evidence of trade secret misappropriation or the threat of trade
`
`secret disclosure, the Court finds Plintron has failed to demonstrate a likelihood of success on the
`
`UTSA and DTSA claims.
`
`c.
`
`Conversion Claim
`
`Plintron’s conversion claim against Defendants lies solely in Phillips’ retention of his
`
`Plintron computer. The other Defendants state they do not have Plintron devices or materials in
`
`their possession, with the exception of McKervey, who still retains some mobile phones and sim
`
`cards he tested while at Plintron. (Response by Pelly, Mathew, McKervey, and Gary at 3, 7.)
`
`ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER - 6
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`
`
`

`

`Case 2:24-cv-00093-MJP Document 36 Filed 02/12/24 Page 7 of 11
`
`
`
`McKervey claims none of them were used and do not have any Plintron information on them and
`
`he is willing to turn them over to Plintron. (Id. at 3.)
`
`With regard to Phillips’ computer, the computer contains Phillips’ personal data which
`
`needs to be removed before it can be returned to Plintron. The Court discussed this issue with
`
`counsel during oral argument and counsel indicated they could work together to find a neutral
`
`third-party to review the data and remove any personal information, after which the computer
`
`could be returned. Because this matter can be resolved without the need for the Court’s ruling,
`
`the Court declines to analyze this claim under the Winter factors.
`
`2.
`
`Irreparable Injury
`
`Plintron only argues irreparable injury as it applies to its trade secrets claims and its
`
`conversion claim. Plintron’s delay in waiting three months to file a TRO, along with its failure to
`
`allege a change in circumstances that would now warrant a TRO, undermines its argument that a
`
`TRO is necessary to preserve the status quo and prevent irreparable harm.
`
`The Ninth Circuit makes clear that a showing of immediate irreparable harm is essential
`
`for prevailing on a TRO. See Caribbean Marine Servs. Co. v. Baldrige, 844 F.2d 668, 674 (9th
`
`Cir. 1988) (“Speculative injury does not constitute irreparable injury sufficient to warrant
`
`granting a preliminary injunction.”). The Ninth Circuit has also found that a long delay before
`
`seeking a preliminary injunction implies a lack of urgency and irreparable harm. Oakland Trib.,
`
`Inc. v. Chron. Pub. Co., 762 F.2d 1374, 1377 (9th Cir. 1985).
`
`Because there is no longer a need for a conversion claim, as discussed above, the Court
`
`turns to Plintron’s trade secrets claim, Plintron’s argument that irreparable injury will occur is
`
`based solely on the threat of potential disclosure of these trade secrets. (Mot. at 15.) As discussed
`
`above, the problem with this is Plintron’s claim is entirely speculative. Plintron’s argument
`
`ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER - 7
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`
`
`

`

`Case 2:24-cv-00093-MJP Document 36 Filed 02/12/24 Page 8 of 11
`
`
`
`consists of string cites to other district court decisions wherein the court found irreparable injury
`
`for the threatened disclosure of a trade secret. While the courts in those cases may be correct,
`
`Plintron fails to submit any evidence of a threat to disclose trade secrets. Absent any evidence
`
`there is nothing to suggest, or for the Court to rely on, that irreparable injury would occur if the
`
`Court does not issue a TRO.
`
`Lastly, Plintron claims Defendants activities have caused and will continue to cause
`
`Plintron irreparable harm due to its loss of customers and goodwill. (Mot. at 16.) But again,
`
`Plintron does nothing more than cite to various court decisions where loss of goodwill is found
`
`and then concludes that the same type of harm is occurring here. That is insufficient to
`
`demonstrate that an immediate, irreparable harm is impending, and a TRO is warranted.
`
`3.
`
`Balance of Equities
`
`The Court finds the balance of equities shows no clear favor. Plintron argues the balance
`
`of equities tips in its favor because a TRO would prohibit Defendants from misappropriating
`
`trade secrets and provide Plintron access to its rightful property. (Mot. at 17-18.) Defendants, on
`
`the other hand, deny they have trade secrets. The Court finds the equities here do not strongly
`
`favor either party.
`
`4.
`
`Public Interest
`
`Lastly, the Court is not convinced there is a strong public interest in the granting of a
`
`TRO. Though the Court acknowledges that the public interest is benefitted through the
`
`enforcement of contractual provisions, and in the prevention of the theft of trade secrets, the
`
`Court is not convinced a TRO here is necessary to protect these interests. Plintron has continued
`
`to do business in the three months since Defendants left without any harm to the company as a
`
`result of trade secret misappropriation or Phillips’ refusal to return the computer pursuant to his
`
`ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER - 8
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`
`
`

`

`Case 2:24-cv-00093-MJP Document 36 Filed 02/12/24 Page 9 of 11
`
`
`
`contract. Plintron argues the public interest is served by protecting companies’ property rights
`
`and economic interests. But this argument requires the Court to then find that companies’
`
`property rights and economic interests are more important than private, personal information,
`
`including health information. On balance, the Court finds these factors do not weigh strongly in
`
`favor of either party.
`
`5.
`
`The Court’s Balancing of the Winter Factors
`
`Mindful that a temporary restraining order is an “extraordinary remedy that may only be
`
`awarded upon a clear showing that the plaintiff is entitled to such relief,” Winter, 555 U.S. at 22,
`
`the Court finds that the record before it weighs against entry of such an order. The Court does
`
`not find Plintron has made a clear showing that it will succeed on its claims or that it will suffer
`
`irreparable harm in the absence of a TRO. Additionally, the Court does not find that the balance
`
`of equities or the public interest favor Plintron. The Court finds an insufficient basis on which to
`
`grant the TRO and DENIES the Motion.
`
`C.
`
`Plintron’s Request for Expedited Discovery
`
`Plintron seeks expedited discovery to serve third party subpoenas on Bank of America,
`
`Paychex, and Microsoft Corp. (Mot. at 20-21.)
`
`Federal Rule of Civil Procedure 26(d) bars parties from seeking “discovery from any
`
`source before the parties have conferred as required by Rule 26(f), except in a proceeding
`
`exempted from initial disclosure under Rule 26(a)(1)(B), or when authorized by these rules, by
`
`stipulation, or by court order.” Fed. R. Civ. P. 26(d)(1). Courts may permit expedited discovery
`
`before the parties’ Rule 26(f) conference only upon a showing of good cause. See Am. LegalNet,
`
`Inc. v. Davis, 673 F. Supp. 2d 1063, 1066 (C.D. Cal. 2009). “Good cause may be found where
`
`the need for expedited discovery, in consideration of the administration of justice, outweighs the
`
`ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER - 9
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`
`
`

`

`Case 2:24-cv-00093-MJP Document 36 Filed 02/12/24 Page 10 of 11
`
`
`
`prejudice to the responding party.” Semitool, Inc. v. Tokyo Electron Am., Inc., 208 F.R.D. 273,
`
`276 (N.D. Cal. 2002). “Factors commonly considered in determining the reasonableness of
`
`expedited discovery include, but are not limited to: (1) whether a preliminary injunction is
`
`pending; (2) the breadth of the discovery requests; (3) the purpose for requesting the expedited
`
`discovery; (4) the burden on the defendants to comply with the requests; and (5) how far in
`
`advance of the typical discovery process the request was made.” Am. LegalNet, 673 F. Supp. 2d
`
`at 1067 (internal quotation marks omitted). But at a minimum, the moving party must
`
`demonstrate adequate diligence and good faith to satisfy the “good cause” standard. See Johnson
`
`v. Mammoth Recreations, Inc., 975 F.2d 604, 609l (9th Cir. 1992); see also Amazon.com, Inc. v.
`
`Yong, No. 21-170RSM, 2021 WL 1237863, at *1 (W.D. Wash. Apr. 2, 2021).
`
`Plintron seeks to subpoena (1) Bank of America for information on Stratabites; (2)
`
`Paychex for information pertaining to its account; and (3) Microsoft for “backup” copies of
`
`Plintron’s Microsoft accounts. (Mot. at 20-21.) Plintron argues good cause exists for Bank of
`
`America because Stratabites recently deleted information. (Id. at 20.) And Plintron claims good
`
`cause exists for Paychex and Microsoft because that data is only held pursuant to the companies’
`
`retention policies, which are unknown to Plintron. (Id. at 21.)
`
`The Court is not convinced good cause exists. The need for expedited discovery is
`
`undermined by Plintron’s delay in commencing litigation. Now that the parties have entered into
`
`litigation and should be proceeding with a discovery conference shortly, it is unclear how many
`
`extra days Plintron would actually get from expedited discovery. Further, Plintron’s claims
`
`regarding Stratabites deletion of information is unconvincing because Plintron seeks to subpoena
`
`documents about Stratabites, not from Stratabites. In addition, Defendants have asked that this
`
`ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER - 10
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`
`
`

`

`Case 2:24-cv-00093-MJP Document 36 Filed 02/12/24 Page 11 of 11
`
`
`
`case be handled through alternate dispute resolution, thus a ruling by the Court runs the risk of
`
`conflicting rulings in each forum.
`
`Because Plintron has not demonstrated the diligence necessary to satisfy good cause, the
`
`Court DENIES Plintron’s Request for Expedited Discovery.
`
`CONCLUSION
`
`Having reviewed the record as presented and heard oral argument, the Court finds
`
`Plintron has not sufficiently supported its request for a Temporary Restraining Order. The Court
`
`therefore DENIES the TRO. The Court similarly finds that Plintron has not demonstrated good
`
`cause to warrant expedited discovery. The Court DENIES Plintron’s request as to Expedited
`
`Discovery.
`
`The clerk is ordered to provide copies of this order to all counsel.
`
`Dated February 12, 2024.
`
`A
`
`
`
`Marsha J. Pechman
`United States Senior District Judge
`
`ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER - 11
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`
`
`