United States District Court, D. Colorado
A. BRIMMER UNITED STATES DISTRICT JUDGE
matter is before the Court on that portion of Loenbro's
Motion for Temporary Restraining Order and Preliminary
Injunction [Docket No. 6] that requests issuance of a
temporary restraining order (“TRO”). The Court
has jurisdiction pursuant to 28 U.S.C. § 1331 and 28
U.S.C. § 1367.
Loenbro Inspection, LLC (“Loenbro”) is an
oilfield services company that provides non-destructive
testing (“NDT”) using phased array ultrasonic
test (“PAUT”) instruments and visual inspection
services. Docket No. 2 at 4, ¶¶ 11, 14. According
to the motion, in late 2017 or early 2018, Loenbro employees
Scott Sommerfield, Jason Mahoney, and Brandon Campos, while
still employed by Loenbro, started making plans to form a
competing company, defendant Trispec LLC
(“Trispec”). Docket No. 6 at 8. These plans
included attempts to recruit current Loenbro employees to the
new company and the preparation of a Trispec business plan.
Id. The business plan identifies as potential
customers three current Loenbro clients. Id. at 9.
On July 8, 2018, defendants Sommerfield, Mahoney, and Campos
announced that they were leaving Loenbro. Id. On
July 24, 2018, Loenbro's Inspection Division Manager
examined equipment used by the individual defendants when
they worked at Loenbro and discovered that the SDHC memory
card from a PAUT device used by Campos, specifically an
OmniScan MX2 device, was missing. Id. at 12. Counsel
for Loenbro requested its return. Id. When it was
returned by Campos on July 25, Loenbro hired a firm to
conduct a forensic analysis of the card, which showed that
the card had been accessed on July 22, 2018, after Mr. Campos
had left Loenbro. Id. at 13. Loenbro alleges that
the memory card includes proprietary MX2 setup files.
Id. at 12. In 2017, during the course of his
employment, Mr. Campos signed a Proprietary Information and
Inventions Agreement that prohibited Mr. Campos from using
Loenbro's proprietary information, including “trade
secrets, ” “source and object codes, ”
“data, programs, ” and “improvements,
” for purposes beyond his employment responsibilities.
Docket No. 7-1 at 45.
31, 2018, plaintiff filed a complaint alleging eight claims
for relief. Docket No. 2. In its first claim for relief,
violation of the Defend Trade Secrets Act
(“DTSA”), 18 U.S.C. § 1836, plaintiff
alleges that defendants retained its trade secret information
after leaving its employment, including “confidential
and proprietary setup files for the OmniScan MX2 PAUT device
that provide Loenbro a competitive advantage by enabling it
to provide more consistent and reliable PAUT results.”
Docket No. 2 at 18, ¶ 80. On August 1, 2018, the Court
held a hearing on that portion of the motion seeking a
temporary restraining order. Docket No. 16. Defendants were
represented at the hearing by counsel. Id.
succeed on a motion for temporary restraining order, the
moving party must show (1) a likelihood of success on the
merits; (2) a likelihood that the movant will suffer
irreparable harm in the absence of preliminary relief; (3)
that the balance of equities tips in the movant's favor;
and (4) that the injunction is in the public interest.
RoDa Drilling Co. v. Siegal, 552 F.3d 1203, 1208
(10th Cir. 2009) (citing Winter v. Natural Resources
Defense Council, Inc., 555 U.S. 7, 20 (2008)); see
Little v. Jones, 607 F.3d 1245, 1251 (10th Cir. 2010)).
“[B]ecause a preliminary injunction is an extraordinary
remedy, the right to relief must be clear and
unequivocal.” Beltronics USA, Inc. v. Midwest
Inventory Distribution, LLC, 562 F.3d 1067, 1070 (10th
Cir. 2009) (quoting Greater Yellowstone Coalition v.
Flowers, 321 F.3d 1250, 1256 (10th Cir. 2003)) (internal
quotation marks omitted). Granting such “drastic
relief, ” United States ex rel. Citizen Band
Potawatomi Indian Tribe of Oklahoma v. Enter. Mgmt.
Consultants, Inc., 883 F.2d 886, 888-89 (10th Cir.
1989), “is the exception rather than the rule.”
GTE Corp. v. Williams, 731 F.2d 676, 678 (10th Cir.
plaintiff asserting a claim for misappropriation of trade
secrets under the DTSA must “establish: (1) the
existence of a trade secret that relates to a product or
service used in, or intended for use in, interstate or
foreign commerce; (2) the acquisition of the trade secret, or
the use or disclosure of the trade secret without consent;
and (3) the person acquiring, using, or disclosing the trade
secret knew or had reason to know that the trade secret was
acquired by improper means.” Arctic Energy Servs.,
LLC v. Neal, No. 18-cv-00108-PAB-KLM, 2018 WL 1010939,
at *2 (D. Colo. Feb. 22, 2018) (citing 18 U.S.C.
§1836(b)(1); 18 U.S.C. § 1839; Ultradent Prods.
Inc. v. Spectrum Solutions LLC, 2018 WL 324868, at *2
(D. Utah Jan. 8, 2018); Blue Star Land Servs. LLC v.
Coleman, 2017 WL 6210901, at *4 (W.D. Okla. Dec. 8,
2017)). The DTSA defines “trade secret” broadly
to include “all forms and types of financial, business,
scientific, technical, economic, or engineering
information” so long as “the owner thereof has
taken reasonable measures to keep such information
secret” and “the information derives independent
economic value, actual or potential, from not being generally
known to, ” or ascertainable by, another person. 18
U.S.C. § 1839(3).
hearing, the Court found that plaintiff demonstrated a
likelihood of success on the merits of its DTSA claim
concerning Mr. Campos' retention and apparent accessing
of the SDHC memory card after he left Loenbro. The Court
found that plaintiff demonstrated that, in the absence of
injunctive relief, it will suffer irreparable harm because
the custom setup files provide a competitive advantage to
plaintiff. The Court found that the balance of equities tips
in plaintiff's favor because defendants indicated that
they use different equipment to perform inspections that
requires different setup files. The public interest favors an
injunction because the public has a substantial interest in
enforcing private property rights, including rights in trade
Court found, pursuant to Fed.R.Civ.P. 65(c), that a bond was
unnecessary in light of defendants' representation that
they use different equipment.
Court found that plaintiff failed to carry its burden of
proof for its other requests for a temporary restraining
foregoing reasons and those stated in the Court's oral
ruling, it is
that, pursuant to Fed.R.Civ.P. 65, the portion of
plaintiff's Motion for Temporary Restraining Order and
Preliminary Injunction [Docket No. 6] seeking a temporary
restraining order is GRANTED in part and
DENIED in part. It is further
that defendants and all affiliated entities, agents,
representatives, employees, attorneys, and other persons
acting, or purporting to act, on their behalf or in active
concert or participation with them, are enjoined from
possessing, using, copying, or disclosing Loenbro Inspection,
LLC's and its affiliates' proprietary setup files for
the OmniScan MX2 PAUT device. It is further
that, pursuant to Fed.R.Civ.P. 65(b)(2), this order will
expire on August 16, 2017 unless extended by the Court for
good cause. It is further
that plaintiff shall serve a copy of this order on