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Complete Fire Protection, Inc. v. Kolman

United States District Court, D. Colorado

April 19, 2019

COMPLETE FIRE PROTECTION, INC., Plaintiff,
v.
RAYMOND KOLMAN, Defendant.

          ORDER GRANTING IN PART PLAINTIFF'S MOTION FOR TEMPORARY RESTRAINING ORDER

          William J. Martinez United States District Judge.

         In this action, Plaintiff Complete Fire Protection, Inc. ("CFP"), sues its former employee, Defendant Raymond Kolman ("Kolman"), for misappropriation of trade secrets in violation of the federal Defend Trade Secrets Act, 18 U.S.C. § 1836, and the Colorado Uniform Trade Secrets Act, Colo. Rev. Stat. §§ 7-74-101 etseq., breach of contract, unjust enrichment, conversion, and civil theft. (ECF No. 1 ¶¶ 50-84.) Currently before the Court is CFP's Emergency Motion for Temporary Restraining Order (the "Motion") (ECF No. 4) and Memorandum in Support (the "Memorandum") (ECF No. 5). For the reasons discussed below, the Motion is granted in part and denied in part.

         I. DISCUSSION

         A. Rule 65 Requirements for a Temporary Restraining Order

         To obtain a temporary restraining order ("TRO") before the party to be restrained has an opportunity to appear and respond, a plaintiff must present

(A) specific facts in an affidavit or a verified complaint clearly show[ing] that immediate and irreparable injury, loss, or damage will result to the movant before the adverse party can be heard in opposition; and
(B) the movant's attorney['s] certification] in writing [regarding] any efforts made to give notice and the reasons why it should not be required.

Fed. R. Civ. P. 65(b)(1). As for requirement "A," CFP has provided a verified complaint that sets forth in detail the immediate and irreparable injury that would result if Kolman's actions are not enjoined. (ECF No. 1 ¶¶ 46-47.)

         As for requirement "B," CFP's attorney certifies that on April 18, 2019, around 12:23 p.m., he e-mailed a copy of the Complaint, Motion, Memorandum, and Motion for a Preliminary Injunction to Kolman at his last known personal e-mail address and asked him if he opposed the motions. (ECF No. 3 at 2.) Approximately ten minutes later, counsel filed the Motion. Counsel had not yet received a response from Kolman at the time of filing. (Id.) The Motion suggests that notice should not be required because of the imminence of irreparable harm absent an injunction. (Id.; ECF No. 5 at 19-20.) The Court finds that CFP has made a sufficient showing that a temporary restraining order should issue without notice.

         B. CFP Satisfies the Four Part Test for Obtaining a TRO

         "A party seeking a temporary restraining order or preliminary injunction must show (1) a substantial likelihood that the movant eventually will prevail on the merits; (2) that the movant will suffer irreparable injury unless the injunction issues; (3) that the threatened injury to the movant outweighs whatever damage the proposed injunction may cause the opposing party; and (4) that the injunction, if issued, would not be adverse to the public interest." NRC Broad. Inc. v. Cool Radio, LLC, 2009 WL 2965279, at *1 (D. Colo. Sept. 14, 2009). The purpose of a temporary restraining order is to "preserv[e] the status quo and prevent[] irreparable harm just so long as is necessary to hold a [preliminary injunction] hearing, and no longer." Granny Goose Foods, Inc. v. Bhd. of Teamsters &Auto Truck Drivers Local No. 70 of Alameda Cnty., 415 U.S. 423, 439(1974).

         On the admittedly limited record before it, the Court finds that CFP has shown a substantial likelihood of success on the merits. With regard to its misappropriation claims under state and federal law, courts have held that client and contact lists, pricing data, and other client information, which are the types of information at issue here, can constitute a trade secret. Executive Consulting Group, LLC v. Baggot, 2018 WL 1942762 at *7 (D. Colo. Apr. 25, 2018); Arctic Energy Servs., LLC v. Neal, 2018 WL 1010939, at *2 (D. Colo. Feb. 22, 2018). (See ECF No. 5 at 14-15.)

         In addition, CFP has presented evidence, in the form of plausible allegations in its verified complaint, describing the reasonable steps it undertook to prevent the secrets from becoming available to others. (ECF No. 5 at 15-16.) See 18 U.S.C. § I839(3)(A); Colo. Rev. Stat. § 7-74-102(4). Finally, the facts suggest that Kolman acquired the trade secrets by improper means, i.e., e-mailing to his personal (rather than work) e-mail address screenshots of secured company data shortly before his departure from the company and commencing employment at one of CFP's competitors. (ECF No. 5 at 16.) See 18 U.S.C. § 1839(5); Colo. Rev. Stat. § 7-74-102(2).

         As for CFP's breach of contract claim, the contract appears to be enforceable, and the facts as presented also suggest that Kolman breached his contract with CFP. The contract between CFP and Kolman submitted as an attachment to the Complaint appears to be enforceable under Colorado law. While Colorado generally prohibits covenants not to compete, the circumstances of the case appear to meet two exceptions to that general rule: covenants governing trade secrets and non-compete contracts for executive or management personnel. Colo. Rev. Stat. § 8-2-113(2)(b) & (d). (ECF No. 5 at 10-13.) As discussed above, the type of information allegedly captured by Kolman is frequently considered trade secret information. In addition, and while not as clear as the Court would prefer, the factual allegations ...


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