CBR Systems Incorporated v. Tompkins

Filing 15

ORDER denying 11 Motion for TRO; granting in part 12 Motion to Expedite. The Court will set a case management conference by separate order. Signed by Judge David G Campbell on 1/30/2012.(NVO)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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CBR Systems Incorporated, a California
corporation,

ORDER
Plaintiff,

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No.CV11-2339 PHX DGC

v.
Mary Tompkins, an individual,
Defendant.

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On January 27, 2012, the Court held a hearing on Defendant’s motion to dismiss

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(Doc. 7), Plaintiff’s application for a TRO (Doc. 11), and Plaintiff’s motion for expedited

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discovery (Doc. 12).

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Defendant’s motion to dismiss. The Court took under advisement Plaintiff’s request for a

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TRO and expedited discovery. For reasons that follow, the Court will deny the TRO

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application, but permit discovery in the case to begin immediately.

For reasons stated in detail on the record, the Court denied

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During oral argument, Plaintiff’s counsel asked the Court to enjoin three specific

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actions: (1) Defendant’s alleged practice of encouraging Plaintiff’s medical referrers to

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discard Plaintiff’s marketing materials; (2) Defendant’s alleged practice of giving gift

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cards to potential medical referrers; and (3) Defendant’s visiting of any medical referrer

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she serviced while employed at Plaintiff. Plaintiff’s counsel asked the Court to enjoin

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these activities under Plaintiff’s claims for unfair competition, tortuous interference with

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business expectancies, and breach of contract.

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Plaintiff has provided no basis for the Court to conclude that Defendant is

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engaging in unfair competition, committing tortuous conduct, or breaching contracts by

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encouraging potential medical referrers to use CORD:USE marketing material rather than

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Plaintiff’s marketing material, or in offering gift cards to potential medical referrers.

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Plaintiff’s counsel failed to identify why the suggestion that a medical referrer change

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marketing materials is improper or illegal. Plaintiff’s counsel argued that Defendant is

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obtaining restricted patient information in violation of federal law through the offering of

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gift cards, but Plaintiff has provided no evidence to support that allegation with respect to

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Defendant’s current activities.

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The Court also concludes that Plaintiff has not provided a sufficient basis for the

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Court to enjoin Defendant from calling on medical referrers she serviced while employed

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by Plaintiff. As noted during the hearing, the Court concludes that California law will

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govern Defendant’s employment contracts with Plaintiff. Defendant asserts, and Plaintiff

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does not disagree, that California law invalidates covenants prohibiting a former

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employee from calling on former customers.

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injunctive relief, therefore, is not the mere fact that Defendant is calling on entities she

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serviced while employed by Plaintiff, but the claim that Defendant is using Plaintiff’s

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confidential and protected information in doing so. The Court concludes, however, that

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Plaintiff has not presented evidence to support this argument. The affidavits attached to

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Plaintiff’s TRO application simply allege that Defendant has been contacting medical

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referrers she serviced while at Plaintiff. Doc. 11-1 at 12, 16. The declarations provide no

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basis for concluding that Defendant has used confidential or proprietary information in

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doing so.

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database maintained by Plaintiff, but provides no information to suggest that Defendant

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has improperly accessed the database.

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Defendant is using confidential information, but provides no factual basis on which the

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Court can rely. Although it is true that Defendant acquired information about Plaintiff’s

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most effective medical referrers while employed at Plaintiff, the Court cannot conclude

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from the mere fact that she has called on these medical referrers that Defendant is

The basis for Plaintiff’s request for

Ms. Sherman’s declaration provides a detailed description of the Siebel

Ms. Sherman does assert her “belief” that

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improperly using Plaintiff’s confidential information.

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For these reasons, Plaintiff has not shown that it is likely to succeed on the merits

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of its argument that Defendant is engaging in unfair competition, tortuously interfering

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with business expectancies, or breaching contracts by encouraging Plaintiff’s medical

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referrers to use CORD:USE marketing materials rather than Plaintiff’s marketing

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materials, by using gift cards in her solicitation of business, or by calling on Plaintiff’s

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medical referrers. Because Plaintiff has not shown a likelihood of success on the merits

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of these claims, the Court concludes that it is not entitled to temporary injunctive relief.

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See Winter v. Natural Res. Def. Council, 555 U.S. 7, 129 S. Ct. 365, 374 (2008) (to

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obtain preliminary injunctive relief, a plaintiff must show that it is likely to succeed on

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the merits).

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The Court recognizes that Plaintiff has a legitimate interest in its existing base of

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medical referrers. As a result, the Court waives the requirement of Rule 26(d)(1). The

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parties need not wait until after they have conferred under Rule 26(f) before commencing

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discovery.

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IT IS ORDERED:

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1.

Defendant’s motion to dismiss (Doc. 7) is denied.

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2.

Plaintiff’s application for a temporary restraining order (Doc. 11) is denied.

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3.

Plaintiff’s motion to expedite discovery (Doc. 12) is granted in part as
described above.

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The Court will set a case management conference by separate order.

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Dated this 30th day of January, 2012.

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