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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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 10 CBR Systems Incorporated, a California corporation, ORDER Plaintiff, 11 12 13 14 No.CV11-2339 PHX DGC v. Mary Tompkins, an individual, Defendant. 15 On January 27, 2012, the Court held a hearing on Defendant’s motion to dismiss 16 (Doc. 7), Plaintiff’s application for a TRO (Doc. 11), and Plaintiff’s motion for expedited 17 discovery (Doc. 12). 18 Defendant’s motion to dismiss. The Court took under advisement Plaintiff’s request for a 19 TRO and expedited discovery. For reasons that follow, the Court will deny the TRO 20 application, but permit discovery in the case to begin immediately. For reasons stated in detail on the record, the Court denied 21 During oral argument, Plaintiff’s counsel asked the Court to enjoin three specific 22 actions: (1) Defendant’s alleged practice of encouraging Plaintiff’s medical referrers to 23 discard Plaintiff’s marketing materials; (2) Defendant’s alleged practice of giving gift 24 cards to potential medical referrers; and (3) Defendant’s visiting of any medical referrer 25 she serviced while employed at Plaintiff. Plaintiff’s counsel asked the Court to enjoin 26 these activities under Plaintiff’s claims for unfair competition, tortuous interference with 27 business expectancies, and breach of contract. 28 Plaintiff has provided no basis for the Court to conclude that Defendant is 1 engaging in unfair competition, committing tortuous conduct, or breaching contracts by 2 encouraging potential medical referrers to use CORD:USE marketing material rather than 3 Plaintiff’s marketing material, or in offering gift cards to potential medical referrers. 4 Plaintiff’s counsel failed to identify why the suggestion that a medical referrer change 5 marketing materials is improper or illegal. Plaintiff’s counsel argued that Defendant is 6 obtaining restricted patient information in violation of federal law through the offering of 7 gift cards, but Plaintiff has provided no evidence to support that allegation with respect to 8 Defendant’s current activities. 9 The Court also concludes that Plaintiff has not provided a sufficient basis for the 10 Court to enjoin Defendant from calling on medical referrers she serviced while employed 11 by Plaintiff. As noted during the hearing, the Court concludes that California law will 12 govern Defendant’s employment contracts with Plaintiff. Defendant asserts, and Plaintiff 13 does not disagree, that California law invalidates covenants prohibiting a former 14 employee from calling on former customers. 15 injunctive relief, therefore, is not the mere fact that Defendant is calling on entities she 16 serviced while employed by Plaintiff, but the claim that Defendant is using Plaintiff’s 17 confidential and protected information in doing so. The Court concludes, however, that 18 Plaintiff has not presented evidence to support this argument. The affidavits attached to 19 Plaintiff’s TRO application simply allege that Defendant has been contacting medical 20 referrers she serviced while at Plaintiff. Doc. 11-1 at 12, 16. The declarations provide no 21 basis for concluding that Defendant has used confidential or proprietary information in 22 doing so. 23 database maintained by Plaintiff, but provides no information to suggest that Defendant 24 has improperly accessed the database. 25 Defendant is using confidential information, but provides no factual basis on which the 26 Court can rely. Although it is true that Defendant acquired information about Plaintiff’s 27 most effective medical referrers while employed at Plaintiff, the Court cannot conclude 28 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 -2- 1 improperly using Plaintiff’s confidential information. 2 For these reasons, Plaintiff has not shown that it is likely to succeed on the merits 3 of its argument that Defendant is engaging in unfair competition, tortuously interfering 4 with business expectancies, or breaching contracts by encouraging Plaintiff’s medical 5 referrers to use CORD:USE marketing materials rather than Plaintiff’s marketing 6 materials, by using gift cards in her solicitation of business, or by calling on Plaintiff’s 7 medical referrers. Because Plaintiff has not shown a likelihood of success on the merits 8 of these claims, the Court concludes that it is not entitled to temporary injunctive relief. 9 See Winter v. Natural Res. Def. Council, 555 U.S. 7, 129 S. Ct. 365, 374 (2008) (to 10 obtain preliminary injunctive relief, a plaintiff must show that it is likely to succeed on 11 the merits). 12 The Court recognizes that Plaintiff has a legitimate interest in its existing base of 13 medical referrers. As a result, the Court waives the requirement of Rule 26(d)(1). The 14 parties need not wait until after they have conferred under Rule 26(f) before commencing 15 discovery. 16 IT IS ORDERED: 17 1. Defendant’s motion to dismiss (Doc. 7) is denied. 18 2. Plaintiff’s application for a temporary restraining order (Doc. 11) is denied. 19 3. Plaintiff’s motion to expedite discovery (Doc. 12) is granted in part as described above. 20 21 4. The Court will set a case management conference by separate order. 22 Dated this 30th day of January, 2012. 23 24 25 26 27 28 -3-

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