Verliant Energy, Inc., et al v. Christopher John Barry

Filing 12

ORDER by Judge Jon S. Tigar GRANTING IN PART AND DENYING IN PART 11 PLAINTIFFS MOTION FOR A TEMPORARY RESTRAINING ORDER; DENYING MOTION FOR EXPEDITED DISCOVERY WITHOUT PREJUDICE; SETTING HEARING FOR JUNE 11 (Attachments: # 1 Exhibit) (jstlc2S, COURT STAFF) (Filed on 6/6/2014)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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VERLIANT ENERGY, INC., et al.,

Case No. 14-cv-02443-JST

Plaintiffs,
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v.
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CHRISTOPHER JOHN BARRY,
Defendant.

United States District Court
Northern District of California

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ORDER GRANTING IN PART AND
DENYING IN PART PLAINTIFFS’
MOTION FOR A TEMPORARY
RESTRAINING ORDER; DENYING
MOTION FOR EXPEDITED
DISCOVERY WITHOUT PREJUDICE;
SETTING HEARING FOR JUNE 11
Re: ECF No. 11

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Plaintiffs Verliant Energy, Inc. and Verliant Sciences, LLC (collectively, “Plaintiffs”) have

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moved for a temporary restraining order barring their former employee and Defendant Christopher
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John Barry (“Defendant”) from conducting various commercial activities, and ordering him to

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return intellectual and other property Plaintiffs claims to own. See Proposed Order at ECF No.
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11-3. Plaintiffs allege that they are California citizens and that Defendant is a British citizen, see
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Complaint ¶¶ 3-5, ECF No. 1, giving this court jurisdiction pursuant to 28 U.S.C. § 1332(a).
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Plaintiffs’ complaint also brings causes of action under federal law, giving this court jurisdiction

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pursuant to 28 U.S.C. § 1331.
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The same legal standard applies to a motion for a temporary restraining order and a motion
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for a preliminary injunction. See Stuhlbarg Int’l Sales Co. v. John D. Brush & Co., 240 F.3d 832,
839, n. 7 (9th Cir. 2001). A plaintiff seeking either remedy “must establish that he is likely to

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succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary
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relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.”

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Am. Trucking Associations, Inc. v. City of Los Angeles, 559 F.3d 1046, 1052 (9th Cir. 2009)
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(quoting Winter v. Nat. Resources Defense Council, 555 U.S. 7, 20 (2008)). Injunctive relief is
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“an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is

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entitled to such relief.” Winter, 555 U.S. at 22.

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To grant preliminary injunctive relief, a court must find that “a certain threshold showing

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is made on each factor.” Leiva-Perez v. Holder, 640 F.3d 962, 966 (9th Cir. 2011). Provided that

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this has occurred, in balancing the four factors, “‘serious questions going to the merits’ and a

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balance of hardships that tips sharply towards the plaintiff can support issuance of a preliminary

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injunction, so long as the plaintiff also shows that there is a likelihood of irreparable injury and

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that the injunction is in the public interest.” Alliance for the Wild Rockies v. Cottrell, 632 F.3d

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1127, 1135 (9th Cir. 2011).

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In addition, a movant seeking the issuance of an ex parte TRO must satisfy Rule 65(b) of

United States District Court
Northern District of California

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the Federal Rules of Civil Procedure, which requires a showing “that immediate and irreparable

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injury, loss, or damage will result to the movant before the adverse party can be heard in

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opposition” and certification of “efforts made to give notice and the reasons why it should not be

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required.” Fed. R. Civ. Pro. 65(b)(1).

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From the evidence before the Court at this time, Plaintiffs have demonstrated the

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probability of success on the merits of their breach of contract and misappropriation of trade secret

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claims. See Declaration of Andrew Chiu ¶¶ 5, 8-16, 32, 35-40. At the very least, there are serious

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questions going to the merits of both claims.

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Plaintiffs have also provided evidence that they will suffer the possibly irreversible loss of

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trade secrets and proprietary intellectual property, and the loss of significant business goodwill.

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Id. ¶ 47. As many courts have recognized, this type of harm is typically considered irreparable.

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See Stuhlbarg, 240 F.3d at 841; W. Directories, Inc. v. Golden Guide Directories, Inc., No. 09-cv-

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1625-CW, 2009 WL 1625945, at *6 (N.D. Cal. June 8, 2009). For this reason, the balance of

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equities tips sharply in Plaintiffs’ favor. Plaintiffs’ claimed irreparable harm significantly

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outweighs any harm to Defendant of being restrained from taking the actions described in the

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temporary restraining order during the short time this order will remain in effect. For similar

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reasons, an injunction is in the public interest.

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However, the purpose of an emergency temporary restraining order is to preserve the status
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quo while a request for fuller injunctive relief is under consideration. Several of Plaintiffs’

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requests for injunctive relief require Defendant to take affirmative actions, such as to send to

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Plaintiffs certain documents and data currently within his control. Therefore, the court will not

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grant Plaintiffs’ proposed order at this time to the extent it seeks those affirmative acts. The Court

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also will not issue an order against unnamed persons and entities who are not parties to the

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lawsuit. The court enters a version of Plaintiffs’ proposed order with the modifications displayed

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as Exhibit A to this order. The deletion of this language is without prejudice to Plaintiffs’ later

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demonstration that their proposed scope of order is both appropriate and enforceable.
The temporary restraining order will remain in effect only until this matter may be heard

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and Defendant has had an opportunity to respond. The Court hereby SETS this matter for hearing

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United States District Court
Northern District of California

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on Wednesday, June 11, 2014, at 9 a.m., 450 Golden Gate Avenue, Courtroom 9, 19th Floor, San

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Francisco, California. At that hearing, the court will consider whether to extend or dissolve the

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temporary restraining order and whether to issue an order to show cause why a preliminary

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injunction should not issue. Plaintiffs’ counsel is ORDERED to immediately provide notice of

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this order to Defendant and to file a declaration with the court within forty-eight hours of this

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order, describing the efforts he has made to provide such notice. Defendant, may, but is not

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required to, file any written response to Plaintiffs’ motion by 12:00 p.m. on June 10, 2014.

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In Plaintiffs’ motion (but not in any sworn declaration), counsel states that “VERLIANT is

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providing notice of the instant application to BARRY’s identified counsel by email, telephone and

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mail.” Motion, at 5 (ECF No. 11). The Court understands Plaintiffs to mean that they provided

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notice at or very shortly after the time that the motion was filed yesterday at 6:18 P.M. In his

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declaration, Plaintiffs’ counsel must also describe exactly what efforts he made to provide notice

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of the motion to Defendant and exactly when those actions were taken.
The Court also will not grant Plaintiffs’ request for expedited discovery or the issuance of

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a protective order. Instead, Plaintiffs and Defendants’ counsel are ordered to immediately meet

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and confer regarding (1) appropriate, limited, expedited discovery and (2) the contents of an

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appropriate protective order.

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Pursuant to Rule 23(c), Plaintiffs shall post a bond of $25,000 within three court days of
this order.
IT IS SO ORDERED.
Dated: June 6, 2014
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JON S. TIGAR
United States District Judge

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United States District Court
Northern District of California

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