Mentor Worldwide LLC v. Craigo

Filing 51

ORDER denying 5 Plaintiff's Motion for Temporary Restraining Order and Preliminary Injunction Motion. Effective forthwith, the court's Temporary Restraining Order 24 , issued by this court on April 6, 2012, is DISSOLVED, RESCINDED, AND ANNULLED, by Judge Robert E. Blackburn on 4/26/12.(mjgsl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Robert E. Blackburn
Civil Case No. 12-cv-00776-REB-MJW
MENTOR WORLDWIDE LLC,
Plaintiff,
v.
KRISTINE CRAIGO,
Defendant.

ORDER DENYING PLAINTIFF’S MOTION FOR PRELIMINARY INJUNCTION
AND DISSOLVING TEMPORARY RESTRAINING ORDER
Blackburn, J.
This matter is before me on the motion for a preliminary injunction contained
within Plaintiff’s Motion for Temporary Restraining Order and Preliminary
Injunction [#5]1 filed March 28, 2012. The defendant filed a response [#18], and the
plaintiff filed a reply [#20]. Based on the plaintiff’s preliminary showing in support of its
motion for temporary restraining order, I issued a Temporary Restraining Order [#24]
on April 6, 2012. On April 20, 2012, I conducted a hearing on the motion for preliminary
injunction and heard argument from both the plaintiff and the defendant. I have
considered the evidence submitted in support of and opposition to the motion for
temporary restraining order and the evidence submitted in support of and opposition to
the motion for preliminary injunction, including the testimony presented at the April 20,
2012, hearing. Having considered this evidence and the arguments presented by the
1

“[#5]” is an example of the convention I use to identify the docket number assigned to a
specific paper by the court’s case management and electronic case filing system (CM/ECF). I use this
convention throughout this order.

parties in their briefs and at the April 20, 2012, hearing, I deny the motion for preliminary
injunction and dissolve the Temporary Restraining Order [#24].
I. JURISDICTION
I have jurisdiction over this case under 28 U.S.C. § 1332 (diversity).
II. STANDARD OF REVIEW
A preliminary injunction is extraordinary relief. A party seeking a preliminary
injunction must show: (1) that the movant has a substantial likelihood of eventual
success on the merits; (2) that the movant will suffer imminent and 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. Lundgrin v.
Claytor, 619 F.2d 61, 63 (10th Cir. 1980); Heideman v. S. Salt Lake City, 348 F.3d
1182, 1189 (10th Cir. 2003) (irreparable injury must be imminent). On balance, the
evidence in this case, considered in light of the relevant factors, does not support the
issuance of a preliminary injunction or a continuation of the temporary restraining order.
III. BACKGROUND
The defendant Kristine Craigo was an employee of the plaintiff Mentor Worldwide
LLC for about 21 years. Ms. Craigo was a plastic surgery sales representative working
in Mentor’s rocky mountain region. Ms. Craigo’s sales efforts focused on Mentor’s
breast implant products. On March 9, 2012, the Food and Drug Administration
approved Sientra Inc. to sell its silicone gel breast implants. The approval made Mentor
and Sientra direct competitors in the silicone gel breast implant business. On March 12,
2012, Ms. Craigo resigned her employment with Mentor and immediately went to work
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for Sientra.
In the few days before her resignation from Mentor, Ms. Craigo e-mailed three
copies of her Mentor customer list to her husband. These customer lists were
contained in spreadsheets created in the computer program Microsoft Excel. The two
spreadsheets e-mailed on March 7, 2012, were sorted in two different ways. Ms. Craigo
e-mailed a third copy of the spreadsheet to her husband on March 8, 2012. Certain
Mentor quota information was included in two of the spreadsheets. At Ms. Craigo’s
request, Mr. Craigo printed one or more copies of one or more of these spreadsheets.
An examination of an image of the hard drive of Mr. Craigo’s computer shows
that the three e-mails, to which the spreadsheets were attached, were deleted from Mr.
Craigo’s computer before the hard drive image was created. However, the image of the
hard drive on Mr. Craigo’s computer shows that the spreadsheets containing Ms.
Craigo’s Mentor customer lists still existed on the hard drive as of April 9, 2012, when
the hard drive image was created. The spreadsheets were located in the folder in which
the e-mail program on the computer automatically places an e-mail attachment. Those
spreadsheets have been removed from Mr. Craigo’s computer. There is no evidence in
the record that Mr. or Ms. Craigo made additional copies of these spreadsheets or
forwarded the spreadsheets to another computer at any time after March 7, 2012. Ms.
Craigo says she has returned to Mentor all printed copies of the spreadsheets.
According to Mentor, within a week of her resignation, Ms. Craigo was contacting
customers with whom Mentor has a business relationship, seeking to obtain business
for Sientra. In her declaration, Ms. Craigo says she “did not solicit or induce any Mentor
client to terminate their business or contractual relationship with Mentor and merely

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responded to inquiries to address Mentor’s misinformation about my departure.”
Craigo Declaration, ¶ 29. Evidence presented at the April 20, 2012, hearing indicates
that Ms. Craigo has contacted Mentor customers on behalf of Sientra since she began
working for Sientra. However, evidence presented at the hearing indicates that Sientra
provided Ms. Craigo lists of potential customers and directed Ms. Craigo to contact
those customers on behalf of Sientra.
Evidence presented at the April 20, 2012, hearing indicates that both Mentor and
Sientra maintain customer information on a website called salesforce.com. Mentor’s
information on salesforce.com is accessible only to a person who has a Mentor e-mail
address, the proper password, and other credentials. There is no evidence that Ms.
Craigo has access to Mentor’s information as maintained on salesforce.com.
According to Mentor’s motion [#5], Ms. Craigo failed to return to Mentor a variety
of items belonging to Mentor when Ms. Craigo resigned her position with Mentor. In her
declaration, Ms. Craigo says she returned to Mentor a large volume of items, including
all Mentor property that was in her possession at the time of her resignation. Craigo
Declaration, ¶¶ 3 - 4. Mentor concedes that Ms. Craigo returned some items, but
Mentor has not yet conducted a complete inventory of items returned by Ms. Craigo.
Included in the items returned to Mentor, Ms. Craigo says, was any printed copy of her
Mentor customer list, as printed by her husband a few days before her resignation.
IV. ANALYSIS
In its motion, Mentor contends that Ms. Craigo retains information that constitutes
trade secrets, including sales histories of Mentor customers, Mentor market share
analysis, Mentor product specifications, Mentor sales trends, names of surgeons who
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have done business with Mentor, the specialties of specific surgeons who are Mentor
customers, the buying patterns of such surgeons, Mentor’s pricing and consignment
sale arrangements with specific Mentor customers, and other information that is not
publicly available. Under these circumstances, Mentor asserts, Ms. Craigo cannot
solicit her former Mentor customers, now on behalf of Sientra, without misappropriating
the trade secret information she knows about those customers. Motion, pp. 6 - 7. On
this basis, Mentor seeks a preliminary injunction (1) that enjoins Ms. Craigo from using
and/or disclosing Mentor’s confidential information and trade secrets; (2) that enjoins
Ms. Craigo from working for Sientra or, alternatively, from contacting Mentor’s
customers; and (3) that requires Ms. Craigo to return to Mentor all Mentor property in
her possession.
Ms. Craigo contends that a preliminary injunction should not enter. According to
Ms. Craigo, she has returned all Mentor property that was in her possession, and she is
not using or disclosing Mentor’s confidential information and trade secrets in her work
with Sientra. Ms. Craigo concedes that she is contacting Mentor customers on behalf of
Sientra but, again, she says Sientra is providing her with the names and contact
information of customers she is to contact. Ms. Craigo contends also that the identifying
information, including name, address, and telephone number, of doctors who likely are
in need of products like those sold by Mentor and Sientra can be obtained readily from a
variety of public sources and, therefore, cannot be seen as a trade secret or confidential
information. According to Ms. Craigo, she is not using information she learned at
Mentor, such as pricing information, sales patterns, and buying trends, in her work with
Sientra.

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A. Likelihood of Success on the Merits
In its complaint [#1], Mentor asserts claims for (1) breach of the confidentiality
agreement between Mentor and Ms. Craigo; (2) actual and/or threatened
misappropriation of trade secrets, under Colorado’s version of the Uniform Trade
Secrets Act; (3) breach of duty of loyalty; and (4) tortious interference with prospective
business advantage. At the April 20, 2012 hearing, counsel for Mentor stated that
Mentor is basing its request for a preliminary injunction only on its misappropriation of
trade secrets claim. Given the evidence submitted to the court by the parties, including
the evidence presented at the April 20, 2012 hearing, I find and conclude that Mentor
has not established a likelihood of success on the merits of its second claim for theft of
trade secrets.
The parties disagree about whether Colorado’s version of the Uniform Trade
Secrets Act or California’s version of the same uniform act is applicable to this case.
For the purposes of this preliminary injunction analysis, the relevant provisions of the
two acts are substantively similar. §§7-74-101 - 7-74-110, C.R.S.; Cal. Civ. Code §§
3426 - 3426.11. Under both acts, improper disclosure or use of a trade secret can
constitute misappropriation of the trade secret. §7-74-102(2), C.R.S.; Cal. Civ. Code
§3426,1(b). Mentor contends, at minimum, that Ms. Craigo is using Mentor’s trade
secret information improperly in her work with Sientra. In addition, Mentor contends that
Ms. Craigo continues to possess physical items that contain Mentor’s trade secret
information.
Notably, a “customer list can be a trade secret when it is the end result of a long
process of culling the relevant information from lengthy and diverse sources, even if the

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original sources are publicly available.” Hertz v. Luzenac Group, 576 F.3d 1103, 1113
(10th Cir. 2009) (citations omitted) (applying Colorado Uniform Trade Secret Act). While
the names, addresses, and phone numbers of relevant Mentor customers may be
available from public sources and thus are not trade secrets, additional and highly
relevant information about these customers, such as sales histories, buying patterns,
pricing arrangements, customer consignment arrangements, and customer preferences,
likely are a trade secrets. There is evidence in the record that Ms. Craigo has
knowledge of such information. The key issue is whether Ms. Craigo is using such
trade secret information in her work with Sientra. On the current record, I conclude that
the evidence that Ms. Craigo has possession of or is using Mentor’s trade secret
information is not sufficient to demonstrate that Mentor has a substantial likelihood of
success on the merits of its trade secrets claim.
First, Ms. Craigo says she returned all physical items owned by Mentor that were
in her possession when she resigned her position with Mentor, including any such items
that contain trade secret information. There is little, if any, evidence in the record that
Ms. Craigo now possesses any physical items owned by Mentor that contain Mentor’s
trade secret information. Second, there is no evidence in the record that shows that Ms.
Craigo now has access to Mentor’s trade secret information as maintained on
salesforce.com. Third, it is undisputed that Ms. Craigo e-mailed to her husband, shortly
before her resignation, Excel spreadsheets containing a list of the customers she
served while she was employed by Mentor. The evidence in the record indicates that
those spreadsheets have been removed from Mr. Craigo’s computer. The record
contains no evidence that Mr. or Ms. Craigo have access to additional copies of those
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spreadsheets.
Fourth, there is little, if any, evidence in the record indicating that Ms. Craigo is
using Mentor’s trade secret information, as developed while she was employed by
Mentor. Ms. Craigo says Sientra tells her what potential customers to contact and, as a
result, Ms. Craigo says she is not using information from her Mentor customer list. The
record contains no evidence that, in making those contacts on behalf of Sientra, Ms.
Craigo is using Mentor’s trade secret information. There is significant evidence in the
record indicating that Sientra repeatedly has instructed Ms. Craigo not to use any
information she acquired while working for Mentor.
Based on the evidence in the record, I conclude that Mentor has not
demonstrated a substantial likelihood of success on its claim for theft of trade secrets.
This is so because the evidence in the record does not demonstrate a substantial
likelihood that Mentor can prove its contention that Ms. Craigo improperly possesses or
improperly is disclosing or using Mentor’s trade secret information.
B. Irreparable Injury
Generally, to establish irreparable injury for the purpose of a temporary
restraining order, the plaintiffs must show that they will suffer irreparable injury, and that
the irreparable injury is of such imminence that there is a clear and present need for
equitable relief to prevent the harm. Heideman v. S. Salt Lake City, 348 F.3d 1182,
1189 (10th Cir. 2003). In the context of a trade secret, the Colorado Uniform Trade
Secrets Act provides that a temporary injunction “may be granted on such equitable
terms as the court deems reasonable to prevent or restrain actual or threatened
misappropriation of a trade secret.” §7-74-103, C.R.S. The California act provides that
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“(a)ctual or threatened misappropriation may be enjoined.” Cal. Civ. Code § 3426.2(a).
“[W]hen the evidence shows that the defendants are engaged in, or about to be
engaged in, the act or practices prohibited by a statute which provides for injunctive
relief to prevent such violations, irreparable harm to the plaintiffs need not be shown.”
Star Fuel Marts, LLC v. Sam's East, Inc., 362 F.3d 639, 651 (10th Cir. 2004). In
essence, if a threatened or actual misappropriation of a trade secret is shown,
irreparable harm properly is presumed.
In this case, the evidence in the record does not demonstrate a substantial
likelihood that Mentor can prove a threatened or actual misappropriation of a Mentor
trade secret by Ms. Craigo. In that circumstance, irreparable injury may not be
presumed. Setting any presumption aside, absent appropriate evidence of a threatened
or actual misappropriation of a trade secret by Ms. Craigo, Mentor cannot demonstrate
irreparable injury caused by such a threatened or actual misappropriation. Thus,
Mentor has not demonstrated irreparable injury.
V. CONCLUSION & ORDERS
Absent evidence sufficient to show a substantial likelihood of success on the
merits of its theft of trade secrets claim, and absent evidence to show that Mentor will
suffer imminent and irreparable injury unless a preliminary injunction issues, Mentor is
not entitled to a preliminary injunction. Given the lack of sufficient evidence on the first
two relevant factors, there is no need to analyze the third and fourth preliminary
injunction factors. Further, after consideration of the more complete evidentiary
presentation made in relation to Mentor’s motion for preliminary injunction, as compared
to the evidence submitted in support of the motion for temporary restraining order, I
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conclude that the Temporary Restraining Order [#24] must be lifted.
THEREFORE, IT IS ORDERED as follows:
1. That insofar as Mentor seeks a preliminary injunction in the Plaintiff’s Motion
for Temporary Restraining Order and Preliminary Injunction [#5] filed March 28,
2012, the motion is DENIED;
2. That effective forthwith, the court’s Temporary Restraining Order [#24],
issued by this court on April 6, 2012, is DISSOLVED, RESCINDED, AND ANNULLED.
Dated at Denver, Colorado, April 26, 2012,
BY THE COURT:

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