LexJet, LLC v. Big Dog Media Solutions, LLC et al

Filing 40

ORDER granting 38 Motion for Permanent Injunction against Dustin Flowers. See order for details. Signed by Judge Elizabeth A. Kovachevich on 5/20/2014. (SN)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
LEXJET, LLC, a Florida limited liability
company,
Plaintiff,
v.

Case No: 8:14-cv-538-T-17TBM

BIG DOG MEDIA SOLUTIONS, LLC, a
Colorado limited liability company,
BARRETT SIMMS, an individual,
STEVEN CUDZILO, an individual, and
DUSTIN FLOWERS, an individual,
Defendants.

/
PERMANENT INJUNCTION BY CONSENT
AGAINST DEFENDANT DUSTIN FLOWERS
This cause came before the Court by agreement o f Plaintiff LexJet, LLC ("LexJet" or
"Plaintiff') and Defendant Dustin Flowers ("Flowers"). Upon consideration of Plaintiffs and
Flowers's agreement to resolve all of Plaintiffs claims brought against Flowers in this matter,
Plaintiffs and Flowers's stipulation to the following findings of fact and conclusions of law, and
the evidence before the Court, the Court enters a permanent injunction by consent against
Flowers as set forth below. Pursuant to Rules 52(a) and 65(d), Federal Rules o f Civil Procedure,
the Court enters the following injunction, findings of fact, and conclusions of law.

Findings of Fact
A.
1.

LexJet's Business
LexJet is a leading provider in the highly competitive and specialized industry of

selling professional-grade, wide-format inkjet printing equipment, media, and supplies. LexJet
primarily sells to end users who create graphics for their own commercial purposes or who resell

EXHIBIT 1

to other end users. From its headquarters in Sarasota, Florida, LexJet serves customers
throughout North America, including in Florida.
2.

LexJet competes with other sellers on a local, regional, and national level.

Because of the large number of competitors in the market and a limited pool o f customers, the
industry is highly competitive. This competition is driven in part by customer's changing needs
and technological advancements in the industry, which require LexJet to establish and maintain
strong customer relationships to survive and grow as a business.
3.

LexJet has been in business for nearly two decades. During that time, LexJet's

success has been largely attributable to its numerous and significant customer relationships,
including for example its relationships with MillerCoors, Coca-Cola, UPS Store, and Cafe Press,
and to its competitively priced products. For sales and marketing purposes, LexJet divides its
customers into a number of different market segments. These include:
•

Exhibit House - customers who produce graphics for conferences, trade shows,
job fairs, and other similar events;

•

Fine Art Reproduction - customers who reproduce fine art for the hospitality
industry or for retail sale;

•

In House - large corporate customers with internal graphics needs; and

•

Large Format Service Bureau - customers who produce banners, signs, posters,
and other large format graphics.

4.

LexJet has invested and continues to invest significant resources in developing

and maintaining these customer relationships. To identify the particular needs of its customers
and create solutions for those needs, LexJet focuses on delivering unparalleled customer service
and support. LexJet employs a team of sales representatives, who are the company's primary

2

points of contact with its customers and potential customers, to deliver this support. LexJet
spends significant time and resources preparing its sales representatives to interact with
customers.
5.

For example, LexJet provides eight weeks o f training to new employees on

developing customer relationships through phone sales. Although most of LexJet's customer
contacts are by telephone, LexJet's sales representatives also frequently have contact with
customers via e-mail. Accordingly, LexJet also provides business writing training to new
employees. Additionally, employees are given product training for all of LexJet's products and
are encouraged to talk to the company's customers about ways LexJet can help their businesses.
LexJet believes that it is not just selling products, but is selling a service to its customers. Thus,
LexJet's success in this industry is dependent in large part on its relationships and contacts with
its customers and potential customers. LexJet also attributes its success to its competitive pricing
structure. LexJet has developed and maintained competitive prices for its many products, which
enable the company to generate sales to new and existing customers.
6.

Throughout its existence, approximately 70% of LexJet's customers are repeat

customers. These repeat customers account for more than 85% of LexJet's revenues, on an
approximate yearly basis.

B.

LexJet's Confidential and Proprietary Customer List and Pricing List

7.

To perform their jobs, sales representatives are given access to specific

information concerning LexJet's customers and potential customers. This information is collected
and stored in an electronic database on LexJet's computer network. The information includes, but
is not limited to, customer contact information, including place of business, e-mail addresses and
phone numbers, and various individual contacts within the organization (such as sales manager,

3

production manager, and accounting manager), make and model o f printing or other graphics
equipment used by the customer, type of software used to drive the printers, previous marketing
contacts with the customer, the customer's web activity, a description of logged conversations
with the customer, billing and shipping information, a classification of the customer by LexJet
market segment, and the LexJet sales representative assigned to the account (the "Customer
List").
8.

Sales representatives are also given access to specific information concerning

LexJet's product pricing and costs. Like the Customer List, this information is collected and
stored in an electronic database on LexJet's computer network. The information includes, but is
not limited to, product descriptions, product IDs, prices, cost, weight, dimensions, and margin
(the "Pricing List").
9.

LexJet's Customer List and Pricing List are unique and proprietary collections of

information developed and used by LexJet in its business. The Customer List contains customer
information that is not publicly available and that is specific to LexJet. The Customer List also
contains information created by LexJet exclusively for employee training purposes. The Pricing
List contains pricing, cost, and margin information that is not publicly available and that is
specific to LexJet.
10.

LexJet sales representatives are authorized to use the Customer List and the

Pricing List in the scope of their employment to contact and sell products to current and potential
customers. As a result of their frequent contact with customers, sales representatives use the
Customer List and Pricing List on a regular basis as part of their jobs.
11.

LexJet considers the Customer List and Pricing List to be confidential and

proprietary property of the company for its exclusive use and benefit. LexJet has developed the

4

Customer List and Pricing List through the expenditure of substantial time and resources since
the company's founding, including but not limited to investments of time and resources in
employee training and creation and maintenance of a detailed database o f the company's
customers, i.e. the Customer List, and product pricing, i.e. the Pricing List. LexJet's success
depends in large part upon the confidential and proprietary information contained in its Customer
List and Pricing List.
12.

LexJet takes a number of steps to protect the confidentiality of the Customer List

and Pricing List. For example, before being hired, LexJet runs a background check on
prospective employees to discover criminal activity, to verify employment history, and to consult
references. LexJet also requires employees to sign a LexJet Corporation Team Guidebook (the
"Employee Guidebook"), which provides, among other things, that employees "will have access
to confidential and proprietary information including certain trade secrets. This information
includes, but is not limited to, personnel information, pricing, customer lists, contractual
agreements, intellectual property and marketing/sales strategies. It is a condition of employment
that you not disclose this information to third parties during or after employment." The
Employee Guidebook currently in effect is substantially and materially the same as the
Employee Guidebook in effect when Flowers worked for LexJet, as discussed below.
13.

Since

approximately

2006,

employees

are

also

required

to

sign

Acknowledgement of Information Security Policy, which provides, among other things, that:

I understand and agree that any computers, software, and storage media
provided to me by the company contains proprietary and 6 confidential
information about LexJet and its customers or its vendors, and that this is
and remains the property of the company at all times;

5

an

I agree that I shall not copy, duplicate (except for backup purposes as part
of my job here at LexJet), otherwise disclose, or allow anyone else to copy
or duplicate any of this information of software.
14.

LexJet further protects the confidentiality of its Customer List and Pricing List by

allowing employees to access the Customer List and Pricing List only through password
protected computers. Customers and non-LexJet employees are not given access to the Customer
List or Pricing List. The Customer List and Pricing List are intended to be used exclusively for
LexJet business. LexJet does not allow its former employees to use the Customer List or Pricing
List for any purpose.

C.

Former LexJet Employee Flowers

15.

In approximately January 2006, LexJet hired Flowers as a sales representative.

16.

During his employment, Flowers was given access to LexJet's Customer List and

Pricing List for use in connection with his employment. Flowers's employment was terminated
on May 9, 2013.
17.

Upon separation from LexJet, Flowers and LexJet entered into a Severance and

Release Agreement. The Severance and Release Agreement further protects the confidentiality of
the Customer List and Pricing List, and provides, among other things, that:

Mr. Flowers agrees to take all necessary means to safeguard and protect
the confidentiality of all Confidential Information. For the purposes o f this
Agreement, "Confidential Information" shall mean 7 all information, in
any form, possessed by LexJet and relating to LexJet's business,
operations, finances, legal matters, or Business Associates, regardless of
whether such information is verbal or written, was learned by Mr. Flowers
intentionally or inadvertently, or is learned directly or indirectly because
of Mr. Flowers' relationship with LexJet. Confidential Information shall
include all information that may legally be protected, even though portions
of such information may be publicly available, or may be available to
certain third parties or others having arrangements or contractual
relationships with LexJet. . . . The obligations of Mr. Flowers under this
Confidentiality provision shall continue in effect indefinitely, or as long as
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permitted by law. Without limiting the definition of Confidential
Information, the following are examples of Confidential Information:. . .
vi. Trade secrets, formulas, patterns, compilations, programs, materials,
methods, LexJet's, [sic] techniques, processes, know-how, and patentable
and non-patentable inventions related to Released Parties' businesses.
(emphasis in original).
18.

The Severance and Release Agreement also provides:
Mr. Flowers agrees that all documents, information, and intellectual
property purchased, possessed or created by any employee of LexJet,
including Mr. Flowers, during employment and relating to the Business
constitute Proprietary Information and are owned by LexJet. The
obligations of Mr. Flowers under this provision shall continue in effect
indefinitely, or for as along as permitted by law. Upon separation, Mr.
Flowers will:
i.
ii.
iii.

iv.

Immediately cease use of all Proprietary Information;
Return all copies of Proprietary Information to LexJet;
Promptly notify LexJet of any third party duplication, distribution, or
use of any Proprietary Information or Confidential Information
which comes to the attention of Mr. Flowers and provide LexJet with
whatever reasonable assistance is necessary to stop such activities;
and
Execute any documents and take all reasonable steps to carry out this
provision and protect LexJet's rights regarding its Proprietary
Information.

D.

Flowers Wrongfully Uses the Customer List and Pricing List

19.

Flowers is or at one time was in unauthorized possession o f the Customer List or

Pricing List. While working for Big Dog Media, Flowers improperly used the Customer List or
the Pricing List, or the information in those lists, to solicit LexJet's customers, including
customers in Florida, for Big Dog Media's competitive benefit. LexJet has provided and hopes
to continue providing goods and services in the future to its customers that Flowers contacted
while working for Big Dog Media.
20.

Flowers does not have authorization to possess or use the Customer List or

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Pricing List, or any of the information in those lists.
21.

LexJet will never know all of the customers contacted by Big Dog Media or

Flowers, and will never know all of the customers who stopped purchasing from LexJet because
of Big Dog Media's or Flowers's improper use of the Customer List and Pricing List. This
problem is compounded because of the repeat business LexJet enjoys from its customers.
Accordingly, it is impossible to quantify fully LexJet's lost sales.
22.

The termination of LexJet's relationships and expectancies with any of the

customers identified on the Customer List as a result o f the unauthorized and improper use o f
that information, along with the unauthorized and improper use of the Pricing List to solicit
business from LexJet's customers, will undermine LexJet's business and cause the company
irreparable harm.
23.

Any finding of fact deemed to be a conclusion of law is herby adopted as such.

Conclusions of Law
1.

This Court has the power to grant permanent injunctive relief upon a showing that

(1) plaintiff has a substantial likelihood of succeeding on the merits, (2) plaintiff will suffer
irreparable injury if the injunction is not granted, (3) the threatened injury to the plaintiff
outweighs the harm an injunction may cause the defendant, and (4) granting the injunction would
not disserve the public interest. Scott v. Roberts, 612 F.3d 1279, 1290 (11th Cir. 2010). The
burden is on the moving party to establish the prerequisites to injunctive relief. Id. (citing Burk v.
Augusta-Richmond County, 365 F.3d 1247, 1262-63 (11th Cir. 2004)).
2.

To prevail on its FUTSA claim, LexJet must prove at trial that LexJet's Customer

List and Pricing List are trade secrets pursuant to FUTSA and the Defendant's actions constitute
misappropriation under FUTSA. Based on Sections 688.002(2) and (4), Florida Statutes, and the

8

evidence before the Court, the Court concludes that LexJet's Customer List and Pricing List are
trade secrets pursuant to FUTSA and that Defendant's actions constitute misappropriation under
FUTSA.
3.

The Court finds that LexJet enjoys a substantial likelihood of prevailing on the

merits of its claim for violation of FUTSA, Count VI of the Complaint.
4.

For the other reasons set forth above, along with the evidence presented to the

Court, the Court also finds that LexJet is substantially likely to prevail on its remaining claims.
5.

The Court further finds that LexJet will suffer irreparable harm without a

permanent injunction maintaining the status quo.
6.

A permanent injunction in this case will serve the public interest.

7.

A bond requirement should be waived. This Court has the discretion when setting

the amount of the bond presumptively required by Rule 65, Federal Rules of Civil Procedure.
Elliott v. Kiesewetter, 98 F.3d 47, 60 (3d Cir. 1996); see also Broward Coalition o f Condos.,
Homeowners Ass'ns & Cmty. Orgs. Inc. v. Browning, 2008 WL 4791004 (N.D. Fla. Oct. 29,
2008).
8.

The waiver of the bond requirement is appropriate based on the public interest

aspects of this litigation, the fact that Flowers is unlikely to suffer significant damage from a
permanent injunction, and the fact that Flowers has agreed to entry of this permanent injunction.
9.

Any conclusion of law deemed to be a finding of fact is herby adopted as such.

Form and Scope of Permanent Injunction
10.

The Court finds that based on the forgoing analysis LexJet has satisfied the

requirements for a permanent injunction. Accordingly, it is ORDERED and ADJUDGED that a
permanent injunction is ENTERED against Defendant Dustin Flowers.

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11.

Flowers, his agents, servants, employees, successors, assigns, affiliates, joint

venturers, and any and all other persons in active concert, in privity, or in participation with him.
are hereby ENJOINED from:
(i)

(ii)

directly or indirectly interfering with LexJet's business and contractual
customer and referral relationships, including without limitation
contacting or soliciting for the purposes of business any party listed on the
Customer List; and

(iii)

12.

using, disclosing, divulging, copying, sharing, transferring, or relying on
any of LexJet's confidential and proprietary information, including without
limitation any of the information set forth in the Customer List or Pricing
List;

otherwise using the information set forth in LexJet's Customer List or
Pricing List for any competitive purpose.

Flowers is hereby Ordered to:
(i)

(ii)

13.

immediately produce to Plaintiffs counsel any and all documents or pieces
of information, as well as any related or derivative documents, no matter
the format, in his care, control, or custody that contain or contained
LexJet's Customer List or Pricing List; and
immediately produce to Plaintiffs counsel any computer or other
electronic storage device in his care, custody, or control on which he
accessed or saved LexJet's confidential and proprietary information,
including the Customer List or Pricing List.

This permanent injunction shall be effective immediately upon entry of this Order

and shall remain in effect until further order of this Court.
14.

The Court retains jurisdiction to make any other orders that are necessary or

proper to construe, enforce, or implement the terms o f this permanent injunction.