Sky Capital Group LLC v. Rojas et al

Filing 56

MEMORANDUM ORDER denying 35 Motion for Preliminary Injunction; granting 36 Motion for Leave to File; finding as moot 46 Motion to Strike. Signed by Judge Edward J. Lodge. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by cjm)

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF IDAHO S K Y CAPITAL GROUP, LLC, an Idaho l i m i t e d liability company, d/b/a Roady's T r u c k Stops, Plaintiff, vs. L A U R A ROJAS, an individual; CHUCK W I T Z E L , an individual; JOHN DOES 1-10; a n d JOHN DOE CORPS 1-10, Defendants. C a s e No. 1:09-CV-00083-EJL M E M O R A N D U M ORDER

B e f o r e the Court in the above-entitled matter is the Plaintiff's second mo t i o n for preliminary injunction, motion to amend complaint, and Defendants' mo t i o n to strike. The parties have filed their responsive briefing on the motions a n d the matters are ripe for the Court's consideration. Having fully reviewed the r e c o r d herein, the Court finds that the facts and legal arguments are adequately p r e s e n t e d in the briefs and record. Accordingly, in the interest of avoiding further d e l a y , and because the Court conclusively finds that the decisional process would n o t be significantly aided by oral argument, the motions shall be decided on the r e c o r d before this Court without oral argument. Local Rule 7.1(d)(2)(ii). Factual and Procedural Background O n February 3, 2009, the Plaintiff, Sky Capital Group, LLC, d/b/a R o a d y ' s Truck Stops (hereinafter "Roady's"), filed a complaint in Idaho state

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c o u r t against the Defendants, Laura Rojas and Chuck Witzel, who were employees o f two companies purchased by Roady's in early 2007. 1 After Roady's purchased t h e two companies, it hired the Defendants as Roady's employees and retained t h e m in their positions as Regional Managers. (Dkt. No. 1, p. 3). On November 2 4 , 2008, both Defendants ended their employment with Roady's. Thereafter, R o a d y ' s alleges the Defendants unlawfully accessed Roady's administrative and e ma i l servers for the purpose of stealing trade secrets and other proprietary i n f o r ma t i o n . (Dkt. No. 1, Ex. 11). Specifically, Roady's contends that the

D e f e n d a n t s accessed and stole their secret and proprietary information in the form o f customer lists, pricing information, and marketing information. Roady's claims t h e Defendants engaged in such conduct for the purpose of starting their own c o mp a n y , Interstate Truck Stop Network (ITN), to directly compete with Roady's. A s a result, Roady's initiated this lawsuit against the Defendants claiming: Breach o f Idaho Trade Secrets Act; Tortious Interference with Prospective Economic A d v a n t a g e ; Tortious Interference with Contract; Unfair Competition; Conversion; B r e a c h of Contract and Implied Covenants; and Slander and Business D i s p a r a g e me n t . (Dkt. No. 1). 2 Roady's also filed a motion for preliminary i n j u n c t i o n seeking to enjoin the Defendants from "using, disclosing, or t r a n s mi t t i n g any and all information improperly procured while Defendants were

Both Defendants are located outside of Idaho with Laura Rojas being a resident of the state of Florida a n d Chuck Witzel being a resident of the state of Wisconsin. (Dkt. No. 7, p. 3).
2

1

Roady's initially filed its complaint in Idaho state court and it was later removed by the Defendants to t h i s Court. (Dkt. No. 5). Roady's filed a motion to remand which was later withdrawn. (Dkt. No. 20).

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e mp l o y e d with Roady's, and improperly procured through access to Roady's c o mp u t e r systems and e-mail servers after terminating their employment with R o a d y ' s . The information includes but is not limited to: customer lists, vendor l i s t s , pricing information, marketing information and other valuable customer and c o mp a n y information." (Dkt. No. 3, pp. 1-2). The Court denied that motion on M a y 14, 2009. (Dkt. No. 31) R o a d y ' s has now filed its second motion for preliminary injunction s e e k i n g to enjoin the Defendants and ITN from "contacting any of Roady's current c u s t o me r s in violation of a valid non-compete agreement" and "from interfering w i t h Roady's current contracts." (Dkt. No. 35, p. 2). In addition, Roady's has mo v e d for leave to amend their complaint to add ITN as a named Defendant, a m e n d its jurisdictional allegations, add a cause of action for violation of the c o mp u t e r fraud abuse act, add additional allegations supporting its conversion and u n f a i r competition causes of action, and to amend its request for preliminary injunction. (Dkt. No. 36, p. 2). Defendants oppose the second motion for

p r e l i mi n a r y injunction and oppose the motion to amend the complaint to the extent t h a t it seeks to add ITN as a named Defendant. (Dkt. No. 37, 40). Analysis I. S e c o n d Motion for Preliminary Injunction A. S t a n d a r d of Law

P r e l i mi n a r y injunctions are designed to preserve the status quo p e n d i n g the ultimate outcome of litigation and to prevent irreparable harm. See
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S i e r r a On-Line, Inc. v. Phoenix Software, Inc., 739 F.2d 1415, 1422 (9th Cir. 1 9 8 4 ) . They are governed by Federal Rule of Civil Procedure 65(a). While courts a r e given considerable discretion in deciding whether a preliminary injunction s h o u l d enter, injunctive relief is not obtained as a matter of right and it is c o n s i d e r e d to be an extraordinary remedy that should not be granted unless the mo v a n t , by a clear showing, carries the burden of persuasion. See Sampson v. M u r r a y , 415 U.S. 61 (1974); Brotherhood of Locomotive Engineers v. MissouriK a n s a s - T e x a s R. Co., 363 U.S. 528 (1960); and Stanley v. Univ. of Southern C a l i f o r n i a , 13 F.3d 1313 (9th Cir. 1994). "A preliminary injunction is an

` e x t r a o r d i n a r y and drastic remedy, one that should not be granted unless the mo v a n t , by a clear showing, carries the burden of persuasion.'" Saini v. I n t e r n a t i o n a l Game Tech., 434 F.Supp.2d 913, 919 (D. Nev. 2006) (citing Mazurek v . Armstrong, 520 U.S. 968, 972 (1997) (quoting 11A Charles Alan Wright & A r t h u r Miller, Federal Practice & Procedure § 2948 (2d ed.1995)). Until recently the preliminary injunction standard in the Ninth Circuit w a s that a party is entitled to a preliminary injunction when it can demonstrate e i t h e r : (1) a combination of probable success on the merits and the possibility of i r r e p a r a b l e injury, or (2) the existence of serious questions going to the merits, w h e r e the balance of hardships tips sharply in plaintiff's favor. GoTo.com, Inc. v. W a l t Disney Co., 202 F.3d 1199, 1204-05 (9th Cir. 2000). The Supreme Court, h o w e v e r , found the "possibility of irreparable harm" standard to be too lenient and h e l d that a plaintiff must demonstrate that irreparable injury is "likely in the
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a b s e n c e of an injunction." Winter v. Natural Resources Defense Council, ___ U.S. _ _ _ , 129 S.Ct. 365, 375 (2008). "Issuing a preliminary injunction based only a p o s s i b i l i t y of irreparable harm is inconsistent with our characterization of i n j u n c t i v e relief as an extraordinary remedy that may only be awarded upon a clear s h o w i n g that the plaintiff is entitled to such relief." Id. at 375-76 (citing Mazurek v . Armstrong, 520 U.S. 968, 972 (1997) (per curiam)). Because a preliminary i n j u n c t i o n is an extraordinary remedy, "[i]n each case, courts `must balance the c o mp e t i n g claims of injury and must consider the effect on each party of the g r a n t i n g or withholding of the requested relief.'" Id. at 376 (citing Amoco

P r o d u c t i o n Co. v. Gambell, 480 U.S. 531, 542 (1987)). "In exercising their sound d i s c r e t i o n , courts of equity should pay particular regard for the public c o n s e q u e n c e s in employing the extraordinary remedy of injunction." Id. at 376-77 ( c i t a t i o n s and quotations omitted). Thus, no longer are plaintiffs granted the

p r e s u mp t i o n of irreparable harm upon a showing of a likelihood of success on the me r i t s . Instead, plaintiffs seeking a preliminary injunction must establish they are l i k e l y to succeed on the merits, that they are likely to suffer irreparable harm in t h e absence of preliminary relief, that the balance of equities tips in his favor, and t h a t an injunction is in the public interest. Jacobsen v. Katzer, CV 06-01905-JSW, 2 0 0 9 WL 29881 *8 (N.D. Cal. Jan. 5, 2009). The Ninth Circuit recently

r e c o g n i z e d the applicability of the Winter decision in this Circuit and stating the r u l e as: "A plaintiff seeking a preliminary injunction must establish that he is l i k e l y to succeed on the merits, that he is likely to suffer irreparable harm in the
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a b s e n c e of preliminary relief, that the balance of equities tips in his favor, and that a n injunction is in the public interest." See American Trucking Ass'ns, Inc. v. C i t y of Los Angeles, 559 F.3d 1046, 1052 (9th Cir 2009) (quoting Winter, 129 S . C t . at 374). This Court will apply the standard articulated in Winter and

r e c o g n i z e d in this Circuit. B. Discussion:

T h e Court's Order on the first motion for preliminary injunction c o n c l u d e d that Roady's had not demonstrated a likelihood of success on the merits o f some of its claim but had done so on certain of their other claims. (Dkt. No. 31). T h e Court denied that motion for preliminary injunction because it found that R o a d y ' s had not shown a likelihood of irreparable damage. Roady's now contends t h a t because the Court's prior Order denying preliminary injunction concluded t h a t it was likely to succeed on it claims for breach of contract and tortious i n t e r f e r e n c e , it need now only demonstrate irreparable injury in order to obtain a p r e l i mi n a r y injunction. (Dkt. No. 35, p. 4). Roady's argues this second motion f o r preliminary injunction is distinct from the first in that the relief is not based on a l l e g e d trade secret violations but is, instead, sought to "stop Defendants from b r e a c h i n g valid and enforceable covenant not to compete, and to otherwise stop D e f e n d a n t s from unlawfully interfering with contracts between Roady's and its c u r r e n t customers." (Dkt. No. 35, p. 3). Roady's argues it is suffering irreparable d a ma g e from the Defendant's continued violations of the non-compete agreement a n d continued interferences with Roady's current contracts such that Roady's is
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u n a b l e to meet some of its purchasing obligations in its vendor agreements which i s , they argue, immediately threatening to Roady's business model and viability. ( D k t . No. 35, p. 3). The harm is irreparable, Roady's maintains, because it is not mo n e t a r y but, instead, a loss of buying power in the form of leverage to negotiate d i s c o u n t s with national vendors. These vendor agreements have quotas requiring R o a d y ' s to purchase a certain amount of goods or services. (Dkt. No. 35, p. 6). T h e loss of customers, Roady's argues, impacts its ability to fulfill these quotas a n d could result in a loss of vendor agreements which, in turn, places Roady's e n t i r e business model in immediate jeopardy. Roady's points to thirty of its

p r e v i o u s customers, amounting to ten percent of its market share, that they claim h a v e terminated their contracts with Roady's. Of these customers, Roady's asserts, " a great majority" are now listed as ITN customers. 3 Defendants oppose the
3

The subject of the Defendants' motion to strike is the second declaration of Kelly Rhinehart. (Dkt. No. 4 5 ) . The objectionable declaration was filed in conjunction with Roady's reply briefing. (Dkt. No. 44). The declaration relates to Mr. Rhinehart's findings using e-Stop.com which, he states, shows truck stops w h o were serviced by Roady's during the Defendants' employment. Generally, supporting affidavits are to b e filed with the initial motion and memorandum so as to allow the opposing party an opportunity to r e s p o n d . See Fed. R. Civ. P. 6(c)(2). Reply affidavits are proper only where they are in response to the o p p o s i n g party's response brief. See Doolittle v. Structured Investments Co., LLC 2008 WL 5121591 *3 ( D . Idaho 2008) (quoting Peters v. Lincoln Elec. Co., 285 F.3d 456, 477 (6th Cir. 2002) ("While the Rules a r e silent as to timing matters with reply affidavits, precedent establishes that, in the face of new evidence, t h e court should permit the opposing party an opportunity to respond" so long as no element of surprise or p r e j u d i c e is created by doing so.)). Although the declaration states it is provided to rebut the Defendants' r e s p o n s e brief, (Dkt. No. 45, ¶ 10), the allegations contained therein relate to arguments made in Roady's o p e n i n g brief and first declaration. (Dkt. No. 35, p. 6) (Dkt. No. 35-2, ¶ 10). The second declaration p r o v i d e s more detailed information regarding Roady's allegations which the Defendants raised questions to i n their responsive briefing. The information was apparently obtained after the Defendants filed their r e s p o n s e briefing to specifically address the Defendants' arguments regarding the number and specifics of t h e truck stops lost allegedly due to the actions of the Defendants. As such, it does not appear Roady's a c t e d in bad faith in filing the second declaration. However, the Defendants may be prejudiced by not b e i n g afforded the opportunity to respond to the second declaration. The remedy would be to allow the D e f e n d a n t s an opportunity to file a sur reply for the limited purpose of addressing the second declaration. I n light of the Court's ruling on the motion, however, the Court finds it unnecessary for such sur reply to be f i l e d . As such, the Court will deem the motion to strike moot. The Court makes no determination as to

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mo t i o n arguing Roady's has not shown irreparable injury, the requested relief is t o o vague, and it seeks to apply the injunction upon ITN who is not a party to this c a s e . (Dkt. No. 40). 4 1. L i k e l i h o o d of Success on the Merits

T h e Court's determination as to the likelihood of success on the m e r i t s of Roady's claims remains the same as determined in the Court's prior O r d e r . (Dkt. No. 31). Accordingly, the Court will adopt the findings articulated in i t s prior order as to the likelihood of success and consider below whether Roady's h a s shown irreparable injury warranting entry of the requested preliminary injunction. 2. I r r e p a r a b l e Injury

A s stated previously, a preliminary injunction requires the moving p a r t y to show "he is likely to suffer irreparable harm in the absence of preliminary relief." Winter, 129 S.Ct. at 374. Irreparable harm exists where monetary

d a ma g e s provide inadequate relief, for example in cases involving environmental d a ma g e or human suffering. See, e.g., Save Our Sonoran, Inc. v. Flowers, 408 F . 3 d 1113, 1120, 1124 (9th Cir. 2005) (environmental); Rodde v. Bonta, 357 F.3d 9 8 8 , 999 (9th Cir. 2004) (human suffering). "[A] preliminary injunction should o n l y be granted if the movant does not have an adequate remedy at law." Saini,

whether such evidence is credible or admissible.
4

As to the applicability of any injunctive relief to ITN, in light of the Court's ruling on the motion for p r e l i mi n a r y injunction there is no need to discuss this issue. The Court will address ITN's status in this ma t t e r below in its discussion of the motion to amend the complaint.

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4 3 4 F.Supp.2d at 918-19 (citations omitted).

Applying these principles to the

r e c o r d here, the Court finds that Roady's has not demonstrated it is likely to suffer i r r e p a r a b l e harm. O n the first motion for preliminary injunction, Roady's argued the h a r ms it could suffer if Defendants are not enjoined from using their trade secrets i n c l u d e incurring a market disadvantage, revelation of their trade secrets, and the l o s s of existing and potential customers. The loss of customers, in particular, R o a d y ' s argued, is irreparable because there is little turnover in the industry and t h e industry's use of multi-year agreements. The second motion is not based on t r a d e secrets violations but, instead, upon alleged breaches of a covenant not to c o mp e t e and unlawful interference with contracts by the Defendants. Here again, t h e second motion for preliminary injunction is based on the loss of customers w h i c h , Roady's claims, results in the loss of buying power and leveraging of its c u s t o me r base and, ultimately, threatens its entire business model. (Dkt. No. 35, p . 2). T h e Court has considered these arguments but again concludes that a n y injury suffered by Roady's is not irreparable as it is recoverable through a mo n e t a r y award. "The possibility that adequate compensatory or other corrective r e l i e f will be available at a later date, in the ordinary course of litigation, weighs h e a v i l y against a claim of irreparable harm." Sampson v. Murray, 415 U.S. 61, 90 ( 1 9 7 4 ) ; Arcamuzi v. Cont'l Air Lines, Inc., 819 F.2d 935, 938 (9th Cir. 1987) ( " t e mp o r a r y economic loss alone generally is not a basis for injunctive relief").
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T h u s , preliminary injunctions are not warranted where they are based on a g e n e r a l i z e d threat of lost revenue, market value, and goodwill. Los Angeles

M e mo r i a l Coliseum Com'n v. Nat'l Football League, 634 F.2d 1197, 1202-03 (9th C i r . 1980). Losses that are merely speculative are also insufficient to support a f i n d i n g of irreparable harm; the injury, rather, must be actual or imminent. G o l d i e ' s Bookstore v. Sup Ct., 739 F.2d 466, 472 (9th Cir. 1984) (trial court's f i n d i n g s that plaintiff would lose goodwill and "untold" customers held s p e c u l a t i v e on appeal). The harm alleged by Roady's here is speculative and too g e n e r a l i z e d to be considered actual or imminent. T h e damages and harms alleged by Roady's are to its customer base a n d , in turn, its business model. Clearly Roady's, and any business for that matter, s u f f e r s harm when it loses customers. Such damages, however, amount to losses in r e v e n u e and profits which can be adequately redressed by monetary relief. See N a t i o n a l Football League, 634 F.2d at 1202-03. The Court does not disagree that if R o a d y ' s prevails, the damages it has suffered may be "substantial." However, mo n e t a r y damages, even if substantial, are recoverable and "[t]ypically, monetary h a r m does not constitute irreparable harm." California Pharmacists Ass'n v.

M a x w e l l - J o l l y , ___ F.3d ___, 2009 WL 975458 * 3 (9th Cir. 2009) (citing N a t i o n a l Football League, 634 F.2d at 1202); (Dkt. No. 27, p. 13-14). 5 Based on
5

In Maxwell-Jolly, the Ninth Circuit recently stated: W e note also that Supreme Court case law and some of our own cases clarify that economic d a ma g e s are not traditionally considered irreparable because the injury can later be remedied b y a damage award. See Sampson v. Murray, 415 U.S. 61, 90 (1974) ("[I]t seems clear that t h e temporary loss of income, ultimately to be recovered, does not usually constitute

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t h e foregoing, the Court concludes that Roady's has not demonstrated the e x i s t e n c e of irreparable damages and the motion for preliminary injunction is denied. 3. B a l a n c e of Hardships and the Public Interest

I n addition to, establishing a likelihood of success on the merits and l i k e l i h o o d fo suffering irreparable harm, a plaintiff seeking a preliminary i n j u n c t i o n must establish that the balance of equities tips in his favor, and that an i n j u n c t i o n is in the public interest. Winter, 129 S.Ct. at 374 (citations omitted); s e e also Continental Airlines v. Intra Brokers, Inc., 24 F.3d 1099, 1104 (9th Cir. 1 9 9 4 ) (stating that courts should balance hardships between plaintiffs and d e f e n d a n t s in considering injunctions). "The factors examined above-the balance o f equities and consideration of the public interest-are pertinent in assessing the p r o p r i e t y of any injunctive relief." Id. at 381. "The public interest inquiry

p r i ma r i l y addresses [the] impact on non-parties rather than parties." Sammartano v . First Judicial District Court, 303 F.3d 959, 974 (9th Cir. 2002). R o a d y ' s argues the requested injunction is narrowly tailored to p r e c l u d e the Defendants from violating "a valid covenant not to compete" and will

irreparable injury.... The possibility that adequate compensatory or other corrective relief will b e available at a later date, in the ordinary course of litigation, weighs heavily against a claim o f irreparable harm." (internal quotation omitted)); Rent-A-Center, Inc. v. Canyon Television & Appliance Rental, Inc., 944 F.2d 597, 603("It is true that economic injury alone does not s u p p o r t a finding of irreparable harm, because such injury can be remedied by a damage a w a r d . " ) ; Caribbean Marine Servs. Co. v. Baldridge, 844 F.2d 668, 676 (9th Cir.1988); A r c a mu z i v. Cont'l Air Lines, Inc., 819 F.2d 935, 938 (9th Cir.1987); Colo. River Indian T r i b e s v. Town of Parker, 776 F.2d 846, 850-51 (9th Cir.1985); Goldie's Bookstore, Inc. v. S u p e r i o r Court, 739 F.2d 466, 471(9th Cir.1984) ("Mere financial injury ... will not constitute i r r e p a r a b l e harm if adequate compensatory relief will be available in the course of litigation.").

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s t i l l allow the Defendants to compete in the market. (Dkt. No. 35, p. 7). The D e f e n d a n t s counter that the requested injunction is too broad and vague the result o f which would be to prevent the Defendants from contacting any truck stop t h e r e b y harming the Defendants and stifle competition and ingenuity. (Dkt. No. 4 0 ) . Since the public has an interest in keeping businesses open and also in e n f o r c i n g confidentiality agreements, the Court finds the public interest factor is a w a s h and the balance of hardships does not tip strongly in either sides favor. 4. Conclusion

B a s e d on the foregoing and the record at this stage, the Court c o n c l u d e s that Roady's has demonstrated that it is likely to succeed on some of its c l a i ms but has not demonstrated that it will suffer irreparable injury. G o T o . c o m, 202 F.3d at 1209 (citation omitted). See

The record before the Court

e v i d e n c e s that the damages are speculative and/or are calculable monetary d a m a g e s all of which are not irreparable. As such the motion for preliminary i n j u n c t i o n is denied. II. M o t i o n to Amend Complaint A. S t a n d a r d of Law

F e d e r a l Rule of Civil Procedure 15(a) provides that after responsive p l e a d i n g has been filed, a party may amend their pleading only by leave of the court or w r i t t e n consent of the adverse party. Such leave "shall be freely given when justice so r e q u i r e s . " Fed. R. Civ. P. 15(a). "Liberality in granting a plaintiff leave to amend is s u b j e c t to the qualification that the amendment not cause undue prejudice to the

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d e f e n d a n t , is not sought in bad faith, and is not futile. Additionally, the district court m a y consider the factor of undue delay." Bowles v. Reade, 198 F.3d 752, 757-58 (9th C i r . 1999) (citation omitted). "Five factors are taken into account to assess the propriety o f a motion for leave to amend: bad faith, undue delay, prejudice to the opposing party, f u t i l i t y of amendment, and whether the plaintiff has previously amended the complaint. F u t i l i t y alone can justify the denial of a motion to amend." Johnson v. Buckley, 356 F . 3 d 1067, 1077 (9th Cir. 2004) (quoting Nunes v. Ashcroft, 348 F.3d 815, 818 (9th Cir. 2003)).

B.

Discussion

P l a i n t i f f s request leave to file an amended complaint to add ITN as a n a m e d Defendant, amend its jurisdictional allegations, add a cause of action for v i o l a t i o n of the computer fraud abuse act, add additional allegations supporting its c o n v e r s i o n and unfair competition causes of action, and to amend its request for p r e l i mi n a r y injunction. (Dkt. No. 36, p. 2). Defendants oppose the second motion f o r preliminary injunction and oppose the motion to amend the complaint only to t h e extent that it seeks to add ITN as a named Defendant. (Dkt. No. 37, 40). As s u c h , the Court will grant the undisputed elements of the motion without d i s c u s s i o n and only take up that portion of the motion that is in dispute herein; the a d d i t i o n of ITN. Defendants argue joinder of ITN is not proper in this case under e i t h e r joinder rules, Rule 19 or Rule 20, of the Federal Rule of Civil Procedure and

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b e c a u s e this Court does not have personal jurisdiction over ITN. 6

Roady's

ma i n t a i n s its motion to amend under Rule 15 as well as personal jurisdiction over I T N are proper. This case was removed by the Defendants on February 27, 2009. ( D k t . No. 1). This Court issued its Scheduling Order on July 8, 2009 setting the d a t e for amending the pleadings or joining parties at December 18, 2009. (Dkt. N o . 34). On August 28, 2009, Roady's filed this motion to amend the complaint. A s such, the motion is timely. Moreover, motions to amend made under Rule 15 a r e to be freely given. Having considered the instant motion in light of the five f a c t o r s of bad faith, undue delay, prejudice to the opposing party, futility of

6

R u l e 19 governs required joinder of parties and states: ( a ) Persons Required to Be Joined if Feasible. ( 1 ) Required Party. A person who is subject to service of process and whose joinder will not d e p r i v e the court of subject-matter jurisdiction must be joined as a party if: (A) in that person's absence, the court cannot accord complete relief among e x i s t i n g parties; or (B) that person claims an interest relating to the subject of the action and is s o situated that disposing of the action in the person's absence may: (i) as a practical matter impair or impede the person's ability to protect the i n t e r e s t ; or (ii) leave an existing party subject to a substantial risk of incurring double, mu l t i p l e , or otherwise inconsistent obligations because of the interest. Rule 20 governs permissive joinder of parties and states: ( a ) Persons Who May Join or Be Joined. ( 1 ) Plaintiffs. Persons may join in one action as plaintiffs if: (A) they assert any right to relief jointly, severally, or in the alternative with respect to or a r i s i n g out of the same transaction, occurrence, or series of transactions or occurrences; and ( B ) any question of law or fact common to all plaintiffs will arise in the action.

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a m e n d m e n t , and whether the plaintiff has previously amended the complaint, the Court

f i n d s the same should be granted. Because it is still early in this case, the Court f i n d s the Defendants are not prejudiced by the addition of ITN as a named party in t h i s action nor does there appear to be any bad faith or undue delay in seeking s u c h amendment. This is also the first request to amend the pleadings. Moreover, t h e interests of justice are in favor of including ITN as a party to this action given t h e allegations and the claims involved. As to the question of whether or not personal jurisdiction exists over I T N , the Court has previously denied the Defendants' motion to dismiss for lack o f personal jurisdiction. (Dkt. No. 28). In doing so, the Court found that the c o n d u c t alleged by Roady's in its complaint as to the named Defendants was s u f f i c i e n t to demonstrate specific personal jurisdiction exists. (Dkt. Nos. 1, 28). T h e complaint's factual allegations against the Defendants included that their c o n d u c t was for the purpose of starting their own company, ITN, to directly

c o mp e t e with Roady's. (Dkt. Nos. 1, 28). Based on the reasoning in the Court's p r i o r Order (Dkt. No. 28), so too the Court finds that personal jurisdiction over I T N exists here. Accordingly, amending the complaint to add ITN is not futile and w i l l be granted. ORDER B a s e d on the foregoing and being fully advised in the premises, the C o u r t HEREBY ORDERS as follows:

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1)

P l a i n t i f f ' s Motion for Preliminary Injunction (Dkt. No. 35) is DENIED.

2)

P l a i n t i f f ' s Motion to Amend the Complaint (Dkt. No. 36) is GRANTED.

3)

D e f e n d a n t ' s Motion to Strike (Dkt. No. 46) is MOOT.

D A T E D : March 2, 2010

Honorable Edward J. Lodge U . S. District Judge

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