MWI Veterinary Supply Co. v. Wotton et al

Filing 71

MEMORANDUM DECISION AND ORDER granting 39 Motion for TRO and for Preliminary Injunction; finding as moot 61 Motion to Strike. This injunction will last through the term of the non-compete provisions in the APA (as extended by the Court through 6/ 8/2013, and the EA. IT IS FURTHER ORDERED, pursuant to Rule 65(c) MWI post a bond of $10,000 immediately. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjm)(Emailed to hg and jd in Finance by cjm.)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

MWI VETERINARY SUPPLY CO.,
Plaintiff,

Case No. 1:12-CV-055-BLW
MEMORANDUM DECISION AND
ORDER

v.

HAROLD M. WOTTON, III and DARROLL
WOTTON,
Defendants.
INTRODUCTION
The Court has before it a motion for preliminary injunction filed by plaintiff MWI.
The Court heard oral argument on August 29, 2012, and took the motion under
advisement. For the reasons explained below, the Court will grant the motion.
FACTUAL BACKGROUND
In 1997, Harold Wotton formed a business called Securos to sell products in the
field of veterinary orthopedics. Six years later he formed another business – IVDN – to
provide wholesale distribution services primarily to the veterinary industry. In 2004,
Harold’s brother Darroll joined Harold at Securos.
Eventually the Wottons received 5 patents for products used to make veterinary
orthopedic surgery more efficient. Securos and IVDN sold not only the patented products
Memorandum Decision & Order - 1

but also other items such as hand-held tools (for example, surgical scissors, scalpels and
forceps), bone screws, sutures, and bandages. See Harold Wotton Affidavit (Dkt. No. 48)
at ¶ 11.
By 2006, one of Securos main customers was Webster Veterinary Supply. Id. at
¶ 13. Securos granted to Webster the right to be the “exclusive reseller” of Securos’s
patented veterinary equipment, allowing Webster to maintain a competitive advantage
over its “major competitor” – MWI – according to the Wottons. Id. at ¶ 16.
In 2007, MWI approached the Wottons about buying the assets of Securos/IVDN,
including the 5 patents. Id. at ¶ 15. The Wottons understood that MWI intended, with
this purchase, to (1) take away the competitive advantage Webster had as exclusive
reseller of Securos’s patented equipment, and (2) to expand MWI’s presence on the East
Coast, where Webster was the largest veterinary supply company. Id. at ¶ 16.
MWI and the Wottons entered into two agreements known as the Asset Purchase
Agreement (APA) and the Key Employee Employment Agreement (EA).1 The APA
covered MWI’s purchase of the assets of Securos/IVDN, including the 5 patents. The EA
governed the terms of the Wottons’ continued employment with MWI, by which they
would operate what was now called the Securos/IVDN division of MWI.
Each agreement contained a separate non-compete clause that barred the Wottons
from competing with MWI. The purpose of the clauses was set forth in the APA: The

1

There were actually two APAs and two EAs.

Memorandum Decision & Order - 2

provisions were necessary to provide MWI with “a period of time to benefit from the
purchase, and that [the Wottons] should be restricted from competing with [MWI’s]
business acquired from [the Wottons] or benefitting from the Proprietary Information and
Goodwill purchased by [MWI].” See Exhibit 1 to Complaint (Dkt. No. 1) at ¶ 9.1.
Each clause took effect at a different time and had a different term. The APA noncompete clause started immediately – on the day of closing, June 8, 2007 – and ran for 5
years until June 8, 2012. The EA non-compete provision did not go into effect until the
Wottons’s employment with MWI ended, and it lasted for 2 years thereafter. Because the
Wottons left MWI within the last year, the EA non-compete provision remains in effect.
The two provisions differed not only in time but also in scope. The APA provision
barred the Wottons from, among other things, (1) selling any products “that were
provided or sold by [IVDN/Securos] . . . prior to Closing”; and from (2) solicit[ing] any
of [MWI]’s customers, clients or employees for the purpose of establishing relationships
for any business or
services that directly or indirectly compete with [MWI]’s business or causing any client,
customer or employee to terminate any relationship with [MWI].”
The EA non-compete clause, on the other hand, states that the Wottons will not
“compete” with MWI. The word “compete” is defined by the agreement to mean “to
engage in the business of veterinary orthopedic equipment design, manufacture . . .[or]
selling . . . .”
The Wottons signed the agreements on June 8, 2007. Pursuant to the agreements,
Memorandum Decision & Order - 3

MWI paid the Wottons $5 million and employed them as executives running the
Securos/IVDN division of MWI.
In February of 2008, while working at MWI under the terms of the two
agreements, the Wottons organized Stealth Medical LLC, and brought in Jay Ray to help
with manufacturing products which, the Wottons allege, would be used for surgery on
humans, not animals. See Wotton Affidavit (Dkt. No. 48) at ¶ 30. The Wottons allege that
for the next three years, Stealth remained “an idle shell.” Id. at ¶ 33. In 2011, Stealth
purchased STAR machine which made bone screws for use on animals or humans. The
Wottons leased the STAR machine to a German company, Detech, which made animal
screws and sold them to MWI. The Wottons allege that they themselves never sold bone
screws to MWI but simply rented the machine to Detech who sold the screws to MWI.
Id. at ¶ 38. The Wottons further allege that Detech sold exclusively to MWI, never
competed with MWI, and sold the screws at the lowest price on the market, thereby
offering a substantial benefit to MWI. Id.
Before being purchased by MWI, the Wottons’ business (Securos) purchased
surgical instruments from vendors in Germany, repackaged them for individual sale, and
sold them to Webster. Id. at ¶ 45. Immediately after the sale of Securos to MWI,
Webster cut off all dealings with what was now the Securos division of MWI.
Thereafter, the Wottons, in their own words, “helped the [German] vendors to
establish a direct business relationship with Webster.” Id. at ¶ 48. Less than a year later,
however, Webster decided to cease doing business with the vendors due to foreign
Memorandum Decision & Order - 4

currency problems and import law compliance issues. Id. Thereafter, the Wottons
“placed the vendors in contact” with two friends of theirs – Jay Ray and Ryan Horgan –
for the purpose of setting up an American company “to serve as a U.S. wholesaler for the
vendors.” Id. at ¶¶ 49,50.
To that end, Jay and Horgan created Globe Source, LLC. Globe sold to Webster
the same veterinary orthopedic items – forceps, scissors, and bone screws, among other
things – that Securos/IVDN sold prior to its sale to MWI. Id. at ¶ 69. The Wottons allege
that they “did not have any connection with Globe at that point in time,” id. at ¶ 50, and
other than some reimbursements “never received a penny” from Globe. Id. at ¶ 69. And
yet by their own admission, the Wottons facilitated the creation of Globe by introducing
two friends to the vendors with the goal of selling veterinary orthopedic supplies to
Webster, MWI’s main competitor. Id. at ¶ 49.
After facilitating Globe’s creation, the Wottons gave advice to its executives. The
Wottons admit that in 2009, during a time the APA barred them from competing with
MWI, they “would respond” to e-mails from Jay Ray and Ryan Horgan “asking for
advice or contact information of certain companies.” Id. at ¶ 51. On one occasion in
2009, Ray sent an e-mail to the Wottons asking for advice concerning a request from
Webster. Id. at ¶ 52. The Wottons cannot recall if they responded. Id. The Wottens
explain that in 2009, they “did not hold any positions at Globe” and thus “understood
their emails to be nothing more than emails seeking advice from friends.” Id. at ¶ 51.
This explanation does nothing, however, to alter the Wottons’ admission that they gave
Memorandum Decision & Order - 5

advice to Globe – a company set up to sell equipment to Webster – during the time they
had agreed, under the APA, to not compete with MWI.
Finally, the Wottons became members of Globe: They admit that they “agreed to
join Globe as members in 2010 . . . .” Id. at ¶ 53. The Wottons held their interest in
Globe through two family trusts knows as the “MBH Family Trust 1" and the “MBH
Family Trust 2.” See Ray Affidavit (Dkt. No. 49) at ¶ 12. The undisputed public record,
contained in a filing with the Massachusetts Secretary of the Commonwealth, shows that
the two family trusts became members of Globe in January of 2010. See Exhibit K (Dkt.
No. 39-6). There is no dispute that the APA non-compete agreement was in effect during
the entirety of 2010. The Wottons explain that they never “paid for our membership
shares” and that they “ceased our limited involvement with Globe effective as of
December 31, 2010.” Wotton Affidavit, supra, at ¶ 53. Jay Ray asserts that although the
Wottons were members of Globe during 2010, they “were not involved in the day-to-day
workings of Globe.” Id. Presently, the Wottons claim to “have absolutely no direct or
indirect interest in Globe and have no intention establishing any relationship with Globe
in the future.” Id. at ¶ 60.
On June 8, 2012, the date the APA non-compete provision expired of its own
terms but a date on which the EA non-compete provision was in effect, the Wottons
launched a new business called Everost. Id. at ¶ 65. The Wottons claim they “do not
plan to use Everost to compete with MWI in violation of the EA (i.e., with respect to
veterinary orthopedic equipment).” Id. at 66. However, the Wottons do intend to sell,
Memorandum Decision & Order - 6

through Everost, “products such as handheld instruments (scissors, forceps, scalpels, etc.),
implants, consumables, and the like in the United States, Canada, Germany, and Dubai2 . .
. .” Id. at ¶ 66. The Wottons interpret the EA non-compete clause to allow the sale of
such products because that provision is limited to “veterinary orthopedic equipment,”
which, under their reading, does not include handheld instruments and consumables.
MWI filed this lawsuit in January of 2012, alleging that the Wottons breached the
two non-compete clauses contained in the APA and the EA. In February of 2012, MWI
filed a motion for injunctive relief, and the Court held a hearing on the motion on
February 16, 2012. At that hearing, counsel for MWI represented that the Wottons had
severed all ties with Globe. The Court relied on that representation, finding that there
was no need for an injunction because the Wottons were not presently engaged in
competition and had no imminent plans to do so.
MWI has now filed a second motion for injunctive relief. MWI argues that
circumstances have changed now that (1) the Wottons have formed Everost, and (2) the
record contains more detail about the Wottons’ dealings during the time both noncompete provisions were in effect. The Court will analyze that motion after reviewing the
legal standard governing the issuance of injunctions.
LEGAL STANDARD
To be entitled to injunctive relief, MWI must show each of the following: (1) a

2

These are the same countries declared off-limits to competition in the EA and APA
non-compete clauses.
Memorandum Decision & Order - 7

likelihood of success on the merits; (2) that irreparable harm is likely, not just possible, if
the injunction is not granted; (3) that the balance of equities tips in its favor; and (4) that
an injunction is in the public interest. Alliance For The Wild Rockies v. Cottrell, 632 F.3d
1127 (9th Cir. 2011).
ANALYSIS
Likelihood of Success on the Merits
The APA non-compete provision banned the Wottons from selling any products
that they sold through IVDN/Securos prior to the sale to MWI. The Wottons now use
Everost to sell products – handheld instruments and consumables – that they agree were
sold through IVDN/Securos prior to the sale to MWI. See Wotton Affidavit, supra at ¶ 69.
The Wottons argue, however, that Everost was not created until June 8, 2012, the date the
APA non-compete clause expired. MWI responds that the Court should equitably extend
the clause for a year due to the Wottons’ conduct in competing with MWI through Globe
during the effective period of the APA non-compete clause.
MWI cites a number of cases extending a contractual ban on competition when
evidence showed that the ban was ignored during its term. Some of those cases extended
the ban only after a finding by a jury (or a judge following summary judgment) that the
defendant breached the ban. See, e.g., Overholt Crop Ins. Serv. Co. v. Travis, 941 F.2d
1361 (8th Cir. 1991) (court extended term of non-solicitation agreement following jury
verdict that defendant was in breach); TEKsystems, Inc. v. Bolton, 2010 WL 447782
(D.Md. Feb. 4, 2010) (court extended term of non-compete agreement following grant of
Memorandum Decision & Order - 8

summary judgment that defendant was in breach). These courts took the extraordinary
step of extending a contractual ban – essentially by re-writing the contract between the
parties – only because the record contained solid evidence that the ban had been ignored
during its term.
That solid record is rarely available at the early stage in a case where TROs or
even preliminary injunctions are at issue. One such rare case occurred in Idaho. WGI
Heavy Minerals Inc v. Gorrill, 2006 WL 6105887 (Id.1stJud.Dist. April 21, 2006). There,
the court considered a request to enforce a non-compete clause and enjoin defendant from
competing with plaintiff. The case was just a few months old at the time. Even on the
basis of that meager record, it was clear the defendant was working for a company in
competition with the plaintiff. Accordingly, even though the non-compete clause had
expired, the court extended the ban and issued the injunction.3
Another rare instance is found in a New York case. Although the case was just a
few months old, the court found a sufficient record establishing the defendant’s
competition with plaintiff to justify a judicial extension of the term of the non-compete
clause. See New York Real Estate Inst., Inc. v. Edelman, 839 N.Y.S.2d 488

3

Idaho law, unlike Federal law, does not require a showing of irreparable harm as a
condition for injunctive relief. See Id.R.Civ.P. 65(e)(2) (requiring a showing of either “great” or
“irreparable” harm). As will be discussed further, MWI has shown irreparable harm here, and so
the Court need not address whether the more lenient Idaho standard applies. See generally Sims
Snowboards, Inc. v. Kelly, 863 F.2d 643, 646 (9th Cir. 1988) (applying state law injunction
standard where it did not conflict with Fed.R.Civ.P. 65).
Memorandum Decision & Order - 9

(N.Y.App.Div.2007).4
These cases state the exception, not the rule. A solid record is required to extend a
ban on competition beyond the time agreed to by the parties, and the vast majority of all
cases will lack that precondition at the early stage of litigation when most motions for
injunctive relief are filed. This case, however, presents one of those rare situations where
a solid record exists early in the proceedings.
The Court’s statement of facts, set forth above, was taken entirely from three
affidavits submitted by the Wottons. Harold Wotton’s affidavit contained most of the
information, and it was confirmed by an affidavit filed by Harold’s brother, Darroll
Wotton. The third affidavit was filed by Jay Ray, the Wottons’ friend and business
associate.
Those three submissions by the Wottons establish that (1) The Wottons facilitated
the creation of Globe so that vendors could restore their sales to Webster; (2) Globe sold
to Webster the same type of veterinary supplies sold by MWI; (3) Webster competed
directly with MWI; (4) The Wottons advised Globe’s executives; (5) The Wottons
became members of Globe in 2010; (6) The Wottons understood that MWI had purchased
the Wottons’ business to obtain a competitive advantage over Webster; (6) During the
entire time that the events just described occurred, the Wottons had agreed, under the

4

This case must be read together with the lower court opinion, New York Real Estate
Inst., Inc. v. Edelman, 2006 WL 4470801 (N.Y.Sup.Ct. 2006), to obtain a full statement of the
underlying facts.
Memorandum Decision & Order - 10

APA, “to not compete with [MWI].”
Even at this early stage in the case, these six points provide strong evidence that
the Wottons competed with MWI by facilitating, advising, and joining Globe.5 Globe
sold to Webster, MWI’s main competitor, the same type of veterinary supplies sold by
MWI. Webster was no random customer of Globe’s; the Wottons facilitated the creation
of Globe to gain Webster’s business. And once Globe was up and running, the Wottons
advised its executives on operations and eventually became members in 2010. These
points are all established by the Wottons’ own submissions and hence provide the
necessary solid record supporting the extension of the APA non-compete provision under
the case law discussed above.
The Court will therefore extend the APA non-compete provision for a year,
representing the time period in 2010 that the Wottons, through their two family trusts,
became members of Globe. Accordingly, the Court finds that the APA remains in effect
and expires on June 8, 2013.
In determining the likelihood of success on the merits, the Court notes that the
Idaho courts are willing to enforce restrictive covenants negotiated as part of a sale of a
business. Bybee v. Isaac, 178 P.3d 616, 622 (Id.Sup.Ct. 2008). While the Wottons allege
that they have completely ended their involvement with Globe, they are going forward

5

The Court at this early stage in the litigation is not making a finding of fact or
conclusion of law on the issue. It is enough – at the injunction stage where likelihood of success
is the standard – to find that strong evidence supports the extension of the non-compete clause,
as set forth in the cases cited above.
Memorandum Decision & Order - 11

with Everost, and plan to sell handheld instruments and consumables used in veterinary
orthopedic surgery like scissors, forceps, scalpels, implants, and bone screws. MWI is
likely to prevail on its argument that the sale of such products violates the non-compete
provision of the APA. The APA bars the Wottons from selling any products that “were
provided or sold by [IVDN/Securos] . . . prior to closing,” and it is undisputed that the
portion of Everost’s product line listed above falls into that category. For all these
reasons, the Court finds it likely that MWI will prevail in its argument that Everost’s sales
of handheld instruments and consumables used in veterinary orthopedic surgery like
scissors, forceps, scalpels, implants, and bone screws violates the APA non-compete
clause that the Court has extended until June 8, 2013, and the Court will enjoin that
conduct.
Even if the APA non-compete clause should not be extended, the Court finds that
MWI is likely to prevail on its argument that the EA non-compete clause bars Everost’s
sales of these items. That non-compete provision applies to “veterinary orthopedic
equipment.” The Wottons argue that this phrase has a “specific industry meaning” that
does not include the items they intend to sell through Everost, items like (1) one-time
consumables like sutures and bandages, (2) non-reusable items like implants and bone
screws, or (3) simple re-usable tools such as surgical scissors, scalpel blades, or forceps.
See Wotton Affidavit, supra at ¶ 20.
Trade usage may be used to interpret contracts under Idaho’s UCC. See I.C. § 282-202. Under the UCC, contract terms may be “explained or supplemented” by, among
Memorandum Decision & Order - 12

other things, the “usage of trade.” Moreover, Official Comment 1(c) to the statute
“definitely rejects” any requirement that the court find an ambiguity before resorting to
trade usage as an interpretation aid.
But if the Idaho UCC is not applicable, the law is quite different – in that case,
trade usage, or any extrinsic evidence for that matter, may be examined only after the
court has found the phrase ambiguous. Kepler-Fleenor v Fremont County, 268 P.3d
1159, 1163 (Id.Sup.Ct. 2012). “For a contract term to be ambiguous, there must be at
least two different reasonable interpretations of the term, or it must be nonsensical.”
Swanson v. Beco Const. Co., 145 Idaho 59, 62, 175 P.3d 748, 751 (2007).
Under Idaho law, an ambiguity could be either patent (on its face) or latent (as
applied to the facts of the case). Kepler-Fleenor, 268 P.3d at 1163. It is likely that
neither applies here. The phrase “veterinary orthopedic equipment” does not appear on
its face to be ambiguous. The phrase simply refers to implements used on animals to
correct or prevent injuries or disorders of their bones or associated structures like tendons
and ligaments. See Merriam-Webster Dictionary (definitions of “veterinary,”
“orthopedic,” & “equipment”). There also appears to be no latent ambiguity when this
definition is applied to the facts of this case. While the Wottons’ counsel argued that it is
unclear whether the phrase refers to veterinary orthopedic implements that are merely
“used” or whether it refers only to those that are “necessary,” the plain meaning of the
phrase would include both.
Thus, the Court could apply trade usage only if the Idaho UCC applies to the
Memorandum Decision & Order - 13

contracts at issue. To answer that question, the Court must determine if the EA and APA
contracts relate to the sale of goods. Fox v Mountain West Elec., Inc., 52 P.3d 848, 855
(Id.Sup.Ct. 2002). The EA contract, standing alone, is simply an employment contract
and does not relate to the sale of goods. Id. The two contracts considered together
involve both goods and non-goods. The Idaho UCC applies to such mixed contracts if
they are predominately for the sale of goods, and only incidentally involve the sale of
non-goods. Id. In characterizing this sale, the Wottons allege that “one of MWI’s main
reasons for acquiring Securos was to acquire the Patented Veterinary Orthopedic
Equipment.” See Wotton Affidavit, supra at ¶ 21. The Wottons are referring to the
crucial importance of their 5 patents in the sale to MWI. Patents are not goods under the
UCC. See U.S. Test, Inc. v. NDE Environmental Corp., 196 F.3d 1376, 1382 (Fed.Cir.
1999) (holding that “a patent is a right to exclude, not a ‘good’ [under the UCC]”). Thus,
it appears likely that whether the EA is considered alone or together with the APA, the
Idaho UCC does not apply and the Court must find ambiguity in the term “veterinary
orthopedic equipment” before it can use trade usage to interpret that term.
However, as discussed above, the Court finds it unlikely that the phrase will be
deemed ambiguous. The plain meaning of the phrase covers equipment used in
veterinary orthopedics such as surgical scissors, forceps, scalpel blades, implants, and
bone screws. Those are the products that the EA non-compete provision bans the
Wottons from selling in competition with MWI. Hence, it is likely that MWI will prevail
on its argument that the Wottons’ operation of Everost to sell those products constitutes a
Memorandum Decision & Order - 14

breach of the EA non-compete clause.
Irreparable Harm
When it purchased the Wottons’ business, MWI asserts, it paid not only for the
business assets but also for (1) the continued efforts of the Wottons who would be
employed by MWI, and (2) their promise not to compete against MWI. MWI further
argues that by creating Everost to compete with MWI, the Wottons have not only hurt
MWI financially but have also damaged the goodwill of the business.
“[E]conomic injury alone does not support a finding of irreparable harm, because
such injury can be remedied by a damage award.” Rent–A–Center, Inc. v. Canyon
Television & Appliance Rental, Inc., 944 F.2d 597, 603 (9th Cir.1991). However,
“intangible injuries, such as damage to ongoing recruitment efforts and goodwill, qualify
as irreparable harm.” Id. Business goodwill includes a company's reputation. See WMX
Techs. v. Miller, 80 F.3d 1315, 1325 (9th Cir.1996).
In Rent-A-Center, the Circuit affirmed an injunction enjoining defendant from
operating a store in violation of a non-compete agreement. Defendant had agreed not to
compete with plaintiff after selling its business to the plaintiff. Id. at 599. When
defendant opened a competing store, plaintiff sought and obtained the injunction, shutting
down the store. Id. On appeal, the Circuit affirmed, finding that the competing store
damaged plaintiff’s goodwill and constituted an intangible injury that would be difficult
to value with damages. Id. at 602. The same circumstances exist here. Without
competition from the formidable Wotton brothers, MWI could expand its business and
Memorandum Decision & Order - 15

reap the gains in reputation and goodwill that accompany success. But competition from
the Wottons – in breach of the APA and EA – would reduce or take away altogether the
goodwill that MWI could have gained if it was unhindered by the Wottons in the market.
That loss is very difficult to quantify in monetary terms, as was recognized by Rent-ACenter, and that makes it likely – not just possible – that MWI will suffer an irreparable
loss.
Moreover, the Wottons agreed in the APA that any breach of the non-compete
clause would cause irreparable harm to MWI. See, e.g., Exhibit 2 (Dkt. No. 2-3) at ¶ 11.5
(provision of APA wherein Wottons agree that breach of the non-compete clause “will
result in irreparable harm to [MWI] which cannot be reasonably or adequately
compensated by damages”). In signing these agreements, the Wottons were represented
by counsel, sophisticated in the industry, and not under any coercion or duress.
While it is not clear if Everost has actually sold any products, the Wottons have
made clear their plans for the company to do so, and that is sufficient to support a finding
of irreparable harm. Stuhlbarg Intern. Sales Co., Inc. v. John D. Brush and Co., Inc., 240
F.3d 832, 841 (9th Cir. 2001) (holding that “[e]vidence of threatened loss of . . . goodwill
certainly supports a finding of the possibility of irreparable harm”). For all of these
reasons, the Court finds that MWI has carried its burden of showing that it will likely
suffer irreparable harm.
Balance of Equities
An injunction will put the Wottons out of the business of supplying veterinary
Memorandum Decision & Order - 16

orthopedic equipment in those regions covered by the APA and EA. That would appear
at first glance to be a substantial hardship. But the Wottons anticipated this hardship and
negotiated a deal that paid them $5 million, in part as compensation for not exercising
their considerable competitive muscle. Their own foresight takes most of the sting out of
an injunction that forces them to comply with their agreements. The real hardship in this
case would actually fall on MWI, because if no injunction was issued, they would be
denied the benefit of their bargain with the Wottons. Consequently, the Court finds that
the balance of equities tips in favor of MWI.
Public Interest
The public interest lies in enforcing contractual agreements and so favors the
granting of an injunction here.
Conclusion
MWI has carried its burden of showing all the prerequisites to obtain injunctive
relief. The Court finds it likely that both the APA and EA non-compete clauses apply
here and bar the Wottons from selling through Everost veterinary orthopedic equipment
including (1) one-time consumables like sutures and bandages, (2) non-reusable items
like implants and bone screws, or (3) re-usable tools such as surgical scissors, scalpel
blades, or forceps. Accordingly the Court will grant MWI’s motion.
Because of the unique fact-intensive inquiry here concerning the equitable extension of
the APA non-compete clause, the Court would be receptive to a request from the Wottons for an
evidentiary hearing limited solely to the extension issue. That request can be made by motion,
Memorandum Decision & Order - 17

and the Court will consider it in due course. It is important to note, however, that the Court
based this injunction on two grounds, independent of each other, and thus even if the APA is
found to provide no support for injunctive relief, the EA continues to do so.

ORDER
In accordance with the Memorandum Decision above,
NOW THEREFORE IT IS HEREBY ORDERED, that the motion for injunctive
relief filed by MWI (docket no. 39) is GRANTED.
IT IS FURTHER ORDERED, that the defendants, as well as their officers, agents,
employees, attorneys, and all persons who are in active concert or participation with
them, are prohibited from selling through Everost, or any other entity, veterinary
orthopedic equipment including (1) one-time consumables like sutures and bandages, (2)
non-reusable items like implants and bone screws, or (3) re-usable tools such as surgical
scissors, scalpel blades, or forceps in any of the locations set forth in the non-compete
clauses of the APA and EA.
IT IS FURTHER ORDERED, that this injunction will last through the term of the
non-compete provisions in the APA (as extended by the Court through June 8, 2013), and
the EA.
IT IS FURTHER ORDERED, pursuant to Rule 65(c) MWI post a bond of $10,000
immediately.
IT IS FURTHER ORDERED, that the motion to strike (docket no. 61) is

Memorandum Decision & Order - 18

DEEMED MOOT.6

DATED: September 14, 2012

Honorable B. Lynn Winmill
Chief U. S. District Judge

6

The Wottons have filed a motion to strike a timeline submitted by MWI along with its
reply brief, contending that it contains improper argument. The Court has not examined the
document and did not use it in any way in deciding this case. Accordingly, the Court will deem
the motion to strike as moot.
Memorandum Decision & Order - 19