Magnesita Refractories Company v. Mishra

Filing 37

OPINION and ORDER DENYING 30 Rule 64 Motion to Vacate Orders of Seizure, for the Immediate Release of Mishra's Laptop Computer and for Attorney Fees. An order regarding the disposition of the laptop will follow. Signed by Chief Judge Philip P Simon on 1/25/2017. (jss)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
MAGNESITA REFRACTORIES
COMPANY,
Plaintiff,
v.
SURENDRA MISHRA,
Defendant.

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CAUSE NO. 2:16-CV-524-PPS-JEM

OPINION AND ORDER
On December 23, 2016, I entered an ex parte temporary restraining order
authorizing the seizure of a laptop computer owned by defendant Surendra Mishra. I
was persuaded that his employer, Magnesita, had made the requisite showing that
there was a strong likelihood that Mr. Mishra was conspiring to steal Magnesita’s trade
secrets contained on the laptop, and the seizure needed to be taken forthwith to prevent
the impending harm. Mishra argues that the seizure of his computer was improper
under Rule 64 of the Federal Rules of Civil Procedure. He seeks the immediate release
of his laptop and attorney’s fees to boot. [DE 30.]
The issue regarding whether Rule 64 prevents the seizure of Mr. Mishra’s
computer that was first raised at a status conference held on January 9, 2017. [DE 29.]
At the hearing, counsel for Mishra raised the issue of the potential application of
Federal Rule of Civil Procedure 64 to the seizure of Mishra’s laptop. Having been hit
with the issue cold in court, I decided that the most prudent thing to do was to give the

parties the opportunity to brief the issue. Now that the issue is fully briefed, I find that
Rule 64 has no bearing on this case.
Rule 64(a) provides:
At the commencement of and throughout an action, every
remedy is available that, under the law of the state where the
court is located, provides for seizing a person or property to
secure satisfaction of the potential judgment. But a federal
statute governs to the extent it a applies.
Mishra argues that the last sentence of Rule 64(a) mandates that the seizure provision of
the Defense of Trade Secrets Act was required to be invoked to seize his laptop, rather
than a temporary restraining order issued under Federal Rule of Civil Procedure 65.
[DE 31 at 5-9.] The DTSA provides a private right of action to owners of a trade secret
that is misappropriated. 18 U.S.C. § 1836(b)(1). Under the DTSA, a plaintiff may move
for the seizure of property necessary to prevent the propagation or dissemination of the
trade secret that is the subject of the action. 18 U.S.C. § 1836(b)(2). In addition, the
DTSA provides remedies in the form of an injunction, damages, and fees. 18 U.S.C. §
1836(b)(3). While one of Magnesita’s substantive claims in this action arises under the
DTSA, it moved for a temporary restraining order, including the seizure of Mishra’s
personal laptop, under Federal Rule of Civil Procedure 65, not the DTSA, and I granted
its motion. Mishra now argues that this was inappropriate and Rule 64 required that
Magnesita follow the due process requirements in the DTSA’s seizure provision and its
failure to do requires me to vacate all seizure orders in this case and immediately return
Mishra’s laptop computer.
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Mishra’s interpretation of Rule 64(a) ignores its purpose, which is to provide for
seizure of a person or property “to secure satisfaction of the potential judgment.” Fed. R.
Civ. P. 64(a) (emphasis added); see also 11A Charles Alan Wright & Arthur R. Miller,
Fed. Prac. & Proc. Civ. § 2931 (3d ed.) (“Rule 64 authorizes the use of provisional
remedies at the commencement and during the course of an action. These remedies
provide for seizure of a person or property for the purpose of securing satisfaction of
the judgment ultimately to be entered in the action.”). The remedies under Rule 64
include arrest, attachment, garnishment, replevin, sequestration, and other
corresponding or equivalent remedies. Fed. R. Civ. P. 64(b); see also 11A Charles Alan
Wright & Arthur R. Miller, Fed. Prac. & Proc. Civ. § 2932 (3d ed.) (“Perhaps the most
common form of prejudgment property seizure is attachment.”). And while Rule 64
states that a federal statute governs to the extent it applies, statutes of the kind
contemplated by Rule 64 address seizures for the purpose of securing the satisfaction of
a potential judgment and include remedies such as imprisonment for debt, garnishment
by the United States, and the freezing of assets by the district court. See 11A Charles
Alan Wright & Arthur R. Miller, Fed. Prac. & Proc. Civ. § 2933 (3d ed.) (collecting cases).
Here, Magnesita moved for an ex parte temporary restraining order pursuant to
Rule 65 to preserve the evidence contained on Mishra’s laptop. [DE 6.] Magnesita did
not request seizure of Mishra’s property for the purpose of securing assets for the
satisfaction of a potential judgment in this case. Indeed, Magnesita only requested the
laptop for 48 hours so that it could be imaged and returned to Mishra. In other words,
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the seizure in this case had nothing to do with securing assets to satisfy a judgment.
Rule 64 is a square peg in a round hole in this situation. It is, therefore, unsurprising
that Mishra did not point me to, and I could not identify, a single case applying Rule 64
to the seizure of real property for the purpose of preservation of evidence.
What’s more, although the DTSA only has been in effect since May 11, 2016, at
least two other courts presiding over cases involving DTSA claims have issued
temporary restraining orders under Rule 65 ordering the seizure of property without so
much as a mention of Rule 64. See Earthbound Corporation v. MiTek USA, Inc., C16-1150
RSM, 2016 WL 4418013, at *11 (W.D. Wash. Aug. 19, 2016) (granting a TRO requiring
defendants to turn over to a neutral third-party expert all flash drives, SD cards, cell
phones, and other external devices for forensic imaging); Panera, LLC v. Nettles,
4:16cv1181-JAR, 2016 WL 4124114, at *2-4 (E.D. Mo. Aug. 3, 2016) (granting a TRO
requiring defendant to turn over his personal laptop and any other materials that may
have housed plaintiff’s materials for review and inspection). In other words, these
courts had no problem relying on a Rule 65 temporary restraining order, rather than the
DTSA, to accomplish the seizure. As a result, Rule 64 did not play into the analysis at
all. As such, I find that Rule 64 does not apply to this case and Mishra’s laptop was
properly seized by way of the temporary restraining order I issued pursuant to Rule 65.
There is yet another reason why Mr. Mishra’s motion must be denied. The DTSA
seizure provision provides that the Court may not grant a request for seizure unless it
finds that it clearly appears from specific facts that, among other things, “an order
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issued pursuant to Rule 65 of the Federal Rules of Civil Procedure . . . would be
inadequate to achieve the purpose of this paragraph because the party to which the
order would be issued would evade, avoid, or otherwise not comply with such an
order.” 18 U.S.C. § 1836(b)(2)(ii)(I). As such, even if Rule 64 applied to the seizure of
property for the preservation of evidence and required the application of the DTSA
seizure provision in this matter, the seizure of Mishra’s personal laptop by way of a
Rule 65 was still appropriate because the DTSA’s seizure provision would only apply if
seizure could not be accomplished by way of Rule 65. Obviously, in this case, Rule 65
did the trick.
For these reasons, Surendra Mishra’s Rule 64 Motion to Vacate Orders of Seizure,
for the Immediate Release of Mishra’s Laptop Computer and for Attorney Fees [DE 30]
is DENIED. An order regarding the disposition of the laptop will follow.
SO ORDERED.
ENTERED: January 25, 2017
_s/ Philip P. Simon__________________
PHILIP P. SIMON, CHIEF JUDGE
UNITED STATES DISTRICT COURT

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