Mulligan v. Koop et al

Filing 31

District Judge Timothy S Hillman: ORDER entered granting in part 2 Motion for Preliminary Injunction. (Castles, Martin)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
___________________________________
SHAWN MULLIGAN, individually and )
derivatively on behalf of ELITE
)
ENTERPRISE SERVICES, LLC,
)
)
Plaintiff,
)
v.
)
)
JONATHAN KOOP and DAVID
)
JEFFRESS,
)
CIVIL ACTION NO.
)
Defendants,
)
15-40072-TSH
)
and
)
)
ELITE ENTERPRISE SERVICES, LLC, )
Nominal Defendant,
)
)
and
)
)
THRIVE NETWORKS, INC. and
)
DIGITAL FEDERAL CREDIT UNION, )
Trustee Defendants.
)
____________________________________)
ORDER ON PLAINTIFF’S MOTION FOR PRELIMINARY INJUNCTION
July 28, 2015
This action arises out of a business dispute between Plaintiff Shawn Mulligan and
Defendant Jonathan Koop. Plaintiff and Defendant Koop each own a 50 percent interest in Elite
Enterprise Services, LLC, a company doing business in the debt acquisition industry. Plaintiff
asserts claims against Defendants for breach of fiduciary duty (Count I), misappropriation of
trade secrets and confidential business information (Count II), and tortious interference with
contractual business relations (Count III). Pending before this Court is Plaintiff's Motion for
Preliminary Injunction (Docket No. 2). District courts in this Circuit consider four factors in
determining whether to grant a preliminary injunction: “[1] the movant’s likelihood of success

on the merits of its claims; [2] whether and to what extent the movant will suffer irreparable
harm if the injunction is withheld; [3] the balance of hardships as between the parties; and [4] the
effect, if any, that an injunction (or withholding of one) may have on the public interest.”
Corporate Technologies, Inc. v. Harnett, 731 F.3d 6, 9 (1st Cir. 2013). Upon consideration of the
motion papers, pleadings and incorporated documents, and arguments of the parties at the motion
hearing on July 20, 2015, the Court finds and rules as follows:
Plaintiff has a reasonable likelihood of success on the merits of at least some of his
claims against the Defendants, and will be irreparably harmed if the Court does not issue
injunctive relief. The harm Plaintiff will suffer is significant. Specifically, without an order
enabling Plaintiff to resume certain operations on behalf of Elite Enterprise Services, LLC, the
company will lose its competitive advantage in the debt acquisition industry, and risks going out
of business. Further, injunctive relief will have no adverse effect on the public interest. However,
much of Plaintiff’s requested relief would inhibit Jonathan Koop’s ability to pursue his own
ventures. Defendant Koop’s rights to pursue other business opportunities are expressly protected
by paragraph 19(b) of the Operating Agreement for Elite Enterprise Services, LLC, which states:
The Members . . . may engage in and possess interests in other business ventures and
investment opportunities of every kind and description, independently or with others,
including serving as managers and general partners of other limited liability companies
and partnerships with purposes similar to those of the LLC. Neither the LLC nor any
other Member shall have rights in or to such ventures or opportunities or the income or
profits therefrom.
See Operating Agreement, Docket No. 22, Ex. 1, ¶ 19(b). The Court is conscious of the need to
protect the business interests of each party during the pendency of this litigation. Thus, weighing
the competing hardships that Plaintiff and Defendants stand to suffer, the Court grants the
following injunctive relief.
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IT IS HEREBY ORDERED:
(1) The proceeds of any funds held in any checking or savings accounts in the name of
Elite Enterprise Services, LLC at Federal Digital Credit Union shall be divided as follows: (a)
one-third shall be released to the control of Plaintiff Shawn Mulligan; (b) one-third shall be
released to the control of Defendant Jonathan Koop; (c) one-third shall be placed in escrow
pending the resolution of this litigation.
(2) Defendants Jonathan Koop and David Jeffress, and any entity controlled by either
individual, shall immediately cease all activities in furtherance of any business venture intended
to cultivate leads of litigious debtors to be sold to debtor litigators based upon the review of data
acquired from debtholders in the course of their business dealings with Elite Enterprise Services,
LLC;
(3) In the event that any leads have been turned over to debt litigators based upon the
review of data acquired from debtholders in the course of their business dealings with Elite
Enterprise Services, LLC, Defendants Jonathan Koop and David Jeffress, and any entity
controlled by either individual, shall immediately identify to this Court all data turned over and
to whom said data was given and shall immediately notify the recipient(s) of the data that they
are to immediately return said data;
(4) Defendant Jonathan Koop shall immediately restore Plaintiff Shawn Mulligan’s
access to the Egnyte operating system and all other access necessary to engage in business on
behalf of Elite Enterprise Services, LLC;
(5) Defendants Jonathan Koop and David Jeffress, and any entity controlled by either
individual, shall be prohibited from utilizing the existing website and/or domain name
www.bkdeacquisitions.com and shall turn over to Plaintiff Shawn Mulligan exclusive access to
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the website and domain name.
(6) Thrive Networks, Inc. shall be prohibited from releasing any information whatsoever
in connection with Elite Enterprise Services, LLC or the confidential data stored with Thrive
Networks, Inc. by Elite Enterprise Services, LLC, except that such information or data may be
provided to Plaintiff Shawn Mulligan and Defendant Jonathan Koop.

SO ORDERED.

/s/ Timothy S. Hillman
TIMOTHY S. HILLMAN
DISTRICT JUDGE

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