Bluestone Physician Services, P.A. v. Moericke et al

Filing 28

ORDER denying 14 Motion for TRO (Written Opinion) Signed by Senior Judge David S. Doty on 2/13/2017. (DLO)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 17-340(DSD/KMM)
Bluestone Physician Services, P.A.,
Plaintiff,
v.

ORDER

Lora Moericke, Margaret Mattice
and Synergy Medical Services, LLC,
Defendants.
James C. Remington, Esq. and Husch Blackwell, LLP, 555 East
Wells Street, Suite 1900, Milwaukee, WI 53202, counsel for
plaintiff.
Mark T. Berhow, Esq. and Hinshaw & Culbertson LLP, 333 South
Seventh Street, Suite 2000, Minneapolis, MN 55402, counsel for
defendants.

This matter came before the court upon the motion for a
temporary restraining order (TRO) by plaintiff Bluestone Physician
Services, P.A.

The court denied the motion from the bench with

this written order to follow.

BACKGROUND
Bluestone is a Minnesota corporation engaged in the business
of providing on-site medical care to patients residing in assisted
living facilities in Wisconsin, among other places.
13, 15.

Compl. ¶¶ 1,

Defendants Lora Moericke and Margaret Mattice began

working at Bluestone as nurse practitioners in November 2015.
¶¶ 16, 17.

Id.

At the outset of their employment, both Moericke and

Mattice signed the Bluestone Employment Agreement (the Agreement).
Id. ¶¶ 16, 17; see id. Exs. A and B.
period

of

one

year

following

Under the Agreement, for a

termination

of

employment

with

Bluestone, neither Moericke nor Mattice shall:
(a) provide similar onsite primary care services to
any residential care facility serviced by [Bluestone] (a
“Customer”);
(b) solicit, induce or attempt to induce any
Customer to terminate or breach any written or oral
agreement, business arrangement or understanding with
[Bluestone]; [or] ...
(d) engage or
practice within the
competition with the
[Bluestone’s] written
Compl. Ex. A, Art. 6.1.

participate in any business or
Practice Territory that is in
business of [Bluestone] without
permission ....

“Practice Territory” is defined as “[t]he

geographic area within a radius of ten (10) miles of any assisted
living,

memory

care,

skilled

nursing

or

group

home

community/facility or location from which [Moericke or Mattice]
provide[d] medical services on behalf of” Bluestone.
Moericke

resigned

from

effective November 4, 2016.

Bluestone

on

Compl. Ex. C.

working

for

defendant

Synergy

21,

2016,

Mattice followed suit

by departing Bluestone on December 27, 2016.
began

October

Id.

Id. Ex. D.

Medical

Service,

Moericke
LLC,

a

competitor of Bluestone, on November 28, 2016. Moericke Decl. ¶ 7.
After

reviewing

the

Agreement,

Synergy

assigned

Moericke

to

facilities in the Green Bay area because she did not see patients
there while employed by Bluestone.

2

Id. ¶ 10.

Moericke maintains

that she has not provided medical services on behalf of Synergy at
any facility she serviced during her tenure with Bluestone.

Id. ¶

11.
Synergy hired Mattice on January 3, 2017, and assigned her to
facilities in Appleton, which is outside the territory she covered
while employed by Bluestone.

Mattice Decl. ¶¶ 10, 13.

Synergy

also assigned Mattice to certain nursing homes in Green Bay
because, according to Mattice, Bluestone does not provide nursing
home care.

Id. ¶ 14.

On January 15, 2017, Mattice also began

providing services to certain of her former Bluestone patients
because Bluestone, at least in part, withdrew from the market. Id.
¶

17.

Although

whether

Bluestone

withdrew

from

the

entire

Wisconsin territory at issue is unclear, the record does support a
finding that Bluestone stopped doing business in at least some of
the facilities Synergy now serves.

See Williams Decl. Exs. 1-5.

On February 2, 2017, Bluestone filed this suit alleging that
Moericke

and

Mattice

breached

the

non-competition

and

other

covenants in the Agreement, that Mattice breached her duty of
loyalty to Bluestone, and that Synergy tortiously interfered with
the

Agreement.

injunctive relief.

Bluestone

seeks

damages

and

declaratory

and

The next day, Bluestone moved for a temporary

restraining order to enjoin Moericke and Mattice from violating the

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Agreement.1

After full briefing and oral argument, the court

denied the motion from the bench.2

In so ruling, the court relied

on the four familiar factors set forth in Dataphase Sys., Inc. v.
C.L. Sys., Inc., 640 F.2d 109, 114 (8th Cir. 1981) (en banc).

The

court provides further analysis for its decision
here.

DISCUSSION
A TRO is an extraordinary equitable remedy, and the movant
bears the burden of establishing its propriety.

Watkins Inc. v.

Lewis, 346 F.3d 841, 844 (8th Cir. 2003). The court considers four
factors in determining whether a TRO should issue:

(1) the

likelihood of success on the merits, (2) the threat of irreparable
harm in the absence of relief, (3) the balance between the harm
alleged and the harm that the relief may cause the non-moving
party, and (4) the public interest.

Dataphase, 640 F.2d at 114.

As stated at the hearing, Bluestone has not met its burden of
establishing the need for the extraordinary remedy of temporary

1

Bluestone initially moved for a TRO and preliminary
injunction, but later withdrew its request for a preliminary
injunction.
Bluestone has reserved the right to move for a
preliminary injunction after the parties have engaged in some
discovery.
Bluestone does not seek injunctive relief against
Synergy.
2

At the hearing, Bluestone stated it was willing to narrow
the scope of its proposed relief to allow Moericke and Mattice to
continue providing care to certain patients. The extent of its
concession is unclear, however.
4

injunctive relief. Most notably, Bluestone has failed to establish
irreparable harm.

See Watkins, 346 F.3d at 844 (noting that the

“[f]ailure to show irreparable harm is an independently sufficient
ground upon which to deny” injunctive relief).

Bluestone has not

established that its harm cannot be addressed through damages. See
Gen. Motors Corp. v. Harry Brown’s, LLC, 563 F.3d 312, 319 (8th
Cir. 2009) (“Irreparable harm occurs when a party has no adequate
remedy at law, typically because its injuries cannot be fully
compensated through an award of damages.”); Iowa Utils. Bd. v.
F.C.C., 109 F.3d 418, 426 (8th Cir. 1996) (“[E]conomic loss does
not, in and of itself, constitute irreparable harm,” and “revenues
and customers lost to competition which can be regained through
competition

are

not

citations omitted).

irreparable.”)

(internal

quotations

and

If Moericke and Mattice have violated the

Agreement by providing care to patients at Bluestone facilities,
Bluestone should be able to readily quantify the costs of those
services. Bluestone does not deny that some aspects of its alleged
harm can be quantified and compensated by an award of damages, but
argues that it could suffer a loss of goodwill as a result of
defendant’s actions.

Although damage to goodwill may qualify as

irreparable harm, United Healthcare Ins. Co. v. AdvancePCS, 316
F.3d 737, 741 (8th Cir. 2002), general allegations about such harm
do not suffice.

See Watkins, 346 F.3d at 846 (rejecting loss of

goodwill as a basis for injunctive relief where plaintiffs alleged

5

“generally that their customer relationships are being irreparably
harmed and that their goodwill is being permanently diminished”).
Nor does potential or speculative harm, as alleged here, suffice.
See Local Union No. 884, United Rubber, Cork, Linoleum, & Plastic
Workers of Am. v. Bridgestone/Firestone, Inc., 61 F.3d 1347, 1355
(8th

Cir.

1995)

(“The

possible

harm

identified

is

wholly

speculative and because it is, it cannot be called irreparable
harm.”).
The court also concludes that the remaining factors weigh in
favor of denying injunctive relief. With respect to the likelihood
of success on the merits, Bluestone’s admission that it has, at
least in part, withdrawn from the market substantially undermines
its claims.

The Agreement precludes Moericke and Mattice from

providing care “to any residential care facility serviced by
[Bluestone]” and from participating in “any business or practice
within the Practice Territory that is in competition with the
business of [Bluestone] without [Bluestone’s] written permission.”
Compl. Ex. A, Art. 6.1.

If Bluestone is no longer in business in

the relevant geographical area, then Moericke and Mattice are not
providing care to facilities “serviced by” Bluestone, nor are they
“in competition” with Bluestone.

As such, they would not be in

violation of the Agreement. To the extent Bluestone still provides
services in the relevant geographical area, the court is unable to
conclude, based on the current record, that Moericke and Mattice

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have breached even a narrow aspect of the Agreement.
The court next finds that the balance of the harms weighs
against granting the motion. It is possible that Bluestone will be
harmed

if

Moericke

and

Mattice

have

directed

patients

Bluestone to Synergy and are allowed to continue to do so.

from

If the

TRO were granted, however, Moericke and Mattice would necessarily
be subjected to the greater harm of losing the ability to earn a
living in their chosen profession. See Katch, LLC v. Sweetser, No.
15-CV-3760, 2015 WL 6942132, at *10 (D. Minn. Nov. 10, 2015) (“[A]
person’s right to labor in any occupation in which he is fit to
engage is a valuable right, which should not be taken from him, or
limited, by injunction, except in a clear case showing the justice
and necessity therefor.”).
The public interest also weighs against granting injunctive
relief.

There appears to be no dispute that patients in some of

the more rural facilities would not have alternative care options
were Moericke and Mattice precluded from providing care to them.
The public interest strongly favors allowing them to provide
medical care to those in need.
Finally, the purpose of a TRO is to “preserve the status quo
until the merits [of the case] are determined.”
F.2d at 113.

Dataphase, 640

Here, as noted, maintaining the status quo would

allow Moericke and Mattice to continue providing medical care to
patients who would otherwise not have ready access to health care.

7

Bluestone acknowledges that, in this regard, the status quo should
be maintained.

Under the circumstances, injunctive relief is not

warranted.

CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED that the
motion for a temporary restraining order [ECF No. 14] is denied.

Dated: February 13, 2017
s/David S. Doty
David S. Doty, Judge
United States District Court

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