Emerson Electric Co. v. Khuti

Filing 43

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that defendants motion to dismiss plaintiffs claims as moot [Doc. #38] is granted with regard to plaintiffs claims for injunctive relief and denied with regard to plaintiffs claims for monetary damages. I T IS FURTHER ORDERED that the temporary restraining order issued on July 30, 2013 [Doc. #13] is dissolved. IT IS FURTHER ORDERED that the Order setting the preliminary injunction hearing for February 26, 2014 [Doc. #37] is vacated and the hearing is canceled. IT IS FURTHER ORDERED that defendants motion to expedite briefing and for an expedited hearing date [Doc. #40] is denied. Signed by District Judge Carol E. Jackson on 2/3/2014. (KMS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
EMERSON ELECTRIC CO.,
Plaintiff,
vs.
BHARAT A. KHUTI,
Defendant.

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Case No. 4:13-CV-1464 (CEJ)

MEMORANDUM AND ORDER
This matter is before the Court on defendant’s motion to dismiss the complaint
and to dissolve the temporary restraining order (TRO) issued by this Court. Plaintiff
has responded in opposition, and the issues are fully briefed.
I.

Background

On July 29, 2013, plaintiff Emerson Electric Company filed suit against its former
employee, defendant Bharat Khuti, alleging breaches of noncompetition and
confidentiality covenants, and seeking injunctive relief and damages.

Defendant

served as the Chief Technology Officer of plaintiff’s wholly-owned subsidiary
corporation, Avocent, where he played an instrumental role in developing a data
aggregation and control platform known as Trellis.

While employed by plaintiff,

defendant signed agreements prohibiting competition with plaintiff for a period of two
years and permanently prohibiting disclosure of protected information.
Defendant resigned from Emerson on July 17, 2013, and accepted a position as
Chief Technology Officer-Software with General Electric Energy Management
Company, a branch of General Electric (GE) that designs technology solutions for data
management conversion and transmission. According to plaintiff, this position is so

similar to defendant’s former position at Emerson that defendant’s acceptance of that
job breached and threatened to further breach the noncompetition and confidentiality
covenants.
On July 30, 2013, after a hearing, the Court granted plaintiff’s motion for a TRO,
and temporarily enjoined defendant from performing work for GE as Chief Technology
officer or in any other capacity involving the assessment, development, or
implementation of any data aggregation and control technologies, and from providing,
disclosing, disseminating, or using plaintiff’s confidential, proprietary and/or trade
secret information.

See Doc. #13.

The preliminary injunction hearing is set for

February 16, 2014.
Defendant now informs the Court that GE has rescinded its offer of employment,
and has filled the Chief Technology Officer-Software position with another individual.
He argues that there is no longer a justiciable case or controversy before the Court,
and moves to dismiss this case as moot and dissolve the TRO.
II.

Discussion

“To qualify as a case fit for federal-court adjudication, ‘an actual controversy
must be extant at all stages of review, not merely at the time the complaint is filed.’”
Arizonans for Official English v. Arizona, 520 U.S. 43, 67 (1997) (quoting Preiser v.
Newkirk, 422 U.S. 395, 401 (1975)). Defendant argues that there is no longer a live
controversy before the Court, because the conduct plaintiff sought to enjoin defendant’s employment by GE in a position similar to that which he held at Emerson is no longer a possibility.

Plaintiff responds that defendant’s employment by a

competitor is capable of repetition, yet evading review, and therefore the Court retains
jurisdiction under that exception to the mootness doctrine.

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The exception on which plaintiff relies is applicable when “(1) the challenged
action [is] in its duration too short to be fully litigated prior to it cessation or expiration,
and (2) there [is] a reasonable expectation that the same complaining party [will] be
subjected to the same action again.” Weinstein v. Bradford, 423 U.S. 147, 149 (1975).
While defendant bears the burden of establishing mootness, it is plaintiff’s burden to
establish that the exception to mootness applies. See, e.g., Honeywell Int’l, Inc. v.
Nuclear Regulatory Comm’n, 628 F.3d 568, 576 (D.C.Cir. 2010) (“The initial heavy
burden of establishing mootness lies with the party asserting a case is moot, but the
opposing party bears the burden of showing an exception applies.”) (internal citations
and quotations omitted); see also Ramirez v. Sanchez Ramos, 438 F.3d 92, 100 (1st
Cir. 2006) (“The party who asserts continuing jurisdiction (here, the plaintiff) bears the
burden of establishing both that the issue is capable of repetition and that, absent
relaxation of the classic mootness rule, it will evade review.”).
Defendant has established that plaintiff’s claims for injunctive relief are moot.
Plaintiff sought to enjoin defendant from working for GE in a capacity similar to that in
which he was employed by Emerson. After the issuance of the TRO, GE withdrew its
offer of employment.

Defendant has no offers of employment, and there is no

evidence that any competitor of Emerson intends to offer defendant a job that would
run afoul of the noncompetition and confidentiality covenants. Plaintiff has failed to
convince the Court that there is any “reasonable expectation” (which must be more
than “a mere physical or theoretical possibility,” Murphy v. Hunt, 455 U.S. 478, 482
(1982)) that defendant will attempt to accept another position of employment in
violation of those covenants.

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Furthermore, the Court does not believe this issue will necessarily evade review.
When determining whether an issue evades review, “the focus of [the] analysis... is
not on the length of time over which the particular action challenged occurred. Rather,
the proper inquiry is whether the [challenged] activity is by its very nature short in
duration, so that it could not, or probably would not, be able to be adjudicated while
fully live.” Clark v. Brewer, 776 F.2d 226, 229 (8th Cir. 1985) (citation and quotations
omitted); see also Hickman v. Missouri, 144 F.3d 1141, 1143 (8th Cir. 1998). Unlike
intrinsically limited periods of time such as human gestation, Roe v. Wade, 410 U.S.
113, 125 (1973), political election cycles, Van Bergen v. Minnesota, 59 F.3d 1541,
1547 (8th Cir. 1995), or administrative segregation of inmates, Clark v. Brewer, 776
F.2d 226, 229 (8th Cir. 1985), the period during which a job offer may be held open
for defendant will not necessarily terminate before a decision is reached on the merits.
Although the Court finds plaintiff’s claims for injunctive relief to be moot, the
claims for monetary damages still present a live controversy. In Count II of the
complaint. plaintiff seeks damages for defendant’s breach of the noncompetition and
confidentiality covenants, and in Count III plaintiffseeks damages for misappropriation
of trade secrets under the Missouri Uniform Trade Secrets Act (MUTSA), Mo. Rev. Stat.
§ 417.450, et seq. Defendant never actually began his employment at GE, due to the
issuance of the TRO, so it is difficult to see what actual damages plaintiff can continue
to claim after the job offer was rescinded.

However, plaintiff may be entitled to

nominal or punitive damages. See Daniele v. Mo. Dep’t of Conservation, 282 S.W.3d
876, 880 (Mo. Ct. App. 2009) (“[I]n Missouri, it is a fundamental precept of contract
law that nominal damages are available where a contract and its breach are
established.”) (quotations and citations omitted); see also Mo. Rev. Stat. § 417.457

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(stating that, in certain cases, punitive damages are available under the MUTSA). This
is enough to keep plaintiff’s claims for monetary damages alive.

See, e.g., DCS

Sanitation Mgmt., Inc. v. Castillo, 435 F.3d 892, 895 (8th Cir. 2006) (“Although an
appeal from a denial of injunctive relief may become moot by the passage of time, a
claim for damages remains viable.”).
Accordingly,
IT IS HEREBY ORDERED that defendant’s motion to dismiss plaintiff’s claims
as moot [Doc. #38] is granted with regard to plaintiff’s claims for injunctive relief and
denied with regard to plaintiff’s claims for monetary damages.
IT IS FURTHER ORDERED that the temporary restraining order issued on July
30, 2013 [Doc. #13] is dissolved.
IT IS FURTHER ORDERED that the Order setting the preliminary injunction
hearing for February 26, 2014 [Doc. #37] is vacated and the hearing is canceled.
IT IS FURTHER ORDERED that defendant’s motion to expedite briefing and for
an expedited hearing date [Doc. #40] is denied.

___________________________
CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE
Dated this 3rd day of February, 2014.

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