BRUCE-TERMINIX COMPANY v. THE TERMINIX INTERNATIONAL COMPANY LIMITED PARTNERSHIP et al
MEMORANDUM OPINION AND ORDER signed by JUDGE CATHERINE C. EAGLES on 8/1/2022; that the plaintiff's second motion for preliminary injunction, Doc. 59 , is DENIED and the defendants' motion for leave to file the declaration of Mr. Myers, Doc. 72 , is DENIED. (Sheets, Jamie)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
THE TERMINIX INTERNATIONAL
PARTNERSHIP, and TERMINIX
GLOBAL HOLDINGS, INC.,
MEMORANDUM OPINION AND ORDER
Catherine C. Eagles, District Judge.
The plaintiff Bruce-Terminix Company holds an exclusive license from the
defendant Terminix International Company Limited Partnership to use the Terminix
name, brand, and “Terminix System” in 17 counties in North Carolina. Bruce seeks a
preliminary injunction prohibiting Terminix and its parent company, the defendant
Terminix Global Holdings, Inc., from merging with or disclosing certain confidential
information to Rentokil Initial PLC, a company that owns at least one competing business
in Bruce’s exclusive territory, or Rentokil’s subsidiaries.
Bruce is unlikely to succeed on the merits of its claim that the merger itself
violates the License Agreement or its claim that Terminix and TGH may not disclose
confidential information related to the Terminix System to Rentokil after the merger.
While Bruce will likely succeed on the merits of its claim that the License Agreement
prohibits Terminix from disclosing the Terminix System to TGH or Rentokil if the
System would then be shared with Rentokil’s subsidiaries within Bruce’s territory, Bruce
has not shown that a disclosure to a competing subsidiary is likely to occur. Bruce’s
motion for a preliminary injunction will be denied.
Background Facts and Procedural History
Since 1932, Bruce has operated a business as a licensee of Terminix1 or its
predecessor, providing pest control and related services. In 1975, Bruce and Terminix
entered into the License Agreement, which grants Bruce the exclusive right to use the
Terminix name and Terminix System in 17 North Carolina counties.
Terminix is a wholly-owned subsidiary of TGH. In 2018 and 2019, TGH’s
predecessor acquired companies that compete with Bruce within Bruce’s service area.
This lawsuit resulted. In December 2021, TGH announced that it would merge with
Rentokil, another large pest control company. Rentokil owns at least one pest control
company in Bruce’s exclusive service area: Bruce’s primary competitor, McNeely Pest
Control. Bruce then filed a supplemental complaint seeking declaratory and injunctive
relief, Doc. 58, along with a motion for a preliminary injunction. Doc. 59.
Specifically, Bruce seeks a declaratory judgment that TGH and Terminix are
prohibited by the License Agreement from (1) merging with Rentokil or its subsidiaries,
so long as Rentokil owns pest control companies with locations in Bruce’s service area,
For ease of reading, the Court will call Terminix International Company Limited
Partnership and its predecessors “Terminix” and will call Terminix Global Holdings “TGH.”
and (2) disclosing to Rentokil or its subsidiaries any confidential, proprietary, technical or
trade secret information related to or part of the Terminix System. Doc. 58 at ¶ 31. In
the pending motion, Bruce seeks a preliminary injunction prohibiting TGH and Terminix
from doing these same acts: merging with Rentokil and disclosing the Terminix System
to Rentokil and its subsidiaries, including McNeely. Doc. 59 at 2–3.
The motion for preliminary injunction revolves around two questions. First, does
Terminix breach the License Agreement if it allows itself to be sold to Rentokil because
Rentokil owns and operates Bruce’s competitors within Bruce’s service area? Second, if
it does not, does Terminix breach the License Agreement if it discloses the Terminix
System to Rentokil or Rentokil’s subsidiaries after the merger?
The License Agreement provides and the parties agree that Terminix cannot
license another company to use the Terminix System or brand within Bruce’s territory.
The parties also agree that Terminix cannot authorize TGH to license those rights or to
sell Rentokil those rights.2 This makes sense: Terminix is the owner of the Terminix
brand and System, but its rights are subject to limitations set forth in contracts, such as
the License Agreement. TGH has no independent rights to the Terminix brand or
System, so it cannot and does not have greater or different rights to the Terminix brand or
System than Terminix. TGH, like Terminix, cannot sell or convey the right to use the
Terminix brand or System within Bruce’s territory, whether through merger, acquisition,
Terminix and TGH acknowledged this point at oral argument. While they maintain that
TGH has no contractual duties to Bruce, that point is not determinative.
franchise, or license. As far as the record shows, Rentokil also has no independent rights
to the Terminix brand or System, so if the merger is completed, it will be subject to the
same limitations. As is true now, Rentokil will have no right to operate competitors in
Bruce’s exclusive territory under the Terminix name or to license the competitors to use
the Terminix System unless Terminix authorizes Rentokil to do so, and Terminix cannot
give such rights to Rentokil without breaching the License Agreement.
The parties disagree over whether Rentokil’s merger with the defendants in and of
itself breaches the License Agreement. Bruce contends the License Agreement prohibits
Terminix and any parent company from owning and operating any pest control
businesses in Bruce’s exclusive area, even if the businesses use neither the Terminix
name nor the Terminix System. And, Bruce asserts, any entity acquiring or merging with
Terminix is also prohibited from owning and operating competitors in Bruce’s service
area, even if those competitors are already in operation at the time of the merger.
The parties also disagree over whether Terminix and TGH may disclose the
Terminix System to Rentokil. Bruce contends that if Terminix and TGH disclose the
Terminix System to Rentokil, then Rentokil will disclose the Terminix System to
McNeely and that both disclosures are prohibited by the License Agreement.
To obtain a preliminary injunction, a party must show that: (1) it is likely to
succeed on the merits; (2) it is likely to suffer irreparable harm if the injunctive relief is
denied; (3) the balance of equities tips in its favor; and (4) injunctive relief would be in
the public interest. See Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008);
United States v. South Carolina, 720 F.3d 518, 533 (4th Cir. 2013). “Satisfying these
four factors is a high bar,” SAS Inst., Inc. v. World Programming Ltd., 874 F.3d 370, 385
(4th Cir. 2017), cert. denied, 139 S. Ct. 67 (2018), as a preliminary injunction is “an
extraordinary remedy involving the exercise of very far-reaching power.” Pashby v.
Delia, 709 F.3d 307, 319 (4th Cir. 2013) (cleaned up). A district court need not consider
all four Winter factors if one is clearly absent. See Henderson for NLRB v. Bluefield
Hosp. Co., 902 F.3d 432, 439 (4th Cir. 2018).
A plaintiff must make a “clear showing” that it is likely to prevail at trial to
demonstrate it is likely to succeed on the merits. See Real Truth About Obama, Inc. v.
FEC, 575 F.3d 342, 345 (4th Cir. 2009), vacated on other grounds, 559 U.S. 1089
(2010), reinstated in relevant part on remand, 607 F.3d 355 (4th Cir. 2010). This does
not require the plaintiff to show a “certainty of success,” Pashby, 709 F.3d at 321, but it
is a higher standard than a showing that serious questions are presented. See Real Truth,
575 F.3d at 346–47.
A plaintiff seeking preliminary injunctive relief must also show a likelihood of
irreparable harm, not just a possibility. See Winter, 555 U.S. at 21–22; Real Truth, 575
F.3d at 347. The irreparable harm must be “neither remote nor speculative, but actual
and imminent.” Scotts v. United Indus. Corp., 315 F.3d 264, 283 (4th Cir. 2002).
Findings of Fact for Purposes of the Pending Motion
Bruce, based in Greensboro, North Carolina, provides residential and commercial
pest control services in 17 counties in western and central North Carolina. Doc. 1 at ¶¶ 1,
8–9;3 see Doc. 1-1 at 20. Bruce has been a Terminix licensee since 1932, shortly after
Bruce’s founding, Doc. 1 at ¶ 9, and it is the only Terminix franchisee to operate in its
service area for the last 90 years. Id. at ¶ 127. Bruce owns or leases 14 branch offices in
its service area. Id. at ¶ 128.
Terminix owns the Terminix brand, which includes the Terminix name, Terminix
trademarks, and confidential trade secrets related to the Terminix System. Doc. 1-1 at p.
5–6 § III. TGH is the corporate parent and 100% owner of Terminix. Doc. 17-1 at ¶ 3.
In 1975, Bruce renewed its License Agreement with Terminix.4 The agreement,
Doc. 1-1, remains in effect today and governs the relationship of the parties. Doc. 1 at
¶ 15. Throughout the License Agreement, the parties explicitly and implicitly recognize
the value of the Terminix trademark, tradename, reputation, and goodwill, along with the
value of the “Terminix System” and instructional materials for providing termite and pest
control services. See, e.g., Doc. 1-1 at pp. 4, 6 § III/C. There are numerous provisions in
the License Agreement designed to maintain and protect those valuable assets. See, e.g.,
id. at p. 6 §§ III/C/2, IV; p. 7 § V.
Under the License Agreement, Terminix authorizes Bruce to operate the
“Terminix System,” defined as the “experience, skill and special techniques and know-
Burns Blackwell, the President of Bruce, has verified the complaint, Doc. 1 at 38, and the
supplemental complaint. Doc. 58 at 14.
The License Agreement was between Bruce and Terminix International. Doc. 1-1 at 4.
The License Agreement allowed Terminix International to assign its rights, id. at p. 13 § XII/A,
and the defendant Terminix International Limited Company Partnership (referred to herein as
Terminix) is the successor in interest to the 1975 License Agreement. Doc. 1 at ¶ 16; see Doc.
60-1 at 3. The License Agreement is governed by Tennessee law. Doc. 1-1 at p. 17 § XX/A.
how in a business . . . of rendering termite and other pest control and related services and
making available materials and equipment used therein,” id. at 4, and to use the Terminix
tradename and marks. Id. at p. 5 § III/A. With one exception for pest control services
offered by Sears,5 Bruce has the exclusive right to operate the Terminix System in a
service area of 17 counties in western and central North Carolina. Id. at 20. Specifically,
Terminix agreed that it “will not itself establish, nor will it license another to establish,
within the [service area], a location from which to operate a Terminix System,” id. at p. 9
§ VII/A, and that it “will not license another to establish, nor will [Terminix] itself
establish, within the [service area], a location from which to operate a business similar to
the Terminix System, under a name other than TERMINIX.” Id. at p. 9 § VII/B.
Bruce also has substantial obligations under the License Agreement. Among other
things, Bruce agrees to pay Terminix a monthly “service fee,” and a “contract fee,” id. at
p. 10 § VIII, to follow Terminix’s standards, to only use chemicals approved by
Terminix, id. at p. 8 § VI, and to make its facilities and records available to Terminix for
inspection. Id. at p. 11 § IX.
In 1986, ServiceMaster, a holding company with various residential and related
services in its portfolio, acquired Terminix. Doc. 1 at ¶ 32; Doc. 17 at 4. ServiceMaster
operated the Terminix brand along with other franchise-based service companies, such as
Merry Maids. Doc. 1 at ¶ 33. ServiceMaster acquired any of its rights to the Terminix
Under the exception, Terminix can establish a location within the service area “under
Sublicense of Sears, Roebuck & Co.” but only if Bruce declines to exercise its right of first
refusal. See Doc. 1-1 at p. 9 § VII/B.
brand and Terminix System from Terminix, so ServiceMaster, which is now TGH, had
no greater rights to the Terminix brand and System than Terminix.
Beginning around 2018, ServiceMaster began to expand its pest control business.
Id. at ¶ 55. ServiceMaster’s 2019 Annual Report announced the completion of “32
acquisitions at Terminix,” with the aim of “increasing the breadth of [their] service
offerings to strengthen [their] capabilities in commercial pest control.” Id. at ¶ 57.
Terminix was then the dominant brand in ServiceMaster’s portfolio, accounting for 87%
of its total revenues in 2019. Id. at ¶ 54.
A ServiceMaster subsidiary acquired a national pest control service network,
Copesan, in 2018. Doc. 17-1 at ¶ 6. Bruce alleges that it competes in its service area
against pest control companies within Copesan’s network. Doc. 1 at ¶¶ 59–60. In 2019,
ServiceMaster acquired Gregory Pest Solutions, a pest control company based in
Greenville, South Carolina, that operates in Bruce’s service area. Doc. 17-1 at ¶ 7; Doc.
60-2 at 5; Doc. 1 at ¶ 68. Gregory uses some Terminix-branded products and equipment,
Doc. 1 at ¶ 71, and has used the Terminix logo on customer service tickets. Doc. 60-3 at
2–4. Also in 2019, ServiceMaster worked to acquire McNeely, Bruce’s main competitor,
but the sale did not go through. Doc. 1 at ¶¶ 82–84, 89–91; Doc. 32 at ¶ 82, 88.
By October 2020, ServiceMaster had changed its name to Terminix Global
Holdings (TGH) and had sold all its brands other than Terminix. Doc. 1 at ¶¶ 4, 99–100.
As was true when it operated as ServiceMaster, any rights TGH has to use, sell, or license
the Terminix brand and the Terminix System were acquired through Terminix, so TGH
has no greater rights to the Terminix brand and System than Terminix.
In December 2021, over a year after Bruce filed this suit, TGH announced it
would be merging with Rentokil, one of the largest pest control companies in the world.
Doc. 58 at ¶ 2. Although billed as a merger, a wholly-owned Rentokil subsidiary,
Rentokil Initial US Holdings, will acquire TGH. Doc. 58-4 at 2; Doc. 65 at ¶ 14. The
transaction is expected to close later this year. Doc. 58 at ¶ 15.
Rentokil and TGH intend to fully integrate into one company following the
merger. Doc. 58-8 at 2. As a result of the integration, Rentokil and TGH will combine
branches, including IT infrastructure and service routes, and will share best practices.
Doc. 58-3 at 3–5. Rentokil and TGH will develop staff together, working to “recruit,
train, and retain” their employees more effectively. Doc. 58-4 at 4. Once the merger is
complete, Rentokil will pay salaries and benefits to former TGH employees. Doc. 58-1
at p. 46–47 § 7.05.
Rentokil is headquartered in the United Kingdom, but it has a significant presence
in the United States through its wholly-owned subsidiaries. Doc. 58 at ¶ 5; Doc. 58-1 at
2. In 2020, Rentokil acquired McNeely, Bruce’s primary competitor. Doc. 58 at ¶¶ 8–9;
Doc. 62 at 5–6.
Conclusions of Law
Bruce’s underlying claim at issue here is for a declaratory judgment that the
merger between Rentokil and TGH will breach the License Agreement and that the
License Agreement prohibits TGH and Terminix from disclosing the Terminix System to
Rentokil and its subsidiaries. Doc. 58 at 12. To obtain a preliminary injunction
prohibiting the merger and prohibiting disclosure, Bruce must show it is likely to succeed
on the merits of its declaratory judgment claim; irreparable harm if injunctive relief is
denied; the balance of equities tips in its favor; and injunctive relief is in the public
interest. See Winter, 555 U.S. at 20; South Carolina, 720 F.3d at 533.
A. The Merger
In the Supplemental Complaint, Bruce seeks a declaratory judgment that a merger
between TGH and Rentokil will be a breach of the License Agreement. Doc. 58 at 12. It
seeks a preliminary injunction to prevent that merger. Doc. 59 at 2–3.
The License Agreement prohibits Terminix from “establish[ing]” or “licens[ing]
another to establish, within [Bruce’s service area], a location from which to operate a
Terminix System” or “a location from which to operate a business similar to the Terminix
System, under a name other than Terminix.” Doc. 1-1 at p. 9 § VII/A and B. Everyone
agrees that Terminix is prohibited from establishing businesses that use the actual
Terminix System or that use the Terminix name in Bruce’s territory.
And Bruce is likely to succeed on a claim that Terminix would breach the License
Agreement if it established a business in Bruce’s service area that uses similar methods
for pest control as the Terminix System, even if the business does not use the actual
System or name. The License Agreement says so, and the parties understood this to be
part of the agreement for many years; neither Terminix nor a parent company acquired or
operated a pest control business that operated within Bruce’s service area from 1975,
when they signed the License Agreement, until 2018. See id. at 4, 18; Doc. 17-1 at ¶ 6.
Multiple provisions within the License Agreement support the interpretation that
Terminix would “establish” a pest control business in breach of the License Agreement if
it acquired and operated an already-existing pest control business within Bruce’s service
area. See, e.g., Doc. 1-1 at p. 9 § VII/B (the “Sears provision”); id. at p. 9 § VI/G (the
arbitration provision). Contrary to the defendants’ contention, Doc. 62 at 16, a pest
control business need not use Terminix’s proprietary business methods to be “similar to
the Terminix System.”6
But Bruce is unlikely to succeed on the merits of its claim that this provision
prohibits Terminix from merging with or being acquired by a company or entity that
already operates a competing business in Bruce’s territory. The License Agreement
contains no provision that Terminix may not be acquired by another company that
already operates competing businesses within Bruce’s service area. As far as the Court
knows, Rentokil currently has the right to own or operate such a business, and there is no
evidence that Terminix will assign the License Agreement to Rentokil. Such an
acquisition does not threaten Bruce’s exclusive territory, as it does not create new
competition. Bruce competes with McNeely now and Bruce will compete with McNeely
after the merger. And through the merger, Terminix is not itself competing with Bruce
because Terminix will not be acquiring pest control companies in Bruce’s territory nor
assigning its License Agreement with Bruce to Rentokil. The License Agreement
protects Bruce from competition by Terminix, but not from all competition.7
The Court need not sort out the corporate formality issues raised by Bruce’s initial
complaint about the 2018 acquisition in order to resolve the pending motion.
Bruce has legitimate concerns that TGH and Rentokil, the holding companies that own or
will own Terminix, will acquire or open new businesses that compete with Bruce in its territory,
Bruce contends that by merging with Rentokil, Terminix is effectively licensing
Rentokil to provide the Terminix brand and System to McNeely, Bruce’s competitor.
But there is no credible evidence to support an implied license to Rentokil. Even if there
were, the license could not give Rentokil greater rights than Terminix has, and as
discussed supra, neither one has or will have rights allowing it to operate Bruce’s
competitors in a manner that threatens Bruce’s exclusive right to the use of the Terminix
brand and System within its defined territory.8
Bruce also fears that Terminix or TGH will license the Terminix System to
Rentokil after the merger and that Rentokil will incorporate the System into the
operations of McNeely. See Doc. 60 at 17; Doc. 71 at 1. Any such licensure and its
hypothetical terms are entirely speculative. Otherwise, this concern revolves around
something Terminix cannot do under the License Agreement. The evidence shows that TGH has
already done so, see, e.g., Doc. 17-1 at ¶ 7, and those acts are the subject of the original
complaint. Nothing else appearing, such acquisitions or new enterprises would not seem to be
the basis for a breach of contract claim against either TGH or Rentokil, since neither are parties
to the License Agreement. Whether such actions by TGH or Rentokil would give rise to other
claims depends on the facts. As discussed infra, there would be problems for TGH or Rentokil if
they purport to authorize one of Bruce’s competitors to use the Terminix name, brand or System,
since they do not themselves own such rights. TGH’s reliance on its status as a separate
corporate entity to avoid breach of contract liability and its concomitant rejection of that status to
avoid liability when it acts as if it were Terminix makes no sense. That said, the availability of
other claims against TGH is outside the scope of the pending motion.
In the merger agreement, TGH promises Rentokil that there “exist no restrictions on the
disclosure, use, license or transfer of” TGH’s intellectual property. Doc. 58-1 at p. 31 § 4.19(b).
“Intellectual property” is defined to include, inter alia, TGH’s trademarks and logos, copyrights,
and “trade secrets and industrial secret rights, and rights in know-how, data and confidential or
proprietary business or technical information.” Id. at p. 12 § 1.01. It thus appears to include the
Terminix System. This representation by TGH to Rentokil seems inaccurate, since, as the Court
has said repeatedly and as the parties agree, TGH has no rights to use the Terminix trademark or
System within Bruce’s territory independent of Terminix’s rights, which are restricted by the
whether Rentokil’s prospective disclosure of the Terminix System to Bruce’s competitors
and, implicitly, the competitors’ use of the System, violates the License Agreement,
discussed infra, not whether Terminix is contractually prohibited from being acquired by
Bruce has not shown that it is likely to succeed on the merits of its claim for a
declaratory judgment that TGH and Terminix are prohibited from merging with Rentokil
while Rentokil owns and operates a competitor within Bruce’s service area. This aspect
of the motion for preliminary injunction will be denied.
In the Supplemental Complaint, Bruce seeks a declaratory judgment that
Terminix’s disclosure of the Terminix System to Rentokil or its subsidiaries will be a
breach of the License Agreement. Doc. 58 at 12. It seeks a preliminary injunction to
prevent any such disclosure. Doc. 59 at 2.
Rentokil is essentially a holding company and is not itself in the business of
providing pest control and related services in Bruce’s territory. See Doc. 58-1 at 2; Doc.
58 at ¶ 5. Bruce is therefore unlikely to succeed on the merits of its claim that disclosure
of the Terminix System to a corporate parent would on its own breach the License
Bruce is likely to succeed on its claim that disclosure of the Terminix System to
McNeely or any other Rentokil subsidiary that competes in Bruce’s territory would
breach the License Agreement. But there is insufficient evidence that this disclosure is so
likely to occur that Bruce will be irreparably harmed if an injunction does not issue.
1. Disclosure to Rentokil
As noted supra, the License Agreement prohibits Terminix from “licens[ing]
another to establish,” within Bruce’s service area, “a location from which to operate a
Terminix System,” Doc. 1-1 at p. 9 § VII/A, as defined in the Agreement. Id. at 4.
Terminix considers aspects of its System to be confidential and Bruce must treat it as
such. See, e.g., id. at p. 6 § IV; p. 7 § V. The License Agreement, however, does not
prohibit Terminix from disclosing the Terminix System to a corporate parent holding
company that does not itself directly compete within Bruce’s service area.9 That is
exactly what Rentokil will be following the merger, and Bruce has pointed to no
authority prohibiting a company from disclosing trade secrets or assets to its holding
company, with appropriate protections in place.10
Nothing in the License Agreement prohibits Terminix from disclosing the
Terminix System to a holding company that does not itself compete with Bruce, and
Bruce is not likely to succeed on the merits of its claim for a declaratory judgment that
This assumes, as seems obvious, that Terminix has no reason to believe the holding
company will misuse this information in a way that would breach Terminix’s contractual
obligations to others, such as Bruce.
See generally Hickory Specialties, Inc. v. B & L Lab’ys, Inc., 592 S.W.2d 583, 587 (Tenn.
Ct. App. 1979) (noting general requirement under Tennessee law that trade secrets must be secret
or they are not trade secrets); Knox Trailers, Inc. v. Clark, No. 20-CV-137, 2021 WL 2043188,
at *7 (E.D. Tenn. May 21, 2021) (noting Tennessee’s trade secrets statute provides that
purportedly confidential information must be protected by secrecy measures that are “reasonable
under the circumstances”); see also Steinberg Moorad & Dunn, Inc. v. Dunn, No. 01-CV-07009,
2002 WL 31968234, at *24 (C.D. Cal. Dec. 26, 2002) (holding under California law that a parent
corporation’s public disclosure of alleged secret information was a factor in finding the
information was not a trade secret).
such a disclosure by itself breaches the License Agreement. This aspect of the motion for
preliminary injunction will be denied.
2. Disclosure to Rentokil Subsidiaries
Bruce also seeks a declaratory judgment that Terminix will breach the License
Agreement if it discloses any confidential, proprietary, technical or trade secret
information related to the Terminix System to Rentokil’s subsidiaries. Doc. 58 at 12. It
seeks a preliminary injunction to prevent that disclosure as well. Doc. 59 at 2–3.
Rentokil is acquiring all of TGH’s rights, including any rights to the Terminix
brand and System that TGH may indirectly hold through its ownership of Terminix. But
it is not acquiring any greater rights than Terminix has. In other words, and to state the
obvious, to the extent Terminix cannot act in a proscribed way in Bruce’s territory,
neither can Rentokil. See discussion supra.
Under the License Agreement, Terminix may not disclose confidential information
related to the Terminix System to a pest control business within Bruce’s service area. See
Doc. 1-1 at p. 9 §§ VII/A, VII/B. It cannot breach these provisions directly, and it cannot
give permission to a corporate parent holding company to breach those provisions either.
See discussion supra and note 9. The defendants acknowledge and agree that TGH and,
after the merger, Rentokil, have no right to disclose confidential information related to
the Terminix System to any other pest control business within Bruce’s service area,
including McNeely. To the extent Bruce’s seeks a declaratory judgment that Terminix
and any parent company may not disclose the Terminix System to Bruce’s competitors
within Bruce’s service area, it is likely to succeed on the merits of its claim.
Bruce, however, has not shown a likelihood of irreparable harm if the Court does
not issue the injunction because its evidence of disclosure to McNeely is, at this point,
speculative. McNeely is a fully operational pest control business that already competes
with Bruce without using the Terminix name, brand, or System. There is no evidence
that McNeely is not profitable or that it needs access to the Terminix name, brand, or
System to remain viable. To the extent McNeely can be made more profitable, Rentokil
could share information from the other apparently profitable non-Terminix pest control
businesses it already owns. There is no clear evidence that Rentokil will convert
McNeely to a Terminix franchise or turn over information about the Terminix System to
McNeely. Bruce has not provided evidence that the status quo will likely be affected by
the way Rentokil operates McNeely following the merger.
Bruce points to evidence that Rentokil and TGH intend to fully integrate “to create
one exceptional company,” Doc. 58-8 at 2, and will “shar[e] best practices,” Doc. 58-3 at
4, but it has not offered specifics about what that integration will entail, when it will
happen, or whether that integration includes disclosure of the Terminix System to
competitors within Bruce’s territory. See Doc. 58 at ¶ 22. While it is possible that
Rentokil will disclose the System to McNeely, possibility is not enough for a preliminary
injunction; Bruce must show a likelihood of actual and imminent irreparable harm. See
Winter, 555 U.S. at 21–22; Scotts, 315 F.3d at 283.
The issue can be resolved at trial without harm to the status quo. If before then
Rentokil takes steps toward allowing competitors within Bruce’s service area to use the
Terminix name or toward disclosing the Terminix System to them, Bruce may seek relief
at that point. But as of now, Bruce has not shown it will likely sustain irreparable harm if
the proposed injunctive relief is not issued.
Motion for Leave to File Declaration
After briefing and oral argument, defendants sought leave to file a declaration by
John Myers, President and CEO of Rentokil North America, Inc. Doc. 73. Bruce
opposes the motion. Doc. 74. The defendants have not explained why they could not
and did not obtain and file this evidence earlier, and the motion will be denied.
Federal Rule of Civil Procedure 6(c)(2) states that “any opposing affidavit must be
served at least 7 days before the hearing, unless the court permits service at another
time.”11 While a district court may in its discretion consider late documents in support of
a motion, such exceptions are generally only appropriate when the movant shows good
cause or excusable neglect. See Orsi v. Kirkwood, 999 F.2d 86, 91 (4th Cir. 1993)
(collecting cases); see also Aldridge v. Marion Cnty. Coal Co., No. 17-CV-79, 2017 WL
3446530, at *5–6 (N.D. W. Va. Aug. 10, 2017). The Local Rules allow for an extension
of time to file supporting documents with a response brief but only if it is shown the
documents cannot be filed contemporaneously with the brief. LR 7.3(f), (g).
The defendants have not shown good cause or excusable neglect to justify their
late filing. Rentokil’s conduct after the merger has been at issue since Bruce filed the
supplemental complaint and Bruce filed the pending motion several months ago; the
Fed. R. Civ. P. 6(c)(2) only refers to “affidavits” but it applies to other documents in
support of a motion, such as declarations. See Masters v. Lin, No. 14-CV-2473, 2015 WL
12830505, at *6 (D.S.C. Jan. 23, 2015).
defendants could have offered the declaration with their response briefing or shortly
thereafter. Allowing the late filing would also prejudice Bruce, which could not respond
to the declaration in reply briefing or at the hearing or depose Mr. Myers before the
pending motion was submitted. That the declaration would be helpful to the Court does
not establish good cause or excusable neglect for failure to comply with filing deadlines.
In any event, even if the Court considered the declaration in full, it would not change the
outcome of this motion.
Right now, Bruce competes against McNeely within Bruce’s service area. After
the Rentokil and TGH merger, that will still be the case. Bruce has not shown it is likely
to succeed on the merits of its claims that Terminix breaches the License Agreement by
merging with Rentokil and by disclosing the Terminix System to Rentokil. So long as
Terminix honors its contractual obligations within Bruce’s service area not to license or
allow to be licensed another Terminix franchise, not to disclose or allow to be disclosed
the Terminix System to a competitor or other entity likely to use it in violation of
Terminix’s obligations to Bruce, and not to establish new competing businesses that use
some of the Terminix System, then Bruce is not harmed. Bruce’s motion for a
preliminary injunction will be denied.
It is ORDERED that:
1. The plaintiff’s second motion for preliminary injunction, Doc. 59, is DENIED;
2. The defendants’ motion for leave to file the declaration of Mr. Myers, Doc. 72, is
This the 1st day of August, 2022.
UNITED STATES DISTRICT JUDGE
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