Plaintiff’s UNOPPOSED Application for Preliminary Injunction
Plaintiff Layfield & Barrett APC asks the court to issue a preliminary injunction barring its former employee Defendant Steven E. Weinberger from using trade secret and confidential information obtained during his employment to solicit former clients of the law firm with whom he had no prior relationship. (CCP 1281.8 (a)(3) & (b); CCP 527.)
In its proposed order, the Plaintiff law firm seeks a preliminary injunction pursuant to the following language:
“restraining and enjoining you [Defendant Weinberger], your employees and agents, your attorneys, or any other persons acting with you or on your behalf, from using any confidential information belonging to Layfield & Barrett, APC that you obtained during your employment with Layfield & Barrett, APC, including, but not limited to client lists, client contact information, lists or contact information of Layfield & Barrett, APC’s co-counsel or referral relationships, lists of current or former employees, and contact information for current or former employees that was obtained during the course of your employment by Layfield & Barrett, APC, and from soliciting clients of Layfield & Barrett, APC with which you had no prior relationship prior to your employment with Layfield & Barrett, APC.” (emphasis added.)
Plaintiff has submitted a copy of the demand for arbitration at Ex. 9. (CCP 1281.8 (b).) The Plaintiff’s application is supported by declarations. (CCP 527(a).)
Plaintiff law firm makes a prima facie showing that on 9/14/15 it hired Defendant as a senior trial attorney to work at the firm’s Scottsdale, Arizona office. Defendant signed a letter agreement regarding his employment, an arbitration agreement, and a confidentiality agreement.
Plaintiff law firm makes a prima facie showing that Defendant Weinberger mismanaged the Scottsdale office, by failing to follow the firm’s methods for developing and managing co-counsel relationships, by failing to meet his own revenue projections, by failing to follow the firm’s policies and procedures, by repeatedly making unreasonable and unsupported claims for referral fees and bonuses to which he was not legally entitled given his failures and poor performance, and by exhibiting increasing absences from the office and inattentiveness to his cases. (See generally Layfield Decl.)
Weinberger committed serious acts of professional negligence and legal malpractice in at least five cases, as detailed in the law firm’s application at pp. 10-12. On 1/20/17, the law firm fired Weinberger for cause. (Ibid.)
Weinberger then set about working with former co-counsel John Aguirre. Weinberger violated his confidentiality agreement by using client information to solicit clients from the firm and to disparage the firm’s reputation and to damage the firm’s relationships with existing clients. (Ibid.; See also Wakefield Decl.)
Plaintiff law firm argues correctly that the California Supreme Court has expressly held that it is well-established that:
“Under the UTSA, a client list qualifies as a ‘[t]rade secret’ if it ‘[d]erives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use’ and ‘[i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy.’ A violation of the UTSA occurs when an individual misappropriates a former employer’s protected trade secret client list, for example, by using the list to solicit clients or to otherwise attain an unfair competitive advantage.” (Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1155-1156.) (internal citations omitted.)
Plaintiff law firm makes a prima facie showing that its client lists and client contact information were confidential and constituted trade secrets, and that Defendant violated his confidentiality agreement by misappropriating that information and improperly using it to solicit clients and interfere with the law firm’s existing business relationships.
Defendant Weinberger has filed no Opposition and has failed to contest or refute the Plaintiff law firm’s prima facie evidentiary showing.
Therefore, the court finds that Plaintiff law firm has met its burden to show a likelihood of prevailing on the merits as to these allegations. The court also finds that the harm the moving party will likely suffer if the application is denied outweighs the harm the Defendant Weinberger is likely to suffer if the application is granted.
Accordingly, the application for preliminary injunction is GRANTED.
- General Law
A preliminary injunction is issued after hearing on a noticed
motion. Its purpose is to preserve the status quo and prevent
irreparable harm pending trial on the merits.
- Burden of Proof
Although the OSC directs the responding party to show cause why the preliminary injunction should not issue, the burden is on the moving party to show all elements necessary to support issuance of a preliminary injunction. (O’Connell v. Superior Court (2006) 141 Cal.App. 4th 1452, 1481.)
As the moving party, Plaintiff has the burden to show that it has a reasonable probability of prevailing on the merits and that the harm it will suffers if relief is denied outweighs the harm Defendant will suffer if relief is granted.
In deciding whether to issue a preliminary injunction, the court must consider two interrelated factors: (1) the likelihood that the moving party will prevail on the merits, and (2) whether the harm the moving party will likely suffer if the motion is denied outweighs the harm the opposing party is likely to suffer if the motion is granted. (Ketchens v. Reiner (1987) 194 Cal.App.3d 470, 474.)
The moving party has the burden to show that it is reasonably probable it will prevail on the merits. (San Francisco Newspaper Printing Co. v. Superior Court (1985) 170 Cal.App.3d 438, 442; Weil & Brown, ¶ 9:632.1.)
- No Statement of Decision Required
Although the hearing is evidentiary, it is not a “trial” within the meaning of CCP 632. Therefore, no statement of decision is required in granting or denying a preliminary injunction. (People v. Landlords Professional Services Inc. (1986) 178 Cal.App. 3d 68, 70-71; Whyte v. Schlage Lock Co. (2002) 101 Cal.App.4th 1443, 1450-1451.)
- Not an Adjudication on the Merits
A ruling on an application for preliminary injunction is NOT an adjudication on the merits of the ultimate rights in controversy. It merely represents the trial court’s discretionary decision whether defendant should be restrained from exercising a claimed right pending trial. (Cohen v. Board of Supervisors (1985) 40 Cal. 3d 277, 286.)
- Bond Requirement
If the preliminary injunction is granted, as a general rule, the court must require an undertaking under CCP 529 or allow a cash deposit in lieu thereof under CCP 995.710. A bond given for a TRO will not serve as a bond for a preliminary injunction. A new bond is required. (Mangini v. Durand (1994) 31 Cal.App. 4th 214, 218.)
The likelihood that the moving party may prevail on the merits is an irrelevant consideration in fixing the bond amount. The undertaking is designed to compensate the responding party in the event, however unlikely, that the preliminary injunction is finally determined to have been unjustified. (Abba Rubber Co. v. Seaquist (1991) 235 Cal.App. 3d 1, 16.)
Plaintiff shall post a bond of $10,000 before the preliminary injunction shall issue, or Plaintiff shall show cause why a lesser bond amount would be appropriate, citing applicable case law in support of its arguments.
Plaintiff shall serve notice of this ruling.