ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR A TEMPORARY RESTRAINING ORDER; DENYING MOTION FOR EXPEDITED DISCOVERY WITHOUT PREJUDICE; SETTING HEARING FOR JUNE 11

Re: ECF No. 11

JON S. TIGAR, District Judge.

Plaintiffs Verliant Energy, Inc. and Verliant Sciences, LLC (collectively, "Plaintiffs") have moved for a temporary restraining order barring their former employee and Defendant Christopher John Barry ("Defendant") from conducting various commercial activities, and ordering him to return intellectual and other property Plaintiffs claims to own. See Proposed Order at ECF No. 11-3. Plaintiffs allege that they are California citizens and that Defendant is a British citizen, see Complaint ¶¶ 3-5, ECF No. 1, giving this court jurisdiction pursuant to 28 U.S.C. § 1332(a). Plaintiffs' complaint also brings causes of action under federal law, giving this court jurisdiction pursuant to 28 U.S.C. § 1331.

The same legal standard applies to a motion for a temporary restraining order and a motion for a preliminary injunction. See Stuhlbarg Int'l Sales Co. v. John D. Brush & Co., 240 F.3d 832, 839, n. 7 (9th Cir. 2001). A plaintiff seeking either remedy "must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest." Am. Trucking Associations, Inc. v. City of Los Angeles, 559 F.3d 1046, 1052 (9th Cir. 2009) (quoting Winter v. Nat. Resources Defense Council, 555 U.S. 7, 20 (2008)). Injunctive relief is "an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief." Winter, 555 U.S. at 22.

To grant preliminary injunctive relief, a court must find that "a certain threshold showing is made on each factor." Leiva-Perez v. Holder, 640 F.3d 962, 966 (9th Cir. 2011). Provided that this has occurred, in balancing the four factors, "`serious questions going to the merits' and a balance of hardships that tips sharply towards the plaintiff can support issuance of a preliminary injunction, so long as the plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is in the public interest." Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011).

In addition, a movant seeking the issuance of an ex parte TRO must satisfy Rule 65(b) of the Federal Rules of Civil Procedure, which requires a showing "that immediate and irreparable injury, loss, or damage will result to the movant before the adverse party can be heard in opposition" and certification of "efforts made to give notice and the reasons why it should not be required." Fed. R. Civ. Pro. 65(b)(1).

From the evidence before the Court at this time, Plaintiffs have demonstrated the probability of success on the merits of their breach of contract and misappropriation of trade secret claims. See Declaration of Andrew Chiu ¶¶ 5, 8-16, 32, 35-40. At the very least, there are serious questions going to the merits of both claims.

Plaintiffs have also provided evidence that they will suffer the possibly irreversible loss of trade secrets and proprietary intellectual property, and the loss of significant business goodwill. Id. ¶ 47. As many courts have recognized, this type of harm is typically considered irreparable. See Stuhlbarg, 240 F.3d at 841; W. Directories, Inc. v. Golden Guide Directories, Inc., No. 09-cv-1625-CW, 2009 WL 1625945, at *6 (N.D. Cal. June 8, 2009). For this reason, the balance of equities tips sharply in Plaintiffs' favor. Plaintiffs' claimed irreparable harm significantly outweighs any harm to Defendant of being restrained from taking the actions described in the temporary restraining order during the short time this order will remain in effect. For similar reasons, an injunction is in the public interest.

However, the purpose of an emergency temporary restraining order is to preserve the status quo while a request for fuller injunctive relief is under consideration. Several of Plaintiffs' requests for injunctive relief require Defendant to take affirmative actions, such as to send to Plaintiffs certain documents and data currently within his control. Therefore, the court will not grant Plaintiffs' proposed order at this time to the extent it seeks those affirmative acts. The Court also will not issue an order against unnamed persons and entities who are not parties to the lawsuit. The court enters a version of Plaintiffs' proposed order with the modifications displayed as Exhibit A to this order. The deletion of this language is without prejudice to Plaintiffs' later demonstration that their proposed scope of order is both appropriate and enforceable.

The temporary restraining order will remain in effect only until this matter may be heard and Defendant has had an opportunity to respond. The Court hereby SETS this matter for hearing on Wednesday, June 11, 2014, at 9 a.m., 450 Golden Gate Avenue, Courtroom 9, 19th Floor, San Francisco, California. At that hearing, the court will consider whether to extend or dissolve the temporary restraining order and whether to issue an order to show cause why a preliminary injunction should not issue. Plaintiffs' counsel is ORDERED to immediately provide notice of this order to Defendant and to file a declaration with the court within forty-eight hours of this order, describing the efforts he has made to provide such notice. Defendant, may, but is not required to, file any written response to Plaintiffs' motion by 12:00 p.m. on June 10, 2014.

In Plaintiffs' motion (but not in any sworn declaration), counsel states that "VERLIANT is providing notice of the instant application to BARRY's identified counsel by email, telephone and mail." Motion, at 5 (ECF No. 11). The Court understands Plaintiffs to mean that they provided notice at or very shortly after the time that the motion was filed yesterday at 6:18 P.M. In his declaration, Plaintiffs' counsel must also describe exactly what efforts he made to provide notice of the motion to Defendant and exactly when those actions were taken.

The Court also will not grant Plaintiffs' request for expedited discovery or the issuance of a protective order. Instead, Plaintiffs and Defendants' counsel are ordered to immediately meet and confer regarding (1) appropriate, limited, expedited discovery and (2) the contents of an appropriate protective order.

Pursuant to Rule 23(c), Plaintiffs shall post a bond of $25,000 within three court days of this order.

IT IS SO ORDERED.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND MOTION FOR PRELIMINARY INJUNCTION AND DENYING WITHOUT PREJUDICE ORDER PERMITTING EXPEDITED DISCOVERY

Upon consideration of the application of Plaintiffs VERLIANT ENERGY, INC. and VERLIANT SCIENCES, LLC ("VERLIANT" or "Plaintiffs") for a Temporary Restraining Order, its accompanying Memorandum of Points and Authorities, the Declarations of Andrew Chiu and Andrew Castricone, and all of the prior proceedings had herein,

1. The Court concludes that, if this temporary restraining order is not issued, Plaintiffs will be irreparably harmed by having their valuable trade secrets disclosed to others competing in the same industry, and may have their other valuable intellectual property exposed to competitors in the field. This exposure of their confidential and proprietary information to other entities in the same industry will likely irreparably harm Plaintiffs, and their efforts to maintain their advantage in their industry. The Court further finds that the specific facts in the declarations submitted by Plaintiffs clearly show that immediate and irreparable injury, loss, or damage will result to them before the Defendant can be heard in opposition; and

2. IT IS THEREFORE ORDERED that Defendant CHRISTOPHER JOHN BARRY ("BARRY" or "Defendant"), and all those acting in concert with him, including but not limited to the directors, officers, employees, agents, affiliates, business partners of Defendant's new employer, are is hereby temporarily enjoined and restrained from:

a. violating the non-compete clause of Defendant's Employment Agreement with VERLIANT, which prohibits Defendant from providing services for any competitor, and also to not solicit Verliant's actual or prospective customers;

b. using, disclosing or transmitting for any purpose, including without limitation, the Intellectual Property assigned to VERLIANT via the Intellectual Property Agreements, and developed at/by VERLIANT while Defendant was working with VERLIANT;

c. using, disclosing or transmitting for any purpose any confidential or proprietary documents and/or information belonging to or concerning VERLIANT and actual or potential customers/business partners, including but not limited to the confidential information, trade secrets and commercially sensitive materials of VERLIANT; and

d. soliciting, inducing, causing, or assisting any third party in soliciting, any actual or potential customers/business partners who Defendant became aware of as a result of Defendant's work with VERLIANT.

3. Specifically, BARRY shall (a) refrain from soliciting business from any of VERLIANT's existing or prospective customer or business partner, and from accepting or maintaining any business with any of these customers or business partners whom BARRY has solicited or discussed VERLIANT's intellectual property, trade secrets, and other Proprietary Information, for the purpose of doing business with BARRY, including, but not limited to the following (collectively referred to as "the List")

4. BARRY shall also refrain from possessing, copying, using, disclosing or transmitting for any purpose, (including, but not limited to solicitation of VERLIANT's existing or prospective customers or business partners, including the List), the confidential information and data contained in VERLIANT's laboratories, offices, records, files, and databases, including, without limitation, VERLIANT's intellectual property, trade secrets, and other Proprietary Information, including all tangible and intangible property regarding and associated data, research, test results, analyses, formulas, processes, and customer and business partner names, addresses, contact information and associated data and research information;

5. BARRY shall immediately return to VERLIANT all of its original records, copies, transcriptions, and computerized data in BARRY's possession, custody or control;

6. BARRY shall refrain from imitating, copying or making unauthorized use or representations of and regarding VERLIANT's trademarks, patents, and other trade secrets and Proprietary Information, including but not limited to

7. BARRY shall refrain from imitating, copying or making unauthorized use or representations regarding VERLIANT's products, technology and processes, including, but not limited to its "Verliant Energy Advanced Anaerobic Digestion" (VEAAD™) technology, or any other copy or colorable imitation of VERLIANT's trademarks, trade dress, patents, and trade secrets for BARRY's use in promoting or soliciting business; and

8. BARRY shall refrain from engaging in any other activity constituting false advertising, false designation of origin, or unfair competition with VERLIANT or constitution of infringements of or damage to VERLIANT's name, trademarks, trade dress, patents, and other intellectual property, reputation or goodwill.

9. The parties are granted leave to conduct expedited discovery before the hearing on the preliminary injunction;

10. The Court orders entry of a Protective Order, as well as in camera hearings to preserve the secrecy of VERLIANT's intellectual property, trade secrets and other proprietary information;

11. There shall be an accounting be ordered in favor of VERLIANT and against Defendant for all profits received due to BARRY's interference, infringement, unfair competition, false advertising and false designation of origin;

12. IT IS FURTHER ORDERED that Defendant, and all those acting in concert with him, including but not limited to the directors, officers, employees and agents of those persons and entities set forth on the List are further ordered to return to VERLIANT or its counsel all records, documents and/or information in whatever form (whether original, copied, computerized or handwritten), pertaining to VERLIANT'S trade secrets and other proprietary information within twenty-four hours of notice to Defendant or his counsel of the terms of such an order;

13. The parties are granted leave to commence expedited discovery in aid of preliminary injunction proceedings before this Court.

14. Plaintiffs shall post a bond in the amount of $25,000 within three court days of the entry of this Order.

15. Plaintiffs' request that the time for service of the Order to Show Cause and accompanying papers be shorted so that they may be served no less than _____ days before the date set for hearing because of the great and irreparable injury to Plaintiffs. This Order to Show Cause and supporting papers shall be served on defendant no later than _______________________ (date) by _____________________________ (manner of service) ____________________. Proof of such service shall be filed and delivered to this court on _____________ (date).

The following briefing schedule shall apply: Any Opposition papers to the OSC shall be filed and served on Plaintiff no later than _______________________, 2014. Any Reply papers to such Opposition shall be filed and served on defendant no later than _____________________, 2014.

16. This Order shall remain in full force and effect for a period of ___________ days pursuant to Fed. R. Civ. P. 65. until the conclusion of the hearing noticed for June 11, 2014, at 9:00 a.m., in Courtroom 9, 450 Golden Gate Avenue, San Francisco, California, unless the order is further extended by order of the Court.

IT IS SO ORDERED.