Category Archives: Case Summary

Supreme Court Expands Protections to Companies Providing Proprietary Information to the Federal Government

June 24, 2019 By in Case Summary, Trade secrets Tags: , , Leave a comment

As I’ve written about previously (see here and here), the Supreme Court heard argument earlier this year in a case that implicates trade-secrets issues, Food Marketing Institute v. Argus Leader Media. I covered the oral argument for this blog. Today, the Court entered its opinion, authored by Justice Gorsuch.

In short, this case addressed whether satisfying the Freedom of Information Act’s (FOIA) exemption for “trade secrets and commercial or financial information obtained from a person and privileged or confidential,” requires a showing of substantial competitive harm. 5 USC § 552(b)(4).

As I suspected, the majority (Justices Gorsuch, Roberts, Thomas, Alito, Kagan, and Kavanaugh) answered this question in the negative and abdicated the competitive-harm requirement. Instead, the Court adopted a more permissive test:

At least where commercial or financial information is both customarily and actually treated as private by its owner and provided to the government under an assurance of privacy, the information is “confidential” within the meaning of Exemption 4.

During oral argument, trade secrets came up in the context of one of the appellee’s attempts to justify the competitive-harm test. Argus Leader argued that by referring to confidential commercial information, the statue used a term of art that required treating this information under the then-existing trade-secrets law. Because that law required showing competitive harm, Argus Leader argued, Exemption 4 required the same.

The Court rejected this argument:

Argus Leader points to no treatise or case decided before Exemption 4’s adoption that assigned any such meaning to the terms actually before us: “commercial or financial information [that is] privileged or confidential.” So even accepting (without granting) that other phases may carry the specialized common law meaning Argus Leader supposes, the parties have mustered no evidence that the terms of Exemption did at the time of their adoption.

This opinion aids companies who provide proprietary information to the federal government, as it removes the most troublesome hurdle to exempting that information from FOIA disclosure. But importantly, under the new test, the government must provide an assurance of privacy before Exemption 4 applies. Thus, any company providing proprietary information to the federal government should first receive that assurance.

Supreme Court Discusses Trade Secrets During Oral Argument

April 23, 2019 By in Case Summary, Trade secrets, Trade Secrets In the News Tags: , , , Leave a comment

Yesterday, the Supreme Court held oral argument Food Marketing Institute v. Argus Leader Media, a case involving an exemption to the Freedom of Information Act (FOIA). The Supreme Court’s Public Information Office granted me a press pass to cover the arguments for this blog, since the case involves trade-secrets issues.

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As I discussed previously, the FOIA contains an exemption for “trade secrets and commercial or financial information obtained from a person and privileged or confidential,” which does not need to be disclosed publicly. 5 USC 552(b)(4). This case addresses the scope of this exemption.

First, some background. Food Marketing Institute is a trade association representing retailers who operate tens of thousands of retail food stores. Argus Leader is a newspaper in Sioux Falls, South Dakota. As part of an investigation of food-stamp fraud, the newspaper filed a FOIA request with the USDA for data showing the amount of Supplemental Nutrition Assistance Program (SNAP)—formerly the Food Stamp Program—redemptions at individual stores.

While much SNAP data is publicly available, this store-level information is not. At the District Court, USDA presented evidence that the store-level data would provide a competitive advantage to other companies if released publicly. After a two-day trial, the District Court disagreed and ordered disclosure. The USDA gave notice to the retailers that it would not appeal, at which point Food Marketing Institute intervened to appeal on the USDA’s behalf.

The Eighth Circuit affirmed, relying on the D.C. Circuit’s test in Nat’l Parks & Conservation Ass’n v. Morton, 498 F.2d 765 (D.C. Cir. 1974), which eight circuits subsequently adopted. Under this test, the above exemption only applies if (1) the information at issue is kept private and not disclosed, and (2) “substantial competitive harm” would likely result if the information is publicly disclosed.

Food Marketing Institute argues that the National Parks test ignores the common meaning of the word “confidential,” thereby adding an “extratextual” requirement of showing competitive harm. Instead, it argues, the Court should apply its longstanding rules of statutory construction and give “confidential” its ordinary meaning, i.e., information “that is privately held and not disseminated,” without the need to show competitive harm if disclosed.

During oral argument, much of the Court’s questions for Food Marketing Institute’s lawyer, Evan Young, involved threshold justiciability issues that are outside this blog’s scope.

But, for our purposes, things got more interesting when Argus Leader’s lawyer, Robert Loeb, got his turn. One of Argus Leader’s primary arguments is that the Court should not look to the ordinary meaning of the term “confidential.”  Instead, because Congress used the language “trade secrets and commercial or financial information,” the Court should look to the then-existing common-law meaning of that term of art.

In its brief, Argus Leader argues that when the above exemption was enacted:

There was an established common-law term of art for non-public business information, disclosure of which would be tortious because it would cause competitive harm. Both courts and the relevant (and near-universally adopted) provisions in the first RESTATEMENT OF TORTS (1939) used the term “trade secrets and other confidential commercial information” (or some near-identical equivalent) to refer to this body of protected materials. Thus, in saying “trade secrets and other confidential commercial information,” courts and commentators meant non-public business information that would likely cause competitive harm if released.

Much of the Court’s questioning of Loeb focused on this argument. Justice Kagan, sounding like her more conservative colleagues, asked him to “give me your best textual argument” for why National Parks correctly interpreted the statute. Loeb responded by saying that the Court needs to look at the words Congress used in context, and that under common law, trade secrets included a competitive-harm requirement.

Justice Sotomayor responded by saying that the Court normally only applies common law to interpret statutory language when there is a term of art. Here, case law used different terms and phrases to cover trade secrets and confidential information. In response, Loeb argued that under the common law, there were two categories, trade secrets and confidential information. And both required a showing of competitive harm.

This didn’t seem to satisfy Justice Gorsuch, who noted that when a statute uses different words from the common law, it’s usually presumed that Congress intended a meaning other than the common law.

Justice Breyer focused on the concept of harm and how such a term would be defined. Noting that “you don’t have to write this opinion, but I might,” Justice Breyer pushed Loeb to clarify what words should be used in the opinion to describe the nature of harm that must be shown. Loeb again pointed to the common law.

Justice Alito asked whether, under common law, a showing of competitive harm was part of the claim itself or only a means for proving damages. Per Loeb, under common law, competitive harm is part of the essence of a trade secret.

Based on the Justices’ comments at oral argument, at least some of them have issues with the justiciability of this case, questioning whether Food Marketing Institute’s claims can be redressed or if they are moot. But if the Court reaches the merits of this case, I predict that it will strike the National Parks test, opting for the customary definition of “confidentiality,” without a showing of competitive harm.

Supreme Court to (Possibly) Address Trade Secrets

April 7, 2019 By in Case Summary, Defend Trade Secrets Act, Florida Non-Compete Lawyer, Trade secrets, Trade Secrets In the News Tags: , , , , 2 Comments

The U.S. Supreme Court rarely hears cases involving trade secrets, primarily because trade secrets have historically been governed by state law. Now that we have the Defend Trade Secrets Act (DTSA), it is more likely that the Court will have to address Circuit splits on statutory interpretation. But thus far, no such issues have reached the Supreme Court.

In a few weeks, however, the Court will hear oral argument in Food Marketing Institute v. Argus Lender Media, a Freedom of Information Act (FOIA) case that involves trade-secrets issues.

The FOIA contains an exemption for “trade secrets and commercial or financial information obtained from a person and privileged or confidential,” which does not need to be disclosed publicly. 5 USC 552(b)(4). This exemption has been interpreted to require proof that disclosure would cause substantial harm to the information source’s competitive position. Circuits have split on how to interpret this test.

The petitioner is asking the Court to dispense with this test and instead hold that the term “confidential” be interpreted under its ordinary meaning, i.e., information “that is privately held and not disseminated,” without the need to show competitive harm if disclosed. See Petitioner’s Brief at p. (i). Alternatively, the petitioner wants the Court to clarify that the substantial harm test is satisfied if “the party opposing disclosure establishes a reasonable possibility that disclosure might injure financial or competitive interests.” Id.

Since the statutory exemption includes trade secrets alongside confidential information, the Court may offer insight into how trade secrets are defined under the FOIA. In such a case, the Court’s comments could carry substantial weight in DTSA cases. Regardless, this case presents important issues for any company that seeks to protect its confidential information  and trade secrets when contracting with the government.

Will Two Lawyers Go to Jail for Asserting Trade Secrets in Bad Faith?

December 15, 2017 By in Case Summary, Florida Non-Compete Lawyer, Trade secrets, Trade Secrets In the News Tags: , , , Leave a comment

Two South Florida lawyers are facing possible jail time, in part because of allegedly asserting in bad faith that documents contained trade secrets. They supposedly wanted to prevent disclosure of documents that proved their witness testified inaccurately. In a case pending in Miami-Dade County Circuit Court, Green Tree Servicing v. Sibon, the judge decided yesterday to go forward with an arraignment for the two lawyers representing the plaintiff, a large loan servicer, on charges of indirect criminal contempt.

This started as a mortgage foreclosure case. The defendants asserted defenses relating to the plaintiff’s “loan boarding” process, i.e., how the plaintiff uploads information from prior servicers’ records, including borrowers’ payment history.

During a deposition, the plaintiff’s representative testified that the company’s training manuals included protocols for verifying this information, including a flow chart showing the process. But the plaintiff had not previously produced those manuals. Not surprisingly, the defendants’ lawyers demanded their production.

The court entered an order requiring production of the manuals and a further deposition of the plaintiff. Three days before the deposition, the plaintiff filed an emergency motion, asserting that the manuals contained trade secrets and work product. The next day, the court entered an order ruling that the motion was not an emergency and directed the plaintiff to set the motion for a hearing (the usual protocol in Miami-Dade Circuit Court for having a judge rule on a motion).

The deposition went forward without production of the manuals. But the plaintiff never set its emergency motion for hearing. Several months later, the court entered an order requiring production of the manuals by noon that day. At 11:59, the plaintiff produced them.

Apparently, the manuals contradict the witness’s testimony. According to the judge, “the document does not contain any ‘flow chart’ that mentions ‘red flags’ that prevent loans from boarding as Mr. Ogden testified he reviewed. To the contrary, it appears from the document produced that [the plaintiff] boards the prior servicer’s records . . . and makes the loan live on its system before any verification process would even begin.”

And then it got interesting. The judge entered an order to show cause, which can be downloaded here. That order informs both the witness and the plaintiff’s attorneys that “this is now a criminal matter” and directs them to appear to show cause why they should not be held in indirect criminal contempt:

It appears that [the plaintiff] and its counsel willfully and contumaciously ignored this Court’s order by refusing to turn over the training materials. Moreover, it appears [the plaintiff] and its counsel improperly sought to have the records deemed confidential to avoid disclosure of the fact that its witness gave grossly inaccurate testimony[.]

According to an article in the Daily Business Review, yesterday, the new judge handling the case (the prior judge recused himself) “ruled that [the witness] was ‘operating at the will of the lawyers’ and dismissed him from the criminal contempt proceedings.” But she will be going forward with the criminal case against the lawyers, pending an appeal.

If true, this is an egregious abuse of the trade-secrets laws. It’s one thing to be over broad when asserting trade-secret protection. It’s another thing entirely to assert trade secrets when none exist, solely to hide a witness’s inaccurate testimony. It will be interesting to see whether these lawyers are sanctioned, and if so, how harshly.

Florida Supreme Court Issues Landmark Noncompete Opinion

September 17, 2017 By in Case Summary, Florida Non-Compete Lawyer, Noncompete Tags: , , , , 1 Comment

It’s been a difficult week in Florida, as the state recovers from Hurricane Irma. But the storm did not deter the Florida Supreme Court from issuing what could be one of the most important opinions in the state’s history regarding Section 542.335, Florida Statutes, the statute governing restrictive covenants. I’m still dealing with hurricane-related issues as my office in Miami prepares to re-open tomorrow, which prevents me from relaying an in-depth analysis. But I wanted to pass along some key takeaways. A more comprehensive analysis will follow in the coming weeks.

This opinion, White v. Mederi Caretenders Visitng Services of Southeast Florida, LLC, resolves a District split on the issue of whether referral sources can constitute a legitimate business interest, a prerequisite under the statute. Referral sources are not included in the statute’s list of protectable business interests, but the statute prefaces that list with the words “includes, but is not limited to.”

I previously wrote about the divergent holdings on this issue. I argued that the Florida Supreme Court should give life to the statute’s “includes, but is not limited to” provision by ruling that referral sources can be a legitimate business interest. The opinion ended up mirroring my analysis, holding that “the subject statute protects a plethora of protected legitimate interests far beyond those listed in the subject statute.” Here are a few key points:

  • This opinion has far-reaching implications beyond cases involving referral sources. It makes clear that courts should engage in industry-specific, context-based analysis to determine whether the plaintiff has a legitimate business interest, regardless of whether that interest is listed in the statute:

The illustrative list guides courts in their interpretation of what types of non-enumerated business interests qualify as legitimate under Section 542.335. However, because the statue protects more business interests than those specifically listed, courts must necessarily engage in fact- and industry-specific determinations when construing non-enumerated interests.

  • The opinion repeatedly references industry-specific determinations. Lawyers attempting to enforce a restrictive covenant should consider what types of industry-specific evidence is necessary to justify the restrictive covenant.
  • The Court also emphasized the purpose of the statute: “preventing unfair competition by protecting critical business interests.” This focus on unfair competition may shift courts’ analysis towards a determination of the unfair advantage provided to the new employer. This was always a consideration on some level, but it may rise in prominence.
  • The opinion also contains language that will likely be cited by defendants: “For an employer to be entitled to protection, there must be special facts present over and above ordinary competition such that, absent a non-competition agreement, the employee will gain an unfair advantage in future competition with the employer.”
  • Lawyers drafting restrictive covenants under Florida law should consider whether it makes sense to include language in which the employee acknowledges the importance of the business interest at issue to the company, particularly when that interest is not enumerated in the statute.

This opinion may embolden companies looking to enforce restrictive covenants. I would not be surprised if this case leads to increased litigation involving alleged business interests outside those listed in the statute. More analysis to come.

A copy of the opinion can be downloaded here.

Florida Companies: Are Your Non-Competes Missing This Critical Provision?

June 15, 2017 By in Advice, Case Summary, Florida Non-Compete Lawyer, Noncompete Tags: , , , , , Leave a comment

Under Florida’s restrictive-covenant statute, Section 542.335(f), a restrictive covenant is only enforceable by a successor entity or third-party beneficiary if the agreement so provides. This provision can become very important following corporate merger or sale transactions. Or in the due-diligence period leading up to those transactions.

In a recent Florida case, Collier HMA Physician Mgmt, LLC v. Menichello, the plaintiff almost fell victim to this statutory requirement. A copy of the opinion can be downloaded here.

In this case, the plaintiff owns a healthcare business employing approximately 40 doctors. It also operates two hospitals and clinics. The defendant, a physician, previously worked for the plaintiff, where he signed a non-compete agreement prohibiting him from working for certain of the plaintiff’s competitors. After his departure, he accepted a position with one of those competitors, and the plaintiff filed suit.

The physician argued that a merger transaction involving the plaintiff’s corporate parent triggered the statutory provision above. Per the physician, since the agreement did not expressly provide for enforcement by successors, the merger invalidated the non-compete. The trial court agreed and granted summary judgment in the defendant’s favor.

The appellate court reversed. To reach that conclusion, it interpreted the term “successor” in the statute as “a corporation that, through amalgamation, consolidation, or other assumption of interests, is vested with the rights and duties of an earlier corporation.”

The court found that “the status of [the plaintiff] after the merger does not comport with the standard definition of a successor as it relates to corporations or other business entities.” In particular, there were several tiers of corporate entities between the plaintiff and the parent company that was subject to the merger. While the ownership of the ultimate parent company changed, “nothing about the corporate structure or ownership of [the plaintiff] was different after the merger”; it “continued in existence as a single member limited liability company.”

In the end, the plaintiff here was able to enforce its non-compete agreement. But all of this trouble could have been avoided. This leads to a very simple takeaway: when drafting restrictive covenants in Florida, include a provision allowing their enforcement by successors and assigns. Florida companies with existing restrictive-covenants should have a lawyer review them for compliance with this statute.

Similarly, anyone considering acquiring or merging with a company with Florida employees/independent contractors needs to have a lawyer review any restrictive covenants for this purpose.

The failure to include this provision could lead to all sorts of problems. For example, it could impede a later merger or sale of the company. But any Florida company can avoid these problems by having a lawyer conduct a simple review.

 

Damages for Misappropriation of Trade Secrets Found Non-Dischargeable In Bankruptcy

May 1, 2017 By in Case Summary, Trade secrets Tags: , Leave a comment

Guest post by Solomon B. Genet

As Eric’s law partner, from time to time I “guest post” on trade secret issues in the insolvency / bankruptcy context.  One important issue involves the dischargeability of pre-bankruptcy misappropriation claims. The March 31, 2017 In re Mandel decision out of the Eastern District of Texas addresses this issue.  There, claimants filed proofs of claim in Mandel’s bankruptcy case alleging that the debtor violated the Texas Civil Theft Liability Act (“TCTLA”) by misappropriating trade secrets. The debtor objected to these claims. On September 30, 2011, the bankruptcy court tried the matter and found that the debtor violated the TCTLA and awarded the claimants damages and attorney’s fees. Years later, the issue before the bankruptcy court was whether these claims (arising from conduct prior to the bankruptcy filing) could be discharged in the bankruptcy case.

The claimants asserted that the damages for violation of the TCTLA were non-dischargeable on a variety of bases, and the bankruptcy court ruled in favor of the claimants on some theories and against the claimant on others.  To narrow the issues for purposes of this post, the bankruptcy court determined that its previous decision finding (as a matter of fact and law) that the debtor misappropriated trade secrets was sufficient to also prove that the debtor committed: (1) fraud; (2) larceny (fraudulent and wrongful taking of the property of another with intent to convert such property to the taker’s use without the consent of the owner); and (3) embezzlement (fraudulent appropriation of property by a person to whom such property has been entrusted, or into whose hands it has lawfully come).  Each of these bases gave rise to the misappropriation of trade secret claims being non-dischargeable.  Therefore, the bankruptcy court did not require re-litigation of the issues and found in favor of the claimants.

Practice Pointer:    When litigating a claim for misappropriation of trade secrets, make sure your strategy includes collection of the debt arising from that claim.  If there is a possibility that the wrongdoer may file for bankruptcy, consider the elements of a claim for non-dischargeablity when presenting and proving your case.

The case is In re Mandel, No. 12-4128, 2017 WL 1207503 (E.D. Tx. March 31, 2017).

 

 

Florida’s Restrictive Covenant Statute: The Power of Presumption

March 16, 2017 By in Case Summary, Florida Non-Compete Lawyer, Noncompete, Trade secrets, Uncategorized Tags: , , Leave a comment

Florida has one of the most employer-friendly restrictive-covenant statutes in the country, Section 542.335, Fla. Stat. For example, the statute prohibits judges from considering any hardship suffered by the person against whom enforcement is sought. The statute also contains a rebuttable presumption that a violation of an enforceable restrictive covenant creates irreparable injury. Yesterday, Florida’s Third District Court of Appeal (which covers Miami-Dade County) issued an opinion showing the power of this presumption. The opinion, in Allied Universal Corp. v. Given, can be downloaded here.

Allied manufactures and distributes water-treatment chemicals. Defendant Given worked as a regional sales manger for Allied and signed a non-compete agreement. As part of his employment, he received training regarding various aspects of Allied’s business. Given resigned from Allied to work for Univar, a company that competes with Allied. Allied filed suit and sought a temporary injunction, which the trial court denied on the grounds that Allied failed to show irreparable harm.

The appellate court focused on the rebuttable presumption of irreparable injury and described the evidence offered by Allied:

At the evidentiary hearing on the motion for temporary injunction, Allied presented unrebutted evidence of the existence of statutorily legitimate business interests to be protected and evidence that Given had substantial relationships with specific prospective or existing Allied customers. Allied’s president, Mr. Palmer, testified that his company had trained Given, over the course of Given’s six-year employment, in its manufacturing and production techniques, marketing strategies, and confidential pricing strategies. In addition, Given had knowledge of existing and prospective customers, and had been sent to several trade meetings to cultivate these contacts.

Thus, the court concluded that Allied had successfully shifted the burden to Given to establish the absence of irreparable injury. But Given “failed to present any such evidence.”

Interestingly, Given argued that because he had not yet begun actively working for Univar, he had not breached the noncompete and no damages were incurred. But he admitted that if he were not enjoined, he would start working for Univar. The court rejected this argument, noting that “the only focus at the preliminary injunction stage is to maintain longstanding relationships and preserve the company’s goodwill.” In the future, plaintiffs can use this language to highlight the need to maintain the status quo.

Given Florida’s employer-friendly restrictive-covenant statute, noncompete and related agreements are powerful tools for Florida companies seeking to protect trade secrets and proprietary information. Cases like Allied show how this statute makes it easier for an employer to obtain an injunction prohibiting violations of a restrictive covenant.

Another Federal Court: No Heightened Pleading Standard in Defend Trade Secret Act Cases

March 15, 2017 By in Case Summary, Defend Trade Secrets Act, Trade secrets Tags: , , Leave a comment

Previously, I wrote about a decision from the District of New Jersey that declined to apply a heightened pleading standard to Defend Trade Secret Act claims. Now, another federal court has reached the same conclusion. A copy of the opinion can be downloaded below.

In Aggreko, LLC v. Barreto, pending in the District of North Dakota, the plaintiff and one of the defendants, Elite Power, are competitors in the generator-renting industry. Defendant Barreto previously worked as Aggreko’s sales manager. Aggreko alleges that Barreto resigned under false pretenses, thereby hiding his intention to work for Elite Power. And on the way out, Barreto allegedly downloaded Aggreko’s trade secrets and confidential information. Aggreko sued Elite Power and Barreto for violations of the Defend Trade Secret Act, among other claims.

The defendants moved to dismiss, arguing that Aggreko failed to plead its misappropriation claims with sufficient particularity. The court rejected this argument:

All that is required at this stage of the proceedings is an allegation that Barreto misappropriated Aggreko’s trade secrets sufficient to put the defense on notice as to the nature of the claim. Aggreko has alleged Barreto wrongfully acquired its trade secrets and provided them to Elite Power. Aggreko describes its trade secrets as including customer lists and information regarding Aggreko’s operations, customers, business proposals, pricing strategy, client preference and history, and proprietary pricing models known only to Aggreko; a description which the Court finds is clearly adequate under Rule 8. The discovery process will provide the parties with the details relevant to the claims, most of which are known to Barreto.

In this case, it sounds like the plaintiff only offered high-level allegations of the trade secrets at issue. And those allegations survived a motion to dismiss. This, along with the case discussed in my prior post, should be encouraging to trade-secret plaintiffs who are leery of a possible heightened pleading standard in federal court.

Aggreko v. Barreto Order

Federal Court Denies Expedited Discovery In Defend Trade Secret Act Case

February 28, 2017 By in Advice, Case Summary, Defend Trade Secrets Act, Florida Non-Compete Lawyer, Trade secrets, Uncategorized Tags: , , , , , , , , Leave a comment

Trade-secret-misappropriation cases can move fast. Often, the plaintiff files a motion for temporary restraining order alongside its complaint. Sometimes, the plaintiff has enough evidence already to justify a TRO. Other times, the plaintiff needs to take discovery before the TRO hearing.

But the typical discovery deadlines in the rules of civil procedure are not well suited for these TRO proceedings. Thus, plaintiffs regularly seek expedited discovery. In my experience, the parties are often able to agree to an expedited discovery schedule, since defendants usually want to take discovery as well. But when the parties cannot agree, the court needs to get involved. A recent case out of the Middle District of Florida shows the importance of narrowly tailoring expedited discovery requests, particularly when asking a judge to permit this type of discovery.

In Digital Assurance Certification, LLC v. Pendolino, the plaintiff works with municipal bond issuers to comply with various SEC regulations. The plaintiff alleges that the defendant, a former employee, left to work for a competitor. And in his final week of work, according to the plaintiff, the defendant used a USB drive to access every document on the plaintiff’s shared drive. Thus, the plaintiff brought claims for violations of the Defend Trade Secret Act and the Florida Uniform Trade Secrets Act, among others, and filed a motion for a TRO.

In advance of the TRO hearing, the plaintiff filed a motion for expedited discovery. The court denied the motion. A copy of the order can be downloaded below.

The court first set forth the standard for determining whether the plaintiff had demonstrated good cause for expedited discovery:

Factors the Court considers in deciding whether a party has shown good cause include: (1) whether a motion for preliminary injunction is pending; (2) the breadth of the requested discovery; (3) the reason(s) for requesting expedited discovery; (4) the burden on the opponent to comply with the request for discovery; and (5) how far in advance of the typical discovery process the request is made.

Here, the court focused on the second factor, the breadth of the plaintiff’s requests. The court took issue with the scope of the plaintiff’s requests, noting that “while these matters may be relevant to the issues raised in DAC’s complaint, they go far beyond what is needed for the hearing on the motion for a temporary restraining order.”

Take away: When bringing a motion for a TRO, the plaintiff’s lawyers need to figure out quickly whether the parties will be able to agree to an expedited discovery schedule. If not, the plaintiff needs to draft discovery requests that are laser focused on the issues relevant to the TRO hearing. In my experience, judges will allow this type of discovery, as long as the requests are reasonable. Conversely, judges will protect defendants from overbroad discovery.

Digital Assurance Certification, LLC v. Pendolino

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