United States District Court, D. Connecticut
MEMORANDUM OF DECISION GRANTING IN PART AND DENYING
IN PART PLAINTIFF'S MOTION FOR A TEMPORARY RESTRAINING
ORDER, PRELIMINARY INJUNCTION, AND EXPEDITED DISCOVERY [DKT.
Vanessa L. Bryant United States District Judge
Maxum Petroleum, Inc. (“Maxum”) filed a Motion
for Emergency Relief pursuant to Federal Rule of Procedure 65
and Local Rule 7(a)(3), seeking an order to restrain or
enjoin Defendants Stephen Hiatt and/or Chemoil Corporation,
Inc. (“Chemoil”) from, inter alia, benefitting
from the confidential business information and trade secrets
to which Chemoil allegedly gained access by hiring several
former Maxum employees. In addition to its motion, Maxum
filed an unverified complaint signed by its attorney David T.
Grudberg and Mr. Hiatt's Employment Agreement. For the
reasons set forth below, the Court DENIES Plaintiff's
motion to the extent it seeks a temporary restraining order.
The Court further GRANTS Plaintiff's motion to the extent
it seeks expedited discovery, and states that it will hold an
early trial on the merits in lieu of a preliminary injunction
Standard of Review
temporary restraining order is an “extraordinary and
drastic remedy, one that should not be granted unless the
movant, by a clear showing, carries the burden of
persuasion.” Merrill Lynch, Pierce, Fenner &
Smith, Inc. v. Reidy, 477 F.Supp.2d 472, 474 (D. Conn.
2007) (quoting Moore v. Consol. Edison Co. of N.Y.,
Inc., 409 F.3d 506, 510 (2d Cir. 2005)). “The
purpose of a temporary restraining order is to preserve an
existing situation in status quo until the court has an
opportunity to pass upon the merits of the demand for a
preliminary injunction.” Garcia v. Yonkers Sch.
Dist., 561 F.3d 97, 107 (2d Cir. 2009). The factors
considered in assessing whether to grant a request for a
temporary restraining order are similar to those used to
determine the merits of a motion for a preliminary
injunction. See Control Sys., Inc. v. Realized Sols.,
Inc., No. 3:11CV1423 PCD, 2011 WL 4433750, at *2 (D.
Conn. Sept. 22, 2011) (citing Local 1814, Int'l
Longshoremen's Ass'n, AFL-CIO v. New York Shipping
Ass'n, Inc., 965 F.2d 1224, 1228 (2d Cir. 1992)). To
obtain a temporary restraining order, therefore, the
Plaintiff must show “irreparable harm, and either (1) a
likelihood of success on the merits of the case or (2)
sufficiently serious questions going to the merits to make
them a fair ground for litigation and a balance of hardships
tipping decidedly in favor of the moving party.”
See Waldman Pub. Corp. v. Landoll, Inc., 43 F.3d
775, 779-80 (2d Cir. 1994).
satisfy the irreparable harm requirement, Plaintiff must
demonstrate that absent a temporary restraining order, it
will “suffer an injury that is neither remote nor
speculative, but actual and imminent, and one that cannot be
remedied if a court waits until the end of trial to resolve
the harm.” See Faiveley Transp. Malmo AB
v. Wabtec Corp., 559 F.3d 110, 118 (2d Cir. 2009).
“Where there is an adequate remedy at law, such as an
award of money damages, injunctions are unavailable except in
extraordinary circumstances.” Id. at 118-19.
claim that irreparable harm should be presumed in this case
because they have alleged a breach of a restrictive covenant
in Mr. Hiatt's employment agreement, and because this
agreement contained a provision stating that “the
Company shall be entitled to injunctive relief”
“in the event of a breach of this Agreement.”
[See Dkt. No. 5, at 22-23; Dkt. No. 6, Exh. 1
the viability of this argument requires the Plaintiff to make
a clear showing that its underlying claim-that Mr. Hiatt
breached his employment agreement-will likely succeed.
Moreover, the Second Circuit has held:
“A rebuttable presumption of irreparable harm might be
warranted in cases where there is a danger that, unless
enjoined, a misappropriator of trade secrets will disseminate
those secrets to a wider audience or otherwise irreparably
impair the value of those secrets. Where a misappropriator
seeks only to use those secrets-without further dissemination
or irreparable impairment of value-in pursuit of profit, no
such presumption is warranted because an award of damages
will often provide a complete remedy for such an injury.
Indeed, once a trade secret is misappropriated, the
misappropriator will often have the same incentive as the
originator to maintain the confidentiality of the secret in
order to profit from the proprietary knowledge . . . .
[W]here there is no danger that a misappropriator will
disseminate proprietary information, the only possible injury
that the plaintiff may suffer is loss of sales to a competing
product[, ] which should be fully compensable by money
damages. Faiveley, 559 F.3d at 118-19 (quotations
and citations omitted).
at this stage has failed to demonstrate that an award of
monetary damages for lost sales cannot adequately remedy the
harm it has alleged.
Plaintiff's likelihood of success at this juncture is
uncertain. While Plaintiff has alleged facts that give rise
to an inference that Mr. Hiatt's current employer has
solicited Maxum's customers and lured away its employees,
it has presented the Court with no direct evidence of Mr.
Hiatt's involvement. Maxum has thus failed to make the
requisite clear showing for the extraordinary remedy it
the language of Mr. Hiatt's employment agreement suggests
that Mr. Hiatt is subject to its non-compete provisions
solely “as a condition to receipt of or continuation of
separation payments.” [See Dkt. No. 6, Exh. 1
¶5(c).] Because Plaintiff has not presented the Court
with evidence that Mr. Hiatt received such separation
payments, it cannot demonstrate with a likelihood of success
that Mr. Hiatt breached the employment agreement by working
for Chemoil before the expiration of the agreement's
“Restrictive Period.” While the Court finds that
a temporary restraining order is not warranted at this time,
it agrees with Plaintiff that this matter should be resolved
expeditiously, to limit any potential damages resulting from
the disclosure of confidential business information and trade
secrets by Mr. Hiatt or other former Maxum employees.
Consequently, this Court holds not only that expedited
discovery is appropriate, but that this case warrants an
early trial on the merits. District Courts may advance a
trial on the merits in order to consolidate it with a hearing
on a motion for preliminary injunction. See Able v.
United States, 44 F.3d 128, 132-33 (2d Cir 1995),
vacated on other grounds, 88 F.3d 1280 (2d Cir.
1996). Consolidation is discretionary, and the Court may
order advancement and ...