Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Embarcadero Technologies, Inc. v. Red Gate Software, Inc.

United States District Court, W.D. Texas, Austin Division

November 20, 2017

EMBARCADERO TECHNOLOGIES, INC., and IDERA, INC., Plaintiffs,
v.
REDGATE SOFTWARE, INC., REDGATE SOFTWARE, LTD., DAVID FRIGNOCA, and DUSTIN ABNEY, Defendants.

          ORDER

          ROBERT PITMAN UNITED STATES DISTRICT JUDGE

         Before the Court are the Application for Preliminary Injunction, (Dkt. 1), and the Motion for Entry of Amended Order Granting Plaintiffs' Application for Preliminary Injunction, (Dkt. 74), filed by Plaintiffs Embarcadero Technologies, Inc. (“Embarcadero”) and Idera, Inc. (“Idera”) (together, “Plaintiffs”). The Court held a hearing on the application for a preliminary injunction on October 20, 2017, and October 23, 2017. After considering the pleadings, the briefs, the evidence presented, and the relevant law, the Court DENIES the application for a preliminary injunction.

         BACKGROUND

         On May 11, 2017, Plaintiffs brought an action in this Court against four defendants, alleging eight claims. (Pls.' Orig. Compl., Dkt. 1). The claims arose from the departure of four employees of Embarcadero, [1] David Frignoca (“Frignoca”), Dustin Abney (“Abney”) and two others, each of whom left Embarcadero and joined the same company. That company, Redgate Ltd., is incorporated in the United Kingdom and has a subsidiary called Redgate Inc., (together, “the Redgate Defendants”), which is incorporated in California. Frignoca left his position at Embarcadero in October 2016 and joined Redgate Ltd. by the end of the month. Plaintiffs contend that he did so in violation of a contract he had signed. Additionally, while employed by Embarcadero, Frignoca uploaded various Embarcadero documents to his personal Google Drive and accessed them a few times after his employment with Embarcadero ceased. Plaintiffs contend that doing so constituted a misappropriation of trade secrets and a breach of his fiduciary duty to the company. Finally, since three former Embarcadero sales employees left to join Redgate after Frignoca did, Plaintiffs claim that he improperly solicited them in violation of his contract. Plaintiffs brought suit against Frignoca, Abney, Redgate Ltd., and Redgate Inc., alleging the following claims: (1) breach of contract (Frignoca); (2) breach of fiduciary duty (Frignoca); (3) aiding and abetting breach of fiduciary duty (the Redgate Defendants); (4) misappropriation of trade secrets in violation of the Federal Defend Trade Secrets Act of 2016, 18 U.S.C. § 1836, et seq. (Frignoca and the Redgate Defendants); (5) misappropriation of trade secrets in violation of the Texas Uniform Trade Secrets Act, Tex. Civ. Prac. & Rem. Code § 134A.001, et seq. (Frignoca and the Redgate Defendants); (6) violation of the federal Computer Fraud and Abuse Act, 18 U.S.C. § 1030, et seq. (Frignoca); (7) violation of the Texas Harmful Access by Computer Act, Tex. Civ. Prac & Rem. Code § 143.001, et seq. (Frignoca); and (8) breach of contract (Abney). (Am. Compl., Dkt. 33, ¶¶ 32-69). Plaintiffs seek various remedies, but relevant here is their request for a preliminary injunction.

         Plaintiffs filed a brief in support of their motion for a preliminary injunction and a request for a hearing on June 12, 2017. (Dkt. 14). On June 28, 2017, the Court scheduled a hearing on the application for a preliminary injunction for July 25, 2017. (Dkt. 26). Plaintiffs requested an extension of the hearing on July 14, 2017, (Dkt. 30), stating their preference for a date in early September, which the Court granted by resetting the hearing for September 6, 2017, (Dkt. 37). The Court needed to reschedule the hearing, so the Court reset the date for August 31, 2017, while giving the parties the option to have the hearing on October 20, 2017, if they preferred. (Dkt. 56). The parties agreed to the October 20 hearing date, (Dkt. 60), so the Court rescheduled the hearing for October 20, 2017. (Dkt. 64). The hearing was held on October 20, 2017 and continued on October 23, 2017.

         The relief sought by Plaintiffs has been characterized in a few different ways. In their original complaint, Plaintiffs requested a preliminary injunction that

a. orders Defendants to return to Plaintiffs all confidential, proprietary and trade secret information of Plaintiffs within their possession, custody, or control, as permitted by 18 U.S.C. § 1836(b)(3)(A)(ii) and applicable state law;
b. prohibits Defendants from using in any manner any confidential, proprietary and trade secret information of Plaintiffs, including confidential information regarding Plaintiffs' customers and products, including to solicit, switch and/or convert Plaintiffs' customers;
c. prohibits Defendants from soliciting any of Plaintiffs' employees; and
d. because there is, or will be, evidence of misappropriation and threatened misappropriation, prohibits Frignoca and Abney from continuing to work for or provide services to Redgate in which these individuals will be permitted to sell competing services to the customers that they personally serviced, or to the customers that their subordinates personally serviced, while employed with Plaintiffs, as permitted by 18 U.S.C. § 1836(b)(3)(A)(i)(I) and applicable state law.

(Orig. Compl., Dkt. 1, at ¶ 80). In their brief in support of their application for a preliminary injunction, Plaintiffs requested that the Court issue a preliminary injunction to

prevent Defendants from: (a) using Plaintiffs' confidential information to solicit Plaintiffs' customers and leads for the purpose of selling products in competition with Plaintiffs; (b) otherwise disclosing or commercially using Plaintiffs' confidential information; (c) soliciting Plaintiffs' existing employees to terminate their employment with Plaintiffs, and (d) allowing Frignoca and Abney to engage in any business that competes with Plaintiffs in the United States.

(Mem. Supp. Appl. Prelim. Inj., Dkt. 14, at 2). Following the hearing, Plaintiffs submitted a request for a much broader injunction, which would include an absolute prohibition on Frignoca and Abney working for Redgate for a year and would force two employees of Redgate who are not parties to this suit to stop working at Redgate for three months and ten days. (Pls.' Mot. Entry Am. Order, Dkt. 74).

         DISCUSSION

         I. Post-Hearing Request for Amended Scope of Relief

         Three days after the conclusion of the hearing, on October 26, 2017, Plaintiffs submitted a much more detailed request for injunctive relief tailored to each defendant. (Pls.' Mot. Entry Am. Order, Dkt. 74). In their request for entry of an amended order, Plaintiffs explain that they “have decided to change the scope of the requested injunctive relief.” (Id. at 1). The scope of relief requested is significantly broader than that outlined in Plaintiffs' application for a preliminary injunction and brief in support of that application. For example, in their briefs, Plaintiffs indicated that they sought injunctions preventing Frignoca and Abney from working for Redgate only on a nationwide basis. (Pls.' Reply Abney Resp. Appl. Prelim. Inj., Dkt. 27, at 4 (“A nation-wide restriction on Abney's competition with Plaintiffs is warranted.”)); Pls.' Reply Frignoca Resp. Appl. Prelim. Inj., Dkt. 29, at 4 (“[A] nation-wide exclusion is presently being sought by Plaintiffs.”)). The newly proposed injunction seeks to prevent Frignoca and Abney from working for Redgate on a global basis. (Pls.' Mot. Entry Am. Order, Dkt. 74-1, at 5, 7). Plaintiffs also request in the proposed order, for the first time, relief against two former Embarcadero employees, Chad Tewis and Adam Altman, who are not parties to this suit. (Id. at 8) (requesting that the Court enter an order requiring that Redgate “place Chad Tewis and Adam Altman on leave with pay or leave without pay (at Redgate's election) until three months and 10 days from the date the Court signs this Order”). The rationale is the alleged violation by Frignoca of a non-solicitation agreement, but Plaintiffs have pointed to no case law supporting the position that the appropriate remedy for the violation of a non-solicitation agreement is to prohibit the solicited employees (not parties to the non-solicitation agreement) from working. More to the point, Plaintiffs gave no notice of their desire to expand the scope of their requested relief prior to or during the hearing.

         Because of its timing, three days after the conclusion of the hearing and five months after the original request for a preliminary injunction, the Court declines to consider the amended request for relief to the extent it differs from Plaintiffs' previous characterizations of the scope of the injunction desired. Plaintiffs had plenty of opportunities to outline the contours of the injunctive relief sought prior to the hearing. To consider a new request for a broader injunction following the hearing would prejudice Defendants, who did not have an opportunity either before or during the hearing to respond to the expanded scope of relief requested after the hearing. Federal courts may issue preliminary injunctions “only on notice to the adverse party.” Fed.R.Civ.P. 65(a)(1). The notice requirement, “with few exceptions, implies ‘a hearing in which the defendant is given a fair opportunity to oppose the application and to prepare for such opposition.'” Williams v. McKeithen, 939 F.2d 1100, 1105 (5th Cir. 1991) (quoting Granny Goose Foods, Inc. v. Brotherhood of Teamsters & Auto Truck Drivers Local No. 70 of Alameda, 415 U.S. 423, 432 n.7 (1974)). Here, the Defendants had ample notice that Plaintiffs were seeking a preliminary injunction, but they did not have notice of the specific relief requested on October 26, three days after the conclusion of the hearing. Therefore, the Court declines to consider this post-hearing request seeking a broader injunction.

         II. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.