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DLMC, Inc. v. Flores

United States District Court, D. Hawaii

December 19, 2018

DLMC, INC., dba KAMA'AINA HEALTH CARE SERVICES, Plaintiff,
v.
BENEDICTA C. FLORES; LOVING CARE HEALTH PROVIDER, INC., Defendants.

          ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER

          DERRICK K. WATSON JUDGE.

         INTRODUCTION

         On September 17, 2018, Plaintiff DLMC, Inc., dba Kama'aina Health Care Services (DLMC), initiated this action against Benedicta Flores and Loving Care Health Provider, Inc. (LCHP), alleging claims for violation of the Defend Trade Secrets Act (DTSA), 18 U.S.C. §1836(b)(3), and the Hawai‘i Uniform Trade Secrets Act. Complaint, Dkt No. 1 (Compl.). DLMC also filed a Motion for Temporary Restraining Order, seeking to enjoin Flores and LCHP from appropriating DLMC's trade secrets and confidential information, as well as from interfering with DLMC's existing and prospective customer relations. Motion for TRO (Motion), Dkt No. 3. Because DLMC may not rely on pleadings and conclusions to establish the likelihood of success on the merits, [1] the Motion for TRO is DENIED.[2]

         BACKGROUND

         DLMC is a Hawai‘i-based corporation with approximately 300 employees, providing healthcare services to elderly and infirm residents of Hawai‘i. Compl. ¶8. Beginning in August 2013, Flores was an office manager for DLMC, working closely with direct-care providers who were also employed by DLMC. Compl. ¶12. She also did some direct-service work with DLMC clients. Id. As a condition of her employment, Flores signed HIPAA confidentiality agreements regarding patient information as well as an employee non-disclosure agreement. Compl. ¶¶4, 13-14.

         DLMC terminated Flores' employment on June 30, 2017, for “misappropriat[ing] confidential, proprietary information…” Compl. ¶18. Flores is now employed by LCHP. Motion at 5. LCHP was started by a former DLMC employee in 2016 and provides healthcare services similar to DLMC. Id.

         On September 17, 2018, DLMC filed a Complaint and Motion for TRO, asking this Court to enjoin Flores' and LCHP's alleged tortious interference with DLMC's existing and prospective clients. Dkt Nos. 1, 3. On November 9, 2018, Flores filed an Opposition to the TRO and a Motion to Dismiss, challenging this Court's subject-matter jurisdiction and arguing that DLMC had failed to provide sufficient evidence of a likelihood of success on the merits or of irreparable harm in the absence of injunctive relief. Dkt Nos. 18, 19. On the same day, LCHP joined in Flores' Motion to Dismiss. Dkt No. 20. DLMC timely replied in support of its TRO motion on November 19, 2018. Dkt No. 22.

         LEGAL STANDARD

         The standards for issuing a temporary restraining order and a preliminary injunction are identical. See, e.g., Hawaii v. Gannett Pac. Corp., 99 F.Supp.2d 1241, 1247 (D. Haw. 1999). A “plaintiff seeking a preliminary injunction 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.” Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008) (citation omitted). “That is, ‘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).

         DISCUSSION

         DLMC claims that Flores has been using trade secrets, in the form of DLMC's customer lists, to lure away customers, to dissuade potential customers from hiring DLMC, and to encourage employees to leave DLMC and join LCHP. Motion at 1. Accordingly, DLMC seeks -

a temporary restraining order enjoining Defendants [Flores and LCHP], and any other person or entity acting on behalf of them both… to stop further violations and to recover Plaintiff's misappropriated confidential information from Defendants.

Motion for TRO at 3.

         A TRO is an extraordinary measure, requiring the movant to carry a heavy burden in order to obtain such relief. See, e.g., Winter, 555 U.S. at 22. DLMC has not only failed to carry this burden but does not come close. By not presenting sufficient evidence in support of the misappropriation of trade secrets by anyone, much less by Defendants, DLMC has failed to show that it is likely to succeed on the merits. Similarly, DLMC has ...


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