485 F.3d 930 (7th Cir. 2007), 06-3412, American Family Mut. Ins. Co. v. Roth

Docket Nº:06-3412.
Citation:485 F.3d 930, 82 U.S.P.Q.2d 1701
Party Name:AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Plaintiff-Appellee, v. Bonnie L. ROTH, et al., Defendants-Appellants.
Case Date:May 07, 2007
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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Page 930

485 F.3d 930 (7th Cir. 2007)

82 U.S.P.Q.2d 1701

AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Plaintiff-Appellee,

v.

Bonnie L. ROTH, et al., Defendants-Appellants.

No. 06-3412.

United States Court of Appeals, Seventh Circuit.

May 7, 2007

Argued April 6, 2007.

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James P. DeNardo (argued), McKenna, Storer, Rowe, White & Farrug, Chicago, IL, for Plaintiff-Appellee.

William P. Tedards, Jr. (argued), Washington, DC, for Defendants-Appellants.

Before POSNER, FLAUM, and EVANS, Circuit Judges.

POSNER, Circuit Judge.

The defendants--insurance agents who sold a variety of insurance products on behalf of the plaintiff, their principal--appeal from the grant, after an evidentiary hearing conducted by a magistrate judge, of a preliminary injunction. After being terminated by the plaintiff, the defendants had begun to solicit its customers, precipitating this suit, which charges the defendants with breaking their agency contract and stealing trade secrets. The appeal challenges so much of the injunction as bars the defendants "from using for any reason any information downloaded from [the plaintiff's] database, including the names contained in Exhibit 34," and "from servicing [the plaintiff's] customers." The issues presented by the appeal are governed by Wisconsin law.

An addendum to the agency contract required the agent "to submit all new business and changes through the system as directed by the Company." By "system" the company meant its digitized database of customer information. The addendum provided "that software and database provided

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contains confidential, proprietary and trade secret information and that the agent and its employees will not use nor disclose to third parties such information unless in the ordinary course of the agent's business with the Company." The agent had access only to the information in the database that concerned the customers whom he served. It might be customer information originated by the agent or information furnished to it by the company when another agent resigned and his customers had therefore to be reassigned. Some 2,000 policies were reassigned to the defendants in the course of their agency relationship with the plaintiff.

Exhibit 34 was a customer list that the defendants maintained separately from the plaintiff's database and used as a source of names for customer solicitations that they conducted after being terminated by the plaintiff. The list contained 1,847 names, of which the vast majority were also in the plaintiff's database. It is highly likely, though not certain, that most of those were names of customers in the group of 2,000 customers that the plaintiff had assigned to the defendants. The plaintiff points out that the contract forbade the defendants to use any name in the database, whatever the source of the name.

The contract can't really mean that agents are forbidden to solicit anyone whose name happens to appear in the database. They are not...

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