Ameritox, Ltd. v. Savelich
Decision Date | 11 March 2015 |
Docket Number | Civil No. WDQ–15–499. |
Citation | 92 F.Supp.3d 389 |
Parties | AMERITOX, LTD., Plaintiff, v. Robert SAVELICH, Defendant. |
Court | U.S. District Court — District of Maryland |
Kaiser H. Chowdhry, Morgan Lewis and Bockius LLP, Washington, DC, for Plaintiff.
Ameritox, Ltd. (“Ameritox”)1 sued Robert Savelich for breach of contract and other claims. ECF No. 1.2 On February 25, 2015, the Court granted Ameritox's motion for a temporary restraining order (“TRO”). ECF No. 12.3 On March 9, 2015, the Court held preliminary injunction hearing. ECF No. 19.4 For the following reasons Ameritox's motion for a preliminary injunction will be denied.5
From April 16, 2010 to January 2015, Savelich worked for Ameritox as a District Manager responsible for the Northwest district. ECF No. 9–5 (“Hopkins Decl.”) ¶¶ 6, 12.6 On April 12, 2010, Savelich signed a Confidentiality7 and Noncompetition8 Agreement (“Agreement”).9 Id. ¶ 7; Hopkins Ex. 2.10 On April 13, 2010 Savelich signed an Employee Agreement on Inventions, Improvements, Copyright, and Trade Secrets (“Trade Secrets Agreement”),11 and an Employee Confidentiality and HIPAA Privacy Agreement (“HIPAA Agreement”).12 Id. ¶¶ 8, 9; Hopkins Ex's. 3, 4.13 All agreements were signed by Savelich at his Oregon home. Savelich Decl. ¶ 10.
On December 19, 2014, Savelich informed James Tully, Ameritox Regional Manager, that he would be resigning from Ameritox to work for Ameritox's competitor, Physicians Choice Laboratory Services (“PCLS”). ECF No. 10–4 (Tully Decl.) ¶ 25; Tully Ex. 1 (Savelich resignation email). Savelich told Tully that he did not think the Agreement would present any issues because PCLS focuses on different product lines, although Savelich would be responsible for Washington, Oregon, and other western states. Tully Decl. ¶¶ 26–27.14
In February 2015, upon learning that a PCLS recruiter had solicited an Ameritox employee, and had mentioned its successful recruitment of Savelich, Ameritox reviewed Savelich's Ameritox email account. Id. ¶¶ 29–30; see also ECF No. 9–6 (“Carr Decl.”) (describing the efforts of Eric Carr, Network, Security and Compliance Manager, to search for emails from Savelich's work account to external accounts). Ameritox learned that, on December 23, 2014, and December 29, 2014, Savelich had sent several emails from his work account to his personal account,15 to which he allegedly attached Confidential Information.16 They include:
On February 23, 2015, Ameritox sued Savelich for breach of contract, misappropriation of trade secrets, and breach of duty of loyalty. ECF No. 1. That day, Ameritox moved for a TRO and preliminary injunction barring Savelich from, among other things, soliciting or attempting to solicit Ameritox customers or employees, or using or disclosing Ameritox's documents, information, or data. ECF Nos. 8, 10 (amended). On February 25, 2015, the Court granted the TRO. ECF No. 12. On February 26, 2015, the Court granted in part and denied in part Ameritox's motion to expedite discovery. ECF No. 17.18
On March 3, 2015, Savelich began producing electronic information, and has returned about 370 pages of hard copy documents to Ameritox, including those listed above. ECF Nos. 24–1 at 8 n. 4; 24–3 (“Supp. Field Decl.”) ¶ 4.19 On March 4, 2015, Savelich produced additional documents, including his PCLS offer letter,20 emails between Savelich and PCLS,21 and answers to interrogatories. Supp. Field Decl. ¶¶ 5–10.
According to Savelich, from December 19, 2014 to the present, he has not had contact with current or former Ameritox customers, but has had contact with several Ameritox employees. ECF No. 25–5 at 22–24.22
Preliminary injunctive relief is an “extraordinary remed[y] involving the exercise of very far-reaching power [and is] to be granted only sparingly and in limited circumstances.” MicroStrategy Inc. v. Motorola, Inc., 245 F.3d 335, 339 (4th Cir.2001) (internal quotation marks omitted).
Because such relief “requires that a district court, acting on an incomplete record, order a party to act, or refrain from acting, in a certain way,” “[t]he danger of a mistake in this setting is substantial.” Hughes Network Sys., Inc. v. InterDigital Commc'ns Corp., 17 F.3d 691, 693 (4th Cir.1994) (internal quotation marks omitted).
To obtain preliminary injunctive relief, the movant must demonstrate that: (1) it is likely to succeed on the merits; (2) it is likely to suffer irreparable harm absent such relief; (3) the balance of equities favors it; and (4) the relief sought is in the public interest. See Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008) ; Real Truth About Obama, Inc. v. Fed. Election Comm'n, 575 F.3d 342, 346 (4th Cir.2009), vacated on other grounds, 559 U.S. 1089, 130 S.Ct. 2371, 176 L.Ed.2d 764 (2010), reinstated in relevant part on remand, 607 F.3d 355 (4th Cir.2010) (per curiam).
As a preliminary matter, the Court must determine what state's law governs Ameritox's contract claims. Here, the Agreement contained a choice-of-law provision requiring the application of Maryland law. See Hopkins Ex. 2 ¶ 7. Under Maryland law,23 this Court should presume that a parties' choice of law is enforceable. See Ground Zero Museum Workshop v. Wilson, 813 F.Supp.2d 678, 696 (D.Md.2011) ; Henry v. Gateway, Inc., 187 Md.App. 647, 979 A.2d 287, 297 (2009) ().
However, Savelich contends that this Court should apply Oregon law to the Agreement because it violated Oregon's statutory notice provision and, thus, is contrary to fundamental Oregon policy. ECF No. 28 at 23; Hr'g Tr. at 14–20. Ameritox contends that the nonsolicitation and confidentiality covenants at issue are not subject to Oregon's notice provision. Hr'g Tr. at 3–5.
Section 187 of the Restatement (Second) of Conflict of Laws, to which Maryland subscribes,24 provides that:
When “the law chosen by the parties would make enforceable a contract flatly unenforceable in the state whose law would otherwise apply, to honor the choice-of-law provision would trench upon that state's fundamental policy.”Barnes Grp., Inc. v. C & C Products, Inc., 716 F.2d 1023, 1031 (4th Cir.1983) (citation and internal quotation marks omitted).
In the absence of the Agreement's choice-of-law provision, Oregon law would apply.26 Under Oregon law, “[a] noncompetition agreement entered into...
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