L.I. City Ventures v. Urban Compass, Inc.

• Decision Date: 16 January 2019
• Docket Number: 18 Civ. 5853 (PGG)
• Parties: L.I. CITY VENTURES, d/b/a/ MODERN SPACES, Plaintiff, v. URBAN COMPASS, INC., d/b/a/ COMPASS, and JESSICA MEIS, Defendants.
• Court: U.S. District Court — Southern District of New York

L.I. CITY VENTURES, d/b/a/ MODERN SPACES, Plaintiff, v. URBAN COMPASS, INC., d/b/a/ COMPASS, and JESSICA MEIS, Defendants.

18 Civ. 5853 (PGG)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

January 16, 2019

ORDER

PAUL G. GARDEPHE, U.S.D.J.:

Plaintiff L.I. City Ventures, LLC, d/b/a Modern Spaces ("Modern Spaces"), asserts claims against Urban Compass, Inc., d/b/a Compass, and Jessica Meis for breach of contract, tortious interference with contract, misappropriation of trade secrets, unfair competition, and tortious interference with prospective economic relations. Modern Spaces and Urban Compass are competing real estate brokerage firms, and Meis is a real estate agent who formerly worked at Modern Spaces, but who now works for Urban Compass. (See Am. Cmplt. (Dkt. No. 1-2) ¶ 1; Benaim Aff. (Dkt. No. 10-2) ¶¶ 7, 17; Meis Aff. (Dkt. No. 24) ¶¶ 2-4) Plaintiff claims that - prior to Meis' departure from Modern Spaces in January 2018 - she emailed numerous documents containing Plaintiff's trade secret information to her personal email account. Plaintiff also claims that Meis thereafter shared Plaintiff's trade secret information with Urban Compass.

Pending before the Court is Plaintiff's motion for a preliminary injunction enjoining Defendants from, inter alia, using or disclosing Plaintiff's trade secret information or soliciting Modern Spaces' clients. For the reasons stated below, Plaintiff's motion will be denied.

BACKGROUND

I. PROCEDURAL HISTORY

Plaintiff filed this action in New York Supreme Court on February 6, 2018. (See Cmplt. (Dkt. No. 1-1)) On June 12, 2018, Plaintiff filed an Amended Complaint, which added a claim for trade secret misappropriation in violation of the federal Defend Trade Secrets Act. (See Am. Cmplt. (Dkt. No. 1-2) ¶¶ 67-80) On June 13, 2018, Plaintiff moved for a temporary restraining order and preliminary injunction in state court. (See Pltf. Br. in Supp. of Preliminary Inj. (Dkt. No. 1-6))

On June 19, 2018, the state court issued a temporary restraining order prohibiting Urban Compass from (1) using "any of Modern Spaces' Proprietary Information that Meis emailed to herself in January 2018,"; and (2) communicating with "Modern Spaces' clients and employees that were disclosed to [Urban] Compass by Meis." The TRO also prohibited Meis from (1) communicating with

any client of Modern Spaces that she communicated with while at Modern Spaces and for which Modern Spaces had an exclusive listing at the time Meis worked at Modern Spaces, or otherwise seeking to divert such client's patronage or business, in whole or in part, from Modern Spaces to any person or firm, including but not limited to, [Urban] Compass, or otherwise seeking to interfere with the business relationship between Modern Spaces and any client of Modern Spaces;

and (2) "using or disclosing to third parties, including without limitation [Urban] Compass, Modern Spaces' Proprietary Information." (State TRO (Dkt. No. 10-7)) Although the TRO was signed on June 19, 2018, it was not filed until June 28, 2018. (Id.)

On June 28, 2018 - the same day that the state court TRO was filed - Defendants removed this action to federal court. (See Notice of Removal (Dkt. No. 1))¹ On July 12, 2018, Plaintiff filed a motion to extend the state court's temporary restraining order, and requested that this court enter a preliminary injunction granting Plaintiff broader relief than that provided in the TRO. (See Mot. (Dkt. No. 10); Pltf. Br. (Dkt. No. 11)) The Court scheduled a hearing on the application to extend the temporary restraining order and to issue a preliminary injunction for July 20, 2018. (Order (Dkt. No. 12)) The parties subsequently stipulated to an adjournment of that hearing to September 5, 2018, and further stipulated to the entry of a TRO "pending a decision on plaintiff's motion for preliminary injunction, with the exception that Jessica Meis will be allowed to use her personal contacts, including her Google Contact list." (July 16, 2018 Defs. Ltr. (Dkt. No. 13) at 1; July 17, 2018 Jt. Ltr. (Dkt. No. 16))

Plaintiff's filings in support of its request for a preliminary injunction assert that - prior to Meis's departure from Modern Spaces - she had emailed to herself numerous documents containing Modern Spaces' trade secret information, in violation of her Independent Contractor Agreement with Modern Spaces. (See Pltf. Br. (Dkt. No. 11) at 9-10, 17-19; Pltf. Reply Br. (Dkt. No. 29) at 5, 10-13) However, Plaintiff did not provide the Court with copies of the documents allegedly containing trade secret information, nor did Plaintiff adequately explain why the information contained in these documents constitutes trade secrets.

At the September 5, 2018 hearing, the Court informed the parties that it could not rule on the motion for a preliminary injunction until Plaintiff identified the information it believes constitutes trade secrets. (Sept. 5, 2018 Tr. (Dkt. No. 47) at 5) The parties then requested the opportunity to participate in a settlement conference. (Id. at 31, 36)

The parties' settlement discussions were not successful. Accordingly, on November 14, 2018, the Court ordered Plaintiff to submit "(1) a clear list of what Plaintiff claims is the proprietary, confidential, trade secret information that Defendant Meis took when she ceased working for Plaintiff; (2) the actual files Plaintiff claims Defendant Meis forwarded to her personal e-mail, rather than only the cover emails; and (3) legal authority demonstrating that these materials constitute trade secret information." (See Order (Dkt. No. 40))

Plaintiff subsequently submitted a supplemental reply declaration, along with three documents that Plaintiff argued "undoubtedly constitute proprietary and/or trade secret information."² (See Levaia Supp. Reply. Decl. (Dkt. No. 42) ¶ 5) Plaintiff also submitted a brief arguing that these documents constitute trade secrets under both federal and New York law. (See Pltf. Supp. Reply Br. (Dkt. No. 43)) Defendants, in response, submitted, inter alia, a copy of the Independent Contractor Agreement between Modern Spaces and Meis. (Meis Supp. Aff., Ex. A (Dkt. No. 46-2) at 11-16) Defendants also submitted a supplemental brief disputing Plaintiff's claim that the three exhibits submitted to the Court contain trade secrets. (Defs. Supp. Br. in Opp. (Dkt. No. 46-1))

II. RELEVANT FACTS

A. Meis's Work at Modern Spaces

Between the summer or fall of 2016 and January 2018, Meis worked as a real estate agent for Modern Spaces. (Benaim Aff. (Dkt. No. 10-2) ¶ 7; Meis Aff. (Dkt. No. 24) at ¶ 3)³ In July 2017, Meis and Modern Spaces executed an agreement governing Meis's work for Modern Spaces (the "Agreement"). (Meis Supp. Aff., Ex. A (Dkt. No. 46-2) at 11-16)

1. Meis's Independent Contractor Agreement

The Agreement contains several provisions addressing Modern Spaces' "Proprietary Information":

7) Termination. . . . In the event of your termination for any reason:

. . . .

c) You will not utilize or disclose to others any Proprietary Information (defined below), including without limitations, any confidential information given to MODERN SPACES or its representatives by MODERN SPACES or by a client of MODERN SPACES without written permission of MODERN SPACES and the client.

. . . .

10) Use and Disclosure of Proprietary Information/Non-Solicitation/Remedies

a) You acknowledge that any information to which you have access at MODERN SPACES and/or which is related to the business of MODERN SPACES whether printed, written or computerized, including without limitation, open listings, exclusive listings, co-exclusive listings, co-brokers listings, names, addresses and telephone numbers pertaining to or in connection with any such listings, is deemed confidential and proprietary to MODERN SPACES (the "Proprietary Information"). You should upon termination of your association with MODERN SPACES for any reason or at the request of MODERN SPACES at any time, you shall (i) immediately turn over to MODERN SPACES all written materials then in your possession concerning the Proprietary Information, together with all copies thereof and all notes with resect thereto, and (ii) not utilize or disclose to others any proprietary information without the written permission of MODERN SPACES.

b) You covenant and agree that, during the term of this Agreement and for a period ending upon your termination with MODERN SPACES, you will not solicit, employ, engage or in any manner encourage any current or former employee, independent contractor broker or salesperson of MODERN SPACES to leave its employ, directly or indirectly, for the employ of a person or entity which directly or indirectly competes with MODERN SPACES.

c) You acknowledge and agree that neither monetary damages nor any other ready [sic] at law will be adequate or sufficient to protect MODERN SPACES from any threatened or actual breach by you of any of your obligations contained in this section of the agreement. Accordingly, you agree that, in the event of a breach or threatened breach of any such obligations, in additions [sic] to and not in lieu of any damages sustained by MODERN SPACES and any other remedies which MODERN SPACES may have, MODERN SPACES shall have the right to equitable relief, including, without limitation, the issuance of any injunction by any such breach or threatened such, without the necessity of proving actual damage or posting a bond.

(See Meis Supp. Aff., Ex. A (Dkt. No. 46-2) ¶¶ 7, 10)

Other provisions in the Agreement emphasize Meis's status as an independent contractor, and acknowledge that Meis would solicit brokerage business beyond Plaintiff's own listings and clients:

2) Listings[.] The Company agrees to make available to you all current Company listings, such listings as the Company chooses to place exclusively in the possession of some other salesperson. The Company agrees to assist, advise, and cooperate with you to facilitate the transaction of real estate business by you. If you

...