Marketgraphics Research Grp., Inc. v. Berge
| Decision Date | 22 May 2014 |
| Docket Number | Case No. 3:13-cv-00001 |
| Parties | MARKETGRAPHICS RESEARCH GROUP, INC. Plaintiff, v. DONALD BERGE; DAVID BERGE; MARTHA BERGE; REALYSIS OF MEMPHIS, LLC; REALYSIS OF JACKSON, LLC; and REALYSIS, LLC., Defendants, |
| Court | U.S. District Court — Middle District of Tennessee |
MEMORANDUM
Plaintiff MarketGraphics Research Group, Inc. ("MarketGraphics") has filed a Motion for Summary Judgment with respect to defendants Donald and Martha Berge (Docket No. 77), to which no opposition has been filed. For the reasons stated herein, the motion will be granted.
Briefly, MarketGraphics is a family owned corporation that collects, analyzes, and distributes data related to markets for new homes. MarketGraphics utilizes licensees within particular areas to collect data, to compile copyrighted reports that MarketGraphics issues to customers, and to maintain relationships with customers. Defendant Donald Berge, withassistance from his son David Berge, worked as a licensee for MarketGraphics from 1997 to 2012, subject to the terms of an Associate Agreement with MarketGraphics that included a broad covenant not to compete (hereinafter, "Non-Compete Clause"). The Associate Agreement was supported by consideration and the defendants admit that the Non-Compete Clause contained in that agreement was, and is, enforceable.2
While working for MarketGraphics, Donald Berge had access to confidential information related to MarketGraphics' business, he received specialized training in MarketGraphics' proprietary systems, and Memphis-area customers came to associate him with MarketGraphics' business. During that time frame, Donald Berge and his son assisted MarketGraphics in preparing periodic reports to Memphis-area customers (the "Memphis Works"). It is undisputed that MarketGraphics has (1) a valid, enforceable, and registered copyright in the Memphis Works, and (2) a protectable business interest in its Memphis clients.
On September 28, 2012, Donald Berge left MarketGraphics, claiming that he intended to retire. However, instead of retiring, Donald Berge - acting through and/or in concert with his son, his wife, and several LLCs (Realysis of Memphis, LLC; Realysis of Jackson, LLC, and Realysis, LLC) - opened a competing business that provided essentially the same services as MarketGraphics. With respect to the Memphis housing market, the defendants produced reports (the "Realysis Works") that essentially paralleled the information provided by MarketGraphics in the Memphis Works. The defendants' joint efforts were successful: they drew approximately 75% of MarketGraphics' Memphis-area customers away. It is undisputed that Donald Berge's actions violated the Non-Compete Clause, which remained enforceable following his September 2012 termination. The undisputed facts also establish that Martha Berge was the sole member and only officer or manager of Realysis, LLC, one of the LLCs that facilitated and participated in Donald Berge's breach of the Associate Agreement. Realysis, LLC owns the trademark used by Realysis of Memphis, LLC, which is located at Donald Berge's residence and publishes the Realysis Works.
MarketGraphics filed a Complaint against the defendants, asserting claims for breach of contract, breach of covenant not to compete, breach of covenant of good faith and fair dealing, copyright infringement, trademark infringement, "cybersquatting," unfair competition, interference with business relations, violations of the Tennessee Consumer Protection Act ("TCPA"), and conspiracy. (Docket No. 1.) MarketGraphics also filed a Motion for Preliminary Injunction, which, subject to geographic and temporal limitations on the proposed injunction, the court granted following a hearing. (Docket Nos. 36 (injunction) and 51 (hearing transcript).) Insubstance, the Preliminary Injunction barred the defendants from competing with MarketGraphics in the area of Memphis, Tennessee until final judgment in the case.
The case had a somewhat circuitous procedural history following the issuance of the Preliminary Injunction, which apparently drove, and continues to drive, certain defendants into bankruptcy. To make a long story short, Donald Berge and Martha Berge filed for bankruptcy and initially obtained stays of this case as it related to them only (Docket Nos. 58-60 and 63), the court issued a Judgment on all outstanding claims against the remaining defendants (David Berge, Realysis of Memphis, LLC, Realysis of Jackson, LLC, and Realysis, LLC) (Docket No. 64),3 Donald Berge and Martha Berge received bankruptcy discharges in January 2014 (following judgment against the other defendants in this case), and, with respect to Donald and Martha Berge, the court (1) dissolved the stay as to them, (2) dismissed without prejudice all claims for monetary relief against them, and (3) held that the bankruptcy discharges did not preclude entry of the injunctive relief sought by MarketGraphics (Docket Nos. 72 and 75).4 On April 11, 2014, with leave of court, MarketGraphics accordingly filed the instant Rule 56 motion against defendants Donald Berge and Martha Berge on its remaining claim against them for injunctive relief. (Docket No. 77.) MarketGraphics requests an order that essentially duplicates the relief granted in the Preliminary Injunction (against the Berges, among others) and theJudgment against the other defendants: namely, barring Donald Berge and Martha Berge from competing with MarketGraphics in the Memphis area for four years from the date of Donald Berge's September 28, 2012 termination.
Rule 56 requires the court to grant a motion for summary judgment if "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a) (2014). At the summary judgment stage, the moving party bears the initial burden of identifying those parts of the record that demonstrate the absence of any genuine issue of material fact. Moldowan v. City of Warren, 578 F.3d 351, 374 (6th Cir. 2009); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). However, if the moving party seeks summary judgment on an issue for which it does not bear the burden of proof at trial, the moving party may meet its burden by showing that there is an absence of evidence to support the non-moving party's case. Id. (citing Celotex, 477 U.S. at 325). "When the moving party has carried this burden, 'its opponent must do more than simply show that there is some metaphysical doubt as to the material facts.'" Id. (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986).) The non-moving party also may not rest upon its mere allegations or denials of the adverse party's pleadings, but rather must set forth specific facts showing that there is a genuine issue for trial. Id.
At this stage, "'the judge's function is not . . . to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial.'" Moldowan, 578 F.3d at 374 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986)). "In evaluating the evidence, the court must draw all inferences in the lightmost favorable to the nonmoving party." Moldowan, 578 F.3d at 374 (citing Matsushita, 475 U.S. at 587). But "[t]he mere existence of a scintilla of evidence in support of the non-moving party's position will be insufficient," Moldowan, 578 F.3d at 374 (quoting Anderson, 477 U.S. at 252), and the non-movant's proof must be more than "merely colorable." Anderson, 477 U.S. at 249. An issue of fact is "genuine" only if the record taken as a whole could lead a rational trier of fact to find for the non-moving party. Moldowan, 578 F.3d at 374 (citing Matsushita, 475 U.S. at 587).
Under Fed. R. Civ. P. 65, a plaintiff seeking a permanent injunction must "satisfy a four-factor test." United Steel, Paper & Forestry, Rubber, Mfg. Energy, Allied Indus. & Service Workers Int'l Union, AFL-CIO-CLC v. Kelsey Hayes Co., --- F. 3d --- , 2014 WL 1585794, at *11 (6th Cir. 2014) (quoting eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006)). Specifically, "[a] plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction." United Steel, 2014 WL 1585794, at *11 (quoting eBay, 547 U.S. at 391). "The standard for a preliminary injunction is essentially the same as for a permanent injunction with the exception that for a preliminary injunction the plaintiff must show a likelihood of success on the merits rather than actual success." Am. Civil Liberties Union of Ky. v. McCreary Cnty., Ky., 607 F.3d 439, 446 (6th Cir. 2010) (internal brackets and quotation omitted).
It is undisputed that Donald Berge, acting in concert with Martha Berge and other defendants, violated the terms of the Non-Compete Clause of the Associate Agreement. It alsoundisputed that MarketGraphics had, and has, protectable interests that the non-compete clause of its Associate Agreement with Donald Berge sought to protect. The court has previously found that, subject to a four-year limitation specific to the Memphis area, the Non-Compete Clause is enforceable under Tennessee law.
The Berges' actions caused MarketGraphics to suffer irreparable harm in the form of the loss of goodwill and the opportunity to compete fairly with respect to its Memphis customers. Indeed, prior to the injunction, MarketGraphics lost approximately 75-80% of its Memphis...
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