Prysmian Cables & Sys. USA, LLC v. Szymanski

• Decision Date: 29 November 2021
• Docket Number: Civil Action No. 3:21-cv-01641-JMC
• Parties: PRYSMIAN CABLES & SYSTEMS USA, LLC, Prysmian, v. Stephen J. SZYMANSKI and Sterlite Technologies, Inc., Defendants.
• Court: U.S. District Court — District of South Carolina

573 F.Supp.3d 1021

PRYSMIAN CABLES & SYSTEMS USA, LLC, Prysmian,

v.Stephen J. SZYMANSKI and Sterlite Technologies, Inc., Defendants.

Civil Action No. 3:21-cv-01641-JMC

United States District Court, D. South Carolina, Columbia Division.

Signed November 29, 2021

Sara Sofia Svedberg, Susan Pedrick McWilliams, Nexsen Pruet Jacobs and Pollard, Columbia, SC, David A. Skidmore, Jr., Pro Hac Vice, Tessa Leigh Castner, Pro Hac Vice, Frost Brown Todd LLC, Cincinnati, OH, for Prysmian Cables & Systems USA LLC.

Charles J. Webb, Eugene H. Matthews, Richardson Plowden and Robinson, Columbia, SC, for Defendants.

ORDER AND OPINION

J. Michelle Childs, United States District Judge

I. INTRODUCTION

This matter is before the court on Prysmian Cables & Systems USA, LLC's ("Prysmian") Motion for Preliminary Injunction (the "Motion") filed pursuant to Rule 65 of the Federal Rules of Civil Procedure, the Defend Trade Secrets Act ("DTSA"), 18 U.S.C. § 1831 et seq. , and the South Carolina Trade Secrets Act ("SCTSA"), S.C. Code Ann. § 39-8-10 et seq. (West 2018) (ECF No. 23.) Prysmian seeks to enforce certain restrictive covenants between Prysmian and Defendant Stephen Szymanski, and additionally alleges Szymanski and his current employer, Defendant Sterlite Technologies, Inc. ("Sterlite") (collectively "Defendants"),¹ misappropriated Prysmian's trade secrets and other confidential information.

The court has reviewed the pleadings, the testimony and exhibits presented at the hearing, and the arguments of counsel. For the reasons stated below, Prysmian's Motion (ECF No. 23 ) is GRANTED IN PART and DENIED IN PART .

II. JURISDICTION

1. The court has diversity jurisdiction over this matter under 28 U.S.C. § 1332(a) because it is undisputed that the parties have complete diversity of citizenship and the amount in controversy exceeds $75,000.00, exclusive of interests and costs. (ECF No. 1 at 1-2 ; ECF No. 11 at 1.)

2. Prysmian is a Delaware corporation headquartered in Highland Heights, Kentucky. Defendant Szymanski is a citizen of South Carolina, and Defendant Sterlite is a South Carolina Corporation headquartered in Columbia, South Carolina. (ECF No. 1 at 1.) The court has personal jurisdiction over the parties, and venue is proper under 28 U.S.C. § 1391(b)(2) because the events which gave rise to Prysmian's claims took place in this judicial district. (Id. at 2.)

3. In addition, the court has federal question jurisdiction under 28 U.S.C. § 1331 over Prysmian's claim under the Defend Trade Secrets Act, 18 U.S.C. § 1836, and supplemental jurisdiction under 28 U.S.C. § 1367 over Prysmian's remaining claims which arise from a common nucleus of operative fact: the breach of Szymanski's Confidentiality, Non-Competition, and Non-Solicitation Agreement with Prysmian (the "Agreement") between Defendant Szymanski and Prysmian and misappropriation of trade secrets by Defendant Szymanski and Defendant Sterlite from Szymanski's former employer, Prysmian. (Id. at 1); see also United Mine Workers of Am. v. Gibbs , 383 U.S. 715, 725, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966).

III. PROCEDURAL HISTORY

1. Prysmian filed a Complaint against Szymanski and Sterlite on June 2, 2021, seeking injunctive relief from the alleged breach of certain restrictive covenants ("Restrictive Covenants") within the Agreement (ECF No. 1 ) and the misappropriation of certain trade secrets, and alleging four claims against Szymanski:

(1) material breaches of restrictive covenants within the Agreement;

(2) actual or threatened misappropriation of trade secrets under the South Carolina Trade Secrets Act, S.C. Code Ann. § 39-8-20, et seq. and the Defend Trade Secrets Act, 18 U.S.C. § 1836, et seq. ;

(3) intentional tortious interference with prospective contractual relations; and

(4) unfair competition;

as well as three claims against Sterlite:

(1) intentional tortious interference with contractual relations for its alleged interference with the Agreement between Szymanski and Prysmian;

(2) intentional tortious interference with prospective contractual relations between Prysmian and its customers and prospective customers; and

(3) actual or threatened misappropriation of trade secrets under the South Carolina Trade Secrets Act, S.C. Code Ann. § 39-8-20, et seq. and the Defend Trade Secrets Act, 18 U.S.C. § 1836, et seq.

(ECF No. 1 at 7-15.)

2. Prysmian filed a Motion for Preliminary Injunction on September 9, 2021, (ECF No. 23 ), seeking injunctive relief under Fed. R. Civ. P. 65.

3. Defendants filed their Response on October 1, 2021. (ECF No. 26.)

4. Thereafter, the court conducted a preliminary injunction hearing on October 25, 2021, and October 26, 2021.

5. The court heard live testimony from seven (7) witnesses (ECF Nos. 43, 44, 45):

Prysmian's witnesses

a. Stephen Szymanski , Head of Telecommunications in the Americas Region, Sterlite. (Hrg. Tr., Szymanski, at 23-243)

b. Massimo Battaini, Chief Executive Officer and President, Prysmian. (Hrg. Tr., Battaini, at 249-314.)

c. Christina Trainor , North America Director of Head Office and Business Units. (Hrg. Tr., Trainor, at 314-336.)

d. Danielle Rodenkirch , North America Telecommunications Commercial Operations Director, Prysmian. (Hrg. Tr., Rodenkirch, at 338-366.)

e. Pat Jacobi , Senior Vice President for North America Telecommunications, Prysmian. (Hrg. Tr., Jacobi, at 367-396.)

Defendants’ witnesses:

f. Steven Beasley , Plant Head, Sterlite. (Hrg. Tr., Beasley, at 367-417.)

g. Daniel Romer , North America Sales Director, Sterlite. (Hrg. Tr., Romer, at 417-481.)

6. The parties addressed two material issues in their pleadings and at the hearing that are relevant to this Motion: (1) the terms and enforceability of the Agreement, and (2) Prysmian's claim that it possessed trade secrets that Szymanski and Sterlite misappropriated.

7. After reviewing the testimony, carefully considering all evidence, weighing the credibility of the witnesses, evaluating the exhibits, and studying the applicable law, the court makes the following Findings of Fact and Conclusions of Law. To the extent any Findings of Fact constitute Conclusions of Law, they are adopted as such; to the extent any Conclusions of Law constitute Findings of Fact, they are so adopted.

IV. FINDINGS OF FACT

A. The Parties

1. Prysmian is a multinational telecommunications company headquartered in Milan, Italy, which manufactures and sells fiber optic cables, and is organized under the laws of Delaware with its principal place of business in Kentucky. (ECF No. 1 at 1-2 ; ECF No. 23 at 3.) Prysmian also produces, among other things, loose tube fiber optic cable. It has facilities throughout the world, including a plant in Claremont, North Carolina that produces loose tube fiber optic cable.² Prysmian does business in all of North America. (Hrg. Tr., Szymanski, at 25:14-16.)

2. Sterlite is a publicly traded telecommunications company headquartered in India (Hrg. Tr., Szymanski, at 115:12-13.) Sterlite sells fiber optic products in the North American market, (ECF No. 23-8 at 1 ), and is valued at approximately 1.5 billion dollars (Hrg. Tr., Szymanski, at 115:14-15.) Prysmian and Sterlite are direct competitors in selling fiber optic cable. (Hrg. Tr., Szymanski, at 26:24-27:1.)

3. Szymanski is the global head of telecommunications for the Americas at Sterlite. He has been employed in the fiber optic cable business for nearly thirty (30) years. (Hrg. Tr., Szymanski, at 46:9-11.) By the time he resigned, Szymanski ran Prysmian's North American telecommunications business, (Hrg. Tr., Szymanski, at 25:9-13), worth approximately half a billion-dollars (Hrg. Tr., Szymanski, at 25:17-18). He has enjoyed considerable professional success in this business and is a recognized leader in the industry.

4. Szymanski sought to leave Prysmian in the summer of 2020 and began communicating with Sterlite. Ultimately, in late August 2020, Szymanski resigned from Prysmian and immediately began working for Sterlite. With Szymanski's guidance, Sterlite is currently opening a manufacturing plant in Kershaw County, South Carolina, that will produce loose tube fiber optic cable. (ECF No. 26 at 7 n.3; Hrg. Tr., Szymanski, at 138:4-8.)

5. On June 18, 2021, approximately ten (10) months after Szymanski left Prysmian, Prysmian filed this action accusing Szymanski and Sterlite, inter alia , of misappropriating its trade secrets and violating the Restrictive Covenants in the Agreement.

B. Szymanski's Role at Prysmian

6. Over the course of a nearly thirty (30) year career, Defendant Szymanski established himself as a leader in the telecommunications, broadband, and fiber optic connectivity industry. (ECF No. 26-12 at 2.) He was employed by Prysmian for over fifteen (15) years, eventually taking on the role of Senior Vice President, where he was responsible for Prysmian's North American Telecommunications business. (ECF No. 23-8 at 3.)

7. As part of his role, Szymanski had access to financial information, including profit-and-loss ("P&L") forecasts, sales forecasts, budgeting, product innovations, and supply chain and manufacturing. (Id. ; see also ECF No. 23-2 at 84-85.) Szymanski also managed customer relationships and was familiar with the identities of Prysmian's clients, their contracts with Prysmian, including pricing and renewal dates, and their contact information. (Id. at 3-4; Hrg. Tr., Szymanski 83:2-11, 84:5-6, 85:6-9.)

8. Like in many industries, customer relationships are valuable in the optical fiber business. (Hrg. Tr., Szymanski, at 98:10-12.) Customer contracts tend to be long-term, often spanning multiple years. (Hrg. Tr., Jacobi, at 377:8-25.)

9. Pricing decisions are important in making sales in the telecommunications business. (Hrg. Tr., Szymanski, at 84:10-18; Rodenkirch, at 365:24-25.) Pricing is not uniform and can change from customer to customer. (Hrg. Tr., Battaini, at 298:23-25; Jacobi, at 379:1-9; Romer, at 453:3-8.) There is not one set market price. (Hrg. Tr., Jacobi, at 379:1-2.) Prysmian has fixed-price contracts with...