The Revelry Grp. v. Jobe
| Decision Date | 18 April 2023 |
| Docket Number | 1:22-cv-00510-DCN |
| Parties | THE REVELRY GROUP LLC, a foreign limited liability company, registered to transact business in the State of Idaho, Plaintiff, v. DAVID JOBE, an individual, and LUKE KIRCHER, an individual, Defendants. |
| Court | U.S. District Court — District of Idaho |
Pending before the Court is Plaintiff The Revelry Group LLC's Motion for Preliminary Injunction. Dkt. 2. On March 17, 2023 the Court held an evidentiary hearing and took the Motion under advisement. For the reasons below, the Court DENIES the Motion.
Plaintiff The Revelry Group LLC is a food, beverage, and hospitality business that conducts business in Idaho and other states. Dkt. 2-1, at 2. Revelry is well known in the catering and culinary community for hosting large events involving many influential individuals and businesses. Dkt. 2-1, at 2-3. The focus of these events ranges from food and beverages to catering, hospitality, and culinary skills. Id. The most famous of these events is the Food and Beverage Leadership Exchange held in Sun Valley, Idaho (also known as “FaBLE”), which Revelry has been running for twenty years. Id.; Dkt. 16, at 5. Other big events include the FoodOvation Exchange and the Global Foodservice Hospitality Exchange (“GFHE”). Dkt. 16, at 5. Each of these events generates substantial profits and goodwill. Dkt. 2-1, at 3.
Defendants David Jobe and Luke Kircher started to work for Revelry in 2017 and 2018, respectively. Dkt. 2-1, at 3. During their time with Revelry, Jobe and Kircher led the exchange events division, and Jobe became an equity member of Revelry in 2019. Dkt. 21, at 3; Dkt. 16, at 4. Defendants were very involved with Revelry's business model, clients, customers, and sponsors. Id. In 2019, however, salary and loan payment disputes started to develop between Revelry and Defendants.
On January 10, 2019, Kircher signed an employment agreement with Revelry. Dkt. 16, at 5. The agreement contained obligations regarding non-solicitation, non-competition, and proprietary and confidential information covenants. Dkt. 2-1, at 3. It also outlined Kircher's annual salary of $150,000 to be paid twice a month in twenty-four equal payments. Dkt. 16, at 5. For three months, Revelry paid below Kircher's agreed-on salary and never reimbursed him for the missed amounts. Id. at 6.
Similarly, in July 2019, Jobe loaned Revelry $250,000 to be repaid with interest[1] on September 30, 2019. Id. Revelry failed to make a timely payment, so Jobe and Revelry signed another promissory note to extend the repayment date until February 15, 2020. Id. Revelry did not repay the loan on this date either. Id. However, Revelry did contend that it repaid the balance later and argues that the COVID pandemic slowed the repayment of the loan. Dkt. 23, at 2. Jobe's Declaration contains an email and a promissory note showing that Revelry guaranteed the loan and the interest on the loan would be repaid. Dkt. 16-4, at 8-12. However, there is no evidence in the record showing receipt of the loan or the interest on the loan being repaid.[2]
In November 2021, Kircher resigned from Revelry. Dkt. 2-1, at 3. The restrictive covenant in Kircher's contract prevented him from soliciting Revelry's customers for one year. Id. at 4. Then at the conclusion of the GFHE 2022 event, Jobe relayed to Revelry that he intended to leave the company. Dkt. 16, at 6. Negotiations to develop a separation agreement started on August 1, 2022, and eventually ended on September 12, 2022, when Revelry sent an agreement to Jobe. Id. at 7. Both Revelry and Jobe signed the agreement on the same day. Id. Jobe and Revelry contend that the separation agreement limited different actions of Jobe: Revelry states that Jobe was restricted from all events that were similar to Revelry's exchange events, while Jobe states he was only restricted from conducting events similar to FoodOvation. Dkt. 2-1, at 6; Dkt. 16, at 7. Revelry contends that the Defendants' conduct following their departure from Revelry violated their respective contracts and verbal promises with Revelry. Dkt 2-1, at 5-6.
In September 2022, Defendants formed Prosper23 LLC, a business centered on catering and culinary skills. Dkt. 16, at 7. Prosper23 is centered around Prosper Forum 2023, which is scheduled to have its inaugural event on August 27-30, 2023. Id. The event is expected to bring in close to $3 million in sponsorships and to have over 100 companies in the catering and culinary industry participate. Id.
On September 16, 2022, after Revelry and Jobe separated, Revelry learned about Prosper23 and was able to obtain pitch materials for the event. Dkt. 2-1, at 6-7; Dkt. 3-2. Revelry also discovered that Defendants were the heads of Prosper, despite an alleged verbal promise from Jobe on July 27, 2022, to not work with Kircher. Dkt. 2-1, at 5-6. Revelry contends that the Defendants' partnership and the existence of Prosper23 violate the contracts that Defendants signed when they left Revelry. Dkt. 2-1, at 6-7. Furthermore, Revelry states that the pitch materials are a “complete mimic” of Revelry's 2023 GFHE event. Id., at 7.
Shortly after Revelry gained the pitch materials, Revelry had a call with sponsors and clients who were split and undecided on which event they wanted to support because limited resources made it difficult to support both. Id., at 6. Revelry was taken off guard by this revelation and cancelled the 2023 GFHE event altogether. Id., at 7.
Revelry now alleges substantial damages ranging over $2 million from the lost estimated revenue of GFHE 2023. Id., at 8. Revelry further alleges that its reputation has been irreparably damaged, and that Defendants have been spreading false statements to Revelry's former sponsors, clients, and customers to dissuade them from doing business with Revelry. Id.
Revelry sent a series of cease-and-desist letters to Defendants throughout September 2022, which Defendants stated were vague and unclear as to what conduct Revelry was seeking to cease. Dkt. 16, at 8. Jobe's counsel contacted Revelry via email for clarification, but Revelry never replied. Id. Revelry contends that its letters were in “clear terms.” Dkt. 2-1, at 10.
On December 19, 2022, Revelry filed with the Court a Complaint against Defendants alleging fraud, breach of contract, breach of implied duty of good faith and fair dealing, recissions, tortious interference with prospective economic advantage, violation of the Idaho Consumer Protection Act (Idaho Code § 48-603(8), (17)), unjust enrichment, and moved for temporary and permanent injunctive relief under Federal Rule of Civil Procedure 65(a) and (d). Dkt. 1. On the same day, Revelry filed a Motion for Preliminary Injunction to enjoin Defendants from further activity in relation to Prosper23 and the alleged solicitation of Revelry's customers, clients, and sponsors. Dkt. 2.
On February 17, Defendants filed an Answer and counterclaimed against Revelry alleging breach of contract. Dkt. 15. On the same day, Defendants filed a Response to the Motion for Preliminary Injunction. Dkt. 16.
On March 10, 2023, the Court issued an order granting Revelry's Motion/Request for Evidentiary Hearing (Dkt. 21), granting Revelry's Motion to Seal (Dkt. 3), and denying Defendants' Evidentiary Objections re: Motion for Preliminary Injunction (Dkt. 16-1).
A preliminary injunction's purpose is to prevent irreparable harm that occurs before a court can render a decision on the merits. Injunctive relief “is an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief.” Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 22 (2008) (cleaned up). A party seeking a preliminary injunction must establish: (1) a likelihood of success on the merits; (2) likely irreparable harm in the absence of a preliminary injunction; (3) that the balance of equities weighs in favor of an injunction; and (4) that an injunction is in the public interest. Id. at 20.
Although a plaintiff seeking injunctive relief must satisfy all four of the Winter factors, the Ninth Circuit has expressly affirmed a “sliding scale” approach post-Winter. Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011). Under this approach, “serious questions going to the merits and a balance of hardships that tips sharply towards the plaintiff can support issuance of a preliminary injunction, so long as the plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is in the public interest.” Id. at 1135 (cleaned up). Serious questions are those “which cannot be resolved one way or the other at the hearing on the injunction.” Bernhardt v. L.A. Cnty., 339 F.3d 920, 926 (9th Cir. 2003) (cleaned up).
A preliminary injunction may only be awarded “upon a clear showing” of evidence that supports each relevant preliminary injunction factor. Winter, 555 U.S. at 22. “This ‘clear showing' requires factual support beyond the allegations of the complaint, but the evidence need not strictly comply with the Federal Rules of Evidence.” CI Games S.A. v. Destination Films, 2016 WL 9185391, at *11 (C.D. Cal. Oct. 25, 2016) (citing Flynt Distributing Co., Inc. v. Harvey, 734 F.2d 1389, 1394 (9th Cir. 1984)).
The basic function of a preliminary injunction is to “preserve the status quo ante litem pending a determination of the action on the merits.” L.A. Mem'l Coliseum Comm'n v. Nat'l Football League, 634 F.2d 1197, 1200 (9th Cir. 1980).
The Court now addresses each of the necessary elements for a preliminary injunction: (A) Likelihood of Success on the Merits; (B)...
To continue reading
Request your trial