United States District Court, N.D. California
ORDER DENYING PLAINTIFF'S TEMPORARY RESTRAINING
ORDER AND DENYING PLAINTIFF'S MOTION TO SEAL RE: DKT.
NOS. 2, 3
HAYWOOD S. GILLIAM, JR. UNITED STATES DISTRICT JUDGE.
24, 2019, Plaintiff CleanFish, LLC, f/k/a Sig and Sour LLC
(“CleanFish”), filed a complaint against
Defendants Dale Sims, Buena Vista Seafood, LLC (“Buena
Vista”), Island Sea Farms, Inc. (“ISF”),
Nanci Dixon, and Paul Simpson, alleging trade secret
misappropriation under federal and California law and breach
of contract. Dkt. No. 1 (“Compl.”). The same day,
Plaintiff also applied for the immediate entry of a temporary
restraining order, order for expedited discovery, and order
to show cause why a preliminary injunction should not issue
against Defendants. Dkt. No. 2 (“Mot.”).
Plaintiff filed an administrative motion to file under seal
certain material used in support of its motion.
Court has carefully considered the parties' briefs,
supporting declarations, and exhibits. The Court finds that
this matter is appropriate for disposition without oral
argument and the matter is deemed submitted. See
Civil L.R. 7-1(b). For the reasons discussed below, the Court
DENIES Plaintiff's motion for temporary
restraining order and DENIES Plaintiff's
administrative motion to file under seal.
CleanFish is a Delaware limited liability company and is a
wholesale and retail distributor of seafood. Compl. ¶
10. Plaintiff was formerly known as Sig and Sour LLC until
approximately April 2018, when it purchased CleanFish, Inc.
through an asset purchase agreement with Defendant Sims. Dkt.
No. 2-1, Declaration of Michael Moniz (“Moniz
Decl.”) ¶¶ 1, 4-6.Mr. Sims was the co-founder
and President of CleanFish, Inc. and has been working in the
seafood industry for approximately thirty-nine years.
Id. ¶ 4; Dkt. No. 17-1, Declaration of Dale
Sims (“Sims Decl.”) ¶ 1. After the
acquisition, Mr. Sims continued to work for Plaintiff as a
“key employee involved in sales and distribution of
seafood to Plaintiff's customers.” Mot. at
On May 17, 2019, Mr. Sims formed Buena Vista, another seafood
distributor company. Mot. at 17; Sims Decl. ¶ 6. In or
around May 31, 2019, Mr. Sims resigned from CleanFish.
Id. Mr. Sims maintains that after his resignation,
Plaintiff attempted to persuade him to reconsider. Sims Decl.
¶ 8. Mr. Sims declined to do so and ceased working at
CleanFish by June 5, 2019. Id. ¶ 9. While Mr.
Sims returned his company cellphone to Plaintiff, he
allegedly still retained the company laptop. Mot. at 17-18.
Mr. Sims represents that the laptop is personal property he
has owned since 2010. Sims Decl. ¶ 14.
has both seafood suppliers and customers, including Defendant
ISF. See Dkt. No. 17-2, Declaration of Paul Simpson
(“Simpson Decl.”) ¶¶ 4-10. ISF is a
British Columbia corporation that farms and supplies mussels
from Canada. Id. ¶ 1. Defendant Dixon is an
employee of ISF, and Defendant Simpson is the President.
Id. ¶¶ 1, 3. ISF began working with Mr.
Sims and CleanFish, Inc. in 2014 and continued that
relationship when Plaintiff acquired CleanFish, Inc. in 2018.
Id. ¶¶ 4-5. However, after the
acquisition, Mr. Simpson avers that Plaintiff consistently
paid ISF's invoices late, which was what eventually led
to ISF's decision to terminate its business with
Plaintiff. Id. ¶¶ 6-10.
contends that it was Mr. Sims's unlawful conduct that
“disrupt[ed] and usurp[ed] [Plaintiff's]
business” with ISF and other customers. Mot. at 12.
Specifically, Plaintiff argues that during Mr. Sims's
final weeks of employment and immediately after his
resignation, he willfully misappropriated Plaintiff's
“Confidential Data, ” defined as “detailed
customer lists, purchasing data, sales figures and other
analysis, and detailed supplier lists, sales data and other
analysis.” Id. at 12. Mr. Sims allegedly
conspired with Ms. Dixon and Mr. Simpson to use the
Confidential Data to fulfill orders to Plaintiff's
customers, thereby competing with Plaintiff. Mot. at 19. This
thus “divert[ed] business away” from Plaintiff
and caused its revenue to drop “precipitously.”
Id. at 27-28.
argues that absent immediate injunctive relief, it will
continue to “suffer irreparable injury and key evidence
may be lost.” Mot. 2 at 2. Plaintiff's motion seeks
an order: (1) enjoining Defendants from altering, destroying,
or disposing of evidence that may be related to this
litigation; (2) directing a forensics expert to
“clone” or “mirror image” Defendants
Sims and Buena Vista's business and personal email
accounts, computers, mobile devices, and computer drives; (3)
directing Defendants to preserve documents related to this
litigation; (4) directing Mr. Sims to return the laptop over
which Plaintiff claims possession; (5) enjoining Defendants
from accessing, using, disclosing, or making available
Plaintiff's “confidential, proprietary, or trade
secret documents, data, or information”; (6) enjoining
Defendants from “directly or indirectly violating or
interfering with confidentiality obligations”; (7)
enjoining Defendants from “directly or indirectly
soliciting, continuing to solicit, initiating contact with,
any of Plaintiff's customers as of May 17, 2019”;
and (8) directing Defendants to return all other documents or
property that contain Plaintiff's “confidential,
proprietary, or trade secret information.” Mot. at 3-4.
Plaintiff also seeks an expedited discovery request to
subpoena non-party witnesses “on an expedited and
immediate basis, ” along with other “discovery
demands.” Id. at 2.
FOR TEMPORARY RESTRAINING ORDER
temporary restraining order is intended to preserve the
status quo and prevents irreparable harm until a hearing can
be held on a preliminary injunction application. See
Granny Goose Foods, Inc. v. Brotherhood of Teamsters &
Auto Truck Drivers, 415 U.S. 423, 429 (1974). However, a
temporary restraining order is an “extraordinary
remedy” that the court should award only upon a clear
showing that the plaintiff is entitled to such relief.
See Winter v. Natural Res. Def. Council, Inc., 555
U.S. 7, 20 (2008). Such an order may be issued only where the
moving party has established: (1) a likelihood of success on
the merits; (2) a likelihood of irreparable harm to plaintiff
in the absence of preliminary relief; (3) the balance of
equities tips in plaintiff's favor; and (4) that an
injunction is in the public interest. See id. at 22.
Winter, a court may only grant preliminary relief
upon a showing that irreparable harm is likely. See
Alliance for the Wild Rockies v. Cottrell, 632 F.3d
1127, 1132 (9th Cir. 2011). The mere possibility of
irreparable harm is insufficient to support issuance of
preliminary relief, even where the other Winter
factors weigh heavily in favor of the movant. Id. In
Alliance, the Ninth Circuit explained that
“‘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 1134.
Likelihood of ...