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Bailey v. Nurmi

United States District Court, N.D. California

December 6, 2019

JOHNNIE HARRY BAILEY, Plaintiff,
v.
JAMES DOUGLAS NURMI, Defendant.

          ORDER GRANTING MOTION FOR A TEMPORARY RESTRAINING ORDER RE: DKT. NO. 2

          WILLIAM H. ORRICK UNITED STATES DISTRICT JUDGE.

         Before me is a motion for a temporary restraining order filed by plaintiff John Harry Bailey against defendant James Nurmi, the former Chief Technology Officer (“CTO”) of Thorium Cybersecurity, Bailey's company. Although Nurmi, who apparently resides in Luxembourg, did not appear at the hearing, Bailey has submitted evidence showing that Nurmi has received actual notice of the existence of this case and of the pending motion. Because Bailey has made a showing of irreparable harm and the balance of hardships tips in his favor, I will grant the motion and enjoin Nurmi from accessing, manipulating, altering, or destroying the source code or other confidential information he has allegedly stolen from Thorium's online accounts.

         Given that Bailey will have to serve Nurmi utilizing the procedure dictated by The Hague Convention, I will extend the Temporary Restraining Order by fourteen days to the maximum allowed by Federal Rule of Civil Procedure 65(b)(2), twenty eight days. Because Nurmi has not responded to Bailey's motion, he may move to dissolve the Temporary Restraining Order at any time and request the earliest possible hearing date. He should contact my courtroom deputy, Jean Davis, if he wishes to do so.

         BACKGROUND

         I. FACTUAL HISTORY

         Plaintiff John Bailey is the founder and CEO of Thorium Cybersecurity. Complaint (“Compl.”) [Dkt. No. 1] ¶ 1. Its flagship product is Ambitrace, which Bailey describes as “a robust enterprise data discovery solution that helps to track sensitive data across all installed endpoints[1] inside and outside an organization.” Id. According to the complaint, the enterprise endpoint security market is expected “to jump to $50 Billion dollars by 2022 in revenue for cybersecurity endpoint providers.” Id.

         Nurmi was hired on or about June 20, 2018, and he later became CTO. Id. ¶ 3. Bailey dismissed Nurmi on July 19, 2019 because of his dishonesty about an outstanding legal issue and his struggles with substance abuse.[2] Id. Ex. A.[3] In addition, Nurmi was failing to perform his duties as CTO, and was staying up all night drinking and appearing disheveled at client meeting. See Id. Exs. A, E.

         Just before dismissing Nurmi, Bailey learned that Nurmi had allowed the company's domain names-thoriumcyber.com, ambitrace.com, ambitrace.net-to expire so that he could acquire them himself. Id. ¶¶ 3, 4. In response to Bailey's request about the domains, Amazon Web Services indicated that it could not transfer ownership of ambitrace.com and ambitrace.net without a court order. Id. Ex. B.

         At some point after his dismissal, Nurmi regained entry to the company's systems, took control of them, and locked Bailey out. Id. ¶ 8. On July 15, 2019, Nurmi sent a message via Signal[4] that he had sold Bailey's intellectual property (IP) and ceased operations of the company in the European Union. Id. ¶ 9, Ex. I.

         On July 26, 2019, Bailey received an email from Nurmi's lawyer. Id. ¶ 6; see Id. Ex. E. The email attached bylaws and a certificate of incorporation for a company called Ambitrace. Id. According to Bailey, those documents are associated with a fake company Nurmi created by forging Bailey's signature. See Id. ¶ 6, Ex. F; Exhibit List 3. The email asserted that Nurmi is a controlling shareholder, has the power to terminate Bailey's role, and has a right to access the accounts. See Id. Ex. E.

         II. PROCEDURAL HISTORY

         Bailey initiated this case on November 21, 2019 alleging violations of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 and California's Comprehensive Computer Data Access and Fraud Act, Cal. Penal Code § 502. He moved for a TRO the same day. Motion for a Temporary Restraining Order (“Mot.”) [Dkt. No. 2]. On November 25, I ordered Bailey to attempt service on Nurmi and to provide both Nurmi and the attorney with copies of his motion.[5] Dkt. No. 8. I scheduled a hearing for December 3, 2019. Id.

         Bailey appeared at the hearing and detailed his attempts to reach Nurmi and his attorney. He sent summonses to Nurmi's addresses in San Francisco and in Luxembourg.[6] He contacted Nurmi's attorney's law firm and learned that (i) that attorney has left the firm, and (ii) the firm is not representing Nurmi with regard to this lawsuit. Exhibit List 2. It referred him to another attorney, who also is not representing Nurmi in this case. Bailey shared all case documents with Nurmi's Ambitrace and personal email addresses via Google documents. Id. Finally, he sent a copy of the summons via Signal, which indicated that Nurmi had opened the message. Id.

         LEGAL ...


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