Elko, Inc. v. Corey Peters
3:22-cv-00015
D. Nev.
Jan 27, 2022

Background

  • Plaintiff Elko, Inc. ("Coach Elko") provides employee transportation in Elko/Winnemucca, Nevada; it sued former employees Corey Peters and Yolanda Perez and several corporate defendants (WTH Commercial, Wynne, Holding Company, Coastal, Gemini, and individual managers) for alleged theft and misuse of trade secrets and unfair competition.
  • Coach Elko alleges Peters emailed and retained confidential files (pricing, bids, sales/marketing strategies, operational plans) to personal accounts and removed an external hard drive before resigning in mid-2021; Perez left shortly thereafter and joined a competitor.
  • Coach Elko claims Defendants used those materials to solicit and poach customers (including one identified customer) and seeks a TRO/PI to stop misappropriation, solicitation, use of copyrighted website material, return of documents/devices, and evidence preservation.
  • The court held an expedited hearing after denying ex parte relief; defendants deny misuse, assert independent development and competitive business reasons, and agreed to a protocol for returning/deleting files.
  • The court found Coach Elko likely to succeed only on the limited issue that Peters improperly acquired and retained confidential materials in breach of his confidentiality agreement, but rejected relief based on speculative use/disclosure, denied copyright relief (no registration), found no demonstrated irreparable harm or favorable equities, and denied the TRO/PI; several relief requests deemed moot by agreement.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Copyright infringement (website copying) Coach Elko: defendants copied website nearly verbatim, infringing copyright Defendants: dispute copying and noted plaintiff lacked copyright registration Denied — Coach Elko lacked registered copyright; registration is prerequisite to suit
Misappropriation by acquisition (Peters' possession) Peters emailed and kept confidential files in violation of policy and confidentiality agreement Defendants disputed improper acquisition but Peters admitted sending/retaining files, claimed benign reasons Held for Coach Elko — likely misappropriation by acquisition; breach of confidentiality established
Use/disclosure of trade secrets to solicit customers (and related torts: tortious interference, breach of contract, civil conspiracy) Coach Elko: defendants used confidential information to poach customers (one lost already) Defendants: independent business model, public/industry info, superior sales; no evidence Peters disclosed files or that defendants used them Denied — plaintiff failed to show use/disclosure; claims premised on speculation and thus unlikely to succeed
Irreparable harm, balance of equities, public interest for injunctive relief Coach Elko: loss of goodwill, confidentiality, clients, competitive disadvantage warrant immediate relief Defendants: delay in seeking relief, lack of evidence of misuse, injunction would chill competition and devastate new market entrant Denied — no likely irreparable harm shown, equities/public interest do not favor injunction; delay undermines urgency
Return of documents / preservation of evidence Coach Elko sought return/destruction and preservation orders Defendants agreed to protocol for return/deletion; inherent litigation duty to preserve evidence Moot/Denied as unnecessary — parties agreed; preservation request moot absent evidence of spoliation

Key Cases Cited

  • Stuhlbarg Int'l Sales Co. v. John D. Brush & Co., 240 F.3d 832 (9th Cir. 2001) (TRO/PI standard substantially identical)
  • Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7 (2008) (four-factor preliminary injunction standard and likelihood of irreparable harm requirement)
  • All. for the Wild Rockies v. Cottrell, 632 F.3d 1127 (9th Cir. 2011) (sliding-scale serious questions test for injunctions)
  • Pimentel v. Dreyfus, 670 F.3d 1096 (9th Cir. 2012) (minimum showing of fair chance of success or serious questions required)
  • Earth Island Inst. v. Carlton, 626 F.3d 462 (9th Cir. 2010) (injunction is extraordinary equitable relief requiring clear showing)
  • Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., 959 F.3d 1194 (9th Cir. 2020) (copyright registration prerequisite to suit)
  • Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984) (public or generally known information cannot be a trade secret)
  • InteliClear, LLC v. ETC Glob. Holdings, Inc., 978 F.3d 653 (9th Cir. 2020) (elements for DTSA misappropriation and harm requirement)
  • Frantz v. Johnson, 999 P.2d 351 (Nev. 2000) (UTSA elements and wrongful misappropriation via breach of duty)
  • Stormans, Inc. v. Selecky, 586 F.3d 1109 (9th Cir. 2009) (injunctive relief must be tailored to remedy specific alleged harm)
  • Oakland Tribune, Inc. v. Chronicle Publ'g Co., Inc., 762 F.2d 1374 (9th Cir. 1985) (delay in seeking injunction undermines claim of irreparable harm)
  • U.S. v. Odessa Union Warehouse Co-op, 833 F.2d 172 (9th Cir. 1987) (district court's broad equitable power to fashion remedies)
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