Garfield Beach CVS LLC v. Palm Care Pharmacy
3:17-cv-00879
S.D. Cal.Jun 9, 2017Background
- Plaintiff Garfield Beach CVS LLC bought El Cajon Express Pharmacy’s confidential prescription files and goodwill and had key Express employees sign Key Employee Agreements (KEAs) prohibiting disclosure of confidential information.
- Defendant Samera Yokoub was an Express driver alleged to have possession of a delivery log (customer names, prescription numbers, signatures, co-pay info); Plaintiff says Yokoub resigned and immediately began working for competitor Mollison Pharmacy.
- Plaintiff alleges Yokoub failed to return delivery logs and that Mollison, using those records, solicited Plaintiff’s customers and caused increased prescription transfers to Mollison.
- Plaintiff filed suit asserting DTSA and California trade secret claims, breach of contract, conversion, unfair competition, and tortious interference, and moved ex parte for a temporary restraining order (TRO) and expedited relief.
- Magistrate Judge Dembin granted a preservation-of-evidence order but denied expedited discovery; the District Court considered evidentiary objections and denied the ex parte TRO for lack of credible evidence showing irreparable harm.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a TRO should issue based on alleged misappropriation and ongoing customer solicitation | Plaintiff: Defendants misappropriated trade secrets (delivery logs) and are actively soliciting customers; irreparable harm will occur without immediate relief | Defendants: Plaintiff’s evidence is unreliable/hearsay; no proof of active solicitation or business loss; jurisdictional challenge to DTSA | Denied — Plaintiff failed to show likelihood of irreparable harm due to lack of credible corroborating evidence |
| Admissibility of evidence supporting the TRO motion | Plaintiff relied on declarations (Silva, Shorez, Vaudry) to show transfers/solicitations | Defendants objected to declarations as hearsay, undated, speculative, or irrelevant | Court sustained objections to Shorez (undated) and paragraphs 11–12 of Silva (hearsay); overruled objection to Vaudry; key hearsay exclusion undermined TRO motion |
| Likelihood of success on merits (trade secret, breach, conversion) for preliminary relief | Plaintiff argued strong likelihood on trade secret, contract, and conversion claims supporting injunctive relief | Defendants disputed facts and emphasized evidentiary deficiencies | Court found serious questions on merits insufficiently supported for ex parte TRO absent credible evidence of irreparable harm |
| Subject-matter jurisdiction under DTSA | Plaintiff invoked DTSA as basis for federal jurisdiction | Defendants contended DTSA does not apply because the alleged trade secret is not intended for use in interstate or foreign commerce | Not decided — Court declined to resolve jurisdictional challenge in ex parte context and invited Defendants to file a separate motion |
Key Cases Cited
- Winter v. Natural Resources Defense Council, 555 U.S. 7 (2008) (sets four-factor standard for preliminary injunctions and TROs).
- Granny Goose Foods, Inc. v. Brotherhood of Teamsters, 415 U.S. 423 (1974) (TROs are temporary measures to preserve the status quo only until a hearing).
- Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127 (9th Cir. 2011) (sliding-scale approach: serious questions on the merits may suffice when coupled with irreparable harm and a favorable balance of hardships).
- Stuhlbarg Int’l Sales Co. v. John D. Brush & Co., 240 F.3d 832 (9th Cir. 2001) (TRO evaluated under preliminary injunction standards).
- Reno Air Racing Ass’n v. McCord, 452 F.3d 1126 (9th Cir. 2006) (ex parte TROs are rarely justified).
- Munaf v. Geren, 553 U.S. 674 (2008) (extraordinary remedies are not awarded as of right).