Katch, LLC v. Sweetser
143 F. Supp. 3d 854
D. Minnesota2015Background
- Katch is a California LLC online advertising intermediary between advertisers and publishers.
- Katch’s platform uses confidential data to identify Quality Publishers and set margins.
- Sweetser, a former Katch executive, left for MediaAlpha and signed a Confidentiality Agreement prohibiting disclosure of confidential information.
- Katch alleges Sweetser will disclose confidential information or breach through new role at MediaAlpha, a direct competitor.
- Katch seeks 120-day injunctions barring Sweetser from working for MediaAlpha, sharing Margin Information, and preserving documents; requests expedited discovery.
- The court must evaluate the Dataphase factors, including choice of law, likelihood of success on the merits, irreparable harm, balance of harms, and public interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Choice of law governing misappropriation claim | California law governs contract; MUTSA outcome unclear | Choice-of-law provision may govern related tort claims | California law may apply; even if applicable, harms likelihood decreases |
| Likelihood of success on MUTSA misappropriation | Confidential Information is a trade secret and will be misappropriated | No inevitable disclosure; differences between platforms reduce value of information | Unlikely to prove high probability of inevitable disclosure; no likelihood of success on merits |
| Breach of contract under confidentiality agreement | Sweetser will breach by working for MediaAlpha | No repudiation or breach shown; can comply with agreement | Insufficient showing of breach or anticipatory breach |
| Irreparable harm | Inevitable disclosure constitutes irreparable harm | Harm speculative; information may be stale or non-actionable | No irreparable harm shown |
| Balance of harms and public interest | Injunctive relief protects legitimate business interests | Injunction would bar Sweetser from employment and chill competition | Balance weighs against injunction; public interest favors allowing Sweetser to work |
Key Cases Cited
- Superior Edge, Inc. v. Monsanto Co., 964 F. Supp. 2d 1017 (D. Minn. 2013) (contract‑related tort claims may be governed by contract’s choice of law)
- Warren E. Johnson Cos. v. Unified Brand, Inc., 735 F. Supp. 2d 1099 (D. Minn. 2010) (contract language may govern related tort claims)
- Inacom Corp. v. Sears, Roebuck & Co., 254 F.3d 683 (8th Cir. 2001) (contract choice-of-law clause may not extend to certain claims)
- Honeywell Int'l Inc. v. Stacey, 2013 WL 9851104 (D. Minn. 2013) (inevitable disclosure standard requires high probability; injunctive relief not granted here)
- United Products Corp. v. Cederstrom, 2006 WL 1529478 (D. Minn. 2006) (no inevitable disclosure; injunction denied when no misappropriation shown)