Steede v. Freight Logic, Inc.
2:25-cv-02136
| D. Kan. | May 9, 2025Background
- Plaintiff Shannon Steede, former CTO of Freight Logic, Inc., was removed from his position after allegedly failing to make a required $100,000 capital contribution.
- Upon removal, Steede withheld control of technological assets (website, email, AWS) and made public and direct communications undermining Freight Logic.
- Multiple parties—Steede, individual defendants (Levy and Burdick), and Freight Logic—filed competing motions for temporary restraining orders (TRO) and preliminary injunctions (PI).
- The primary legal standard for TRO/PI motions is the four-factor test: likelihood of success, irreparable harm, balance of harms, and public interest; courts emphasize irreparable harm as dispositive.
- The court held evidentiary hearings where all parties were able to present evidence and make arguments on the record regarding the requested relief.
- The matter was resolved at the preliminary injunction stage, denying all three parties' motions for failure to satisfy key legal standards, primarily irreparable harm and likelihood of success on the merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was Steede unlawfully removed as CTO and entitled to reinstatement? | Steede argued he was improperly removed without a shareholder vote and thus should be reinstated and granted full control. | Levy/Burdick countered Steede failed to make required capital contribution, so removal was justified. | Court found Steede failed to prove shareholder status or likelihood of success; motion denied. |
| Does any party face irreparable harm warranting TRO/PI? | Steede claimed harm through removal and loss of control over Freight Logic. | Levy/Burdick claimed harm to Freight Logic’s reputation and operations; Freight Logic cited loss of goodwill. | Court found Steede and individual defendants had only compensable harms; only Freight Logic showed irreparable harm (loss of goodwill). |
| Can Freight Logic prevail on conversion, breach of fiduciary duty or tortious interference claims? | Not directly at issue from Steede; he denied wrongful control and claimed personal property in tech assets. | Freight Logic argued Steede’s control over tech assets, refusal to transfer, and bad faith conduct supported all three claims. | Court found legal theories (esp. conversion over web/IP access; duties post-termination) were novel, untested, and Freight Logic failed to show likelihood of success or damages. |
| Should injunctive relief be granted on current record? | Steede: yes, based on new evidence and urgency. | Levy/Burdick & Freight Logic: yes, to prevent ongoing harm to company/reputation. | Court denied all TRO/PI motions—Steede and individual defendants for lack of irreparable harm, Freight Logic for lack of likelihood of success. |
Key Cases Cited
- Mrs. Fields Franchising, LLC v. MFGPC, 941 F.3d 1221 (10th Cir. 2019) (sets four-factor test for preliminary injunction, emphasizing irreparable harm)
- Nken v. Holder, 556 U.S. 418 (2009) (likelihood of success and irreparable harm are the most critical factors)
- Heideman v. South Salt Lake City, 348 F.3d 1182 (10th Cir. 2003) (clarifies what constitutes irreparable harm)
- Bixler v. Foster, 596 F.3d 751 (10th Cir. 2010) (harm to shareholder investments considered harm to corporation, not individuals)
- Burcham v. Unison Bancorp, Inc., 77 P.3d 130 (Kan. 2003) (sets bases for fiduciary duties and tortious interference elements under Kansas law)
- Turner v. Halliburton Co., 722 P.2d 1106 (Kan. 1986) (outlines tortious interference with contract and with prospective advantage under Kansas law)