The Center for Advancing Innovation, Inc. v. Bahreini
8:18-cv-01119
D. MarylandMay 4, 2018Background
- CAI, a Maryland nonprofit that runs webinars and stores confidential due-diligence, financial models, and client lists, sued former employees Samuel and Alejandra Bahreini (and others) under the DTSA alleging improper downloads and retention of CAI files after termination.
- The Bahreinis had signed NDAs; neither had non-competes. Both were terminated in January 2018; CAI alleges Sam downloaded many files and changed account access to block CAI. CAI also alleges Alejandra gave passwords and that Sam solicited business using CAI materials.
- CAI sought a TRO, preliminary injunction, and an extraordinary civil seizure under 18 U.S.C. § 1836(b)(2)(A) of electronic devices tied to relevant IP addresses. CAI asserted imminent, irreparable harm and likelihood of success on its trade-secrets claim.
- Defendants disputed the secrecy and proprietary nature of the materials, contended many flagged documents are publicly available, asserted Sam acted at the CEO’s direction and has not disseminated materials, and said devices are with counsel.
- The Court held a TRO hearing, considered submitted affidavits and exhibits, and denied CAI’s motion for TRO/preliminary injunction and for civil seizure.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CAI is likely to succeed on the merits of its DTSA claim | Files downloaded by Sam contain trade secrets (eight categories) and were misappropriated after access termination | Many documents are publicly available; Sam downloaded some at CEO’s direction; no proof of dissemination | Denied—CAI did not make a clear showing of likelihood of success |
| Whether CAI will suffer irreparable harm absent injunctive relief | Loss of confidential financial models, clients, and diversion of business to competitors would cause irreparable injury | No clear evidence of dissemination or lost customers; devices are with counsel; alleged solicitations are speculative | Denied—CAI failed to show imminent, non-speculative irreparable harm |
| Whether extraordinary civil seizure under 18 U.S.C. § 1836(b)(2)(A) is warranted | Seizure necessary to prevent propagation/dissemination and defendants would evade less drastic relief | Seizure is extraordinary and unnecessary given disputed facts and custody of devices; assertion of public availability undermines trade-secret claim | Denied—requirements for civil seizure (including likelihood of success and imminent irreparable harm) not met |
| Adequacy of Rule 65 equitable relief versus seizure | Injunctive relief would be inadequate because defendants would evade/compliance unlikely | Defendants’ conduct and custody of devices do not demonstrate evasion; equitable relief may suffice | Court found CAI did not establish the predicate facts to justify seizure; TRO/PI denied |
Key Cases Cited
- Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7 (2008) (four-factor test for preliminary injunctions and standard that extraordinary relief requires clear showing)
- Real Truth About Obama, Inc. v. Fed. Election Comm'n, 575 F.3d 342 (4th Cir. 2009) (Fourth Circuit standard for preliminary injunction analysis)
- Hughes Network Sys., Inc. v. InterDigital Commc'ns Corp., 17 F.3d 691 (4th Cir. 1994) (irreparable harm defined as harm not compensable by money damages)
- Direx Israel, Ltd. v. Breakthrough Med. Corp., 952 F.2d 802 (4th Cir. 1991) (irreparable harm must be actual and imminent)