Judge: Mark H. Epstein, Case: 25SMCV01886, Date: 2025-04-21 Tentative Ruling

Case Number: 25SMCV01886    Hearing Date: April 21, 2025    Dept: I

This is a trade secret case that perhaps should have been filed as a cross complaint in the action by defendants against plaintiff.  Plaintiffs claim that they hired defendant Mesbah, who was later an independent contractor.  According to plaintiffs, defendants had access to plaintiffs’ trade secrets, which plaintiffs list out.  Plaintiffs allege that defendants left and took the trade secrets with them.  Defendants now operate clinics that, at least inferentially, compete with plaintiffs’ clinics.  Further, at least some of plaintiffs’ former employees now work for defendants.  (Defendants earlier filed a separate employment based action against plaintiffs.)  Plaintiffs assert that defendants stole plaintiffs’ trade secrets and will not give them back.  Plaintiffs seek a TRO and an OSC re: Preliminary Injunction.

The standards governing TROs are well settled.  The court looks to the probability that plaintiffs will succeed on the merits and the balance of hardships.  The stronger plaintiffs’ showing on one, the less strong it must be on the other.  The other thing the court seeks to do is to maintain the status quo ante, which is the way things were right before the dispute arose.  A TRO and preliminary injunction may issue to protect a trade secret and plaintiffs also claim that defendants agreed to such relief when hired.

The court starts with one observation.  Plaintiffs state that defendants “took” the trade secrets and that plaintiffs cannot operate their business without the trade secrets.  The court needs some clarification.  If by “took” plaintiffs mean that defendants downloaded the information and wiped plaintiffs’ computers such that defendants, and only defendants, have that information, then plaintiffs’ case is quite strong.  Things like taking a patient’s medical file or contracts that plaintiffs have negotiated with providers or the like such that plaintiffs do not have access to that information is a lay-down for a TRO.  But the court doubts that is what happened.  The court suspects that defendants are actually alleged to have taken a copy of that material.  If that is the case, then plaintiffs’ bare statement without explanation as to the harm that will befall them absent a TRO rings hollow.  If plaintiffs have a patient to treat and the medical file is still there, the court would think that plaintiffs can treat the patient.  If plaintiffs need to bill a provider and plaintiffs have the original of the contract, the bill will go out.  In short, assuming that what was taken was a copy, the court is not sure what the emergency harm is about which plaintiffs complain.  Indeed, the court can see none and neither of the substantive declarations describes it in anything more than the broadest generalities.  As to the likelihood of success, the showing is relatively weak.  There is some showing to be sure.  But a patient’s chart is not a trade secret.  It is confidential and private, but not a trade secret.  Contracts with providers or workflows or lease terms or compensation structures might be trade secrets, but more of a showing is needed that that the information is password protected (whatever that means) and somehow took 20 years to develop.  That is not a strong showing.  It could be that a strong showing can ultimately be made, but this showing is long on conclusory statements and short on any detail.

In short, at least at present, there is no showing of truly irreparable injury and only a weak showing that there are trade secrets here or what they are with any particularity or specification.  On the other side of the coin, the court sees some danger in shooting from the hip.  The scope of the order is not well defined or particularized, the line between know-how or the like and the supposed trade secret is hard to define, and the court has no idea what the effect would be on the defense.  On the merits, plaintiffs say that they have a forensic report, but the court has not seen it and the court has not seen the other side’s position or argument.  The court also must confess some concern as to the interplay between this case and the case brought by the defense against plaintiffs.

The court will therefore DENY the TRO.  The court will, however, discuss a briefing schedule with the parties.  The court suggests that plaintiffs file a new standalone motion for preliminary injunction so that they can ensure that they put their best foot forward in terms of evidence.  If they’ve got a forensic report, it ought to be included, for example.  That will also lead to a hearing date through the reservation system, which leads to the rest of the briefing schedule.  The parties can look to see how far out that would put the hearing—the court thinks it would not be too long. 

The court will also discuss with plaintiffs and defendants whether there are any interim promises that ought to be discussed.