IP Law Daily, TRADE SECRETS—D. Md.: Former employees of nursing home operator fail to revise preliminary injunction, (Jul 21, 2020)

By Todd Fanter, J.D.

The former employees sought to clarify that they could use enjoined information or develop property that was publicly available.

Two former employees of nursing home operator Brightview Group, LP failed to present good cause for amending a preliminary injunction, according to the federal district court in Baltimore. The court found that use of publicly available information did not fall within the prohibitions of the preliminary injunction, abrogating any need to amend the injunction. The court also ruled that the injunction did not prohibit the pursuit of any specific land development opportunity not aided in any way by the enjoined information, but the court would only rule on the opportunities on an ad hoc basis (Brightview Group, LP v. Teeters, July 15, 2020, Gallagher, S.).

Brightview Group develops and operates senior living communities. Between 2018 and 2019, two of Brightview’s then employees, defendants Andrew Teeters and Ross Dingman, allegedly used Brightview documents containing confidential, proprietary, and/or trade secret information, to form Monarch, a competing senior living community development business. This array of information allegedly included Brightview’s operational guidelines, proprietary market demographics research, development pipeline, and other documents containing Brightview’s confidential, proprietary, and/or trade secret information. Brightview alleged that Teeters and Dingman retained the documents after their firing from Brightview and continued to use the information even after being sued.

In February of 2020, the court granted Brightview’s motion for preliminary injunction. The defendants were enjoined from accessing, using, disclosing, or disseminating any of the Brightview documents set forth in the court’s appendix to the court order. The defendants did not appeal the court’s decision. However, in March of 2020, the defendants collectively filed a motion to alter or amend the order and preliminary injunction.

The defendants moved to amend the preliminary injunction in two ways: (1) to make clear that the defendants may use the information that was also publicly available and (2) to clarify that the defendants may develop senior living communities on any property that was not listed on the pipeline document in the appendix, or that had also been made publicly available. Brightview opposed the requests, arguing that either clarification would merely be an advisory opinion that the defendants are unentitled to, because there was no change in the law, or facts, to justify the requested relief.

The court did not believe it necessary to alter further the order’s language to address the defendants’ hypothetical concerns regarding publicly available information contained within the appendix documents. The court opined that if the defendants were able to obtain publicly available information without using any of the appendix documents, that acquisition could not, by law, be enjoined, no matter what reading of the preliminary injunction order Brightview might hypothetically offer.

The defendants also sought to amend the injunction order to specify which properties the defendants might lawfully develop during the course of the litigation. The defendants requested that the court amend the order to specify that the defendants could develop any property not listed on the sole "pipeline document" provided during the preliminary injunction hearing, which encompassed properties in Maryland and Virginia.

The court found that additional Brightview pipeline documents could exist that might be entitled to trade secret protection, or may otherwise be confidential or proprietary in nature, like the Maryland and Virginia pipeline document. Telling the defendants that any property that might be listed in another Brightview document was fair game could, in effect, rubber-stamp further potential misappropriation of Brightview trade secrets, or could further unlawful competition, thereby undermining the purpose of the original preliminary injunction order.

The defendants additionally asked the court to amend the preliminary injunction order to allow them to develop any senior living site that was being publicly marketed. The court agreed that its memorandum opinion did not definitively conclude whether Brightview’s Maryland and Virginia development pipeline was a trade secret. However, even if that development pipeline was a trade secret, there could be no misappropriation to enjoin if defendants pursued identical development opportunities acquired through reverse engineering, independent derivation or any other lawful means of acquisition. The injunction in this case prohibited accessing, using, disseminating or disclosing the appendix documents, but it did not enjoin the pursuit of any specific development opportunity that was not aided by the further use of any appendix document. The court declined to decide carte blanche an issue that was more appropriately decided on an ad hoc basis, with more complete information. At that particular stage in the litigation, the law has always provided that an individual may lawfully compete with his former employer, and nothing in the court’s preliminary injunction order intended to, or could have, nullified that principle.

The court also found that even if the defendant’s motion was read to seek a modification specifically as to the Virginia property, the requested modification came too late. A motion to modify a preliminary injunction is meant only to relieve inequities that arise after the original order. The evidence regarding the Virginia property was available an entire month before the hearing held on the preliminary injunction motion.

Lastly, the parties disagreed as to which Federal Rule of Civil Procedure governed the defendant’s motion. The court ruled that under any framework of review, the defendants were not entitled to the requested relief, and the defendant’s motion amend the preliminary injunction order was denied. Therefore, the court need not definitively resolve the parties’ technical arguments.

This case is No. 1:19-cv-02774-SAG.

Attorneys: Mark Spencer Saudek (Gallagher Evelius & Jones LLP) for BrightView Group, LP. Jonathan P. Kagan (Kagan Stern Marinello & Beard, LLC) for Andrew M. Teeters.

Companies: BrightView Group, LP

Cases: TradeSecrets GCNNews MarylandNews