IP Law Daily, TRADE SECRETS—S.D. Miss.: Preliminary injunction denied in tribal services dispute., (Apr 25, 2023)

By Kevin M. Finson, J.D.

A company providing services to tribal communities could not show irreparable harm.

A tribal communities services company failed to show it stood to suffer irreparable harm in the absence of a preliminary injunction, the U.S. District Court in Jackson has held. The only damages were monetary and they were, while difficult to calculate, not impossible to determine (Tribal Solutions Group, LLC v. Valandra, April 21, 2023, Reeves, C.).

Tribal Solutions Group, LLC and its partner Tribal Communications, LLC (collectively, TSG) were in the business of providing services “that support efforts in healthcare, education, broadband expansion, and economic development” to tribal communities. TSG alleged that a former Senior Vice President of Tribal Communications, along with former independent contractors and vendors, misappropriated trade secrets from TSG and used the stolen information to create a new, competing company under the name Tribal Ready, Inc. (Tribal Ready). TSG brought suit for violation of state and federal trade secrets statutes, breach of fiduciary duties, and related claims. TSG also sought a preliminary injunction to prohibit the defendants from continuing use of the claimed trade secrets. The court noted the traditional four factor test, but only found it necessary to discuss one factor.

Irreparable harm. TSG argued that it faced irreparable harm not remediable by money damages in the form of lost business opportunities, goodwill, customer relations, and erosion of market position. The court held, however, that TSG’s argument on these points was merely speculative: there was no concrete evidence of such losses. TSG also argued that the amount of lost profits would be difficult or impossible to calculate, but again the court found this was mere speculation unsupported by evidence.

The court noted an exception to the general rule regarding irreparable harm in 5th Circuit case law for cases where the potential economic loss was so great as to threaten the existence of the movant’s business, but again found that TSG had not supplied it with any facts from which it could make a determination about the scale of the threatened loss. The court found TSG had failed to show a risk of irreparable harm.

The court denied the preliminary injunction. Assuming without substantial discussion that the remaining factors favored issuance of an injunction, the lack of irreparable harm was fatal to the request.

The Case is No. 3:23-CV-10-CWR-FKB.

Attorneys: Neville H. Boschert (Jones Walker, LLP) for Tribal Solutions Group, LLC and Tribal Communications, LLC. Benjamin Au (Orrick, Herrington & Sutcliffe, LLP) for Joseph Valandra, Clayton Wooley and Tribal Ready, Inc.

Companies: Tribal Solutions Group, LLC; Tribal Communications, LLC; Tribal Ready, Inc.

Cases: TradeSecrets MississippiNews