United States District Court, E.D. Michigan, Southern Division
David
R. Grand Mag. Judge
OPINION AND ORDER DENYING PLAINTIFF'S MOTION FOR
TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION (ECF
NO. 10)
HONORABLE LINDA V. PARKER U.S. DISTRICT JUDGE
Plaintiff
LinTech Global, Inc. (“Plaintiff”) initiated this
lawsuit against Defendants CAN Softtech, Inc.
(“CAN”) and Swapna Reddygari
(“Reddygari”) by filing a Verified Complaint for
Injunctive and Other Relief (the “Complaint”) in
Michigan State Circuit Court in Oakland County, Michigan.
(ECF No. 1, PageID 7.) Upon recognition of the parties'
complete diversity, Defendants removed the matter to the
United States District Court for the Eastern District of
Michigan pursuant to 28 U.S.C. §§ 1441 and 1446.
(Id. at 1.) Plaintiff's Complaint alleges four
counts: breach of duty of loyalty and unjust enrichment by
Defendant Reddygari, breach of contract by Defendant CAN, and
trade secret misappropriation by both Defendants.
(Id. at 14-17.) Presently this matter is before the
Court on Plaintiff's Motion for Temporary Restraining
Order and Preliminary Injunction (the “Motion”).
(ECF No. 10.) The Motion has been fully briefed, and the
Court is dispensing with oral argument pursuant to Local Rule
7.1(f)(2). (ECF Nos. 10, 15, 16.)
I.
Factual and Procedural History
Plaintiff LinTech is an information technology contractor,
providing support services to federal government agencies on
different projects. (ECF No. 1, PageID 8.) In its Complaint,
Plaintiff alleges as follows. Since September 26, 2014,
Plaintiff-holding a prime contract-provided software
development, project management, operation, and maintenance
support services for the Federal Aviation Administration
(“FAA”) Designee Management System
(“DMS”) (also referenced as the “FAA
project”). (Id. at 9.)
On or
about April 17, 2017, Plaintiff hired Defendant Reddygari as
a fulltime employee responsible for managing the daily,
on-site operations of the FAA project. (Id.)
Subsequently, Plaintiff promoted Defendant Reddygari;
sometime in 2018, she began serving as Plaintiff's only
Project Manager and Site Manager for the FAA Project.
(Id.) In this role, she directly reported to Michael
Lin, Plaintiff's President and Owner, and Ursa Hopkins,
Plaintiff's Chief Operating Officer. (Id.) Also,
she frequently interacted with Plaintiff's FAA customer
and was relied upon to communicate customer concerns and to
oversee that Plaintiff's duties related to the FAA
project were met. (Id.) Additionally, Defendant
Reddygari's responsibilities included: making
recommendations on whether additional positions were
necessary for the FAA project, making recommendations on
selecting subcontractors for the FAA project, and making
hiring and firing decisions related to the FAA project.
(Id.)
During
Defendant Reddygari's tenure at LinTech, she recommended
and “convinced” Mr. Lin-LinTech's President
and Owner-that the subcontractor, Defendant CAN, should be
hired to assist Plaintiff with the FAA project. (Id.
at 10.) CAN, like LinTech[1], is a company providing information
technology support services. (Id.) Although
Defendant Reddygari disclosed to Plaintiff that Amar
Chandagari, President of CAN Softtech, Inc., was her husband,
she also represented that there would be no conflict of
interest in hiring her husband's company to work on the
FAA project because “her allegiance was with LinTech[,
] and CAN would be treated like any other
subcontractor.” (Id.) As a result, Plaintiff
hired Defendant CAN as a subcontractor. (Id.) The
parties entered into an “Indefinite Delivery Indefinite
Quantity” Agreement (the “Subcontractor
Agreement” or the “Agreement”) on or around
May 2, 2018. (Id.) At the time of the Agreement,
neither Defendant disclosed that Defendant Reddygari had any
ownership interest or any managerial role at CAN Softtech,
Inc. (Id. at 10, 12.) While working full-time for
Plaintiff on the FAA project, however, Defendant Reddygari
had an ownership interest in and served as the Chief
Executive Officer of CAN Softtech, Inc. (Id. at 10,
12.)
After
Plaintiff contracted with Defendant CAN for services related
to the FAA project, CAN and its employees were increasingly
used. (Id. at 11.) By November 2018, LinTech
employees working on the FAA project were reduced from 100%
of the positions to 4 of 19 (21%) of the positions-the 15
other positions being filled by CAN employees. (Id.)
Although Mr. Lin addressed balancing the number of
Plaintiff's and Defendant's employees on the project,
Defendant Reddygari continued to use mostly CAN employees.
(Id.)
Because
the FAA project did not have a set expiration[2], Defendant
Reddygari had the responsibility of updating Mr. Lin on when
and whether the project was up for re-bid or might end.
(Id.) Defendant Reddygari informed Mr. Lin that the
FAA project would extend beyond April 2020, but never
informed him that it would be re-bid or that Plaintiff's
contract was in jeopardy of being terminated. (Id.)
Without
any prior notice, on May 14, 2019, Defendant Reddygari
resigned from her employment with Plaintiff, and Defendant
CAN terminated its subcontract with Plaintiff. (Id.
at 12.) The same day, the FAA ended its relationship with
Plaintiff and directly[3] awarded Defendant CAN “substantially
the same project as the FAA project that LinTech held for
five (5) years”. (Id.) Upon Defendants'
respective resignation and termination, they retained 12
laptop computers that contained Plaintiff's confidential
and proprietary information related to the FAA project.
(Id. at 13.) After Plaintiff demanded the
computers' return, Defendants returned them to Plaintiff
on May 22, 2019. (Id.)
On May
24, 2019, believing Defendants to have misappropriated its
confidential and proprietary information, Plaintiff initiated
this lawsuit against Defendants by filing a Verified
Complaint for Injunctive and Other Relief (the
“Complaint”) in Michigan State Circuit Court in
Oakland County, Michigan, alleging breach of duty of loyalty
and unjust enrichment against Defendant Reddygari, breach of
contract against Defendant CAN, and trade secret
misappropriation against both Defendants. (ECF No. 1, PageID
7, 14-17.) Upon recognition of the parties' complete
diversity, Defendants removed the matter to the United States
District Court for the Eastern District of Michigan pursuant
to 28 U.S.C. §§ 1441 and 1446. (Id. at 1.)
Presently this matter is before the Court on Plaintiff's
Motion for Temporary Restraining Order and Preliminary
Injunction (the “Motion”). (ECF No. 10.) The
Motion has been fully briefed, and the Court is dispensing
with oral argument pursuant to Local Rule 7.1(f)(2). (ECF
Nos. 10, 15, 16.) Plaintiff moves the Court to issue a
temporary restraining order and preliminary injunction
enjoining Defendants from “using and/or disclosing
LinTech's confidential and proprietary pricing,
technical, process, customer, staffing and labor
information.” (ECF No. 10, PageID 98-99.)
II.
Temporary Restraining Order and Preliminary
Injunction
Injunctive relief is “an ‘extraordinary remedy
involving the exercise of a very far-reaching power, which is
to be applied only in limited circumstances which clearly
demand it.' ” Apex Tool Group, LLC v.
Wessels, 119 F.Supp.3d 599, 606 (E.D. Mich. 2015)
(citing Leary v. Daeschner, 228 F.3d 729, 739 (6th
Cir.2000)). In issuing injunctive relief, the court
considers: “(1) ‘whether the movant has a strong
likelihood of success on the merits; (2) whether the movant
would suffer irreparable injury without the injunction; (3)
whether issuance of the injunction would cause substantial
harm to others; and (4) whether the public interest would be
served by issuance of the injunction.' ”
Id. (citing Kentucky v. Hagel, 759 F.3d
588, 600 (6th Cir.2014). “[I]rreparable harm . . . must
weigh in favor of relief for an injunction to issue.”
Id. at 607 (citing Kelly Servs. v. Eidnes,
530 F.Supp.2d 940, 949 (E.D.Mich.2008)). Specific findings
concerning each of the factors are not necessary when
“fewer factors are dispositive of the issue.”
Id. (citing Six Clinics Holding Corp., II v.
Cafcomp Sys., Inc., 119 F.3d 393, 399 (6th Cir.1997)).
“
‘To be granted an injunction, the plaintiff must
demonstrate, by clear and convincing evidence, actual
irreparable harm or the existence of an actual threat of such
injury.' ” Id. at 609 (citing Patio
Enclosures, Inc. v. Herbst, 39 Fed.Appx. 964, 969 (6th
Cir.2002)). Irreparable harm is the most important
prerequisite for injunctive relief. Id. (citations
omitted). The Court concludes that Plaintiff has failed to
demonstrate irreparable harm that necessitates the
Court's grant of ...