Document 153 - 2017-02-13 Order re Defendents' Renewed Motion to Dismiss
Document 154 - 2017-02-13 Order re Plantiffs' Motion for Preliminary Injunction & Defendents' Motion to Vacate TRO
Court Grants Motion for Temporary Restraining Order Against MiTek and Individual Defendants
On August 16, 2016 Earthbound Corporation and Intact Structural Supply (ISS) filed a Motion for Temporary Restraining Order, Order to Show Cause, and Order for Expedited Discovery. On August 19, 2016, United States District Court Judge Ricardo S. Martinez granted the motion. A copy of Judge Martinez’ Order can be found here: Temporary Restraining Order (pdf). On page 17 of the Order, Judge Martinez wrote:
For the reasons set forth in Plaintiffs’ opening brief, along with those set forth in its Reply, and on a review of the forensic evidence presented by Ms. Goodman, this Court agrees that a TRO should issue. Serious questions have been raised as to whether the individual Defendants misappropriated trade secrets and other confidential information, and whether they did so at the direction or with the acquiescence of Defendant MiTek, and the balance of hardship tips in Plaintiffs’ favor. (italics added).
Pursuant to the Order MiTek and the individuals must provide expedited discovery and appear with their counsel for a preliminary injunction hearing in Seattle on September 28, 2016.
MiTek USA sued for Economic Espionage, Misappropriation of Trade Secrets, Unfair Business Practices, and Civil Conspiracy.
On July 25, 2016, Earthbound Corporation and Intact Structural Supply, LLC (“ISS”) filed a lawsuit in United States District Court, Western District of Washington at Seattle, Case No. 2:16-cv-1150, against defendants MiTek USA, Inc., Ken Keyse, James Miller, and Jason Birdwell. The First Amended Complaint can be reviewed here: Amended Complaint (pdf).
The lawsuit alleges that MiTek conspired with former ISS employees to steal trade secrets and confidential, proprietary information including customer lists, pricing methodology, pending project lists and other company information, and to engage in unfair competition. The lawsuit alleges that the former ISS employees copied documents, transferred files to thumb drives and cloud based servers, and wiped computer and telephones of key business information. It states ten causes of action against the defendants for violating federal and state laws, including violation of the Computer Fraud and Abuse Act, 18 U.S.C. §1030 and the Economic Espionage Act, 18 U.S.C. §1831. It describes the conduct of MiTek, Keyse, Miller, and Birdwell as “willful and malicious” and designed to harm ISS’s business and steal customer relationships in the market.
As set forth in the First Amended Complaint, MiTek tried to purchase Earthbound on two occasions. Those efforts failed. Although the parties had entered into a NDA protecting the disclosure of information, the lawsuit alleges that MiTek used such information and engaged in a concerted effort to recruit from and destabilize ISS by taking its three key employees. Forensic evidence of the defendants’ conduct cited in the First Amended Complaint includes payment made by MiTek to the individuals while they were employed by ISS, copying of data by the individual employees before and after announcing their resignation, forwarding Earthbound documents to private email accounts before and after announcing their resignation, deletion or attempted deletion of data and emails from company laptops and company cell phones.
The lawsuit further alleges that MiTek, Keyse, Miller, and/or Birdwell are presently using Earthbound and ISS’s confidential data to undercut customer bids they learned of while employed by ISS. It is believed defendants are underbidding projects using ISS’s pricing information and pending projects lists.
Earthbound and ISS are seeking restraining order against MiTek, Keyse, Miller, and Birdwell to stop them from using Earthbound’s trade secrets to unfairly compete. In addition, Earthbound seeks the return of its confidential data and economic damages caused by the defendants’ actions.