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Edward D. Jones & Co., L.P. v. Peterson

United States District Court, D. Nevada

November 12, 2019

EDWARD D. JONES & CO., L.P., Plaintiffs,


         Presently before the court is plaintiff Edward D. Jones & Co., L.P.'s (“Edward Jones”) motion for temporary restraining order. (ECF No. 4).

         Also before the court is Edward Jones' motion for preliminary injunction. (ECF No. 6).

         I. Background

         This action arises from defendant Michael Peterson's purported misappropriation and use of Edward Jones' trade secrets and confidential information. (ECF No. 1). Edward Jones alleges the following:

         Edward Jones is an investment and financial advisory firm that deals almost exclusively with individual investors. Id. Peterson was employed by Edward Jones as a financial advisor in Henderson, Nevada from February 2006 until his resignation on October 25, 2019. Id. Jones has since obtained employment with Ameriprise Financial Services, Inc. (“Ameriprise”), an investment firm that competes with Edward Jones. Id.

         Peterson executed an “Investment Representative Employment Agreement” (“employment agreement”) when he accepted employment with Edward Jones. Id. The employment agreement provided that Peterson would have access to confidential, proprietary, and trade secret information of Edward Jones. (ECF No. 1-1). In the employment agreement, Peterson agreed to protect said information, use it only in the course of his employment, and return it to Edward Jones upon termination of his employment. Id.

         Prior to his resignation, Peterson printed a “Total Value Sequence Summary Report” (“customer list”) on September 17, 2019, which details all Edward Jones customers he provided services to, their account numbers, and the assets contained in their accounts. (ECF No. 1, 1-3). Edward Jones has been unable to locate the customer list in Peterson's former Henderson, Nevada branch office. (ECF No. 4). After beginning employment with Ameriprise, Peterson “contacted, via telephone, at least eleven Edward Jones customers” and “sent transfer paperwork to at least fifteen Edward Jones customers.” (ECF No. 1-2, 1-4). Peterson continues to solicit Edward Jones' current customers. (ECF No. 1).

         On November 8, 2019, Edward Jones filed a complaint alleging four causes of action: (1) misappropriation of trade secrets pursuant to the Defend Trade Secrets Act (“DTSA”), 18 U.S.C. §§ 1836, et seq.; (2) misappropriation of trade secrets pursuant to Nevada's codification of the Uniform Trade Secrets Act (“UTSA”), NRS Chapter 600A; (3) breach of contract; and (4) injunctive relief. Id. Edward Jones is presently pursuing these claims in arbitration pursuant to the Financial Industry Regulatory Authority (“FINRA”) Code of Arbitration. (ECF No. 4). Edward Jones requests that the court issue a temporary restraining order enjoining Peterson from violating the employment agreement until a FINRA arbitration panel can determine whether a longer injunction should be entered. Id.

         II. Legal Standard

         Under Federal Rule of Civil Procedure 65, a court may issue a temporary restraining order when the moving party provides specific facts showing that immediate and irreparable injury, loss, or damage will result before the adverse party's opposition to a motion for preliminary injunction can be heard. Fed.R.Civ.P. 65. “Injunctive relief is an extraordinary remedy and it will not be granted absent a showing of probable success on the merits and the possibility of irreparable injury should it not be granted.” Shelton v. Nat'l Collegiate Athletic Assoc., 539 F.2d 1197, 1199 (9th Cir. 1976).

         “The purpose of a temporary restraining order is to preserve the status quo before a preliminary injunction hearing may be held; its provisional remedial nature is designed merely to prevent irreparable loss of rights prior to judgment.” Estes v. Gaston, No. 2:12-cv-1853-JCM-VCF, 2012 WL 5839490, at *2 (D. Nev. Nov. 16, 2012); see also Sierra On-Line, Inc. v. Phoenix Software, Inc., 739 F.2d 1415, 1422 (9th Cir. 1984).

         This court must consider the following elements in determining whether to issue a temporary restraining order and preliminary injunction: (1) a likelihood of success on the merits; (2) likelihood of irreparable injury if preliminary relief is not granted; (3) balance of hardships; and (4) advancement of the public interest. Winter v. N.R.D.C., 555 U.S. 7, 20 (2008); Stanley v. Univ. of S. California, 13 F.3d 1313, 1319 (9th Cir. 1994); Fed.R.Civ.P. 65 (governing both temporary restraining orders and preliminary injunctions).

         The party seeking the injunction must satisfy each element; however, “the elements of the preliminary injunction test are balanced, so that a stronger showing of one element may offset a weaker showing of another.” Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011). “Serious questions going to the merits and a balance of hardships that tips sharply towards the plaintiff can support issuance of a preliminary injunction, so long as the plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is in the public interest.” Id. at 1135 (internal quotations marks omitted).

         Finally, to obtain injunctive relief, plaintiff must show it is “under threat of suffering ‘injury in fact' that is concrete and particularized; the threat must be actual and imminent, not conjectural or hypothetical; it must be fairly traceable to the challenged action of the defendant; and it must be likely that a favorable judicial decision will prevent or redress the injury.” Ctr. for Food ...

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