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PSX, Inc. v. Medina

United States District Court, D. Nevada

December 31, 2019

PSX, INC., a Louisiana Corporation; Plaintiff,
v.
Gilberto S. Medina, Jr., an individual; Defendant.

          FISHER & PHILLIPS LLP BRIAN L. BRADFORD, ESQ. ATTORNEYS FOR PLAINTIFF PSX, INC.

          RICE REUTHER SULLIVAN & CARROLL, LLP DAVID A. CARROLL, ESQ. ATTORNEYS FOR PLAINTIFF

          KINNEY, ELLINGHAUSEN & DESHAZO MICHAEL L. DESHAZO, ESQ. (APPLICATION FOR ADMISSION PRO HAC VICE PENDING) ATTORNEYS FOR PLAINTIFF

          STIPULATION AND ORDER TO AMEND COMPLAINT PURSUANT TO LR 7-1, AND LR 15-1

         THE PARTIES TO THIS ACTION, by and through the parties' counsel of record, hereby stipulated as follows:

         The parties hereby stipulate, subject to this Court's approval, that Plaintiff PSX, Inc. is permitted to file and serve the First Amended Complaint attached hereto as Exhibit 1, within ten days of approval by this Court. This parties enter this stipulation for good and not for any improper purpose, such as to harass or cause necessary delay.

         The caption shall be amended accordingly. Defendant's Motion to Dismiss for Failure to Join Necessary Party (ECF No. 12) shall be dismissed as moot upon Plaintiff's filing of its First Amended Complaint.

         IT IS ORDERED.

         EXHIBIT 1

         FIRST AMENDED COMPLAINT

         Plaintiff PSX, Inc. (“PSX” or “Plaintiff”), by and through its undersigned counsel, complains against Defendant, Gilberto S. Medina, Jr. (“Medina”) and CCS Presentation Systems, LLC (“CCS”), and alleges as follows:

         I. SUMMARY OF THE ACTION

         1. This Complaint arises from undeniable evidence that: (a) Medina began competing with former employer, PSX, while he was still working for and conducting business on behalf of PSX, and is presently competing with PSX using unfair and unethical business practices, not to mention using PSX's confidential and trade secret information for the benefit of another competitor; (b) Medina copied, retained, and continues to possess without authorization a large amount of proprietary, confidential, and trade secret information of PSX, including a comprehensive client list with confidential details about PSX's clients and prospective clients; (c) on or around April 5, 2019, the same day he resigned from PSX, Medina sent from his personal e-mail account a large amount of Confidential Information and PSX's Trade Secrets, including (as further described below) information and attachments containing price lists and client and prospective client contact information; and (d) since the time that Medina stopped performing services on behalf of PSX in April of 2019, he was subsequently hired by CCS Presentation Systems, LLC (“CCS”) and began to solicit PSX's employees and clients using PSX's confidential and trade secret information while he was still employed by PSX, (as set forth below and above) including, but not limited to, contact information of employees and clients that is not generally available from public sources and was compiled by PSX through significant effort and time.

         2. Plaintiff seeks permanent injunctive relief from this Court to compel Medina, to (a) refrain from disclosing and using any of Plaintiff's confidential and trade secret information; (b) order Medina to return to Plaintiff the property that that Medina wrongfully took; (c) prohibit Medina from further benefiting financially from their unlawful solicitation of clients using PSX's confidential and trade secret information; and (d) prohibit Medina from soliciting PSX's clients and unfairly competing with PSX in the course of providing his services to CCS.

         II. THE PARTIES

         3. Plaintiff PSX, Inc. (“PSX”) is a corporation organized and existing under the laws of the state of Louisiana, maintaining its principal place of business in Covington, LA at 150 New Camellia Blvd., Covington, LA 70433.

         4. Plaintiff is informed and believes and on that basis alleges that Gilberto Medina is an individual residing in Clark County in the city of Henderson, Nevada.

         5. Medina was hired by PSX on or about August 29, 2016 to work as Director of Business Development and Management, Western Division, of PSX. Thereafter, he continued providing services to PSX and conducting business on behalf of PSX until on or about April 5, 2019.

         6. Plaintiff is informed and believes and on that basis alleges that Medina is currently employed by CCS Presentation Systems, LLC (“CCS”), an Arizona limited liability company, licensed to conduct business and is conducting business in the State of Nevada. CCS is also engaged in the highly competitive commercial audiovisual industry. CCS is a direct competitor of PSX.

         7. Plaintiff is informed and believes and on that basis alleges that Defendants, and each of them, acted in concert with one another to commit the wrongful acts alleged herein, and aided, abetted, incited, compelled and/or coerced one another in the wrongful acts alleged herein, and/or attempted to do so. Upon further information and belief, Defendants, and each of them, formed and executed a conspiracy or common plan pursuant to which they would commit the unlawful acts alleged herein, with all such acts alleged herein done as part of and pursuant to said conspiracy, intended to cause and actually causing PSX harm.

         III. JURISDICTION AND VENUE

         8. The Court has subject matter jurisdiction over this civil action pursuant to 28 U.S.C. § 1331 because this action involves claims asserted pursuant to the federal Defend Trade Secrets Act (18 U.S.C. §§ 1830, et seq.) and the federal Computer Fraud and Abuse Act (18 U.S.C. §§ 1030, et seq.). Injunctive relief is sought pursuant to Federal Rule of Civil Procedure 65.

         9. The supplemental jurisdiction of the Court is invoked pursuant to 28 U.S.C. § 1367 to consider Plaintiff's claims under Nevada common law, the Nevada Trade Secrets Act, and other Nevada statutes.

         10. Venue is proper in this judicial district as to Medina pursuant to 28 U.S.C. § 1391(b) because a substantial part of the events or omissions giving rise to the claims occurred in this judicial district. Medina was performing services on behalf of PSX out of PSX's Nevada-based office from on or about August 29, 2016 until on or about April 5, 2019.

         IV. FACTUAL ALLEGATIONS

         PSX's Business Overview

         11. Headquartered in Louisiana with an office in Nevada, PSX has provided state-of-the-art technology and advanced systems integration since 1996.

         12. PSX specializes in the design, engineering, fabrication and installation of custom audio, video, lighting, show control, digital signage networks, software systems, and infrastructure for casinos, convention centers, hotels, day/night clubs, theme parks, restaurants, schools, universities, and other venues around the world. Indeed, PSX is one of the most experienced companies in the United States delivering advanced audiovisual systems for the casino market. PSX prides itself on ensuring client satisfaction and providing their clients with innovative, leading edge designs at the forefront of new technologies.

         PSX's Trade Secrets and Confidential Database

         13. PSX's business is client-driven, and as an integral part of its business, PSX has developed, compiled and maintains a database that contains and collectively compiles detailed confidential, private, proprietary, and trade secret information and data including, but not limited to: (a) names/identities of clients and prospective clients (where names and identities of such clients and prospective clients are not generally available and not publicly disclosed by either PSX or the client or prospective client); (b) the primary contact person(s) for each client and prospective client; (c) client service histories (including, among other things, negotiated rates, pricing models, historical orders, specifications, and preferences, financial information, and revenues from each client); (d) sales strategies, performance reports, presentations, revenue projections, stock projections, sales goals, histories, and performance indicators; and (e) other non-public financial information of PSX that would be valuable for a competitor to have. Collectively, the foregoing categories of information, whether the information is in the actual Database, in any other electronic or paper form, or in a person's head as information the person was exposed to while conducting business on behalf of PSX, are referred to herein as “Trade Secrets.”

         14. PSX's Trade Secrets were compiled and developed by PSX over many years through substantial efforts and trial-and-error. PSX has expended a great deal of time, money and effort identifying, cultivating relationships with, and servicing the needs of its clients and prospective clients. To aid this process, PSX invested a substantial amount money developing its database. PSX derives substantial benefit by maintaining the confidentiality of the Trade Secrets in its database, and disclosure and use of this information would be injurious to PSX.

         15. PSX's Trade Secrets, all of which are a product of substantial time and expense, are not generally known to the public. PSX's Trade Secrets are not readily ascertainable in PSX's industry or in any type of trade or public directory or any other source. Additionally, this information was secured with considerable time, effort and expense to PSX, and is not readily ascertainable by others including PSX's competitors.

         16. Plaintiff's database facilitates seamless client relations, operations, and business development. It allows PSX to ensure prompt responsiveness to client needs and requests. To that end, the clients' and prospective clients' history, orders, specifications, preferences, and pricing are accessible via this proprietary Database solely to PSX employees who have a need-to-know basis for this information for purposes of performing their jobs.

         17. PSX's Trade Secrets would provide a substantial competitive advantage if acquired by any competitor, as the Trade Secrets would allow a competitor (and have allowed Medina) to: (a) target PSX's clients and prospective clients; (b) inform the competitor of the specific person(s) to contact; (c) inform the competitor of the clients' preferences and order history; (d) inform the competitor of the negotiated discount rates, and specific pricing history for these clients, and thereby allow the competitor to undercut PSX's rates; and (e) otherwise allow the competitor to profit from PSX's extensive and proprietary legwork in establishing and growing its business.

         18. PSX's Trade Secrets are a direct result of PSX's marketing and sales efforts, in addition to the time and monetary investment PSX has made in developing its worldwide business reputation and standards. PSX has invested and continues to invest significant time and resources to gather, capture, and compile accurate information regarding its clients and prospective clients. Thus, the identity, direct contact information, sales discounts and contract terms offered to clients of PSX are highly valuable assets that, if disclosed, would benefit PSX's competitors and undermine and injure PSX's business.

         19. PSX's Trade Secrets are valuable to PSX, and the value of PSX's Trade Secrets lies primarily in being kept secret and not generally known. For that reason, PSX has taken, and continues to take, careful, substantial, and reasonable steps to safeguard the secrecy of its Trade Secrets, including, but not limited to: (a) imposing strict confidentiality standards in the PSX Employee Handbook; (b) emphasizing to employees, contractors, and service providers and reminding them of PSX's need to keep this information a secret; (c) requiring, as a condition of employment, that Medina promise not to use or disclose this information, except in the performance of his duties for PSX and/or while conducting business on behalf of PSX; (d) limiting access and/or restricting access to this information by employees and contractors/vendors on a need-to-know basis; (e) requiring coded passwords to access PSX's database and other electronic systems, networks, servers, and computers of PSX; and (f) implementing a number of physical and electronic security measures, including restricting access to databases and network space, assigning passwords and user-level permissions to access information on PSX's computers and electronic system, servers, and networks, and requiring that Trade Secrets be kept in secure locations when not in use.

         20. In the course and scope of his duties to PSX, and in order to conduct business on behalf of PSX, Medina was given access and authorization to use and used Plaintiff's Trade Secrets and Confidential Information (defined below) for the ...


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