United States District Court, D. Maryland
ALBERT S. SMYTH CO., INC., et al.
MARK A. MOTES, et al.
Catherine C. Blake United States District Judge.
plaintiffs, a group of related jewelry businesses-Albert S.
Smyth Co., Inc.; Smyth Ellicott City, LLC; Smyth Annapolis,
LLC; Smyth Management Services, LLC; Smyth Enterprises, LLC;
and TheDiamondStore.com, LLC-originally sued Mark A. Motes,
claiming that he breached his employment agreement by paying
himself more than he was entitled to, and requesting
injunctive relief to enforce a restrictive covenant in the
agreement. The plaintiffs wish to amend their
complaint to add two additional defendants-John
Jackson III and Meritage Fine Jewelers, LLC-and four
additional claims-(1) violation of the Defend Trade Secrets
Act, 18 U.S.C. § 1836; (2) violation of the Maryland
Uniform Trade Secrets Act, Md. Code Comm. Law § 11-1203;
(3) breach of restrictive covenants; and (4) breach of
fiduciary duty. (ECF No. 54). They also have filed a motion
for a preliminary injunction, (ECF No. 36), two related
discovery motions, (ECF Nos. 37, 38), and a motion to set a
briefing schedule, (ECF No. 40). For the reasons stated
below, the plaintiffs' motion to amend will be granted,
but its motion for injunctive relief, and related discovery
and briefing motions, will be denied without prejudice. In
granting the motion to amend, the court also will deny,
without prejudice, Motes's motion to dismiss the original
complaint and allow all defendants to refile motions to
dismiss the plaintiffs' amended complaint.
Motion to Amend
Rule 15(a)(2) of the Federal Rules of Civil Procedure
“a party may amend its pleading only with the opposing
party's written consent or the court's leave.”
Fed.R.Civ.P. 15(a)(2). “[L]eave to amend shall be given
freely, absent bad faith, undue prejudice to the opposing
party, or futility of amendment.” U.S. v.
Pittman, 209 F.3d 314, 317 (4th Cir. 2000). “Delay
alone . . . without any specifically resulting prejudice, or
any obvious design by dilatoriness to harass the opponent,
should not suffice as reason for denial.” Davis v.
Piper Aircraft Corp., 615 F.2d 606, 613 (4th Cir. 1980).
argues that he will be prejudiced by the plaintiffs'
motion to amend because granting it would further delay the
resolution of this action. But that is exactly the sort of
naked prejudice-by-delay claim that Davis declared
insufficient to defeat a motion to amend. To be sure, Motes
also claims that he has been prejudiced by adverse media
publicity and the existence of this litigation. That
argument, however, says nothing about whether the
plaintiffs' motion to amend itself would cause prejudice,
but rather expresses Motes's frustration that he has been
sued at all.
also argues that the motion should be denied as futile. A
motion to amend should be denied as futile “when the
proposed amendment is clearly insufficient or frivolous on
its face.” Johnson v. Oroweat Foods Co., 785
F.2d 503, 510 (4th Cir. 1986). The plaintiffs' amendments
are not insufficient on their face. The plaintiffs do not
attempt to assert time-barred claims or claims this court has
already dismissed. Instead, the amendments add two new causes
of action that, as evidenced by the 18 pages Motes spends
opposing them, (ECF No. 61), are not obviously futile.
See Id. at 511 (“The complexity of the
arguments advanced by counsel on both sides indicates that
the issue of the . . . [plaintiff's claim] is not
obviously frivolous”). Nor is doubt as to the merits of
the plaintiffs' additional claims reason to deny their
motion to amend. The possibility that the plaintiffs'
claim will be dismissed does not mean that dismissal is
inevitable. See Id. Thus, Motes also fails to defeat
the plaintiffs' motion on the futility
prong.Accordingly, the plaintiffs' motion to
amend will be granted. The defendants are free to file
motions to dismiss the plaintiffs' amended complaint.
Motion for Injunctive Relief
plaintiffs also have filed a motion for injunctive relief,
grounded in their first proposed amended complaint, arguing
that they are likely to succeed on their federal and state
trade secret claims, a civil RICO claim, and their claim that
Motes violated a restrictive covenant, in part because he
allegedly started a competing business venture. (ECF No. 36).
The plaintiffs also allege that they are likely to suffer
irreparable harm in the absence of preliminary relief.
relief [is] an extraordinary remedy that may only be awarded
upon a clear showing that the plaintiff is entitled to
relief.” Di Biase v. SPX Corporation, 872 F.3d
224, 230 (4th Cir. 2017) (internal quotation marks omitted).
Thus, a party moving for a preliminary injunction must show
that she is “(1) likely to succeed on the merits; (2)
that [she] is likely to suffer irreparable harm in the
absence of preliminary relief; (3) that the balance of
equities tips in [her] favor; and (4) that an injunction is
in the public interest.” Winter v. Natural Reources
Defense Council, Inc., 555 U.S. 7, 20 (2008).
motion is now moot. It contains different claims-it presses a
civil RICO claim, but not a breach of loyalty claim-than the
claims present in the plaintiffs' third amended
worth noting, moreover, that even if the motion were not
moot, the plaintiffs' argument for irreparable injury is
significantly belied by the nearly one year delay caused, in
part, by the shifting defendants and arguments across three
proposed amended complaints. Further, a review, though
certainly not a final resolution, of the plaintiffs'
amended complaint does not make it clear that the plaintiffs
are entitled to preliminary relief. The plaintiffs argue that
Motes is violating a restrictive covenant by participating in
a competing jewelry business. But that argument is undercut
by the fact that, even if Motes is subject to a restrictive
covenant, it is not clear from the amended complaint that he
is personally involved in the business. (Am. Compl., ECF No.
54, ¶ 83). Moreover, although the complaint alleges
that a new defendant, John Jackson III, accessed and
maintained control over trade secrets after his employment
with the plaintiffs ended, no similar allegation has been
levied against Motes. (See Id. at ¶¶
74-81). Nonetheless, the plaintiffs are free to renew their
request for a preliminary injunction based on their amended
the court is denying the plaintiffs' motion for
injunctive relief, it also will deny as moot the
plaintiffs' related motions for expedited discovery, (ECF
No. 37), forensic examination, (ECF No. 38), and for a
briefing schedule, (ECF No. 40).
the plaintiffs' motion to amend their complaint will be
granted. Motes's outstanding motion to dismiss will be
denied as moot, without prejudice. He, along with the newly
added defendants, are free to file motions to dismiss the
plaintiffs' amended complaint. The plaintiffs' motion
for injunctive ...