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The Center for Advancing Innovation, Inc. v. Bahreini

United States District Court, D. Maryland, Southern Division

May 4, 2018

SAMUEL BAHREINI, et al., Defendants.


          GEORGE J. HAZEL United States District Judge

         In this case. Plaintiff The Center For Advancing Innovation, Inc. ("CAI") initiated this litigation against Defendants Samuel Bahreini, Alejandra Diaz (aka Alejandra Bahreini). Jenna Baker (a former CAI employee who allegedly does business as "Konstellate"). John Doe Companies 1-10 and Robin Roes 1-10 alleging one count of violating the Defense of Trade Secrets Act ("DTSA") pursuant to 18 U.S.C. § 1836.[1] ECF No. 1. On May 1. 2018. CAI filed the now-pending Motion For Temporary Restraining Order ("TRO") and For Preliminary Injunction. ECF No. 8. The Court held a hearing on CAI's Motion on May 4. 2018. ECF No. 19. For the reasons discussed below. CAI's Motion is denied.

         I. BACKGROUND

         On April 18. 2018. CAI filed the instant Complaint against Defendants ECF No. 1. The Complaint was brought pursuant to 18 U.S.C. § 1836 of the DTSA. Prior to filing this lawsuit, on February 16. 2018. CAI filed a complaint in the Circuit Court for Montgomery County, Maryland. Case No. 443339V. On March 12, 2018, the Bahreinis sued CAI and Rosemarie Truman alleging unpaid wages and defamation. Case No. 444106V.

         CAI is a Maryland 501(c)(3) corporation whose founder and CEO is Rosemarie Truman. ECF No. 1 ¶ 1. Among other projects it oversees, CA1 coordinates, hosts and manages conference calls and webinars which are attended by inventors, researchers, scientists, universities, and other companies in which products (some of which are still being developed) are reviewed, discussed and evaluated. Id. ¶ 12. All participants are required to sign a nondisclosure agreement ("NDA"). CAI records and saves non-public, confidential and proprietary information regarding these webinars and the products discussed therein. Id. ¶ 14. CA1 also maintains confidential financial models and client lists, along with confidential internal and external emails. Id. ¶¶ 26-27. To store this information. CAI utilizes a number of different software platforms. Id. ¶ 28.

         Defendants Mr. and Mrs. Bahreini previously worked for CAI. Mr. Bahreini managed CAI's software platforms, and Mrs. Bahreini worked as Ms. Truman's executive assistant. Id. ¶¶ 29. 35. Both Mr. and Mrs. Bahreini signed NDAs as part of their employment contracts. Id. ¶¶ 32. 36. Neither the NDAs nor the Bahreinis' contracts contained non-compete clauses. See ECF Nos. 1-1. 1-2. 1-3. 1-4. 1-5. Mrs. Bahreini's contract was terminated on January 17. 2018, and Mr. Bahreini's contract was terminated on January 21. 2018. Id. ¶¶ 40-41.

         On January 17, 2018. at 8:35 AM, the day that Mrs. Bahreini's contract was terminated, CAI alleges that Ms. Truman removed Mr. Bahreini's access to CAIs Google Cloud account, and advised him that his administrative rights to all of CAI's data were being terminated. Id. ¶ 44. Later that day, another CAI employee restored Mr. Bahreini's access to his administrative privileges. Id. Mr. Bahreini subsequently downloaded over a thousand CAI files, some of which CAI alleges contained trade secrets, and confidential and proprietary information. Id. ¶ 45. On January 23. 2018. the day that Mr. Bahreini's contract was terminated. Mr. Bahreini downloaded another 790 files from CAFs account. Id. ¶ 50. On January 26. 2018, he downloaded four more files. Id. ¶ 51. CAI alleges that Mr. Bahreini did not stop with simply downloading CAI documents, but went into CAI accounts and changed the ownership and access rights of various accounts to block CAI's access to those accounts and documents stored therein. Id. ¶¶ 54-63. Furthermore, CAI alleges that Mr. Bahreini has since sought money from CAI in exchange for the return of its files, and kept for himself refunds of CAI subscriptions that he cancelled. Id. ¶ 67. CAI also alleges that Mr. Bahreini has sent disparaging emails to clients of CAI. Id. ¶ 66. CAI alleges that Mr. Bahreini's actions have caused CAI to reach out to CAFs stakeholders and re-establish key information, along with access to their various accounts, at CAFs inconvenience and expense. Id. ¶ 70. CAI alleges that it is unclear whether they have uncovered the full extent of Mr. Bahreini's misconduct, as they are still discovering additional tampering. Id. ¶ 72.

         CAI also alleges that Mrs. Bahreini conspired with Mr. Bahreini and supplied him with Ms. Truman's account passwords to help him gain access to CAI accounts. Id. ¶ 79. CAI alleges that the Bahreinis have refused to return CAFs property and information, and that the Bahreinis have shared some of CAFs trade secrets with John Doe corporations and Robin Roes. Id. ¶¶ 85-86. CAI also alleges that the Mr. Bahreini is now working with Defendant Baker, as Mr. Bahreini has used the email address "" Id. ¶ 89. Konstellate is the alleged trade name for one of CAFs competitors, run by Defendant Baker, a former CAI employee. Id. ¶ 5.

         In its Complaint. CAI asserts that Defendants have violated the Defense of Trade Secrets Act. 18 USC § 1836. and asks the Court for (1) an order for a civil seizure pursuant to 18 USC § 1836(b)(2)(A) for all electronic devises owned or controlled by the Bahreinis associated with a certain IP address or which communicated with CAI's devices or accounts from April 24, 2017 to the present; (2) an order for injunctive relief against Defendants prohibiting the misappropriation of CAI's trade secrets, prohibiting the use of CAI's trade secrets, and prohibiting anyone who has received CAI's trade secrets from competing with CAI; and (3) a monetary reward in excess of $10 million. ECF No. 1 at 22-23.[2]

         On April 18, 2018, CAI filed a Motion for Expedited Hearing regarding its Complaint. alleging that it would suffer severe and irreparable harm absent relief ECF No. 3. The next day, on April 19. 2018, the Court ordered CAI to re-file its Motion as a Motion for a Temporary Restraining Order and Preliminary Injunction pursuant to Federal Rule of Civil Procedure 65, and to address the relevant legal standard laid out by the Fourth Circuit in Real Truth About Obama. Inc. v. FEC\ 557 F.3d 342 (4th Cir. 2009). ECF No. 4. Eleven days later, on April 30. 2018, CAI filed its now-pending Motion For Temporary Restraining Order and For Preliminary Injunction. ECF No. 6. which it supplemented on May 1, ECF No. 8.

         On May 3, 2018. the Defendants filed an Opposition to Plaintiffs Motion for a TRO. ECF No. 15. and a Motion to Dismiss. Or, In The Alternative, For More Definite Statement, ECF No. 16.[3] In their Opposition. Defendants argue that CAI has not provided "clear proof" to warrant a TRO: that CAI has not demonstrated "extraordinary circumstances" to warrant a civil seizure: and that CAFs information does not meet the definition of a "trade secret."

         Along with their Opposition, the Defendants submit Sam Bahreini's Affidavit. ECF No. 15-3. Among other things, this document asserts that: CAI's contact list was not developed by Ms. Truman, but was acquired from her former employer, id ¶ 7; CAFs business model and projects are not confidential, but are regularly published online, id. ¶¶ 13; Mr. Bahreini was not informed on January 17, 2018. that his account access was being terminated and was asked by Ms. Truman to continue working for CAI, id, ¶ 15; the Bahreinis have not disseminated any of CAI's information to any third party, id. ¶ 24: and the only devices the Bahreinis used to work for CAI were submitted to their counsel, id ¶ 27.

         Finally, on May 4, 2018.[4] hours before the motion hearing held in this case, CAI filed a reply to Defendants' Opposition, along with 23 exhibits. ECF No. 17. CAI submits the Declaration of Ms. Truman along with evidentiary exhibits that CAI alleges undermines the credibility of Mr. Bahreini's Affidavit and which demonstrates the harm that CAI may suffer absent a TRO or order authorizing a civil seizure. ECF No. 17-1. In its reply and corresponding Declaration, CAI makes two points. First. CAI attacks Mr. Bahreini's contention that he has "no knowledge of any business owned, formed, or operated by Ms. Baker, " and that his "" email address was not related to Ms. Baker. See ECF No. 15-3 ¶¶ 23. 25. CAI attaches documentary evidence indicating that (Constellate is an entity founded by Jenna Baker that seems to compete with CAI. ECF Nos. 17-16. 17-17. 17-18. 1 7-19. which Mr. Bahreini was aware of and active in as early as April 2, 2018. ECF No. 17-22. Second. CAI argues that Mr. Bahreini and Konstellate have taken CAI's due diligence of a product called "CardioSense" and used it to solicit business from the University of Pittsburgh-a "CAI stakeholder"-in early April 2018. ECF No. 1 7 at 2.

         II. ...

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