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ActivEngage, Inc. v. Smith

United States District Court, M.D. Florida, Orlando Division

December 30, 2019

ACTIVENGAGE, INC., Plaintiff,
v.
TODD L. SMITH, Defendant.

          ORDER

          ROY B. DALTON JR. UNITED STATES DISTRICT JUDGE.

         Plaintiff moves for an emergency injunction pending appeal. (Doc. 45 (“Appeal Motion”).) Defendant opposes. (Doc. 48.) On review, the Appeal Motion is due to be denied.

         I. Background

         After removal from state court, Plaintiff ActivEngage (“ActivEngage”) moved for a preliminary injunction. (See Docs. 2, 9.) ActivEngage alleged its former CEO and co-founder Defendant Todd L. Smith (“Smith”) violated the Florida Uniform Trade Secrets Act (“FUTSA”), Defend Trade Secrets Act (“DTSA”), and his fiduciary duty by misappropriating ActivEngage's trade secret, a product named ActivProspect. (See Doc. 9.) The Court denied ActivEngage's requested relief, finding it had not shown a substantial likelihood of success or irreparable injury. (Doc. 35 (“PI Order”).) ActivEngage appealed. (Doc. 42.)

         Now, ActivEngage seeks a preliminary injunction pending appeal of the PI Order. (Doc. 45.)[1] ActivEngage argues it will succeed on appeal because the Court should have held an evidentiary hearing on its preliminary injunction motion (“PI Motion”) and did not make a finding on the merits of its breach of fiduciary duty claim. (Id. at 6-12.) In the Appeal Motion, ActivEngage repeats its previous arguments-it will be irreparably harmed without injunctive relief and neither Smith nor the public will be harmed by the relief. (Id. at 13-16; see also Doc. 9.) Smith responds the Court did not have to hold an evidentiary hearing nor make a finding on ActivEngage's breach of fiduciary duty claim and ActivEngage hasn't shown irreparable injury. (Doc . 4 8 .) Briefing complete, the matter is ripe. (See Docs. 45, 48.)

         II. Legal Standards

         A district court may issue a preliminary injunction pending appeal when the movant shows: (1) a substantial likelihood of success on the merits of the appeal; (2) substantial risk of irreparable injury unless the injunction issues; (3) no substantial harm to other interested persons; and (4) no harm to the public interest. See Touchston v. McDermott, 234 F.3d 1130, 1132 (11th Cir. 20 00). A preliminary injunction pending appeal is an “extraordinary remedy.” Id. at 1133.

         III. Analysis

         A. Substantial Likelihood of Success on Appeal

         ActivEngage claims it will prevail on appeal because the Court should have held an evidentiary hearing on its PI Motion and failed to make a finding on its breach of fiduciary duty claim. (Doc. 45, p. 6.) Smith says both were unnecessary. (Doc. 48, pp. 1- 2.) Smith is right.

         1. Evidentiary Hearing

         ActivEngage says the Court should have held an evidentiary hearing because the issues were disputed, it did not get an opportunity to depose Smith, and it could not present rebuttal evidence. (Doc. 45, pp. 6-9.) Smith counters an evidentiary hearing was neither requested nor necessary. (Doc. 48, pp. 2-8.)

         Although ActivEngage did not request an evidentiary hearing, [2] it argues the Court was required to hold one because of the complexity of the case. (Doc. 45, pp. 6-9.) The cases ActivEngage cites are inapposite, addressing the need to notify the non-moving party of a preliminary injunction motion under Federal Rule of Civil Procedure 65. (See Id. at 6-8 (citing cases).) The purpose of Federal Rule of Civil Procedure 65 is to give the non-moving party a fair opportunity to prepare and oppose a preliminary injunction. McDonald's Corp. v. Robertson, 147 F.3d 1301, 1311 (11th Cir. 1998); see also All Care Nursing Serv. v. Bethesda Mem'l Hosp., 887 F.2d 1535, 1538 (11th Cir. 1989). “So long a s these goals are met, Rule 65 does not require an evidentiary hearing.” Robertson, 147 F.3d at 1311; see also FTC v. Vylah Tec LLC, 727 Fed.Appx. 998, 1001 (11th Cir. 2018) (denying the district court erred in failing to hold an evidentiary hearing where “both parties had the opportunity to present arguments and educate the court regarding the complex issues involved in the case”).[3]

         Smith, as the non-moving party, does not contend he needed an evidentiary hearing to oppose the PI Motion. (See Doc. 48.) ActivEngage is attempting to use the shield meant to protect the non-moving party to a preliminary injunction as a sword to get an evidentiary hearing after ...


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