Bailey v. Nurmi

Background

Johnnie Harry Bailey, the founder and chief executive officer of Thorium Cybersecurity, sued James Douglas Nurmi, the company’s former chief technology officer. Bailey alleged that, after Nurmi’s dismissal, Nurmi regained access to Thorium’s systems, took control of them, and locked Bailey out. The affected accounts included Google Apps, GitHub, and Amazon Web Services, which contained confidential intellectual property and source code.

Bailey also alleged that Nurmi had allowed several company domain names to expire so that Nurmi could acquire them, and that Nurmi later said he had sold Bailey’s intellectual property and stopped the company’s operations in the European Union. Bailey filed claims under the federal Computer Fraud and Abuse Act and California’s Comprehensive Computer Data Access and Fraud Act. He moved for a temporary restraining order, which is short-term emergency court relief.

Notice and service

Nurmi did not appear at the hearing or file anything in the case. The court found that the evidence showed Nurmi had actual notice of the case and the pending motion. However, because Bailey said Nurmi lived in Luxembourg, formal service required compliance with the Hague Convention on Service Abroad of Judicial and Extrajudicial Documents. The court explained that this process could require translated documents, specified forms, and delivery through Luxembourg’s designated authority.

Court’s analysis

The court applied the same standard used for a preliminary injunction. Bailey had to show a likelihood of success on the merits, likely irreparable harm without emergency relief, a balance of hardships favoring him, and that the injunction would serve the public interest. The court also recognized that serious questions about the merits, combined with a hardship balance strongly favoring the plaintiff, can support emergency relief when the other requirements are met.

The court found that Bailey had shown likely irreparable harm because he and other Thorium employees were locked out of company accounts containing intellectual property, and because Bailey asserted that the business depended on access to its data and customer-related services. The court found serious questions concerning both of Bailey’s computer-access claims, determined that the balance of hardships favored Bailey, and found that the public interest supported temporary relief.

Order

The court granted Bailey’s motion for a temporary restraining order. It enjoined Nurmi from accessing, manipulating, altering, or destroying the source code or confidential information he allegedly stole from Thorium’s online accounts. The order was set to expire 28 days from December 6, 2019, after the court extended the temporary order by 14 days to allow time for service. The opinion states that Nurmi could move to dissolve the order and request the earliest possible hearing date.

The court did not resolve the ultimate merits of Bailey’s claims; it ruled on the request for temporary emergency relief.