Teleport Mobility, Inc. v. Sywula

Background

Teleport Mobility, Inc. and Northern Lights, L.L.C. sued Krzysztof Sywula after his departure from the plaintiffs. The complaint alleged nine claims, including violations of the federal Defend Trade Secrets Act, the California Uniform Trade Secrets Act, a computer-access and fraud statute, and the Lanham Act, as well as breach of contract, conversion, interference with contractual relations, breach of fiduciary duty, and unfair business practices.

The plaintiffs sought a temporary restraining order, an order requiring Sywula to explain why relief should not issue, expedited discovery, and an evidence-preservation order. After a March 3, 2021 hearing, the parties agreed to treat the request as one for a preliminary injunction instead of a temporary restraining order.

Preliminary-Injunction Analysis

A preliminary injunction is temporary relief issued before the final decision in a case. The court stated that plaintiffs had to show a likelihood of success on the merits, likely irreparable harm without relief, a balance of equities favoring relief, and that the relief would serve the public interest. The court also recognized its authority to issue interim relief on claims subject to arbitration when necessary to preserve the status quo and the usefulness of arbitration, provided the requirements for injunctive relief were met.

For the reasons stated during the hearing, the court found that plaintiffs had shown a sufficient likelihood of success, irreparable harm without preliminary relief, equities favoring relief, and a public interest supporting relief. The court found that plaintiffs’ requested relief was too broad and therefore limited the injunction to preserving the status quo.

Ordered Relief

The court ordered Sywula and people acting under his direction or in concert with him not to delete, modify, disseminate, disclose, or block the plaintiffs’ access to their programs, software, codes, files, internal networks, email accounts, and listed productivity, cloud, hosting, domain, and other systems.

By March 12, 2021, Sywula was ordered to:

- Give the plaintiffs equal control or administrative authority over the listed programs, files, and internal networks; - Provide logins, user identifications, passwords, and other information needed by the plaintiffs’ forensic experts to determine whether he had accessed, deleted, modified, or shared plaintiffs’ materials; - Identify other people, entities, or locations to which he had transmitted, shared, disclosed, or stored plaintiffs’ programs, files, or internal networks; and - File a declaration under penalty of perjury stating whether he accessed the plaintiffs’ systems, codes, software, or emails on or after January 17, 2021, and, if so, when and whether he modified, copied, or deleted related information.

The court separately ordered defense counsel Christopher L. Walters to report by March 12 whether Sywula authorized counsel to accept service. If Sywula had not authorized service, counsel was ordered to provide an address for service. Teleport Mobility and Northern Lights were also ordered by that date to provide the court with a list of their investors.

Finally, the court ordered all parties and people acting in active concert or participation with them to preserve all evidence under applicable federal and state rules. They were ordered to stop deleting, destroying, removing, altering, modifying, concealing, or otherwise hiding documents or information related to the lawsuit, wherever the information was stored.

Disposition

Judge Susan Illston granted a limited preliminary injunction and an evidence-preservation order. The order provided temporary case-related relief and did not state that the court had finally resolved the underlying claims.