CMG Mortgage, Inc. d/b/a CMG Financial v. Kaim

Background

On March 15, 2023, CMG Mortgage, Inc. d/b/a CMG Financial (CMG) filed a motion for a temporary restraining order and an order to show cause. CMG sought an injunction against former CMG employees to prevent their further use of CMG’s confidential information. The opinion identifies First Heritage Mortgage as the respondents’ new employer.

Legal standard

A temporary restraining order is an extraordinary remedy. The court explained that a party seeking this relief generally must show a likelihood of success on the merits, likely irreparable harm without preliminary relief, that the balance of equities favors the party seeking relief, and that an injunction would serve the public interest. Under Federal Rule of Civil Procedure 65(b)(1), an order issued without written or oral notice also requires specific facts showing that immediate and irreparable injury will occur before the opposing party can be heard, along with a written certification by the moving party’s attorney about notice efforts and why notice should not be required.

Ruling

The court found that Rule 65’s requirements were not met for issuing a temporary restraining order without notice to the respondents. CMG had sent a cease-and-desist letter to First Heritage Mortgage on March 3, 2023—nearly two weeks before the order—requesting that the employer and respondents stop violating the confidentiality agreement and return CMG’s confidential information. The court found that CMG had not come close to showing that irreparable harm would occur unless the order was issued without notice. It also stated that speculation about what the defendants might do if given notice was not evidence, particularly because no problematic conduct had been shown after the letter.

The court directed CMG to serve the motion, supporting documents, and this order on the respondents by noon Pacific time on March 17, 2023. CMG could serve the materials by email but had to file a declaration and supporting proof confirming service by 5:00 p.m. that day. Any response from the respondents was due by 3:00 p.m. on March 23, 2023. The order does not expressly state that the motion was denied; it states that the requirements for issuing a temporary restraining order without notice were not met and sets a process for service and response.