ACTIVENGAGE, INC.

v.

SMITH

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 cofounder 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. 48.) 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. 2000). 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 as these goals are met, Rule 65 does not require an evidentiary hearing.” Robertson, 147 F. 3d at 1311; see

F. 3d at 1311. ActivEngage also says removal to state court prevented it from deposing Smith and it could not rebut Smith’s evidence in briefings. (Doc. 45, p. 6.) ActivEngage did not bring this to the attention of the Court until now. ActivEngage made no objections to the briefing schedule or the hearing, which was conducted expeditiously to address what

ActivEngage contended was an irreparable injury. (See Doc. 9.) ActivEngage did not request leave to file rebuttal evidence. See Antoine O/B of L.A. v. School Bd. of Collier Cty., 301 F. Supp. 3d 1195, 1198 n.3 (M.D. Fla. 2018) (finding an evidentiary hearing unwarranted where “neither party requested an evidentiary hearing, moved for leave to question the opposing side’s witness, or asserted that live testimony would be needed to decide the motion for preliminary injunction”).

2. Breach of Fiduciary Duty

ActivEngage says the Court did not make a finding on the likelihood of success of its breach of fiduciary duty claim. (Doc. 45, pp. 9–12.) Smith says it wasn’t necessary.

(Doc. 48, p. 10.)⁴ True, but the Court did, finding ActivEngage’s breach of fiduciary duty claim interwoven with its other claims and disposing of them together. (See Doc. 35.) In its PI Motion, ActivEngage said Smith breached his fiduciary duty “by creating 360Converge and using his knowledge of ActivProspect to compete with ActivEngage.” (Doc. 9, p. 12.) But the Court found ActivEngage had “not provided evidence that Smith told anyone at 360Converge about ActivProspect, and Smith explained in detail how ActivProspect and 360Converge’s product are different.” (Doc. 35, pp. 12–13.) ActivEngage failed to show Smith was competing with ActivEngage. (See id.) But the Court did not have to make a finding on ActivEngage’s breach of fiduciary duty claim because it failed to show irreparable injury, a necessary requirement to warrant a preliminary injunction. See Four Seasons Hotels & Resorts B.V. v. Consorcio Barr, S.A., 320 F. 3d 1205, 1210 (11th Cir. 2003) (requiring all four factors, including irreparable

B. Irreparable Injury

For the same reasons as before, ActivEngage says it will be irreparably injured without a preliminary injunction because Smith used ActivProspect to develop 360Converge, ActivProspect is ActivEngage’s next generation software, and ActivEngage must be first to market with it. (Doc. 45, pp. 13–14.) ActivEngage filed no additional support with its Appeal Motion. (See Docs. 9, 45.) The Court remains unpersuaded. (See

Doc. 35, p. 14–16 (explaining ActivEngage has not shown a continuing investment in ActivProspect to indicate it can be first to market with it or that it is relying on it as its next generation software).) ActivEngage now argues irreparable injury is presumed in cases of breach of noncompetition and confidentiality agreements. (Doc. 45, p. 13.) But this presumption only applies where “the employee revealed specific trade secrets to his new employer.” ACR Electronics, Inc. v. DME Corp., No. 11-62591-CIV-MARRA, 2012 WL 13005955, at *14 (S.D. Fla. Oct. 31, 2012). ActivEngage has not shown ActivProspect is a trade secret or that Smith revealed it to anyone. (See Doc. 35, pp. 7–14.) So the presumption does not apply. See ACR Electronics, 2012 WL 13005955, at *14. For the reasons in the PI Order,

ActivEngage has not shown irreparable injury. (See Doc. 35, pp. 14–16.)⁵ A preliminary

IV. CONCLUSION

Accordingly, it is ORDERED AND ADJUDGED that Plaintiff ActivEngage’s Emergency Motion for Injunction Pending Appeal (Doc. 45) is DENIED. DONE AND ORDERED in Chambers in Orlando, Florida, on December 30, 2019. i, Mi é <a ROY B. DALTON JR: United States District Judge

Copies to: Counsel of Record