N.C. Business Court Opinions, July 5, 2023 – July 18, 2023
Found. Bldg. Materials, LLC v. Conking & Calabrese, Co., 2023 NCBC 46 (N.C. Super. Ct. July 7, 2023) (Earp, J.)
Key Terms: temporary restraining order; expedited discovery; misappropriation of trade secrets; preliminary injunction; irreparable harm; balance of equities
Plaintiff Foundation Building Materials, LLC (FBM) filed a complaint alleging that its former employees had resigned to start the North Carolina office of a competing company and in doing so are using FBM’s trade secrets. FBM simultaneously moved for a TRO, which was granted, and a preliminary injunction, both relating to the alleged misappropriation of trade secrets. Following expedited discovery, the Court heard the motion for a preliminary injunction and granted it in part and denied it in part.
The Court first determined that of the seven categories of information alleged to be trade secrets, FBM was only likely to succeed on the misappropriation of trade secrets claim as to three of the categories because, based on the evidence presented, the remaining categories either did not appear to be trade secrets or had not been misappropriated.
Regarding irreparable injury, the Court concluded that FBM was still susceptible to irreparable harm from improper use of two of the categories of information, but, as for the third category, any potential harm had already occurred and therefore a preliminary injunction was not appropriate in that regard.
Finally, the Court concluded that the equities weighed in favor of granting a preliminary injunction regarding the remaining two categories because failure to do so could deprive FBM of its competitive advantage, while Defendants would suffer little or no injury if the injunction were issued.
Chi v. N. Riverfront Marina and Hotel LLLP; Feng v. N. Riverfront Marina and Hotel LLLP, 2023 NCBC Order 35 (N.C. Super Ct. July 11, 2023) (Earp, J.)
Key Terms: attendance at mediation; impasse; sanctions; N.C.G.S. 7A-38.1
Pursuant to case management orders entered by the Court, a two-day mediation, involving the parties in both actions, occurred by Zoom in May 2023. However, only eight of the nineteen plaintiffs participated on the first day and none participated on the second day, although their counsel appeared to convey an impasse. After learning that the defendants intended to move for sanctions for plaintiffs’ failure to appear, counsel for plaintiffs offered to pay the full mediator’s fee and reimburse defendants’ reasonable attorneys’ fees. The defendants rejected these offers and filed a motion for sanctions.
By statute and the rules governing mediated settlement conferences, parties to an action must attend mediation and are subject to sanctions for failure to do so without good cause. Moreover, only the mediator has the authority to declare an impasse. Accordingly, since the plaintiffs had not shown good cause for not attending the mediation, the Court granted the motion and ordered the plaintiffs to pay defendants’ attorneys’ fees for the mediation.
By: Natalie Kutcher and Grace Kinley
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The information in this article is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation.