United States District Court, D. Massachusetts
OPTUM, INC. and OPTUM SERVICES, INC., Plaintiffs,
DAVID WILLIAM SMITH, Defendant.
MEMORANDUM AND ORDER
hearings on January 30 and 31, 2019, for the reasons
explained in a February 5, 2019 Memorandum and Order (Docket
No. 48), the court found that it had the authority before
compelling arbitration to decide plaintiffs' Optum, Inc.
and Optum Services, Inc.'s ("Optum") motion for
a temporary restraining order ("TRO"). If granted,
the TRO would prohibit Optum's former employee, defendant
David Smith, from working for up to 28 days, see Fed.R.Civ.P.
65(b)(2), at a recently established company known as
"ABC," to protect Optum's trade secrets until
an arbitrator could be selected and assume responsibility for
deciding the parties' dispute.
January 30, 2019, after hearing argument on the issue, the
court stated that it had the authority to decide the motion
for a TRO before compelling arbitration. Therefore, it then
heard argument on the merits of Optum's request for a
the parties' arguments, the court stated that it was
considering hearing testimony because it was uncertain how it
would decide the motion based on the conflicting affidavits.
See Jan. 30, 2019 Tr. (Docket No. 50) at 90-92
(citing Blackwelder Furniture Co. of Statesville v.
Seilig Mfg. Co., 550 F.2d 189, 192 n.6 (4th Cir. 1977)
and Semmes Motors, Inc. v. Ford Motor Co., 429 F.2d
1197, 1204 (2d Cir. 1970)). The court also expressed some of
the reasons for its uncertainty and noted that if it decided
the motion for a TRO without hearing testimony one party
would be "disappointed" by the decision.
Id. at 92. Counsel for Smith then urged the court to
allow Smith to testify. Id. at 95. The court
proceeded to hear testimony on January 30 and 31, 2019 from
Smith and three other witnesses. It considered the evidence
complete and intended to hear argument from counsel
concerning the merits of Optum's motion for a TRO.
despite the fact that no order had been entered, on January
30, 2019, Smith filed a notice of appeal of the court's
statement that it had the authority to decide the motion for
a TRO before compelling arbitration. Later that day, Smith
filed a motion to stay pending appeal, arguing that the
notice of appeal divested this court of jurisdiction. The
parties agreed, however, that it would be appropriate for the
court to hear additional testimony on January 31, 2019, as
the Chief Operating Officer of ABC, John Stoddard, was on his
way to Boston to testify then.
February 1, 2019, Optum filed its opposition to the motion to
stay. It argued that a stay was not required and that it
would be irreparably harmed during the pendency of
Smith's appeal if the court exercised its discretion to
grant a stay.
indicated earlier, on February 5, 2019, the court issued a
Memorandum further explaining why it had the authority to
decide the motion for a TRO before compelling arbitration.
See Docket No. 48. Accordingly, it denied
Smith's motion to compel arbitration immediately.
February 5, 2019, the court issued a second Memorandum and
Order concerning Smith's motion to stay pending appeal.
See Docket No. 49 (the "Stay Decision"). It
recognized that there was, as of that date, an order, Docket
No. 48, that Smith then had a right to appeal pursuant to 9
U.S.C. § 16(a). Id. at 3. The court went on to
explain why it was uncertain whether it had the authority to
deny Smith's motion for a stay. Id. at 3-8. In
view of that uncertainty, the court concluded that it
"was most appropriate to grant Smith's request for a
stay without addressing the merits of the request, and to
provide Optum the opportunity to ask the First Circuit to
decide de novo whether the stay should be continued
or lifted." Id. at 8.
February 7, 2019, Optum filed in this court a Motion for an
Injunction Pending Appeal and/or an Indicative Ruling on the
Pending Motion for a Temporary Restraining Order. On February
8, 2019, Smith filed his opposition to that motion. At 6:21
p.m. on February 8, 2019, Optum filed a motion for leave to
file a reply to Smith's opposition, attaching its Reply
to the motion.
in part requests an "indicative ruling" pursuant to
Federal Rule of Civil Procedure 62.1(a) and its counterpart,
Federal Rule of Appellate Procedure 12.1(a). Rule 62.1(a)(3)
If a timely motion is made for relief that the court lacks
authority to grant because of an appeal that has been
docketed and is pending, the court may . . . state either
that it would grant the motion if the court of appeals
remands for that purpose or that the motion raises a
2009 Advisory Committee Notes to Rule 62.1 state that it
applies to "any motion that the district court cannot
grant because of a pending appeal." As the term
"may" communicates, the court has the discretion,
but not the obligation, to provide an indicative ruling when
the Rule applies.
explained earlier, this court allowed Smith's motion for
a stay because it is unclear whether the First Circuit would
find that his appeal divested it of jurisdiction to decide
Optum's motion for a TRO, and it is most appropriate to
permit the First Circuit to decide de novo whether a
stay is necessary or appropriate. See Docket No. 49
at 8. As this court essentially assumed, without finding,
that it lacked jurisdiction in granting a stay pending
appeal, it is appropriate to assume the same concerning
Optum's Rule 62.1 motion and to find, therefore, that the
Rule now applies. In the hope that it will be helpful to the