Governo Law Firm, LLC v. CMBG3 Law, LLC

          CORRECTED MEMORANDUM AND ORDER ON PLAINTIFF’S MOTION FOR A POST-TRIAL PRELIMINARY INJUNCTION

          Kenneth W. Salinger, Justice

         The Court will issue a post-trial, temporary injunction that is more specific and narrower in scope than the order sought by Plaintiff.

         The Governo Law Firm, LLC brought suit claiming that six of its former partners and their new law firm took copies of electronic files and databases that belong to the Governo Firm. Defendants contended that these materials belonged to the clients who transferred their legal representation to the new firm. At trial the jury heard evidence, and indeed it was undisputed, that over time the Governo Firm conceded that substantial parts of the files and databases copied and taken by Defendants were indeed client file materials that belong to clients that transferred from the Governo Firm to the new CMBG3 law firm. But the Governo Firm contended that Defendants are not entitled to keep other, albeit unspecified, parts of those files and databases.

         Yesterday the jury in this case returned in verdict in the Governo Firm’s favor on some but not all of its claims. The jury found that Defendants converted some documents, files, or information in databases that belongs to the Governo Firm, and that the six individual Defendants breached their duty of loyalty by misusing some confidential information that belonged to the Governo Firm. On the other hand, the jury also found that Defendants did not misappropriate any trade secrets and did not commit any unfair or deceptive act or practice. The Governo Firm asked the jury to award unjust enrichment damages. It argued that the entire $2.8 million earned by Defendants since they left the Governo Firm was attributable to Defendants’ use of materials that they copied and took from the Governo Firm. The jury disagreed, awarding $900, 000 in damages.

         To reach this verdict the jury necessarily found that at least part of the electronic files and databases that Defendants copied and took with them when they left the Governo Firm did not constitute materials that clients were entitled to take with them when they transferred their legal representation from the Governo Law Firm to CMBG3 Law.

         The Governo Firm has filed a post-trial motion for a preliminary injunction, asking the Court to bar Defendants from accessing or using any "property of the Governo Law Firm," from accessing any of the thumb drives onto which some of the Defendants had copied electronic files and databases from the Governo Firm’s servers, or from accessing what Defendants’ referred to as the "Alternative Laptop" onto to which Defendants copied some but not all of these files and databases.

         According to the motion, the Governo Firm has styled its request as seeking a preliminary rather than a permanent injunction because it is still working on its broader request for permanent injunctive relief.

         When final judgment enters in this case, the Governo Firm will be entitled to appropriate permanent injunctive relief without having to demonstrate that they would suffer irreparable harm without such relief or that such harm outweighs any harm to Defendants from granting the injunction. See generally Borne v. Haverhill Golf & Country Club, Inc., 58 Mass.App.Ct. 306, 323 (2003) ("In protesting that there has been no inquiry into who would suffer irreparable harm," defendant "mistakenly seeks to graft onto a permanent injunction criteria that apply to preliminary injunctive relief").^[2] This principle has special force with respect to the Governo Firm’s right to control the use of electronic files and databases. The entry of a permanent injunction barring any further improper use of those materials will cut off any claim for future damages. See Curtiss-Wright Corp. v. Edel-Brown Tool & Die Co., 381 Mass. 1, 9-10 & 12 (1980).

         Since the Governo Firm is now seeking a preliminary injunction, however, it "must show a likelihood of success on the merits of the underlying claim; actual or threatened irreparable harm in the absence of injunction; and a lesser degree of irreparable harm to the opposing party from the imposition of an injunction." Wilson v. Commissioner of Transitional Assistance, 441 Mass. 846, 860 (2004).

         Nonetheless, the Governo Firm has already prevailed at trial. As a result there is no longer any question about their likelihood of success on the merits.

         And the fact that Plaintiffs have prevailed on the merits materially alters the calculus in balancing the harm that will persist if no injunction is issued, on the one hand, and the harm that may result if the injunction were to be granted, on the other. "What matters as to each party is not the raw amount of irreparable harm the party might conceivably suffer, but rather the risk of such harm in light of the party’s chance of success on the merits." Siemens Bldg. Techs., Inc. v. Division of Capital Asset Mgmt., 439 Mass. 759, 762 (2003), quoting Packaging Industries Group, Inc. v. Cheney, 380 Mass. 609, 616 (1980). Thus, "an attempt to show irreparable harm cannot be evaluated in a vacuum"; instead, it must be evaluated as part of a "sliding scale analysis" in which "the predicted harm and the likelihood of success on the merits [are] juxtaposed and weighed in tandem." Ross-Simons of Warwick, Inc. v. Baccarat, Inc., 102 F.3d 12, 19 (1st Cir. 1996).

         Given that the Governo Firm prevailed in part at trial, the Court is satisfied that there is a sufficient risk of irreparable harm from continued misuse of Governo Firm materials to justify the issuance of a properly tailored preliminary injunction.

         The injunctive relief sought by the Governo Firm is both too vague and overbroad, however. The request to enjoin any use of "property of the Governo Law Firm" is unenforceably vague, especially now that Plaintiff has conceded Defendants’ clients are entitled to keep, and allow Defendants to use, substantial parts of the materials that Defendants had copied and taken. The request to enjoin any access of the thumb drives and the Alternative Laptop is overbroad. The Court credits evidence at trial that those devices contain not only copies of files and databases that the Governo Firm claims as its own, but also personal files that the Governo Firm allowed Defendants to copy and take (in the case of the thumb drives) and all sorts of computer software, files, and data that did not come from the Governo Firm or that the Governo Firm subsequently transferred to CMBG3 because it belongs to transferred clients (in the case of the alternative laptop).

         The Court will therefore enter a narrower preliminary injunction that bars Defendants from accessing or using any part of the 8500 New Asbestos Litigation files or of any database copied and taken from the Governo Law Firm, except for any files, documents, information, or databases that the Governo Firm transferred to any of the Defendants or any of their clients after November 20, 2016 (their last day working for the Governo Firm). The Court will also clarify that Defendants are free to use files, documents, or information that they obtain from some ...