Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_19-cv-00458/USCOURTS-casd-3_19-cv-00458-2/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 18:1836(a) Injunction against Misappropriation of Trade Secrets

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

ZEETOGROUP, LLC; TIBRIO, LLC,

Plaintiffs,

v.

NICHOLAS FIORENTINO, an 

individual; SABIHA TUDESCO, an 

individual; INTERNET THINGS, LLC; 

SIMPLY SWEEPS, LLC; 

CREDIREADY, LLC; TWO MINUTE 

MEDIA TOPICS, LLC; and DOES 1-100, 

inclusive,

Defendants.

Case No.: 19-CV-458 JLS (NLS)

ORDER (1) GRANTING 

PLAINTIFFS’ MOTION FOR

CLARIFICATION; (2) DENYING 

WITHOUT PREJUDICE 

PLAINTIFFS’ REQUEST FOR 

ATTORNEY’S FEES; AND 

(3) DENYING WITHOUT 

PREJUDICE PLAINTIFFS’ MOTION 

FOR SANCTIONS

(ECF Nos. 35, 43)

Presently before the Court are Plaintiffs Zeetogroup, LLC and Tibrio, LLC’s Motion 

for Clarification and Attorney’s Fees (“Mot. for Clarification,” ECF No. 35) and Ex Parte

Motion for Sanctions (“Mot. for Sanctions,” ECF No. 43). Also before the Court are 

Defendants Nicholas Fiorentino and Sabiha Tudesco (together, the “Individual 

Defendants”), along with Defendants Internet Things, LP fka Internet Things, LLC; 

SimplySweeps, LP fka SimplySweeps, LLC; CrediReady, LP fka CrediReady, LLC; and 

Two Minute Media Topics, LP fka Two Minute Media Topics, LLC’s (together, the “Entity 

Defendants”) Responses in Opposition to the Motions for Clarification (“Clarification 

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Opp’n,” ECF No. 38) and for Sanctions (ECF No. 44); and Plaintiffs’ Replies in Support 

of the Motions for Clarification (ECF No. 39) and for Sanctions (ECF No. 45). Having 

considered the Parties’ arguments, the evidence, and the law, the Court rules as follows. 

BACKGROUND

Plaintiffs filed suit on March 8, 2019, alleging Defendants misappropriated

Plaintiffs’ trade secrets. See generally ECF No. 1 (“Compl.”). Plaintiffs allege that on 

November 9, 2018, Defendant Nicholas Fiorentino, the founder and CEO of Internet 

Things, reached out to Rocky Iorio, an employee of Plaintiffs, and asked him for a “list of 

[Plaintiffs’] big buyers.” Id. ¶¶ 40–45; Ex. 1 at 85. Mr. Iorio complied with this request 

and sent Mr. Fiorentino screen shots of Plaintiffs’ proprietary platform listing around 

eighty of Plaintiffs’ biggest advertising campaigns and all of the associated metrics for 

each campaign. Id. Ex. 1 at 85

Around a month later, Mr. Fiorentino hired Defendant Sabiha Tudesco, who was 

then Plaintiffs’ Chief Revenue Officer, away from Plaintiffs. Compl. ¶ 48. Plaintiffs allege 

Ms. Tudesco was familiar with the list sent by Mr. Iorio and knew it was Plaintiffs’ 

property. Id. Plaintiffs allege that Ms. Tudesco proceeded to contact the clients on the list 

and recruit them to Defendant Internet Things. Id. Ms. Tudesco denies having seen the 

list until after the litigation had commenced. Declaration of Sabiha Tudesco ¶ 20, ECF 

No. 17-3.

After learning about the misappropriation of the list, Plaintiffs filed suit and, shortly 

after, filed a motion for temporary restraining order and preliminary injunction. ECF No. 

12. Specifically, Plaintiffs asked the Court to enjoin Defendants “from using any of the 

information [contained in the trade secrets] and . . . from contacting the advertisers 

disclosed by Mr. Iorio.” Id. at 6. The Court granted the motion in its May 13, 2019 Order 

and entered the following preliminary injunction (the “Injunction”):

IT IS ORDERED that, pending further order of the Court, 

Defendants are ENJOINED from divulging, using, disclosing, 

or making available to any third person or entity Plaintiffs’ trade 

secrets or using Plaintiffs’ trade secrets for the purpose of 

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directly or indirectly competing with Plaintiffs. Defendants are 

further prohibited from soliciting any business from customers 

identified by Plaintiffs’ trade secrets. Defendants may continue 

any business relationships with customers identified in Plaintiffs’ 

trade secrets that were in existence before November 9, 2018; 

however, Defendants may not use Plaintiffs’ trade secrets to 

enhance these pre-existing business relationships in any way. 

ECF No. 30 (“Prior Order”) at 13. 

After the Court entered the Injunction, Plaintiffs’ filed their Motion for Clarification. 

See ECF No. 35. In that Motion, Plaintiffs also requested attorney’s fees. Id. Before the 

Court had an opportunity to rule on that Motion, Plaintiffs filed their Ex Parte Motion for 

Sanctions. See ECF No. 43. 

DISCUSSION

I. Motion for Clarification

Plaintiffs contend that clarification of the Injunction is necessary because the Parties 

dispute the scope and applicability of the Injunction. Mot. for Clarification at 4. Plaintiffs 

request the Court answer four questions with regard to the scope of the Injunction: 

“(1) does the prohibitory language [in the Injunction] bar Tudesco from doing business 

with, or expanding business with, any entity or person contained on the list on behalf of 

Entity Defendants; (2) does the prohibitory language [in the Injunction] bar Fiorentino 

from doing business with, or expanding business with, any entity or person contained on 

the list on behalf of Entity Defendants; (3) does ‘business relationship’ mean a financial 

transaction . . . ; and (4) does ‘use Plaintiffs’ trade secrets to enhance’ mean using the 

campaigns and metrics identified to grow revenue?” Id. at 7.

Defendants argue that Plaintiffs’ request is merely an attempt to expand the terms of 

the Injunction. Clarification Opp’n at 6. Defendants contend that they are in compliance 

with the Injunction and that no clarification is necessary and, therefore, the Court should 

deny the Motion for Clarification. Id. at 5. 

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Based on the briefing, it is clear to the Court that the Parties have different 

understandings of the scope of the Injunction. Thus, clarification is necessary. 

Accordingly, the Court GRANTS Plaintiffs’ Motion for Clarification and will address the 

questions raised by Plaintiffs. 

A. The Meaning of “Business Relationship”

The Court first addresses the meaning of the following sentence in the Injunction: 

“Defendants may continue any business relationships with customers identified in 

Plaintiffs’ trade secrets that were in existence before November 9, 2018.” Specifically, the 

Court clarifies the meaning of “business relationship[.]” 

For purposes of the Injunction, the business relationship necessary to continue work 

with customers identified in the Plaintiffs’ trade secret list is the same type of business 

relationship necessary to sustain a claim for intentional interference with prospective 

economic advantage under California law. The business or economic relationship must 

have been existing as of November 9, 2018, though it is not necessary for the relationship 

to have been a contractual one. See Am. Student Fin. Grp., Inc. v. Aequitas Capital Mgmt., 

Inc., No. 12-CV-2446-CAB (JMA), 2014 WL 12165418, at *9 (S.D. Cal. Apr. 24, 2014)

(citing Roth v. Rhodes, 25 Cal. App. 4th 530, 546 (1994)). If a contract did exist between 

Defendants and a customer at any time prior to November 9, 2018, that will serve as proof 

of a business relationship that may continue. See Westside Ctr. Assocs. v. Safeway Stores 

23, Inc., 42 Cal. App. 4th 507, 521 (1996). In the absence of a contractual relationship, 

Defendants must show proof that it was “reasonably probable” that the business 

relationship would lead to “future economic benefit” to the Entity Defendants. See id.

(citing Youst v. Longo, 43 Cal. 3d 64, 71 (1987)).

B. Applicability of the Injunction to Individual Defendants

Next, the Court addresses whether the Injunction applies to the Individual 

Defendants specifically. In the Injunction, the Court enjoined all Defendants from using 

Plaintiffs’ trade secrets, including the Individual Defendants. See Prior Order at 13. After 

reviewing the May 13, 2019 Order, the moving papers, and the evidence, the Court now 

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concludes that the Injunction should not apply to Ms. Tudesco in her individual capacity. 

The Court does not change its previous decision, however, that the Injunction applies to 

Mr. Fiorentino in his individual capacity. 

Regarding Ms. Tudesoco, the Court now finds that Plaintiffs have not shown a 

likelihood of success on the merits regarding the claim for misappropriation of trade secrets

as to her. To state a claim for misappropriation of trade secrets, Plaintiffs must show 

“(1) the existence and ownership of a trade secret, and (2) misappropriation of the trade

secret.” Sun Distrib. Co., LLC v. Corbett, No. 18-CV-2231-BAS-BGS, 2018 WL 4951966, 

at *3 (S.D. Cal. Oct. 12, 2018). The Court concludes Plaintiffs have not pled plausibly that 

Ms. Tudesco misappropriated Plaintiffs’ trade secrets. There is no allegation that

Ms. Tudesco participated in the alleged misappropriation of the list that occurred on

November 9, 2018. See generally Compl. Plaintiffs state, with no supporting evidence, 

that Ms. Tudesco used the list once she joined the Entity Defendants. Compl. ¶ 48. 

Without any evidence supporting their assertion, the Court concludes that the 

misappropriation of trade secrets claim against Ms. Tudesco is unlikely to succeed on the 

merits. 

As for Mr. Fiorentino, the Court finds no reason to depart from its previous ruling 

that the Injunction applies to him in his individual capacity, in addition to his role as an 

agent of the Entity Defendants. See Prior Order at 13. Mr. Fiorentino has been sued in his 

individual capacity and was the instigator of the alleged misappropriation. The Court 

therefore finds that the misappropriation of trade secrets claim against Mr. Fiorentino is 

likely to succeed on the merits. 

Although the Injunction does not enjoin Ms. Tudesco from soliciting the businesses

named in Plaintiffs’ trade secrets list when done in her individual capacity, as an agent of 

the Entity Defendants, Ms. Tudesco is bound by the terms of the Injunction to the same 

extent as the Entity Defendants. See Fed. R. Civ. P. 65(2)(B) (“The [preliminary 

injunction] order binds only the following who receive actual notice of it by personal 

service or otherwise: . . . the parties’ officers, agents, servants, employees, and attorneys.”)

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To that end, the relevant business relationships are only those of the Entity Defendants and 

Mr. Fiorentino, not any business relationships that Ms. Tudesco may have had prior to her 

employment with the Entity Defendants. This does not impede Ms. Tudesco’s right to 

compete with Plaintiffs. By choosing to work for a company whose CEO misappropriated 

trade secrets, however, she is bound by the conditions of the Injunction, so long as she acts 

as its agent. A company cannot skirt the conditions of an injunction imposed on them by 

hiring new employees and arguing that the injunction imposes restraints on those 

employees right to compete. 

C. The Meaning of “Use Plaintiffs’ Trade Secrets to Enhance”

Plaintiffs ask the Court to clarify the meaning of “Defendants may not use Plaintiffs’ 

trade secrets to enhance these pre-existing business relationships in any way.” Mot. for 

Clarification at 7. Here, the Court clarifies that the sentence means Defendants may not 

use the campaigns and metrics identified in the list of trade secrets to grow existing 

business relationships. The revenue generated by existing relationships may grow, but that 

growth may not be the result of using Plaintiffs’ trade secrets. 

II. Request for Attorney’s Fees

In addition to asking for clarification, Plaintiffs also request the Court award 

attorney’s fees. Mot. for Clarification at 7. Under the Defend Trade Secrets Act, a court 

may, “if a motion to terminate an injunction is made or opposed in bad faith, or the trade 

secret was willfully and maliciously misappropriated, award reasonable attorney’s fees to 

the prevailing party.” 18 U.S.C. § 1836(b)(2)(D). Plaintiffs allege that Defendants 

“willfully misappropriated trade secrets” and “ma[de] a bad faith effort to oppose the 

preliminary injunction,” entitling them to attorney’s fees. Mot. for Clarification at 7. 

Plaintiffs, however, are not yet the prevailing party for purposes of the statute. While 

Plaintiffs prevailed on their motion for a preliminary injunction, “prevailing party status 

ordinarily requires being ahead when the final whistle blows in a case, not at halftime.” 

Dunster Live, LLC v. LoneStar Logos Mgmt. Co., LLC, 908 F.3d 948, 953 (5th Cir. 2018). 

Until there is a “final score in this federal lawsuit, the Defend Trade Secrets Act does not 

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allow attorney’s fees.” Id. Plaintiffs’ request is therefore DENIED WITHOUT 

PREJUDICE. 

III. Motion for Sanctions

Turning to Plaintiffs Motion for Sanctions, Plaintiffs contend that Defendants have 

violated the Injunction by soliciting new clients using Plaintiffs’ trade secrets. Mot. for 

Sanctions at 4. Plaintiffs ask the Court to impose “monetary sanctions,” find Defendants 

“in contempt of court,” and prohibit Defendants “from conducting any further business 

before this case is concluded.” Id. at 3. Because the Court has now clarified the scope of 

the Injunction, the Court will allow Defendants time to evaluate this Order to determine 

whether they are in violation of the Injunction and, if so, to bring themselves into 

compliance. For this reason, the Court DENIES WITHOUT PREJUDICE Plaintiffs’ 

Motion for Sanctions (ECF No. 43). 

CONCLUSION

Based on the foregoing, the Court:

1. GRANTS Plaintiffs’ Motion for Clarification (ECF No. 35) and clarifies the 

Injunction as stated above, see supra Sections I.A–C; 

2. DENIES WITHOUT PREJUDICE Plaintiffs’ request for Attorney’s Fees; 

and, 

3. DENIES WITHOUT PREJUDICE Plaintiffs’ Motion for Sanctions (ECF 

No. 43). The Court GRANTS Defendants forty-five days from the electronic docketing 

of this Order to bring themselves into compliance with the terms of the Injunction based 

on the additional clarification in this Order. If disagreements remain about Defendants’ 

compliance with the Injunction at that time, the Parties must MEET AND CONFER to 

discuss what issues are still outstanding and possible solutions, other than motion practice,

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to resolve those issues. Should the issues persist following such meet-and-confer efforts, 

Plaintiffs may renew their motion for sanctions and fees. 

IT IS SO ORDERED. 

Dated: February 24, 2020

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