Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_19-cv-02007/USCOURTS-casd-3_19-cv-02007-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 18:1030 Fraud &amp; Related Activity in Connection with Computers

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

TGG MANAGEMENT COMPANY 

INC. (dba TGG ACCOUNTING),

Plaintiff,

Case No. 19-cv-2007-BAS-KSC

ORDER GRANTING IN PART

PLAINTIFF’S MOTION FOR 

PRELIMINARY INJUNCTION

[ECF No. 23]

v.

JOHN PETRAGLIA, et al.,

Defendants.

Plaintiff TGG Management Company, Inc. (“TGG”) filed a complaint against 

eight Defendants: John Petraglia, Megan Zerba, Garrett Tapken, Erik Rhoades, 

Sayva Solutions, Inc., Bubbly Brands, LLC, Sash Group, Inc., and Holiday Foliage, 

Inc. TGG alleges, inter alia, trade secret misappropriation. Soon after filing its 

complaint, TGG filed a motion for preliminary injunction, requesting the Court 

enjoin Defendants from accessing or using TGG’s trade secret information. (“PI 

Mot.,” ECF No. 23.) TGG seeks a preliminary injunction against all of the above 

Defendants except for Defendant Rhoades. (See ECF No. 56.) The Court permitted 

TGG to engage in limited, expedited discovery for the purposes of its Motion. (ECF 

No. 48.)

Defendants Bubbly Brands, Sash Group, Holiday Foliage, and Sayva 

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Solutions filed oppositions to the Motion for Preliminary Injunction. (ECF Nos. 51, 

52, 53.) TGG filed a reply in support of the motion. (ECF No. 59.) Because TGG’s 

reply contained new information that it had received in discovery (and that 

Defendants had not yet had a chance to respond to), the Court permitted sur-replies. 

Bubbly Brands, Sash Group, Holiday Foliage, and Sayva filed sur-replies. (ECF 

Nos. 72, 73, 77.)1

The Court held oral argument on the Motion on January 2, 2020. For the 

foregoing reasons, the Court GRANTS IN PART TGG’s Motion. The injunction is 

detailed on the last page of this Order.

I. BACKGROUND

Plaintiff TGG provides management accounting and business advisory 

services for business clients. (PI Mot. at 1.) TGG was founded in 2006 by its current 

CEO Matt Garrett. Over time, TGG alleges Mr. Garrett and others developed what 

they call “The TGG Way”— “a proven set of accounting and finance best practices, 

processes and procedures, specially designed electronic tools, and other trade secrets, 

coupled with financial guidance, to ensure the financial health and success of TGG’s 

clients.” (“Garrett Decl.,” ECF No. 23-1, ¶ 9.) The TGG Way “uses an objective

and measurable system for implementing accounting best practices, quality control,

and client and team communications. It is at the center of TGG’s brand, and is what

differentiates TGG from its competition.” (PI Mot. at 4.) The TGG Way and TGG’s 

 1 Various parties have filed objections to declarations filed by other parties, arguing that certain 

assertions are inadmissible. But “the rules of evidence do not apply strictly to preliminary 

injunction proceedings” because of “the urgency of obtaining a preliminary injunction at a point 

when there has been limited factual development.” Herb Reed Enters., LLC v. Florida Entm’t 

Mgmt., Inc., 736 F.3d 1239, 1250 n.5 (9th Cir. 2013). A trial court may give “inadmissible evidence 

some weight, when to do so serves the purpose of preventing irreparable harm before trial.” Flynt 

Distrib. Co. v. Harvey, 734 F.2d 1389, 1394 (9th Cir. 1984); see also Republic of the Philippines 

v. Marcos, 862 F.2d 1355, 1363 (9th Cir. 1988) (“It was within the discretion of the district court 

to accept . . . hearsay for purposes of deciding whether to issue the preliminary injunction.”).

Under this Ninth Circuit precedent, the Court OVERRULES all evidentiary objections.

(ECF No. 53-5, 59-10, and 77-2).

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trade secrets give TGG a competitive advantage. (Id.)

Defendant John Petraglia began working for TGG in January 2016. (Garrett 

Decl. ¶ 41.) By virtue of his role, Petraglia had access to some of TGG’s confidential 

trade secret information. Petraglia left TGG in April 2019 and began working for 

Defendant Sayva Solutions, Inc. (Id. ¶¶ 43, 45.) Similarly, Defendant Megan Zerba 

began working for TGG in June 2013, had access to trade secret information while 

at TGG, and now also works for Sayva. Upon their departure, both Petraglia and 

Zerba refused to sign TGG’s Reminder of Confidentiality and Nonsolicitation form. 

(Id. ¶¶ 44, 48.) On Sayva’s website, Petraglia is listed as the CFO of Sayva’s 

Accounting Services and Zerba is listed as the Controller. (Id. ¶ 8.) TGG alleges 

“Sayva provides outsourced professional services such as accounting, specialized 

project consulting, and full-time recruiting services.” (PI Mot. at 3.) TGG alleges 

that as a result of Petraglia and Zerba’s actions, Sayva has built an accounting 

division that directly competes with TGG. (Id.) Sayva combats this assertion, and 

its CEO declares that Sayva started its accounting services line of business in 

September 2017 (without the help of any current or former TGG employees). (“Buell 

Decl.,” ECF No. 53-4 ¶¶ 7, 11.) Petraglia was hired in June 2019 as a Managing 

Director. (Id. ¶ 16.) Zerba, Petraglia and seven others currently form Sayva’s 

accounting services group. (Id. ¶ 17.)

After Petraglia and Zerba left, TGG hired the Berkeley Research Group to 

conduct a forensic analysis of Petraglia’s and Zerba’s TGG-issued laptops. (Garrett 

Decl. ¶ 62.) David Jiminez of Berkeley concluded that before Petraglia left TGG, he

connected a personal external USB storage device to his TGG laptop and accessed

various files. (“Jiminez Decl.,” ECF No. 23-24 ¶ 12.) TGG analyzed the list of files 

Petraglia accessed and concludes, “[t]he files . . . are sweeping and include many of 

TGG’s most valuable assets and proprietary trade secrets.” (PI Mot. at 10.) Petraglia 

also emailed himself various TGG materials. (Id.) Zerba similarly copied various 

TGG files onto a personal USB storage device before leaving TGG. (Jiminez Decl. 

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¶ 14.)

As to the other Defendants, Defendant Garrett Tapken previously worked for 

TGG and now works for TGG’s former client, Tosdal law Firm. (Garrett Decl. 

¶¶ 50–53.) Defendants Bubbly Brands, Sash Group, and Holiday Foliage are former 

clients of TGG. After Petraglia and Zerba left TGG, these former clients began 

disengagement from TGG. TGG believes the entities are working with Sayva 

(through Petraglia and Zerba), who is likely using TGG’s trade secrets to perform 

accounting services for the clients. Sayva agrees only that it has provided Bubbly 

Brands, Sash Group, and Holiday Foliage “periodic accounting documents that 

reflect the actual financial state of their respective companies” but asserts that neither 

it or its employees have used TGG’s proprietary material. (Buell Decl. ¶¶ 22, 25–

32.) 

Holiday Foliage periodically now works with Sayva, and it specifies that this 

is because when Zerba and Petraglia left TGG, Holiday Foliage did not feel its 

financial interests were being taken care of, so it disengaged with TGG. (“Sayva and 

HF Opp’n,” ECF No. 53, at 6.) Holiday Foliage has received periodic accounting 

documents from Sayva that are identical to the financial information that TGG 

provided Holiday Foliage when it was TGG’s client. (Id.) Sash Group also was a 

former TGG client, but it disengaged and began working with Sayva. (“Sash Opp’n,”

ECF No. 52, at 4.) “The only documents Sash Group has received from Sayva are 

typical accounting documents reflecting the financial status of Sash Group.” (Id. at 

5.) Sash Group no longer works with Sayva or any other accounting firm. (Id. at 4.) 

Finally, Bubbly Brands previously used TGG (specifically, Petraglia) for its 

bookkeeping and accounting services. (“Urbani Decl.,” ECF No. 51-1, ¶ 11.) 

Bubbly Brands now receives that same service from Sayva. (Id. ¶ 13.)

TGG moves for a preliminary injunction on: (1) its trade secret 

misappropriation claim (against all Defendants); (2) its Computer Fraud and Abuse 

Act claim (against Petraglia, Zerba, and Sayva); (3) its Computer Data Access and 

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Fraud Act claim (against Petraglia and Zerba).

II. LEGAL STANDARD

Federal Rule of Civil Procedure 65 governs the issuance of preliminary 

injunctions. A preliminary injunction is an equitable remedy aimed at preserving the 

status quo and at preventing the occurrence of irreparable harm during the course of 

litigation. See Fed. R. Civ. P. 65. “A plaintiff seeking a preliminary injunction must 

establish that he is likely to succeed on the merits, that he is likely to suffer 

irreparable harm in the absence of preliminary relief, that the balance of equities tips 

in his favor, and that an injunction is in the public interest.” Winter v. Natural Res. 

Def. Council, Inc., 555 U.S. 7, 20 (2008). A preliminary injunction is an 

“extraordinary remedy that may only be awarded upon a clear showing that the 

plaintiff is entitled to such relief.” Id. at 22.

III. ANALYSIS

A. Notice of the Sought Preliminary Injunction

Defendants Petraglia, Zerba, and Tapken have not filed oppositions to the 

Motion for Preliminary Injunction. A court may issue a preliminary injunction only 

on notice to the adverse party. Fed. R. Civ. P. 65(a)(1). Thus, the Court must ensure 

the Defendants are on notice of the Motion before proceeding.

Petraglia and Zerba were served with the preliminary injunction by mail to 

their place of employment—Sayva Solutions. (ECF No. 23-26.) Further, counsel 

for Sayva and Holiday Foliage now represents Petraglia and Zerba. (“Tencer Decl.,”

ECF No. 77-1, ¶ 6.) Therefore, the Court concludes that Petraglia and Zerba are on 

notice of TGG’s Motion for Preliminary Injunction.2

 2 TGG highlights the lack of opposition by Petraglia and Zerba, arguing it shows that a preliminary 

injunction is warranted against the two former employees. (Reply at 1.) Defendants argue that 

Petraglia and Zerba’s lack of opposition should not be seen as an “admission of wrongdoing.” 

(“Sayva and HF Sur-Reply,” ECF No 77, at 4.) The Court does not find that a lack of opposition 

alone justifies an injunction, nor does the Court find it establishes guilt. The Court is only finding 

here that Petraglia and Zerba are on notice of the Motion for Preliminary Injunction and have failed 

to oppose it and present any arguments against TGG’s position.

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Further, Defendant Tapken appeared in this matter, (see ECF Nos. 41, 45) but 

did not file an opposition to the Motion. Because Tapken appeared in this matter, is 

represented by an attorney, and that attorney received electronic notice of TGG’s 

Motion, Tapken is also on notice of the Motion. The Court now turns to the merits 

of the Motion.

B. Likelihood of Success on the Merits

TGG must establish it will prevail on the merits of its claims. The Court first 

turns to TGG’s claims under the Defend Trade Secrets Act (“DTSA”) and the 

California Uniform Trade Secrets Act (“CUTSA”). To state a claim for 

misappropriation of trade secrets under CUTSA, a plaintiff must allege: (1) the 

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

secret. Pellerin v. Honeywell Int’l, Inc., 877 F. Supp. 2d 983, 988 (S.D. Cal. 

2012) (citation omitted). A claim for misappropriation under the DTSA has 

substantially similar elements. See 18 U.S.C. § 1836.

1. Trade Secret

In establishing the existence of a trade secret, “[a] plaintiff need not ‘spell out 

the details of the trade secret,’” Autodesk, Inc. v. ZWCAD Software Co., No. 5:14-

cv-1409-EJD, 2015 WL 2265479, at *5 (N.D. Cal. May 13, 2015), but must 

“describe the subject matter of the trade secret with sufficient particularity to separate 

it from matters of general knowledge in the trade or of special persons who are skilled 

in the trade, and to permit the defendant to ascertain at least the boundaries within 

which the secret lies.” Pellerin, 877 F. Supp. 2d at 988 (quoting Diodes, Inc. v. 

Franzen, 260 Cal. App. 2d 244, 253 (1968)). Both the DTSA and CUTSA define a 

“trade secret” as:

all forms and types of financial, business, scientific, technical, 

economic, or engineering information, including patterns, plans, 

compilations, program devices, formulas, designs, prototypes, 

methods, techniques, processes, procedures, programs, or codes, 

whether tangible or intangible, and whether or how stored, compiled, 

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or memorialized physically, electronically, graphically, 

photographically, or in writing if-

(A) the owner thereof has taken reasonable measures to keep 

such information secret; and

(B) the information derives independent economic value, actual 

or potential, from not being generally known to, and not being readily 

ascertainable through proper means by, another person who can obtain 

economic value from the disclosure or use of the information;

18 U.S.C. § 1839(3); see also Cal. Civ. Code § 3426.1(d). TGG lists the trade secrets 

at issue in this case as: 

(1)Quickbooks accounting file (containing TGG’s accounting/financial records, 

income statements, and customer records/lists)

(2)Quality assurance materials (containing TGG’s best practices for providing 

accounting to businesses)

(3)Proprietary sales and marketing materials (containing templates TGG uses to 

make sales proposals, as well as lists of prospective clients)

(4)Utilization report

(5)Training materials (used to train staff on how to carry out the TGG Way)

(6)financial models, templates, and statements.

(PI Mot. at 6–7.)

Sayva and Holiday Foliage argue that TGG has not established that certain

information it seeks to protect constitutes trade secrets. (Sayva and HF Opp’n at 

15.)3

 First, these Defendants argue that much of what TGG seeks to protect is

“Microsoft Excel based” and not protectable. (Id.) This argument misses the point—

TGG is not seeking to protect an Excel spreadsheet that anyone with Excel could 

create or access. Instead, TGG’s CEO provides that TGG has created Excel 

workbooks “designed to automate the export of vast amounts of information from 

QuickBooks into a formatted Excel file that has been pre-programmed to run 

 3 Bubbly Brands and Sash Group do not dispute that TGG has identified at least some trade secrets. 

(“BB Opp’n,” ECF No. 51, at 11; Sash Opp’n at 8.) 

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calculations and tie out a company’s financial information between different sheets” 

using formulas that an engineer using a programming application built for TGG. 

(“Garrett Reply Decl.,” ECF No. 59-6, ¶¶ 5–6.) The software applications are 

embedded in the Excel workbooks. (Id.) See Hunter Consulting, Inc. v. Beas, No. 

SACV 12-1947 AG (JPRx), 2012 WL 6193381, at *3 (C.D. Cal. Dec. 10, 2012) 

(finding the plaintiff owned trade secrets when it claimed, inter alia, it had proprietary 

software programs that managed its customer information). The Court finds TGG 

has established that its workbooks and software templates are trade secrets.

Defendants also argue that TGG is improperly seeking to claim as trade secrets 

the former clients’ own financial data. Again, this argument misses the mark. TGG 

is seeking to protect the software and codes in the Excel spreadsheets, not the data 

from the clients that is inputted into the spreadsheets. (See, e.g., Exhibit W to Garrett 

Reply Decl., ECF No. 59-7 (a spreadsheet of Bubbly Brands financial statement 

showing that TGG’s code is used on the spreadsheet).)

Next, Defendants do not contest that TGG’s customer list is a trade secret. 

Customers lists are commonly found to be protectable when the list is based on the 

employer’s expended time and effort in identifying specific customers. TGG claims 

its customer list contains the customers records, contact, payment, and sales history 

information. (Garrett Decl. ¶ 15.) TGG has sufficiently established that the list is a 

trade secret. See MAI Sys. Corp. v. Peak Comput., Inc., 991 F.2d 511, 521 (9th Cir. 

1993) (finding a customer database qualifies as a trade secret because the database 

has “potential economic value because it allows a competitor . . . to direct its sales 

efforts to those potential customers”); see also Henry Schein, Inc. v. Cook, 191 F. 

Supp. 3d 1072, 1077 (N.D. Cal. 2016) (“Customer information such as sales history 

and customer needs and preferences constitute trade secrets.”); Whyte v. Schlage, 101 

Cal. App. 4th 1443, 1456 (2002) (holding marketing research exploring “the needs 

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of numerous, diverse buyers” may qualify as trade secret).4

TGG has demonstrated that the above information has value and is not 

generally known or readily ascertainable through proper means. Further, TGG has 

established it used reasonable measures to protect its proprietary information from 

the public. Only certain employees have access to the information, and TGG’s 

networks (and the employees’ computers) are encrypted and require passwords for 

access. (Garrett Decl. ¶¶ 25–26.) As a condition of employment with TGG, 

employees agreed to maintain the information in strict confidence and not to disclose

or use the trade secret information. (Id. ¶¶ 31–35.) Further, TGG states it does not 

provide its Excel files to clients, instead providing PDFs which do not contain the 

coded information. (Garrett Reply Decl. ¶ 9.)5 These efforts are sufficient. See

Morlife, 56 Cal. App. 4th at 1523 (finding reasonable measures where customer list 

was stored on a computer with restricted access and the company instructed 

employees to maintain confidentiality); Courtesy Temp. Serv., Inc. v. Camacho, 222 

Cal. App. 3d 1278, 1288 (1990) (finding reasonable measures where customer list 

was distributed to employees on an “as needed basis” and employees were directed 

 4 At oral argument, the Court expressed concerns about whether certain documents constituted 

trade secrets and also about the breadth of the proposed preliminary injunction. The parties then 

met and conferred and submitted a joint proposed order that lists the documents Defendants may 

not use or access. The Court therefore adopts the parties’ stipulation as to what documents are 

proprietary.

5 To combat this, Holiday Foliage states that TGG provided Holiday Foliage “with a copy of an 

Excel file in or around June 2019 that contained numerous worksheets and areas for inputting” 

financial information. (Sayva and HF Sur-Reply at 3.) Therefore, Defendants argue this is proof 

that TGG does not protect its information. (Id.)

But TGG has sufficiently established at this stage that it and Holiday Foliage were in a 

confidential relationship and that the disclosure of the Excel files was made in furtherance of that 

relationship. See Direct Techs., LLC v. Elec. Arts, Inc., 836 F.3d 1059, 1070 (9th Cir. 2016); see 

also Pachmayr Gun Works, Inc. v. Olin Mathieson Chem. Corp., 502 F.2d 802 (9th Cir. 1974) 

(“[C]ourts will consider the factual circumstances of each case on an individual basis, to determine 

whether a confidential relationship may reasonably be implied” such that an entity must maintain 

the secrecy of confidential information). Therefore, the fact that TGG once provided a client with 

its accounting file which contained some of TGG’s trade secrets does not establish that TGG failed 

to use reasonable measures to protect its information.

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to keep it confidential). 

In sum, the Court finds Plaintiff has established it has protectable trade secrets.

2. Misappropriation

Misappropriation is defined as:

(1) Acquisition of a trade secret of another by a person 

who knows or has reason to know that the trade secret was 

acquired by improper means; or

(2) Disclosure or use of a trade secret of another without 

express or implied consent by a person who:

(A) Used improper means to acquire knowledge of 

the trade secret; or

(B) At the time of disclosure or use, knew or had 

reason to know that his or her knowledge of the trade 

secret was: 

(i) Derived from or through a person who had 

utilized improper means to acquire it; 

(ii) Acquired under circumstances giving rise 

to a duty to maintain its secrecy or limit its use; 

(iii) Derived from or through a person who 

owed a duty to the person seeking relief to maintain 

its secrecy or limit its use; or

(C) Before a material change of his or her position 

knew or had reason to know that it was a trade secret and 

that knowledge of it had been acquired by accident or by 

mistake.

Cal. Civ. Code § 3426.1(b). Misappropriation under the DTSA is nearly identical. 

See 18 U.S.C § 1839(5).

a. Individual Defendants. 

As noted above, Zerba, Petraglia, and Tapken did not oppose the preliminary 

injunction. TGG alleges, and provides evidence, that Zerba and Petraglia 

downloaded and emailed to themselves certain trade secrets without permission. 

(Garrett Decl. ¶¶ 64–66, 69–71; see generally Jiminez Decl.) This is sufficient 

evidence that the two former employees acquired trade secrets by improper means. 

See Henry Schein, 191 F. Supp. 3d. at 1077 (finding a likelihood of success on the 

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merits of a misappropriation claim when the plaintiff alleged the defendant e-mailed 

and downloaded to her personal devices confidential information before leaving to 

work for a competitor). Zerba and Petraglia both knew that they should not have 

acquired these documents, as evidenced by the fact that when they left TGG, they 

both refused to sign TGG’s Reminder of Confidentiality and Nonsolicitation form. 

(Garrett Decl. ¶¶ 44, 48.) Further, these Defendants were given a copy of TGG’s 

Employee Handbook, which identifies what documents TGG claims as its trade 

secrets. (Id. ¶¶ 36–40.) Therefore, TGG has sufficiently alleged it is likely to 

succeed on the merits of its misappropriation claim against Zerba and Petraglia.

But TGG’s motion, and even its reply brief which includes extra information

following discovery, contains scarce allegations against Tapken. TGG only alleges 

that Petraglia has been communicating and working with Tapken and a former TGG 

client, the Tosdal Law Firm. (PI Mot. at 11.) This does not show that Tapken is 

using, or even in possession of, any confidential information. TGG has not shown it 

is likely to succeed on the merits of its misappropriation claim against Tapken. The 

Court therefore declines to issue a preliminary injunction against Tapken.

b. Entity Defendants. 

The Court now turns to the entity Defendants. Holiday Foliage, Sash Group, 

and Bubbly Brands are all former clients of TGG. Sayva is an accounting firm that 

TGG alleges to be its current competitor. The Court begins its analysis with Sayva.

Sayva. Sayva first argues that any preliminary injunction sought against it is 

moot because it is “already in compliance with TGG’s requested relief that 

Defendants not access, copy, or use any TGG materials, return all TGG materials, 

and preserve the documents related to litigation.” (Sayva and HF Sur-Reply at 1.) 

“It is possible, of course, that a defendant’s conduct can moot the need for injunctive 

relief.” FTC v. Affordable Media, 179 F.3d 1228, 1237 (9th Cir. 1999). But, “an 

action for an injunction does not become moot merely because the conduct 

complained of was terminated, if there is a possibility of recurrence, since otherwise 

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the defendant’s [sic] would be free to return to [their] old ways.” Id. (quoting FTC 

v. Am. Standard Credit Sys, Inc., 874 F. Supp. 1080, 1087 (C.D. Cal. 1994)). The 

Court finds that even though Sayva states it is currently not accessing or using TGG’s 

materials, there is a possibility that Sayva could start doing so. Sayva admittedly is 

in possession of documents that were copied, (see Sayva and HF Sur-Reply at 1), 

therefore, nothing stops it at this point from using the documents. The requested 

injunction is therefore not moot.

As to the issue of whether TGG has established a likelihood of success on the 

merits of its misappropriation claim, the Court has reviewed the documents that 

Sayva produced to TGG in discovery. Sayva is indeed in possession of TGG’s trade 

secrets. TGG provides a long list of documents that Sayva produced in discovery, 

(Valco Decl. ¶ 7) showing that many of TGG’s documents ended up on Sayva’s 

computers—a fact Sayva does not dispute. (See Sayva and HF Sur-Reply at 1.) Of 

course, merely being in possession of trade secrets is not sufficient (assuming Sayva 

used no improper means to acquire those trade secrets). But, there is also evidence 

that Sayva is using certain trade secrets. For example, TGG attaches screenshots of 

Excel Financial Statements and Analyses for Bubbly Brands. (ECF No. 61, at 32 

(sealed); ECF No. 59-3.) One screenshot is TGG’s analysis for the client and the 

other is Sayva’s. The document Sayva produced is identical to the file from TGG’s 

systems: “Both Excel workbooks include many of the same worksheets . . . [and] 

both contain identically coded macros.” (Valco Decl. ¶ 7.a.) But on Sayva’s 

worksheet, it replaced the TGG logo with that of its own.6

 Ms. Valco also declares 

there are “at least 13 other Excel workbook files produced by Sayva that look very 

similar to the format of TGG’s Excel workbooks and have the same macros, but 

 6 Sayva contests TGG’s comparison of the two Excel sheets, arguing that the workbooks only “look 

similar and contain many of the same tabs” and nothing more. (Sayva and HF Sur-Reply at 3.) 

The Court disagrees. The declaration by counsel and a comparison of the attached exhibits 

establish the probability that Sayva is using TGG’s trade secrets in the Excel sheet.

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replaced the TGG logo with the Sayva logo.” (Id. at ¶ 7.b.) This is sufficient

evidence that Sayva, at least in its accounting work for Bubbly Brands, used TGG’s 

Excel workbooks using TGG’s macro code. The Court finds that TGG has 

sufficiently established that Sayva is using TGG’s trade secrets, which Sayva 

acquired when Zerba and Petraglia took the information by improper means. TGG 

is likely to succeed on the merits of its misappropriation claim against Sayva.

Holiday Foliage, Sash Group, and Bubbly Brands. Turning to the three

former client Defendants, TGG produces documents showing that Sayva is using 

TGG’s excel formats and/or codes for the clients’ financial statements. For example, 

as noted above, TGG attaches screenshots of Sayva’s Excel Financial Statements and 

Analyses for Bubbly Brands. (ECF No. 61, at 32 (sealed); ECF No. 59-3.) Further, 

TGG’s attorney Ms. Valco declares that Sayva produced a TGG-branded document 

of financial statements for Holiday Foliage. (Valco Decl. ¶ 7.k.) She declares that 

Sayva is using TGG’s coding for Holiday Foliage’s financial statements. (Id.; 

Exhibit 3 to Valco Decl., ECF No. 61, at 35.)

Despite this, the Court finds that TGG has not sufficiently established that the 

former client Defendants are liable for misappropriation. At this point, the evidence 

shows that the former clients are too far removed from the problem. TGG has 

sufficiently established that Zerba and Petraglia acquired trade secrets and that Sayva 

is in possession of those trade secrets and is using certain documents or codes when 

performing accounting services for its clients. But the fact that Sayva may be using 

certain code or spreadsheets while performing accounting services for Bubbly 

Brands, Holiday Foliage, and Sash Group does not mean that the three former client 

Defendants are “using” the confidential information. If anything, someone else is 

using the documents for their benefit—inputting their financial information into the 

spreadsheets and sending the spreadsheets back to them. Central Valley Gen. Hosp. 

v. Smith, 162 Cal. App. 4th 501, 528–29 (2008) (holding that mere possession of a 

trade secret does not constitute misappropriation).

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And this is logical that misappropriation does not stretch this far. Bubbly

Brands sells bath bombs and essential oils, Holiday Foliage manufactures Christmas 

goods, and Sash Group sells handbags. It is immaterial to these companies what 

code or Excel spreadsheets their accounting company uses to perform their 

bookkeeping. The clients are not “using” TGG’s trade secrets; while they may 

technically be in possession of some of TGG’s trade secrets, it is only because Sayva 

is using the trade secrets in its accounting of the clients’ financial information. The 

Court cannot say that these Defendants have acquired or are using TGG’s trade 

secrets under the misappropriation statute. And in any event, the Court finds that a 

preliminary injunction enjoining Sayva, Zerba, and Petraglia from using the trade 

secrets sufficiently protects TGG’s rights, and an injunction prohibiting the clients 

from also using the trade secrets (when Sayva is the one using the information) is 

unnecessary. An injunction should be “no broader than necessary to provide 

complete relief to the [moving party].” Easyriders Freedom F.I.G.H.T. v. Hannigan,

92 F.3d 1486, 1496 (9th Cir. 1996). In sum, TGG has not established that it is likely 

to succeed on the merits of its misappropriation claim against Bubbly Brands, 

Holiday Foliage, and Sash Group. The Court declines to issue a preliminary 

injunction for these Defendants.

The Court finds that TGG has established it is likely to succeed on the merits 

of its trade secret misappropriation claim against Petraglia, Zerba, and Sayva.7

 The 

Court now turns to the next Winter factors.

C. Irreparable Harm

TGG asserts that it will suffer irreparable harm if preliminary injunctive relief 

 7 TGG also moves for an injunction on its Computer Fraud and Abuses Act claim (brought against 

Petraglia, Zerba, and Sayva) and its Computer Data Access and Fraud Act claim (brought against 

Petraglia and Zerba). The Court finds it need not analyze the merits of these causes of action. An 

injunction pursuant to these causes of action would be unnecessary and duplicative because the 

Court will enjoin Petraglia, Zerba, and Sayva from misappropriating TGG’s trade secrets, as 

detailed below. The injunction on misappropriation is adequate to protect TGG’s interests.

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is not granted and Defendants are permitted to continue allegedly benefitting from

its proprietary information.

“[E]conomic injury alone does not support a finding of irreparable harm, 

because such injury can be remedied by a damage award.” Rent-A-Ctr., Inc. v. 

Canyon Television & Appliance Rental, Inc., 944 F.2d 597, 603 (9th Cir. 1991) 

(citing L.A. Mem’l Colliseum Comm’n v. Nat’l Football League, 634 F.2d 1197, 1202 

(9th Cir. 1980)). However, an “intention to make imminent or continued use of a 

trade secret or to disclose it to a competitor will almost always certainly show 

irreparable harm.” Pac. Aerospace & Elec., Inc. v. Taylor, 295 F. Supp. 2d 1188, 

1198 (E.D. Wash. 2003) (quoting Campbell Soup Co. v. ConAgra, Inc., 977 F.2d 86, 

92–93 (3rd Cir. 1992)). Further, “[e]vidence of threatened loss of prospective 

customers or goodwill certainly supports a finding of the possibility of irreparable 

harm.” Stuhlbarg Int’l Sales Co. v. John D. Brush & Co., 240 F.3d 832, 841 (9th 

Cir. 2001). And, “the loss of customers to a competitor is considered to be irreparable 

harm that justifies equitable relief.” Shippers, a Div. of Illinois Tool Works, Inc. v. 

Fontenot, No. 13CV1349 JLS (MDD), 2013 WL 12092056, at *6 (S.D. Cal. Sept. 

23, 2013) (citing Stuhlbarg, 240 F.3d at 841).

TGG argues it will suffer irreparable harm through the loss of customers, as 

clients have already switched from using TGG’s services to using those of Sayva 

and/or Petraglia and Zerba. (PI Mot. at 22; Garrett Decl. ¶ 87.) TGG also claims it 

will lose the value of its trade secrets.

The Court finds that the record supports TGG’s assertion that it has lost and 

could lose clients to Sayva and/or Petraglia and Zerba who offer competing services. 

The Court also finds TGG has sufficiently alleged harm in the potential loss of the 

value of its trade secrets. See Henry Schein, 191 F. Supp. 3d at 1077 (finding the 

plaintiff has established a likelihood of irreparable harm when it established “that it 

will lose established customer relationships as well as the economic value of its 

accumulated data on current and prospective customers”); see also Waymo LLC v. 

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Uber Techs., Inc., No. C 17-939 WHA, 2017 WL 2123560, at *11 (N.D. Cal. May 

15, 2017) (finding irreparable harm because the former employee was in possession 

of confidential files and “[m]issue of that treasure trove remains an ever-present 

danger. . . . Such misuse cannot be unwound after the fact, nor can it be adequately 

compensated for with monetary damages.”). Therefore, TGG could be irreparably 

harmed in the absence of a preliminary injunction.

D. Balance of Equities

To qualify for injunctive relief, TGG must establish that “the balance of 

equities tips in [its] favor.” Winter, 555 U.S. at 20. A court has the “duty . . . to 

balance the interests of all parties and weigh the damage to each.” L.A. Mem’l 

Coliseum Comm’n, 634 F.2d at 1203. The damage to TGG, as noted above, is the 

loss of customers and the lost value of its trade secrets. Sayva does not point to any 

damage to itself if it is enjoined from using TGG’s trade secrets.

The balance of equities tip in TGG’s favor.

E. Public Interest

“The public interest is served when [a] defendant is asked to do no more than 

abide by trade laws and the obligations of contractual agreements signed with [his] 

employer. Public interest is also served by enabling the protection of trade secrets.” 

Henry Schein, 191 F. Supp. 3d at 1078 (citing Bank of Am., N.A. v. Lee, No. CV 08–

5546 CAS (JWJX), 2008 WL 4351348, at *7 (C.D. Cal. Sept. 22, 2008).) Because 

the preliminary injunction’s reach is narrow and affects only the parties with no 

impact on nonparties, “the public interest [is] at most a neutral factor in the analysis 

rather than one that factors granting or denying the preliminary injunction.” 

Stormans, Inc. v. Selecky, 586 F.3d 1109, 1138–39 (9th Cir. 2009).

The public interest is served in ordering Defendants here to abide by trade laws 

and protect TGG’s trade secrets.

/ / /

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F. Bond

Pursuant to Rule 65(c), when a court issues a preliminary injunction, it must 

also require that the movant post a bond “in an amount that the court considers 

proper to pay the costs and damages sustained by any party found to have been 

wrongfully enjoined.” See Fed. R. Civ. P. 65(c). “The court has wide discretion in 

setting the amount of the bond, and the bond amount may be zero if there is no 

evidence the party will suffer damages from the injunction.” Connecticut Gen. Life 

Ins. Co. v. New Images of Beverly Hills, 321 F.3d 878, 882 (9th Cir. 2003) (citation 

omitted). At oral argument, Defendants submitted that no bond was necessary. 

Therefore, TGG is not required to post a bond.

IV. CONCLUSION

For the foregoing reasons, the Court GRANTS IN PART TGG’s Motion for 

Preliminary Injunction. (ECF No. 23.) Specifically, the Court GRANTS the Motion 

for Preliminary Injunction as it relates to misappropriation by Zerba, Petraglia, and 

Sayva. The Court DENIES the Motion for Preliminary Injunction as it relates to 

Tapken, Bubbly Brands, Holiday Foliage, and Sash Group. 

Following oral argument, Sayva and TGG submitted separate (but similar) 

proposed injunctions. The Court adapted portions of both proposals and makes the 

following orders:

(1) Defendants John Petraglia, Megan Zerba, and Sayva Solutions (including 

any representatives, agents, employees, officers, directors, partners, subsidiaries, or 

any other persons under their control or acting in concert with them) are enjoined 

during the pendency of this litigation, or until the Court orders otherwise, from 

accessing, copying, or using any of TGG’s documents or derivatives thereof, 

including:

(a) TGG’s QuickBooks Accounting File (including any backups);

(b) TGG’s Quality Assurance materials; 

(c) any TGG financial and accounting workbooks or workbook

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templates, including the following:

(i) accounting workbooks/working papers and subschedules, including month-end close workbooks for 

corporations, month-end close workbooks for partnerships, 

month-end close workbooks for limited liability companies 

(LLCs), a process for “rolling over” templates from one 

accounting period to the next;

(ii) process documentation for accounts payable, accounts 

receivable, bank reconciliations, cash flow reporting, credit card 

processing, fixed assets, inventory, month-end close procedures, 

payroll and revenue recognition, cash drawers, cash receipts and 

deposits, wire transfers, and check signing authority;

(iii) documents for reporting Quality Assurance results;

(iv) working papers and schedules for financial statements, 

including accrued liability schedule, capital lease schedule, 

convertible notes schedule, deferred rent schedule, loan 

amortization schedule, fixed asset schedule, prepaid expense 

schedule, AP tracker template, credit card receipt tracker 

template, insurance schedule, employee tracker template, 

intangible asset schedule, IRS Form 941 quarterly reconciliation 

template, weekly client update template, breakeven analysis 

template, capitalization table template, tax return (schedule L) to 

balance sheet reconciliation template, triple bottom line 

template, covenant compliance template, key advisors list 

template, cash forecasting template, templates specific to and 

inventory-based business, and month-end checklists; and

(v) any other financial statements or financial models 

prepared by TGG;

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(d) TGG’s sales and marketing materials;

(e) TGG customer lists and information; 

(f) TGG’s Utilization Report; 

(g) TGG’s internal training and instruction materials, including for 

how to use the templates, workbooks, and schedules described 

above in Paragraph (1)(c);

(h) any other materials copied or downloaded from TGG’s 

computer systems by Petraglia and Zerba to any external drives, 

personal email accounts, or cloud storage accounts; and

(i) any files derived from the above categories (e.g., SAYVA0002300; SAYVA-0002284; SAYVA-0002391; SAYVA0002290; SAYVA-0002301; SAYVA-0002353; SAYVA0002355; SAYVA-0002367; SAYVA-0002368; SAYVA0002381; SAYVA-0002399; SAYVA-0002373; SAYVA0002388).

(2) Defendants Petraglia, Zerba, and Sayva are enjoined from using any of 

the forgoing documents to solicit business from any current TGG clients 

whose information is contained in the materials described in Paragraph (1).

(3) Defendants Petraglia, Zerba, and Sayva will return to TGG any external 

drives or USB storage devices that contain TGG documents.

IT IS SO ORDERED.

DATED: January 14, 2020

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