Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_24-cv-03704/USCOURTS-azd-2_24-cv-03704-0/pdf.json

Nature of Suit Code: 880
Nature of Suit: other
Cause of Action: 18:1836(a) Injunction against Misappropriation of Trade Secrets

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Blue Compass RV LLC,

Plaintiff,

v. 

Michael McFadden, et al.,

Defendants.

No. CV-24-03704-PHX-KML

ORDER 

Defendants Michael McFadden and Zachary LeDuc were previously employed by 

plaintiff Blue Compass RV LLC. In the last few months, McFadden and LeDuc left Blue 

Compass and formed a new company, Camper Capital, LLC, that competes with Blue 

Compass in the sale and installation of camper shells. McFadden still has possession of 

some of Blue Compass’s confidential information, although he claims he has not accessed 

that information since leaving. Blue Compass seeks a temporary restraining order and 

preliminary injunction that would, in effect, prohibit McFadden, LeDuc, and Camper 

Capital from conducting business. The present record does not establish Blue Compass is 

entitled to the early relief it seeks.

I. Background1

Blue Compass describes itself as “the fastest-growing RV retail company in 

history.” (Doc. 1 at 3.) It has locations across the United States, including six in Arizona 

1 Some of these facts are drawn from the complaint. That complaint is not verified, and its 

factual assertions would not be admissible in their current form. At this preliminary stage,

however, the court may consider inadmissible evidence. See, e.g., Flathead-LoloBitterroot Citizen Task Force v. Montana, 98 F.4th 1180, 1190 (9th Cir. 2024).

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and one in New Mexico. The locations are “full-service RV dealerships,” selling vehicles 

such as motorhomes. (Doc. 7 at 2.) The locations, including three in the Phoenix 

metropolitan area, also sell “new and used camper shells, truck bed covers, and truck caps,”

which Blue Compass refers to collectively as “camper shells.” (Doc. 1 at 2.) Sometime in 

early 2024, Blue Compass hired Michael McFadden as its “Market Vice President –

Southwest.” (Doc. 7 at 3.) In that role, McFadden had management responsibilities over 

the locations in Arizona and New Mexico. (Doc. 7 at 3.) On April 21, 2024, McFadden 

executed an “Employee Covenants Agreement.” For present purposes the crucial sections 

of that agreement are numbered two, four, five, and six.

2

Section two of the agreement states McFadden was required to return any 

“confidential information” in his possession within five business days of the end of his 

employment. (Doc. 20-1 at 1-2.) The agreement defined “confidential information” as all 

information “of a private, secret, proprietary or confidential nature” concerning Blue 

Compass and its operations. (Doc. 20-1 at 1.) 

Section four of the agreement consists of an “Acknowledgment Regarding 

Company’s Business.” (Doc. 20-1 at 4.) That section identifies Blue Compass as “engaged 

in the selling, leasing, advertising, marketing, financing, storing, repairing and servicing of 

new and used Recreational Vehicles.” The section contains a special definition for 

“Recreational Vehicles”: “all brands and types of motorhomes, towable travel trailers, fifth 

wheels, toy haulers, pop-up campers, truck campers, tear drop trailers, and any other type 

of vehicle or trailer sold, leased or serviced by [Blue Compass].” (Doc. 20-1 at 4.) Section 

four also acknowledges Blue Compass “may engage in additional related businesses or in 

separate and distinct businesses from time to time.” (Doc. 20-1 at 4.) 

Section five of the agreement, titled “No Solicitation/No-Hire,” addresses both Blue 

Compass’s customers and employees. It provides that for 24 months after the end of his 

2 The agreement contains a choice-of-law provision requiring application of Florida law. 

(Doc. 20-1 at 8.) That provision also has a forum selection clause stating all disputes “shall 

be instituted only in the state or federal courts located in Broward County, in the state of 

Florida.” (Doc. 20-1 at 8.) Neither party has invoked that forum selection clause, but Blue 

Compass believes the choice-of-law clause should apply such that Florida law governs the 

reach of the agreement. (Doc. 1 at 14.) 

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employment, McFadden cannot employ any person who had been an employee of Blue 

Compass at any time for the “then-prior six (6) months.” (Doc. 20-1 at 4.) Section 5 also 

prohibits McFadden from “solicit[ing] or induc[ing] any customer of [Blue Compass] to 

patronize any business directly or indirectly in competition with the businesses conducted 

by [Blue Compass]” and prohibits McFadden from encouraging a “vendor . . . to withdraw, 

curtail or cancel” its business with Blue Compass. (Doc. 20-1 at 4.)

Section six is titled “Agreement Not to Compete.” (Doc. 20-1 at 4.) It prohibits 

McFadden from “directly or indirectly . . . selling, leasing, designing, manufacturing, 

advertising, marketing, financing, storing, repairing or servicing . . . any new or used 

Recreational Vehicles” or engaging “in any additional related or other business that [Blue 

Compass] or any subsidiary or affiliate of [Blue Compass] engaged in at any time.” (Doc. 

20-1 at 5.) These limitations apply for 12 months after the end of his employment and are 

geographically limited to 100 miles within “any dealership or office within the geographic 

area over which [McFadden] had business responsibilities” or within 75 miles of any Blue 

Compass dealership. (Doc. 20-1 at 5.)

While employed by Blue Compass, McFadden attended “the University of 

Michigan Ross School of Business executive leadership program.” (Doc. 7 at 3.) During 

that program, McFadden led “Blue Compass’s Camper Shell expansion initiative.” (Doc. 

7 at 4.) That initiative involved McFadden working with “Blue Compass’s senior finance 

leaders . . . to identify areas for growth and expansion” regarding camper shell sales. (Doc. 

7 at 4.)

McFadden’s pay from Blue Compass was based, at least in part, on commissions. 

According to McFadden, Blue Compass often miscalculated his commissions and he had 

to independently calculate how much he was owed. To do so McFadden “emailed [himself] 

Blue Compass’s Monthly Operating Reports because they show net profits.” (Doc. 18-1 at 

6.) Those reports do not include the name of Blue Compass’s customers or employees, nor 

do they “reveal any business strategies or the like.” (Doc. 18-1 at 6.) According to 

McFadden, it was not unusual for him to have access to the Monthly Operating Reports. 

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Blue Compass’s Pacific Region President texted the reports to McFadden almost every 

month of McFadden’s employment, sometimes to his personal cellphone. (Doc. 18-1 at 6.)

The parties have not identified when LeDuc began working for Blue Compass but 

until shortly before this suit was filed, LeDuc worked as “Blue Compass RV’s General 

Sales Manager for its Mesa, Arizona dealership.” (Doc. 7 at 11.) In that role, LeDuc was 

responsible for the sale and installation of camper shells to individuals and other 

companies. LeDuc “developed close relationships with Blue Compass’s fleet/commercial 

customers who purchase Camper Shells in bulk for fleet vehicles.” (Doc. 7 at 12.) LeDuc 

never signed an agreement like the one signed by McFadden.

As of October 2024, McFadden and LeDuc were both employed by Blue Compass. 

On October 23, 2024, LeDuc filed Camper Capital’s articles of organization for a limited 

liability company. (Doc. 7 at 2.) Those articles listed LeDuc as the sole member and 

manager. (Doc. 7 at 2.) Around that same time McFadden was having conversations with 

Blue Compass’s Vice President and Chief Human Resources Officer, Taylore Elliott. 

McFadden claims that on three different occasions, Elliott stated McFadden’s agreement 

prohibited him “from working in the Recreational Vehicle – as defined by the restrictive 

covenant agreement – industry.” (Doc. 18-1 at 5.) Elliott allegedly stated McFadden “did 

not need permission from Blue Compass to work in the automotive (which includes truck 

shells)” industry. (Doc. 18-1 at 5.) Elliott admits she exchanged emails with McFadden 

prior to his departure but does not explain the content of those emails. (Doc. 7 at 6.)

McFadden resigned from Blue Compass on November 30, 2024. In doing so he 

executed a Separation Agreement that required he return all of Blue Compass’s 

confidential information in his possession. (Doc. 1 at 10.) On December 6, 2024, 

McFadden amended Camper Capital’s articles of organization to reflect that both he and 

LeDuc were members and managers. (Doc. 7 at 2.) LeDuc resigned from Blue Compass 

on December 19, 2024. (Doc. 18-1 at 11.) At present, McFadden and LeDuc are running 

Camper Capital at a single location in Phoenix, Arizona. 

Camper Capital “deals in truck accessories exclusively, including truck shells, 

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which are also known as camper shells – the protective enclosures placed over beds of 

pickup trucks that are accessories to trucks.” (Doc. 18-1 at 4.) Camper Capital recently 

signed “Manufacturer Agreements” with “three leading Camper Shell manufacturers.” 

(Doc. 7 at 13.) Before those agreements, “Blue Compass was the only full-service RV 

dealership in Arizona to sell Campers Shells from all three of these leading manufacturers.” 

(Doc. 7 at 13.) Thus, Blue Compass believes Camper Capital is in direct competition 

regarding the sale and installation of camper shells from the same manufacturers as Blue 

Compass. 

After resigning from Blue Compass, McFadden has not solicited any Blue Compass 

customers or employees. (Doc. 18-1 at 6.) McFadden still has possession of Monthly 

Operating Reports but has not accessed them after resigning from Blue Compass. (Doc. 

18-1 at 6.)

On December 23, 2024, Blue Compass filed its complaint against McFadden, 

LeDuc, and Camper Capital. (Doc. 1.) The complaint alleges eight claims against various 

combinations of defendants. The claims and defendants are: 

1. Violation of the Defend Trade Secrets Act—all defendants;

2. Breach of contract—McFadden;

3. Breach of fiduciary duties—McFadden and LeDuc;

4. Conspiracy—all defendants;

5. Aiding and abetting a breach of fiduciary duty—all defendants;

6. Tortious interference with business expectancy—all defendants;

7. Tortious interference with contract—LeDuc and Camper Capital;

8. Unfair competition—all defendants.

On December 27, 2024, Blue Compass filed its motion for temporary restraining order and 

preliminary injunction. (Doc. 8.) That motion recites most of the facts set forth above and 

seeks a somewhat strange mix of injunctive relief. 

Blue Compass’s motion explicitly identifies the relief it seeks by referencing the 

proposed injunction filed at the same time as the motion. The proposed injunction would 

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require defendants allow an independent forensic examiner to access their electronic 

devices to determine whether defendants possess any of Blue Compass’s confidential 

information. (Doc. 9-1 at 3.) The injunction would also prohibit defendants from soliciting 

any of Blue Compass’s customers or hiring any of Blue Compass’s employees. (Doc. 9-1 

at 4.) Finally, the injunction would prohibit McFadden, and only McFadden, from 

operating or owning “a Recreational Vehicle franchise or dealership.” (Doc. 9-1 at 4-5.) 

For purposes of its proposed relief, Blue Compass defines “Recreational Vehicle” using 

the same definition contained in McFadden’s agreement. (Doc. 9-1 at 5 n.2.)

The peculiarity of this requested relief is highlighted by Blue Compass specifically 

seeking to prevent McFadden from operating a “Recreational Vehicle franchise or 

dealership.” In opposing Blue Compass’s motion, defendants focused on their belief that 

camper shells do not qualify as “Recreational Vehicles.” Thus, defendants argued no 

injunction was appropriate because Camper Capital does not qualify as a “Recreational 

Vehicle franchise or dealership.” Blue Compass’s reply seems to admit defendants are 

correct by shifting its focus and seemingly requesting relief beyond what was originally

requested. According to the reply, McFadden’s agreement prohibits him from working in 

the Recreational Vehicle business or “any business in which Blue Compass [also] 

engages.” (Doc. 20 at 2.)

II. Analysis

A. Standard for Early Injunctive Relief

A court must analyze a request for a temporary restraining order or preliminary 

injunction under two slightly different tests. First, a court must evaluate if there is a 

likelihood of success on the merits, if there is a likelihood of irreparable harm, whether the 

balance of equities tips in plaintiff’s favor, and whether an injunction would be in the public 

interest. Winter v. Natural Resources Defense, Inc., 555 U.S. 7, 20 (2009). A court must 

also assess whether “serious questions going to the merits were raised and the balance of 

hardships tips sharply in the plaintiff’s favor” in addition to showing “a likelihood of 

irreparable injury and that the injunction is in the public interest.” All. for the Wild Rockies 

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v. Cottrell, 632 F.3d 1127, 1134–35 (9th Cir. 2011).

B. Likelihood of Success or Serious Questions

Blue Compass argues it is likely to succeed or there are serious questions going to 

the merits on all of its claims. Based on the available evidence and defendants’ failure to 

respond to certain arguments, Blue Compass has made the requisite showing except for its 

claim under the Defend Trade Secrets Act.

i. Defend Trade Secrets Act (“DTSA”)

Blue Compass’s first claim is for misappropriation of trade secrets under the DTSA. 

“To succeed on a claim for misappropriation of trade secrets under the DTSA, a plaintiff 

must prove: (1) that the plaintiff possessed a trade secret, (2) that the defendant 

misappropriated the trade secret; and (3) that the misappropriation caused or threatened 

damage to the plaintiff.” InteliClear, LLC v. ETC Glob. Holdings, Inc., 978 F.3d 653, 657–

58 (9th Cir. 2020). These elements turn on very specific definitions set forth in the DTSA 

and Blue Compass has not established those definitions cover the present situation.

It is not clear which “trade secrets” are at issue but the most likely candidates are 

the Monthly Operating Reports. Those reports are the only potential trade secrets Blue 

Compass clearly identifies in its filings. For purposes of this order, Blue Compass has 

waived any argument that other information, such as McFadden’s general knowledge of 

the camper shell industry, should be treated as trade secrets.

To qualify as “trade secrets” under the DTSA, Blue Compass would have to show 

it took “reasonable measures to keep [the reports] secret” and the reports “derive[] 

independent economic value, actual or potential, from not being generally known to, and 

not being readily ascertainable through proper means.” 18 U.S.C. § 1839(3). The 

declaration in support of Blue Compass’s motion states the reports contain information 

“unique to the business of Blue Compass, highly confidential, and not available from any 

other source.” (Doc. 7 at 10.) But there are no specifics regarding the measures Blue 

Compass took to keep the reports secret. Similarly, the declaration states the reports would 

be “invaluable to a competitive entity.” (Doc. 7 at 10.) But there is no further explanation 

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why that is the case. 

Assuming the reports qualify as trade secrets, the second element of a DTSA claim 

requires evidence defendants misappropriated those trade secrets. DTSA provides a special 

definition of “misappropriation” that requires acquisition through “improper means” or 

disclosure or use of the trade secret without consent. 18 U.S.C. § 1839(5)(A), (B). Blue 

Compass alleges defendants “continue to possess and access” the reports. (Doc. 1 at 14.) 

That may be enough to state a claim for relief, but McFadden has declared the reports have 

“zero strategic relevance to truck shells.” (Doc. 18-1 at 6.) And McFadden states he has 

not “used or disclosed” the reports after leaving Blue Compass. (Doc. 18-1 at 6.) Blue 

Compass did not provide any contrary evidence establishing defendants likely are 

accessing and using the information. Accordingly, the present record does not establish the 

requisite misappropriation.

Assuming the reports are trade secrets and defendants misappropriated them, there 

is no evidence McFadden’s continued retention of the reports has caused or threatened 

damage to Blue Compass. Again, McFadden has declared the information he possesses has 

no relevance to Camper Capital and Blue Compass has not provided any evidence 

contradicting that. At present, there is not a sufficient evidentiary basis to conclude 

McFadden’s possession of the reports has caused or threatened harm.

Having failed to establish any of the three elements required for a DTSA claim, Blue 

Compass has not shown a likelihood of success nor has it established serious questions 

going to the merits.

ii. Breach of Contract

Blue Compass’s breach of contract claim is brought against only McFadden. 

According to Blue Compass, McFadden is violating the terms of the Employee Covenants 

Agreement regarding competing with Blue Compass, employing LeDuc, soliciting 

customers and vendors, and retaining or using the reports. (Doc. 8 at 11.) Blue Compass 

also believes McFadden’s retention of the reports violates his Separation Agreement. Blue 

Compass is partially correct. 

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McFadden’s Employee Covenants Agreement prohibits him from competing in the 

Recreational Vehicle business, as that term is defined in the agreement. The agreement also 

prohibits competition “in any additional related or other businesses that [Blue Compass] 

engages in at any time.” (Doc. 20-1 at 5.) It is undisputed that Blue Compass and Camper 

Capital are both in the camper shell business. Based on the present record and the very 

limited briefing provided by the parties, Blue Compass has a strong likelihood of success 

on this aspect of its breach of contract claim.3 This likelihood of success, however, is 

tempered in this context by the fact that Blue Compass’s original motion sought relief only 

regarding the Recreational Vehicle business. That is, Blue Compass’s original motion did 

not even seek relief under the language Blue Compass now cites as, and which may be, 

crucial to its likelihood of success outside of the preliminary injunction posture.

McFadden’s Employee Covenants Agreement also prohibits him from directly or 

indirectly employing anyone who had been employed by Blue Compass in the previous six 

months. (Doc. 20-1 at 4.) Blue Compass believes McFadden is violating this provision by 

“continuing to employ LeDuc at Camper Capital.” (Doc. 8 at 11.) Both McFadden and 

LeDuc are identified as members and managers of Camper Capital. Blue Compass has not 

explained whether all members or managers of a limited liability company qualify as 

employees of that company. And there is reason to doubt that is accurate. See, e.g., A.R.S. 

§ 29-3304 (Arizona’s Limited Liability Company Act listing member, manager, and 

employee separately). Blue Compass has not established LeDuc is “employ[ed] by”

Camper Capital within the meaning of McFadden’s Employee Covenants Agreement. 

Therefore, Blue Compass has not established a likelihood of success or serious questions 

going to the merits on this aspect of its breach of contract claim. 

McFadden’s Employee Covenants Agreement prohibits him from soliciting 

customers of Blue Compass and prohibits him from requesting or encouraging any of Blue 

Compass’s vendors from “withdraw[ing], curtail[ing], or cancel[ing]” business with Blue 

Compass. (Doc. 20-1 at 4.) Blue Compass has not provided any evidence that McFadden 

3 Neither party has provided briefing on how agreements such as McFadden’s are treated 

under Florida law.

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is soliciting Blue Compass’s current customers, nor has it provided any evidence that 

McFadden is acting in a prohibited fashion regarding Blue Compass’s relationships with 

its vendors. The parties agree Camper Capital has executed agreements with some of Blue 

Compass’s vendors, but there is no evidence those vendors have stopped doing business 

with Blue Compass as a result. Based on the available evidence, Blue Compass does not 

have a strong likelihood of success on this aspect of its breach of contract claim.

Finally, McFadden’s Employee Covenants Agreement and Separation Agreement 

prohibit his retention of Blue Compass’s confidential information, as that term is defined 

in the agreements. It is undisputed McFadden has possession of the monthly reports. 

Assuming those reports qualify as confidential information, there is a strong likelihood 

Blue Compass will succeed on this aspect of its breach of contract claim.

Overall, Blue Compass appears likely to succeed on at least some aspects of its 

breach of contract claim.

iii. Breach of Fiduciary Duties

Blue Compass’s breach of fiduciary duty claim is brought against McFadden and 

LeDuc. Blue Compass believes the evidence “clearly establishes that McFadden and 

LeDuc breached their fiduciary duties of loyalty, utmost good faith, and a high degree of 

care” because they planned the launch of Camper Capital during their employment at Blue 

Compass. (Doc. 8 at 12.) Defendants did not address this argument in their opposition, so 

the court assumes Blue Compass has a strong likelihood of success. The court notes, 

however, that “preparation to compete is not enough to support a breach of fiduciary duty 

claim.” Firetrace USA, LLC v. Jesclard, 800 F. Supp. 2d 1042, 1053 (D. Ariz. 2010). The 

limited evidence provided by Blue Compass therefore may not have been sufficient if 

defendants had addressed this claim.

iv. Tortious Interference

Blue Compass brings a claim for tortious interference with business expectancy 

against all defendants and a claim for tortious interference with contract against LeDuc and 

Camper Capital. Blue Compass argues the evidence “firmly establishes” defendants 

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“tortiously interfered with McFadden’s Employment Agreement with Blue Compass and 

Blue Compass’s business expectancy with its existing and prospective customers.” (Doc. 

8 at 12.) Again, defendants do not respond to this argument and the court assumes Blue 

Cross has a strong likelihood of success on both of these claims.

C. Likelihood of Irreparable Harm

Having established Blue Compass is likely to succeed on at least some claims, the 

next issue is whether Blue Compass has established a likelihood it will suffer irreparable 

harm. Blue Compass claims it is likely to suffer such harm in the form of damage “to its 

future business expectancy, competitive position in the marketplace, customer 

relationships,” and loss of confidential information. (Doc. 8 at 13.) Without any meaningful 

elaboration of how these alleged harms justify injunctive relief, it appears these harms are 

simple economic harm. 

“[E]conomic harm is not generally considered irreparable.” E. Bay Sanctuary 

Covenant v. Biden, 993 F.3d 640, 677 (9th Cir. 2021). But “[t]he threat of being driven out 

of business is sufficient to establish irreparable harm.” hiQ Labs, Inc. v. LinkedIn Corp., 

31 F.4th 1180, 1188 (9th Cir. 2022). In other words, a “threat of ‘extinction’ is enough to 

establish irreparable harm, even when damages may be available and the amount of direct 

financial harm is ascertainable.” Id. Here, Blue Compass has provided no evidence it might 

be driven out of business by Camper Capital such that the economic harm it fears should 

be deemed irreparable.

The Ninth Circuit has noted some intangible injuries, such as injury to a business’s 

goodwill, may qualify as irreparable. See, e.g., Rent–A–Ctr., Inc. v. Canyon Television & 

Appliance Rental, Inc., 944 F.2d 597, 603 (9th Cir. 1991). Blue Compass’s harms, such as 

damage to its “customer relationships,” may be alluding to these intangible injuries. But 

Blue Compass has not explained how these intangible injuries are likely to occur. At the 

very least, Blue Compass has not provided “specific evidence that its reputation and 

goodwill [are] likely to be irreparably harmed.” adidas Am., Inc. v. Skechers USA, Inc., 

890 F.3d 747, 761 (9th Cir. 2018).

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Finally, a finding of irreparable injury is appropriate “where the underlying injury 

does not readily lend itself to calculable money damages.” Epic Games, Inc. v. Apple, Inc., 

67 F.4th 946, 1003 (9th Cir. 2023). For example, irreparable injury may exist where 

damages can only be calculated after a “protracted and speculative inquiry.” Id. In the 

present case, McFadden’s noncompete obligations expire 12 months after the end of his 

employment, approximately eleven months from now. (Doc. 20-1 at 5.) Blue Compass has 

not explained why it would be inordinately difficult to calculate the damages it suffers 

during such a discrete and relatively short period of time. 

D. Balance of Equities

While the lack of irreparable harm is fatal to Blue Compass’s request for relief, the 

balance of equities also weigh against granting relief. The court must “weigh the damage 

to each [party] in determining the balance of the equities.” CTIA - The Wireless Ass’n v. 

City of Berkeley, California, 928 F.3d 832, 852 (9th Cir. 2019) (quotation marks and 

citation omitted). The “damage to each” is measured as “the effect on each party of the 

granting or withholding of the requested relief.” Winter v. Nat. Res. Def. Council, Inc., 555 

U.S. 7, 24 (2008).

Blue Compass argues refusing an injunction will cause grave harm to its future 

business expectancy and competitive position in the marketplace. (Doc. 8 at 13.) But as set 

forth above, it is not clear Blue Compass is suffering such harm at present. Blue Compass 

has 100 RV dealerships across the country and has not explained how much of its business 

is attributed to camper shells. Defendants contend camper shells are “not the heart of [Blue 

Compass’s] business, not even close,” and Blue Compass does not dispute that in its reply. 

(Doc. 18 at 12.) If only a small fraction of Blue Compass’s business involves camper shells, 

it is not clear how Blue Compass as a whole will suffer the serious harm it alleges. In brief, 

refusing an injunction places Blue Compass at risk of suffering minor setbacks to a small

portion of its business.

As for defendants, Blue Compass believes Camper Capital is not entitled to operate 

at all. McFadden and LeDuc represent that an injunction would prevent them “from making 

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a living,” and Blue Compass does not dispute this point. (Doc. 18 at 13.) An injunction has 

a likelihood of imposing significant economic harm on defendants.

Withholding an injunction places Blue Compass at risk of suffering minor harm but

granting an injunction may decimate defendants. The balance of equities favors defendants.

E. Public Interest

The final factor the court must consider is the public interest. The requested 

injunction would reach only to the present parties. “When the reach of an injunction is 

narrow, limited only to the parties, and has no impact on non-parties, the public interest 

will be at most a neutral factor in the analysis rather than one that favor[s] [granting or] 

denying the preliminary injunction.” Stormans, Inc. v. Selecky, 586 F.3d 1109, 1138–39 

(9th Cir. 2009). Blue Compass argues an injunction would serve the public interest because 

if one is not issued, “a contract would have no meaning in the State of Arizona.” (Doc. 8 

at 14.) The court is skeptical that withholding an injunction in this particular case, at this 

particular time, will result in Arizona becoming a contract-free zone. But more importantly, 

withholding an injunction will not affect Blue Compass’s other contract-based remedies. 

For example, defendants may still be found liable and required to pay monetary damages.

The public interest does not support either party. 

F. Balance

“A preliminary injunction is an extraordinary remedy never awarded as of right.” 

Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24 (2008). Blue Compass has established 

a likelihood of success or serious questions going to the merits on some of its claims. But 

Blue Compass has not made a sufficient showing it will suffer irreparable harm, the balance 

of equities tip strongly in favor of defendants, and the public interest does not support either 

party. Based on the present record, a preliminary injunction is not merited.4

The analysis in this order turns on the limited arguments and limited record 

presented by the parties at this stage. Blue Compass is free to renew its motion if it can 

present more convincing evidence supporting irreparable injury and the balance of equities. 

4 McFadden appears to concede he is not entitled to retain possession of the reports. Based 

on that, he should consider negotiating their immediate return.

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Defendants, and especially McFadden, should keep in mind that Blue Compass has shown 

a likelihood of success on some of its claims. That creates a significant possibility that at 

some point, defendants will be subject to an injunction or monetary damages, and they 

should tailor their behavior and plans accordingly. 

IT IS ORDERED the Motion for Temporary Restraining Order and Preliminary 

Injunction (Doc. 8) is DENIED. 

Dated this 16th day of January, 2025.

 

 

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