Court Opinion

ID: 9391836
Source: CourtListenerOpinion
Date Created: 2023-05-03 15:00:45.017532+00
Date Added: 2024-06-11T17:18:16.583401
License: Public Domain

USCA11 Case: 22-11870    Document: 35-1       Date Filed: 05/03/2023   Page: 1 of 9

                                                    [DO NOT PUBLISH]
                                    In the
                United States Court of Appeals
                         For the Eleventh Circuit

                          ____________________

                                 No. 22-11870
                          ____________________

       GLE SCRAP METAL, INC.,
       a foreign proﬁt corporation authorized to do
       business in Florida,
                                                       Plaintiﬀ-Appellant,
       versus
       TIAN TAN,
       TY INTERNATIONAL LLC,
       a Florida Limited Liability Company,

                                                    Defendants-Appellees.
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       2                        Opinion of the Court                    22-11870

                             ____________________

                  Appeal from the United States District Court
                       for the Middle District of Florida
                   D.C. Docket No. 6:22-cv-00573-PGB-LHP
                           ____________________

       Before JORDAN and NEWSOM, Circuit Judges, and GRIMBERG,∗ Dis-
       trict Judge.
       PER CURIAM:
              This appeal requires us to determine whether the district
       court abused its discretion when it denied GLE Scrap Metal’s mo-
       tion for a preliminary injunction. The injunction would have en-
       joined GLE’s former employee, Tian Tan, and his new company,
       TY International, from operating their “Doctor Scrap” app.
       GLE—a scrap-metal recycling company—ﬁled its motion simulta-
       neously with a complaint alleging that Tan had misappropriated
       GLE’s trade secrets and breached his conﬁdentiality, non-solicita-
       tion, and non-competition agreements by marketing his app—
       which GLE claims is in direct competition to its business.
              The district court initially granted a TRO based on the alle-
       gations in the complaint, but following an evidentiary hearing, it
       dissolved the TRO and denied GLE’s motion for a preliminary in-
       junction after concluding that GLE failed to demonstrate either

       ∗ Honorable Steven D. Grimberg, United States District Judge for the North-
       ern District of Georgia, sitting by designation.
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       22-11870                Opinion of the Court                         3

       irreparable injury or a substantial likelihood of success on the mer-
       its. For the reasons explained below, we affirm.
                                          I
                                         A
              GLE is a recycling company specializing in purchasing, pro-
       cessing, and trading large quantities of scrap metal. It essentially
       operates as a “middleman” in that it connects buyers and sellers of
       various types of scrap metal. Using valuation formulas that it as-
       serts are proprietary, GLE can quickly price its sellers’ metal and
       identify buyers in a way that it feels provides a competitive ad-
       vantage.
               Tian Tan began working for GLE in June 2017 as its Director
       of International Marketing, at which time he executed conﬁdenti-
       ality, non-solicitation, and non-competition agreements. Some-
       time in May 2018, Tan was promoted to Vice President of Interna-
       tional Business, which required him to sign a similar agreement.
              A large part of Tan’s role while at GLE was to receive photos
       of scrap metal from suppliers and forward them to GLE customers
       to collect bids. Tan quickly realized that this process created a “bot-
       tleneck” that prevented him from facilitating quick trades. And so
       he set out to formulate a tech-based solution: the Doctor Scrap app.
       According to GLE, the “app[] would mimic GLE’s operations” by
       quickly pairing buyers and sellers: It would “examine photographs
       of the scrap materials being oﬀered for sale to determine the com-
       position,” estimate the price, and accept bids from potential cus-
       tomers. Enlisting the services of his tech-savvy wife, who did the
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       4                         Opinion of the Court                    22-11870

       actual coding, Tan got to work on creating the app. Sometime dur-
       ing the summer of 2021, Tan presented a beta version of the app
       to Danny Zack—GLE’s CEO—but Zack seemed unenthusiastic.
       Tan interpreted Zack’s lack of enthusiasm as a rejection.
               According to Tan, after GLE declined to get involved in the
       app’s development, he resigned 1 and continued to develop it using
       his own resources and contacts. In his resignation email, Tan said
       that he intended to “chase [his] IT dream to see if [he could] use
       technology to make some positive change to [the] industry” by fo-
       cusing on developing the app “as [he] described to [GLE].” And he
       did, in fact, create an app, but not one—at least according to the
       district court—that yet performs all of the functions that GLE ini-
       tially described. In its current state, the district court found, the
       Doctor Scrap app only collects data—it does not actually facilitate
       trades.
              Soon after Tan and GLE parted ways, Tan began to promote
       his newly developed Doctor Scrap app—ﬁrst in an article published
       in an online trade publication, then in emails targeted to at least
       one of GLE’s customers, and ﬁnally in a blast email to a group that
       GLE claims is its customer list but that Tan insists is a member list
       from a trade association. In this “[s]olicitation” email blast (as GLE
       describes it) Tan represented his team as being “experts from GLE”
       and other companies, even though it was sent months after his

       1Tan announced his resignation in September 2021, but stayed on to assist
       with the transition until November 2021. Therefore, the restrictive covenants
       described in Tan’s employment contracts with GLE will soon expire.
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       22-11870                Opinion of the Court                          5

       departure from GLE. In this same email, Tan stated that the Doc-
       tor Scrap app can be used to “[f ]ind solid buyers in each item across
       the world.”
                                          B
               After GLE learned about Tan’s promotional efforts, GLE
       filed its complaint and emergency motion for a preliminary injunc-
       tion in the Middle District of Florida. In the motion, GLE alleged
       that Tan misappropriated its trade secrets and breached his confi-
       dentiality, noncompete, and non-solicitation agreements by using
       images taken from GLE’s (or its customer’s) facilities, by employ-
       ing its proprietary pricing formula to build the Doctor Scrap app,
       and by marketing the app to its customers. Based on the allegations
       in the complaint, the district court immediately issued a TRO en-
       joining Tan from promoting the app and scheduled an evidentiary
       hearing to determine whether to convert the TRO into a prelimi-
       nary injunction.
              Following the evidentiary hearing, the district court denied
       GLE’s motion for a preliminary injunction, concluding that it had
       failed to establish either irreparable injury or a substantial likeli-
       hood of success on the merits.
              As to irreparable injury, the district court first concluded that
       any harm that might occur could be remedied ex post through an
       award of monetary damages. The court also found that no harm
       was imminent because GLE hadn’t lost any business to the Doctor
       Scrap app and because the app wasn’t capable of actually facilitat-
       ing trades.
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       6                       Opinion of the Court                 22-11870

               The district court separately concluded that GLE was un-
       likely to succeed on the merits of its claims. As for its trade-secrets
       claim, the court held that GLE had failed to show that Tan actually
       used GLE’s trade secrets in developing and promoting Doctor
       Scrap. In particular, the district court explained, GLE had failed to
       show that Tan used its proprietary valuation formula to calculate
       prices or that he used confidential photos from its facility rather
       than publicly available ones. Moreover, the district court empha-
       sized, GLE had failed to prove that Tan marketed Doctor Scrap us-
       ing its customer lists rather than the trade association’s member list
       (which happened to include GLE customers). The district court
       likewise concluded that GLE was unlikely to succeed on its breach-
       of-contract claims, finding that Tan’s app did not truly compete
       with GLE because it did not actually facilitate trades. Accordingly,
       the district court denied GLE’s preliminary-injunction motion and
       ordered the TRO dissolved.
              GLE timely appealed to this Court. The denial of a prelimi-
       nary injunction “rests within the sound discretion of the district
       court,” and we will reverse only if the district court abuses its con-
       siderable discretion. Cunningham v. Adams, 808 F.2d 815, 819 (11th
       Cir. 1987). Moreover, we review the district court’s “[u]nderlying
       findings of fact [] for clear error.” L.E. by and Through Cavorley v.
       Superintendent of Cobb Cnty. Sch. Dist., 55 F.4th 1296, 1299 (11th Cir.
       2022).
             For reasons we’ll explain, we hold that that the district court
       neither (1) abused its discretion in concluding that GLE failed to
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       22-11870                 Opinion of the Court                           7

       demonstrate irreparable injury nor (2) made any clearly erroneous
       findings of fact in the course of so concluding. Accordingly, we
       affirm the district court’s refusal to issue the preliminary injunction
       on the irreparable-injury ground alone, making it unnecessary for
       us to consider whether GLE successfully established a substantial
       likelihood of success on the merits.
                                           II
               “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). In order to obtain one, the moving party (here, GLE)
       must establish four separate requirements—that “(1) it has a sub-
       stantial likelihood of success on the merits; (2) irreparable injury
       will be suﬀered unless the injunction issues; (3) the threatened in-
       jury to the movant outweighs whatever damage the proposed in-
       junction may cause the opposing party; and (4) if issued, the injunc-
       tion would not be adverse to the public interest.” Swain v. Junior,
       961 F.3d 1276, 1284–85 (11th Cir. 2020).
               A showing of irreparable harm is “the sine qua non of in-
       junctive relief.” Ne. Fla. Chapter of Ass’n of Gen. Contractors of Am.
       v. City of Jacksonville, Fla., 896 F.2d 1283, 1285 (11th Cir. 1990) (quot-
       ing Frejlach v. Butler, 573 F.2d 1026, 1027 (8th Cir. 1978)). “The in-
       jury must be ‘neither remote nor speculative, but actual and immi-
       nent.’” Id. (quoting Tucker Anthony Realty Corp. v. Schlesinger, 888
       F.2d 969, 973 (2d Cir. 1989)). As we have explained, “[t]he key word
       in this consideration is irreparable.” Id. “Mere injuries, however
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       8                       Opinion of the Court                 22-11870

       substantial, in terms of money, time and energy necessarily ex-
       pended in the absence of a stay, are not enough.” Id.
              In concluding that GLE had failed to demonstrate irrepara-
       ble injury, the district court determined both (1) that GLE had not
       “aﬃrmatively demonstrated that it would suﬀer non-compensable
       harm, such as irreversible damage to its reputation or loss of good
       will” and (2) that any injuries that GLE sought to avoid “do not
       appear to be imminent.” We ﬁnd no abuse of discretion in either
       determination.
              Importantly, in its decision, the district court found the fol-
       lowing facts: (1) that “[a]t this point in time, [GLE] has not lost any
       business to [Tan’s] Doctor Scrap app”; (2) that “currently [GLE] has
       not demonstrated the app facilitates actual trades as a middleman”;
       (3) that “Tan has testiﬁed the app currently does not possess this
       feature” and that GLE has “failed to rebut this assertion”; and (4)
       that “the evidence did not show that the app currently acts as a
       middleman, nor does it appear imminently likely to do so.” GLE
       hasn’t demonstrated that those ﬁndings were clearly erroneous,
       and together they amply support the district court’s determination
       that GLE failed to show irreparable injury.
              On appeal, GLE contends that its harm is indeed imminent
       because even absent a trading function in the Doctor Scrap app,
       “the damage to GLE’s goodwill ha[s] already started.” Br. of Ap-
       pellant at 14. As the district court’s decision reﬂects, however, GLE
       oﬀered no evidence to substantiate that assertion. That failure is
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       22-11870               Opinion of the Court                       9

       fatal, particularly given the standard by which we review the dis-
       trict court’s decision.
                                       III
              The district court did not abuse its discretion in concluding
       that GLE failed to establish irreparable injury and, on that ground,
       refusing to issue a preliminary injunction. We needn’t consider
       GLE’s argument that it successfully established substantial likeli-
       hood of success on the merits.
             AFFIRMED.