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Concepts in Production, LLC v. Joiner

United States District Court, N.D. Mississippi, Aberdeen Division

July 12, 2018

CONCEPTS IN PRODUCTION, LLC PLAINTIFF
v.
JUSTIN JOINER DEFENDANT

          ORDER

          DEBRA M. BROWN UNITED STATES DISTRICT JUDGE

         This contract action is before the Court on Concepts in Production, LLC's motion for preliminary injunction. Doc. #5.

         I Procedural History

         On August 4, 2017, Concepts in Production, LLC (“CIP”), invoking federal question and diversity jurisdiction, filed in this Court a “Complaint for Injunctive Relief and Damages” against Justin Joiner. Doc. #1. The complaint alleges that Joiner, a former employee of CIP, is in violation of a “Non-Compete and Nondisclosure Agreement” (“Agreement”) he signed as a part of his employment. Id. at 2. Based on this alleged violation, CIP asserts claims for: (1) breach of contract; (2) breach of fiduciary duty; (3) accounting; (4) punitive damages; (5) conversion; (6) injunctive relief; (7) spoliation of evidence; (8) violation of the Defense of Trade Secret Act; (9) violation of Mississippi's Uniform Trade Secrets Act; (10) fraud; (11) intentional interference with business relations/contracts; and (12) violation of the Computer Fraud and Abuse Act.

         CIP served Joiner with a copy of the complaint on August 15, 2017. Doc. #3. Approximately three weeks later, on September 5, 2017, CIP filed a motion for preliminary injunction. Doc. #5. The same day, Joiner answered CIP's complaint. Doc. #7. Joiner's answer contains two counterclaims: a claim for a declaratory judgment that the Agreement is unenforceable, and a claim for intentional infliction of emotional distress.[1] Joiner responded in opposition to the motion for preliminary injunction on September 19, 2017. Doc. #11. On September 26, 2017, CIP answered Joiner's counterclaims. Doc. #15.

         Beginning on April 4, 2018, this Court held a two-day evidentiary hearing on the motion for preliminary injunction. Following the hearing, the Court directed the submission of supplemental briefs. Doc. #59. CIP filed its supplemental brief on April 30, 2018. Doc. #62. Joiner filed his supplemental brief on May 29, 2018. Doc. #65.

         II Preliminary Injunction Standard

         As a general matter, “federal law governs the procedural questions when a preliminary injunction may issue and what standards of review … apply[. However, courts] analyze the substantive legal questions under, and in light of, the relevant state's law in a diversity case.” Heil Trailer Int'l Co. v. Kula, 542 Fed.Appx. 329, 335 n.22 (5th Cir. 2013) (quoting Flood v. ClearOne Commc'ns, Inc., 618 F.3d 1110, 1117 (10th Cir. 2010)) (quotation marks and alterations omitted). “[A]t the preliminary injunction stage, the procedures in the district court are less formal, and the district court may rely on otherwise inadmissible evidence, including hearsay evidence.” Sierra Club, Lone Star Chapter v. F.D.I.C., 992 F.2d 545, 551 (5th Cir. 1993). However, “the record must nevertheless support [a] court's decision.” Id.

         III Factual Background

         A. Three-Dimensional Printing, CIP, and the Metal X

         This case deals primarily with the marketing and sale of three-dimensional (“3-D”) printers. 3-D printers create three-dimensional objects by taking information produced from a computer-aided design system and laying a substance, either plastic polymer or metal, to form the shape specified. Metal 3-D printers, the type relevant here, may be used in either desktop (office) or industrial settings, and are measured by, among other things, the maximum metal density of the parts they produce.

         The density of a printed object refers to the presence of defects in the material after production and is measured on a scale of 0% to 100%, with 100% representing a material free of defects. Because defects in a substance will form cracks which will grow, the density of an object is “critically important” in the aerospace, automotive, and medical industries.

         CIP, located in Amory, Mississippi, sells manufacturing technology, including 3-D printers. CIP also sells computer numerical control systems, SolidWorks design software, and other engineering services to a wide variety of industries. Since 2015, CIP has sold 3-D polymer printers produced by Markforged. During the fourth quarter of 2016, CIP began selling, but not shipping, a Markforged metal printing machine known as the Metal X.

         The Metal X printer is marketed for industrial environments and utilizes a process called atomic fusion, in which a part is printed in layers with metal powder and then washed and fused together in a process known as sintering. The printer has a maximum metal density of 99.7% and sells for approximately $100, 000.[2] Ex. P-8.

         B. CIP's Hire of Joiner

         On March 6, 2017, CIP hired Justin Joiner to work as a sales account manager to sell “every product that CIP sells, ” including the Metal X, to consumers in Tennessee, Alabama, and the Florida panhandle. Prior to hire by CIP, Joiner had most recently worked as a territory sales representative for GoEngineer, a Texas company offering software and ancillary services and products to design and manufacturing industries. Ex. P-16. Before GoEngineer, Joiner worked as a business development manager for ModernTech Solutions, an Alabama company which sold 3D printers and related services, including SolidWorks. Id.

         On the day he began his employment with CIP, Joiner executed a “Non-Compete and Nondisclosure Agreement.” Ex. P-1. The Agreement provided in relevant part:

Section II. Upon expiration or termination of this agreement and for a period of two years following employment, Justin Joiner agrees not to compete with [CIP] within a 300 mile radius of [CIP's office] located at 1208 Guy Pickle Drive, Amory, Mississippi.
The non-compete clause will not apply if this agreement is terminated as a result of [CIP] violating the terms of this agreement.
Competition is defined, for the purpose of this agreement, as having ownership in, being employed by, managing, consulting for or rendering services to any organization or individual that is or was a client of [CIP] during Justin Joiner's employment with [CIP] or for any other business substantially similar to or competitive with [CIP] or any of the following types of business: Sales of SOLIDWORKS or any other product offered by [CIP].

Id.

         C. ...


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