Opinion
Civil Action No. 03-2390, SECTION: E/5.
June 23, 2005
ORDER AND REASONS
On June 22, 2005, oral argument was heard on the following motions: (1) defendants' Motion for More Definite Statement (r.d. #53); (2) plaintiffs' Motion for Leave to File Third Amended Complaint (r.d. #62); (3) plaintiffs' Motion for Injunctive Relief (r.d. #57); (4) defendants' Motion for Extension of Time to Amend Pleadings (r.d. #71); and, (5) defendants' Motion to Strike Motion for Injunctive Relief (r.d. #72).
At the hearing and on the record, defendants' Motion for More Definite Statement (r.d. #53) was granted in part and denied in part, and plaintiffs' Motion for Leave to File Third Amended Complaint (r.d. #62) and defendants' Motion for Extension of Time to Amend Pleadings (r.d. #71) were granted. See r.d. # 120. Further, part A of plaintiffs' Motion for Injunctive Relief (r.d. #57) was granted at the hearing, and parts C, D, and E (see ¶ XXVII of plaintiffs' Motion for Injunctive Relief at r.d. #57), and defendants' Motion to Strike Motion for Injunctive Relief (r.d. #72) were taken under submission at the close of oral argument.
See this Court's minute entry on June 2, 2005, at r.d. #90, limiting the hearing on plaintiffs' Motion for Injunctive Relief to items A, C, D and E of ¶ XXVII of that motion, and noting, with reference to part A, Statement of Defendants' Intent, Submitted in Response to Magistrate Judge's Request, filed into the record on June 1, 2005, r.d. #77.
A preliminary injunction is a remedy that should be imposed only in extraordinary cases. Canal Auth. of State of Fla. v. Callaway, 489 F.2d 567, 572 (5th Cir. 1974). Whether to grant or deny a preliminary injunction rests with the discretion of the district court, and a party seeking a preliminary injunction must demonstrate that the injury suffered would be irreparable absent the entry of an injunction. Id. "An injury is 'irreparable' only if it cannot be undone through monetary remedies." City of Meridian, Miss. V. Algernon Blair, Inc., 721 F.2d 525, 529 (5th Cir. 1983) ( quoting Deerfield Medical Center v. City of Deerfield Beach, 661 F.2d 328, 338 (5th Cir. 1981).
After consideration of the parties' memoranda, the testimony, exhibits and depositions and counsels' oral argument, and the law, the Court finds that parts B, D, E, F and G of plaintiffs' request for injunctive relief implicate the contractual disputes between the parties, and that the plaintiffs will not suffer irreparable harm absent injunctive relief because monetary remedies are available regarding these issues. A determination of these issues raised must be referred to the merits.
Part C of plaintiffs' request for injunctive relief requests a preliminary injunction to prohibit the following:
Any restraint on the use by individual customers of their name, address or policy information which State Farm contends is "trade secrets" that have been released to third parties, released to Moore for use in the NFIP Insurance Program and are therefore no longer subject to any claim of trade secrecy.
State Farm claims that the names, addresses and general policy information of its insureds is a trade secret under La.R.S. 51:1431. Moreover, State Farm argues that pursuant to the contractual agreements between plaintiffs and defendants, the plaintiffs are prohibited from using that information to solicit business from State Farm's insureds for one year from the date of termination of the contracts between the parties.
"Trade secrets" means information, including formula, pattern, compilation, program, device, method, technique, or process, that:
(a) derives independent economic value, actual or potential, from not being generally known to and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use, and
(b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
La.R.S. 51:1431(4).
The Court concludes that the names, addresses and general policy information of State Farms' insureds belong to the insureds. Each insured may disclose that information at will, and to anyone for any purpose. Also, the information is routinely provided by State Farm to banks and other lenders and/or entities that request the information for legitimate business transactions, as well as to its agents for their use in soliciting and selling other insurance products, such as government backed insurance programs like NFIP or other assigned risk plans, or health insurance which State Farm does not offer. For example, the state law requires that all motor vehicle owners carry liability insurance, and their insurance information must be provided to the State Department of Motor Vehicles. The information is also available in many public records such as mortgage and conveyance records, and can be purchased from entities that collect and sell such information such as Choice point.
The Court recognizes statutory privacy issues related to the collection, maintenance and use of such information, but that is a separate issue from whether the information is a trade secret.
The Court's conclusion that the names, addresses and general policy information of State Farm's insureds is not a trade secret does not address plaintiffs' request for injunctive relief prohibiting State Farm from enforcing the contractual provisions that prohibit plaintiffs from using that information to solicit business from State Farm's insureds for one year from the date of termination of the contracts between the parties. That is an issue of contract interpretation for which plaintiffs' have a monetary remedy, and for which injunctive relief is not appropriate. The issue must be referred to a trial on the merits of the claim.
Accordingly,
IT IS ORDERED that plaintiffs' Motion for Injunctive Relief, ¶ XXVII, part C, is GRANTED IN PART, insofar as the Court's finding that the names, addresses and general policy information of State Farms' insureds is not a "trade secret"; and DENIED IN PART insofar as plaintiffs' request that the Court prohibit State Farm from restraining plaintiffs' solicitation of State Farm's customers pursuant to the contracts between the parties; and
IT IS FURTHER ORDERED that defendants' Motion to Strike Motion for Injunctive Relief is GRANTED as to ¶ XXVII parts B, D, E, F and G of plaintiffs' Motion for Injunctive Relief.