Bluebird v. Johnson

Opinion

20CA1407 Bluebird v Johnson 12-02-2021

COLORADO COURT OF APPEALS

Court of Appeals No. 20CA1407

Boulder County District Court No. 20CV30549

Honorable Bruce Langer, Judge

Bluebird Botanicals, LLC,

Plaintiff-Appellee,

v.

Jeremiah Desmond O’Leary, f/k/a Jeremiah Johnson,

Defendant-Appellant.

ORDER AFFIRMED

Division I

Opinion by JUDGE DUNN

Dailey and Kuhn, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e)

Announced December 2, 2021

Lewis, Brisbois, Bisgaard & Smith, LLP, Benjamin Hase, Denver, Colorado, for

Plaintiff-Appellee

Jeremiah Desmond O’Leary, Pro Se

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¶ 1 Defendant, Jeremiah Desmond O’Leary, f/k/a Jeremiah

Johnson (Mr. Johnson), appeals the district court’s order granting a

preliminary injunction in favor of plaintiff, Bluebird Botanicals, LLC

(Bluebird), restraining Mr. Johnson from disparaging Bluebird and

barring him from disseminating and using Bluebird’s trade secrets

or confidential information. We affirm.

I. Background

¶ 2 In August 2018, Bluebird hired Mr. Johnson as a digital

marketer.

1

When hired, Mr. Johnson signed an at-will employment

and nondisclosure agreement (nondisclosure agreement), which,

among other things, prohibited him from disseminating Bluebird’s

trade secrets and confidential information and gave Bluebird “the

right to injunctive relief” if he did so.

¶ 3 Bluebird terminated Mr. Johnson in September 2019. At that

time, the parties entered a severance agreement and general release

(severance agreement), under which Mr. Johnson received $2,000

in exchange for releasing “any and all claims” against Bluebird.

1

We take the facts from the parties’ pleadings.

2

This agreement, too, included nondisclosure, nondisparagement,

and confidentiality provisions.

¶ 4 In July 2020 — after learning Mr. Johnson had contacted one

of its vendors and then contacted one of its customers (and

allegedly provided the customer confidential information) —

Bluebird sued Mr. Johnson for breach of contract, civil theft, and

misappropriation of trade secrets, seeking injunctive relief and

damages.

¶ 5 In response to Bluebird’s motion for injunctive relief, the

district court entered an order temporarily restraining Mr. Johnson

from contacting Bluebird’s clients and disseminating or using

Bluebird’s confidential information. The court then set a hearing on

Bluebird’s motion for a preliminary injunction.

¶ 6 After hearing testimony and considering the evidence, the

court found Bluebird had “met its burden” and entered a

preliminary injunction, restraining Mr. Johnson from disparaging

Bluebird and disseminating or using its trade secrets and

confidential information.

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¶ 7 The court didn’t rule on the merits of Bluebird’s claims for

breach of contract, civil theft, or misappropriation of trade secrets;

those claims were still pending as of the date of the appeal.

II. Analysis

¶ 8 Mr. Johnson contends the district court abused its discretion

by granting the preliminary injunction. Because we perceive no

abuse of discretion, we affirm.

A. Legal Principles and Standard of Review

¶ 9 A preliminary injunction is a temporary form of equitable relief

meant to preserve the status quo or to protect a party’s rights

pending the final determination of a case on its merits. City of

Golden v. Simpson, 83 P.3d 87, 96 (Colo. 2004); Gitlitz v. Bellock,

171 P.3d 1274, 1278 (Colo. App. 2007).

¶ 10 A district court may grant a preliminary injunction only if the

moving party shows

(1) a reasonable probability of success on the

merits;

(2) a danger of real, immediate, and irreparable

injury which may be prevented by injunctive

relief;

(3) that there is no plain, speedy, and adequate

remedy at law;

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(4) that the granting of a preliminary

injunction will not disserve the public interest;

(5) that the balance of equities favors the

injunction; and

(6) that the injunction will preserve the status

quo pending a trial on the merits.

Rathke v. MacFarlane, 648 P.2d 648, 653-54 (Colo. 1982) (citations

omitted); accord Gitlitz, 171 P.3d at 1278.

¶ 11 We review a district court’s decision to grant a preliminary

injunction for an abuse of discretion. Markwell v. Cooke, 2021 CO

17, ¶ 21. Thus, we will only overturn the court’s decision if it’s

manifestly arbitrary, unreasonable, or unfair, or a misapplication of

the law. Bill Barrett Corp. v. Lembke, 2018 COA 134, ¶ 15, aff’d on

other grounds, 2020 CO 73. And we will uphold the district court’s

factual findings “unless they are so clearly erroneous as to find no

support in the record.” Id. at ¶ 16.

B. The District Court’s Order

¶ 12 At the preliminary injunction hearing, Mr. Johnson testified,

as did Bluebird’s Chief People Officer and a cybersecurity

investigator. The parties also introduced several exhibits. In its

detailed written order, the court summarized the evidence and

made the following findings of fact:

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• Mr. Johnson “breached several sections [of the

nondisclosure agreement] . . . by emailing a spreadsheet to

[a Bluebird customer] containing [Bluebird’s] customer

order information, pricing history, payment type

information and other confidential information,” which

Bluebird’s Chief People Officer testified were trade secrets.

• Mr. Johnson “breached several sections of the [s]everance

[a]greement” by disparaging Bluebird in emails to a

Bluebird customer and a Bluebird marketing vendor.

• Specifically, the email to the marketing vendor “was

disparaging in that it alleged criminal and unethical

behavior by [Bluebird] and negatively impacted the business

relationship between [the vendor] and [Bluebird].”

• Mr. Johnson “acknowledged that he signed the [s]everance

[a]greement” but had “claimed that he did not have to follow

the [s]everance [a]greement.”

• Mr. Johnson admitted he contacted the vendor.

• Mr. Johnson admitted he “downloaded” Bluebird’s data and

emails but claimed that he didn’t need “prior written

consent in order to disclose [Bluebird’s] data.”

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• Mr. Johnson “continues to believe that he has the right to

reach out to [the customer].”

¶ 13 Based on those findings, the court then applied the proper six-

factor test and concluded Bluebird had satisfied its burden to show

preliminary injunctive relief was warranted. See Rathke, 648 P.2d

at 653-54; Gitlitz, 171 P.3d at 1278.

C. The District Court Acted Within its Discretion

¶ 14 To start, Mr. Johnson generally disputes the district court’s

findings on “all six elements.” But because the record doesn’t

include the preliminary injunction hearing transcript, we must

presume the missing transcript supports the district court’s

findings and conclusions. See Hock v. N.Y. Life Ins. Co., 876 P.2d

1242, 1252 (Colo. 1994) (“An appellate court must presume that the

[district] court’s findings and conclusions are supported by the

evidence when the appellant has failed to provide a complete

record.”); accord Sovde v. Scott, 2017 COA 90, ¶ 43. With this in

mind, we consider the court’s findings and conclusions on each

preliminary injunction factor.

¶ 15 First, the court found Bluebird demonstrated a reasonable

probability of success on the merits because Mr. Johnson admitted

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to downloading and distributing Bluebird’s trade secrets and

continued to believe he had the right to reach out to a Bluebird

customer. Though Mr. Johnson disagrees that the disclosed

information constituted trade secrets, the court’s finding is based

on witness testimony (which we presume has record support) and

the nondisclosure and severance agreements. Thus, we may not

disturb this finding. See Woodbridge Condo. Ass’n v. Lo Viento

Blanco, LLC, 2020 COA 34, ¶ 24, aff’d, 2021 CO 56; see also Hock,

876 P.2d at 1252. And to the extent Mr. Johnson contends his

actions were justified to report Bluebird’s “unlawful business

practices,” that doesn’t negate the court’s findings that he admitted

to disseminating Bluebird’s trade secrets.

¶ 16 Second, the court found Mr. Johnson’s actions presented “a

danger of real, immediate, and irreparable injury to” Bluebird.

Specifically, the court found that Mr. Johnson’s disparaging

comments to Bluebird’s vendor “impacted [Bluebird’s] business

relationship” with the vendor and that transmitting trade secrets to

Bluebird’s customer created “a danger of real and irreparable injury

. . . should the loss or even temporary cessation of the business

relationship with [the customer] occur.” Mr. Johnson doesn’t

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contest these findings but argues the court erred because it failed

to apply “standing, mootness, and ripeness.” But we’re unaware of

any authority — and Mr. Johnson points us to none — stating that

those justiciability doctrines are related to this second injunctive

factor.

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Nor do we see any obvious jurisdictional concerns.

¶ 17 Third, the court found no plain, speedy, and adequate remedy

at law because Bluebird couldn’t guarantee that additional

instances of disparagement or transmission of trade secrets

wouldn’t occur “given [Mr. Johnson’s] admitted conduct and prior

history.” The court also reasoned that monetary damages “are

difficult or impossible to ascertain when trade secrets are

disseminated,” and “the impacts from disparagement upon

[Bluebird’s] business relationships and reputation cannot be

realized until it has already occurred.” Mr. Johnson says this was

error because “no actual damages were shown” and “courts should

refuse to consider uncertain or contingent future matters that

suppose speculative injury that may never occur.” But, as the

2

To the extent Mr. Johnson contends Board of Directors, Metro

Wastewater Reclamation District v. National Union Fire Insurance Co.

of Pittsburgh, 105 P.3d 653, 656 (Colo. 2005) is instructive, we are

unpersuaded as that case doesn’t involve a preliminary injunction.

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district court correctly found, “[a]n injury may be irreparable . . .

where monetary damages are difficult to ascertain or where there

exists no certain pecuniary standard for the measurement of the

damages.” Gitlitz, 171 P.3d at 1279; see also Kroupa v. Nielsen, 731

F.3d 813, 820 (8th Cir. 2013) (“Because damage to one’s reputation

is a harm that cannot be remedied by a later award of money

damages, the threat of reputational harm may form the basis for

preliminary injunctive relief.”).

¶ 18 Fourth, the court recognized a “public interest in employees

being able to bring forth complaints against employers, and to

disclose illegal activity to law enforcement.” But the court

concluded that doing so doesn’t require either the unauthorized

distribution of trade secrets or the disparagement of the employer.

It therefore found that a preliminary injunction wouldn’t disserve

the public interest. Though Mr. Johnson contends Bluebird’s

“public health violations” and “unauthorized practice of medicine”

do disserve the public interest, the district court correctly

concluded that Mr. Johnson may report any concerns about

Bluebird’s practices without disparaging Bluebird or disseminating

10

its trade secrets. The court’s findings are therefore not manifestly

unreasonable or unfair.

¶ 19 Fifth, the court found the balance of equities favors granting

the injunction, emphasizing it was not entering a final judgment in

the dispute. Mr. Johnson contends he has the right to report

unlawful business practices as a “whistleblower.” But the

preliminary injunction doesn’t prevent him from pursuing his

whistleblower claims. Rather, it prevents him from disparaging

Bluebird and disseminating its trade secrets. Also, as the court

pointed out, “[a] law enforcement agency or governmental entity

conducting an investigation has the power of subpoena should the

release of confidential information be required.”

¶ 20 And sixth, the court found a preliminary injunction would

preserve the status quo by “[p]reventing further transmission of

[Bluebird’s] trade secrets and disparagement.” As best we can tell,

Mr. Johnson doesn’t appear to contest this factor. The status quo

means, of course, that Mr. Johnson has the right to raise his

defenses to Bluebird’s claims during the litigation of those claims.

The district court’s findings after the “preliminary injunction

hearing are not determinative of the ultimate merits of the case.”

11

Phoenix Capital, Inc. v. Dowell, 176 P.3d 835, 839 (Colo. App.

2007).

3

¶ 21 Given all this, we can’t say the court abused its discretion by

granting the preliminary injunction. See Sanger v. Dennis, 148 P.3d

404, 419 (Colo. App. 2006) (concluding that because the record

supported the district court’s findings, the court didn’t abuse its

discretion by granting the preliminary injunction).

III. Other Issues

¶ 22 Mr. Johnson also appears to raise other issues beyond his

challenge to the preliminary injunction order. To the extent he

does, nothing else is before us. The sole final, appealable order

challenged in the notice of appeal is that addressing the request for

injunctive relief. See C.A.R. 1(a)(3) (a preliminary injunction is

appealable as a final order); see also Sanger, 148 P.3d at 409 (“A

preliminary injunction is considered to be a final order and is

appealable under C.A.R. 1(a)(3).”). And to the extent Mr. Johnson

raises arguments not presented to — or ruled on by — the district

court, we decline to consider them. See Est. of Stevenson v.

3

We express no opinion on the merits of Bluebird’s claims or Mr.

Johnson’s defenses.

12

Hollywood Bar & Cafe, Inc., 832 P.2d 718, 721 n.5 (Colo. 1992)

(arguments not considered and ruled on by the district court are

not preserved for appellate review); see also Gf Gaming Corp. v.

Taylor, 205 P.3d 523, 528 (Colo. App. 2009).

IV. Appellate Attorney Fees

¶ 23 Bluebird requests attorney fees and costs under C.A.R. 38,

arguing Mr. Johnson’s appeal is frivolous and “primarily comprised

of non-appealable issues that have been recycled from countless,

repetitive filings.” Bluebird also says Mr. Johnson falsely stated

that he (1) “preserved issues” and (2) “raised arguments at the time

of the preliminary injunction hearing.”

¶ 24 A self-represented party shall not be assessed attorney fees

except upon a finding that the “party clearly knew or reasonably

should have known” that his appeal was “substantially frivolous,

substantially groundless, or substantially vexatious.” § 13-17-

102(6), C.R.S. 2021; see also Artes-Roy v. Lyman, 833 P.2d 62, 63

(Colo. App. 1992) (reversing an attorney fee judgment against the

self-represented plaintiffs because the trial court didn’t find “the

plaintiffs knew or reasonably should have known that filing of the

suit lacked substantial justification”).

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¶ 25 Bluebird doesn’t contend that Mr. Johnson “clearly knew or

reasonably should have known” that his appeal was frivolous. Nor

can we conclude he did. After all, the district court told Mr.

Johnson that he could file an appeal if he believed the court erred

by granting the preliminary injunction. That Mr. Johnson doesn’t

precisely understand the contours of issue preservation reflects his

self-represented status, rather than an obvious effort to pursue a

knowingly frivolous appeal.

¶ 26 We thus deny Bluebird’s request for appellate attorney fees

and single or double costs under C.A.R. 38. And to the extent Mr.

Johnson requests “damages and legal fees,” we likewise deny that

request.

V. Conclusion

¶ 27 We affirm the order granting Bluebird’s request for a

preliminary injunction.

JUDGE DAILEY and JUDGE KUHN concur.