iTalent Corporation v. Kotha

District Court, N.D. California·Decided September 19, 2025·No. 5:25-cv-06365·Unknown

Opinion

1 2 6 7 iTALENT CORPORATION, Case No. 25-cv-06365-BLF

8 Plaintiff, ORDER DENYING PLAINTIFF'S 9 v. MOTION FOR A TEMPORARY RESTRAINING ORDER 10 RAJU KOTHA, et al., [Re: ECF No. 11-3] 11 Defendants.

12 13 Before the Court is Plaintiff iTalent Corporation’s (“Plaintiff” or “itD”) motion for a 14 Temporary Restraining Order (“TRO”) against Defendants Caleb Hernandez (“Hernandez”), Fred 15 Walters (“Walters”), Raju Kotha, and Priya Kotha (collectively, “Defendants”). ECF No. 11-3 16 (“Mot.”). Plaintiff alleges that Defendants are engaged in a multi-year, ongoing conspiracy to 17 wrest control of itD’s Indian office, including by siphoning itD’s funds, misappropriating itD’s 18 trade secrets, interfering with itD’s client relationships, and stealing itD’s web domains. Plaintiff 19 seeks to enjoin Defendants from taking any steps in furtherance of this alleged scheme and also 20 seeks to direct Defendants to restore the status quo ante. Defendants filed oppositions, ECF Nos. 21 27, 28, 29, and Plaintiff submitted replies, ECF Nos. 37, 38, 39. The Court held a hearing on the 22 motion on September 16, 2025. ECF No. 45. 23 For the reasons stated on the record at the hearing and explained below, the Court DENIES 24 Plaintiff’s TRO application WITHOUT PREJUDICE to file a motion for a preliminary injunction 25 (ECF No. 11). 27 A. Procedural History 1 against Raju Kotha. Id. ¶ 3. On August 29, itD submitted its First Amended Complaint (“FAC”), 2 which added Hernandez, Walters, and Priya Kotha as Defendants. ECF No. 10 ¶ 11–13. 3 Although summons had not been returned executed as to Raju Kotha, the complaint makes 4 allegations about his conduct after he had been served with the initial complaint, including his 5 “admitt[ing] that he had indeed been working with Hernandez and Walters.” Id. ¶¶ 60, 62. 6 itD brings fifteen causes of action: (1) Civil RICO Under 18 U.S.C. § 1962(c); (2) 7 Violations of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 et seq.; (3) Violation of the 8 Defend Trade Secrets Act, 18 U.S.C. § 1836; (4) Violation of the California Uniform Trade 9 Secrets Act, Cal. Civil Code § 3426 et seq; (5) Breach of Contract; (6) Aiding and Abetting 10 Breach of Contract; (7) Violation of California Penal Code § 502(c) et seq.; (8) Violation of 11 California Penal Code § 496(a); (9) Trespass to Chattels; (10) Breach of Duty of Loyalty; (11) 12 Aiding and Abetting Breach of Duty of Loyalty; (12) Breach of Fiduciary Duty; (13) Aiding and 13 Abetting Breach of Fiduciary Duty; (14) Tortious Interference with a Business Relationship; and 14 (15) Conversion. See FAC ¶¶ 65–170. 15 B. Facts 16 itD is a California corporation that offers technology services to clients. ECF No. 11-5, 17 Declaration of Renee La Londe (“La Londe Decl.”) ¶ 4. iTalent Application Pvt. Ltd., (“iTalent 18 Application”) was formed in 2014. Id. ¶ 6. Although it is a distinct entity, iTalent Application is, 19 in practice, itD’s India office. Id. All of its revenue comes from pass-through billing to itD. Id. 20 In 2002, itD’s predecessor was founded by CEO, board member, and majority shareholder 21 Renee La Londe. Id. ¶ 2. In 2002, itD hired Hernandez as the Finance and Operations Manager. 22 Id. ¶ 8. When he joined the company, he signed a contract that includes a confidentiality clause. 23 Id. In 2005, he began to refer to himself as CFO. Id. ¶ 9. By 2007, Hernandez was replaced in 24 practice as CFO but kept a leadership role in the company and his title. Id. ¶¶ 9–10. He is still a 25 director of itD. Id. ¶ 11. 26 itD hired Walters as general partner in 2007. Id. ¶ 12. He likewise signed an employment 27 agreement with a confidentiality clause. Id. Walters was promoted to the position of Chief 1 Raju Kotha was hired as the Technical Manager of iTalent Application in 2014. Id. ¶ 14. 2 Although everyone who is hired to work at itD signs an employment agreement with a 3 confidentiality clause, Raju Kotha’s personnel file—which was kept only in paper copy—is 4 missing. Id. ¶ 14; ECF No. 11–20, Declaration of Cecilia Landeros (“Landeros Decl.”) ¶ 7. In 5 2015, itD also hired Priya Kotha as iTalent Application’s Finance and Operations Manager. La 6 Londe Decl. ¶ 15. 7 The facts underlying this lawsuit are complex and disputed. But at the core, itD alleges 8 that, over the past several years, Defendants “concocted a scheme to spin off iTalent Application 9 as a separate company and competitor to itD.” Id. ¶ 16. 10 1. Financial Investigation and Hernandez’s Conduct 11 itD alleges that iTalent Application falsified up to 10 employees to siphon funds from itD 12 under the guise of payroll. Id. ¶ 17. itD uncovered this discrepancy in March 2025 after Tom 13 Wilkinson, itD’s current CFO, noted itD’s earnings were down by $2 million. Id. ¶¶ 18–22; ECF 14 No. 11-19, Declaration of Tom Wilkinson (“Wilkinson Decl.”) ¶¶ 4–7. itD eventually discovered 15 $750,000 in cash sitting in iTalent Application’s bank account along with three open invoices for 16 roughly $450,000 for which Hernandez, Walters, and Raju Kotha were “pushing payment.” 17 Wilkinson Decl. ¶ 8. For his part, Hernandez disclaims any knowledge of fictitious employees 18 and points out that no fake employee has been identified by itD. ECF No. 27-1, Declaration of 19 Caleb Hernandez (“Hernandez Decl.”) ¶ 4. 20 itD suggests that Hernandez “became heated” during a confrontation with La Londe over 21 the ongoing financial investigation and “vehemently urged” her not to come to iTalent Application 22 in India to oversee an audit by KPMG. La Londe Decl. ¶¶ 20, 22. Hernandez disputes this 23 account, explaining that he was never “heated,” but was surprised by and concerned about some of 24 La Londe’s conduct. Hernandez Decl. ¶¶ 5–7. 25 On May 22, 2025, three days after La Londe returned from her trip to oversee the audit, 26 Hernandez resigned. Id. ¶ 23. Before his last day (June 23, 2025), he allegedly “dragged his feet” 27 with respect to the transition, including failing to supply “requested bookkeeping data.” Id. 1 his last day, a system that houses itD’s client lists. Id. ¶ 43. La Londe discovered, after 2 Hernandez left the company, that his email sent folder had been emptied and his email inbox was 3 missing emails from a period of several years. Id. ¶ 25, Ex. C. Priya Kotha ignored requests to 4 recover Hernandez’s missing emails. Id. ¶ 26, Ex. D. 5 Hernandez tells a different story. He explains that he stayed on “at itD’s request” and 6 performed tasks until July 9, 2025. Hernandez Decl. ¶ 9. He explains that he accessed NetSuite 7 only once and suggests the other logins were not caused by his actions. Id. at ¶ 10. He says that 8 he did not wipe his “entire email box for years 2023 through 2025,” but instead deleted only sent 9 items, because many were personal. Id. ¶ 11. On July 18, 2025, he returned his laptop. Id. ¶ 9. 10 2. Walters’s Conduct 11 According to itD, Walters sought to poach itD’s business and potential partners. La Londe 12 Decl. ¶¶ 34–41. For example, Walters entered into a Partnership Agreement in 2020 with a 13 company, “Interfered Partner 1” on behalf of itD. Id. ¶ 34. But Walters kept this business 14 relationship a secret from his colleagues, even when it should have come up naturally in context. 15 Id. ¶¶ 34–35; ECF No. 11-18, Declaration of Tyson Nunemacher (“Nunemacher Decl.”) ¶¶ 2–7. 16 Before he left the company, Walters forwarded contracts with Interfered Partner 1 to his personal 17 email address. La Londe Decl. ¶ 36, Ex. G. There is evidence that Walters also interfered with 18 two other potential business partners. Id. ¶¶ 38–41.

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