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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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. And after he left the company, his email had 19 been mostly cleared out for stretches of years. Id. ¶ 27, Ex. E. He also attempted to wipe his work 20 laptop before returning it. Id. ¶ 29. Walters left itD on July 18, 2025. ECF No. 29-1, Declaration 21 of Fred Walters (“Walters Decl.”) ¶ 4. On August 21, 2025, he signed an affidavit confirming that 22 he had returned all of itD’s confidential material and destroyed any duplicates or copies. Id. ¶ 5, 23 Ex. A. 24 3. Raju Kotha and Priya Kotha’s Conduct 25 In June and July of 2025, Raju Kotha used La Londe’s login credentials to the web domain 26 provider GoDaddy, Inc. (“GoDaddy”) and other of itD and La Londe’s accounts. La Londe Decl. 27 ¶ 30. Raju Kotha transferred several of itD’s key web domains to himself and seized ownership of 1 detail in a series of emails sent from an employee of iTalent Application to Priya Kotha, 2 suggesting her involvement with and supervision of the conduct. See id. Ex. F. And a forensic 3 investigator’s audit revealed that Raju Kotha and Priya Kotha “engaged in mutual privilege 4 escalation” by granting each other administrative roles and privileges in key itD accounts, which 5 amounts to “[s]trong evidence of a deliberate circumvention of security controls.” ECF No. 11- 6 17, Declaration of Chris Canada (“Canada Decl.”) ¶¶ 4–7. The forensic investigation also 7 revealed evidence consistent with Raju Kotha’s repeatedly breaking into La Londe’s email 8 account, accessing Hernandez’s mailbox to perform mass email deletions, and purging his own 9 emails. Id. ¶¶ 8–13. Priya Kotha’s activity was also consistent with her purging her emails. Id. 10 ¶ 13. 11 On July 29, itD filed its initial complaint against Raju Kotha. ECF No. 1. Although Raju 12 Kotha has “feigned cooperation” since being served with the complaint, including claiming “to 13 have returned all stolen systems,” there have been issues with various of itD’s systems as recently 14 as August 17, 2025. La Londe Decl. ¶ 46. Raju Kotha also “suggested through intermediaries that 15 he would honor his commitment to pay iTalent Application's employees if itD dismissed and 16 waived all claims against him.” Id. ¶ 47. 17 4. Walters and Hernandez’s Visit to India 18 itD alleges in the Amended Complaint that Raju Kotha admitted to La Londe and itD upon 19 being served with the complaint that his conduct was part of a “larger plan including Hernandez 20 and Walters.” FAC ¶ 60. 21 La Londe “instructed” Raju Kotha not to allow Hernandez and Walters into the office of 22 iTalent Application after they had resigned. La Londe Decl. ¶ 24. But upon resignation, 23 Hernandez and Walters both flew to India “to thank the employees that [they] had worked with for 24 the past 13 years.” Hernandez Decl. ¶ 12. Hernandez explains that he did not engage in any 25 wrongdoing while he was visiting iTalent Application and went only to say goodbye to longtime 26 colleagues. Id. But itD provides evidence that Walters and Hernandez were in iTalent 27 Application’s office working. See, e.g., La Londe Decl. Ex. F at 5 (mentioning, in an email to 5. The TRO Application 1 On September 2, 2025, itD filed its TRO application on the basis of six claims: (1) 2 violation of the Computer Fraud and Abuse Act (“CFAA”); (2) violations of the Defend Trade 3 Secrets Act (“DTSA”) and California Uniform Trade Secret Act (“CUTSA”); (3) breach of 4 contract; (4) trespass to chattels; (5) breach of fiduciary duty; and (6) tortious interference with 5 prospective economic advantage. Mot. at 4–5. The breach of contract claim is brought only as to 6 Hernandez and Walters, the breach of fiduciary duty claim is brought only against Hernandez, and 7 the rest of the claims are brought against all four Defendants. Id. 8 II. LEGAL STANDARD 9 The standard for issuing a temporary restraining order is identical to the standard for 10 issuing a preliminary injunction. Washington v. Trump, 847 F.3d 1151, 1159 n.3 (9th Cir. 2017). 11 An injunction is a matter of equitable discretion and is “an extraordinary remedy that may only be 12 awarded upon a clear showing that the plaintiff is entitled to such relief.” Winter v. Natural 13 Resources Defense Council, Inc., 555 U.S. 7, 22 (2008). And “a TRO ‘should be restricted to . . . 14 preserving the status quo and preventing irreparable harm just so long as is necessary to hold a 15 [preliminary injunction] hearing and no longer.’” E. Bay Sanctuary Covenant v. Trump, 932 F.3d 16 742, 779 (9th Cir. 2018) (quoting Granny Goose Foods, Inc. v. Brotherhood of Teamsters & Auto 17 Truck Drivers Local No. 70, 415 U.S. 423, 439 (1974)). 18 A plaintiff seeking preliminary injunctive relief must establish “[1] that he is likely to 19 succeed on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary 20 relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public 21 interest.” Id. at 20. “[I]f a plaintiff can only show that there are serious questions going to the 22 merits—a lesser showing than likelihood of success on the merits—then a preliminary injunction 23 may still issue if the balance of hardships tips sharply in the plaintiff’s favor, and the other two 24 Winter factors are satisfied.” Friends of the Wild Swan v. Weber, 767 F.3d 936, 942 (9th Cir. 25 2014) (alteration in original) (internal quotation marks and citation omitted). 26 27 III. DISCUSSION 1 A. Likelihood of Success on the Merits 2 1. CFAA and Trespass to Chattels 3 The CFAA prohibits intentionally accessing a computer “without authorization” or by 4 “exceed[ing] authorized access” to obtain information from a protected computer. See 18 U.S.C. § 5 1030(a)(2)(C). As explained on the record at the hearing, the Court finds itD is likely to succeed 6 on the merits of its CFAA claim as to Raju Kotha and Priya Kotha. By breaking into La Londe’s 7 email and seizing control of itD’s GoDaddy domains and other key systems, Raju Kotha and Priya 8 Kotha plainly exceeded the scope of their authorized access to itD’s computers with intent to 9 defraud to obtain things of value. Canada Decl. ¶¶ 4–13; La Londe Decl. ¶¶ 30–33. 10 Although the CFAA is alleged as a conspiracy, FAC ¶ 81, itD has not submitted evidence 11 that meets the elements of conspiracy. Accordingly, the Court does not find that the record 12 supports a likelihood of success on the merits of the CFAA claim with respect to Hernandez and 13 Walters, because the evidence does not support their exceeding the scope of their authorized 14 access to itD’s computers. 15 The same evidence supports a likelihood of success on the merits of the Trespass to 16 Chattels claim as to Raju Kotha and Priya Kotha. To succeed on a claim for trespass to chattels 17 under California law, the plaintiff must show that “(1) defendant intentionally and without 18 authorization interfered with plaintiff’s possessory interest in the computer system; and (2) 19 defendant's unauthorized use proximately resulted in damage to plaintiff.” Margolis v. Apple Inc., 20 743 F.Supp.3d 1124, 1135 (N.D. Cal. 2024) (quoting eBay, Inc. v. Bidder's Edge, Inc., 100 21 F. Supp. 2d 1058, 1069–70 (N.D. Cal. 2000)). Here, itD has shown that Raju Kotha and Priya 22 Kotha seized control of various of its key systems, which led to, at minimum, a loss of La Londe’s 23 time and energy. Canada Decl. ¶¶ 4–13; La Londe Decl. ¶¶ 30–33. The Trespass to Chattels 24 claim is likewise alleged as a conspiracy, FAC ¶ 137, and is insufficient as to Walters and 25 Hernandez for the same reason as is the CFAA claim. 26 2. CUTSA and DTSA 27 The Court now turns to itD’s claims for misappropriation of trade secrets under the Defend 1 Trade Secrets Act of 2016 (“DTSA”), 18 U.S.C. § 1836, and the California Uniform Trade Secrets 2 Act (“CUTSA”), Civil Code § 3426 et seq. itD bases its trade secrets claims on the alleged 3 misappropriation of confidential client lists and customer contracts. Mot. at 18. 4 Courts often analyze claims under the Federal Defend Trade Secrets Act and the California 5 Uniform Trade Secrets Act together, because “the elements are substantially similar.” InteliClear, 6 LLC v. ETC Glob. Holdings, Inc., 978 F.3d 653, 657 (9th Cir. 2020). To succeed on a claim for 7 misappropriation of trade secrets under either act, a plaintiff must prove: “(1) that the plaintiff 8 possessed a trade secret, (2) that the defendant misappropriated the trade secret; and (3) that the 9 misappropriation caused or threatened damage to the plaintiff.” Nat’l Specialty Pharmacy, LLC 10 v. Padhye, 734 F. Supp. 3d 922, 929 (N.D. Cal. 2024) (quoting InteliClear, 978 F.3d at 657–58) 11 (discussing DTSA); CytoDyn of New Mexico, Inc. v. Amerimmune Pharms., Inc., 160 12 Cal. App. 4th 288, 297 (2008) (“Under the UTSA, a prima facie claim for misappropriation of 13 trade secrets ‘requires the plaintiff to demonstrate: (1) the plaintiff owned a trade secret, (2) the 14 defendant acquired, disclosed, or used the plaintiff's trade secret through improper means, and (3) 15 the defendant's actions damaged the plaintiff.’”). 16 Here, the Court finds that itD is likely to succeed on the merits of its trade secrets claims 17 with respect to Walters, because he emailed himself confidential client contracts before resigning. 18 La Londe Decl. ¶ 36, Ex. G. The Court agrees with Plaintiff that the contract between itD and 19 Interfered Partner 1 qualifies as a trade secret. See Xsolla (USA), Inc. v. Aghanim Inc., No. 2:24- 20 cv-02116-ODW, 2024 WL 4139615, at *7 (C.D. Cal. Sept. 10, 2024) (finding that information 21 regarding “confidential contracts with customers” qualified as a trade secret). That Walters took it 22 is evidence of misappropriation that threatens harm to itD. 23 The Court acknowledges that customer lists sometimes qualify as trade secrets. See, e.g., 24 id. Here, there is no evidence in the record of the makeup of the allegedly misappropriated 25 customer lists. So the Court cannot evaluate whether a trade secret is at issue. Moreover, that 26 Hernandez repeatedly attempted to login to his NetSuite account, the home of itD’s client lists, 27 does not provide sufficient evidence of misappropriation of trade secrets. Id. ¶ 43. This evidence 1 personal information. Hernandez Decl. ¶ 9. Finally, the Court does not find that the record 2 supports itD’s trade secrets claims with respect to Raju Kotha and Priya Kotha. 3 Accordingly, the Court finds that itD has shown there is a serious question going to the 4 merits of itD’s DTSA and CUTSA claims with respect to Walters. 5 3. Breach of Fiduciary Duty 6 itD argues that because Hernandez is a director of itD, he owed itD fiduciary duties and 7 violated them by participation in the scheme to seize control of iTalent Application and spin it off 8 as a competitor of itD. Mot. at 22–23. 9 To succeed on the merits of a breach of fiduciary duty claim, a plaintiff must show (1) the 10 existence of a fiduciary duty, (2) its breach, and (3) damages proximately caused by the breach. 11 7EDU Impact Acad. Inc. v. You, 760 F.Supp.3d 981, 1003 (N.D. Cal. 2024) (quoting Les 12 Fields/C.C.H.I. Ins. Servs. v. Hines, No. 15-cv-03728-MEJ, 2016 WL 6873459, at *14 (N.D. Cal. 13 Nov. 22, 2016)). Corporate directors generally owe fiduciary duties to the company. Id. at 1004. 14 Here, it is undisputed that Hernandez is a director of itD. La Londe Decl. ¶ 11; Hernandez 15 Decl. ¶ 1. Accordingly, he owes the company fiduciary duties. And the evidence of Hernandez’s 16 participation in the alleged conspiracy, which the Court discusses at length above, shows serious 17 questions going to the merits of the claim. 18 4. Tortious Interference with Prospective Economic Advantage 19 itD argues it is likely to prevail on the merits of its claim for tortious interference with 20 prospective economic advantage, which it brings against all four Defendants. Mot. at 23–26. itD 21 argues that Walters’s interference with actual and potential of itD’s partners amounts to tortious 22 interference. In response, Walters argues that he executed a sworn affidavit confirming that he 23 returned or destroyed all of itD’s confidential material. ECF No. 29 (“Walters Opp.”) at 5. 24 To prevail on a claim of tortious interference with an economic relationship, itD must 25 show “(1) an economic relationship between the plaintiff and some third party, with the 26 probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the 27 relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; 1 by the acts of the defendant.” TransWorld Airlines, Inc. v. Am. Coupon Exch., Inc., 913 F.2d 676, 2 689 (9th Cir. 1990). 3 As a threshold matter, the Court notes that the sole evidence supporting this claim pertains 4 to Walters.1 He secretly entered into a relationship with Interfered Partner 1 and apparently sought 5 to move that relationship away from itD. La Londe Decl. ¶¶ 34–36. The evidence supports the 6 allegations that Walters sought to interfere with two other potential partners of itD. Id. ¶¶ 38, 40. 7 And itD has shown that these partnerships were potentially quite valuable. Id. ¶ 37, 39, 41. The 8 Court notes that itD did not submit evidence of actual economic loss as a result of this 9 interference, only potential loss. Nor did itD submit evidence of Plaintiff’s communications with 10 clients confirming its claims. 11 The Court further observes that although Walters signed a sworn affidavit attesting that he 12 has returned or destroyed all of itD’s confidential material in his possession as of August 21, 2025, 13 he left itD on July 18, 2025. Walters Decl. ¶¶ 4–5. Walters offers no evidence of what happened 14 in the intervening period of more than a month. 15 Accordingly, the Court finds that itD has shown a serious question going to the merits of 16 its tortious interference claim. 17 5. Breach of Contract 18 itD argues that Hernandez and Walters breached their Employment Contracts with itD 19 because they both signed agreements to use itD’s information only to the benefit of itD. Mot. at 20 20. Hernandez and Walters do not dispute that they signed Employment Agreements with 21 confidentiality clauses. La Londe Decl. ¶¶ 8, 12. In light of the evidence of their conduct, 22 discussed at length above, the Court finds that there is a serious question going to the merits of 23 whether Hernandez and Walters are in breach of their contractual obligations to itD. 24 B. Irreparable Harm 25 The Court turns next to whether itD is likely to suffer irreparable harm absent a Temporary 26 Restraining Order. itD argues that because its confidential information has been misappropriated 27 1 and Defendants are “actively engaged in their conspiracy,” it will suffer irreparable harm. Mot. at 2 26. Defendants argue that the delay between itD’s filing its initial complaint and submitting its 3 TRO application undermines the claim that the situation merits emergency relief. ECF No. 27 4 (“Hernandez Opp.”) at 5; Walters Opp. at 4–5. 5 The Court notes that the gap in time between itD’s filing of the initial complaint and 6 submitting the TRO application is explained by the need to conduct a thorough investigation 7 before asking the Court for relief. However, the Court finds that itD has not shown a likelihood of 8 irreparable harm, because it has effectively cut off avenues for further harm. There is no evidence 9 before the Court that Defendants have ongoing access to itD’s systems or domains. Nor has itD 10 submitted evidence of any ongoing interference with current or potential partners. 11 Because the Court finds that itD has not shown a likelihood of irreparable harm absent 12 preliminary relief, it need not conduct an analysis of the remaining Winter factors. The Court 13 concludes that itD has not met its high burden to show that a TRO should issue. 14 C. Service of Process and Personal Jurisdiction 15 Raju Kotha and Priya Kotha object on the grounds that (1) service of process was 16 improper, and (2) the Court does not have personal jurisdiction over them. ECF No. 28 (“Kotha 17 Opp.”) at 2. As stated on the record at the hearing, the Court notes that it authorized email service 18 of the TRO application and observes that there are indicia of personal jurisdiction as to Raju Kotha 19 and Priya Kotha. Because the Court is not issuing a temporary restraining order, the Court will 20 defer any ruling on these issues until Defendants’ Motion to Dismiss is heard.
21 22 23 24 25 26 27 IV. ORDER itD has submitted significant evidence of serious wrongdoing by each of the Defendants. 2 Denial of temporary relief may be a result of the aggressive and thorough action of itD and its 3 Counsel to staunch the flow of its proprietary and trade secret information into the hands of 4 wrongdoers. It is only because itD failed to show ongoing harm that this TRO is denied. 5 For the foregoing reasons, Plaintiff's Application for a Temporary Restraining Order is 6 DENIED WITHOUT PREJUDICE to refile a motion for preliminary injunction. 4 8 Dated: September 19, 2025
10 TH LABSON FREEMAN United States District Judge
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