MichJeff, LLC v. FCX Global, Inc

CourtDistrict Court, E.D. North Carolina
DecidedJuly 2, 2024
Docket7:24-cv-00449
StatusUnknown

This text of MichJeff, LLC v. FCX Global, Inc (MichJeff, LLC v. FCX Global, Inc) is published on Counsel Stack Legal Research, covering District Court, E.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MichJeff, LLC v. FCX Global, Inc, (E.D.N.C. 2024).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA SOUTHERN DIVISION No. 7:24-CV-449-D

MICHIEFF, LLC, et al., ) Plaintiffs, □ v. ORDER FCX GLOBAL, INC., et al., Defendants.

On May 29, 2024, MichJeff, LLC (“MichJeff’) and Jeffrey Allan Mueller (“Mueller”) (collectively, “plaintiffs”) filed a verified complaint and application for temporary restraining order (“TRO”) and a preliminary injunction against FCX Global, Inc. (“FCX”), Jarett Reinhartz (“Reinhartz”) (collectively, “FCX defendants”), Ten Toes Down, Inc. (“TTD”), Micah Gabriel Katz (“Katz”), and Nate Jones (“Jones”) (collectively, “TTD defendants”) (all collectively “defendants”) in New Hanover County Superior Court [D.E. 1-1]. Plaintiffs assert claims for (1) breach of contract, (2) misappropriation of trade secrets in violation of the North Carolina Trade Secrets Protection Act (“TSPA”), N.C. Gen. Stat. §§ 66-152, et seq., (3) unjust enrichment, (4) and deceptive trade practices in violation of the North Carolina Unfair and Deceptive Trade Practices Act (“UDTPA”), N.C. Gen. Stat. §§ 75-1, et seq., (5) constructive fraud, and (6) civil conspiracy. See [D.E. 1-1] ff 78-118. On May 30, 2024, defendants removed the action to this court [D.E. 1]. On June 7, 2024, plaintiffs moved for a TRO, expedited discovery, and a preliminary "injunction [D.E. 16] and filed a memorandum in support [D.E. 16-1]. On June 21, 2024, defendants responded in opposition [D.E. 20, 25]. On June 28, 2024, plaintiffs replied [D.E. 28]. □

As explained below, the court denies plaintiffs’ motion for a TRO, expedited discovery, and a preliminary injunction. . In 1959, Mueller’s father founded Mueller Sports Medicine (“MSM”). See Compl. [D.E. 1-1] 13. MSM manufactures and distributes sports medicine products. See id. Mueller began working part-time for MSM when he was 11 years old, began working full-time for MSM when he was 17 years old, and has worked “at every level of MSM” for approximately 50 years. Id. at q 14. While working at MSM, Mueller developed “extensive and deep industry relationships” with “manufacturers, distributors, wholesalers, raw material processors, retailers, sales representatives, medical facilities, professional sports teams, athletic trainers, and sports training organizations” (Mueller’s “relationship capital”). Id, at § 15. Through his work at MSM, Mueller also “gained and developed extensive sports medicine industry knowledge, expertise, and skills in the areas of product development, manufacturing, distribution, marketing, pricing, sales, and fulfillment” (Mueller’s “industry knowledge”). Id. at { 20; see id. at § 21. In 2016, Mueller semi- retired from MSM and created MichJeff to provide consulting services in the sports medicine industry. See id, at { 26. FCX sells and distributes “Insite,” a shoe insole product. See id. at { 30. Reinhartz is President or Managing Director of FCX. See id. at Reinhartz has a background in podiatry and pedorthics. See id. at { 28. On June 22, 2016, Mueller met Reinhartz at a trade exposition and learned about the Insite insole. See id. at fj 34-37. In 2017, FCX hired Mueller and MichJeff “to help FCX develop and implement processes and strategies to refine Insite insoles as a product, grow its sales, increase its profitability, and provide similar consulting.” Id. at ¢ 43; see id. at □□ 38-41, 43. Plaintiffs entered an independent contractor agreement and a confidential disclosure

agreement (“CDA”) with FCX. See id. at J] 43-46. While working with FCX, plaintiffs “conveyed Industry Knowledge and Relationship Capital to [FCX] through [Reinhartz].” Id. at □ 51. In 2020, plaintiffs were introduced to Katz, Jones, and TTD. See id. at 952. At that time, TTD was “a current or soon-to-be licensee of FCX’s Insite” to create a separate product, Move Insoles. Id. at 1 53. In 2022, plaintiffs and TTD “entered into an agreement” in which plaintiffs agreed to “provide a similar, but broader suite of services to TTD” than what plaintiffs provided to FCX. Id. □□ 955. TTD agreed “not to circumvent” plaintiffs “by communicating or conducting business with” plaintiffs’ clients. Id. at 57. While working with TTD, plaintiffs conveyed their industry knowledge and relationship capital to TTD through Katz and Jones. See id. at fj 62-65. On March 20, 2024, FCX issued a notice of termination to plaintiffs with a termination date of April 19, 2024. See id. at | 49. On April 19, 2024, FCX stopped paying plaintiffs. See id. In April 2024, Katz told plaintiffs that TTD would not renew its contract with plaintiffs and “intended to halt all compensation.” Id. at § 61. Plaintiffs allege that FCX and TTD have continued to use and benefit from plaintiffs’ industry knowledge and relationship capital without paying plaintiffs. See id. at 66—77. The court has considered plaintiffs’ motion for a TRO under the governing standard. See, e.g., Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008); Centro Tepeyac v. Montgomery Cnty., 722 F.3d 184, 188 (4th Cir. 2013) (en banc); Real Truth About Obama, Inc. v. FEC, 575. F.3d 342, 346 (4th Cir. 2009), vacated on other grounds, 559 U.S. 1089 (2010), reissued in relevant part, 607 F.3d 355 (4th Cir. 2010) (per curiam). A motion for a TRO follows the same standard applicable to a motion for a preliminary injunction. See U.S. Dep’t of Lab. v. Wolf Run Mining

3 .

Co., 452 F.3d 275, 281 n.1 (4th Cir. 2006). MichJeff and Mueller must establish that (1) they are likely to succeed on the merits, (2) they are likely to suffer irreparable harm absent preliminary relief, (3) the balance of equities tips in their favor, and (4) an injunction is in the public interest. See Winter, 555 U.S. at 20. A TRO “is an extraordinary remedy never awarded as of right.” Id. at 24; see Di Biase v. SPX Corp., 872 F.3d 224, 230 (4th Cir. 2017); Shibumi Shade, Inc. v. Beach Shade LLC, No. 5:21-CV-256, 2022 WL 390839, at *3 (E.D.N.C. Feb, 8, 2022) (unpublished) appeal dismissed, No. 2023-1051, 2022 WL 17661183 (Fed. Cir. Dec. 14, 2022) (unpublished); Mitchell v. N.C. Div. of Emp. Sec., 76 F. Supp. 3d 620, 628 (E.D.N.C. 2014), aff'd, 599 F. App’x

517 (4th Cir. 2015) (per curiam) (unpublished). .

Plaintiffs seek relief under North Carolina law. Accordingly, the court must predict how the Supreme Court of North Carolina would rule on any disputed state-law issue. See Twin City Fire Ins. Co. v. Ben Amold-Sunbelt Beverage Co. of S.C., 433 F.3d 365, 369 (4th Cir. 2005). In doing so, the court must look first to opinions of the Supreme Court of North Carolina. See Stahle v. CTS Corp., 817 F.3d 96, 100 (4th Cir. 2016). If there are no governing opinions from the Supreme Court of North Carolina, this court “may consider lower court opinions[,] . . . treatises, and the practices of other states.” Twin City Fire Ins. Co., 433 F.3d at 369 (quotation omitted).! In doing so, a federal court “should not create or expand [a] [s]tate’s public policy.” Time Warner Ent.-Advance/Newhouse P’ship v. Carteret-Craven Elec. Membership Corp., 506 F.3d 304, 314 (4th Cir. 2007) (cleaned up); Wade v. Danek Med., Inc., 182 F.3d 281, 286 (4th Cir. 1999). Moreover, in predicting how the highest court of a state would address an issue, this court must

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MichJeff, LLC v. FCX Global, Inc, Counsel Stack Legal Research, https://law.counselstack.com/opinion/michjeff-llc-v-fcx-global-inc-nced-2024.