Nutritional Therapy Association, Inc. v. Rithmic Wellness, LLC

CourtDistrict Court, D. Colorado
DecidedMarch 12, 2024
Docket1:24-cv-00478
StatusUnknown

This text of Nutritional Therapy Association, Inc. v. Rithmic Wellness, LLC (Nutritional Therapy Association, Inc. v. Rithmic Wellness, LLC) is published on Counsel Stack Legal Research, covering District Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nutritional Therapy Association, Inc. v. Rithmic Wellness, LLC, (D. Colo. 2024).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Judge Charlotte N. Sweeney

Civil Action No. 1:24-cv-00478-CNS-SBP

NUTRITIONAL THERAPY ASSOCIATION, Inc., a Washington corporation,

Plaintiff,

v.

RITHMIC WELLNESS, LLC, a Colorado limited liability company d/b/a ROBO WELLNESS; MICHAEL REPSHER, an individual; and DEBORAH ELVIN, an individual,

Defendants.

ORDER

This matter comes before the Court on Plaintiff’s Motion for Temporary Restraining Order or, in the Alternative, Temporary Injunction. ECF No. 4. For the reasons explained below, the motion is DENIED. I. BACKGROUND Plaintiff Nutritional Therapy Association, Inc. (Nutritional Therapy or NTA) filed its lawsuit against Defendant Rithmic Wellness LLC (Robo Wellness) and its owners, Defendants Michael Repsher and Deborah Elvin. ECF No. 1 (Redacted Compl.); ECF No. 3 (Unredacted Compl.). Nutritional Therapy alleges five claims for relief: (1) breach of contract; (2) Colorado Deceptive Trade Practices Act1; (3) violation of the Trade

1 Plaintiff asserts its Colorado Deceptive Trade Practice Act (Count Two) against all Defendants. The other four counts are asserted against Robo Wellness only. Secrets Act, 18 U.S.C. § 1836, et seq.; (4) violation of the Colorado Uniform Trade Secrets Act C.R.S. § 7-74-101, et seq.; and (5) unjust enrichment. ECF No. 1, ¶¶ 92–145. Nutritional Therapy, founded in 1997, is a family-owned membership organization and school providing foundational holistic nutrition education. ECF No. 4 at 3. Nutritional Therapy’s graduates apply their training to launch private practices; work alongside doctors, naturopaths, chiropractors, holistic practitioners; and develop corporate wellness programs, among others. Id. In 2001, Nutritional Therapy created the Nutritional Assessment Questionnaire (NAQ). Id. at 3–4. Nutritional Therapy eventually packaged the NAQ with additional tools

and resources within a broader proprietary program named “Nutri-Q.” Id. at 4. By 2008, after teaching students in a classroom settings for years, Nutritional Therapy migrated Nutri-Q to a web-based platform, providing access to practitioners on the go. Id. For an annual subscription fee, customers could access the Nutri-Q program through Nutritional Therapy’s website. Id. In 2018, Nutritional Therapy wanted to improve the functionality of Nutri-Q, and to do so, it needed to change its outdated website-hosting platform. Id. at 5. To that end, Nutritional Therapy began talks with Michael Repsher and Deborah Elvin, owners and operators of Robo Wellness. Id. Repsher and Elvin are software developers. Id. Elvin also is a graduate of Nutritional Therapy’s practitioner program. Id.

In December 2018, Nutritional Therapy and Robo Wellness entered into a Software Development, License and Hosting Agreement (the License Agreement). ECF No. 4 at 5; ECF No. 5-1 (License Agreement dated December 7, 2018). According to Nutritional Therapy, Nutritional Therapy hired Robo Wellness to host the Nutri-Q website and improve the capabilities of the cloud-based Nutri-Q platform using Robo Wellness’s software-as-a-service (SaaS) platform to build specific improvements to the Nutri-Q program (known as Customizations). ECF No. 4 at 5. These services were collectively referred to as “Nutri-Q by NTA powered by Robo Wellness.” Id.2 In exchange for hosting Nutri-Q and building Customizations for the program, the parties agreed that Robo Wellness would receive one-half of all subscription revenue for the Nutri-Q service. Id. at 7. The parties agree that the License Agreement contained an automatic one-year

renewal unless either party provided written notice of termination at least three months in advance of the last day of the term. Id. After termination, the parties further agreed that Robo Wellness would provide an additional 90 days of hosting services, deliver the Nutritional Therapy Customizations in a mutually agreed upon format, and assist Nutritional Therapy with reasonable requests it may have during the 90-day transition period. Id. The parties further agreed that each party would retain its intellectual-property rights, and all licenses would terminate. Id. Unhappy with the terms of the License Agreement, Nutritional Therapy attempted to renegotiate the terms in April 2022. Id. at 8. It also attempted to buy Robo Wellness for

2 Robo Wellness characterizes the agreement to host Nutri-Q as a “Combined Platform.” ECF No. 30 at 5. In fact, it refers to the “Combined Platform” over 40 times in its response. The License Agreement generally supports this characterization. See License Agreement at 1 (“NTA is interested in collaborating with Robo Wellness to license the Robo Wellness SaaS Platform and the Robo Wellness IP Rights, with certain modifications to integrate the NTA Software into the Robo Wellness SaaS Platform, in order to market a software as a service platform (the ‘Nutri-Q by NTC powered by Robo Wellness’ or ‘Service’) to NTA graduates and other nutritional therapy practitioners (‘Users’).”). Nutritional Therapy does not address this characterization in its reply. $100,000 and hire Repsher and Elvin as employees. Id.; ECF No. 30 at 6. Robo Wellness rejected Nutritional Therapy’s proposals. ECF No. 4 at 8. Nutritional Therapy thus notified Robo Wellness that it planned to terminate the License Agreement on December 31, 2023. Id. at 9. According to the parties, the transition period would extend through March 7, 2024. Id. Nutritional Therapy filed its lawsuit on February 20, 2024, a few weeks before the transition period ended. Nutritional Therapy alleges that Robo Wellness failed to assist Nutritional Therapy in its transition to a new website provider. Id. at 9. It further alleges that Robo Wellness used Nutritional Therapy’s proprietary algorithm, forms, and

confidential information to build an imitation program that Robo Wellness called “Whole Practice.” Id. Nutritional Therapy succinctly describes its core allegation as follows: The central premise of Nutritional Therapy’s complaint is that Robo Wellness has used Nutritional Therapy’s confidential, proprietary information to build a competing website, “Whole Practice,” and is improperly competing with Nutritional Therapy by not providing Nutritional Therapy with the data needed to continue the Nutri-Q site and by making misleading statements to Nutri-Q users to induce them to move to Whole Practice.

ECF No. 34 at 3. Robo Wellness denies these allegations for several reasons. In addition to denying that it used any trade secrets of Nutritional Therapy, Robo Wellness explains that the License Agreement is not a non-compete and is expressly “non-exclusive,” ECF No. 30 at 7; License Agreement, ¶ 10 (“[T]his Agreement is non-exclusive.”), so it had every right to launch Whole Practice. In the instant motion, Nutritional Therapy seeks a temporary restraining order (TRO) against Robo Wellness. Although its motion is somewhat vague in its requests, Nutritional Therapy filed a proposed order (as it is required to do) asking the Court to order the following relief: (1) Defendants are hereby ordered to immediately cease all solicitation of customers for the Whole Practice program or any other similar program. In accordance with this order, Defendants shall remove, and may not post or repost, any banner, announcement, statement, or other notice claiming or suggesting that the Nutri-Q program and website are terminating, closing, or otherwise ending.

(2) Defendants are hereby ordered to immediately stop accepting any new subscriptions or purchases of the Whole Practice program or any other similar program.

(3) Defendants shall immediately cease operation of the Whole Practice program.

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Nutritional Therapy Association, Inc. v. Rithmic Wellness, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nutritional-therapy-association-inc-v-rithmic-wellness-llc-cod-2024.