Pre-Paid Legal Services, Inc. v. Cahill

924 F. Supp. 2d 1281, 2013 WL 551335, 2013 U.S. Dist. LEXIS 18562
CourtDistrict Court, E.D. Oklahoma
DecidedFebruary 12, 2013
DocketCase No. 12-CV-346-JHP
StatusPublished
Cited by5 cases

This text of 924 F. Supp. 2d 1281 (Pre-Paid Legal Services, Inc. v. Cahill) is published on Counsel Stack Legal Research, covering District Court, E.D. Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pre-Paid Legal Services, Inc. v. Cahill, 924 F. Supp. 2d 1281, 2013 WL 551335, 2013 U.S. Dist. LEXIS 18562 (E.D. Okla. 2013).

Opinion

ORDER AFFIRMING AND ADOPTING THE REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

JAMES H. PAYNE, District Judge.

On January 22, 2013, United States Magistrate Judge Steven P. Shreder entered his Report and Recommendation in regard to Plaintiffs Motion for Preliminary Injunction [Doc. No. 11]; Plaintiffs Motion to Dissolve or Modify Temporary Restraining Order [Doc. No. 4]; the Motion to Extend Temporary Restraining Order [Doc. No. 8]; and the Motion for Expedited Ruling on Plaintiffs Motion to Extend Temporary Restraining Order and for Expedited Discovery [Doc. No. 10]. The Magistrate Judge recommended that Plaintiffs Motion for Preliminary Injunction [Doc. No. 11] be granted in part and denied in part. The Magistrate Judge further recommended that: (i) the Motion to Dissolve or Modify Temporary Restraining Order [Doc. No. 4], the Motion to Extend Temporary Restraining Order [Doc. No. 8], and the Motion for Expedited Ruling On Plaintiffs Motion to Extend Temporary Restraining Order and for Expedited Discovery [Doc. No. 10] should be denied as moot, as the temporary restraining order issued by the state court expired by its own terms prior to the hearing on the motion for preliminary in[1284]*1284junction; (ii) the Motion for Expedited Discovery [Doc. No. 9] should be granted to the extent the parties announced they are conducting limited discovery by agreement, but otherwise denied; and, (iii) the Expedited Motion to Stay Pending Arbitration [Doc. No. 13] should be granted, as the parties agree the case should be submitted to arbitration. The parties have filed no objections to the Magistrate Judge’s Report and Recommendation within the time prescribed by law. 28 U.S.C. § 636(b)(1), Fed.R.Civ.P. 72(a).

This Court finds that the Report and Recommendation of the Magistrate Judge is supported by the record. Therefore, upon full consideration of the entire record and the issues presented herein, this Court finds and orders that the Report and Recommendation entered by the United States Magistrate Judge on January 22, 2013, be AFFIRMED and ADOPTED by this Court as its Findings and Order.

IT IS SO ORDERED.

REPORT AND RECOMMENDATION

STEVEN P. SHREDER, United States Magistrate Judge.

Pre-Paid Legal Services, Inc. (“PPLSI”) initiated suit against Defendant Todd Ca-hill in the District Court of Pontotoc County based on claims of breach of contract, misappropriation of trade secrets, and tortious interference with contractual or business relations. See, Docket No. 2, Ex. A-1. While the case was still pending in Pontotoc County, PPLSI asked for and was granted a Temporary Restraining Order (TRO) prohibiting Defendant from contacting PPLSI associates to solicit or encourage them to join any new company or leave PPLSI. See, Docket No. 8, Ex. 1. The matter was removed to this Court on August 14, 2012. See, Docket No. 2. PPLSI then filed Plaintiff Pre-Paid Legal Services, Ine.’s Motion for Preliminary Injunction. See, Docket No. 11. The Court referred the Motion, inter alia, to the undersigned Magistrate Judge for á hearing pursuant to 28 U.S.C. § 636(b)(1)(B), and a report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(C). See, Docket No. 19.

I. Facts

Pre-Paid Legal Services, Inc. (“PPLSI”), now known as LegalShield, sells legal service plans which gives members access to legal services. When a member purchases a plan, they are given a toll free number to call to receive legal advice from certain law firms contracted with PPLSI. See, Docket No. 25, p. 8. Through the plan, members pay a monthly fee and are offered legal representation for a variety of subjects at either no additional cost or a discounted price. Id. PPLSI has executive offices in Dallas, Texas, operations offices in Ada, Oklahoma, and employs approximately 650 individuals, not including sales associates. See, Docket No. 25, p. 10.

PPLSI operates under a network marketing sales model, which utilizes the services of sales associates, each of whom are independent contractors of PPLSI, to sell memberships and recruit new sales associates. See, Docket No. 25, p. 10-11. Those independent contractors are solely responsible for building their own “organization” or “team” by recruiting other sales associates, and those recruited (along with anyone brought into the organization by the recruit) then become part of the recruiter’s “downline.” See, Docket No. 25, p. 11-12. Associates are compensated for each sale made within the associate’s downline. See, Docket No. 25, p. 11. Downline information is made available to PPLSI sales associates through their “back office.” The back office is a username and password protected site which contains information related to an associate’s downline, including names, phone numbers, addresses, pro[1285]*1285ductivity levels, and activity levels, which “benefit[s] them in growing and maturing their team” and allows associates to identify the most successful associates within their organization. See, Docket No. 25, p. 14, p. 18.

All individuals who wish to become PPLSI sales associates must submit a signed agreement entitled “Associate Agreement.” See, Docket No. 25, p. 20. A copy of PPLSI’s Policies and Procedures is attached to each agreement, and the agreement requires that prospective associates agree to abide by the terms delineated in the Policies and Procedures. See, Plaintiffs Exhibit 1. The Policies and Procedures identify downline information as “confidential, propriety information” that may not be used “for any purpose other than promoting PPLSI during or after his or her relationship with PPLSI.” See, Plaintiffs Exhibit 1, Policies and Procedures, ¶ 8. Further, the agreement states that “[a]n Associate may not proselytize, recruit or solicit in any manner any PPLSI Associate, including without limitation his or her first line, into any other company or organization during the term of the Associate Agreement and for 2 years after the date of any termination hereof.” See, Plaintiffs Exhibit 1, Policies and Procedures, ¶ 20. The word “solicit” is not defined in the Agreement.

PPLSI has a department of employees known collectively as “Associate Services,” which focuses its efforts on resolving issues related to PPLSI’s sales associates. Additionally, this department provides an avenue of communication between PPLSI’s corporate offices and its sales associates. As such, associates are encouraged to call Associate Services when they have concerns regarding associates who are attempting to recruit PPLSI associates into other opportunities. When Associate Services receives an associate complaint of this nature, an investigation is initiated and the offending associate’s access to his back office is terminated. See, Docket No. 25, p. 10, p. 42-44.

Defendant Todd Cahill began working as a PPLSI sales associate in October 2004. Defendant quickly emerged as a top PPLSI sales associate and built a sizable downline of approximately 25,000 individuals in the Southern California area.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
924 F. Supp. 2d 1281, 2013 WL 551335, 2013 U.S. Dist. LEXIS 18562, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pre-paid-legal-services-inc-v-cahill-oked-2013.