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Marco, Inc., A Minnesota Corporation v. Advanced Systems

November 22, 2011

MARCO, INC., A MINNESOTA CORPORATION, PLAINTIFF,
v.
ADVANCED SYSTEMS, INC., AN IOWA CORPORATION; CHRISTINE M. BERGESON; WAYNE C. EWING; JIM E. LIEBSCH; MICHAEL R. LINTON; LORIN PITTS; PAUL W. ROBSON, JR.; AND KENT REILLY, DEFENDANTS.



The opinion of the court was delivered by: Karen E. Schreier Chief Judge

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT ADVANCED SYSTEMS, INC.'S MOTION TO CLARIFY

Plaintiff, Marco, Inc., brought suit against defendants, including Advanced Systems, Inc. (ASI), asserting various causes of action related to alleged breaches of non-disclosure and employment agreements. On July 13, 2011, the court granted Marco's amended motion for a preliminary injunction. Docket 68. ASI moves to clarify the preliminary injunction. Docket 71. Marco resists. ASI's motion is granted in part and denied in part.

BACKGROUND

The pertinent facts to this order are as follows:

In 2010, Marco and ASI entered a bidding competition to purchase Best Business Products, a South Dakota company that sold and serviced office equipment. On September 17, 2010, ASI and Best entered into a "Confidential Disclosure Agreement" (September NDA). On December 7, 2010, ASI and Best entered into another "Non-Disclosure and Confidentiality Agreement," which ASI drafted (December NDA). After entering into the December NDA, ASI received additional confidential and proprietary information about Best, which was contained in Best's "E-Automate" program, a software program used by companies to manage their inventory, finances, service histories, and customer service records. ASI received a CD containing a complete, unredacted copy of Best's entire customer database and other confidential and proprietary information. Marco later won the bidding competition and succeeded to all of Best's contractual rights.

After ASI lost the bidding competition, it decided to independently enter the South Dakota market. ASI hired a number of former Best employees and began cold-calling businesses, including Best customers, in South Dakota. Marco then filed suit against ASI. The court entered a preliminary injunction which prohibits ASI and any of its employees from using, possessing, or disclosing any of Marco/Best's confidential information and from contacting, soliciting, inducing, or attempting to induce, any Best customer to do business with ASI. Docket 71 at 27.

DISCUSSION

I. Definition of Customers

ASI requests the court to clarify "who is considered a customer of Best Business Products (BBP)?" Docket 71 at 2. Marco argues that ASI's motion violates local civil rule 7.1(B), which requires that the movant set forth "the specific points of law with the authorities in support thereof on which the movant relies, including the Federal Rule of Civil Procedure on the basis of which the motion is made," because ASI fails to specify any law, authority, or rule in support of its motion. Marco asserts that ASI moves under Federal Rule of Civil Procedure 65, which allows a party to move for reconsideration of a court order, and that the Rule 65 motion is improper because the preliminary injunction is clear.

The court will not construe ASI's motion as a Rule 65 motion. The parties legitimately dispute the preliminary injunction's terms and attempted to resolve the issues before seeking the court's clarification. See e.g.,Docket 79-2. A motion to clarify an order when a legitimate dispute arises is a proper motion. See, e.g., Glen v. Fairway Indep. Mortg. Corp., No. 4:08-CV-730-RWS, 2010 WL 891621, at *1 (E.D. Mo. Mar. 8, 2010) (granting a motion to clarify the court's order when the parties disputed what the court ordered); Henry v. Premcor Refining Group, No. 3:07-CV-00518-WRW, 2010 WL 129669, at *1 (E.D. Ark. Jan. 11, 2010) (same).

ASI asserts that a customer "is a person or business who had a product under contract with BBP or an ongoing contract service agreement as of December 7, 2010." Docket 71 at 2. Marco contends that a customer is any one of the 8,128 businesses, which were included on the e-automate database disc. Docket 78 at 1. The preliminary injunction states that Advanced Systems and any of its employees and/or agents are prohibited from contacting, soliciting, inducing, or attempting to induce any customer of Best Business Products (to the extent that such customer was a customer of Best Business Products as of December 7, 2010) to do business with Advanced Systems, Inc. or cease doing business with Marco/Best until a final decision has been issued in this case or until December 7, 2012, see Docket 56-4 at ¶ 9 (stating that the December 7, 2010, NDA is effective for two years), whichever occurs first. For purposes of clarification, ASI may continue its cold-call operation, but known Best customers should not be contacted and when a potential customer discloses that it has either a product under contract with Best or a service contract with Best, all contact by ASI with that customer should immediately cease.

Docket 68 at 27.

The preliminary injunction enforced sections 2(e) and 2(f) of ...


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