Opinion
Civil Action No. 4:19-cv-02760
2019-11-25
Justin C. PFEIFFER, Plaintiff, v. AJAMIE PLLC d/b/a Ajamie LLP, Thomas R. Ajamie, Dona Szak, John Withers Clay, V, Defendants.
Justin Carl Pfeiffer, Richmond, TX, pro se. Charles Henry Peckham, Peckham Martin PLLC, Houston, TX, for Defendants.
Justin Carl Pfeiffer, Richmond, TX, pro se.
Charles Henry Peckham, Peckham Martin PLLC, Houston, TX, for Defendants.
MEMORANDUM AND ORDER GRANTING PRELIMINARY INJUNCTION
Charles Eskridge, United States District Judge
Before the Court is Defendant Ajamie LLP's Motion for Preliminary Injunction and to Place Document Under Seal, filed on an emergency basis and under seal. Dkt 51.
The Court has considered the motion and other submissions, the evidence and testimony introduced at a hearing on the motion, and applicable law. Having done so, the Court largely grants the motion and orders relief as follows. 1. Background
This case concerns alleged retaliation for reporting alleged international corruption. Plaintiff Justin Pfeiffer asserts that Ajamie LLP operates a foreign bribery enterprise on behalf of itself [Redacted] Dkt 7 at 5–11. Pfeiffer also asserts that Ajamie LLP terminated his employment as retaliation for reporting this alleged enterprise. Id at 14.
On July 25, 2019, Pfeiffer commenced this lawsuit against Ajamie LLP and others, asserting violations of the Racketeer Influenced and Corrupt Organizations Act, violations of the Title VII Civil Rights Act of 1964, dismissal in violation of public policy, tortious interference with prospective relations, breach of contract, detrimental reliance, quantum meruit, and intentional infliction of emotional distress. Dkt 1. Pfeiffer filed an amended complaint on August 29, 2019. Dkt 7. The Court denied a motion to dismiss filed by Ajamie LLP alleging pleading defects. Dkt 46. Pfeiffer sought and obtained leave to file a second amended complaint. Dkt 46. Pfeiffer filed this on November 22, 2019. Dkt 67.
By its nature, this case involves client-confidential documents and information. And so at the outset, the Court established a protective order directing the parties to file under seal anything containing attorney-client or attorney work product. Dkt 4. Ajamie LLP requested that order because the original complaint allegedly contained privileged and confidential client information and attorney work product. Dkt 3 at 1. Pfeiffer did not oppose the relief sought. Id.
Pfeiffer asserts that his claims in the instant case are related to [Redacted] Dkt 8 at 1. On October 28, 2019 Pfeiffer filed a Notice and Statement of a Related Case [Redacted] Dkt 49. According to Pfeiffer, [Redacted] Dkt 49 at 3.
Over the course of this lawsuit, including through the above notice, Ajamie LLP learned that Pfeiffer [Redacted] Ajamie LLP has not yet filed an answer in this case. But based on the foregoing, on November 5, 2019, Ajamie LLP filed a standalone counterclaim against Pfeiffer alleging breach of fiduciary duty and breach of contract stemming from Pfeiffer's unauthorized disclosures of [Redacted] firm information. Dkt 50.
Ajamie LLP also filed the motion under review here, seeking a preliminary injunction to prevent Pfeiffer from disclosing confidential [Redacted] and documents. Dkt 51. Ajamie LLP alleges that Pfeiffer has already revealed some or all of these documents to others, and that he now threatens to [Redacted] Dkt. 51-2 ¶¶ 14–15.
The Court granted Ajamie LLP temporary relief and ordered expedited briefing. Dkt 53. Pfeiffer responded, and offered ten exhibits. Dkt 57. Pfeiffer appropriately filed this response under seal. But on the CM/ECF system with this filing, Pfeiffer listed detailed descriptions of the exhibits and attachments. The Court found that these descriptions disclosed privileged and confidential information of Ajamie LLP and ordered the Clerk to revise the descriptions. Dkt 63.
The Court held an evidentiary hearing on November 13, 2019. Dkt 62. Ajamie LLP called as witnesses Pfeiffer and Defendant Thomas Ajamie. Ajamie LLP additionally offered eleven exhibits, one of which was additional to documents attached to the parties' filings. Dkt 66. Pfeiffer represented himself and made his own proffer of evidence.
As relevant to this motion, the Court makes the following findings of fact based on the testimony at hearing and the exhibits submitted. Matters noted as testimony of a witness constitute an admission or are otherwise sufficiently established that the Court makes it a finding of fact.
Plaintiff Justin Pfeiffer is a practicing attorney. Ajamie LLP hired Pfeiffer as an associate on November 4, 2013. Dkt. 51-2 ¶ 6. Ajamie LLP terminated Pfeiffer's employment on August 4, 2017. Id.
Pfeiffer signed a Confidentiality Policy on his first day of employment at Ajamie LLP. Dkt 57 at 19. Pfeiffer testified that Ajamie LLP provided confidential information to him after he became an associate at the firm.
Ajamie LLP represents [Redacted] Dkt. 51-2 ¶ 7. Ajamie testified that the firm assigned Pfeiffer to work on a matter on behalf of [Redacted] Pfeiffer performed legal services [Redacted] Id at ¶ 9. [Redacted] Dkt 57 at 3–4.
Pfeiffer testified that while employed at Ajamie LLP, he would forward his work emails and [Redacted] documents to his personal email address. Pfeiffer testified that representatives of Ajamie LLP told him on termination of his employment to return all [Redacted] documents. On August 10, 2017, Pfeiffer agreed to return all such documents. Dkt. 66-4.
Pfeiffer testified that alter his termination, he [Redacted] Pfeiffer testified [Redacted]
On October 21, 2019, Pfeiffer provided a copy of these documents to Ajamie LLP's counsel. Dkt. 51-3 ¶ 10. Ajamie recognizes the documents [Redacted] Dkt. 51-2 ¶ 11. These documents include attorney notes, [Redacted] Id. Ajamie also asserts a belief that Pfeiffer possesses confidential information and documents [Redacted] Id at ¶ 19.
Ajamie LLP intended to keep these documents confidential and not to disclose them to unauthorized third parties. Id at ¶ 12. Pfeiffer did not have authorization to take the [Redacted] documents or firm documents from Ajamie LLP, to keep those documents after his employment ended, or to disclose the documents or the information in them to third parties. Id at ¶ 13.
Pfeiffer testified these documents are saved on a thumb drive. He testified that he has made two copies of the thumb drive and given them to two other individuals for safekeeping. Pfeiffer testified these individuals are within his control to request the thumb drives back. Pfeiffer testified that he has made some copies of the documents, but only those [Redacted] Pfeiffer testified that the documents are not saved on the cloud or on any public server.
Pfeiffer testified that he has disclosed at least some [Redacted] of Ajamie LLP to the following persons and entities:
• [Redacted]
• [Redacted]
• [Redacted]
• [Redacted]
• [Redacted]
• [Redacted]
• [Redacted]
• [Redacted]
• [Redacted]
• [Redacted]
• [Redacted]
• [Redacted]
Pfeiffer testified that he told [Redacted] that he had documents that may be relevant to that matter.
Pfeiffer testified that he has provided at least [Redacted] of Ajamie LLP to the following persons and entities:
• [Redacted]
• [Redacted]
• [Redacted]
• [Redacted]
• [Redacted]
Pfeiffer testified that no government agency has subpoenaed or otherwise requested him to provide documents either in the United States [Redacted] The Court finds that Pfeiffer disclosed the documents voluntarily and of his own choice, and not pursuant to any compulsory process.
On the present record, it is unknown what interest any government entity actually has in these documents, if any, or whether they pertain to any active investigation. No government entity has made any filing in this case or taken any position before this Court whatsoever.
2. Legal standard
A preliminary injunction is an "extraordinary remedy." Byrum v. Landreth , 566 F.3d 442, 445 (5th Cir. 2009). A federal court may grant a preliminary injunction only if the movant shows (1) a substantial likelihood of success on the merits; (2) a substantial threat of irreparable harm; (3) the balance of hardships in the applicant's favor; and (4) no disservice to the public interest. Daniels Health Sciences, LLC v. Vascular Health Sciences, LLC , 710 F.3d 579, 582 (5th Cir. 2013).
3. Analysis
a. Substantial likelihood of success on the merits
A plaintiff "is not required to prove [his] entitlement to summary judgment" to show a likelihood of success on the merits. Byrum , 566 F.3d at 466. But the "plaintiff must present a prima facie case." Daniels Health , 710 F.3d at 582.
i. Breach of contract
Under Texas law, "[t]he essential elements of a breach of contract action are: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach." Smith International, Inc. v. Egle Group, LLC , 490 F.3d 380, 387 (5th Cir. 2007), quoting Valero Marketing & Supply Co. v. Kalama International, LLC , 51 S.W.3d 345, 351 (Tex. App. 2001).
The testimony and evidence presented by Ajamie LLP establishes a prima facie case of breach of contract and demonstrates a substantial likelihood of success on the merits.
Pfeiffer signed Ajamie LLP's Confidentiality Policy on his first day of employment with the firm. Dkt. 66-1. The Confidentiality Policy states in relevant part that:
• "[M]atters related to the firm and its practice are not to be discussed in the presence of any unauthorized persons";
• "The information received in the office and discussed in the office is the private property of the client and of the firm";
• "Aside from the embarrassment that would result from any unauthorized disclosure, there is the likelihood of creating legal liability and prejudice to the client and to the firm"; and
• "In addition to client matters, information pertaining to the business of the firm and its employees must be treated with the utmost sensitivity and confidentiality."
Pfeiffer made his signature just below this acknowledgement: "I have read and agree to comply with the rules and conditions in this Policy as it relates to confidentiality and the firm. I understand a violation of this Policy may result in disciplinary action, including possible termination, and/or legal action." Id. Testimony from Ajamie established that Ajamie LLP takes its obligations of client confidence seriously. Likewise, his testimony made clear that the firm actively requires its employees to keep those confidences sacrosanct.
Pfeiffer understood that he was under obligation to return confidential information to Ajamie LLP. Shortly after his termination, he wrote in an email to another Ajamie LLP lawyer charged to gather up any such information that he would "comply with the request to return confidential information in [his] possession per the terms of the letter in a reasonable period of time." Dkt. 66-4.
The Court has detailed above the unauthorized disclosures that Pfeiffer has made to date of confidential information and documents of Ajamie LLP and [Redacted] Ajamie LLP has thus made a prima facie showing that Pfeiffer breached his contractual duties under the Confidentiality Policy.
Pfeiffer asserts various reasons that the Confidentiality Policy is not a valid contract. None persuade the Court. On this record, the Confidentiality Policy is a valid contract that binds Pfeiffer.
Pfeiffer first asserts that the Confidentiality Policy is unsupported by consideration. Dkt 57 at 19. The Court finds that it is. Under Texas law, at-will employment doesn't preclude formation of other contracts between employer and employee so long as neither party relies on continued employment as consideration for the contract. J.M. Davidson, Inc v. Webster , 128 S.W.3d 223, 228 (Tex. 2003). An employer's promise to provide confidential information can supply consideration. Eurecat U.S., Inc. v. Marklund , 527 S.W.3d 367, 390 (Tex. App. 2017). The promise to provide confidential information can be implied and is performed when the employer provides the confidential information. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding , 289 S.W.3d 844, 850-852 (Tex. 2009).
The evidence establishes that Ajamie LLP promised to supply confidential information to Pfeiffer when he signed the Confidentiality Policy. Ajamie LLP performed its promise when it provided Pfeiffer with confidential information. Consideration thus supports the Confidentiality Policy.
Pfeiffer argues that Eurecat supports his position, but the court there addressed successive confidentiality agreements. Specifically, those at-will employees had already signed confidentiality agreements in 1999 and 2005, and the question was whether consideration supported two additional confidentiality agreements signed in 2011. Eurecat , 527 S.W.3d at 388. No evidence established that the employer provided any new confidential information pertaining to the disputed claim after signing the 2011 agreements. And so, the court held invalid those later agreements as unsupported by new consideration. Id at 389–90. Here, Pfeiffer signed only the Confidentiality Policy. No prior policy existed.
Pfeiffer also asserts that the Confidentiality Policy has no clear duration, which he suggests would permit him to terminate the agreement and disclose confidential information. Dkt 57 at 21. Even apart from whether the law supports this position, it misses the point. Under the terms of the contract, Pfeiffer agreed the "information received in the office and discussed in the office is the private property of the client and of the firm." Dkt. 66-1. When Ajamie LLP terminated Pfeiffer's employment, the information remained the property of Ajamie LLP and its clients. Neither passage of time nor his termination alters that fact. Pfeiffer also asserts that the Confidentiality Policy is unenforceable as adhesive. Dkt 57 at 22. But he offers no evidence to show that Ajamie LLP took unjust advantage of his economic necessity or otherwise coerced him into signing the contract. King v. Bishop , 879 S.W.2d 222, 224 (Tex. App. 1994). To the contrary, on this record, Pfeiffer's position at Ajamie LLP appears to have been no different than the typical compensated position of any associate at a law firm.
Pfeiffer also asserts that the Confidentiality Policy is void because of illegality. Dkt 57 at 22. And it is true that a contract is void where its performance will violate the law. Lewis v. Davis , 145 Tex. 468, 199 S.W.2d 146, 148–49 (1947). Pfeiffer cites Dominguez v. Trent as a case on point. 836 S.W.2d 677, 679 (Tex. App. 1992). It is not. The court there declined to enforce the terms of a contract "deliberately designed to evade the requirements of federal and state law." Id. But nothing on the face of the Ajamie LLP confidentiality policy at all suggests that the firm designed it to evade the law. Instead, on this record, it appears to state a fairly standard requirement of confidentiality.
Pfeiffer appears to assert that Ajamie LLP's enforcement of the Confidentiality Policy would require him to violate 18 U.S.C. § 1510 and [Redacted] Dkt 57 at 23. Both provisions prohibit interference with criminal investigations. But the law presumes a contract's legality, and so a party asserting illegality has the burden of proof to establish it. Patterson v. Pritchard , 2011 WL 3371545, at *4 (Tex. App.). At this stage, Pfeiffer hasn't met his burden to show how the Confidentiality Policy or Ajamie LLP's requested relief would cause Pfeiffer to violate any law. Indeed, he testified that no governmental entity compelled him to provide the information, and the evidence establishes that he voluntarily did so.
To be clear, the question is not whether any government entity may obtain these documents. Such entities are of course free to pursue information through any and all lawful channels available to them. And certainly, nothing in this Order precludes any government entity from requesting or pursuing these documents in the future.
Instead, the question is only whether Pfeiffer could voluntarily choose to ignore those obligations. Given the Confidentiality Policy to which Pfeiffer agreed, the Court holds that he may not.
ii. Breach of fiduciary duty
To prove a breach of fiduciary duty, the movant must show (1) a fiduciary relationship between the plaintiff and defendant; (2) the defendant breached his fiduciary duty to the plaintiff; and (3) the defendant's breach results in injury to the plaintiff or benefit to the defendant. Navigant Consulting, Inc. v. Wilkinson , 508 F.3d 277, 283 (5th Cir. 2007).
Any employee who occupies a position of trust owes fiduciary duties to his employer. Navigant , 508 F.3d at 283. And an associate at a law firm does hold such a position of trust and so owes such fiduciary duties. See Johnson v. Brewer & Pritchard, P.C. , 73 S.W.3d 193, 202 (Tex. 2002) ; see also Bray v. Squires , 702 S.W.2d 266, 270 (Tex. App. 1985). Ajamie LLP has made a prima facie showing that Pfeiffer owes a fiduciary duty to his former employer, Ajamie LLP.
An employee may not carry off his employer's confidential information and client documents and disclose that information to competitors or use that information to the detriment of his employer. Navigant , 508 F.3d at 284. An employee who does so violates his duties to his employer. Id. at 285. Ajamie LLP has established a substantial likelihood of success on the merits that Pfeiffer breached his fiduciary duties by making unauthorized disclosures of confidential information and documents of Ajamie LLP and [Redacted] to unauthorized third parties.
Lawyers also owe fiduciary duties to their clients. "Lawyers are members of a learned profession asserting high ethical standards." McCuin v. Texas Power & Light Co. , 714 F.2d 1255, 1264 (5th Cir. 1983). "The duty of loyalty to the client, with which the duty of confidentiality is inherently intertwined, is one of the basic tenets of the legal profession." Douglas v. DynMcDermott Petroleum Operations Co. , 144 F.3d 364, 370 (5th Cir. 1998) ; see Tex Disciplinary Rules Prof'l Conduct Rule 1.05 (concerning duty of confidentiality).
These duties survive termination of the attorney-client relationship. Sealed Party v. Sealed Party , 2006 WL 1207732, at *21 (S.D. Tex.). Pfeiffer in fact acknowledges he has a fiduciary duty to his former clients. Dkt 57 at 28.
The Court bases its ruling here on the contractual and fiduciary duties that Pfeiffer owes to Ajamie LLP. But the Court has already determined that certain at-issue documents require the parties to observe their fiduciary duties to clients and former clients. And so, a protective order requires them to file anything containing attorney-client or attorney work product under seal. Dkt 4. Yet Pfeiffer [Redacted] Dkt 63.
"An ethical code is not a garment that lawyers may don and doff at pleasure." McCuin , 714 F.2d at 1264. This Court will deal harshly with any knowing violation by any party of its prior protective order or failure to abide by the preliminary injunction entered here.
iii. Pfeiffer's other assertions
The Court briefly addresses other issues raised by Pfeiffer in response and defense.
Pfeiffer asserts that the motion for a preliminary injunction is procedurally improper because Ajamie LLP didn't properly assert its counterclaim in an answer. Dkt 57 at 18. Pfeiffer is correct that a party may assert counterclaims only in a "pleading." See FRCP 12(1)(B), 13. As defined by Rule 7(a), pleadings only include complaints, answers, and replies to an answer. Other courts have held that a filing of a motion to dismiss doesn't allow a defendant to file counterclaims on a standalone basis. See Northern Valley Communications, LLC v. Qwest Communications Co., LLC , 2012 WL 523685, at *1 (D. S.D.).
But that doesn't end the inquiry. Nothing in the federal rules prohibits a party from seeking by motion a necessary preliminary injunction. See generally FRCP 65. The preliminary injunction sought by Ajamie LLP links directly to Pfeiffer's claims in this action. And it certainly links to claims that Ajamie LLP intends to litigate in this action. The Court thus accepts the counterclaim insofar as Ajamie LLP uses it to support its motion for a preliminary injunction. See National Association of Government Employees, Inc v. National Emergency Medical Services Association, Inc. , 969 F. Supp. 2d 59, 67 (D. Mass. 2013) (court may accept standalone counterclaim as affidavit in support of plaintiff's motion for preliminary injunction and address motion on merits).
The cases relied upon by Pfeiffer compel no different result. Pfeiffer cites United States v. Snider for the proposition that "[w]ithout a valid claim there can be no counterclaim, compulsory or permissive." 779 F.2d 1151, 1157 (6th Cir. 1985). Pfeiffer appears to argue that because his first amended complaint was procedurally defective, and because he hadn't yet filed a second amended complaint when Ajamie LLP filed its counterclaim, no valid claim existed against which Ajamie LLP could even yet assert a counterclaim. But "[e]quity looks to substance, and not to form, and will not lend its aid to one whose sole ground for seeking such aid is based upon a technicality." Bride v. Baker , 37 App. D.C. 231, 236 (D.C. Cir. 1911). The technicality from which Pfeiffer seeks to benefit is one of his own making. It would be most inequitable to deny Ajamie LLP's motion for preliminary injunction merely on the grounds that Pfeiffer hadn't yet properly pleaded his own claim.
Pfeiffer cites the procedurally complicated case of Studebaker Corp. v. Gittlin , where the court enjoined a stockholder from using written authorizations obtained in violation of proxy rules. 360 F.2d 692, 694 (2d Cir. 1966). The matter proceeded on an expedited basis, with the initial paper being an order to show cause supported by an affidavit. A hearing on the injunction was held the next day, and the injunction issued two days later. Meanwhile, after the hearing but before the injunction issued, a complaint had been filed. On appeal, the Second Circuit held that under the circumstances the court could properly treat the affidavit as a complaint and the order to show cause as an early answer. This case doesn't support Pfeiffer's assertion that it is necessary for the complaint to be filed properly before the court's hearing on the preliminary injunction. To the contrary, it typifies the ability of a Court to exercise its discretion when equity demands it.
Pfeiffer also asserts that [Redacted] law precludes Ajamie LLP's motion. Dkt 57 at 16. The Court finds this argument unpersuasive and unconnected to the issues at hand. Pfeiffer cites no United States or Texas authority for the proposition that he can volunteer [Redacted].
Pfeiffer also asserts that the doctrine of unclean hands bars Ajamie LLP's right to equitable relief, linking it to a supposed Interpol Red Alert issued against [Redacted] Id. at 27. That doctrine only applies where the wrongful acts "in some measure affect the equitable relations between the parties in respect of something brought before the court for adjudication." Mitchell Brothers Film Group v. Cinema Adult Theater , 604 F.2d 852, 863 (5th Cir. 1979), quoting Keystone Driller Co. v. General Excavator Co. , 290 U.S. 240, 245, 54 S.Ct. 146, 78 L.Ed. 293 (1933). The doctrine "does not purport to search out or deal with the general moral attributes or standing of a litigant." Mitchell Brothers, 604 F.2d at 863, quoting NLRB v. Fickett-Brown Manufacturing Co. , 140 F.2d 883, 884 (5th Cir. 1944). The parties disputed at the hearing whether an Interpol Red Alert had even issued. But even apart from that dispute, Pfeiffer hasn't shown how such an alert affects the equities as between Pfeiffer and Ajamie LLP.
Pfeiffer last asserts that his disclosures fall under the crime-fraud exception to Texas Disciplinary Rule 1.05. Dkt 57 at 26. The crime-fraud exception requires the party asserting the exception to substantiate that belief to the court. See United States v. Zolin , 491 U.S. 554, 571-72, 109 S.Ct. 2619, 105 L.Ed.2d 469 (1989). It pertains not to past wrongdoing, but to future wrongdoing. Id. at 562-63, 109 S.Ct. 2619. Pfeiffer's only allegations are to supposed past conduct. And the exception applies only to compelled disclosures of evidence in a court proceeding. Yet Pfeiffer testified that no law enforcement agency in the United States or [Redacted] has subpoenaed him or otherwise requested through any legal process that he disclose client confidential information. The crime-fraud exception is thus inapplicable at this stage.
b. Substantial threat of irreparable harm
Ajamie LLP must show that it is "likely to suffer irreparable harm," that is, harm for which there is no adequate remedy at law. Daniels Health , 710 F.3d at 585.
Pfeiffer has already disclosed some quantity of confidential [Redacted] information of Ajamie LLP to numerous individuals. The Court believes that absent its own intervention the risk of Pfeiffer further disclosing such information is high. The Court also believes that any future disclosure threatens irreparable harm.
In any situation placing confidential information at stake, once it is made public, its confidential nature is permanently and irrevocably impaired. See Hadix v. Johnson , 1989 WL 27984, *2 (6th Cir. 1989) (attorney-client relationship "fragile" and "no adequate legal remedy for a violation of the privilege"). This is irreparable harm sufficient to obtain equity's protection.
Ajamie also adamantly testified that if Pfeiffer continues to disclose [Redacted] information, Ajamie LLP faces an unquantifiable risk of irreparable harm to its reputation. The loss of reputation, goodwill, and clients that Ajamie LLP and Ajamie himself may face further establishes irreparable harm. Alliantgronp, LP v. Feingold , 2009 WL 1357209, at *2 (S.D. Tex. 2009) ; see also Cooter & Gell v. Harfmarx Corp. , 496 U.S. 384, 413, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990) (Stevens, J., concurring in part, dissenting in part) (observing that "most lawyers are wise enough to know that their most precious asset is their professional reputation").
Pfeiffer points to an order entered by [Redacted] Dkt 57 at 32. [Redacted] Pfeiffer asserts that this means that these confidential documents will inevitably be disclosed. Perhaps, but that is of no import here. [Redacted] Whatever result obtains at the end of any litigated challenge there gives no license here that absolves Pfeiffer of his own contractual and fiduciary duties.
c. The balance of harms
For reasons already stated, Ajamie LLP appears certain to face substantial harm if the Court denies the requested equitable relief.
On the other hand, the Court perceives no real hardship to Pfeiffer from the entry of a preliminary injunction that he abide by his contractual and fiduciary duties to keep client information confidential. See Fundamental Administrative Services, LLC v. Anderson , 18 F. Supp. 3d 680, 688 (D. Md. 2014) (no likelihood of harm to lawyer when preliminary injunction mandates lawyer to adhere to ethical norms). Pfeiffer offers no evidence in this regard. Dkt 57 at 33–34. To the contrary he testified that he has been neither subpoenaed to turn over these documents, nor requested to do so through any legal process in the United States or [Redacted] And he previously agreed with Ajamie LLP after termination to return these documents, which he didn't do.
The balance of harms tilts in favor of granting the preliminary injunction.
d. Public interest
Granting the preliminary injunction in this case will not disserve the public interest.
A lawyer's duties of confidentiality and loyalty are fundamental tenants of the legal profession. "These duties—confidentiality and loyalty—serve to fortify the client's trust placed with the attorney and to ensure the public's confidence in the legal system as a reliable and trustworthy means of adjudicating controversies." Douglas v. DynMcDermott Petroleum Operations Co. , 144 F.3d 364, 370 (5th Cir. 1998). The public interest in enforcing the attorney-client privilege and attorney's duty of confidentiality is self-evident. Prudential Insurance Co. of America v. Massaro , 2000 WL 1176541, at *18 (D. N.J.), aff'd , 47 F. App'x 618 (3d Cir. 2002).
Pfeiffer asserts that the public-interest inquiry should consider the government of [Redacted] request to the government of the United States for assistance in detaining [Redacted] Dkt 57 at 34. Pfeiffer hasn't established the scope of such request or even its existence. It is also beside the point. Neither the United States nor [Redacted] has requested Pfeiffer's assistance. The Court has before it no facts establishing that issuance of the requested preliminary injunction will harm the interests of either the United States or [Redacted]
Pfeiffer also points again to the discovery order issued by [Redacted] He asserts that a substantial public interest exists in ensuring that court orders are followed. Id. The Court agrees. But it doesn't follow that issuing the requested injunction here would in any way thwart the order there. [Redacted] As such, public interest weighs in favor of issuing a preliminary injunction pending trial.
e. Bond requirement
A federal court may issue a preliminary injunction "only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained." FRCP 65(c). The security bond's purpose is to prevent damages to a party from a wrongful injunction. FRCP 65(c).
Upon inquiry at the hearing, Pfeiffer suggested a bond in an amount between $10,000 and $20,000. Ajamie LLP suggested a nominal amount of $1,000. Neither party articulated specific reasons or strong preferences. Both parties deferred to the Court's discretion.
The Court finds that a bond of $5,000 is appropriate.
f. Pfeiffer's request to vacate the Court's prior order
Pfeiffer requests that the Court vacate Docket 53, its prior order of November 7, 2019 granting Ajamie LLP temporary relief pending the Court's decision here. Dkt 57 at 36. By its nature, this Order now supersedes that prior order. But the Court otherwise denies Pfeiffer's request.
Pfeiffer asserts the Court's prior order is procedurally defective because it didn't require a bond. Id. at 37. A federal court has discretion to decide the amount of bond or that no bond is necessary. Kaepa, Inc. v. Achilles Corp. , 76 F.3d 624, 628 (5th Cir. 1996). Given the temporary nature of the relief and no assertion by Pfeiffer of potential harm, the Court determined no bond was necessary.
Pfeiffer also asserts that the Court's prior order is an impermissible restraint on First Amendment guarantees. Dkt 57 at 37. Pfeiffer isn't a member of the press, and he points to no other authority granting him a First Amendment right to reveal confidential [Redacted] information. The Court is aware of none.
Pfeiffer asserts the Court's prior order violates international comity and perhaps compromises the ability of [Redacted] to investigate alleged criminal conduct within its borders. Id. at 38. The Court simply does not see how the matter before it impedes any investigation and prosecution against [Redacted] Pfeiffer testified that no legal process or subpoena required him to turn over confidential [Redacted] documents to anyone in [Redacted] And to the extent any later subpoena or legal requirement might demand response by Pfeiffer, he may bring that to the Court's attention for appropriate relief.
g. Additional requests by the parties
At the hearing, Pfeiffer speculated that he may need access to the subject confidential documents in order to pursue his claims against Ajamie LLP in this action. The Court doesn't decide here whether a continuing need exists or is appropriate. Pfeiffer may make later motion as to any such asserted need after conferring in good faith with Ajamie LLP. Such motion at a minimum must make a proposal to accommodate such access with confidentiality concerns in mind or otherwise establish that such concerns are inapplicable or revocable as to certain documents.
As part of its requested relief, Ajamie LLP asks that Pfeiffer return all documents directly to it. Dkt 51 at 22. What is to become of these documents in some ways implicates the public-interest inquiry above. Based on Ajamie's testimony at the hearing, the Court believes that Ajamie LLP would comply with any lawful requests from government entities for the documents. But even so, the Court believes the proper and durable place for safekeeping of these documents is with the Clerk of the Court.
In its motion, Ajamie LLP also requested permission to have forensic examinations conducted on the storage media, documented with normal chain-of-custody procedures. Dkt 51 at 23. The Court doesn't decide here whether such examination is necessary or appropriate. Ajamie LLP should consider further its need in this regard. It may make later motion for such access after conferring in good faith with Pfeiffer. Such motion at a minimum must make a proposal as to sufficient procedures to accomplish such examination.
4. Imposition of injunction
The Court finds that Ajamie LLP has met the requirements for a preliminary injunction. And so, the Court GRANTS Ajamie LLP's motion for preliminary injunction.
A district court's order imposing an injunction must "state its terms specifically" and "describe in reasonable detail" the conduct restrained or required. FRCP 65(d) ; see Daniels , 710 F.3d at 586. The Court issues the following orders.
It is ORDERED that Ajamie LLP must post a bond in the amount of $5,000 for the following preliminary injunction to become effective.
It is further ORDERED that Pfeiffer must:
• On or before Wednesday, December 4, IDENTIFY all confidential or privileged documents and other materials, in whatever form, concerning Ajamie LLP's [Redacted] that Pfeiffer obtained during his employment at Ajamie LLP and retained after termination of his employment;
• On or before Wednesday, December 4, SURRENDER to the Clerk of the Court any and all originals and copies of confidential or privileged documents he took from Ajamie LLP that are in his possession or control, including all storage media containing such documents, without altering the documents or storage media;
• On or before Wednesday, December 4, take all further actions necessary to DELETE all copies that have been made in whatever medium that are subject to his possession or control, and if any copies have been
uploaded to the cloud or remote server, Pfeiffer must delete all copies to the best of his ability; and
• On or before Wednesday, December 4, Pfeiffer must PROVIDE a certification to the Court regarding the steps he has taken to comply with this Order.
It is further ORDERED that:
• Pfeiffer must not share, disclose, or discuss, or offer to share, disclose, or discuss, confidential or privileged information or documents concerning Ajamie LLP's [Redacted] obtained during Pfeiffer's employment by Ajamie LLP with anyone other than the Court, Ajamie LLP, or Ajamie LLP's counsel and co-defendants; and
• Pfeiffer must immediately inform the Court and Ajamie LLP if called upon to disclose any confidential information regarding [Redacted] pursuant to a subpoena or other legal process.
It is further ORDERED that this Order is binding on Pfeiffer as well as his agents, servants, employees, attorneys, and others who are in active concert or participation with him. FRCP 65(d)(2).
It is further ORDERED that the Clerk of Court must keep and maintain unaltered the documents and storage media that Pfeiffer surrenders under this Order.
It is further ORDERED that the Clerk of Court must maintain Docket 49 under seal.
This Order supersedes Docket 53, the Court's prior order of November 7, 2019.
SO ORDERED.