Opinion
2:15-cv-01344-JAD-PAL
09-24-2015
AERODYNAMICS INCORPORATED, a Michigan corporation; ADI HOLDINGS COMPANY, INC., a Georgia corporation, Plaintiffs v. CAESARS ENTERTAINMENT OPERATING COMPANY, INC., a Delaware corporation; STEVEN MARKHOFF, an individual; INTERNATIONAL MANAGEMENT SOLUTIONS, LLC, a Delaware corporation; VIA AIRLINES, INC., a Colorado corporation; VIA AIR, LLC, a Delaware corporation; and AMOS VIZER, an individual, Defendant
Order Granting Limited TRO, Setting Hearing on Motion for Preliminary Injunction, and Sealing Documents [ECF 23, 39, 47]
Plaintiffs Aerodynamics Incorporated and ADI Holdings Company, Inc. (collectively ADI) move for a temporary restraining order and preliminary injunction against defendants Steven Markhoff; Amos Vizer; Caesars Entertainment Operating Company, Inc. (Caesars); International Management Solutions, LLC (IMS); Via Airlines, Inc.; and Via Air, LLC. Defendants filed an unopposed motion for an order sealing one exhibit that they submitted in response to the motion. ADI also moves unopposed for an order sealing five exhibits that it submitted in reply. Having reviewed the parties' pleadings, points and authorities, and supporting declarations and exhibits, I find that ADI has met the standard for a narrowly tailored temporary injunction on its claims for breach of contract and misappropriation of trade secrets. I thus grant the motion for temporary restraining order and set the motion for preliminary injunction for hearing on an expedited briefing schedule. Until further order of this court, Markhoff, Vizer, IMS, Via Air, and Via Airlines are restrained from acquiring, disclosing, or using any portion of ADI's (1) FAA-approved manuals; (2) STM Master Charter Agreement; (3) Accounts Receivable Report as of March 31, 2005; (4) Cost Template for Caesars Operations Actual Budget October 14th 2014; (5) agreements with aircraft lessors Republic and Cymus; and (6) pool parts agreement with aircraft manufacturer and parts vendor Embraer.
ECF 23.
ECF 39.
ECF 47.
ECF 1, 32.
ECF 23, 33, 37, 39, 41, 47.
ECF 24-27, 34-36, 38, 42-46.
I find compelling reasons exist to seal portions of Exhibit 1 to ECF 34 and thus grant defendants' motion to seal that exhibit, but instruct the parties to be prepared to discuss, at the hearing of the preliminary injunction motion, unsealing that exhibit with the caveat that certain information be redacted. I also find compelling reasons exist to seal the entirety of Exhibits 2, 5, 6 and 8 to ECF 45 and thus grant ADI's motion to seal those exhibits. But I deny ADI's motion as to Exhibit 7, which is a screen shot of the contents of a Dropbox folder and appears to have been mistakenly filed in place of the Caesars Master Air Contract Summary.
Background
ADI sues all of the defendants for misappropriation of trade secrets, and sues Caesars, Markhoff, and IMS for breach of contract and breach of the covenant of good faith and fair dealing. Defendants answered the complaint by admitting the veracity of some of ADI's allegations but denying that they misappropriated any of ADI's trade secrets or breached either agreement.
ECF 1.
See generally ECF 32.
ADI's claims center around two agreements. The first is a non-disclosure agreement (NDA) that ADI and Caesars, through Caesars' affiliate ESS Travel Management, entered into in October 2014 to protect the confidential information that would be exchanged while they negotiated an agreement for Caesars to charter aircraft from ADI. Markhoff, then vice president of ESS Travel, was ADI's point of contact at Caesars for the NDA and proposed charter agreement. The second agreement is a letter of intent (LOI) that was entered into between ADI and IMS in February 2015, for IMS's proposed purchase of all of the equity interests in ADI. IMS is Markhoff's company, and he was ADI's point of contact at IMS for the LOI.
ECF 24 ¶ 13; ECF 24-2 at 2-4. The Embraer ERJ-145 50-seat regional jet is one of the two types of aircraft specifically contemplated under the charter agreement.
See e.g. ECF 35 ¶¶ 1-16.
ECF 24 ¶ 19; ECF 24-2 at 2-9.
See ECF 35 ¶¶ 34-35.
ADI alleges that (1) Caesars and Markhoff breached the NDA; (2) Markhoff and IMS breached the LOI; and (3) all of the defendants engaged in misappropriation when Markhoff shared ADI's trade secrets with its competitor Via Air and Via Airlines (collectively Via). ADI also alleges the defendants misappropriated ADI's trade secrets when Markhoff used, and Via Airlines' chairman Vizer acquired and used, certain of ADI's trade secrets to negotiate with ADI's vendors and customers on behalf of Via. It is undisputed that Caesars ultimately gave the charter agreement to Via, whom Markhoff attests had been a vendor of Caesars for several years.
ECF 1 ¶¶ 86-88, 96-97, 102.
ECF 1 ¶¶ 52-59, 62-67, 72-80.
ECF 32 ¶ 16.
ECF 35 ¶ 49.
ADI now moves for a temporary restraining order against all of the defendants under its breach of contract and misappropriation claims. ADI's counsel C. Dana Hobart, Esq. certifies that the motion was served on counsel for all parties through the court's ECF system. In support of its motion, ADI submitted (1) the declaration and supplement of Scott Beale, the former president, chief executive officer, chairman of the board, and owner of ADI, with a collective 18 exhibits; (2) the declaration and supplement of C. Dana Hobart, Esq. with a collective 11 exhibits; (3) the declaration of Darrell Richardson, the current president and chief operating officer of ADI, with two exhibits; (4) the declaration and supplement of Gerald P. Elder, owner of GPE Aviation Consulting Group, Inc., with one exhibit; (5) and the declaration of Larry Hecht, the chief operating officer of Aerodynamics, Inc.
ECF 23 at 21 n. 5.
ECF 25 ¶ 2.
ECF 24, 45, 46.
ECF 25, 42.
ECF 26.
ECF 27, 43.
ECF 44.
Defendants responded with (1) the declaration of Richard Castro, director in the Corporate Compliance and Investigations Department of Caesars Enterprise Services, LLC, with one exhibit; (2) the declaration of Markhoff with four exhibits; (3) and the declaration of Vizer. Defendants also attached 15 exhibits, consisting of 383 pages, to their response, including the affidavit of Sue Pavlak, chief operating officer of POWWOW, LLC dba PASS Charters, one of ADI's customers.
ECF 34.
ECF 35.
ECF 36.
ECF 33-1-33-15.
Discussion
I. Motion for Temporary Injunctive Relief
The legal standard for issuing a temporary restraining order with notice and the legal standard for preliminary injunctive relief are "substantially identical." In Winter v. Natural Resources Defense Council, Inc., the Supreme Court clarified that, under these standards, the plaintiff "must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest." The Ninth Circuit subsequently recognized in Stormans, Inc. v. Selecky that the Supreme Court had "definitively refuted" the circuit's possibility-of-irreparable-harm test. However, several panels of the Ninth Circuit have since instructed that "if a plaintiff can only show that there are 'serious questions going to the merits'—a lesser showing than likelihood of success on the merits—then a preliminary injunction may still issue if the 'balance of hardships tips sharply in the plaintiff's favor,' and the other two Winter factors are satisfied."
See Stuhlbarg Intern. Sales Co., Inc. v. John D. Brush and Co., Inc., 240 F.3d 832, 839 n. 7 (9th Cir. 2001) (stating that the "analysis is substantially identical for the injunction and the TRO").
Winter v. Nat. Resources Def. Council, Inc., 555 U.S. 7, 20 (2008).
Stormans, Inc. v. Selecky, 586 F.3d 1109, 1127 (9th Cir. 2009) (citing Winter, 555 U.S. at 22).
Shell Offshore, Inc. v. Greenpeace, Inc., 709 F.3d 1281, 1291 (9th Cir. 2013) (quoting with emphasis Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011)); accord Towery v. Brewer, 672 F.3d 650, 657 (9th Cir. 2012) (quoting Cottrell, 632 F.3d at 1135).
A. Likelihood of success on the merits
ADI alleges that I have jurisdiction over the subject-matter of this action under 28 U.S.C. § 1332 because the parties are diverse and the amount in controversy exceeds $75,000. Under Erie R. Co. v. Tompkins, federal courts sitting in diversity apply state substantive law and federal procedural law.
ECF 1 ¶ 1.
Erie R. Co. v. Tompkins, 304 U.S. 64 (1938); accord Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 427 (1996).
1. Breach of contract
Both of the agreements at issue contain Nevada choice-of-law provisions. To state a valid claim for breach of a written contract under Nevada law, the plaintiff must allege the existence of a valid agreement between the plaintiff and the defendant, a material breach by the defendant, and damages.
ECF 24-2 at 3 ¶ 10; ECF 24-3 at 6 ¶ 9(d).
See Bernard v. Rockhill Dev. Co., 734 P.2d 1238, 1240 (Nev. 1987) (per curiam).
Defendants acknowledge "[t]here is no dispute that Caesars and ADI executed a mutual non-disclosure agreement, and there is no dispute that IMS and ADI executed a letter of intent that contained a confidentiality provision." Defendants do deny, however, that ADI has met its burden of demonstrating that it is likely to succeed on the merits of the breach and damages elements.
ECF 33 at 13:9-11.
a. Breach
Caesers and Markhoff argue that the breach element turns on the alleged disclosure of ADI's trade secrets to ADI's potential aircraft seller General Electric Capital Aviation Services (GE Capital), ADI's aircraft lessors Republic Airways Holdings, Cymus Holdings, and ADI's customer PASS Charters, Inc. Defendants continue, if the alleged disclosures occurred—which they deny—Caesars and Markhoff cannot be in breach of the NDA because the disclosed-to entities already possessed ADI's trade secrets. Nor can Markhoff or IMS be in breach of the LOI because ADI gave them permission to speak with Cymus and Republic as part of the due diligence Markhoff and IMS conducted to potentially acquire ADI.
ECF 33 at 13:13-14.
ECF 33 at 13:13-22.
ECF 33 at 13:22-14:02
Defendants' argument misses the mark. ADI does not allege that mere disclosure to third parties was a breach of the NDA or LOI, but that disclosure to third parties for reasons contrary to the stated purposes of those agreements was the breach. To that point, ADI argues that Markhoff and Caesars breached the NDA, and Markhoff and IMS breached the LOI, by using ADI's confidential and trade-secret information to interfere with ADI's agreements with PASS Charters. ADI also argues that in violation of the LOI, Markhoff and IMS allowed an employee of Via, ADI's competitor, to access and review ADI's confidential and trade-secret information under the guise that she was an "independent forensic accountant" for Markhoff and IMS. ADI further contends that after both Caesars and IMS terminated their respective negotiations with ADI and in violation of the NDA and LOI, Markhoff and Vizer used ADI's confidential and trade-secret information to negotiate contracts for Via's benefit with ADI's aircraft manufacturer and parts vendor Embraer, ADI's aircraft lessors Republic and Cymus, and ADI's potential aircraft seller GE Capital. ADI's theory for holding Caesars liable for Markhoff's acts and omissions is based on paragraph four of the NDA, which defines "Related Persons" and provides that ADI and Caesars will "be responsible for any acts or omissions [of their respective] Related Persons that result in a breach of this Agreement." ADI alleges that Markhoff is one of Caesars' "Related Persons."
ECF 1 ¶¶ 96-97, 102; ECF 24-2 at 2 ¶ 2 ("Mutual Business Purpose of Disclosure"of the NDA was a "business transaction including the possible chartering of aircraft from [ADI] by [Caesars]"); ECF 24-3 at 2 (purpose of the LOI was the "proposed purchase of all the equity interests of ADI" by IMS).
ECF 23 at 16:19-17:7.
ECF 23 at 13:01-14:13.
ECF 23 at 15:14-18:10.
ECF 24-2 at 2-3 ¶ 4.
ECF 1 ¶ 83.
Regarding the ADI-PASS Charters agreement, ADI presents evidence in the form of a declaration from Scott Beale stating that Markhoff used, and allowed Vizer to acquire and use, ADI's trade-secret and confidential information in order to usurp ADI's on-demand-charter-flight agreement with PASS Charters for Via's benefit. Defendants respond with the affidavit of Sue Pavlak, chief operating officer of PASS Charters, who attests that: (1) the ADI-Pass Charters agreement was mutually terminated between the two for other reasons; (2) she arranged the meeting in February 2015 with Markhoff, whom she believed was acting solely on behalf of Caesars, to discuss an agreement between Caesars and PASS Charters; (3) neither Markhoff nor Via Airlines shared any information, confidential or otherwise, with her regarding ADI; (4) PASS Charters "selected to use [Via Airlines'] charters services in place of ADI's" because of the past relationship between PASS Charters and Via Airlines and PASS Charters' customers' complaints about ADI; and (5) ADI's alleged "NCAA clients" are really PASS Charters' clients as ADI was "merely a vendor for transportation services."
Beale is the former president, chief executive officer, chairman, and owner of ADI. ECF 24 ¶ 1.
Vizer is the chairman of Via Airlines. ECF 36 ¶ 5.
ECF 24 ¶¶ 27-28.
ECF 33-15 ¶¶ 7-8.
ECF 33-15 ¶¶ 9-10.
ECF 33-15 ¶¶ 11, 13.
ECF 33-15 ¶¶ 13-14.
ECF 33-15 ¶ 13.
As for Via's access to ADI's confidential and trade-secret information, Beale attests that after IMS and ADI entered into the LOI, Markhoff represented to him that in order for IMS's "partners" to address "a revised offer for sale[,]" they required "an independent forensic accountant identified only as 'Marina' to visit ADI's facilities and conduct a further analysis of ADI's trade secrets." Beale allowed the inspection and limited it "to reviewing, but not copying" ADI's information. According to Beale, he and James Carroll, accounting manager for ADI, conducted a short briefing with Marina on February 12, 2015, where she evaded basic questions about her background. But Beale states that, at Markhoff's urging and because he felt secure under the confidentiality agreements, Marina was granted "unfettered access" to ADI's confidential documents with the caveat that she look, not copy. Beale claims that Marina "became angry when she was told she would not be permitted to take ADI's digital QuickBooks financial database" back to her hotel and used her personal cell phone to call Markhoff so that he "could pressure ADI into increasing her access."
ECF 24 ¶ 19.
ECF 24 ¶ 19.
ECF 24 ¶ 20.
ECF 24 ¶ 20.
ECF 24 ¶ 21.
Beale states that when Marina returned the next day, he was informed by Carroll and Mike Hoyle, "a subtenant of office space at ADI's facility," that "they witnessed Marina taking pictures of ADI documents with her personal cell phone." Beale claims that, after he confronted and informed Marina that she would be removed if she kept taking photographs, she was "visibly upset" and left the building saying she was going to take lunch, but she never returned.
ECF 24 ¶ 22. District courts may consider hearsay evidence "in deciding whether to issue a preliminary injunction." Johnson v. Couturier, 572 F.3d 1067, 1083 (9th Cir. 2009) (citing Republic of the Philippines v. Marcos, 862 F.2d 1355, 1363 (9th Cir. 1988) (en banc); Flynt Distrib. Co. v. Harvey, 734 F.2d 1389, 1394 (9th Cir. 1984)).
ECF 24 ¶ 22. ADI's complaint tells a slightly different story: ADI asked Marina to leave after she was discovered taking photographs of ADI's confidential documents. ECF 1 ¶ 66. The difference, however, is not relevant to whether or not ADI is likely to prove breach.
Hours after Marina left ADI's offices, Beale received an email from Markhoff "on behalf of IMS 'terminating our diligence and our interest in acquiring'" ADI. Beale attests that a true and correct copy of that email is attached to his initial declaration as Exhibit 5. Three days later, Markhoff, this time on behalf of Caesars, sent ADI a letter stating that "Caesars has elected to no longer pursue a contract with ADI to operate aircraft for the Caesars air network." Darrell Richardson, current president and chief operating officer of ADI, attests that a true and correct copy of that letter is attached to his declaration as Exhibit 1.
ECF 24 ¶ 24.
ECF 24 ¶ 24; ECF 24-5.
ECF 26 ¶ 3.
ECF 26 ¶ 3; ECF 26-1.
Beale says he later discovered that "Marina" is Marina Morgan—the financial director for Via Air, LLC. All defendants, save Caesars, admit Marina Morgan holds that position. Although defendants submitted declarations from Markhoff and Vizer, neither addresses Marina's alleged presence and activities at ADI's offices in mid-February 2015.
ECF 24 ¶ 23.
ECF 32 at ¶ 64. Caesars was without sufficient knowledge to admit or deny that allegation.
The remainder of ADI's breach allegations concern actions taken by Markhoff, IMS, Vizer, and Via after both IMS and Caesars terminated their respective potential relationships with ADI. Beale attests that ADI allowed Markhoff to "review[]" the Embraer pool parts agreement as part of the "unfettered access" it gave Markhoff to ADI's confidential and trade-secret information. Markhoff states that, during his due diligence, ADI "disclosed" to him the fact that it had an agreement with Embraer for pool or spare parts and that he has personally negotiated similar agreements.
ECF 24 ¶ 14.
ECF 35 ¶ 45.
Richardson attests that on March 28, 2015, Andre op't Hof, vice president of sales and business development for Embraer Aircraft Customer Services, Inc., exchanged emails with him regarding that agreement, and he supplies their email exchange as Exhibit 2 to his declaration. In the exchange, "Andre" discloses to Richardson that Embraer is "engaged in a negotiation with another operator" that "might soon operate a number of" ERJ jets into "Las Vegas for a local entertainment company." Andre goes on to state that, much to Embraer's "surprise and displeasure, we are let [sic] to believe that they have access to a copy of the Embraer-ADI exchange Pool agreement." Andre expresses disbelief because that would violate the Embraer-ADI non-disclosure agreement, and he asks Richardson to clarify. Richardson responds that he will need to conduct an internal investigation into the matter and asks if Andre could disclose the identity of the person or company that Embraer is negotiating with. Andre replies, "In confidence, Steven Markhoff from Caesars Entertainment. I believe they looked at ADI in the context of a possible acquisition." Defendants did not directly respond to this evidence. Markhoff admits that "he communicated with Embraer[,]" but cryptically attests only that neither he nor Via has "ever entered into a contract with Embraer for a pool parts agreement."
ECF 26 ¶ 4.
ECF 26-2 at 2.
ECF 26-2 at 2.
ECF 26-2 at 2.
ECF 26-2 at 2.
ECF 26-2 at 2.
ECF 26 ¶ 79(c).
ECF 35 ¶ 46 (emphasis added).
As for ADI's lease with Cymus, Beale attests that Markhoff contacted Cymus and "requested a term sheet to lease the same two aircraft that Cymus was already leasing to ADI." Beale claims Markhoff knew to go after the Cymus lease because he learned from ADI's confidential and trade-secret information that ADI was behind in its payments to Cymus. Beale states that Markhoff "used this information in an attempt to convince Cymus to terminate its leases with ADI and, thereafter, lease the aircraft to" Via. Markhoff's only comment regarding Cymus is that ADI gave him permission to speak directly with that vendor as part of the due diligence he was conducting under the LOI.
ECF 23 ¶¶ 25-26.
ECF 24 ¶¶ 25-26.
ECF 24 ¶ 26.
ECF 35 ¶¶ 42, 44.
Beale attests that on February 19, 2015, he had a telephonic conversation with Chris Beers—leasing agent at Skyworld Aviation and whom ADI works with in its leases with Republic and Cymus—and Beers told him that Markhoff and Vizer attended a meeting with Republic executives on February 17, 2015. Beale attests that, according to Beers, Markhoff stated at the meeting that "he was going to be resigning from Caesars to join the Vizer companies [Via Air and Via Airlines]" and that he had never planned to acquire ADI, but to "'steal ADI's business and put them out of business.'" Beale further attests that, according to Beers, Vizer confirmed the statements Markhoff made during that meeting. Markhoff acknowledges he met with Republic but states it was Republic who suggested Via lease the then ADI-leased aircraft "in order to operate the Caesars network." Markhoff continues, "After [he] started working with Via Airlines on the Republic aircraft leases, Republic decided against providing the aircraft for lease to [Via and Caesars] for the stated reason that it could complicate [Republic's] pilot union negotiations." Vizer offers no statement in his declaration about the meeting he allegedly attended with Markhoff and representatives for Republic.
ECF 24 ¶ 37.
ECF 24 ¶ 38.
ECF 24 ¶ 38.
ECF 35 ¶ 48.
ECF 35 ¶ 50.
See generally ECF 36.
Beale attests that he engaged in "extensive negotiations with Jim Steckart," the senior vice president of marketing for GE Capital, "to purchase five Embraer ERJ-145 regional jets to add to the aircraft [in] ADI's fleet and, particularly, to enable ADI to fulfill the" proposed charter agreement with Caesars. The negotiations ended with a letter of intent for ADI to purchase five specific Embraer ERJ-145 regional jets from GE Capital, which Beale attests is attached to his initial declaration as Exhibit 8. Beale goes on to state that he provided Markhoff with a copy of the GE Capital letter of intent in January 2015, and explained to Markhoff why it was an "attractive and unique opportunity." According to Markhoff, after Republic decided against leasing aircraft to Via Airlines, he reached out to his contact at GE Capital, Jim Steckart, and Via ultimately purchased five ERJ-145LR jets from GE Capital in June 2015. But, Markhoff claims, ADI did not "disclose any letters of intent with" GE Capital to him, and that the first time he "became aware of this alleged letter of intent was once [he] reviewed ADI's motion." In reply, however, ADI submitted evidence tending to show that one of the jets contemplated under the GE Capital letter of intent is the same jet that Markhoff helped Via purchase from GE Capital.
ECF 24 ¶ 31.
ECF 24 ¶ 31; ECF 24-8.
ECF ¶ 32.
ECF 35 ¶ 53.
ECF 35 ¶ 39.
ECF 24 ¶ 33; ECF 24-9, 24-10.
On this evidence, I find ADI has not shown it is likely to demonstrate that either Markhoff or IMS breached the LOI with regard to the PASS Charters agreement. I do find, however, that ADI has shown it is likely to demonstrate breaches based on: (1) Markhoff and IMS allowing an employee of Via to access and review ADI's confidential and trade secret information under the representation that she was their "independent forensic accountant"; and (2) Markhoff using and disclosing and Vizer acquiring and using ADI's confidential or trade-secret information to negotiate, whether successfully or not, similar deals with Embraer, Republic, Cymus, and GE Capital for Via's benefit.
b. Damages
ADI argues that it was damaged as a result of the alleged breaches by losing the charter agreement with Caesars to Via. Caesars responds that ADI lost the charter agreement because Caesars had determined that ADI was "an unsuitable vendor for Caesars." According to Richard Castro, director of Caesars' corporate compliance and investigations department, that decision was based on the fact that a $600,000 judgment had been entered against Beale personally in a civil fraud action. Based on this evidence, I find that ADI has not shown it is likely to demonstrate the harm it suffered in losing the charter agreement was the result of a breach of the NDA.
See ECF 34 ¶¶ 11-14.
ADI has, however, raised serious questions on the merits of whether it was damaged as a result of the use, disclosure, and acquisition of the confidential and trade-secret information contained in ADI's agreements with GE Capital, Republic, Cymus, and Embraer by Markhoff, Vizer, and Via. ADI has shown a reasonable probability that it lost at least one jet contemplated under the GE Capital letter of intent to Via and that its goodwill, reputation, business interests, and bargaining power with Embraer, Republic, and Cymus were damaged as a result of the alleged breaches. ADI has also shown a reasonable probability that Via gained an unfair advantage as a result of its financial director gaining access to ADI's confidential or trade-secret information under the representation that she was an independent forensic accountant for Markhoff and IMS.
2. Misappropriation of trade secrets
"Nevada's Uniform Trade Secrets Act, NRS Chapter 600A, provides that the '[a]ctual or threatened misappropriation [of a trade secret] may be enjoined.'" To successfully maintain a claim for misappropriation of trade secrets under Nevada law, the plaintiff must demonstrate (1) the existence of a "valuable trade secret"; (2) "misappropriation of the trade secret through [acquisition,] use, disclosure, or nondisclosure of use of the trade secret"; and (3) that misappropriation was improper because it was made in breach of an express or implied contract or by a party with a duty not to disclose."
Finkel v. Cashman Prof, Inc., 270 P.3d 1259, 1263-64 (Nev. 2012) (quoting NEV. REV. STAT. § 600A.040(1)).
Kaldi v. Farmers Ins. Exch., 21 P.3d 16, 23 (Nev. 2001) (quoting Frantz v. Johnson, 999 P.2d 351, 358 (Nev. 2000)); accord NEV. REV. STAT. § 600A.030.
a. Existence of trade secrets
"[A] trade secret is information that '[d]erives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by the public,' as well as information that '[i]s subject to efforts that are reasonable under the circumstances to maintain its secrecy.'" "Whether information is a trade secret generally is a question of fact." The court considers four factors:
Finkel, 270 P.3d at 1264 (quoting NEV. REV. STAT. § 600A.030(5)(a)-(b)).
Finkel, 270 P.3d at 1264 (citing Frantz, 999 P.2d at 358).
(1) the extent to which the information is known outside of the business and the ease or difficulty with which the acquired information could be properly acquired by others; (2) whether the information was confidential or secret; (3) the extent and manner in which the employer guarded the secrecy of the information; and (4) the former employee's knowledge of . . . [the alleged trade secret] and whether this information is known by the employer's competitors. . . .An analysis of these factors compels the conclusion that a number of the items identified by ADI qualify as trade secrets.
Id. (quoting Frantz, 999 P.2d at 358-59).
i. FAA-approved operational manuals
According to Beale, ADI's FAA-approved manuals and operations specifications "contain all of ADI's procedures, personnel, many supplier lists, business procedures, capabilities, product designs and specifications, unpatented inventions, formulas, techniques, and other business information that provides ADI with a competitive edge." Beale attests that the cost of developing the manuals and specifications for its Part 121 certification process to fly 50-seat jets was "at least $1 million" and ADI has since "spent thousands of hours improving and revising the manuals." "With more than a decade of work in total," Beale attests that "ADI has an efficient and proven operational system that would take years to duplicate [and] cost multiple millions of dollars." Supporting Beale's statements is the declaration ADI submitted from Gerald P. Elder, "owner of GPE Aviation Consulting Group, Inc., which provides consulting services to airlines on a wide range of subjects including applications for Federal Aviation Administration certification." Elder attests that GPE's typical proposal for Part 121 certification process is "30 weeks from commencement of GPE support to issuance" of the specifications, with an estimated cost for those services being "$635,400."
ECF 45 ¶ 6.
ECF 24 ¶ 3.
ECF 24 ¶ 3.
ECF 27 ¶ 1.
ECF 27 ¶ 4. --------