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Christian v. Veritiv Corp.

United States District Court, S.D. Illinois

November 24, 2014

J. TODD CHRISTIAN, PATRICK GERWITZ, TIMOTHY McCARTHY, JOHN BRIDGES, And MIDLAND PAPER COMPANY, Plaintiffs,
v.
VERITIV CORPORATION, Defendant. VERITIV CORPORATION and XPEDX, LLC, Counterclaim/Third Party, Plaintiffs,
v.
J. TODD CHRISTIAN, PATRICK GERWITZ, TIMOTHY McCARTHY, JOHN BRIDGES, CAROLYN HUNT, MICHAEL GRAVES, and MIDLAND PAPER COMPANY, Counterclaim/Third Party, Defendants

For J Todd Christian, Patrick Gerwitz, Timothy McCarthy, John Bridges, Midland Paper Company, Plaintiffs: Jack C. Carey, LEAD ATTORNEY, Law Offices of Jack C. Carey, Belleville, IL; William George Miossi, LEAD ATTORNEY, Winston & Strawn - Washington, DC, Washington, DC; Mark E. Goodman, Capes Sokol et al., Clayton, MO; Mary M Lenahan, PRO HAC VICE, Winston & Strawn - Washington, DC, Washington, DC.

For Veritiv Corporation, Defendant: Daniel P Hart, Robert C. Stevens, Seyfarth Shaw LLP - Atlanta, Atlanta, GA; Jason P. Stiehl, Seyfarth Shaw LLP - Chicago, Chicago, IL.

For Michael Graves, Carolyn Hunt, Cross Defendants, ThirdParty Defendants, Counter Defendants: William George Miossi, LEAD ATTORNEY, Mary M Lenahan, Winston & Strawn - Washington, DC, Washington, DC.

For xpedx, LLC, ThirdParty Plaintiff, Counter Claimant: Jason P. Stiehl, Seyfarth Shaw LLP - Chicago, Chicago, IL.

For Veritiv Corporation, ThirdParty Plaintiff, Counter Claimant: Jason P. Stiehl, Seyfarth Shaw LLP - Chicago, Chicago, IL; Robert C. Stevens, Seyfarth Shaw LLP - Atlanta, Atlanta, GA.

For Patrick Gerwitz, John Bridges, Midland Paper Company, J Todd Christian, Timothy McCarthy, ThirdParty Defendants, Counter Defendants: Jack C. Carey, LEAD ATTORNEY, Law Offices of Jack C. Carey, Belleville, IL; William George Miossi, LEAD ATTORNEY, Mary M Lenahan, Winston & Strawn - Washington, DC, Washington, DC.

MEMORANDUM AND ORDER

Honorable David R. Herndon, United States District Judge.

I. Introduction

This matter is before the Court on Counterclaim / Third Party Plaintiffs' Motion for Preliminary Injunction (Doc. 23), seeking to enforce the terms of the noncompetition agreements of J. Todd Christian, Patrick Gerwitz, Timothy McCarthy, John Bridges and Carolyn Hunt.

Plaintiffs filed a declaratory judgment against Defendant Veritiv Corporation (" Veritiv") in St. Clair Circuit County Court, IL seeking a judgment that noncompetition agreements between Veritiv and Christian, Gerwitz, McCarthy and Bridges, respectively, are unenforceable, and that Midland Paper Company (" Midland") did not tortiously interfere with the Veritiv noncompetition agreements by hiring these individuals. (Doc. 5-1.) Veritiv removed the case to this Court on August 12, 2014, on the basis of diversity. (Doc. 5.)

Concurrently, Veritiv's subsidiary, xpedx, LLC, brought a separate suit against Plaintiffs and Carolyn Hunt and Michael Graves (Midland's President), in the Circuit Court of St. Louis County, Missouri, alleging various claims, including breach of the individuals' noncompetition agreements for accepting employment with Midland and soliciting sales from customers they had solicited on behalf of xpedx, LLC prior to resigning, and related tort claims against Midland and Graves, among other things. On July 30, 2014, xpedx, LLC filed a motion for a temporary restraining order against the defendants in its Missouri action, and on August 1, 2014, the Missouri court awarded xpedx, LLC, a Temporary Restraining Order. (Doc. 36-1.) The Missouri court also entered an order directing the parties to engage in expedited discovery and setting a preliminary injunction hearing for September 12, 2014. On September 10, 2014, xpedx, LLC abruptly cancelled the Missouri preliminary injunction hearing, and advised that it planned to allow the TRO to expire September 12th. The Missouri court unconditionally dissolved the TRO on September 12, 2014. (Doc. 36-4.)

On September 15, 2014, xpedx, LLC filed a Third Party Complaint against Plaintiffs and Carolyn Hunt and Michael Graves (together, " Counterclaim / Third Party Defendants"), and Veritiv counterclaimed in this Court against Counterclaim / Third Party Defendants, alleging breach of contract, breach of duty of loyalty, tortious interference with contract, misappropriation of trade secrets, civil conspiracy, and unfair competition. Also on September 15th, xpedx, LLC voluntarily dismissed its Missouri action.

On September 23, 2014, Veritiv and xpedx, LLC (" Counterclaim / Third Party Plaintiffs") filed a motion for preliminary injunction against the Counterclaim / Third Party Defendants. (Doc. 23.) On November 13, 2014, the Court held a hearing on the motion. After hearing arguments and reviewing the evidence submitted by parties, which included deposition testimony and declarations from customers, suppliers and the parties, the Court DENIED Counterclaim / Third Party Plaintiffs' motion for preliminary injunction. The Court now formalizes ...


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