United States District Court, W.D. Oklahoma
IOFINA, INC., IOFINA RESOURCES, INC., and IOFINA CHEMICAL, INC., Plaintiffs,
IGOR KHALEV, and KIVA HOLDING, INC., Defendants.
MILES-LAGRANGE UNITED STATES DISTRICT JUDGE.
the Court is defendants' Motion to Modify Temporary
Restraining Order or, in the Alternative, to Require
Plaintiffs to Post a Bond, filed April 19, 2017. On May 10,
2017, plaintiffs filed their response, and on May 17, 2017,
defendants filed their reply. Based upon the parties'
submissions, the Court makes its determination.
December 2, 2016, this Court entered an order granting
plaintiffs' Application for Temporary Restraining Order
Pending a Hearing on Plaintiffs' Request for Permanent
Injunction and temporarily enjoining “Dr. Khalev from
continuing to use or to disclose plaintiffs' trade secret
process and confidential and proprietary information, either
with KIVA or other entities, to build additional iodine
extraction plants using plaintiffs' trade secret process
until further order of this Court.” December 2, 2016
Order [docket no. 281] at 5. On February 17, 2017, this Court
entered an order granting in part and denying in part
plaintiffs' Motion for Permanent Injunction and ordering
plaintiffs to file with the Court their proposed revised
permanent injunction. In that order, the Court found:
that some limited permanent injunction against Dr. Khalev
should be entered in this case and that said injunction
should enjoin Dr. Khalev from engaging in conduct in breach
of the Non-Disclosure Agreement and from engaging in conduct
that would result in a misappropriation of plaintiffs'
trade secrets. The Court also finds that any permanent
injunction entered in this case should not enjoin KIVA from
any conduct, should not enjoin the operation of the South
Leedey plant, and should not enjoin Dr. Khalev from engaging
in any conduct that would be considered the same conduct that
he engaged in in relation to the planning, construction, and
operation of the South Leedey plant.
17, 2017 Order [docket no. 313] at 6. On March 7, 2017, plaintiffs
appealed the Court's February 17, 2017 Order to the
United States Court of Appeals for the Tenth Circuit.
now move this Court, pursuant to Federal Rule of Civil
Procedure 65(b), (c), to modify the scope of the Temporary
Restraining Order and require plaintiffs to post a bond in an
amount this Court considers appropriate to compensate
defendants for potential costs and damages sustained in the
event defendants are later found to have been wrongfully
restrained. Specifically, defendants seek modification of the
Temporary Restraining Order to reflect this Court's newly
developed conclusion as to the appropriate scope of
injunctive relief in this case as set forth in the February
17, 2017 Order. Defendants assert that the following changed
circumstances since the entry of the Temporary Restraining
Order justify the requested modification: (1) the Court's
February 17, 2017 Order, (2) plaintiffs filing a notice of
appeal, and (3) the Tenth Circuit's Order deferring
ruling on defendants' Motion to Dismiss to the merits
panel. Defendants further contend that because the injunctive
scope of the Temporary Restraining Order is much broader than
the injunctive relief contemplated by the Court's
guidelines set forth in its February 17, 2017 Order, equity
urges that the Temporary Restraining Order should be modified
to allow defendants to operate the South Leedey plant and to
not enjoin Dr. Khalev from engaging in any conduct that would
be considered the same conduct that he engaged in in relation
to the planning, construction, and operation of the South
Leedey plant. Defendants also contend that if the Temporary
Restraining Order is not modified, defendants will be harmed
by the restrictions on their ability to expand and/or consult
with third parties and the public interest will be harmed by
the overbroad Temporary Restraining Order.
assert that there is no reason to change the status quo
pending the appeal and defendant have cited no factual basis
for doing so. Plaintiffs further assert that because
defendants are currently suffering no harm from the Temporary
Restraining Order, their request for modification is
premature and should be denied. Plaintiffs also assert that
modifying the Temporary Restraining Order pending appeal
would present a risk of irreparable harm to plaintiffs that
outweighs any future harm to defendants. Finally, plaintiffs
assert that this Court should exercise its discretion to
determine that no bond is necessary or that only a nominal
bond should be posted.
courts retain power to modify injunctions in light of changed
circumstances.” John Zink Co. v. Zink, 241
F.3d 1256, 1260 (10th Cir. 2001) (internal quotations and
citation omitted). Further,
where a modification of an injunctive decree is sought the
court should determine whether the changes are so important
that dangers, once substantial, have become attenuated to a
shadow, and it must be shown that the moving party is exposed
to severe hardships of extreme and unexpected nature. Thus
the requested change should be approached with caution and a
strong showing is required of new conditions and
circumstances making the original injunction oppressive.
Ridley v. Phillips Petroleum Co., 427 F.2d 19, 22
(10th Cir. 1970) (internal quotations omitted).
“Nevertheless the court cannot be required to disregard
significant changes in law or facts if it is satisfied that
what it has been doing has been turned through changing
circumstances into an instrument of wrong.” Sys.
Fed'n No. 91, Ry. Emps.' Dep't, AFL-CIO v.
Wright, 364 U.S. 642, 647 (1961) (internal quotations
and citation omitted).
carefully reviewed the parties' submissions, the Court
finds that no modification of the Temporary Restraining Order
is necessary in this case. While the Court finds that its
February 17, 2017 Order could constitute changed
circumstances, the Court finds that said changed
circumstances do not subject defendants to severe hardships
and do not render the Temporary Restraining Order oppressive.
Under the Temporary Restraining Order, defendant KIVA
Holding, Inc. is not enjoined from operating its Leedey
plant. Further, under the Temporary Restraining Order, Dr.
Khalev is only enjoined from using or disclosing
plaintiffs' trade secret process and confidential and
proprietary information to build additional iodine extraction
plants using plaintiffs' trade secret process; Dr. Khalev
is not enjoined from any conduct that does not involve using
or disclosing plaintiffs' trade secret process. Finally,
the Court finds that any harm to defendants during the term
of this injunction - the length of the appeal of the
Court's February 17, 2017 Order - will be adequately
addressed through requiring plaintiffs to post a bond, as set
Rule of Civil Procedure 65(c) provides, in pertinent part:
The court may issue a preliminary injunction or a temporary
restraining order 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. . . .
Fed. R. Civ. P. 65(c). “[A] trial court may, in the
exercise of discretion, determine a bond is unnecessary to
secure a preliminary injunction if there is an absence of
proof showing a likelihood of harm.” Coquina Oil
Corp. v. Transwestern Pipeline Co., 825 F.2d 1461, ...