AssuredPartners of California Insurance Services LLC v. Mary Pahl, et al.

1 WO [5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA [8] 9 AssuredPartners of California Insurance No. CV-25-00693-TUC-RM Services LLC, 10 ORDER Plaintiff, [11] v. [12] Mary Pahl, et al., [13] Defendants. [14] 15 Pending before the Court is Plaintiff’s Motion for Preliminary Injunction (Doc. 7), 16 Plaintiff’s Motion for Leave to Conduct Expedited Discovery and for a Scheduling Order 17 on Motion for Preliminary Injunction (“Motion for Expedited Discovery”) (Doc. 8) and 18 Plaintiff’s Motion for Leave to File Reply in Support of Motion for Scheduling Order 19 (“Motion for Leave to File Reply”) (Doc. 19). For the following reasons, the Court will 20 grant the Motion for Expedited Discovery and the Motion for Leave to File Reply, and will 21 deny without prejudice and with leave to refile the Motion for Preliminary Injunction. 22 I. Background 23 On December 15, 2025, Plaintiff initiated this action by filing a Complaint (Doc. 1) 24 and paying the associated fees. Plaintiff is a California limited liability company that 25 provides “insurance products and services to businesses located in Arizona and throughout 26 the nation.” (Doc. 1 at 5.) Defendant Mary Pahl is a former employee of Plaintiff’s who 27 resigned from Plaintiff’s employ on November 17, 2025, and who, according to Plaintiff’s 28 allegations, commenced employment with Liberty Company Insurance Brokers LLC 1 (“Liberty”)—the other Defendant in this action—the same day. (Id. at 2.) Plaintiff states 2 that Liberty “has employees and does business in Arizona” and is a competitor of Plaintiff. 3 (Id. at 5.) 4 Plaintiff submits as Exhibit B to its Complaint a document entitled Restrictive 5 Covenants Agreement (“the Agreement”) signed by Ms. Pahl and a representative of 6 Plaintiff on August 14, 2023. (Doc. 1-1.) The Agreement states that “Employee shall not 7 take, copy, duplicate in any way, use, or disclose to any third party, any Confidential 8 Information for any reason other than as intended within the scope of Employee’s 9 employment.” (Id. at 5.) This restriction applies to “Confidential Information that is not a 10 trade secret” for eighteen months after “Employee’s employment with Company ends.” 11 (Id.) The term “Confidential Information” is defined as “all Trade Secrets and other 12 information that is proprietary, private, and not generally known or accessible to members 13 of the public or competitors of Company.” (Id.) 14 The Agreement further states that for eighteen months after the conclusion of 15 Employee’s employment, “Employee shall not directly or indirectly . . . solicit, sell, 16 provide, or renew any Insurance Products or Related Services to any Restricted Client . . . 17 or service any Insurance Products or Related Services on behalf of any Restricted Client[.]” 18 (Id. at 5-6.) The term “Restricted Client” is defined as “any client of Employer Group 19 during the twelve months immediately preceding the date upon which Employee’s 20 employment with Company ends . . . as to which Employee received any . . . compensation; 21 or for which Employee had material and ongoing involvement in soliciting, selling, 22 providing, renewing or servicing any Insurance Products or Related Services; or about 23 whom Employee received material Confidential Information[.]” (Id. at 6-7.) 24 In the Complaint, Plaintiff alleges that “mere hours before she sent her resignation 25 letter” Ms. Pahl used the laptop she had been issued by Plaintiff to access Confidential 26 Information regarding Restricted Clients, and with that information compiled “certificate 27 holder lists” for some of these clients. (Doc. 1 at 11.) According to Plaintiff, these lists 28 contained “information about the insured, their policies, their certificate holders, contact 1 information, and work product of [Plaintiff] not provided to others.” (Id. at 12.) Plaintiff 2 alleges that Ms. Pahl sent this information to the Restricted Clients despite the fact that the 3 information had not been requested in an effort to “launder” it, intending to ask the clients 4 to send the information back to her once she commenced work at Liberty. (Id.) 5 Plaintiff further alleges that many of the clients Ms. Pahl sent emails to before her 6 resignation have now informed Plaintiff that they are taking their business to Liberty. (Id. 7 at 13.) Plaintiff states that Ms. Pahl has accepted the business of these Restricted Clients 8 “and is now servicing that business at Liberty, in plain violation of the express terms of her 9 Agreement.” (Id.) Plaintiff submits an image of an email it claims was misdirected to Ms. 10 Pahl’s former email address at Plaintiff’s company, and which Plaintiff believes provides 11 confirmation that “Defendant Pahl is personally servicing Restricted Client accounts.” (Id.) 12 The email identifies Ms. Pahl as an Account Manager at Liberty Company Insurance 13 Brokers. (Id.) Plaintiff further states that Liberty has helped Ms. Pahl in the enterprise of 14 “laundering” Confidential Information and proceeding to service the accounts of Restricted 15 Clients. (Id. at 10.) Plaintiff cites Liberty’s “history of poaching business through 16 misappropriation of competitors’ trade secrets,” and further cites evidence that “Liberty’s 17 attorney,” Mr. Louis Shoch, signed Ms. Pahl’s resignation letter. (Id. at 2, Doc. 1-1.) 18 Plaintiff sets forth in its Complaint seven counts arising from these allegations. (See 19 Doc. 1.) Count I is a breach of contract claim against Ms. Pahl. (Doc. 1 at 14.) Count II is 20 a tortious interference with contractual relations claim against Liberty. (Id. at 15.) Count 21 III is an unjust enrichment claim against Ms. Pahl and Liberty. (Id.) Count IV is a claim 22 for breach of the duty of loyalty against Ms. Pahl. (Id. at 16.) Count V is a claim for aiding 23 and abetting a breach of the duty of loyalty against Liberty. (Id. at 17.) Count VI is a claim 24 for trade secret misappropriation under the federal Defend Trade Secrets Act against Ms. 25 Pahl and Liberty. (Id.) And finally, Count VII is a claim of trade secret misappropriation 26 under the “Arizona Trade Secrets Act”1 against Ms. Pahl and Liberty. (Id. at 19.) 27 On December 16, 2025—one day after filing its Complaint—Plaintiff filed a Motion 28 1 The Court presumes Plaintiff is referring to the Arizona Uniform Trade Secret Act, A.R.S. § 44-401, et seq. 1 for Preliminary Injunction (Doc. 7) and the present Motion for Expedited Discovery (Doc. 2 8). In the Motion for Preliminary Injunction, Plaintiff requests that Defendants be 3 restrained from possessing or using Plaintiff’s Confidential Information; be required to 4 provide forensic verification that they no longer possess Plaintiff’s Confidential 5 Information; and affirm the same under oath. (Doc. 7 at 6-7.) Plaintiff further requests that 6 Ms. Pahl be restrained from providing insurance services to the clients deemed off-limits 7 by the Restrictive Covenants Agreement. (Id.) On December 29, 2025, the Court issued an 8 Order requiring Defendants to file a response to the Motion for Expedited Discovery on or 9 before January 8, 2026, and ordering that no reply to the response to the Motion for 10 Expedited Discovery would be filed absent further Order of the Court. (Doc. 14.) The Court 11 further stated that it would defer resolution of the Motion for Preliminary Injunction until 12 after resolution of the Motion for Expedited Discovery. (Id.) On January 8, 2026, 13 Defendants timely filed their response to the Motion for Expedited Discovery. (Doc. 18.) 14 In the Motion for Expedited Discovery, Plaintiff argues that good cause for 15 permitting expedited discovery exists here because Plaintiff has moved for a preliminary 16 injunction, and Plaintiff’s requested discovery will assist Plaintiff in establishing the 17 validity of its claims and the proper scope of any injunctive relief. (Doc. 8 at 4.) Plaintiff 18 further argues that there is “a significant risk of spoliation of evidence in the absence of 19 expedited discovery” because this matter involves electronically stored information, and 20 such information is more likely to be “altered or lost.” (Id.) Plaintiff proposes that each 21 party be permitted to serve up to five interrogatories and requests for production on the 22 opposition; to serve non-party documentary subpoenas containing up to five requests for 23 production; to conduct depositions of each party limited to three hours; and to conduct 24 depositions of relevant non-parties limited to two hours. (Id. at 4-5.) Plaintiff submits five 25 proposed interrogatories and five proposed requests for production. (Doc. 8-2.) Plaintiff 26 proposes that the expedited discovery, briefing on the Motion for Preliminary Injunction, 27 and a hearing on the Motion for Preliminary Injunction all be completed within forty-five 28 to sixty days. (Doc. 8 at 6.) 1 In their response to Plaintiff’s Motion for Expedited Discovery, Defendants argue 2 that the Motion for Expedited Discovery violates Local Rule of Civil Procedure (“LRCiv”) 3 7.2(j), which states that “[n]o discovery motion will be considered or decided unless a 4 statement of moving counsel is attached thereto certifying that after personal consultation 5 and sincere efforts to do so, counsel have been unable to satisfactorily resolve the matter.” 6 Defendants further argue that Plaintiff should be required to identify with particularity the 7 trade secrets it claims were misappropriated before any discovery may commence. (Doc. 8 18 at 21.) Defendants also state that Plaintiff has not identified a sufficient need for 9 expedited discovery, and that in Defendants’ view, Plaintiff’s proposed schedule for 10 discovery, briefing, and a hearing on the Motion for Preliminary Injunction is overly 11 compressed and “unworkable.” (Id. at 22-23.) Defendants’ position is that, at most, the 12 Court should order an expedited conference between the parties pursuant to Rule 26(d)(1).2 13 On January 14, 2026, Plaintiff filed a Motion for Leave to File Reply in support of 14 the Motion for Expedited Discovery. (Doc. 19.) In the Motion for Leave to File Reply, 15 Plaintiff argues that a reply is justified because Defendants have unfairly mischaracterized 16 Plaintiff’s efforts to comply with LRCiv 7.2(j),3 and Defendants’ response to the Motion 17 for Expedited Discovery improperly advances arguments relevant instead to the Motion 18 for Preliminary Injunction. (Id.) On January 15, 2026, Defendants filed a response to the 19 Motion for Leave to File Reply, in which they explain that they have no objection to new 20 legal argument presented in any proposed reply, but “do oppose any attempt by Plaintiff to 21 submit new evidence” in its reply. (Doc. 20 at 2.) On January 16, 2026, Plaintiff filed a 22 Notice, attached to which as Exhibit A is a copy of Plaintiff’s proposed reply. (Doc. 21.) 23 The proposed reply reiterates Plaintiff’s position that expedited discovery is warranted, and 24 2 Rule 26(d)(1) provides that “[a] party may not seek discovery from any source before the parties have conferred as required by Rule 26(f), except . . . when authorized . . . by court 25 order.” 3 Because it is in the interests of justice to consider the Motion for Expedited Discovery on 26 the merits, the Court will excuse any noncompliance with LRCiv 7.2(j) as it relates to the Motion for Expedited Discovery. Moreover, the purpose of LRCiv 7.2(j) appears to be to 27 encourage cooperation between counsel in the context of discovery disputes arising after discovery has been formally initiated, as opposed to expedited discovery requests in cases 28 where opposing counsel has not yet appeared at the time the request is filed. In the future, however, the parties must comply with LRCiv 7.2(j). 1 contains images of additional emails between counsel in an email chain first submitted to 2 the Court as an exhibit to Defendants’ response to the Motion for Expedited Discovery. 3 (Doc. 21-1.) 4 II. Motion for Expedited Discovery 5 In general, discovery may not commence until after the parties have conferred 6 pursuant to Rule 26(f). Burch v. HCA Healthcare, Inc., No. 2:25-CV-01408-JAD-MDC, [7] 2025 WL 2772572 at *1 (D. Nev. Sept. 26, 2025). However, a district court may permit 8 expedited discovery prior to the Rule 26(f) conference upon a showing of good cause. Am. 9 LegalNet, Inc. v. Davis, 673 F. Supp. 2d 1063, 1066 (C.D. Cal. 2009) (collecting cases). 10 The good cause standard may be satisfied where a party seeks a preliminary injunction. Id. 11 (internal citations omitted). Factors considered by district courts in determining the 12 propriety of expedited discovery include: (1) whether a preliminary injunction is pending; 13 (2) the purpose for requesting the expedited discovery; (3) how far in advance of the typical 14 discovery process the request was made; (4) the breadth of the discovery requests; (5) the 15 burden on the defendants to comply with the requests; and (6) whether the requests are 16 narrowly tailored to achieve their stated purpose. See id.; see also Perdomo v. Noem, No. 17 2:25-CV-05605-MEMF-SP, 2025 WL 3053167 at *1 (C.D. Cal. Oct. 17, 2025). 18 Here, a motion for preliminary injunction is pending, and Plaintiff’s stated purpose 19 for requesting the expedited discovery is to support the motion for preliminary injunction, 20 two factors which weigh heavily in favor of granting Plaintiff’s request. Although 21 Plaintiff’s request was made significantly in advance of the typical discovery process, the 22 breadth of the requests and the burden on Defendants to comply with them is not 23 disproportionate in light of the value that the proposed discovery will have in establishing 24 the propriety and scope of any injunctive relief. As such, the Court will grant Plaintiff’s 25 Motion for Expedited Discovery. In consideration of Defendant’s arguments regarding the 26 time required to respond to Plaintiff’s proposed discovery requests, however, the Court 27 will modify Plaintiff’s proposed expedited discovery deadlines as set forth below. Pursuant 28 to Rule 26(d)(1), the Court will allow the parties to execute expedited discovery prior to 1 conferring under Rule 26(f). 2 In Defendants’ response to the Motion for Expedited Discovery, Defendants 3 contend that Plaintiff should be required to identify with particularity the trade secrets it 4 claims were misappropriated before any discovery may commence. (Doc. 18 at 21.) Since 5 the Court presently authorizes only limited, expedited discovery of information relevant to 6 Plaintiff’s Motion for Preliminary Injunction, and because “[d]iscovery in a trade-secret 7 case requires an ‘iterative process where requests between parties lead to a refined and 8 sufficiently particularized trade secret identification,’”4 the Court will not at this time order 9 Plaintiff to more specifically identify the trade secrets that are the subject of some of its 10 claims.5 11 III. Motion for Leave to File Reply 12 As discussed above, Plaintiff seeks leave to file a reply in support of the Motion for 13 Expedited Discovery because, in Plaintiff’s view, Defendants have not given a fair account 14 of Plaintiff’s efforts to comply with LRCiv 7.2(j), and Defendants have prematurely 15 advanced arguments relevant to the Motion for Preliminary Injunction rather than the 16 Motion for Expedited Discovery. (Doc. 19.) The Court will grant Plaintiff’s Motion for 17 Leave to File a Reply, and has read and considered the proposed reply submitted by 18 Plaintiff (Doc. 21-1). 19 IV. Motion for Preliminary Injunction 20 Since Plaintiff will likely need to supplement or reformulate its Motion for 21 Preliminary Injunction as a result of information obtained through the expedited discovery 22 process, the Court will deny Plaintiff’s currently pending Motion for Preliminary 23 Injunction (Doc. 7) without prejudice and with leave to refile. 24 Accordingly, 25 . . . . [26] 4 Quintara Biosciences, Inc. v. Ruifeng Biztech, Inc., 149 F.4th 1081 , 1088 (9th Cir. 2025). 27 5 Plaintiff has alleged that the spreadsheets compiled by Ms. Pahl and sent to clients prior to her departure from Plaintiff’s company, which it alleged contained “information about 28 the insured, their policies, their certificate holders, contact information, and work product of [Plaintiff] not provided to others” constitute protectable trade secrets. (Doc. 1 at 12.) 1 IT IS ORDERED that Plaintiff’s Motion for Preliminary Injunction (Doc. 7) is 2 denied without prejudice and with leave to refile as set forth below. 3 IT IS FURTHER ORDERED that Plaintiff’s Motion for Leave to File Reply in 4 Support of Motion for Scheduling Order (Doc. 19) is granted. 5 IT IS FURTHER ORDERED that Plaintiff’s Motion for Leave to Conduct 6 Expedited Discovery and for a Scheduling Order on Motion for Preliminary Injunction 7 (Doc. 8) is granted. The following governs expedited discovery and briefing on Plaintiff’s 8 renewed Motion for Preliminary Injunction in the above-captioned matter: 9 1. Protective Order. The parties shall meet and confer to draft a stipulated 10 protective order governing the disclosure of confidential information. Any such 11 stipulated protective order is due on or before January 30, 2026. 12 2. Written Discovery Requests. Each party is authorized to serve up to five (5) 13 interrogatories and five (5) requests for production on any other party. Each 14 party is additionally authorized to serve non-party documentary subpoenas 15 and/or subpoenas duces tecum containing up to five (5) requests for production. 16 Written discovery requests shall be served on or before February 2, 2026. 17 Responses to written discovery requests, as well as responsive documents, shall 18 be due on or before February 13, 2026. 19 3. Discovery Disputes. In the event of a dispute over written discovery requests, 20 the parties must engage in personal consultation regarding the dispute and must 21 make a sincere effort to resolve the conflict expeditiously. See LRCiv 7.2(j). The 22 deadline to file a motion regarding any dispute over written discovery requests 23 is February 20, 2026, with any response due by February 27, 2026, and no 24 reply permitted absent leave of Court. 25 4. Depositions. Depositions of parties and any relevant non-parties shall be 26 completed on or before February 27, 2026. Depositions of parties are limited 27 to three (3) hours on the record, and depositions of non-parties are limited to 28 two (2) hours on the record. Taking the deposition of a witness during the 1 expedited discovery period shall not prevent a party from later deposing that 2 witness in the course of ordinary discovery. 3 5. Scope of Expedited Discovery. All expedited discovery shall be limited to the 4 issues relevant to Plaintiff's forthcoming Motion for Preliminary Injunction. 5 6. Motion for Preliminary Injunction. Plaintiff’s renewed Motion for Preliminary 6 Injunction shall be filed on or before March 11, 2026. Defendant’s response 7 shall be filed within fourteen (14) days of the date Plaintiff's renewed Motion 8 for Preliminary Injunction is filed. Plaintiff's reply shall be filed within seven 9 (7) days of the date Defendant’s response is filed. 10 IT IS FURTHER ORDERED that a hearing on Plaintiff's renewed Motion for 11 |} Preliminary Injunction is scheduled for April 8, 2026, at 2:30 p.m., before the Honorable Rosemary Marquez, in Courtroom 5A of the United States District Court for the District 13 || of Arizona, Evo A. DeConcini U.S. Courthouse, 405 W. Congress Street, Tucson, AZ 14]) 85701. 15 Dated this 26th day of January, 2026. [16] 17 ff 19 ANGULAyf Honorable Rosthiary □□□□□□□ 20 United States District □□□□□ [28] -9-