## Facts

- Kenneth D. Malamed founded Financial Management Advisors, LLC (FMA), an investment firm serving high-net-worth clients.
- In 2008, First Western Capital Management Company (FWCM) acquired FMA; Malamed worked for FWCM until FWCM terminated him on September 1, 2016.
- In 2016, FWCM considered selling the company; Malamed learned of the potential sale and objected to a contemplated buyer.
- After learning of the possible sale, Malamed instructed his assistant to print copies of his “client book,” containing contact information for about 5,000 FWCM contacts, including 331 current clients, and spreadsheets listing clients’ assets under management and fees.
- FWCM filed suit alleging trade-secret misappropriation under the Defend Trade Secrets Act (DTSA) and the Colorado Uniform Trade Secrets Act (CUTSA), plus breach of contract and breach of fiduciary duty.
- FWCM sought a temporary restraining order and a preliminary injunction to prevent Malamed from using the information and soliciting FWCM clients.

## Issues

1. Whether a plaintiff seeking a preliminary injunction under DTSA and CUTSA may be excused from proving irreparable harm, based on a presumption of irreparable harm from statutory authorization of injunctive relief.

## Decision

- The Tenth Circuit reversed the preliminary injunction.
- The court held that DTSA and CUTSA do not permit a court to presume irreparable harm merely because the statutes authorize injunctive relief.
- Because the district court found monetary damages could compensate FWCM and therefore irreparable harm was not shown, FWCM was not entitled to preliminary injunctive relief.

## Legal Principles

- A preliminary injunction requires proof of: (1) likelihood of success on the merits, (2) likelihood of irreparable harm absent relief, (3) balance of equities in the movant’s favor, and (4) consistency with the public interest.
- Irreparable harm is an independent, mandatory element; it cannot be replaced by categorical presumptions tied to statutory violations.
- Statutes authorizing injunctive relief (including DTSA and CUTSA) do not displace traditional equitable requirements for preliminary injunctive relief.
- Supreme Court authority requires rejection of categorical rules that bypass the four-factor equitable test in favor of automatic presumptions.

## Conclusion

The Tenth Circuit held that plaintiffs seeking preliminary injunctive relief for trade-secret misappropriation under DTSA or CUTSA must affirmatively prove irreparable harm; statutory authorization for injunctions does not justify presuming irreparable harm, and an injunction cannot stand where damages are adequate.


First W. Capital Mgmt. Co. v. Malamed, 874 F.3d 1136 (10th Cir. 2017)