Next Advisor Continued, Inc. v. Lendingtree, Inc.

Next Advisor Continued, Inc. v. LendingTree, Inc., 2017 NCBC 51.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
MECKLENBURG COUNTY 15 CVS 21379

NEXT ADVISOR CONTINUED,
INC.,

Plaintiff,
ORDER AND OPINION ON
v. DEFENDANTS’ MOTION FOR
PARTIAL SUMMARY JUDGMENT1
LENDINGTREE, INC. AND
LENDINGTREE, LLC,

Defendants.

1. THIS MATTER is before the Court upon Defendants LendingTree, Inc. and

LendingTree, LLC’s (together “LendingTree” or “Defendants”) Motion for Partial

Summary Judgment (the “Motion”) in the above-captioned case. Having considered

the Motion and supporting documents, the briefs in support of and in opposition to

the Motion, appropriate matters of record, and the arguments of counsel at the April

13, 2017 hearing on the Motion, the Court hereby GRANTS the Motion.

Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P., by
Christopher G. Smith, Susan H. Hargrove, and Isaac Linnartz, for
Plaintiff Next Advisor Continued, Inc.

Moore & Van Allen PLLC, by Jonathan M. Watkins, Scott M. Tyler, M.
Cabell Clay, Thomas D. Myrick, Russell F. Sizemore, and Glenn E.
Ketner, III, for Defendants LendingTree, Inc. and LendingTree, LLC.

Bledsoe, Judge.

1 To protect LendingTree’s confidential business information, this Opinion has been redacted.

An original, unredacted version of this Opinion was filed under Seal on June 9, 2017 and is
available, as necessary, for any appellate process.
I.

INTRODUCTION

2. The core of this dispute is Plaintiff Next Advisor Continued, Inc.’s

(“Plaintiff” or “Next Advisor”)2 contention that “[a]fter acquiring Next Advisor’s

confidential information, and Trade Secret Information [through the parties’ non-

disclosure agreement entered into to facilitate negotiations concerning Defendants’

potential acquisition of Next Advisor], [Defendants] began to develop new content

and promote that content heavily on [the channels that Next Advisor confidentially

had disclosed as [its] most productive revenue channels]” and “revolutionized [their]

entire credit card marketing strategy.” (Compl. ¶ 23.) Defendants vigorously dispute

Next Advisor’s allegations and deny all liability on Next Advisor’s claims.

II.

PROCEDURAL HISTORY

3. Next Advisor initiated this action in Mecklenburg County Superior Court on

November 6, 2015, seeking injunctive and monetary relief, including punitive

damages, against Defendants for alleged breach of a non-disclosure agreement,

misappropriation of trade secrets under N.C. Gen. Stat. §§ 66-152 et seq., and unfair

or deceptive trade practices under N.C. Gen. Stat. § 75-1.1. (See generally Compl.)

4. After a period of discovery, Next Advisor moved for a preliminary injunction

on April 11, 2016 (the “P.I. Motion”). The Court held an evidentiary hearing on the

P.I. Motion on June 21, 2016.

2 Until June 22, 2016, Plaintiff’s corporate name was Next Advisor, Inc.
5. On June 29, 2016, the Court issued a preliminary injunction (the “P.I.

Order”) barring Defendants and those acting in concert with them from “using or

disclosing the confidential and trade secret information that Defendants obtained

from Next Advisor pursuant to the Mutual Non-Disclosure Agreement dated

November 20, 2014” (the “NDA”), and barring such actors from, “engaging in paid

credit card content marketing by placing credit card advertisements through any

content marketing company” through and until the conclusion of this civil action, and

unless and until ordered otherwise by the Court.3 (P.I. Order ¶ 73 (a)–(b).)

6. In November 2016, Defendants acquired Iron Horse Holdings, LLC, which

does business as CompareCards (“CompareCards”). Defendants subsequently sought

clarification concerning whether the restrictions in the P.I. Order extended to

CompareCards, whereupon, after a telephone conference and full briefing, the Court

held a hearing on December 16, 2016, at which all parties were represented by

counsel. After considering the arguments of counsel, the Court issued an Order on

December 22, 2016, concluding “that CompareCards, is acting in concert or

participation with Defendants, and based on CompareCards’ [future business plans

as presented by Defendants,] intends to act in concert or participation with

Defendants, and as such, is subject to the [P.I. Order].” (Order on Defs.’ Mot. Clarify

Prelim. Inj. ¶ 10.)

3 The P.I. Order was first filed under seal on June 29, 2016 so that the Court could determine

whether the parties contended that any portion of the Order contained confidential business
information that should remain under seal. After no objections were made, the Court refiled
the P.I. Order on the public docket in its entirety without redactions on July 6, 2016.
7. On February 20, 2017, Defendants moved for partial summary judgment,

contending that judgment should be entered as a matter of law establishing that

Plaintiff is not entitled to either (i) compensatory damages or (ii) injunctive relief

extending after January 2, 2018.

8. The Court held a hearing on the Motion on April 13, 2017, at which all

parties were represented by counsel. The time for briefing, arguments, and further

submissions has now passed, and the Motion is ripe for resolution.

III.

FACTUAL BACKGROUND

9. While findings of fact are not necessary or proper on a motion for summary

judgment, “it is helpful to the parties and the courts for the trial judge to articulate a

summary of the material facts which he considers are not at issue and which justify

entry of judgment.” Collier v. Collier, 204 N.C. App. 160, 161–62, 693 S.E.2d 250, 252

(2010) (quotations and citation omitted). Therefore, this Court limits its factual

recitation to the undisputed material facts necessary and helpful to decide the

Motion, and not to resolve issues of material fact.

10. Erik Larson (“Mr. Larson”) is the founder of Next Advisor and was Next

Advisor’s CEO at all times relevant to this dispute. (Second Larson Aff. ¶ 1.)

11. Next Advisor’s business involved using sponsored ads on popular websites

that when clicked took the viewer to Next Advisor’s blog, which contained editorial

content intended to drive consumers to apply for credit cards. (First Larson Aff. ¶ 1;

Second Larson Aff. ¶¶ 5–6.) Credit card issuers paid Next Advisor when a consumer
applied and was approved for a credit card through the Next Advisor webpage. (First

Larson Aff. ¶ 1.)

12. LendingTree is an online marketer and advertiser of loan and credit

products. (DiToro Aff. ¶ 4.)

13. Beginning in the fall of 2014 and continuing through the spring and summer

of 2015, Next Advisor and Defendants engaged in discussions exploring Defendants’

potential acquisition of Next Advisor. (First Larson Aff. ¶ 2.)

14. This dispute arose after those acquisition negotiations failed in the summer

of 2015. (First Larson Aff. ¶¶ 5–7.) As noted above, this litigation commenced in

November 2015.

15. Several months later, on May 5, 2016, Next Advisor and Bankrate, Inc.

(“Bankrate”) executed an Asset Purchase Agreement (the “APA”), by which Bankrate

agreed to purchase substantially all of Next Advisor’s assets. (Defs.’ Mot. Partial

Summ. J. Ex. A, hereinafter “APA”.) Bankrate’s purchase of Next Advisor’s assets

closed on June 17, 2016. (Defs.’ Mot. Partial Summ. J. Ex. G, 6/21/16 Hr’g Tr.

(Larson) 51:11–20.)

16. Of particular relevance to Defendants’ Motion, the APA provided for the

purchase of all of Next Advisor’s confidential information and intellectual property,

(APA 11, § 2.1(a)(viii)), which included all trade secrets and proprietary information,

(APA 6–7, § 1.1; Defs.’ Mot. Supp. Partial Summ. J. Ex B, Litigation Agreement,

hereinafter “Litig. Agmt.”). However, the APA expressly excluded “Seller’s claims

presently alleged as of the date of [the APA] in the litigation described in Schedule
2.1(b)(viii)[.]” (APA 13, § 2.1(b)(vii).) The excluded claims set forth in Schedule

2.1(b)(viii) specifically included:

4. The claims of Seller in, but not the Intellectual Property (and any
other rights thereto) alleged in, Next Advisor v. LendingTree, Inc. and
LendingTree, LLC (Civil Action No. 15-CVS-20775), filed in the State of
North Carolina, County of Mecklenburg, General Court of Justice
Superior Court Division.

(APA App. 3.)

17. In addition to upfront consideration of $79.25 million, the APA provided an

opportunity for Next Advisor to earn up to $145.7 million in additional compensation

over an eighteen-month period if Bankrate were to achieve certain performance

targets (the “Earnout”). (APA 18–19, § 2.6.) It is undisputed that the APA provides

that the eighteen-month period (the “Earnout Period”) expires on January 2, 2018.

(APA 19, § 2.6(a)(vii).)

18. Since the Bankrate acquisition, Next Advisor has had no continuing credit

card or marketing operations. (Defs.’ Mot. Partial Summ. J. Ex E, Larson 30(b)(6)

Dep. 23:11–20, 61:13–14, hereinafter “Larson 30(b)(6) Dep.”.)

19. Except to the extent of its interest in the Earnout, Next Advisor does not

currently own any trade secrets, and its ownership of confidential information is

limited to accounts receivable and bank accounts. (Larson 30(b)(6) Dep. 22:16–23:10;

APA; Litig. Agmt.)

20. LendingTree has not generated a profit from its paid credit card content

marketing business. (Pl.’s Mem. Opp’n Defs.’ Mot. Partial Summ. J. 7.) To the

contrary, between the initiation of due diligence in late 2014 or early 2015 and the
entry of the P.I. Order, LendingTree had nearly $[REDACTED] in revenue, but over

$[REDACTED] in expenses, arising from its paid credit card content marketing

business. (Pl.’s Mem. Opp’n Defs.’ Mot. Partial Summ. J. 6 n.3, Ex. 6–8, Defs.’ Resp.

to Pl.’s Interrogs. No. 18–21; Ex. 3, Ziegler LendingTree 30(b)(6) Dep. 123:5–124:10.)

21. Next Advisor has not sought to join Bankrate as a party to this litigation,

and Bankrate has not sought to intervene or otherwise appear in this case for any

purpose.

IV.

LEGAL STANDARD

22. Defendants’ Motion seeks entry of summary judgment determining that

Plaintiff cannot obtain: (a) compensatory damages; or (b) injunctive relief extending

after January 2, 2018.

23. Summary judgment is appropriate “if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show that

there is no genuine issue as to any material fact and that any party is entitled to

judgment as a matter of law.” Variety Wholesalers, Inc. v. Salem Logistics Traffic

Servs., LLC, 365 N.C. 520, 523, 723 S.E.2d 744, 747 (2012) (quoting N.C. R. Civ. P.

56(c)). “A party against whom a claim, counterclaim, or crossclaim is asserted or a

declaratory judgment is sought, may, at any time, move with or without supporting

affidavits for a summary judgment in his favor as to all or any part thereof.” N.C. R.

Civ. P. 56(b).
24. The moving party bears the burden of showing that no genuine issue of

material fact remains to be resolved. Camalier v. Jeffries, 340 N.C. 699, 706, 460

S.E.2d 133, 136 (1995). A genuine issue is one “supported by substantial evidence,”

and “an issue is material if the facts alleged would constitute a legal defense, or would

affect the result of the action, or if its resolution would prevent the party against

whom it is resolved from prevailing in the action.” DeWitt v. Eveready Battery Co.,

355 N.C. 672, 681, 565 S.E.2d 140, 146 (2002) (internal quotations and citations

omitted).

25. Summary judgment dismissing a party’s claim will be granted if the movant

can prove “an essential element of the opposing party’s claim does not exist, cannot

be proven at trial, or would be barred by an affirmative defense.” Dobson v. Harris,

352 N.C. 77, 83, 530 S.E.2d 829, 835 (2000). “Once the party seeking summary

judgment makes the required showing, the burden shifts to the nonmoving party to

produce a forecast of evidence demonstrating specific facts, as opposed to allegations,

showing that he can at least establish a prima facie case at trial.” Gaunt v. Pittaway,

139 N.C. App. 778, 784–85, 534 S.E.2d 660, 664 (2000).

V.

ANALYSIS

A. Compensatory Damages

26. Compensatory damages “cover[] all loss recoverable as a matter of right and

include[] all damages (beyond nominal damages) other than punitive or exemplary

damages.” Dobrowolska v. Wall, 138 N.C. App. 1, 12, 530 S.E.2d 590, 598 (2000)
(quoting 22 Am. Jur. 2d Damages § 23 (1988)); see also Black’s Law Dictionary 416

(8th ed. 2004) (defining actual damages as synonymous with compensatory damages).

Defendants contend that Plaintiff’s admissions,4 together with the sworn

acknowledgments of Mr. Larson, Plaintiff’s CEO, founder, and damages expert, and

Shirley Webster, Plaintiff’s retained damages expert,5 establish that the undisputed

evidence shows that Plaintiff cannot prove with reasonable certainty the amount of

Plaintiff’s actual losses from Defendants’ alleged wrongdoing. (Defs.’ Mem. Supp.

Mot. Partial Summ. J. 1–2, 5–7.) Based on these admissions and acknowledgments,

Defendants seek a ruling that Plaintiff cannot recover compensatory damages on any

claim in this action as a matter of law. (Defs.’ Mot. Partial Summ. J; Defs.’ Mem.

Supp. Mot. Partial Summ. J. 8–10.)

4
Plaintiff has conceded the difficulty of calculating Plaintiff’s damages with any certainty.
(Defs.’ Mot. Supp. Mot. Partial Summ. J. Ex. H, 9/29/16 Hr’g Tr. (Smith) 38:11–12 (“[T]here’s
no more classic demonstration of the difficulty of proving monetary damages.”); Pl.’s Mem.
Opp’n Defs.’ Mot. Stay P.I. Order 7 (“While it is clear that LendingTree’s continued
competition would harm Next Advisor’s efforts to maximize its earnout, it would be extremely
difficult to ascertain those damages with any certainty.”); Defs.’ Mot. Partial Summ. J. Ex.
M, Pl.’s Resp. Defs.’ Writ of Cert. 33 (“Next Advisor has demonstrated that it will likely suffer
significant harm if LendingTree is allowed to use Next Advisor’s own information against it
in the competitive marketplace. Those damages would be extraordinarily difficult to
calculate.”).)
5 Plaintiff’s experts have admitted under oath that the damage and harm suffered by
Plaintiff due to Defendants’ conduct is “unquantifiable,” (Defs.’ Mot. Partial Summ. J. Am.
Ex. F, Larson Expert Dep. 295:12–296:2, 296:20–296:24; see also Ex. J, Larson Expert
Disclosure 1 (designating Mr. Larson to testify that the harm Plaintiff suffered is
“unquantifiable”)), and “impossible to calculate . . . with any reasonable certainty[,]” (Defs.’
Mot. Partial Summ. J. Ex D, Webster Dep. 15:22–16:3 (hereinafter “Webster Dep.”); see also
Webster Dep. 13:17–23, 16:13–18, 17:23–18:4, 186:1–7, 238:18–22.) Ms. Webster has also
testified that she was not aware of any information from which she could quantify with
reasonable certainty any damages suffered by Plaintiff. (Webster Dep. 17:23–18:5, 146:5–
15.)
27. Although Plaintiff agrees that it is unable to quantify its economic loss or

lost profits resulting from Defendants’ alleged wrongdoing with reasonable certainty,

Plaintiff contends that Defendants have not argued in their Motion against Plaintiff’s

right to recover nominal damages, actual damages based on unjust enrichment,

punitive damages, and attorneys’ fees, and thus have failed to meet their initial

burden under Rule 56 to show that Plaintiff is not entitled to compensatory damages.

(Pl.’s Mem. Opp’n Defs.’ Mot. Partial Summ. J. 6.)

28. As an initial matter, Defendants’ Motion argues that Plaintiff is not entitled

to compensatory damages as a matter of law; thus, Defendants’ Motion does not

address Plaintiff’s right to recover nominal damages, punitive damages or attorneys’

fees, none of which are in the nature of compensatory damages. See Dobrowolska,

138 N.C. App. at 12, 530 S.E.2d at 598. In any event, Defendants clarified at the

hearing that they do not seek a ruling concerning Plaintiff’s right to seek punitive

damages or attorneys’ fees on this Motion, and, to the extent Defendants intend the

Motion to request a ruling as to Plaintiff’s right to recover nominal damages, which

is unclear, the Court denies Defendants’ Motion based on the record and arguments

before the Court at this stage of the litigation.

29. As to Plaintiff’s right to seek unjust enrichment damages for Defendants’

alleged misappropriation of trade secrets,6 Defendants have satisfied their initial

burden under Rule 56 by pointing to undisputed evidence that Defendants did not

6 Plaintiff has conceded that it cannot show with reasonable certainty economic loss resulting
from Defendants’ alleged misappropriation. See supra ¶ 27; N.C. Gen. Stat. § 66-154(b)
(“[A]ctual damages may be recovered, measured by the economic loss or the unjust
enrichment caused by misappropriation of a trade secret, whichever is greater.”).
earn a profit in their paid credit card content marketing business after execution of

the NDA and prior to the entry of the P.I. Order.

30. The courts of this State routinely look to a defendant’s profits as the proper

measure of unjust enrichment damages on a trade secret misappropriation claim

under Chapter 66. For example, in Medical Staffing Network Inc. v. Ridgway, the

Court of Appeals found that, after a bench trial, the “trial court’s use of [defendant’s]

total revenue as a basis for calculating [plaintiff’s] lost profits was too speculative to

constitute a proper measure of damages.” 194 N.C. App. 649, 660, 670 S.E.2d 321,

330 (2009). Instead, the Court concluded that defendant’s profits were the proper

measure—either the profit earned by the defendant as a result of the alleged trade

secret misappropriation or the profit attributable to a change in the plaintiff’s and

defendant’s relative market share. Id. at 661, 670 S.E.2d at 330. See, e.g., GE Betz,

Inc. v. Conrad, 231 N.C. App. 214, 239, 752 S.E.2d 634, 652 (2013) (quoting Black’s

Law Dictionary 1329 (9th ed. 2009) (observing that “[p]rofit is ‘[t]he excess of

revenues over expenditures in a business transaction’”).

31. Other North Carolina appellate decisions are to similar effect. See, e.g., GE

Betz, Inc. 231 N.C. App. at 238, 752 S.E.2d at 652 (holding measure of unjust

enrichment damages for trade secret misappropriation is “the profits garnered by

[defendant]” (emphasis added)); Potter v. Hilemn Labs., Inc., 150 N.C. App. 326, 336,

564 S.E.2d 259, 265–66 (2002) (calculating unjust enrichment damages for trade

secret misappropriation by subtracting direct costs from the sales of products using

the trade secret); Barker Indus. v. Gould, 146 N.C. App. 561, 566–67, 553 S.E.2d 227,
231 (2001) (calculating unjust enrichment damages for trade secret misappropriation

as defendants’ net income or net sales).

32. Thus, Defendants’ proof shifts the burden to Plaintiff under Rule 56 to show

at least a prima facie case on this issue for trial. Plaintiff contends that it has met

its burden by forecasting evidence that Defendants have been unjustly enriched by

their alleged misappropriation because Defendants earned substantial revenues,

although not profits, from paid credit card content marketing after they gained access

to Plaintiff’s confidential information and trade secrets. (Pl.’s Mem. Opp’n Defs.’ Mot.

Partial Summ. J. 7–8.) Plaintiff also asserts that Defendants’ willingness to suffer a

loss on its paid credit card content marketing business, and Defendants’ CEO’s

assertion that this business is the “next significant growth engine for our company,”

(Bona Aff. Ex. B; Webster Dep. 74:17–77:24, 106:15–108:23; Pl.’s Mem. Opp’n Defs.’

Mot. Partial Summ. J. Ex. 11), evidences that the allegedly misappropriated trade

secrets have value to Defendants and establishes that Defendants have gained an

improper benefit from their wrongful misappropriation.

33. North Carolina law makes plain, however, that Plaintiff’s evidence of

Defendants’ revenues in Defendants’ paid credit card content marketing business,

but not their profits, is too speculative to provide evidence of Plaintiff’s alleged

damages on its misappropriation claim to a reasonable certainty. See, e.g., GE Betz,

Inc. 231 N.C. App. at 238, 752 S.E.2d at 652; Potter, 150 N.C. App. at 336, 564 S.E.2d

at 265–66; see generally Med. Staffing Network, Inc., 194 N.C. App. at 660–61, 670

S.E.2d at 330 (“[T]he party seeking damages bears the burden of showing that the
amount of damages is based upon a standard that will allow the finder of fact to

calculate the amount of damages with reasonable certainty.”).

34. Moreover, Plaintiff has not offered any evidence as to the value of the

allegedly misappropriated trade secrets or the resulting increase in value of

Defendants’ paid credit card content marketing business from the alleged

misappropriation, and discovery is now closed. Without more, the Court cannot

conclude that Plaintiff has forecast evidence demonstrating its alleged damages with

reasonable certainty. See, e.g., Med. Staffing Network, Inc., 194 N.C. App. at 660, 670

S.E.2d at 330 (holding that “reasonable certainty” requires more than “hypothetical

or speculative forecasts”).

35. As such, the Court concludes that the undisputed evidence establishes that

Plaintiff has failed to show that it has suffered legally cognizable unjust enrichment

damages on its misappropriation claim.

36. Accordingly, based on the foregoing, the Court concludes that Defendants

are entitled to the entry of summary judgment establishing that Plaintiff is not

entitled to recover compensatory damages for any of its claims, including any unjust

enrichment damages on its misappropriation claim, as a matter of law.7

7 Plaintiff relies heavily on Booe v. Shadrick, 322 N.C. 567, 570, 369 S.E.2d 554, 555–56
(1988) to support its proposition that its evidence is sufficient to survive summary judgment
in light of the equitable nature of unjust enrichment. (Pl.’s Mem. Opp’n Defs.’ Mot. Partial
Summ. J. 7.) Although Booe holds that damages for an unjust enrichment claim is the value
of the benefit conferred, the Supreme Court concluded in that case that evidence of specific
prior payments for similar services provided a basis to calculate damages with reasonable
certainty. Id. at 571, 369 S.E.2d at 556. No such evidence has been proffered here.
B. Injunction Duration

37. Although not specifically raised as such in its briefs, Defendants’ contention

that Plaintiff does not have a protectable interest to justify equitable relief after the

Earnout Period expires on January 2, 2018 implicates Plaintiff’s standing to pursue

injunctive relief after that date. (Defs.’ Mem. Supp. Mot. Partial Summ. J. 11.) The

Court therefore raised Plaintiff’s standing to the parties at the hearing.

38. Defendants argued at the hearing that Plaintiff cannot show an “injury in

fact” after January 2, 2018, precluding injunctive relief thereafter, because Plaintiff

transferred the alleged confidential and trade secret information to Bankrate under

the APA and because the only rights, title, or interests Plaintiff retained in the

transferred trade secrets—the Earnout—expires on January 2, 2018. Therefore,

Defendants contend that Plaintiff lacks standing and has no interest protectable by

an injunction after January 2, 2018.

39. Plaintiff argued in response that the Trade Secret Protection Act (“TSPA”)

permits the owner of a trade secret at the time of misappropriation to seek equitable

relief even after the owner no longer has an ownership interest in the trade secret.

40. “Standing is a necessary prerequisite to a court’s proper exercise of subject

matter jurisdiction,” Aubin v. Susi, 149 N.C. App. 320, 324, 560 S.E.2d 875, 878

(2002), and “refers to whether a party has a sufficient stake in an otherwise

justiciable controversy such that he or she may properly seek adjudication of the

matter,” Am. Woodland Indus., Inc. v. Tolson, 155 N.C. App. 624, 626, 574 S.E.2d 55,
57 (2002).8 It requires “that the plaintiff have been injured or threatened by injury

or have a statutory right to institute an action.” Bruggeman v. Meditrust Co., L.L.C.,

165 N.C. App. 790, 795, 600 S.E.2d 507, 511 (2004) (quoting In re Baby Boy Scearce,

81 N.C. App. 531, 541, 345 S.E.2d 404, 410 (1986)). As a result, standing is an issue

that can be challenged at any time, Crouse v. Mineo, 189 N.C. App. 232, 236, 658

S.E.2d 33, 36 (2008), may be raised by the Court ex mero motu, Willowmere Cmty.

Ass’n v. City of Charlotte, 792 S.E.2d 805, 808 (N.C. Ct. App. 2016), and must be

addressed before the merits, In re T.B., 200 N.C. App. 739, 742, 685 S.E.2d. 529, 531–

32 (2009).

41. The burden is on the party seeking a remedy and invoking jurisdiction to

prove its standing for every form of relief sought. See Neuse River Found., 155 N.C.

App. at 113, 574 S.E.2d at 51; Queen’s Gap Cmty. Ass’n v. McNamee, 2011 NCBC

LEXIS 37, at *4 (N.C. Super. Ct. Sept. 23, 2011). Because standing is “an

indispensable part of the plaintiff’s case, each element must be supported in the same

way as any other matter on which the plaintiff bears the burden of proof, i.e., with

the manner and degree of evidence required at the successive stages of the litigation.”

Neuse River Found., 155 N.C. App. at 113, 574 S.E.2d at 51.

42. Standing “most often turns on whether the party has alleged ‘injury in fact’

in light of the applicable statutes or caselaw.” Neuse River Found., 155 N.C. App. at

8 Although “North Carolina courts are not constrained by the ‘case or controversy’
requirement of Article III of the United States Constitution[,]” North Carolina courts have
“refer[red] generally to a party’s right to have a court decide the merits of a dispute” as a
question of “standing.” Neuse River Found. v. Smithfield Foods, Inc., 155 N.C. App. 110, 114,
574 S.E.2d 48, 52 (2002).
114, 574 S.E.2d at 52. An injury in fact is “an invasion of a legally protected interest

that is (a) concrete and particularized and (b) actual or imminent, not conjectural or

hypothetical[.]” Neuse River Found., 155 N.C. App. at 114, 574 S.E.2d at 52 (quoting

Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)).

43. The TSPA states, in relevant part, that “[t]he owner of a trade secret shall

have remedy by civil action for misappropriation of his trade secret.” N.C. Gen. Stat.

§ 66-153. The TSPA affords an “owner of a trade secret” several remedies, including

a preliminary injunction and a permanent injunction. N.C. Gen. Stat. § 66-154(a)–

(b).

44. Specifically, the TSPA states that,

Except as provided herein, actual or threatened misappropriation of a
trade secret may be preliminarily enjoined during the pendency of the
action and shall be permanently enjoined upon judgment finding
misappropriation for the period that the trade secret exists plus an
additional period as the court may deem necessary under the
circumstances to eliminate any inequitable or unjust advantage arising
from the misappropriation.

N.C. Gen. Stat. § 66-154(a). Therefore, under the TSPA, a party has standing to seek

injunctive relief if (i) he is the “owner of the trade secret” and “the trade secrets exist”

or (ii) he is the “owner of [a] trade secret” that has ceased to exist but where

“circumstances [of] . . . inequitable or unjust advantage arising from the

misappropriation” persist. The term “[o]wner” is not defined under the TSPA nor has

it been defined by the courts of this State. See generally SCR-Tech LLC v. Evonik

Energy Servs. LLC, 2014 NCBC LEXIS 71, at *1–2 (N.C. Super. Ct. Dec. 31, 2014)
(noting the uncertainty about how our appellate courts will interpret the legislature’s

choice to restrict misappropriation claims to an “owner”).

45. Here, it is undisputed that Plaintiff held all rights, title, and interests in the

confidential and trade secret information that is at issue in this litigation, and that

Plaintiff transferred those rights, title, and interests to Bankrate on June 17, 2016,

retaining only an interest in the confidential and trade secret information to the

extent of the Earnout under the APA. Upon the Earnout Period’s expiration on

January 2, 2018, Plaintiff will cease to have any interest or a stake of any kind in the

alleged trade secrets. Indeed, as of that date, Plaintiff will no longer possess any

rights, title, or interests in the alleged trade secrets that could be adversely affected

by the disclosure or use of those alleged trade secrets or that could be affected or

protected by this Court’s entry of injunctive relief.

46. As such, the Court concludes that Plaintiff does not have a legally protected

interest to support injunctive relief after the Earnout Period expires on January 2,

2018, and, hence, does not have an injury in fact resulting from any alleged

misappropriation of trade secrets under the TSPA after that date. See, e.g., Gen. Elec.

Co., v. Int’l Union of Elec., Radio & Mach. Workers, 47 N.C. App. 153, 158, 266 S.E.2d.

750, 753 (1980) (“A trial court sitting in equity has no powers to issue an injunction

when only abstract rights are involved.”); see also Minitube of Am., Inc. v. Reprod.

Provisions, LLC, No. 13-CV-685-JPS, 2014 U.S. Dist. LEXIS 60596, at *29–30 (E.D.

Wis. May 1, 2014) (holding that plaintiff lacked standing to obtain injunctive relief

where it had no legal interest in the intellectual property after an asset sale).
47. As a result, the Court concludes that Plaintiff lacks standing to seek

protection of the alleged trade secrets at issue under the TSPA after the expiration of

the Earnout Period on January 2, 2018. Plaintiff has not offered any evidence to

persuade the Court to the contrary. See, e.g., Smith v. Rockingham, 268 N.C. 697,

699, 151 S.E.2d 568, 570 (1966) (quoting Pharr v. Garibaldi, 252 N.C. 803, 815, 115

S.E.2d 18, 27 (1960) (“It is not enough for the plaintiff to allege simply that the

commission or continuance of the act will cause him injury, or serious injury, or

irreparable injury; but he should allege the facts, from which the court may determine

whether or not such injury will result.”)); see also Kentuckians for the Commonwealth,

Inc. v. Rivenburgh, 317 F.3d 425, 436 (4th Cir. 2003) (quoting Califano v. Yamaski,

422 U.S. 682, 702 (1979) (“[Injunctive relief] should be no more burdensome to the

defendant than necessary to provide complete relief to plaintiffs.”)).9

VI.

CONCLUSION

48. Based on the foregoing, the Court hereby GRANTS Defendants’ Motion for

Partial Summary Judgment as follows:

a. On the issue of whether Plaintiff is entitled to recover compensatory

damages on its claims, Defendants’ request for summary judgment is

GRANTED, and the Court concludes that Plaintiff is not entitled to

recover compensatory damages on any of Plaintiff’s claims as a matter

9 The Court’s ruling addresses Plaintiff’s standing and is without prejudice to, and does not
affect, whatever rights or remedies may be available to any other person or entity claiming
to be an “owner” of some or all of the alleged trade secrets at issue in this litigation.
of law. To avoid confusion, the Court notes that this ruling is without

prejudice to Plaintiff’s right to seek, and Defendants’ right to challenge,

Plaintiff’s nominal damages, punitive damages, and/or attorneys’ fees,

if appropriate, at a later stage of this litigation.

b. On the issue of whether Plaintiff is entitled to injunctive relief

continuing after January 2, 2018, Defendants’ request for summary

judgment is GRANTED, and the Court concludes that, unless earlier

terminated by the Court, the P.I. Order entered on June 29, 2016 shall

extend only through and including January 2, 2018 and Plaintiff shall

not be entitled to injunctive relief to protect the alleged trade secrets at

issue in this litigation after that date.10

SO ORDERED, this the 14th day of June, 2017.

/s/ Louis A. Bledsoe, III
Louis A. Bledsoe, III
Special Superior Court Judge
for Complex Business Cases

10Plaintiff contended at the hearing that CompareCards has violated the P.I. Order but has
not sought relief by proper means to address this alleged misconduct. Thus, the Court does
not address or consider Plaintiff’s contention in its resolution of the Motion.