[I]n this declaration, Cecich avowed that "numerous clients have informed JPMorgan that [Chamberlain] called them after he resigned from JPMorgan seeking to discuss Ameriprise or set up a meeting to discuss transferring their accounts to him at Ameriprise. In some instances, the clients specifically told JPMorgan that [Chamberlain] expressly asked the clients to move their business to him at Ameriprise. I personally spoke with several of these clients." (Id. ¶ 6.) In the next three paragraphs, Cecich summarized his conversations with three particular JPMorgan customers who allegedly had been solicited by Chamberlain. (Id. ¶¶ 7-9.) Cecich did not, however, identify those customers by name or provide verbatim accounts of his conversations with them. (Id.)
[I]f there were a case where a broker were shown clearly to be violating solicitation agreements, I think that the equities and the public interest would be advanced by enjoining that conduct . . . . But on the other hand, when, as here, there has not been a showing as to a likelihood of the solicitation violations, . . . [t]here's not a public interest in prophylactically restraining a broker who has not been shown compellingly to have done anything wrong . . . ."].)
Nearly all of Chamberlain's objections to JPMorgan's request to engage in expedited discovery flow from the premise that the FINRA rules preclude, either expressly or in spirit, the pursuit of discovery and a preliminary injunction once a TRO request has been denied. But that premise is mistaken. FINRA Rule 13804(a) provides that "[i]n industry or clearing disputes required to be submitted to arbitration under the Code, parties may seek a temporary injunctive order from a court of competent jurisdiction. Parties to a pending arbitration may seek a temporary injunctive order from a court of competent jurisdiction even if another party has already filed a claim arising from the same dispute in arbitration pursuant to this paragraph, provided that an arbitration hearing on a request for permanent injunctive relief pursuant to paragraph (b) of this rule has not yet begun." See https://www.finra.org/rules-guidance/rulebooks/finra-rules/13804. Critically, FINRA Rule 13100(ff) further provides that "[t]he term 'temporary injunctive order' means a temporary restraining order, preliminary injunction or other form of initial, temporary injunctive relief." See https://www.finra.org/rules-guidance/rulebooks/finra-rules/13100. Thus, under FINRA Rule 13804(a) as clarified by FINRA Rule 13100(ff), although JPMorgan must proceed in an arbitral forum in this "industry dispute" to the extent it wishes to obtain permanent injunctive relief, JPMorgan is permitted to go to federal court to obtain temporary forms of injunctive relief, which include both a TRO and a preliminary injunction. Put another way, although JPMorgan's earlier attempt to obtain a TRO was unsuccessful, JPMorgan remains free to seek a preliminary injunction. See, e.g., Fid. Brokerage Servs., LLC v. Guadagnino, 2019 WL 7371822, *1 (S.D. Fla. 2019) (rejecting defendant's argument "that Fidelity is not entitled to the procedural mechanism of obtaining preliminary injunctive relief in this Court pursuant to FINRA Rules and applicable law" because "even a cursory examination of relevant law indicates that . . . [Fidelity] is entitled to seek such relief in this Court"); Primerica Fin. Servs., Inc. v. Charnot, 2016 WL 7510248, *3 (N.D. Ill. 2016) ("Charnot contends that FINRA rules preclude PFSI from seeking a preliminary injunction in this Court, as opposed to a temporary restraining order, which it already has. The argument . . . is unpersuasive in light of FINRA Rule 13100(aa) [now Rule 13100(ff)], which defines 'temporary injunctive order' as 'a temporary restraining order, preliminary injunction or other form of initial, temporary injunctive relief.'") (citations omitted). And indeed, JPMorgan has made a request for a preliminary injunction and that request remains pending-although JPMorgan sought both forms of temporary injunctive relief in its motion filed on July 20, 2022 (Doc. 2), the Court made clear during the July 29, 2022 hearing that it was only denying the TRO component of this request while leaving for another day the resolution of the preliminary injunction component (Doc. 25 at 45-55).
relatively little to say about the actual substance of JPMorgan's proposed discovery requests. Chamberlain does not, for example, dispute JPMorgan's contention that the discovery requests are narrowly tailored to obtain only documents that relate to JPMorgan's non-solicitation claim. Nor does Chamberlain dispute that it is necessary for JPMorgan to subpoena Ameriprise because he may individually lack authority to gather and produce some of the relevant documents. At bottom, all of Chamberlain's arguments regarding burden and prejudice are the normal burdens that any litigant (or third-party subpoena recipient) would incur when presented with a legitimate discovery request
[T]he proposed discovery requests are relatively narrow in scope, JPMorgan's purpose (i.e., to obtain evidence necessary to support its pending request for a preliminary injunction on its non-solicitation claim) is legitimate, the burdens to Chamberlain and Ameriprise are relatively modest, and the request is not premature because, given the unusual interplay between the litigation in this forum and in the arbitral forum, this will be JPMorgan's only opportunity to pursue discovery here. Although the Court continues to be troubled, as it was during the TRO hearing, by JPMorgan's failure to provide specifics concerning the phone calls it has purportedly received from customers regarding Chamberlain's alleged solicitation efforts-Cecich's most recent declaration, like his previous one, simply offers vague summaries of conversations with unspecified individuals-this observation does not undermine the overall conclusion that good cause to engage in expedited discovery is present.