I ordered a Status/Scheduling Conference to discuss the extent of the default against the defendants, to establish a schedule for the filing of an application for attorneys fees and of any oppositions thereto, to discuss the future course of this litigation, and to set a schedule for future events, including dates for hearings on the application for fees and costs and for any assessment of damages hearings needed as a result of these findings. The parties have submitted memoranda setting forth their views regarding the extent of the default established by this decision; the future course of this litigation, including what discovery, if any, may be necessary; the scheduling of any additional hearings; and any other matters that the parties felt needed to be discussed at the Status/Scheduling Conference. In addition, the Plaintiff submitted some additional motions, Plaintiff Pacific Packaging Products, Inc .' s, Motion For Standstill Injunction and Plaintiff Pacific Packaging Products, Inc.'s, Motion For Preservation of Evidence On Damages and a bench memorandum regarding the value of the defendant's counterclaims. In addition to the submission called for by my order of January 31, 2014, the Defendants submitted affidavits of each of the individual defendants regarding their counterclaims and the potential value of those counterclaims, oppositions to the additional motions of the Plaintiff and to the Plaintiff's request for further injunctive relief, and an affidavit of Andrew Slater with respect to business he had obtained from a client, Cardinal Health. I have reviewed all of the materials submitted by the parties and have considered all of the arguments made by the parties in their written submissions and at the hearing before me. Having done so, I make the following additional orders with respect to this matter.

I decline the request of the Plaintiff to default the Defendants on all counts of the Plaintiff's complaint. Based on my findings I do not believe that such a sanction is warranted. The sanction requested by the Plaintiff is excessive in light of my findings and those of Judge Billings and in light of other sanctions on the Defendants.

*2 In light of my findings, however, I will enter a default against the Defendants on any of Pacific's claims in the Verified Amended Complaint to the extent that those claims allege that the defendants took confidential, proprietary information with them when they left Pacific Packaging and that they used that information in seeking to attract customers that had been Pacific customers. I agree with Judge Billings' finding “that the defendants took with them confidential information belonging to Pacific” and “that some but not all of the salesman defendants used this information in pitching business to some potential customers.” See pps. 3–4 of Judge Billings' Findings of Fact, and Further Memorandum and Order, On Plaintiff's Motion For Preliminary Injunction dated April 20, 2010. I also agree with Judge Billings that “not all of the information Pacific claims was confidential was, or could have been, of equal importance in the process of persuading customers to leave Pacific and sign on with Partners.” Id.

The default is limited to the 49 customers which were the focus of the preliminary injunction hearing before Judge Billings and any other Pacific Packaging customers whose business the Defendants were successful in obtaining during the period from October 16, 2009 through April 20, 2011, the end of the period for the potential “head start” injunction being considered by Judge Billings.[1]

The default establishes only that the Defendants took confidential Pacific Packaging information with them when they left to form Packaging Partners, LLC and that they used such information in obtaining business from customers of Pacific Packaging. The default leaves open any questions of whether the Defendants would have obtained that business in any event (on which issue the Defendants will bear the burden of proof) and of what damages, if any, the Plaintiff has suffered as a result of the Defendants' use of that confidential information.

The Plaintiff is to serve its request for attorneys fees and costs associated with the fraud on the court hearings by the close of business on April 28, 2014. That request is to contain a detailed description of the attorneys fees and costs associated with the Plaintiff's Emergency Motion For Judgment On All Claims Based Upon Defendants' Fraud On The Court. The Defendants will have 45 days from the date they are served with that request to serve upon the Plaintiff any opposition to the request for fees. The Plaintiff will then file the request for fees along with the opposition and a request for a hearing. A hearing will then be scheduled by the clerk.

All discovery is to be completed in this matter by the close of business on December 31, 2014. Motions for summary judgment are to be filed by the close of business on March 31, 2015. A final pre-trial conference will be scheduled by the clerk by the end of June 2015.

*3 The Defendants' complaint for contempt is dismissed as a further sanction for the fraud on the Court and the spoliation of evidence.

Due to the Defendants' deliberate violation of Judge Billings' clear and unequivocal order of April 20, 2010, limiting the products which they could sell to Reynolds, I impose the following sanction. The Defendants and any affiliated entity, including but not limited to Packaging Partners, LLC, Atlantic Shippers, Packaging Concepts and any other entities, are enjoined from making sales of any product—let me be clear that the injunction is as to any product whatsoever—to Reynolds Packaging Products for the period of one year beginning on May 1, 2014. The injunction will take effect on May 1, 2014, in order to permit Reynolds Packaging Products to make arrangements to obtain products elsewhere. The Defendants are to submit an affidavit within ten days of this order indicating what products it is now selling to Reynolds Packaging Products. That affidavit is for the Court's use only in determining the sufficiency of the sanction and it need not be shared with the Plaintiff. Thereafter, each of the individual defendants, except Sandra Zeraschi, is to file an affidavit with the Court by the close of business on the following dates: August 1, 2014, November 1, 2014, February 1, 2015, and May 1, 2015, attesting under the pains and penalties of perjury that they are complying with the terms of the injunction and that neither Packaging Partners, LLC nor any other entity with which the defendants are affiliated has sold any product to Reynolds Packaging Products. By the close of business on May 1, 2015, the Defendants are to file an affidavit from an authorized representative of Reynolds Packaging Products attesting that from May 1, 2014, through April 30, 2015, that entity has not purchased any products whatsoever from Packaging Partners, LLC or from any entity affiliated with Packaging Partners, LLC or from any entity with which the individual defendants are affiliated.

DENIED as requested after a hearing; however, I will order real estate attachments on property owned by each of the Defendants in the amount of $100,000 as to each of the individual defendants and as to any real estate owned by the defendant corporation. I find that there is a reasonable likelihood that the Plaintiff will recover judgment in an amount equal to or greater than $100,000.

ALLOWED after a hearing as follows: The Defendants are to preserve in the manner in which they customarily conduct their business all of the items requested in Paragraphs (1) through (8) of this motion with respect to the 49 customers which were the focus of the preliminary injunction hearing before Judge Billings and any other Pacific Packaging customers whose business the Defendants were successful in obtaining during the period from October 16, 2009 through April 20, 2011, the end of the period for the potential start-up injunction being considered by Judge Billings.

*4 For the foregoing reasons, it is ORDERED as follows:

1. The Defendants are defaulted on any of Pacific's claims in the Verified Amended Complaint to the extent that those claims allege that the defendants took confidential, proprietary information with them when they left Pacific Packaging and that they used that information in seeking to attract customers that had been Pacific customers. The default is limited to the 49 customers which were the focus of the preliminary injunction hearing before Judge Billings and any other Pacific Packaging customers whose business the Defendants were successful in obtaining during the period from October 16, 2009 through April 20, 2011, the end of the period for the potential “head start” injunction being considered by Judge Billings. The default establishes only that the Defendants took confidential Pacific Packaging information with them when they left to form Packaging Partners, LLC and that they used such information in obtaining business from customers of Pacific Packaging. The default leaves open any questions of whether the Defendants would have obtained that business in any event (on which issue the Defendants will bear the burden of proof) and of what damages, if any, the Plaintiff has suffered as a result of the Defendants' use of that confidential information.

2. The Plaintiff is to serve an application for attorneys fees and costs associated with the fraud on the court hearings by the close of business on April 28, 2014. That request is to contain a detailed description of the attorneys fees and costs associated with the Plaintiff's Emergency Motion For Judgment On All Claims Based Upon Defendants' Fraud On The Court. The Defendants will have 45 days from the date they are served with that request to serve upon the Plaintiff any opposition to the request for fees. The Plaintiff will then file the request for fees along with the opposition and a request for a hearing. A hearing will then be scheduled by the clerk.

3. All discovery is to be completed in this matter by the close of business on December 31, 2014. Motions for summary judgment are to be filed by the close of business on March 31, 2015. A final pre-trial conference will be scheduled by the clerk by the end of June 2015.

4. The Defendants' complaint for contempt is dismissed.

5. The Defendants and any affiliated entity, including but not limited to Packaging Partners, LLC, Atlantic Shippers, Packaging Concepts and any other entities, are enjoined from making sales of any product—let me be clear that the injunction is as to any product whatsoever—to Reynolds Packaging Products for the period of one year. The injunction will take effect thirty days from the date of this order to permit Reynolds Packaging Products to make arrangements to obtain products elsewhere.

6. The Defendants are to submit an affidavit within ten days of this order indicating what products it is now selling to Reynolds Packaging Products. That affidavit is for the Court's use only in determining the sufficiency of the sanction and it need not be shared with the Plaintiff. Thereafter, each of the individual defendants, except Sandra Zeraschi, is to file an affidavit with the Court by the close of business on the following dates: August 1, 2014, November 1, 2014, February 1, 2015, and May 1, 2015, attesting under the pains and penalties of perjury that they are complying with the terms of the injunction and that neither Packaging Partners, LLC nor any other entity with which the defendants are affiliated has sold any product to Reynolds Packaging Products. By the close of business on May 1, 2015, the Defendants are to file an affidavit from an authorized representative of Reynolds Packaging Products attesting that from May 1, 2014, through April 30, 2015, that entity has not purchased any products whatsoever from Packaging Partners, LLC or from any entity affiliated with Packaging Partners, LLC or from any entity with which the individual defendants are affiliated.

*5 7. Plaintiff Pacific Packaging Products, Inc.'s, Motion For Standstill Injunction (Paper # 121) is DENIED as requested after a hearing; however, I order attachments on real estate owned by each of the Defendants in the amount of $100,000 as to each of the individual defendants and as to any real estate owned by the defendant corporation. I find that there is a reasonable likelihood that the Plaintiff will recover judgment in an amount equal to or greater than $100,000.

8. Plaintiff, Pacific Packaging Products, Inc.'s Motion For Preservation of Evidence On Damages (Paper # 122) is ALLOWED after a hearing as follows: The Defendants are to preserve in the manner in which they customarily conduct their business all of the items requested in Paragraphs (1) through (8) of this motion with respect to the 49 customers which were the focus of the preliminary injunction hearing before Judge Billings and any other Pacific Packaging customers whose business the Defendants were successful in obtaining during the period from October 16, 2009 through April 20, 2011, the end of the period for the potential start-up injunction being considered by Judge Billings.

Judge Billings made rulings on the Plaintiff's request for a preliminary “head start” injunction with respect to each of the former Pacific customers that the Defendants had sold to as of the time of the hearings on the requested injunctive relief. Those rulings do not preclude the Plaintiff from seeking to prove that it suffered damages as a result of the Defendants' use of the confidential information with respect to those customers.