All parties involved in the Joe Gibbs Racing v Chris Gabehart and Spire Motorsports legal matter met in the Western District of North Carolina court on Tuesday for a hearing on two different matters.
1. A motion to determine if the judge should proceed with contempt of court hearings on whether or not Spire and Gabehart have violated preliminary court orders
2. If Spire should be added alongside Gabehart to the aforementioned preliminary injunction and temporary restraining order
On the latter, many of the arguments have been revealed in court previously, and much of the Joe Gibbs Racing presentation was attempting to convince Judge Susan C. Rodriguez that the orders on Gabehart should also apply to Gabehart.
Rodriguez did not issue a ruling on either matter after the hearing concluded at 3:30 p.m.
Specifically, the previously ordered injunction and TRO prevents Gabehart from using or disclosing any misappropriated Joe Gibbs Racing trade secrets -- including race strategy, engineering analytics, financial details, and proprietary performance models stored on personal devices.
JGR wants to ‘enjoin’ Spire to that motion too, specifically wanting the other defendant to not use information that has been argued to be ‘trade secrets’ over the past year.
For example, Joe Gibbs Racing has pointed to the depositions of Travis Peterson (crew chief, No. 71) and (floor foreman) Doug Powers as examples of Spire constructing underbodies and gearbox cooling practices changing after the arrival of Gabehart.
Spire says these are just common practices.
Thus, part of what Joe Gibbs Racing attorney Thomas M. Melsheimer asked Judge Rodriguez for is an order that will prevent Spire from running their current underbody and gearbox cooling approaches until the legal matter is resolved.
Rodriguez was unsure how such an order could even be applied because everyone in the room has yet to remotely reach any agreement on what even constitutes a ‘trade secret’ in the first place.
Spire is very adamant that these construction processes, or even the tire pressure ranges that Gabehart gave Peterson, are just ‘shop talk’ items and not an example of anything proprietary brought over from Joe Gibbs Racing.
In his opening remarks, Melsheimer said that Gabehart had a longstanding plan to acquire and distribute Joe Gibbs Racing trade secrets to Spire Motorsports. Sitting in the gallery next to wife Jennifer, Gabehart shook his head noticeably in reaction.
Joe Gibbs Racing, which needs to prove harm in asking the court for any preliminary injunction, cited Spire’s increased success year-over-year as evidence that Gabehart and his information is benefiting the on-track results.
In response, Spire attorney Joshua D. Davey presented a graph that showed Spire’s performance increase as commensurate to how much money it has spent, especially since the investment of TWG Motorsports’ Dan Towiss and Mark Walter.
Davey said Spire’s two wins this year were very circumstantial. Daniel Suarez winning the Coca-Cola 600 was a gutsy two-tire pit stop call by crew chief Ryan Spark and a resulting race against the rain, which worked out in their favor.
Davey then showed a video of the massive multi-car incident at Talladega that Carson Hocevar avoided before going on to win.
The judge drew laughter from the room when she said, ‘I remember,’ after watching the clip. Rodriguez has previously admitted in court that she considers herself a casual to moderate NASCAR enthusiast.
Davey also said Spire’s performance gains are owed to a 50 percent decrease in DNFs year-over-year and that they added a proven veteran in Daniel Suarez to drive the No. 7 over young Justin Haley.
The court collectively laughed when Davey said the No. 77 also had a driver that was maturing year-over-year. That driver is the polarizing Carson Hocevar.
Joe Gibbs Racing also pointed to an exchange in deposition in which Peterson was asked by Melsheimer ‘have you ever received, orally, JGR information and the veteran crew chief responded ‘probably.’
Melsheimer argued that Spire should be enjoined alongside Gabehart because the ex-JGR competition director attended at least 12 Cup Series competition meetings this year and created a best practices strategy similar to what he used last year in his previous job.
That includes a much-ballyhooed document called the ‘CG (Chris Gabehart) Master,’ which JGR says is a copied and pasted spreadsheet used at JGR called the ‘CC (Crew Chief) Audit.’
Speaking on behalf of Gabehart, Cary Davis articulated the spreadsheet as a ‘note taking device’ that only utilized publicly available stats and information and not trade secrets. Judge Rodriguez pushed back, offering that Gabehart could pull from publicly available data but do so in a way that is proprietary to his time at JGR.
She offered this:
“You can still have trade secrets up here,” Rodriguez said pointing to the side of her head, “and still misappropriate them.”
Davey responded that Gabehart created this spreadsheet on his own, and not for Spire, and that Spire never used the CG Master as it was preserved and locked down at the time of litigation.
“Spire doesn’t need Mr. Gabehart for anything Cup-related,” Davey said while offering that Gabehart is currently on administrative leave and that Spire’s competition department is led by competition director Matt McCall and technical director Dax Gerringer.
Davey rejected the premise that Spire has only enjoyed success this year because of the hiring of Gabehart.
“To listen to them, Spire couldn’t raise its way out of a paper bag until Chris Gabehart showed up, and that’s just not true,” he said.
As for the dozen of competition meetings Gabehart attended until he was told to stop, Spire’s position is that it’s normal for an upper level executive to do so and that he only did so to be aware of how the organization was faring as the ‘right hand’ of team co-owner Jeff Dickerson.
Ultimately, Davey told Judge Rodriguez that the determination of whether or not Gabehart used the misappropriated Joe Gibbs Racing information for the benefit of Spire was not something to be decided by a preliminary injunction but instead the jury.
The trial is scheduled to begin on February 1.
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The hearing on the motion regarding contempt was not a contempt hearing but instead was just the hearing to determine if the judge decides that a contempt hearing is necessary.
When Davis, representing Gabehart, said that his client had not offered ‘real meaningful input’ when attending those dozen or so competition meetings, the judge pushed back on that line of thinking.
“Even a little bit would be a violation,” of the court order, Rodriguez said.
To wit, Joe Gibbs Racing’s position isn’t to prove that Gabehart provided meaningful input to Spire orally or otherwise, but whether he acted once at Spire since the injunction and TRO was issued in a fashion similar to the services he provided to Joe Gibbs Racing.
Similar to the expanded injunction hearing, Spire’s attorney Davey said ‘these are really basic concepts’ regarding the things his clients have done this year or even the tire pressure conversation between Gabehart and Peterson.
“The idea this is a very specific JGR process has no evidence,” Davey said.
The judge pushed back on that too, suggesting that the CG Master did have some evidence of similarity to the CC Audit.
However, Davey said if the CG Master or CC Audit was a trade secret, than every team that uses a similar spreadsheet is also using trade secrets. Davey said such focus plans are ‘Racing 101’ items like finishing order and stage points earned.
Representing Gabehart, attorney Davis said there is no evidence Gabehart shared the files he misappropriated from Joe Gibbs Racing before returning the. Davis said JGR is trying to ‘crush Gabehart and put him out of a job.’
In their countersuits, Gabehart has accused JGR of acting out of personal spite and not principle, citing Heather Gibbs communication as evidence of a ‘calculated campaign’ of punishment, withheld wages and efforts to prevent him from working anywhere in NASCAR.
The instances of Gabehart discussing very specific setup parameters with Spire employees came in February before the TRO and injunction was issued. Gibbs says discovery has yet to close and that they believe getting both the full scope of Spire competition meeting minutes will prove further violation of court orders.
Melsheimer has argued that any instance of Gabehart speaking at a competition meeting after February is a violation of the court order.
Gabehart is currently on ‘administrative leave’ from Spire but Joe Gibbs Racing had several questions about what that even meant during the hearing. This was a reference to Gabehart working a Late Model race over the weekend, spotting for Spire development driver Tristan McKee.
Melsheimer also wants the judge to enforce a permanent administrative leave through the duration of the legal process.