Judge: Armen Tamzarian, Case: 24STCV07262, Date: 2024-06-03 Tentative Ruling

Case Number: 24STCV07262    Hearing Date: June 3, 2024    Dept: 52

Plaintiffs Cambria Investment Management, L.P. and Cambria GP, LLC’s Motion for Preliminary Injunction

Plaintiffs Cambria Investment Management, L.P. and Cambria GP, LLC (Cambria) move for a preliminary injunction against defendant Lani Pollock.

“In deciding whether to issue a preliminary injunction, a court must weigh two ‘interrelated’ factors: (1) the likelihood that the moving party will ultimately prevail on the merits and (2) the relative interim harm to the parties from issuance or nonissuance of the injunction.”  (Butt v. State of California (1992) 4 Cal.4th 668, 677–678 (Butt).)  The second factor concerns “the comparative consequences of the issuance and nonissuance of the injunction” before trial.  (Common Cause v. Board of Supervisors (1989) 49 Cal.3d 432, 442.)  “The trial court’s determination must be guided by a ‘mix’ of the potential-merit and interim-harm factors; the greater the plaintiff’s showing on one, the less must be shown on the other to support an injunction.”  (Butt, supra, 4 Cal.4th at p. 678.) 

Likelihood of Prevailing

            Plaintiffs demonstrate a substantial probability of prevailing on the merits of their claims for breach of contract, intentional interference with contract, and intentional interference with economic relations.  In 2018, defendant became a limited partner of Cambria Investments after her late husband, Eric Richardson, died.  (Faber Decl., ¶ 11.)  The partnership is governed by the “Agreement of Limited Partnership of Cambria Investment Management, L.P.” (id., Ex. A) and the “First Amended and Restate Agreement of Limited Partnership” (id., Ex. B).  The initial partnership agreement prohibits partners and former partners from making statements or taking actions “that in any way could (i) disparage the Company, or which foreseeably could harm the reputation or goodwill of the Company, or (ii) cause or encourage or condone the making of such statement or the taking of such action by anyone else.”  (Ex. A, § 4(j).)

            Plaintiffs present evidence showing they are likely to succeed in proving defendant breached the partnership agreement’s non-disparagement provision.  In January 2024, she sent an email to one of Cambria’s business partners with subject line “Fraud – never ever made deal with Tim Rotolo for anything in my life.”  (Faber Decl., Ex. L.)  The body states, “Tim, Do you have something to do with this fraudulent document?  We never made a deal – you never made an offer – I haven’t spoken with you in 2 years?  WTF is this.”  (Ibid.)  Tim Rotolo forwarded the email to Mebane Faber, Cambria’s CEO (Faber Decl., ¶¶ 2, 25) and asked, “Is this a hack?  No clue what is happening.”  (Id., Ex. L.) 

Plaintiffs further present evidence that, on January 27, 2024, defendant sent an email from her late husband’s account in reply to an email from 2017 inviting numerous Cambria employees and business associates to a conference call.  (Faber Decl., ¶ 26, Ex. M.)  The email says only “suck my dick.”  (Ibid.) 

Plaintiffs also present evidence Pollock made numerous posts on Facebook, making statements such as, “The hyena [F]aber – edited and switched himself and JIM FROLIC to the roles of signor and Stealor…  THEN THERE IS THE GOVERNMENT PAYOFF BRIBE DESK ON WALLSTREET – how CAMBRIA is tied to the Government – ONE SEC FOR THAT!”  (Faber Decl., Ex. T.)  In another post, Pollock wrote, “Oh, this ties back to Meb Faber and the Hyenas serving me today and it says Washington and 2016 – and that I appeared in court while I was awarded in court – I never went to court – I never knew about their plot to steal of course – they don’t write a letter and say hey we are stealing from you!!!  This is Hyena Hyjinx – smoke and mirrors 100 percent lies that all lead back to the Capital Crime of Premeditated Outright Murder! If Eric Wayne Eric W. Richardson.”  (Ibid.) 

This evidence, along with numerous other documents plaintiffs submitted, shows a strong likelihood of proving defendant made statements that disparage Cambria or could foreseeably harm its reputation or goodwill.

The same evidence also shows plaintiffs are likely to prevail on the merits of their claims for intentional interference with contract and with prospective economic advantage.    

Balance of Interim Harm

            The balance of interim harm to the parties supports granting a preliminary injunction.  “[I]n order to obtain injunctive relief the plaintiff must ordinarily show that the defendant’s wrongful acts threaten to cause irreparable injuries, ones that cannot be adequately compensated in damages.”  (Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342, 1352; accord CCP § 526(a).)  Harming a business’s goodwill can constitute irreparable harm.  (Donahue Schriber Realty Group, Inc. v. Nu Creation Outreach (2014) 232 Cal.App.4th 1171, 1185.)  When the plaintiff shows a substantial probability of prevailing on the merits, that irreparable harm can outweigh “the defendant’s liberty of speech rights.”  (Ibid.)

            Plaintiffs present evidence defendant has repeatedly made statements that injure Cambria’s goodwill and business reputation, including after plaintiffs served defendant with the summons and complaint in this action.  (Faber Decl., Exs. T-V.)  The interim harm to defendant would be restricting her speech, but only on limited subjects.  Given plaintiffs’ strong likelihood of prevailing on the merits, the court finds good cause to issue a preliminary injunction. 

Undertaking

Code of Civil Procedure section 529(a) provides, “On granting an injunction, the court or judge must require an undertaking on the part of the applicant to the effect that the applicant will pay to the party enjoined any damages, not exceeding an amount to be specified, the party may sustain by reason of the injunction, if the court finally decides that the applicant was not entitled to the injunction.” 

Parties may, however, waive the undertaking requirement.  (Smith v. Adventist Health System/West (2010) 182 Cal.App.4th 729, 740-743.)  Defendant did so via the partnership agreement.  It provides, “Each Partner acknowledges and agrees that his, her or its failure to perform any of the covenants in this section 4.6 would cause irreparable injury to the Company and its Affiliates and damages that would be difficult or impossible to determine.  Accordingly, without limiting any remedies that may be available with respect to any breach of this Agreement, each Partner consents to the entry of an injunction to restrain any breach of this section 4.6 and waives any obligation the Company would otherwise have to post a bond or other security in connection with such injunction or other relief.”  (Faber Decl., Ex. A, § 4.6(k).)  The court therefore will not require plaintiffs to post an undertaking.

Scope of Injunction

            Plaintiffs move for an order enjoining defendant in three manners.  First, they seek an order prohibiting defendant “from disparaging [Cambria] or making any public statements which foreseeably could harm the reputation or goodwill of” Cambria.  (Prop. Order, p. 2.)  This proposed order is likely unconstitutional.  “[A]any prior restraint on expression bears a heavy presumption against its constitutional validity.”  (Wilson v. Superior Court (1975) 13 Cal.3d 652, 657.)  That presumption applies to preliminary injunctions.  (Id., pp. 658-659.) “An order prohibiting a party from making or publishing false statements is a classic type of an unconstitutional prior restraint. [Citation.]  ‘While [a party] may be held responsible for abusing his right to speak freely in a subsequent tort action, he has the initial right to speak freely without censorship.’ ”  (Evans v. Evans (2008) 162 Cal.App.4th 1157, 1167-68).)  Moreover, “[a]n injunction is unconstitutionally vague if it does not clearly define the persons protected and the conduct prohibited.”  (Id. at p. 1167.)   

            The proposed order is a classic prior restraint.  It is also impermissibly vague because it does not clearly identify what Pollock is prohibited from saying.   The court will exercise its discretion to not issue such a broad prior restraint against defendant. 

Second, plaintiffs seek an order prohibiting defendant from “disclosing any ‘Proprietary Information’ in her possession, custody, or control that belongs to [Cambria] as that term is defined in section 4.6(b) of the Agreement of Limited Partnership of Cambria Investment Management, L.P.”  (Prop. Order, p. 2.)  Plaintiffs show good cause for such an order.  The partnership agreement adequately defines “proprietary information.”  (Faber Decl., Ex. A, § 4.6(b).)  Plaintiffs present sufficient evidence defendant has disclosed some such proprietary information and is likely to do so again. 

Third, plaintiffs seek an order prohibiting defendant “from using all email and social media accounts bearing the name ‘Eric Richardson,’ or information derived or obtained from those accounts, to contact employees, directors, partners, or parties to contracts or economic relationships with” Cambria.  (Prop. Order, pp. 2-3.)  Plaintiffs show good cause for that order.  Plaintiffs present evidence defendant has used the late Eric Richardson’s email and Facebook accounts to disparage Cambria and interfere with its contracts and business relationships.  Plaintiffs present evidence defendant is likely to do so again if the court does not issue this preliminary injunction.

Disposition

Plaintiffs Cambria Investment Management, L.P. and Cambria GP, LLC’s motion for preliminary injunction is granted in part. 

The court hereby issues the following preliminary injunction against defendant Lani Pollock:

Defendant Lani Pollock is prohibited from disclosing any “Proprietary Information” in her possession, custody, or control that belongs to Plaintiffs Cambria Investment Management, L.P. or Cambria GP, LLC, as that term is defined in section 4.6(b) of the Agreement of Limited Partnership of Cambria Investment Management, L.P. 

Defendant Lani Pollock is prohibited from using all email and social media accounts bearing the name “Eric Richardson,” or information derived or obtained from those accounts, to contact employees, directors, partners, or parties to contracts or economic relationships with Plaintiffs Cambria Investment Management, L.P. and Cambria GP, LLC.

Plaintiffs are not required to post an undertaking.