Judge: H. Jay Ford, III, Case: 21SMCV01031, Date: 2023-01-31 Tentative Ruling

Case Number: 21SMCV01031    Hearing Date: January 31, 2023    Dept: O

  Case Name:  Eskenazi, et al. v. Moran, et al.

SUBJECT:                MOTION FOR PRELIMINARY INJUNCTION

MOVING PARTY:   Plaintiffs Jack Eskenazi and American Health Capital d/b/a American Healthcare Capital  

RESP. PARTY:         Defendants and Cross-Complainants Mike Moran, Andre Ulloa, Mark Thomas, M.A.E.C. LLC and Healthcare Deal Team  

TENTATIVE RULING

            Plaintiffs’ Motion for Preliminary Injunction is DENIED. 

            Plaintiffs seek issuance of a preliminary injunction based on their causes of action misappropriation of trade secret and unfair competition.  Plaintiffs must establish the likelihood that (1) the likelihood of prevailing on these causes of action; (2) the existence of irreparable harm/inadequacy of legal remedies, i.e. a real threat of immediate and irreparable injury due to the inadequacy of legal remedies; and (3) circumstances indicating that the hardships Plaintiffs will sustain if the injunction does not issue outweigh the harm Defendants would suffer if the injunction does issue.  See CCP §562(a)(2).   A preliminary injunction must not issue unless the plaintiff can demonstrate reasonable probability that he will prevail on the merits, regardless of the balancing of the hardships or the irreparable nature of the harm.  See San Francisco Newspaper Printing Co. v. Superior Court (1985) 170 Cal.App.3d 438, 442.

I.  Plaintiffs fail to demonstrate a reasonable likelihood of prevailing on the claim for misappropriation of trade secrets.

            Plaintiffs fail to establish the alleged client database or list is a trade secret, i.e. it derives independent economic value from not being known to the general public and that the database or list was the subject of reasonable efforts to maintain its secrecy.  Eskenazi submits a declaration regarding the efforts that generated the list.  See Dec. of J. Eskenazi, ¶11.  However, Eskenazi fails to identify any information on the lists that would qualify as unique information that is not publicly available.  Id. at ¶¶11. 

            Eskenazi also fails to establish that the list or database was the subject to reasonable efforts to maintain its secrecy.  “Reasonable efforts to maintain secrecy have been held to include advising employees of the existence of a trade secret, limiting access to a trade secret on ‘need to know basis,’ and controlling plant access.”  Whyte v. Schlage Lock Co. (2002) 101 Cal.App.4th 1443, 1454.  Eskenazi does not attest to any specific efforts to maintain the secrecy to the list.  Eskenazi testifies that the Defendants executed employment agreements discussing generally trade secrets, including client lists, and obligating Defendants not to disclose or use them in any manner.  See Dec. of J. Eskenazi, ¶¶4-7. 

            Finally, Eskenazi’s testimony regarding Defendants’ use of any client list or database is conclusory, based on information and belief and hearsay.  See Dec. of J. Eskenazi, ¶¶15, 19. Plaintiffs therefore fail to submit admissible evidence of misappropriation of a trade secret.

II.  Plaintiffs fail to demonstrate a reasonable likelihood of prevailing on the claim for Unfair Business Practices

            Business & Professions Code section 17200 provides: “As used in this chapter, unfair competition shall mean and include unlawful, unfair or fraudulent business practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and Professions Code.” Business and Professions Code section 17203 provides for injunctive relief against “[a]ny person performing or proposing to perform an act of unfair competition within this state.”

            Plaintiffs argue Defendants are misrepresenting Plaintiffs’ deals as Defendants’ deals to the public.  Plaintiffs submit screenshots of Defendants’ website listing Defendants’ “successful transactions.”  See Dec. of J. Eskenazi, ¶17, Ex. 9.  Plaintiffs contend these are “AHC’s previous deals” and Defendants are using those deals for their own advertising purposes.  Id. Plaintiffs fail to establish that Defendants’ listing of these “successful transactions” is misleading or false.  Defendant Moran testifies that Defendants personally worked or participated in the deals listed, and Plaintiffs recognized Defendants’ roles in closing those deals.  See Opposition, Dec. of M. Moran, ¶¶11-13.  Plaintiffs fail to establish that Defendants’ advertisement of deals they previously brokered and/or closed as “Successful Transactions” is false or misleading, even if those transactions were brokered or closed on Plaintiff’s behalf.  As presented, Defendants listing of these deals is akin to listing prior work experience on a resume.  Plaintiffs do not claim that Defendants did not work on the transactions listed. 

            Defendants concede that they did not take down the website “healthcaredealteam.com,” which used Plaintiffs’ trademark and business information, until June 10, 2021, six days after Defendants departed Plaintiffs’ employ.  See Opposition, Dec. of M. Moran, ¶¶7, 10; Dec. of J. Eskenazi, ¶17.  For approximately six days, Defendants failed to take down the website that was built with Plaintiffs’ permission to obtain business for Plaintiffs.  See Opposition, Dec. of M. Moran, ¶¶7, 10; Dec. of J. Ezkenazi, Ex. 8.  There is no evidence that Defendants used the trademark after the website was dismantled, and the website was only operational for an additional six days after the Defendants left Plaintiffs’ employ.  There is also no evidence that the website, which was originally set up with Plaintiffs’ permission for development of Plaintiffs’ business, directed any business to Defendants for those six days it was operational after the Defendants left Plaintiffs’ employ.