Judge: John C. Gastelum, Case: 23-01323096, Date: 2023-12-07 Tentative Ruling
Motion for Preliminary Injunction
Tentative Ruling: Plaintiff’s Motion for Preliminary Injunction is DENIED.
Per Code of Civil Procedure section 527(a):
“A preliminary injunction may be granted at any time before judgment upon a verified complaint, or upon affidavits if the complaint in the one case, or the affidavits in the other, show satisfactorily that sufficient grounds exist therefor.” (Emphasis added.) Additionally, section 526(a)(1) provides, in relevant part, that an “injunction may be granted” when “it appears by the complaint that the plaintiff is entitled to the relief demanded, and the relief, or any part thereof, consists in restraining the commission or continuance of the act complained of, either for a limited period or perpetually.” (Emphasis added.)
Here, Plaintiff filed a Complaint, but not a Verified Complaint.
Additionally, “A superior court must evaluate two interrelated factors when ruling on a request for a preliminary injunction: (1) the likelihood that the plaintiff will prevail on the merits at trial and (2) the interim harm that the plaintiff would be likely to sustain if the injunction were denied as compared to the harm the defendant would be likely to suffer if the preliminary injunction were issued.” (Smith v. Adventist Health System/West (2010) 182 Cal.App.4th 729, 749, see Brown v. Pacifica Found., Inc. (2019) 34 Cal.App.5th 915, 925.) The trial court may not issue an injunction, regardless of the amount of interim harm, “unless there is some possibility” that plaintiff will ultimately prevail on the merits of the claim. (Association of Orange County Deputy Sheriffs v. County of Orange (2013) 217 Cal.App.4th 29, 49.)
The burden is on plaintiff to show all elements necessary to support issuance of the injunction. (O’Connell v. Superior Court (2006) 141 Cal.App.4th 1452, 1481.)
The Complaint here asserts seven causes of action against five Defendants. However, it seems the primary target of the action is against Defendant Rahmani, who opened an allegedly competing business, Defendant Avesta Aesthetics, in April 2023.
Plaintiff also contends the primary basis for injunction is the Rahmini NDA Agreement. However, the portions of that agreement relating to non-competition are void. (Bus. & Prof. Code, § 16600.)
Further, Plaintiff has not sustained its burden of establishing a likelihood of prevailing on the merits as to any of the causes of action.
Breach of Contract
Plaintiff’s only evidence is the Declaration of Brandi Langley (Plaintiff’s owner). She declares, Defendants stole Wake Up Beautiful's customer list, marketing materials, promotional specials, business model, and employees/contractors, including but not limited to Dr. Jamie, Caputo, and Chilvers.” (Decl. ¶7.) She also declares, “Prior to the acts described below by Defendants, Wake Up Beautiful consistently achieved an open rate of upwards of 50% on its email marketing campaigns; following Defendants' activities, the open rate was cut nearly in half, and Wake Up Beautiful's sales plummeted accordingly.” (Decl.¶3)
Indeed, pursuant to section 2 of the NDA, “Confidential Information” does include client lists, marketing plans and surveys, among other things.
Yet, curiously absent from Plaintiff’s evidence are any Declarations from clients to show they have been contacted by Defendants utilizing the same text or email process that Plaintiff uses. Nor is there any supporting evidence of actual damages by Defendants’ alleged activity.
Furthermore, Defendant Rahmani’s Declaration under penalty of perjury also states:
7. No intellectual property owned by Wake Up Beautiful was ever taken or used by me or Avesta Aesthetics, Inc.
8. I and Avesta Aesthetics have never reached out to any of Wake Up Beautiful’s customers or employees to provide services to or retain them as employees.
9. No Customer list belonging to Wake Up Beautiful was ever taken or utilized in any ways by me and/or Avesta Aesthetics.
15. I have not taken any confidential information, or trade secrets specific to Wake Up Beautiful. My work at Wake Up Beautiful was limited to teaching a few hours a week for a few classes to students, for which I used my own independently obtained knowledge and expertise.
(Decl. of Rahmani¶¶7-15.)
Fraud – Intentional Misrepresentation
The Fraud cause of action appears to be intrinsically linked to the breach of contract cause of action, Plaintiff pleading. (Complaint¶41).
For the same reasons as set forth above, it does not appear Plaintiff will prevail on this cause of action.
Misappropriation of Trade Secrets -Civil Code § 3426.1
Plaintiff pleads:
55. The trade secrets that Defendants are alleged to have misappropriated include, but are not limited to, the following:
· Plaintiff’s customer list(s);
· Plaintiff’s cell phone / text message recipient list; and
· Marketing strategy, content, photographs, graphic images, and other images and words describing and depicting Wake Up Beautiful.
Initially, pursuant to Civil Code section 3426.1(d), a trade secret means, “information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
(1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and
(2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”
In Courtesy Temporary Service, Inc. v. Camacho (1990) 222 Cal.App.3d 1278, 1287, the Court explained,
A list of customers or subscribers “built up by ingenuity, time, labor and expense of the owner over a period of many years is property of the employer,” and “ ‘[k]nowledge of such a list, acquired by an employee by reason of his employment, may not be used by the employee as his own property or to his employer's prejudice.’ ” (Greenly v. Cooper (1978) 77 Cal.App.3d 382, 392, 143 Cal.Rptr. 514.) Employees, by appropriating only those customers who, after Courtesy's efforts, chose to patronize Courtesy and saving themselves comparable efforts in screening those entities who declined Courtesy's patronage, have acquired commercially invaluable information…
…“[R]easonable 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.” (See legis. committee com., 12 West's
Ann.Civ.Code, (1990 pocket supp.) p. 108.)
(Courtesy Temporary Service, Inc., supra, 222 Cal.App.3d 1278, 1288.)
Accordingly, it appears the customer lists mentioned in Complaint¶55 are trade secrets pursuant to Civil Code section 3426.1(d)(1).
As to subdivision (d)(2), Plaintiff simply argues, “As far as the steps that Wake Up Beautiful took to protect its Confidential Information, it utilized the Rahmani NDA to protect information provided to Rahmani, and thereafter sent multiple cease-and-desist letters in attempts to stop the theft and misuse of the Confidential Information.” [Motion page 12:1-2.] However, as suggested by Plaintiff, the NDA was only entered into with Rahmani after there was an interest in purchasing the Plaintiff; however, Defendant Rahmani was also an employee. There is no indication that other means were taken to protect this information as to employees. Furthermore, the cease and desist letters are somewhat after the fact, and an attempt to provide “protection” after the information had been allegedly taken.
Thus, it does not appear the information allegedly taken qualifies as a trade secret pursuant to Civil Code section 3426.1(d)(2).
Also, in terms of actually misappropriating the trade secret(s), Langley declares that “Chilvers effectively stole and provided to Avesta/Rahmani the entire 6,500 customer contacts from Wake Up Beautiful's database and subsequently blatantly sent to my family members, close personal friends, personal emails of vendors, and other such contacts that they would never had access to if they had not broken into my database and stole the confidential information.” (Decl. of Langley¶11.) Langley alleges Chilvers did this shortly after she resigned in October 2022, but Chilvers was not hired by Defendant Avesta until March 2023. (Decl. of Rahmahni¶11.) This accusation that Chilvers would break into Plaintiff’s database and forward information on to Avesta six months prior to Avesta hiring her seems odd. Also, there is no other “evidence” that any family members, close personal friends, etc., clients, vendors, etc. were solicited by Avesta by Avesta utilizing a client list.
This information, coupled with Rahmani’s Declaration stating Avesta has not used Plaintiff’s trade secrets suggests Plaintiff will not prevail on the merits as to this cause of action.
Commercial Misappropriation – Use of Name or Likeness
The only evidence in support of this cause of action appears to be Attorney Winthrop’s Declaration wherein he simply states:
4. Attached hereto as Exhibit 4 is a true and correct copy of an April 6, 2023 email to Ms. Rahmani's counsel, Kambiz Drake, regarding ongoing violations of the Rahmani NDA, including but not limited to using Wake Up Beautiful's database and customer list, photos, and other proprietary information.
Although photos are attached to the email, there is nothing identifying either business. There is no side- by-side of any documents or marketing material establishing that the same photos or marketing material was used by both companies. There is also no indication any client or student of the Plaintiff has been confused by the alleged use of Plaintiff’s name or likeness.
As such, it does not appear it is likely Plaintiff will prevail on this cause of action.
Intentional Interference with Prospective Economic Relations
Plaintiff pleads:
77. Defendants, and each of them, knew that Plaintiff’s email and text customer lists were the lifeblood of Plaintiff’s business, and that Plaintiff had economic relationships with each individual on its email and/or text message customer lists. (Complaint¶77.)
However, as there is scant evidence that any customer has been contacted, there is not a likelihood of prevailing.
California Bus. & Prof. Code § 17200, and Conspiracy
These causes of action appear to rely on the same arguments as stated above, and thus, it does not appear Plaintiff has sustained its burden of establishing a likelihood of prevailing on the merits.
Additionally, there is no discussion of the interim harm Plaintiff will sustain if the injunction is not granted. Finally, the injunction as currently sought and framed, is far too extensive and would be difficult to enforce.
For the foregoing reasons, Motion for Preliminary Injunction is DENIED.
Plaintiff’s Evidentiary Objections: 1-6 Overruled, 7 Sustained, 8-9 Overruled, 10 Sustained, 11-12 Overruled.
Defendant to give notice.