Judge: Stephen I. Goorvitch, Case: 22STCV36277, Date: 2023-11-13 Tentative Ruling
Case Number: 22STCV36277 Hearing Date: November 13, 2023 Dept: 39
Equisolar, Inc. v.
Jose Mendoza, et al.
Case No.
22STCV36277
Motion for
Preliminary Injunction
BACKGROUND
Plaintiff
Equisolar, Inc. (“Plaintiff”) filed this action against SolarPro Electric, LLC
(“SolarPro”) and eight individual defendants.
Four individual defendants (Jose Mendoza, Reyna Mendoza, Sebastian
Molina, and Carlos Manriguez) have been served and filed answers. Two individual defendants (Patrick Estrada
and Jonathan Mendoza) have been served but never filed answers and Plaintiff
never sought entry of default. Two
individual defendants (Mario Barraza Ramirez and David Ibarra) were never
served. Now, Plaintiff seeks a
preliminary injunction against SolarPro and six of the individual defendants: (1)
Sebastian Molina, (2) Carlos Felipe Manriguez, (3) Jonathan Mendoza, (4) Jose
Mendoza, (5) Reyna Mendoza, and (6) David Ibarra. The motion is denied with respect to David
Ibarra because he was never served with the summons and complaint. With respect to the remaining defendants, the
motion is denied on the merits.
PLAINTIFF’S ALLEGATIONS
Plaintiff provides
solar energy in residential and commercial markets in California. (Complaint, ¶ 27.) In June 2019, Defendant Sebastian Molina, who
was Plaintiff’s General Sales Manager, formed his own business DH Remodel
Service, to compete directly with Plaintiff.
(Id., ¶ 37.) Based upon his
position, Molina had access to Plaintiff’s databases, including Plaintiff’s
confidential, proprietary, and trade secret information. (Id., ¶ 38.)
Based upon this information, Molina solicited Plaintiff’s customers and
directed them to his new venture.
(Ibid.) Molina also instructed
his sales representatives to sign-up customers with DH Remodel Service, not
Plaintiff, which they did. (Ibid.) Plaintiff discovered this scheme in December
2019, and when he was confronted, Molina resigned. (Id., ¶ 39.)
However, even after his resignation, Molina continued to use Plaintiff’s
confidential, proprietary, and trade secret information to solicit Plaintiff’s
customers. (Id., ¶ 41.)
In or about
April 2022, Molina partnered with Defendants Jose Mendoza and Reyna Mendoza at
SolarPro, where the three recruited Plaintiff’s employees. (Id., ¶ 43.)
Prior to his departure, Defendant Carlos Manriguez was Plaintiff’s Operations
Manager and therefore had access to Plaintiff’s confidential, proprietary, and
trade secret information. (Id., ¶
45.) Manriguez joined SolarPro in April
2022, where he also recruited Plaintiff’s employees and misused information he
stole from Plaintiff. (Id., ¶¶ 48-49.) Defendant Patrick Estrada was Plaintiff’s
Logistics Manager, and Plaintiff alleges that he also misused its
information. (Id., ¶¶ 50-55.)
LEGAL STANDARD
To obtain a preliminary injunction,
a plaintiff ordinarily is required to present evidence of the irreparable
injury or interim harm that it will suffer if an injunction is not issued
pending an adjudication of the merits. If
the threshold requirement of irreparable injury is established, then we must
examine two interrelated factors to determine whether the trial court's
decision to issue a preliminary injunction should be upheld: (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. (Costa Mesa City
Employees' Assn. v. City of Costa Mesa (2012) 209 Cal.App.4th 298,
305-306.)
A preliminary injunction has “the
effect of merely maintaining the status quo until the cases are decided on
their merits.” (People v. Black's
Food Store (1940) 16 Cal.2d 59, 62.)
The Court has the authority to enjoin actual or threatened
misappropriation of trade secrets under Civil Code section 3426.2. (Civ. Code, § 3426.2, subd. (a).) Civil Code section 3426.2 preempts any
alternative bases for relief based on misappropriation of trade secrets. (K.C. Multimedia, Inc. v. Bank of America
Tech. & Operations, Inc. (2009) 171 Cal.App.4th 939, 958.) To obtain injunctive relief, the moving party
must advance evidence of improper use or disclosure of the trade secret, or
plans to do so. (Continental
Car-Na-Var Corp. v. Moseley (1944) 24 Cal.2d 104, 107.) “But speculation that a departing employee
may misappropriate and use a trade secret in a startup business will not
support an injunction.” (FLIR
Systems, Inc. v. Parrish (2009) 174 Cal.App.4th 1270, 1277.)
DISCUSSION
The
information at issue consists of “information relating to leads, potential
customers, existing customers, and past customers.” Plaintiff seeks a preliminary injunction to
enjoin Defendants from misappropriating its confidential, proprietary, and
trade secret information, and to enjoin Defendants from using any such
information “to contact, solicit, communicate, or otherwise do business with
[its] customers or individuals named in [its] databases prior to 2023.”
As an
initial matter, much of the information Plaintiff seeks to protect does not
appear to be a trade secret. A customer
list is a trade secret if the identity of customers itself has economic value
and the owner has made reasonable efforts to preserve its secrecy. (See Civ. Code, § 3426.1, subd. (d).) However, to be a trade secret, information
must not be “generally known to the public or to other persons who can obtain
economic value from its disclosure or use . . . .” (Civ. Code, § 3426.1, subd. (d)(1).) In this case, Plaintiff “purchases data from
outside lead and data providers, and then provides the data to its in-house
telemarketing department.” (Declaration
of Isaac Hernandez, ¶ 4.) If Plaintiff
was able to purchase this data, presumably the outside providers would also
provide this data to other purchasers, and Plaintiff does not refute this point
or demonstrate that this information was confidential. Plaintiff’s motion does not distinguish
between the customer lists it purchased and those that it refined. Therefore, the Court defines trade secret narrowly
as only those customers who actually signed-up for Plaintiff’s services.
Even with
this limitation, Plaintiff does not demonstrate a likelihood of success on the
merits because its evidence is inadmissible.
Plaintiff relies on the declaration of Isaac Hernandez, which states: “During
a phone conversation with Jose and Reyna, Reyna admitted to stealing
Equisolar’s employees and customers, said they will continue to do so and that
there was nothing Equisolar could do about it.”
(Ibid.) Similarly, Hernandez
states: “Customers would inform us that they received a visit from another
company called SolarPro, and others would cancel their contracts with us and
sign up with SolarPro.” (Id., ¶ 22.) The declaration lacks foundation because it
does not make clear that Hernandez was a party to the conversations. Accordingly, the Court cannot confirm that
this is based upon Hernandez’s personal knowledge as opposed to having heard
about the call from a participant, which is hearsay.
Hernandez also states that “we”
discovered Manriquez was able to access and download files from Plaintiff’s
computer system. (Id., ¶ 23.) The declaration does not state that he
personally discovered this issue or establishes a foundation for personal
knowledge.
Plaintiff also relies on a
declaration from Defendant Patrick Estrada, who worked for Plaintiff from July
2021 through May 2022. (Declaration of
Patrick Estrada, ¶ 2.) Estrada states: “Felipe
and Sebastian were propping up SolarPro with the data they stole from
Equisolar.” (Declaration of Patrick
Estrada, ¶ 10.) There is no foundation
for this assertion. Estrada states:
“When you purchase data to input from data and lead providers, you receive the
data in raw files. The data then needs
to be formatted . . . [and] it was formatted exactly like EquiSolar’s
data.” (Ibid.) This does not support Plaintiff’s motion for
two reasons. First, it is not surprising
that former employees would continue to use the formatting they learned at
EquiSolar. Second, and more important,
this information is not a “trade secret” because it was available from data and
lead providers. Similarly, Estrada
states that Manriguez had lists of “clients who previously received quotes from
Equisolar.” (Id., ¶ 16.) As discussed, it is not clear this is a
“trade secret.”
Finally, Estrada states that Mario Barraza
Ramirez showed him Equisolar’s “rehash list,” which is “a list of customers who
showed a very high interest in the service, but for whatever reason were not
able to fully commit at the time.” (Id.,
¶ 18.) Estrada states that this list is a
list of “hot leads.” (Ibid.) However, this was over one year ago, in
August or September 2022, and it is now November 2023. Therefore, this list has now grown “cold,”
and there is no reason to issue a preliminary injunction.
The Court also considered whether
to grant a preliminary injunction with respect to soliciting Equisolar’s
employees. Hernandez states: “In or
about September 2022, Equisolar’s sales representatives began receiving text
messages and phone calls from Molina, Manriguez, and Estrada, telling them to
leave Equisolar and come work with them at SolarPro.” (Declaration of Isaac Hernandez, ¶ 21.) The declaration provides no foundation that
this is based upon personal knowledge as opposed to hearsay (i.e., the sales
representatives told him that they received these text messages and phone
calls). However, Hernandez’s statement
appears to be corroborated by Estrada.
(Declaration of Patrick Estrada, ¶ 14.)
Regardless, per their employment agreements, Equisolar’s employees
agreed not to solicit fellow employees for 12 months after their
employment. It has been over 12 months
since the defendants resigned from Equisolar, so there is no basis for a
preliminary injunction on this issue.
Based upon the foregoing, the Court
denies Plaintiff’s motion for a preliminary injunction because Plaintiff cannot
establish a likelihood of success on the merits. Plaintiff’s evidence is inadmissible or
inconclusive, and the Court notes that several defendants provide contrary declarations. Moreover, Plaintiff cannot establish
irreparable harm because it waited over one year to seek redress. Therefore, the motion is denied.
CONCLUSION AND ORDER
Based upon the foregoing, the Court
orders as follows:
1. Plaintiff’s motion for a preliminary
injunction is denied.
2. The Court orders Plaintiff’s counsel to
seek default or dismiss Patrick Estrada and Jonathan Mendoza forthwith.
3. The Court orders Plaintiff’s counsel to
Mario Cesar Barraza Ramirez and David Ibarra, and to file the proofs of
service, forthwith.
4. The Court advances and continues the
case management conference and orders to show cause to February 29, 2024, at
8:30 a.m.
5. Plaintiff’s counsel shall provide
notice and file proof of such with the Court.