Super Mario Plumbing et al v. Belodedov et al

Filing 21

ORDER signed by District Judge Troy L. Nunley on 2/14/2018 DENYING 9 Motion for a Preliminary Injunction. (York, M)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 12 SUPER MARIO PLUMBING, a California corporation; and DIMITAR DECHEV, an individual, 13 Plaintiffs, 14 15 16 17 v. No. 2:17–cv–02545–TLN-AC ORDER DENYING PLAINTIFFS’ MOTION FOR A PRELIMINARY INJUNCTION OLEG BELODEDOV, an individual; PETRU VERHOVETCHI, an individual; 5-STAR PLUMBING, INC., a California corporation, 18 Defendants. 19 This matter is before the Court pursuant to Plaintiffs Super Mario Plumbing (“Super 20 21 Mario”) and Dimitar Dechev’s (“Dechev”) (collectively, “Plaintiffs”) Motion for a Preliminary 22 Injunction (ECF No. 9). Defendants Oleg Belodedov (“Belodedov”) and Petru Verhovetchi 23 (“Verhovetchi”) (collectively, “Individual Defendants”) oppose. (ECF No. 13.) The corporate 24 defendant, 5-Star Plumbing (“5-Star”), has not filed an opposition. Plaintiffs filed a reply. (ECF 25 No. 15.) For the reasons detailed below, the Court DENIES Plaintiffs’ Motion for a Preliminary 26 Injunction (ECF No. 9). 27 /// 28 /// 1 1 I. 2 Plaintiffs allege Individual Defendants are former employees of Super Mario. (ECF No. FACTUAL AND PROCEDURAL BACKGROUND 3 9-1 at 5.) Plaintiffs allege Defendants founded 5-Star as a competitor to Super Mario, although 4 Plaintiffs allege 5-Star is not licensed as a plumber. (ECF No. 9-1 at 6.) Plaintiffs allege 5 Defendants attempted to sabotage Super Mario’s business by trying to bribe Super Mario’s 6 dispatcher to send its service calls to 5-Star instead, signing up on Angie’s List as a competitor 7 plumber, and posting fake negative reviews of Plaintiffs’ services on-line. (ECF No. 9-1 at 5–6.) 8 9 Plaintiffs allege the fake negative reviews appeared on-line as early as the beginning of November 2017. (ECF No. 9-1 at 5.) Plaintiffs allege their business has dropped 25% since, 10 which they attribute to the reviews. (ECF No. 9-1 at 9.) Plaintiffs allege they have had to reduce 11 the work hours of two employees from full-time to part-time due to the reduction in business 12 Plaintiffs attribute to Defendants’ alleged conduct. (ECF No. 9-1 at 9; ECF No. 9-2 at 4.) 13 Plaintiffs allege they know the reviews are fake because the language in many of the 14 reviews is copied verbatim from older posts about other plumbing companies in different states. 15 (ECF No. 9-1 at 7.) Plaintiffs allege some of the fake reviews contain the names of the other 16 plumbing companies. (ECF No. 9-1 at 8.) Plaintiffs allege they know Defendants are responsible 17 for the fake negative reviews partly because Defendants threatened that action. (ECF No. 9-1 at 18 6.) Further, Plaintiffs allege Dechev confronted Verhovetchi, who denied responsibility, Dechev 19 confronted both Individual Defendants and they laughed, and a Super Mario employee confronted 20 Beledodov and he refused to respond to the accusation. (ECF No. 9-1 at 8–9; ECF No. 9-2 ¶ 12; 21 ECF No. 9-3 ¶¶ 4–5.) 22 Plaintiffs filed a motion for a temporary restraining order moving the Court to order 23 Defendants to remove multiple on-line posts Plaintiffs believe are fake negative reviews of 24 Plaintiffs’ services purporting to be from Plaintiffs’ customers, and an order to show cause why a 25 preliminary injunction should not issue. (ECF No. 9 at 1–2.) The Court denied Plaintiffs’ motion 26 but considered it as a motion for preliminary injunction. (ECF No. 11 at 6.) Individual 27 Defendants filed an opposition in the form of two letters signed by them addressed to Plaintiffs’ 28 attorney and Dechev. (ECF No. 13 at 1–4.) Plaintiffs have replied. (ECF No. 15.) 2 1 II. 2 Injunctive relief is “an extraordinary remedy that may only be awarded upon a clear 3 showing that the plaintiff is entitled to such relief.” Winter v. Natural Res. Def. Council, Inc., 555 4 U.S. 7, 22 (2008) (citing Mazurek v. Armstrong, 520 U.S. 968, 972 (1997) (per curiam)). “The 5 purpose of a preliminary injunction is merely to preserve the relative positions of the parties until 6 a trial on the merits can be held.” University of Texas v. Camenisch, 451 U.S. 390, 395 (1981) 7 (emphasis added); see also Costa Mesa City Employee’s Assn. v. City of Costa Mesa, 209 Cal. 8 App. 4th 298, 305 (2012) (“The purpose of such an order is to preserve the status quo until a final 9 determination following a trial.”) (internal quotation marks omitted);, Inc. v. Walt STANDARD OF LAW 10 Disney, Co., 202 F.3d 1199, 1210 (9th Cir. 2000) (“The status quo ante litem refers not simply to 11 any situation before the filing of a lawsuit, but instead to the last uncontested status which 12 preceded the pending controversy.”) (internal quotation marks omitted). In cases where the 13 movant seeks to alter the status quo, preliminary injunction is disfavored and a higher level of 14 scrutiny must apply. Schrier v. University of Co., 427 F.3d 1253, 1259 (10th Cir. 2005). 15 Preliminary injunction is not automatically denied simply because the movant seeks to alter the 16 status quo, but instead the movant must meet heightened scrutiny. Tom Doherty Associates, Inc. 17 v. Saban Entertainment, Inc., 60 F.3d 27, 33–34 (2d Cir. 1995). 18 “A plaintiff seeking a preliminary injunction must establish [1] that he is likely to succeed 19 on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, 20 [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest.” 21 Winter, 555 U.S. at 20. A plaintiff must “make a showing on all four prongs” of the Winter test 22 to obtain a preliminary injunction. Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 23 (9th Cir. 2011). In evaluating a plaintiff’s motion for preliminary injunction, a district court may 24 weigh the plaintiff’s showings on the Winter elements using a sliding-scale approach. Id. A 25 stronger showing on the balance of the hardships may support issuing a preliminary injunction 26 even where the plaintiff shows that there are “serious questions on the long as the 27 plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is in the 28 public interest.” Id. Simply put, Plaintiff must demonstrate, “that [if] serious questions going to 3 1 the merits were raised [then] the balance of hardships [must] tip[ ] sharply in the plaintiff’s 2 favor,” in order to succeed in a request for preliminary injunction. Id. at 1134–35 (emphasis 3 added). 4 III. ANALYSIS 5 Plaintiffs argue a preliminary injunction, ordering Defendants to remove what Plaintiffs 6 allege are fake negative online reviews of their business, is necessary to protect them and the 7 public. (ECF No. 15 at 2.) Individual Defendants filed an opposition denying all of the 8 allegations. (ECF No. 13 at 1, 3.) Plaintiffs argue the Court should not consider Individual 9 Defendants’ opposition because it was due on a Wednesday but filed the following Monday. 10 (ECF No. 15 at 4.) The Court will accept Individual Defendants’ late filing and construe it as an 11 opposition. Masaoka v. JPMorgan Chase NA, 2012 WL 13018552, at *1 (C.D. Cal. May 21, 12 2012) (granting a pro se litigant leave to file an opposition 21 days after the deadline); see also 13 Visant Corp. v. Barrett, 2013 WL 3450512, at *4 (S.D. Cal. July 9, 2013) (considering a pro se 14 filing which included attached emails as a motion to dismiss and motion to strike, citing 15 Bernhardt v. L.A. Cty., 339 F.3d 920, 925 (9th Cir. 2003), which stated “[c]ourts have a duty to 16 construe pro se pleadings liberally.”). 17 18 19 A. Plaintiffs Request a Mandatory Injunction, Which is Subject to a Heightened Standard “A preliminary injunction can take two forms. A prohibitory injunction prohibits a party 20 from taking action and preserves the status quo pending a determination of the action on the 21 merits. A mandatory injunction orders a responsible party to take action.” Marlyn 22 Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 878–79 (9th Cir. 2009) 23 (internal quotation marks and citations omitted); Garcia v. Google, 786 F.3d 733, 740 (9th Cir. 24 2015) (en banc). Plaintiffs move the Court to order Defendants to remove negative reviews of 25 Super Mario from websites. Plaintiffs request a mandatory injunction. 26 The Ninth Circuit has adopted a heightened standard with respect to mandatory 27 injunctions. Park Vill. Apartment Tenants Ass’n v. Mortimer Howard Trust, 636 F.3d 1150, 1161 28 (9th Cir. 2011). A mandatory injunction “goes well beyond simply maintaining the status quo” 4 1 during litigation and is “particularly disfavored.” Stanley v. Univ. of S. Cal., 13 F.3d 1313, 1320 2 (9th Cir. 1994). A district court should deny a mandatory injunction, “unless the facts and law 3 clearly favor the moving party.” Id. “In general, mandatory injunctions are not granted unless 4 extreme or very serious damage will result[,] and are not issued in doubtful cases or where the 5 injury complained of is capable of compensation in damages.” Marlyn Nutraceuticals, 571 F.3d 6 at 879 (internal quotation marks and citations omitted); Garcia, 786 F.3d at 740. 7 B. Plaintiffs Have Not Shown the Law and Facts Clearly Favor Their Position 8 A party moving for a preliminary injunction must “make a showing on all four prongs” of 9 the Winter test. Alliance for the Wild Rockies, 632 F.3d at 1135. “The first factor under Winter is 10 the most important—likely success on the merits.” Garcia, 786 F.3d at 740. Although courts 11 consider the same factors in evaluating either type of preliminary injunction, the standard for 12 evaluating those factors for a mandatory injunction is “doubly demanding.” Id. The movant must 13 show “the law and facts clearly favor [the movant’s] position, not simply that [the movant] is 14 likely to succeed.” Id. (emphasis original). Thus, Plaintiffs here must show that the law and facts 15 clearly favor their position, not simply that they are likely to succeed on the merits. 16 Plaintiffs argue they are likely to succeed on the merits because Defendants “fail to deny” 17 the allegations, have a motive to post fake negative reviews to harm a competitor, benefited from 18 fake positive reviews during the same time, and threatened to post fake reviews of Super Mario. 19 (ECF No. 15 at 4–5.) 20 Individual Defendants did deny the allegations in their pro se filing. (ECF No. 13 at 1, 3) 21 (stating “all of these accusations are false”). Only 5-Star, which cannot appear pro se in federal 22 court, has failed to respond to Plaintiffs’ motion. Additionally, Plaintiffs’ argument Defendants 23 have a motive to harm a competitor would apply equally to all other plumbing businesses. 24 Plaintiffs argue fake positive reviews appeared on 5-Stars’s website at the same time that 25 fake negative reviews appeared about Super Mario, and that the similarity in tactic and time make 26 it “next to impossible” to conclude Defendants were not responsible for all of the behavior. (ECF 27 No. 15 at 5.) Even assuming Super Mario received fake negative reviews and 5-Stars’s website 28 contains fake positive reviews, Plaintiffs do not cite any authority for the proposition that a Court 5 1 must infer that a company with fake positive reviews must be responsible for fake negative 2 reviews of a competitor business. 3 Finally, Plaintiffs state Defendants threatened to post negative reviews. (ECF No. 15 at 4 5.) Plaintiffs attached a declaration from Dechev stating he contacted Defendants to discuss their 5 disagreements and Defendants told “Dechev that if he ‘poked his nose’ into Defendants’ business, 6 there will be bad reviews posted online on [Super Mario’s] websites aimed at [Super Mario].” 7 (ECF No. 9-2 ¶ 7.) Individual Defendants, as noted above, deny all allegations. (ECF No. 13 at 8 1, 3.) Plaintiffs offer no basis for their speculation that Defendants are responsible for the 9 negative reviews beyond Dechev’s interpretation that Defendants threatened that behavior when 10 Dechev spoke with them. Levitt v. Yelp! Inc., No. C 10-1321 MHP, 2011 WL 13153230, at *9 11 (N.D. Cal. Mar. 22, 2011) (finding “no basis from which to infer that Yelp authored or 12 manipulated the content of the negative reviews complained of by [the] plaintiffs,” where the 13 plaintiffs alleged negative reviews appeared directly after they declined Yelp’s offer to improve 14 ratings if the plaintiffs purchased advertising). 15 Further, in both their First Amended Complaint and their motion, Plaintiffs advance 16 interpretations of conversations with Individual Defendants which are not supported by the 17 attached declarations. In their First Amended Complaint, Plaintiffs allege Belodedov told a Super 18 Mario employee named Uri, “that he would be open to negotiations, but that he believed that Uri 19 did not have the authority to negotiate, intimating that he, [Verhovetchi] and 5-STAR were 20 behind the negative reviews.” (ECF No. 8 ¶ 20.) Plaintiffs attach the declaration of Uri Murga 21 (“Uri”) to their motion, in which Uri states he called Belodedov who refused to respond to Uri’s 22 accusations because Uri did not have “the authority to discuss it with him,” but stated Belodedov 23 would speak to someone else about the subject. (ECF No. 9-3 ¶¶ 4–5.) The declaration does not 24 mention the word “negotiation” or the concept of being “open to negotiations.” 25 In their motion, Plaintiffs allege that “[i]n conversations with Plaintiffs, Defendants all but 26 admitted they posted the fraudulent and fabricated ‘reviews’.” (ECF No. 9-1 at 15.) Plaintiffs 27 attach a declaration from Dechev in which Dechev states that he accused Verhovetchi of posting 28 the fake negative reviews and Verhovetchi laughed at the accusation and stated he did not post 6 1 the reviews. (ECF No. 9-2 ¶ 12.) Dechev states he later saw both Individual Defendants and 2 accused them of posting the reviews and they both laughed at him. (ECF No. 9-2 ¶ 12.) Neither 3 declaration supports the strong conclusions Plaintiffs attribute to them. 4 Plaintiffs have not alleged any facts sufficient to allow the Court to draw a reasonable 5 inference that Defendants are responsible for posting fake negative reviews of Super Mario. 6 Plaintiffs, therefore, have not established a likelihood of success on the merits, the more lenient 7 standard applicable to assessing prohibitory injunctions. Kwong v. Santa Clara Cty. Sheriff’s 8 Office, 2017 WL 4950005, at *4 (N.D. Cal. Nov. 1, 2017) (analyzing both a motion for 9 preliminary injunction and a motion to dismiss, and finding that as the plaintiff failed to allege 10 sufficient facts for the court to infer the defendant was liable for the misconduct, “[i]t follows that 11 [the plaintiff] has not established that she is likely to succeed on the merits”). 12 As Plaintiffs have not satisfied even the Winter standard to show a likelihood of success 13 on the merits, Plaintiffs have not satisfied the heightened standard applicable to mandatory 14 injunctions — to establish that the law and facts clearly favor their position. Garcia, 786 F.3d at 15 740 (stating, “In plain terms, mandatory injunctions should not issue in doubtful cases.”); Park 16 Vill. Apartment Tenants Ass’n, 636 F.3d at 1160. 17 18 C. The Court Need Not Consider the Remaining Winter Factors “Because it is a threshold inquiry, when a plaintiff has failed to show the likelihood of 19 success on the merits, [a court] need not consider the remaining three Winter elements.” Garcia, 20 786 F.3d at 740. Plaintiffs have not satisfied the first Winter factor, therefore, the Court need not 21 consider the remaining Winter factors. Accordingly, the Court DENIES Plaintiffs’ motion for a 22 preliminary injunction. 23 IV. 24 For the foregoing reasons, the Court DENIES Plaintiffs’ Motion for a Preliminary 25 26 27 CONCLUSION Injunction (ECF No. 9). IT IS SO ORDERED. Dated: February 14, 2018 28 7 Troy L. Nunley United States District Judge

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