Ardis Health, LLC et al v. Nankivell

Filing 30

MEMORANDUM AND ORDER granting in part and denying in part 6 Motion for Preliminary Injunction filed by the Plaintiffs: For the reasons set forth within, the motion (docket no. 6) is granted in part and denied in part. (Signed by Judge Naomi Reice Buchwald on 10/19/2011) Copies Mailed By Chambers. (ab)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------------X
ARDIS HEALTH, LLC, CURB YOUR CRAVINGS,
LLC, and USA HERBALS, LLC,
Plaintiff,

MEMORANDUM AND ORDER

- against -

11 Civ. 5013 (NRB)

ASHLEIGH NANKIVELL,
Defendant.
----------------------------------------X
NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE
Plaintiffs Ardis Health, LLC (“Ardis”), Curb Your Cravings,
LLC (“CYC”), and USA Herbals, LLC (“USA Herbals”) have moved for
a preliminary injunction against defendant Ashleigh Nankivell
requiring her to (i) return plaintiffs’ login information for
various

websites,

(ii)

return

a

laptop

allegedly

owned

by

plaintiffs and the content thereon, and (iii) refrain from using
any and all of plaintiffs’ proprietary content and trademarked
or copyrighted works.1 For the reasons stated below, plaintiffs’
motion is granted in part and denied in part.

1

The original motion for a preliminary injunction also requested the return
of other equipment, including a video camera. Plaintiffs have since located
that equipment and have withdrawn that part of the motion.

BACKGROUND2
Plaintiffs

are

a

group

of

closely

affiliated

online

marketing companies that develop and market a variety of herbal
and beauty products. They are wholly owned and collaboratively
operated by their founder Jordan Finger.
In October 2008, defendant was hired as Video and Social
Media

Producer

by

CYC,

the

main

online

entity

in

Finger’s

enterprise. Defendant was at various points paid by both CYC and
USA Herbals or USA Herbals alone and performed work for a number
of

entities

in

Finger’s

enterprise,

including

plaintiffs.

Defendant’s

duties

included

maintaining

websites,

blogs,

and

each

producing

social

of

the

videos

and

pages

in

media

connection with the online marketing of plaintiffs’ products.
Her responsibilities with respect to plaintiffs’ online presence
included maintaining passwords and other login information for
websites, email accounts, and social media accounts, as well as
for

third-party

servers

where

plaintiffs

stored

content

(collectively, “Access Information”).
At
agreement

the

start

governing

of
the

her

employment,

creation

of

work

defendant
product

signed
(the

an

“Work

Product Agreement”) with CYC. That agreement provides that all

2

These facts are drawn from Plaintiffs’ Memorandum of Law in Support of Their
Motion for Preliminary Injunction and the declaration and exhibits thereto,
Defendant’s Memorandum of Law in Opposition and the declarations and exhibits
thereto, and Plaintiffs’ Reply Memorandum of Law and the declaration and
exhibits thereto.

2

work created or developed by defendant “shall be the sole and
exclusive property of CYC, in whatever stage of development or
completion,” and that it “will be prepared as ‘work-for-hire’
within the meaning of the Copyright Act of 1976.” (Decl. of
Jordan Finger (“Finger Decl.”), Ex. E, at ¶ 10.) The agreement
also

provides

that

defendant

must

return

all

confidential

information to CYC upon request, and that “actual or threatened
breach of [the agreement] will cause CYC irreparable injury and
damage.” (Id. at ¶¶ 5, 8.)
Plaintiffs provided defendant with equipment to perform her
job functions, though she also used her own computer and video
equipment on occasion. Defendant’s personal computer crashed in
the

spring

of

2010,

purportedly

due

to

over-use

from

work-

related tasks, and plaintiffs provided her with a used laptop as
a replacement. Defendant stored much of the work she created on
this equipment.
In

or

about

June

2010,

Finger

and

defendant

began

to

develop a service known as “Whatsinurs,” a social media website
for cosmetic products. Defendant produced both alpha and beta
versions of a website for the service, and Ardis applied for a
trademark

in

the

name

on

April

6,

2011

and

registered

a

copyright for the website on July 27, 2011. On June 6, 2011,
Finger

sent

organization

defendant
and

an

governance

agreement
of

3

pertaining

Whatsinurs

(the

to

the

“Founders

Agreement”).

The

agreement

lists

defendant

as

one

of

three

“founding shareholders” and provides for her to acquire 5% of
the outstanding founding shares and operating shares. (Decl. of
Gail I. Auster, Ex. 1, at ¶¶ B, C.) Finger and Karl Alomar, the
third

founder,

were

to

be

the

only

two

members

of

the

organization’s board of directors. The Founders Agreement was
never signed.
Defendant,
employment

in

meanwhile,
the

spring

had
of

begun
2011.

seeking

Plaintiffs

alternative
allege

that

defendant’s work suffered as a result of her job search, while
defendant

asserts

that

Finger

simply

became

enraged

upon

learning of defendant’s ambulatory intentions. Regardless of the
motivation, defendant was fired on June 23, 2011.
Upon defendant’s termination, Finger requested the return
of the laptop plaintiffs had provided to her, as well as the
Access Information. Defendant, however, declined to return the
computer and information. Plaintiffs are now unable to access a
number of their online accounts and websites to update them as
needed for their marketing purposes. Plaintiffs also allege that
the laptop contains proprietary information that is otherwise
unavailable to them, though defendant maintains that the laptop
was synced with the desktop she used at work, so all of the work
files on the laptop are within plaintiffs’ control.

4

Additionally,

at

some

point

prior

to

her

termination,

defendant began displaying content from the Whatsinurs website,
alongside other projects she was involved with, on her personal
websites as part of her design portfolio. Defendant uses these
websites

as

a

means

of

self-promotion

to

find

future

work.

Internet searches for the term “Whatsinurs” will return these
websites alongside the official Whatsinurs website and certain
of its social media pages.
DISCUSSION
I.

Legal Standard
A party seeking a preliminary injunction must show (1) a

likelihood of irreparable harm in the absence of the injunction;
and

(2)

either

a

likelihood

of

success

on

the

merits

or

sufficiently serious questions going to the merits to make them
a

fair

tipping
State

ground

for

decidedly

Senate,

599

litigation,

in

the

F.3d

with

movant’s

148,

154

a

balance

favor.
(2d

of

hardships

Monserrate

Cir.

2010).

v.

The

N.Y.

injury

underlying an injunction “must be one requiring a remedy of more
than mere money damages. A monetary loss will not suffice unless
the movant provides evidence of damage that cannot be rectified
by

financial

compensation.”

Tucker

Anthony

Realty

Corp.

v.

Schlesinger, 888 F.2d 969, 975 (2d Cir. 1989).
A preliminary injunction is an “extraordinary remedy that
should

not

be

routinely

granted.”

5

Procter

&

Gamble

Co.

v.

Ultreo, Inc., 574 F. Supp. 2d 339, 344 (S.D.N.Y. 2008) (internal
quotation

marks

omitted).

Indeed,

when

the

movant

seeks

a

mandatory injunction -- one that will alter the status quo -- it
must show a “clear” or “substantial” likelihood of success on
the merits. See Mastrovincenzo v. City of New York, 435 F.3d 78,
89-90 (2d Cir. 2001); Jolly v. Coughlin, 76 F.3d 438, 473 (2d
Cir. 1996).
II.

Plaintiffs’ Entitlement to Injunctive Relief
A.

Plaintiffs
Are
Information

Entitled

to

Recover

the

Access

Plaintiff has provided the Court with sufficient evidence
to

support

a

finding

of

irreparable

harm

if

the

Access

Information is not returned prior to a final disposition in this
case.

Plaintiffs

advertise

their

depend

heavily

businesses,

on

which

their

online

requires

the

presence

to

ability

to

continuously update their profiles and pages and react to online
trends. The inability to do so unquestionably has a negative
effect

on

plaintiffs’

reputation

and

ability

to

remain

competitive, and the magnitude of that effect is difficult, if
not

impossible,

to

quantify

in

monetary

terms.

Such

injury

constitutes irreparable harm. See Tom Doherty Assocs., Inc. v.
Saban Entm’t, Inc., 60 F.3d 27, 38 (2d Cir. 1995) (discussing
the

principle

that

irreparable

harm

lies

“where

there

is

a

threatened imminent loss that will be very difficult to quantify

6

at trial”); N.Y.C. Triathlon, LLC v. NYC Triathlon Club, Inc.,
704 F. Supp. 2d 305, 343 (S.D.N.Y. 2010) (finding “[p]rospective
loss of . . . goodwill alone” to be “sufficient to support a
finding of irreparable harm” and noting plaintiff’s loss of “the
ability to control its reputation”).
Defendant asserts that plaintiffs will not be irreparably
harmed if they do not receive the Access Information because the
websites and blogs to which the information pertains had not
been used for the two years preceding defendant’s termination.
Defendant was employed by plaintiffs for the entirety of that
period, and she acknowledges that it was her responsibility to
post content to those websites. Defendant cannot use her own
failure

to

perform

her

duties

as

a

defense.

Moreover,

past

failure to utilize the websites does not preclude a finding of
irreparable harm. New opportunities may arise that plaintiffs
are

unable

withholding

to

take

the

advantage

Access

of

as

Information.

a

result

For

of

defendant’s

instance,

plaintiffs

have recently begun participating in “daily deal” promotions,
the success of which depends heavily on tie-ins with social
media.
It is uncontested that plaintiffs own the rights to the
Access Information. Defendant’s unauthorized retention of the
information

may

therefore

form

the

basis

of

a

claim

of

conversion. See Thyroff v. Nationwide Mut. Ins. Co., 460 F.3d

7

400,

403-04

(2d

Cir.

2006)

(“According

to

New

York

law,

‘[c]onversion is the unauthorized assumption and exercise of the
right

of

ownership

exclusion

of

the

over

goods

owner's

belonging

rights.’”).

to

another

the

likelihood

The

to

of

plaintiffs’ success on the merits of this claim is unquestioned,
and

plaintiffs

injunctive

have

relief.

clearly

established

Defendant

must

their

provide

them

right

to

with

the

requested Access Information.
B.

Plaintiffs Are Not Entitled
Laptop Computer at This Time

to

the

Return

of

the

Plaintiffs have not demonstrated irreparable harm if the
laptop computer is not returned to them. Plaintiffs have made no
arguments whatsoever with respect to the computer itself; as a
mass-produced

object,

its

loss

is

clearly

monetarily

compensable.
Plaintiffs have, however, made some attempt to demonstrate
that they will suffer irreparable harm if the contents of the
computer

are

specifically,
wherein

not
to

defendant

made

the

available

clause

expressly

of

the

to

them.

Work

acknowledged

They

Product

that

“the

point,

Agreement
actual

or

threatened breach of this Agreement will cause CYC irreparable
injury and damage,” which should entitle CYC “to injunctive and
other equitable relief.” (Finger Decl., Ex. E, at ¶ 8.) Because
that agreement also provides that defendant must, upon CYC’s

8

request, “take all action necessary to immediately return to CYC
all of the Confidential Information without retaining any copies
thereof,” plaintiffs contend that defendant’s failure to return
the

information

contained

on

the

computer

constitutes

irreparable injury.
A

conclusory

contract

provision

alone

cannot

establish

irreparable harm. The provision “might arguably be viewed as an
admission by [defendant] that plaintiff will suffer irreparable
harm were [defendant] to breach” the contract, Ticor Title Ins.
Co. v. Cohen, 173 F.3d 63, 69 (2d Cir. 1999), but “contractual
language declaring money damages inadequate in the event of a
breach

does

injunctive

not

relief

control
is

the

question

appropriate.”

whether

Baker’s

Aid

preliminary
v.

Hussmann

Foodservice Co., 830 F.2d 13, 16 (2d Cir. 1987). Rather, the
Court must perform a standard inquiry into the existence of
irreparable injury and simply use the contractual provision as
one factor in its assessment. See, e.g., Life Techs. Corp. v. AB
Sciex PTE, Ltd., No. 11 Civ. 325, 2011 U.S. Dist. LEXIS 40586,
at

*13-14

language

(S.D.N.Y.
as

a

Apr.

11,

2011)

non-dispositive

part

(considering
of

its

contractual

irreparable

harm

analysis); Int’l Creative Mgmt., Inc. v. Abate, No. 07 Civ. 1979
(PKL), 2007 U.S. Dist. LEXIS 22964, at *19 (S.D.N.Y. Mar. 28,
2007) (same); Markovits v. Venture Info Capital, Inc., 129 F.
Supp. 2d 647, 661 (S.D.N.Y. 2001) (same).

9

Defendant contends that all of the laptop’s contents have
been synced with a desktop computer within plaintiffs’ control.
Although plaintiffs argue that without access to the laptop they
cannot

be

contents

certain

were

that

synced,

all,

they

rather

have

than

not

just

some,

demonstrated

of

the

irreparable

injury in the event that there is a discrepancy. Indeed, they
have done no more here than rely on the language contained in
the Work Product Agreement and have therefore not met their
burden

with

respect

to

irreparable

injury.

The

requested

injunction is not appropriate.3
C.

Plaintiffs Are Not Entitled to Enjoin Defendant from
Displaying Whatsinurs Content on Her Website

Plaintiffs’

arguments

to

the

contrary

notwithstanding,

irreparable harm may not be presumed in matters of copyright and
trademark infringement. See Salinger v. Colting, 607 F.3d 68,
79-80 (2d Cir. 2010) (“The court must not adopt a ‘categorical’
or ‘general’ rule or presume that the plaintiff will suffer
irreparable harm [in copyright cases] . . . . Instead, the court
must actually consider the injury the plaintiff will suffer if
he or she loses on the preliminary injunction but ultimately
prevails on the merits . . . .”); Tecnimed SRL v. Kidz-Med,
Inc.,

763

F.

Supp.

2d

395,

402

(S.D.N.Y.

2011)

(applying

Salinger to a trademark claim).

3

Because the issue is resolvable at the irreparable harm step of the inquiry,
the Court does not opine on plaintiffs’ likelihood of success on the merits.

10

Plaintiffs
their

claim

displaying

of

have

presented

irreparable

selected

little

injury

Whatsinurs

evidence

as

a

in

result

content,

in

a

support

of

of

defendant

non-functional

manner, on her personal websites. Essentially, plaintiffs assert
that, because a web search for “Whatsinurs” includes defendant’s
websites in the results (though they appear below the actual
Whatsinurs

website

and

its

manifestations

on

social

media

sites), consumers may become confused as to the true Whatsinurs
website and the Whatsinurs brand will become diluted.
The

claim

is

preposterous

on

its

face.

Not

only

do

defendant’s websites appear below plaintiffs’ in search results,
defendant’s

do

not

purport

to

be,

or

in

any

way

give

the

impression of being, portals for the sale of commercial goods.
On

both

wholly

of

defendant’s

non-functional,

websites,
little

the

more

Whatsinurs
than

content

dressed-up

is

image

captures. It is clearly labeled as an example of defendant’s
“Design”

capabilities

projects

defendant

has

and

surrounded

worked

on.

It

by

content

does

not

from

other

compete

with

plaintiffs’ websites or pose potential issues of confusion.
Nevertheless, plaintiffs argue that because defendant is
displaying their marks, bad faith may be presumed, see Tri-Star
Pictures,

Inc.

v.

Unger,

14

F.

Supp.

2d

339,

357

(S.D.N.Y.

1998), and bad faith establishes a presumption of confusion, see
GoSmile, Inc. v. Levine, 769 F. Supp. 2d 630, 645 (S.D.N.Y.

11

2011). Bad faith, however, is not appropriately presumed here
because defendant has “a credible innocent explanation,” TriStar Pictures, 14 F. Supp. 2d at 357, namely that displaying
prior

projects

is

industry

standard

for

web

designers

in

garnering new clientele.
Even
confused

assuming
between

likelihood

of

that

potential

defendant’s

confusion

customers

would

and

create

be

websites,

“a

presumption

of

plaintiffs’

not

does

likely

a

irreparable injury.” Marks Org., Inc. v. Joles, No. 09 Civ.
10629, 2011 U.S. Dist. LEXIS 28182, at *27 (S.D.N.Y. Mar. 16,
2011).

Plaintiffs

have

done

little

more

than

assert

that

confusion itself will irreparably injure them; such conclusory
assertions

are

insufficient

to

carry

their

burden.

While

defendant need not remove the references to Whatsinurs or the
samples of her work on Whatsinurs from her websites at this
time, defendant is directed to remove the following language
from

her

resume

on

her

websites:

version. http://whatsinurs.com.”

12

“Currently

updating

alpha

CONCLUSION

For

the

foregoing

reasons,

the

motion

(docket

no.

6)

is

granted in part and denied in part.

Dated:

New York, New York
October 19, 2011

L<iLL~
NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE

Copies of the foregoing Order have been mailed on this date to
the following:
Attorneys for Plaintiff
David Valicenti, Esq.
Christopher Hennessey, Esq.
Cohen Kinne Valicenti & Cook LLP
28 North Street, 3rd Floor
pittsfield, MA 01201
Attorney for Defendant
Gail I. Auster, Esq.

Gail I. Auster & Associates, P.C.

17 Battery Place, Suite 711

New York, NY 10004

13