Judge Real Extends TRO Enjoining Defendants Conduct Until Resolution of Case

On April 11, 2016, Judge Real of the Central District of California granted an ex parte application for a temporary restraining order in favor of our client ReachLocal, Inc.  ReachLocal sought to prevent defendants Kieran Cassidy and his company, PPC Claim (collectively, the "Defendants"), from contacting its clients, employees, and investors.  The article on the TRO can be accessed here.  After granting the TRO, Judge Real set an expedited hearing for April 11 for a preliminary injunction.

On April 11, 2016, at 10:00 a.m., Judge Real heard arguments from counsel for the issuance of a preliminary injunction against the Defendants.  Judge Real granted the preliminary injunction and issued an order shortly after setting forth the same terms for the preliminary injunction as the TRO.  A copy of the minute order granting the preliminary injunction can be found here.

Preliminary Injunction Issued Barring Delegation of .Africa Top-Level Domain Until Case Resolution

On Tuesday, April 12, 2016, the Honorable R. Gary Klausner of the Central District of California granted a preliminary injunction in favor of our client DotConnectAfrica Trust (“DCA”). The preliminary injunction prohibits defendant Internet Corporation for Assigned Names and Numbers from delegating the rights to the generic top-level domain (“gTLD”) “.Africa” until the case resolves. 

As a initial issue to the preliminary injunction motion (and central to ICANN’s opposition), ICANN argued that DCA was barred from pursuing any court-related relief as a result of a provision included in the gTLD application Guidebook.  The relevant portions of the provision are as follows: 

"Applicant hereby releases ICANN…from any and all claims by applicant that arise out of, are based upon, or are in any way related to, any action, or failure to act, by ICANN…in connection with ICANN’s…review of this application…Applicant agrees not to challenge, in court…any final decision made by ICANN with respect to the application, and irrevocably waives any right to sue or proceed in court…on the basis of any other legal claim against ICANN….with respect to the application.”

DCA argued that because the provision barred relief from any and all claims arising out of the application process – including fraudulent or intentional wrongdoing - the release was void as a matter of law pursuant to Cal. Civil Code §1668.  Section 1668 provides that “[a]ll contracts which have for their object, directly or indirectly, to exempt anyone from responsibility for his own fraud, or willful injury to the person or property or another, or violation of law, whether willful or negligent, are against the policy of the law.”  The Court agreed with DCA, finding the provision “against the policy of law” by exempting ICANN from fraudulent or intentional wrongdgoin.  The court rejected both of ICANN’s arguments that (1) the release had to affect public policy to be void, and (2) because DCA’s motion for a preliminary injunction was not based on DCA’s claims for fraud, the provision was enforceable here.  The Court held that DCA alleged intentional misconduct and those allegations sufficed for purposes of finding the provision unenforceable.

Continuing through its analysis, the Court found serious questions as to the merits of DCA’s declaratory relief claim that ICANN be ordered to follow the decision of its internal review process and continue to process DCA’s .Africa application in accordance with ICANN’s bylaws and articles of incorporation.  Agreeing with DCA, the Court emphasized the fact that .Africa can only be issued once; if DCA’s application was improperly processed and ICANN is not barred from delegating the .Africa rights, DCA could suffer irreparable harm losing the chance to control the .Africa domain.  Balancing this fact against any potential harm to ICANN, the scales tipped sharply in DCA’s favor.  Finally, with respect to the public interest involved in the issuance of a preliminary injunction, ICANN claimed that delay would prejudice the African community.  ICANN put forth a declaration to support this claim from Moctar Yedaly – the head of the AUC’s Information Society Division of the Infrastructure and Energy Department.  As the AUC was alleged to have improper involvement in the processing of DCA’s application, the Court noted Mr. Yedaly's conflict of interest and gave little weight to the declaration.  The Court stated that “it is more prejudicial to the African community, and the international community in general, if the delegation of .Africa is made prior to a determination of the fairness of the process by which it was delegated.”

A copy of the order can be accessed here.

 

A/C Privilege - Common Interest Doctrine

In Seahaus La Jolla Owners Association v. Superior Court (224 Cal.App.4th 754), the California Court of Appeals explained the Common Interest Doctrine of the attorney-client privilege.  The defendant sought to obtain information disclosed by counsel of the HOA at pre-litigation meetings; the defendant claimed that the presence of homeowners (who were affiliated with the defendant) at the pre-litigation meetings waived the attorney-client privilege. The plaintiff claimed the disclosure was was protected under the Common Interest Doctrine and contested the defendant's request.

The Court ruled in favor of the plaintiff and held the information privileged. As the Court explained, the Common Interest doctrine was a qualified privilege dependent on the content and circumstances of the communication sought to be privileged.  The qualification required that all parties (to the allegedly privileged communication) have (1) a common interest in securing legal advice related to the same matter, and (2) the communications are made to advance that common interest.  Since the homeowners were concerned with their respective property values in relation to the claim made by the HOA, they shared a common interest in the legal status of the HOA’s claim.  Since the disclosures were also made pursuant to the HOA’s claims, they were made to advance said common interest.  Because the HOA was required by law to notify all homeowners of upcoming litigation, its was required to disclose the information to homeowners affiliated with the defendant, and that did not destroy the privilege.

The court concluded that the decision did not expand the scope of the attorney-client privilege, but only applied recognized rules to an unusual set of facts.

Court Grants Ex Parte TRO Enjoining Defendants' Further Disruptive Communications

On Friday, April 1, 2016, the Honorable Manuel L. Real of the United State District Court for the Central District of California, granted our client’s ex parte application for a temporary restraining order against the defendants.

Our client, ReachLocal, Inc., caught wind of spurious internet postings and communications made on Defendant PPC Claim Limited’s website and by Defendant Kieran Cassidy.  Cassidy claimed that ReachLocal was misleading its clients and that he obtained ReachLocal’s entire current and former client list and would be contacting them in the future.  After the communications and postings continued, ReachLocal filed suit (C.D. Cal. 2:16-cv-01007) and applied for a temporary restraining order to prevent further communications by the Defendants.  In one of his last communications to ReachLocal’s CEO, Defendant Cassidy stated that he would be willing to come to an “agreement/arrangement” with ReachLocal, in order to (effectively) go away.  However, in his communications to ReachLocal clients, Cassidy failed to disclose his interest in a competing business - a fact significant to Judge Real in granting ReachLocal’s temporary restraining order.

Judge Real found ReachLocal to have demonstrated all elements for a preliminary injunction: (1) ReachLocal demonstrated a likelihood of success on its claim for trade secret misappropriation (among others); (2) threatened use of the customer list constituted irreparable harm; (3) in balancing the potential harms of the parties, ReachLocal's harm outweighed any the Defendants would incur by temporarily ceasing their communications; and (4) although Defendants claimed to be consumer advocates, by “engaging in this information campaign as part of a veiled competitive commercial practice[,] the desire to acquire an improper commercial advantage,” did not constitute injury to any public interest.

Judge Real granted the temporary restraining order, enjoining the Defendants from further communicating to ReachLocal clients and investors, directly, through massing mailings, email, LinkedIn, or any other website, until hearing a motion for a preliminary injunction.  Judge Real set the hearing for April 11, 2016.

 

Court Grants Ex Parte TRO preventing issuance of .Africa top-level domain

On Friday, March 4, the Honorable R. Gary Klausner ruled in favor of BNS' client, granting a temporary restraining order, enjoining Internet Corporation for the Assigned Names and Numbers (ICANN) from issuing the .Africa top-level domain.

Plaintiff Dot Connect Africa Trust (DCA) applied ex parte for a temporary restraining order on Wednesday March 2, believing that ICANN would be issuing the .Africa domain at its triannual meeting in Marrakesh, Morocco on March 5.  DCA brought suit in state court just weeks before, seeking to enforce ICANN's internal review process ruling that held ICANN improperly processed DCA's application, among other claims.  After ICANN removed to federal court, DCA amended its complaint and moved for a preliminary injunction.  Because the meeting would occur only days after, DCA followed the preliminary injunction with an ex parte application for a temporary restraining order.

Ruling in DCA's favor, Judge Klauser found serious questions going to the merits of DCA's case.  Coupled with the facts that .Africa can be issued only once and cannot be compensated for monetarily, the Court granted the temporary restraining order, enjoining ICANN from issuing .Africa until DCA's preliminary injunction is heard.

DCA's motion is set to be heard April 4, 2016