United States District Court, D. Nevada
TEMPORARY RESTRAINING ORDER
before the court is the matter of Rooftop Digital
Imaging, LLC v. Paramount Visuals Company, Inc., case
Rooftop Digital Imaging, LLC (“plaintiff”) has
filed a motion for temporary restraining order pursuant to
Federal Rule of Civil Procedure 65 and NRS 33.010. (ECF No.
alleges that defendant Paramount Visuals Company, Inc.
(“defendant”) is contacting vendors or current
and former clients of plaintiff's and is representing to
third parties that it has ownership interest in plaintiff and
that is has authority to act on behalf of plaintiff.
case arises out of a breakdown in negotiations between
plaintiff and defendant relating to a potential buyout/merger
of the two companies. (ECF No. 1). An agreement to agree was
executed by the parties setting forth preliminary terms and
obligations of each party to begin the buyout/merger process.
September 3, 2017, the parties entered into a non-disclosure
agreement (“NDA”). (ECF No. 1). Pursuant to the
NDA, defendant was to maintain confidential information it
obtained through its dealings with plaintiff. Id.
Plaintiff provided defendant with significant confidential
information relating to customer lists, pricing, and vendors.
December 31, 2017, the parties executed a one-page purchase
agreement. (ECF No. 1). Plaintiff argues that the terms of
this agreement indicated it was preliminary and that a more
detailed agreement including specific terms was to follow.
Id. No more formal agreement followed. Id.
Further, at no point did defendant request or pursue a formal
transfer of ownership of plaintiff. Id.
contends that the basis for the buyout/merger was the
purported financial stability defendant offered. (ECF No. 1).
In early February 2018, plaintiff began to express concerns
as to defendant's ability to meet its financial
obligations under the purchase agreement. Id. The
parties then entered into negotiations to reverse or dissolve
the prior agreements. Id. These negotiations broke
down resulting in defendant retaining counsel. Id.
alleges that defendant has been contacting plaintiff's
existing clients and directing these clients to make payments
directly to defendant. (ECF No. 1). Further, plaintiff
contends that defendant told plaintiff's primary vendor,
Montroy Sign and Graphic Products (“Montroy”),
that defendant owned plaintiff and that Montroy was no longer
to deal directly with plaintiff. Id.
March 12, 2018, plaintiff filed its complaint in the Eighth
Judicial District Court of the State of Nevada alleging the
following causes of action: (1) breach of contract; (2)
unjust enrichment; (3) money due and owing; (4) breach of
implied covenant and good faith and fair dealing; (5)
intentional interference with contractual relationships; (6)
intentional interference with prospective economic advantage;
(7) fraudulent inducement; and (8) injunctive and declaratory
relief. (ECF No. 1). On March 22, 2018, defendant removed the
case to federal court. Id.
Federal Rule of Civil Procedure 65, a court may issue a
temporary restraining order when the moving party provides
specific facts showing that immediate and irreparable injury,
loss, or damage will result before the adverse party's
opposition to a motion for preliminary injunction can be
heard. Fed.R.Civ.P. 65. “Injunctive relief is an
extraordinary remedy and it will not be granted absent a
showing of probable success on the merits and the possibility
of irreparable injury should it not be granted.”
Shelton v. Nat'l Collegiate Athletic Assoc., 539
F.2d 1197, 1199 (9th Cir. 1976).
purpose of a temporary restraining order is to preserve the
status quo before a preliminary injunction hearing may be
held; its provisional remedial nature is designed merely to
prevent irreparable loss of rights prior to judgment.”
Estes v. Gaston, no. 2:12-cv-1853-JCM-VCF, 2012 WL
5839490, at *2 (D. Nev. Nov. 16, 2012) (citing Sierra
On-Line, Inc. v. Phoenix Software, Inc., 739 F.2d 1415,
1422 (9th Cir. 1984)). “Thus, in seeking a temporary
restraining order, the movant must demonstrate that the
denial of relief will expose him to some significant risk of
irreparable injury.” Id. (quoting
Associated Gen. Contractors of Cal. v. Coal. of Econ.
Equity, 950 F.2d 1401, 1410 (9th Cir. 1991)).
Supreme Court has stated that courts must consider the
following elements in determining whether to issue a
temporary restraining order and preliminary injunction: (1) a
likelihood of success on the merits; (2) likelihood of
irreparable injury if preliminary relief is not granted; (3)
balance of hardships; and (4) advancement of the public
interest. Winter v. N.R.D.C., 555 U.S. 7, 20 (2008).
The test is conjunctive, meaning the party seeking the
injunction must satisfy each element.
post-Winter, the Ninth Circuit has maintained its
serious question and sliding scale test. See Alliance for
the Wild Rockies v. Cottrell, 632 F.3d 1127 (9th Cir.
2011). “Under this approach, the elements of the
preliminary injunction test are balanced, so that a stronger
showing of one element may offset a weaker showing of
another.” Id. at 1131. “Serious
questions going to the merits and a balance of hardships that
tips sharply towards the plaintiff can support issuance of a
preliminary injunction, so long as the plaintiff also shows
that there is a likelihood of irreparable injury and that the
injunction is in the public interest.” Id. at
1135 (internal quotations marks omitted).
court, having considered the complaint, memorandum of law,
supporting declarations, and accompanying exhibits, hereby
finds that plaintiff is likely to succeed in showing that
defendant breached the NDA, that defendant breached the
covenant of good faith and fair dealing, and that defendant
intentionally interfered with existing and prospective
contractual relationships. Defendant contacted third parties,
notably plaintiff's vendors and clients, to inform them
of defendant's ownership of plaintiff and to redirect
payment directly to defendant. (ECF No. 1). Based on the
purchase agreement, plaintiff contends it is unambiguous that
no transfer of ownership had taken place yet. Id.
Further, at the time this law suit was filed in state court,
the parties were engaged in efforts to negotiate a