Labs v. Tamayo, Case No. 13-cv-01119-JST
| Decision Date | 01 July 2013 |
| Docket Number | Case No. 13-cv-01119-JST |
| Parties | NOVUS OPTIMUM LABS, et al., Plaintiffs, v. GINA TAMAYO, et al., Defendants. |
| Court | U.S. District Court — Northern District of California |
Before the Court is Plaintiffs Novus Optimum Labs, dba Novus Optimum, Inc. and Meliza Reyes' Motion for Preliminary Injunction and Application for a Writ of Attachment against Defendants Gina and Edgardo Tamayo and Novus Opti-Lab.
Plaintiff Novus Optimum Labs, dba Novus Optimum, Inc. is wholly owned by Plaintiff Meliza Reyes. Compl., ECF No. 1 ¶ 5. Reyes, 67, filed this action on March 12, 2013, alleging that one of her employees, Defendant Gina Tamayo, absconded with $160,000 in cash and almost $100,000 in Reyes' personal property after Reyes entrusted her with the keys to the corporate facility on Pier 26 in San Francisco. Id. ¶¶ 5, 20, 30. On March 16, 2013, Plaintiffs filed an ex parte request for prejudgment attachment. ECF No. 16. This court denied that application on April 4, 2013, ECF No. 13. Defendants answered the Complaint and counterclaimed on April 30, 2013. ECF No. 15. Plaintiffs filed the instant motion for preliminary injunction on May 13, 2013, ECF No. 17, and application for writ of attachment on May 14, 2013, ECF No. 18. The Verified First Amended Complaint was filed May 23, 2013. ECF No. 20 ("FAC"). This court held a hearing on Plaintiff's Motion and Application for prejudgment attachment on June 20, 2013.
Plaintiffs Reyes and Novus Optimum have been selling herbal supplement products since 1997 or 1998. FAC ¶ 10; Reyes Decl., ECF No. 18-2, ¶¶ 4-5. Those products include supplements such as "Brain Sharpener 4-Kids," "Age-Spots Cleanser," "Sleep Ezzy," "4-Cellulite," and "4-Glowing Complexion." FAC ¶¶ 11, 36a; Reyes Decl., ¶ 6. In 2008, Reyes met Defendant Gina Tamayo. FAC ¶ 13; Reyes Decl. ¶ 8. Reyes hired Ms. Tamayo to help with clerical duties, such as answering telephones, inventory control, labeling products, and filing. FAC ¶ 13; Reyes Decl. ¶ 8. Ms. Tamayo's husband, Edgardo, is also a named Defendant in this case.
In October 2010, while Reyes was traveling, Gina Tamayo accused Reyes' brother Celso Reyes, also employed by Novus Optimum, of sexually harassing her. FAC ¶ 16. Gina Tamayo subsequently obtained a restraining order from San Mateo Superior Court against Celso Reyes. Id. According to Plaintiff Reyes, she fired her brother Celso based on Tamayo's allegations. Id. ¶ 17; Reyes Decl. ¶ 11.
In September 2012, Reyes moved Novus Optimum from Pier 19 to Pier 26. Reyes Decl. ¶ 13. Plaintiff Reyes alleges that, before and after the move, she stored a substantial amount of valuable property at her Pier 26 corporate facility, including: two duck figurines valued at $4,000; a Faberge egg purchased for $8,000; two "150 Years of Baseball" books signed by several players, including Mickey Mantle and Joe DiMaggio, valued at $30,000; four Lalique vases valued at $25,000; a Rodin sculpture appraised by Sotheby's in 1995 for $25,000; and $160,000 in cash. FAC ¶ 30; Reyes Decl. ¶ 16. Reyes alleges that the Tamayos both knew she kept expensive property in the facility, and that Gina Tamayo had a key to the Pier 26 facility, from which she made a copy for her husband. FAC ¶ 21-29; Reyes Decl. ¶ 14. Reyes alleges that over the course of January and February 2013, the Tamayos stole several of the items, including the cash. FAC ¶¶ 32-35. In addition, Reyes alleges that the Tamayos attempted to poison her, and that Gina Tamayo recorded her telephone calls. Id. ¶¶ 23, 38-39.
In addition to the alleged theft, Reyes alleges that the Tamayos stole the secret "Formula5" for an unspecified Novus Optimum product, FAC ¶ 32, and that the Tamayos opened a sham business for the purpose of diverting revenue from Novus Optimum Labs' customers to the Tamayos' new business venture, called "Novus Opti-Lab," id. ¶¶ 27-29, 35-36; Reyes Decl. ¶ 23, 25-27. The FAC alleges that the Tamayos collected payment for Novus Optimum Labs products through their website, which is an unauthorized copy of the Novus Optimum Labs website, and then never shipped the purchased products. Id.
Plaintiffs assert claims for violation of the Lanham Act and for copyright infringement arising out of the Novus Opti-Lab business, as well as several state and common law claims arising out of the theft and embezzlement, including conversion, theft by larceny, fraud, negligent misrepresentation, and breach of implied contract. In addition, Plaintiffs sue under California's Financial Abuse of Elders law, Cal. Welf. & Inst. Code § 15610.30.
Defendants counterclaim for damages for fraudulent misrepresentation, breach of contract, breach of the covenant of good faith and fair dealing, and unjust enrichment "due to the false promises and fraudulent misrepresentations Counterdefendants made to Ms. Tamayo in order to induce her not to bring legal action against them for repeated sexual harassment she suffered while employed by Counterdefendants at the hands of Counterdefendant Reyes' brother, Celso Reyes." ECF No. 15 ("Answer"). Defendants allege that, between February 2010 and October 2010, Ms. Tamayo was repeatedly sexually harassed by Celso Reyes. Id. p. 26. "Such instances of sexual harassment included, but were not limited to, groping and other offensive touching of Ms. Tamayo, repeated lude[sic] and suggestive comments to Ms. Tamayo, as well as Mr. Reyes actually exposing his genitalia in the workplace." Id. Ms. Tamayo sought and obtained a restraining order from the San Mateo County Superior Court in October 2010. Id. p. 27; G. Tamayo Decl., ECF No. 23, Ex. A ("Restraining Order").
According to the Tamayos, Plaintiff Meliza Reyes tried to dissuade them from taking legal action against her, as Ms. Tamayo's employer, stemming from the alleged harassment. First, Ms. Tamayo alleges that Plaintiff Reyes promised her "a substantial wage increase as well as healthand dental benefits" in or about December 2010. Id. p. 28; G. Tamayo Decl. ¶ 13. For six months, Reyes failed to provide Ms. Tamayo with the increased compensation and benefits. Answer p. 29. In August or September 2011, Reyes promised Tamayo instead that she would receive ten percent of the proceeds of the sale of the Novus Optimum business; Reyes told Ms. Tamayo that the business was worth between $100 and $500 million. Id.; G. Tamayo Decl. ¶ 13.
Ms. Tamayo alleges that in October 2010 she asked Reyes for help setting up a small business selling complexion-lightening products. Answer p. 29. According to the Tamayos, Reyes agreed to help, and suggested that the products be sold under a name similar to Novus Optimum's so Ms. Tamayo could sell alongside Novus Optimum at trade shows and conferences. Id. pp. 29-30; G. Tamayo Decl. 20. Defendants further allege that Ms. Reyes offered to help Ms. Tamayo by allowing her to sell Novus Optimum products, too. Per Defendants, "Reyes supplied the products required to fill those orders, and Ms. Tamayo was required to pay approximately 80% of the proceeds to counterdefendant Reyes as the supplier." Answer p. 27; G. Tamayo Decl. ¶ 20. Defendants allege that, pursuant to that agreement, Ms. Reyes authorized them to register the fictitious business name "Novus Opti-Lab" in August 2011. Answer p. 27; G. Tamayo Decl. ¶ 21. Reyes allegedly also promised to help Ms. Tamayo set up a website for Novus Opti-Lab, which website is a subject of Ms. Reyes' Complaint. Answer p. 27; G. Tamayo Decl. ¶ 22.
This court has subject matter jurisdiction over Plaintiffs' claims pursuant to federal question jurisdiction, as their claims arise under the Lanham Act and the Copyright Act, under 28 U.S.C. § 1331, and supplemental jurisdiction, pursuant to 28 U.S.C. § 1367.
Plaintiffs seek a preliminary injunction against Defendants enjoining them: (1) from using the Novus Opti-Lab domain name, credit card terminal, and fictitious business name, and from using either Novus Opti-Lab's or Novus Optimum's product marks; (2) from distributing, selling, or offering for sale products bearing Novus Optimum or Novus Opti-Lab marks; (3) "[d]oing any other act which is likely to confuse, mislead or deceive Plaintiffs' customers or members of thepublic with whom Defendants are associated, sponsored by or approved by Plaintiffs"; (4) using, disclosing, copying, or transmitting any of Plaintiffs' trade secrets; (8) destroying, discarding, altering, or otherwise making unavailable to Plaintiffs any documentary, computer, or other evidence relevant to this action; (9) using, disclosing, copying, or transmitting the personal information of Plaintiffs' customers, and (10) coming within 100 yards of the Pier 26 facility. PI Mot., ECF No. 17, p. 5. For the reasons discussed below, the Court will grant the Motion.
"A preliminary injunction is an extraordinary remedy never awarded as of right." Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 24 (2008). It is a device for "preserving the status quo and preventing the irreparable loss of rights before judgment." Sierra On-Line, Inc. v. Phoenix Software, Inc., 739 F.2d 1415, 1422 (9th Cir. 1984). An injunction is appropriate only where the remedies available at law are inadequate to prevent irreparable injury. Weinberger v. Romero-Barcelo, 456 US 305, 312 (1982).
Any party seeking a preliminary injunction must establish "(1) that it is likely to succeed on the merits, (2) that it is likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of equities tips in its favor, and (4) that an injunction is in the public interest." Earth Island Inst. v. Carlton, 626 F.3d 462, 469 (9th Cir. 2010) (citing Winter, 555 U.S. at 24). The movant must carry the burden of persuasion "by a clear...
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