Local Moms Network, LLC v. Lamont

• Jurisdiction: United States,Federal
• Court: U.S. District Court — District of Connecticut
• Writing for the Court: Stefan R. Underhill United States District Judge
• Docket Number: 3:24-cv-192 (SRU)
• Decision Date: 23 February 2024
• Parties: LOCAL MOMS NETWORK, LLC, Plaintiff, v. RACHAEL LAMONT, Defendant.
• topic: Business of Law,Contracts,Intellectual Property,Civil Procedure,Internet, Media and Communications

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LOCAL MOMS NETWORK, LLC, Plaintiff, v. RACHAEL LAMONT, Defendant.

No. 3:24-cv-192 (SRU)

United States District Court, D. Connecticut

February 23, 2024

TEMPORARY RESTRAINING ORDER

Stefan R. Underhill United States District Judge

Movant-Plaintiff Local Moms Network, LLC (“Local Moms”) has twice moved for a temporary restraining order against its former independent contractor, Rachael Lamont. TROs, Docs. No. 3 15.

For the reasons set forth below, Local Moms's motions for a temporary restraining order and a preliminary injunction docs. no. 3, 15, are granted to the extent that Local Moms seeks a temporary restraining order.

I. Background

Local Moms is a web-based business whose targeted consumer base is parents across the country. Compl., Doc. No. 1 ¶¶ 9, 13. Local Moms provides digital content, monetized by advertisements, and partners with local and national brands to present its target audience with “hyper-local . . . resources, services, and products.” Id. ¶¶ 12-13. One of Local Moms's targeted “territories” is Frisco, Texas. Id. ¶ 25. Local Moms hires independent contractors, “Secondary Territorial Sales Representatives (‘SSR'),” who are local parents in its targeted territories. Id. ¶ 14. When Local Moms hires a new SSR, it provides training and “a shared drive containing . . . a library of pre-developed content that is available to share.” Id. ¶ 17.

Rachael Lamont was a Local Moms SSR who worked in the Frisco Area Moms Territory, which eventually rebranded as the North Dallas Area Territory. Id. ¶¶ 25, 33, 36-37. Local Moms gave Lamont the login information for the North Dallas Instagram and Facebook accounts. Id. ¶ 38. When Lamont acquired the Instagram login information, the account had about 10,000 followers. Id. Lamont signed a Secondary Territorial Sales Representation Agreement, or “SSR Agreement,” with Local Moms on September 22, 2020. Id. ¶ 25. The SSR Agreement contains “Restrictive Covenants,” including an “Agreement Not To Compete or Solicit . . . for a period of twelve (12) months following the . . . termination thereof” not to “compete[] . . . in the Territory, or in . . . Texas[.]” SSR Agreement ¶ 12, Doc. No. 1-1 at 11. “The SSR further acknowledges that, were it to breach any of the covenants . . . the damage to the Company would be irreparable....[T]he Company, . . . shall be entitled to preliminary and permanent injunctive relief against any breach . . . of any of said covenants[.]” Id. at 12.

Lamont allegedly “began to ignore her obligations” as an independent contractor and “decided that she was going to run the Instagram Account her own way, without any direction from” Local Moms. Doc. No. 1 ¶ 39. Local Moms alleges Lamont stole the Instagram account. Id. ¶¶ 76-78, 91. After several back-and-forth communications between Local Moms and Lamont's counsel, Lamont's employment agreement with Local Moms was terminated. Id. ¶¶ 80-84. Lamont, however, retained the Instagram account. Id. ¶ 99.

On February 9, 2024, Local Moms filed a complaint against Lamont alleging claims of Cybersquatting in violation of 15 U.S.C. § 1125(d); Federal Trademark Dilution in violation of 15 U.S.C. § 1125(c); Breach of Contract; Conversion; and Trespass to Chattel. Id. ¶¶ 100-151. That same day, Local Moms moved for a temporary restraining order and a preliminary injunction. Doc. No. 3.^[1] I held a telephonic hearing regarding the temporary restraining order on February 14, 2024. Min. Entry, Doc. No. 26. Ms. Lamont and her counsel, Attorney Rehns, were present on the call.

During the telephonic hearing, both parties agreed to engage in settlement discussions after the hearing. I encouraged Lamont to give Local Moms control of the Instagram account in a show of good faith. Counsel for Local Moms confirmed in e-mail correspondence on February 14 that Lamont returned the Instagram login and password to Local Moms. Counsel for Local Moms additionally emailed that “[t]he parties [] also agreed to cooperate on drafting and entering into a voluntary TRO that will expire in 14 days . . . should settlement fall through.”

On February 21, 2024, Local Moms filed a notice that it was unable to resolve its dispute with Lamont. Doc. No. 31 at 2. Local Moms discovered “that Ms. Lamont had started her own Instagram account, Facebook account and Tik Tok account[.]” Id. at 1. Local Moms alleges Lamont's social media accounts are “all in direct competition with TLMN in the restricted area” of the non-compete clause in the SSR Agreement. Id.

Ms. Lamont is now competing with TLMN . . . with the same photo she used on the TLMN account, and is promoting her accounts as “sharing family fun, dining & travel in the Dallas Area”, even using the same font as the TLMN Account on her posts. Indeed, Ms. Lamont's Instagram feed includes the same posts she deleted from the TLMN website claiming that they were “personal” content ....Ms. Lamont's Facebook post launch[ed] her new “brand”, in which she unequivocally states her intent to compete: “Follow along for the same incredible content you've come to love-.”

Doc. No. 33 at 1-2 (emphasis added). Local Moms attached exhibits containing screenshots of Lamont's new social media accounts and posts. Doc. No. 33-1.

I held another telephonic hearing regarding the temporary restraining order on February 23, 2024. Min. Entry, Doc. No. 33. Counsel for Lamont informed me that Lamont had taken down the allegedly competing accounts.

II. Standard of Review

Federal Rule of Civil Procedure 65(b) gives district courts the power to grant temporary restraining orders with or without notice to the adverse party. “[E]very restraining order must: [] state the reasons why it issued; [] state its terms specifically; and [] describe in reasonable detail-and not by referring to the complaint or other document-the act or acts restrained or required.” Fed.R.Civ.P. 65(d)(1). Temporary restraining orders bind “the parties; [] the parties' officers, agents, servants, employees, and attorneys; and [] other persons who are in active concert or participation with” the aforementioned persons if they “receive actual notice.” Fed.R.Civ.P. 65(d)(2).

“It is well established that in this Circuit the standard for an entry of a TRO is the same as for a preliminary injunction.” Andino v. Fischer, 555 F.Supp.2d 418, 419 (S.D.N.Y. 2008) (collecting cases). “A party seeking a preliminary injunction must demonstrate ‘(1) irreparable harm in the absence of the injunction and (2) either (a) a likelihood of success on the merits or (b) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in the movant's favor.'” MyWebGrocer, LLC v. Hometown Info, Inc., 375 F.3d 190, 192 (2d Cir. 2004) (quoting Merkos L'inyonei Chinuch, Inc. v. Otsar Sifrei Lubavitch, Inc., 312 F.3d 94, 96 (2d Cir. 2002)).

III. Discussion

As outlined above, a party seeking a temporary restraining order must show “irreparable harm in the absence of the injunction” and “either (a) a likelihood of success on the merits or (b) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in the movant's favor.” MyWebGrocer, LLC v. Hometown Info, Inc., 375 F.3d at 192 (quoting Merkos L'inyonei Chinuch, 312 F.3d at 96). I discuss each factor in turn.

A. Irreparable Harm

“Irreparable harm exists where, but for the grant of equitable relief, there is a substantial chance that upon final resolution of the action the parties cannot be returned to the positions they previously occupied.” Lazor v. Univ. of Connecticut, 560 F.Supp.3d 674, 678 (D. Conn. 2021) (quoting United States SEC v. Daspin, 557 Fed.Appx. 46, 48 (2d Cir. 2014) (cleaned up).

After the February 14, 2024 telephonic hearing, and after Lamont returned the Instagram login to Local Moms, Lamont created new social media accounts. See Doc. No. 31-1. Lamont has continued to post on Instagram, TikTok, and Facebook “in direct competition” with Local Moms. See id. (new posts on TikTok, Instagram, and Facebook); Lisiewski Decl., Doc. No. 15-1 ¶ 56. Her Instagram posts reflect the same content she previously posted under the Local Moms's Instagram. See Doc. No. 31-1 at 5. Local Moms claims Lamont is using the same standardized font that is used by Local Moms's platforms nationwide. Id. at 1; see id. at 5.

Lamont's Facebook post suggests she is intentionally targeting and soliciting Local Moms's customer base. Lamont created a shareable image to “bid farewell to this account” and “invite you to join me on my brand new journey at @itsrachaelskye[.] Follow along for the same incredible content you've come to love[.]” Id. at 3-4. Lamont additionally posted an Instagram reel captioned, “when you pour your heart into building a brand from the ground up and lose it in less than 10 seconds . . . BUT starting over can be fun.” Id. at 6. Her followers commented “What happened?!” and “No clue what happened, but here for this new page!” Id.

When Lamont signed the SSR Agreement, she agreed to not “solicit, divert, take away, or attempt to take away . . any business or patronage of the Company or any of its affiliates, whether actual or potential, or . . . interfere with, . . . then existing or potential relationships of the Company.” SSR Agreement, Doc. No. 1-1 at 11. Lamont intentionally solicited Local Moms's customers to join her new page “for the same incredible content” she posted on behalf of Local Moms. See Doc. No. 31-1 at 3-4 (emphasis added). Lamont may have already diverted some of Local Moms's business. If Lamont draws followers to her page, and away from Local Moms's page, there is no guarantee the diverted follower will return to Local Moms. The...