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Gold v. Maurer

United States District Court, District of Columbia

May 1, 2017

JAMES GOLD, et al., Plaintiffs,


          COLLEEN KOLLAR-KOTELLY United States District Judge

         Plaintiffs are three executives of a financial services provider who seek injunctive relief against Defendant, a former executive, to preclude him from repeating certain allegedly defamatory statements at an impending business meeting. Presently before the Court is Plaintiffs' [2] Motion for a Temporary Restraining Order and Injunction in Aid of Arbitration (“TRO Motion”). Upon consideration of the pleadings, [1] the relevant legal authorities, and the record for purposes of the pending motion, the Court concludes that none of the preliminary injunction factors weigh in favor of granting injunctive relief in this matter. Accordingly, Plaintiffs' [2] TRO Motion is DENIED.

         I. BACKGROUND

         Plaintiffs are all directors of Steward Partners Holding, LLC, which provides “multifaceted financial solutions and ‘platinum' level service to clients and their families” through a wholly-owned subsidiary, Steward Partners Global Advisory (collectively, “Steward”). Compl. ¶ 1. Plaintiff James Gold serves as Chief Executive Office of the company, Plaintiff Michael McMahon is the Chairman of the Board of Directors, and Plaintiff Hy Saporta is the President and Chief Operating Officer. Id. ¶¶ 2-4. Defendant Michael Maurer was a founding member of Steward, and also a Director of the company until he was removed from his position by the Board of Directors in January 2017, allegedly for cause. Id. ¶ 5; Decl. of Michael Maurer, ECF No. 10-1, ¶ 38. This action concerns certain statements that Defendant allegedly made prior to and shortly after his separation from Steward. The Court reserves its presentation of the content and context of these statements for its discussion of Plaintiffs' likelihood of success on the merits, below.

         On April 19, 2017, Plaintiffs and Steward filed a demand for arbitration before the American Arbitration Association (“AAA ”), seeking relief in the form of damages and a permanent injunction for claims of defamation-premised on the same statements that underlie the TRO Motion-as well as breach of fiduciary duty and breach of contract. Compl. ¶ 11. The arbitration was brought pursuant to an arbitration agreement in a series of contracts to which all of the parties are signatories, and no party contests the propriety of arbitration. Compl. ¶ 7. On April 20, 2017, the day after filing their demand for arbitration, Plaintiffs filed the TRO Motion with this Court. According to that motion, Defendant Maurer had allegedly scheduled a meeting, for as early as the week of April 24, 2017, “with executives of [a] financial company which provides essential services to Steward . . . .” TRO Mot. at 9. Plaintiffs claimed that, at this meeting, Defendant intended to “publish additional defamatory statements.” Id. As a result, Plaintiffs sought emergency injunctive relief “solely for the purposes of aiding or preserving Plaintiffs' legal rights that are being decided by arbitration, ” and requested that the Court issue a temporary restraining order and preliminary injunction “prohibiting Defendant, directly or indirectly, from disparaging any of the Plaintiffs and/or Steward pending the resolution of the underlying claims in arbitration . . . .” TRO Mot. at 9, 14.

         Shortly after receiving the TRO Motion, the Court held a telephonic conference attended by counsel for both parties. Defense counsel represented that the meeting referenced in the TRO Motion, allegedly with a financial services company that the Court shall refer to simply as the “Business Partner, ” was unlikely to occur before mid-May. Minute Order, April 20, 2017. Moreover, the next day, Defendant filed a declaration wherein he represented that there was no meeting currently scheduled with the Business Partner, but that he had “been working to schedule a meeting with an employee or employees of [the Business Partner] sometime after May 14, 2017.” Decl. of Michael Maurer, ECF No 6-1. In connection with his opposition, Defendant further informed the Court that he “do[es] not currently have a meeting scheduled with any representative of [the Business Partner, ]” and that in his “most recent correspondence with [the Business Partner, Defendant] provided [his] availability for a meeting between May 10-22, 2017.” Decl. of Michael Maurer, ECF No. 10-1, ¶¶ 1-2. Defendant also informed the Court that he has a significant, preexisting financial and personal relationship with the Business Partner that is separate and apart from Steward, and that his brother and sister-in-law are both employees of the Business Partner. Id. ¶¶ 3-5.

         During the aforementioned conference call, and solely in an attempt to foster an amicable resolution of this matter, the Court suggested an agreement that could have potentially resolved this matter without need for further proceedings before this Court. In particular, the Court instructed Defendant to file a notice on the docket in the event that he was willing to “agree to not repeat the statements described on pages 5 and 6 of the [TRO] Motion at the meeting described on page 7 of the [TRO] Motion . . . .” Minute Order, April 20, 2017. Nonetheless, the Court emphasized that “[d]efense counsel did not have an opportunity prior to the conference call to review the pleadings or discuss with Defendant whether he would agree to not repeat the [pertinent] statements . . . .” Id. In his opposition to the TRO Motion, Defendant declined to enter such an agreement, primarily because no such meeting is scheduled; because he has family members who are employees of the Business Partner; because he has as a relationship with the Business Partner that predates the founding of Steward; and because he views the pertinent statements as true, and may need to honestly answer questions regarding the circumstances of his departure from Steward in order to “maintain longstanding and important business relationships for future jobs.” Opp'n Mem. at 3. Plaintiffs have sought to make Defendant's decision to decline the agreement relevant to this Court's resolution of the TRO Motion, contending that it is further evidence of Defendant's intent to defame Plaintiffs. Reply at 1. The Court, however, does not in any way hold Defendant's decision against him, as the agreement was suggested by the Court solely as a potential means of amicably resolving this lawsuit, and at no time did defense counsel or Defendant affirmatively state that they would enter such an agreement.

         Several days after the initial conference call, by Minute Order dated April 24, 2017, the Court provided additional instructions regarding the content of the parties' briefing of the TRO Motion. Because Plaintiffs had represented that it was unlikely that an arbitrator could be appointed prior to the week of May 14, 2017, see ECF No. 7, the Court required Plaintiffs to “recount in their reply the steps that have been taken to seek expedited appointment of an arbitrator to adjudicate their request for emergency relief, and [to] attach any correspondence with the AAA regarding these efforts.” The Court, in particular, referred Plaintiffs to Rule 38 of the AAA's Commercial Arbitration Rules, which provides that “[w]ithin one business day of receipt of notice . . ., the AAA shall appoint a single emergency arbitrator designated to rule on emergency applications.” In their Reply, Plaintiffs have relayed that despite their best efforts to expedite the appointment of an arbitrator, as evidenced by correspondence with the AAA, the arbitrator selection process will not begin until May 8, 2017. Nonetheless, Plaintiffs indicated that the process could be completed in only a few days once it begins, assuming that Defendant cooperates in the selection of an arbitrator. Reply at 3. Plaintiffs, however, have not attempted to seek emergency appointment of an arbitrator pursuant to Rule 38, claiming that such an appointment would “not necessarily [be] significantly faster than the process as it has played out so far under Plaintiffs' efforts to expedite . . . .” Reply at 5. However, Rule 38, by its own terms, provides for the appointment of an emergency arbitrator within one day-substantially faster than the current timetable described by Plaintiffs.

         Finally, by way of their Reply, Plaintiffs have also sought to substantially narrow the scope of the injunctive relief they seek through the TRO Motion. Unlike their original broad request for an order “prohibiting Defendant, directly or indirectly, from disparaging any of the Plaintiffs and/or Steward pending the resolution of the underlying claims in arbitration, ” Plaintiffs now only seek a “temporary restraining order for fourteen (14) days to prevent Defendant from repeating the same defamatory and false statements described in the underlying motion to Steward's key business partner.” Reply at 2; see also Proposed Order, ECF No. 12-10.[2]


         A temporary restraining order or preliminary injunction is “an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief.” Sherley v. Sebelius, 644 F.3d 388, 392 (D.C. Cir. 2011) (quoting Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 22 (2008)); see also Mazurek v. Armstrong, 520 U.S. 968, 972 (1997) (“[A] preliminary injunction is an extraordinary and drastic remedy, one that should not be granted unless the movant, by a clear showing, carries the burden of persuasion.” (emphasis in original; quotation marks omitted)). “A plaintiff seeking a preliminary injunction must establish [1] that he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest.” Aamer v. Obama, 742 F.3d 1023, 1038 (D.C. Cir. 2014) (quoting Sherley, 644 F.3d at 392 (quoting Winter, 555 U.S. at 20) (alteration in original; quotation marks omitted)). “‘When seeking a preliminary injunction, the movant has the burden to show that all four factors, taken together, weigh in favor of the injunction.'” Abdullah v. Obama, 753 F.3d 193, 197 (D.C. Cir. 2014) (quoting Davis v. Pension Benefit Guar. Corp., 571 F.3d 1288, 1292 (D.C. Cir. 2009)). “The four factors have typically been evaluated on a ‘sliding scale.'” Davis, 571 F.3d at 1291 (citation omitted). Under this sliding-scale framework, “[i]f the movant makes an unusually strong showing on one of the factors, then it does not necessarily have to make as strong a showing on another factor.” Id. at 1291-92.

         The Court notes that it is not clear whether this Circuit's sliding-scale approach to assessing the four preliminary injunction factors survives the Supreme Court's decision in Winter. See Save Jobs USA v. US. Dep't of Homeland Sec., 105 F.Supp.3d 108, 112 (D.D.C. 2015). Several judges on the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) have “read Winter at least to suggest if not to hold ‘that a likelihood of success is an independent, freestanding requirement for a preliminary injunction.'” Sherley, 644 F.3d at 393 (quoting Davis, 571 F.3d at 1296 (concurring opinion)). However, the D.C. Circuit has yet to hold definitively that Winter has displaced the sliding-scale analysis. See id.; see also Save Jobs USA, 105 F.Supp.3d at 112. In any event, this Court need not resolve the viability of the sliding-scale approach today as the Court determines that “a preliminary injunction is not appropriate even under the less demanding sliding-scale analysis.” Sherley, 644 F.3d at 393.


         The Court proceeds by assessing each of the preliminary injunction factors in turn. For the reasons stated, the Court concludes that Plaintiffs have not shown that any one of the four factors weighs ...

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