Court Temporarily Orders Removal of Web Site Critical of Company, Reverses Two Months Later

I’ve seen some recent decisions — usually trial court decisions — that enjoin a broad range of speech (not just libelous speech) because the judge thinks the defendant is wrongly badmouthing the plaintiff. I think such injunctions are generally unconstitutional prior restraints, unless they follow a trial on the merits in which the speech is found to be unprotected (e.g., libelous), and unless they are limited to speech that has been found to be unprotected. (For more on why I think such temporary injunctions are unconstitutional, though limited permanent injunctions after a full trial are allowed, see this article, which discusses intellectual property injunctions but which cites cases that deal with libel injunctions; see also this post on a recent Kentucky Supreme Court decision that reflects this distinction.) But such injunctions sometimes are nonetheless issued; see, for instance, this item from last Fall.

I was therefore pleased to see a trial court decision that rejected a request for such an injunction, in Cambridge Who’s Who Publishing, Inc. v. Sethi (Nassau Cty., N.Y., Sup. Ct. Jan. 25) — though I was not pleased to see that the court had earlier temporarily enjoined such speech (in my view, unconstitutionally) for two months. Here’s an excerpt (emphasis added):

[UPDATE: To respond to some comments, let me note that I read the court’s decision as treating the non-disclosure agreement as limited to “confidential business information” in the sense of proprietary business information such as client names, addresses, and credit card numbers, and not allegations about the business’s supposed misconduct, even if the business would have liked to keep such allegations confidential. That’s why the court enjoined — likely constitutionally — the use of client lists and the like, but ultimately declined to enjoin publication of the information about plaintiff’s data loss.

Moreover, note that the plaintiff asked for an injunction that wasn’t limited to confidential business information even under the broadest possible view of “confidential,” but would have covered “maintaining any ‘blog’ or website concerning defendant’s former employment.” And the court in fact temporarily granted such an injunction banning “any statements that may interfere with plaintiff’s good will, including maintaining a website or blog, pending the determination of the motion,” though it later dissolved the injunction on free speech grounds. The contract between the parties would not have authorized an injunction of such breadth.]

Plaintiff Cambridge Who’s Who Publishing provides marketing and networking services to business professionals. On July 21, 2008, defendant Harsharan Sethi was hired by Cambridge as director of management information systems. At the time of his employment, Sethi signed an “employee covenants and non-disclosure agreement.” In the non-disclosure agreement, Sethi promised not to use confidential information of Cambridge, except in carrying out the business of the company. The company defines confidential information as including “client names, addresses, and credit card numbers.” Sethi was terminated by Cambridge on February 12, 2010.

By order to show cause dated May 12, 2010, plaintiff moved for a preliminary injunction, restraining defendant from attempting to access plaintiff’s data base; contacting plaintiff’s “members,” i.e. its customers; utilizing plaintiff’s customers list; disclosing the customers’ personal information; making any statements about plaintiff that might interfere with its good will, including contacting plaintiff’s employees or vendors; and maintaining any “blog” or website concerning defendant’s former employment.

In support of the motion, plaintiff submitted a web page, allegedly posted by defendant at www.cambridgeregistryscam.com. The webpage states that, “You might be legally entitled [to] a full refund of any membership fee…that you were charged by Who’s Who businesses ! …Please stand by for…information on various management personnel…their backgrounds…their life styles…their prior run ins with [the] law, IRS….Also coming up:.. their threatening tactics, their harassment tactics….You are entitled to file complaints with your District Attorneys Offices and or Attorney General’s office….” Although it is unclear when the web page was first posted, it appears to have been viewed on May 11, 2010.

By order dated September 7, 2010, the court granted plaintiff’s motion for a preliminary injunction to the extent of enjoining defendant from soliciting any of plaintiff’s customers, or disclosing their names or personal information, during the pendency of the action. However, … the court denied the remainder of plaintiff’s motion for a preliminary injunction, including the request that defendant be restrained from making any defamatory statements concerning Cambridge …

By order to show cause dated November 23, 2010, plaintiff moves for leave to renew its motion for a preliminary injunction to the extent that the court declined to restrain defendant from making any oral or written statements concerning Cambridge, including posting any “blog” or website, concerning defendant’s former employment with the company. In support of the motion to renew, plaintiff submits certain allegedly defamatory statements, which were made after the court’s order, denying in part plaintiff’s request for a preliminary injunction. Plaintiff argues that disparagement of its business constitutes extraordinary circumstances which justify a prior restraint on speech. In the order to show cause dated November 23, 2010, the court granted a temporary restraining order, enjoining defendant from contacting plaintiff’s employees concerning his former employment, or making any statements that may interfere with plaintiff’s good will, including maintaining a website or blog, pending the determination of the motion….

[Among other documents], plaintiff submits a web page allegedly posted by defendant at www.whoswhoamongscammers.com. The web page has a headline which reads, “Did Your Who’s Who Loose Your Personal Information?????” Although the web page does not identify Cambridge by name, it recites the items of data which were lost, the fact that Who’s Who management was advised of the data loss, and their failure to report the loss to authorities. Defendant opposes plaintiff’s motion for leave to renew its motion for a preliminary injunction on the ground that defendant’s right of free speech has been violated.

The freedom of speech guaranteed by the Constitution embraces at the least the liberty to discuss publicly and truthfully all matter of public concern without previous restraint or fear of subsequent punishment. To safeguard this liberty, on an application for a preliminary injunction, restraining defendant’s speech on a matter of public concern, the court must focus on the objective content of the communication, rather than “amorphous considerations of intent and effect.” The court must “give the benefit of any doubt to protecting rather than stifling speech.”

The claimed data loss, involving social security numbers and credit card information, implicates the economic interests of a large number of people. Thus, the content of defendant’s communication is a matter of public concern, even though its intent and effect may have been to disparage plaintiff’s business, retaliate for defendant’s discharge, or shift responsibility for the data loss. Thus, the court must give the benefit of any doubt to protecting defendant’s right to free speech.

Plaintiff has a reasonable justification for not presenting the communications earlier because they were made subsequent to plaintiff’s original motion. However, defendant’s communications concerning the data loss are constitutionally protected, and plaintiff has not shown the extraordinary circumstances required for a preliminary injunction. Plaintiff’s motion for leave to renew its motion for a preliminary injunction, restraining defendant from communicating with plaintiff’s customers or law enforcement agencies concerning the data loss, is denied.