Prehired, LLC v. Provins
2:22-cv-00384
E.D. Cal.Apr 12, 2022Background
- Prehired LLC provides paid job-training/mentorship (fee charged only after job or program completion). Plaintiff and Matthew Provins were customers/partners: membership executed Oct. 14, 2020; MTT Partner Service Agreement executed May 1, 2021; NDA executed May 20, 2021; Provins terminated the partner agreement Aug. 26, 2021.
- After termination, Provins posted on LinkedIn, Slack, and GoFundMe alleging Prehired engaged in false advertising, ‘‘predatory’’ contracts, ‘‘gaslighting,’’ and urged contract releases and public opposition; Plaintiff alleges many clients/potential clients cited those posts when cancelling or withdrawing business.
- Plaintiff alleges losses including a $20,000 contract and lost partnerships (one projected to produce about $2 million) and filed suit (trade libel and intentional interference) on March 1, 2022, seeking a temporary restraining order to bar further statements, remove posts, and stop communications with Prehired’s customers.
- Defendant opposed, asserting First Amendment protection against prior restraints and that his posts are opinion or truthful; he submitted a declaration asserting truth of certain factual claims.
- The Court denied the TRO on April 12, 2022, holding the requested injunction would be an unconstitutional prior restraint and that Plaintiff failed to show likelihood of success on trade libel or irreparable harm for interference.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether enjoining further statements would be a permissible prior restraint | Plaintiff sought injunction against further defamatory/trade-libel statements and removal of posts to prevent ongoing harm | Provins argued injunction would be an unconstitutional prior restraint on speech | Denied: requesting to bar future statements is a classic prior restraint; Plaintiff failed strict-scrutiny showing to overcome heavy presumption against prior restraints |
| Whether Provins’ statements constitute actionable trade libel (falsity vs. opinion) | Statements are false factual assertions part of campaign to harm Prehired | Statements are opinion or mix of opinion and statements Provins can prove true based on personal knowledge | Denied likelihood of success: posts contain opinion and some factual assertions, and Plaintiff did not prove falsity; burden unmet for extraordinary TRO remedy |
| Whether Plaintiff can prove actual malice for trade libel | Plaintiff alleges Provins knew statements were false and acted to destroy business | Provins proffers personal-knowledge declarations; Plaintiff’s conclusory allegations insufficient | Denied likelihood of success: Plaintiff failed to show clear-and-convincing evidence of actual malice |
| Whether Plaintiff faces irreparable harm from alleged interference with business relationships | Plaintiff claims lost revenue and that Provins’ insolvency makes money damages inadequate | Provins disputes wrongful interference; economic losses are compensable with money damages | Denied: economic injury alone is not irreparable; Plaintiff gave no other basis for irreparable harm (e.g., loss of goodwill or insolvency proof) |
Key Cases Cited
- Winter v. Nat. Res. Def. Council, 555 U.S. 7 (U.S. 2008) (establishes four-factor test for preliminary injunctions)
- Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127 (9th Cir. 2011) (permits sliding-scale balancing of Winter factors)
- Neb. Press Ass’n v. Stuart, 427 U.S. 539 (U.S. 1976) (prior restraints on speech are highly disfavored)
- Alexander v. United States, 509 U.S. 544 (U.S. 1993) (defines prior restraint and notes TROs are classic examples)
- Levine v. U.S. Dist. Ct., 764 F.2d 590 (9th Cir. 1985) (prior restraint may be upheld only if danger, narrow tailoring, and no less-restrictive alternatives)
- ComputerXpress, Inc. v. Jackson, 93 Cal. App. 4th 993 (Cal. Ct. App. 2001) (trade libel requires a false statement of fact likely to cause pecuniary loss)
- Piping Rock Partners, Inc. v. David Lerner Assocs., 946 F. Supp. 2d 957 (N.D. Cal. 2013) (an opinion implying undisclosed facts requires those implied facts to be true)
- Rent-A-Ctr., Inc. v. Canyon Television & Appliance Rental, Inc., 944 F.2d 597 (9th Cir. 1991) (economic injury alone does not establish irreparable harm)
- Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134 (Cal. 2003) (elements for tort of intentional interference with prospective economic advantage)