Wagner Equipment Co. v. Wood
893 F. Supp. 2d 1157
D.N.M.2012Background
- Defendants purchased a Caterpillar 501 Harvester from Plaintiff in Oct 2010 for logging use, which had operating problems.
- The parties memorialized a Settlement Agreement and Release effective March 9, 2011; Plaintiff claimed it had materially performed its obligations.
- Defendants allegedly nullified the settlement unilaterally; Cat Inc. was involved to authorize additional repairs by Plaintiff.
- Plaintiff alleged Defendants launched an email campaign defaming Plaintiff, harming its business reputation before repairs were completed.
- Plaintiff filed a state-court action on May 10, 2011; a motion for preliminary injunction followed on May 12, 2011; the case was removed to federal court on diversity grounds.
- Count I seeks injunctive relief to prevent Defendants from continuing to publish defamatory statements; Defendants moved to dismiss injunction claims under Rule 12(c).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the preliminary injunction claim should be dismissed | Plaintiff no longer seeks a preliminary injunction. | Equity principles bar prior restraints on defamation; preliminary relief is inappropriate. | Dismissal of the preliminary injunction claim is appropriate. |
| Whether the permanent injunction claim is viable under the First and New Mexico constitutions | New Mexico courts would permit injunctions of defamatory speech after adjudication; permanent relief is proper. | Permanent injunction against defamation is an unconstitutional prior restraint under the First Amendment and NM Constitution. | Permanent injunction claim remains viable at this stage; not prohibited as a matter of law. |
Key Cases Cited
- Pittsburgh Press Co. v. Pittsburgh Comm'n on Human Relations, 413 U.S. 376 (U.S. 1973) (injunctions against speech may be permitted after adjudication; not all injunctions are unconstitutional)
- Balboa Island Village Inn, Inc. v. Lemen, 40 Cal.4th 1141 (Cal. 2007) (defamatory speech injunction after trial can be permissible)
- Auburn Police Union v. Carpenter, 8 F.3d 886 (1st Cir. 1993) (modern approach to defamation injunctions; must be narrowly tailored and post-merits)
- Hill v. Petrotech Res. Corp., 325 S.W.3d 302 (Ky. 2010) (constitutional interpretation allowing injunction after final adjudication of falsity)
- City of Farmington v. Fawcett, 114 N.M. 587 (N.M. Ct. App. 1992) (NM appellate view on prior restraint and free-speech rights)